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Ferronordic

Ferronordic

Authorised dealer of construction equipment in Russia

Ferronordic is an authorised dealer of Volvo CE, Terex, Dressta, Mecalac and Rottne in Russia and for Volvo CE and Mecalac in Kazakhstan. In parts of Russia, Ferronordic is an appointed aftermarket partner for Volvo and Renault Trucks and dealer for Volvo Penta. As of 2020, Ferronordic is also the authorised dealer for Volvo and Renault Trucks in parts of Germany. It aims to be the leading service and sales company in its markets. It is currently the only dealer in Russia, and one of few in Europe, allowing it to offer the ‘Certified Rebuild’ warranty extension on Volvo equipment following repairs and service. The company, founded in 2010, has ~100 outlets and 1,500 employees.

The underlying market for western, high-quality CE in Russia/CIS could offer high double-digit growth for several years to come due to general economic recovery, pent-up demand for at least 60,000 units and a change in purchasing behaviour from a focus on initial price to total cost of ownership. Improved operations and market share gains in Germany could generate profit. As a certified Volvo CE distributor, Ferronordic’s ability to gain market share would imply high sales potential.

Russia has historically been notorious for low transparency, poor corporate governance and corruption. Sanctions have also proven to have a significant impact on the Russian economy, which in turn could hamper the recovering market for CE. Approximately 80% of Ferronordic’s sold units are Volvo, which implies a high reliance on that relationship.

SEKm 2020 2021e 2022e
Sales 4656 5244 5938
Sales growth (%) 24,3 12,6 13,2
EBITDA 543 603 726
EBITDA margin (%) 11,7 11,5 12,2
EBIT adj 355 416 528
EBIT adj margin (%) 7,6 7,9 8,9
Pretax profit 308 376 513
EPS rep 16,96 20,39 27,8
EPS growth (%) -1,7 20,2 36,4
EPS adj 16,2 20,39 27,8
DPS 5 8 9
EV/EBITDA (x) 4,8 4 2,9
EV/EBIT adj (x) 7,3 5,8 4
P/E (x) 10,3 8,6 6,3
P/E adj (x) 10,8 8,6 6,3
EV/sales (x) 0,6 0,5 0,4
FCF yield (%) 24,7 13,1 17
Dividend yield (%) 2,9 4,6 5,1
Net IB debt/EBITDA 0,1 -0,2 -0,6
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITA 366 416 528
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 366 416 528
Other financial items -3 0 0
Net financial items -58 -40 -15
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 308 376 513
Tax -62 -80 -109
Net profit 246 296 404
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 246 296 404
EPS 16,96 20,39 27,8
EPS Adj 16,2 20,39 27,8
Total extraordinary items after tax 11 0 0
Tax rate (%) -20 -21,2 -21,2
Gross margin (%) 18,1 19,1 19,7
EBITDA margin (%) 11,7 11,5 12,2
EBITA margin (%) 7,9 7,9 8,9
EBIT margin (%) 7,9 7,9 8,9
Pretax margin (%) 6,6 7,2 8,6
Net margin (%) 5,3 5,6 6,8
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 24,3 12,6 13,2
EBITDA growth (%) 9,9 11,1 20,4
EBIT growth (%) 2,4 13,6 26,9
Net profit growth (%) -1,7 20,2 36,4
EPS growth (%) -1,7 20,2 36,4
Profitability 2020 2021 2022
ROE (%) 25,1 25 28
ROE Adj (%) 24 25 28
ROCE (%) 18 19,8 22,8
ROCE Adj(%) 17,5 19,8 22,8
ROIC (%) 22,1 28,3 35,4
ROIC Adj (%) 21,4 28,3 35,4
Adj earnings numbers 2020 2021 2022
EBITDA Adj 532 603 726
EBITDA Adj margin (%) 11,4 11,5 12,2
EBITA Adj 355 416 528
EBITA Adj margin (%) 7,6 7,9 8,9
EBIT Adj 355 416 528
EBIT Adj margin (%) 7,6 7,9 8,9
Pretax profit Adj 297 376 513
Net profit Adj 235 296 404
Net profit to shareholders Adj 235 296 404
Net Adj margin (%) 5,1 5,6 6,8
Sales 4656 5244 5938
COGS -3812 -4244 -4766
Gross profit 844 1000 1173
Other operating items -301 -397 -447
EBITDA 543 603 726
Depreciation on tangibles -136 -145 -153
Depreciation on intangibles 0 0 0
N/A N/A N/A
SEKm 2020 2021e 2022e
EBITDA 543 603 726
Net financial items -58 -40 -15
Paid tax -62 -80 -109
Non-cash items 0 0 0
Cash flow before change in WC 423 483 602
Change in WC 289 -56 -64
Operating cash flow 712 428 538
CAPEX tangible fixed assets -79 -89 -101
CAPEX intangible fixed assets -5 -4 -5
Acquisitions and disposals 0 0 0
Free cash flow 628 334 432
Dividend paid -62 -73 -116
Share issues and buybacks 0 0 0
Other non cash items 0 0 0
Decrease in net IB debt 527 214 266
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 3 3 3
Indefinite intangible assets 0 0 0
Definite intangible assets 8 7 6
Tangible fixed assets 557 507 461
Other fixed assets 51 51 51
Fixed assets 711 665 623
Inventories 1145 1316 1496
Receivables 488 518 584
Other current assets 0 0 0
Cash and liquid assets 884 1018 1284
Total assets 3228 3517 3987
Shareholders equity 1075 1299 1586
Minority 0 0 0
Total equity 1075 1299 1586
Long-term debt 240 160 160
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 7 7 7
Other long-term liabilities 7 7 7
Short-term debt 496 496 496
Accounts payable 1145 1290 1473
Other current liabilities 44 44 44
Total liabilities and equity 3228 3517 3987
Net IB debt 67 -147 -413
Net IB debt excl. pension debt 67 -147 -413
Capital invested 1155 1165 1187
Working capital 445 500 564
EV breakdown 2020 2021 2022
Market cap. diluted (m) 2543 2543 2543
Net IB debt Adj 67 -147 -413
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 2610 2396 2130
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 150,1 155,5 158,3
Capital invested turnover (%) 351,1 452 504,9
Capital employed turnover (%) 231,2 250 256,7
Inventories / sales (%) 26,2 23,5 23,7
Customer advances / sales (%) 0,9 0,8 0,7
Payables / sales (%) 22,1 23,2 23,3
Working capital / sales (%) 12,7 9 9
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 6,2 -11,3 -26,1
Net debt / market cap (%) 3,4 -5,8 -16,3
Equity ratio (%) 33,3 36,9 39,8
Net IB debt adj. / equity (%) 6,2 -11,3 -26,1
Current ratio (%) 142,7 149,3 160,8
EBITDA / net interest (%) 984 1507,5 4838,4
Net IB debt / EBITDA (%) 12,3 -24,4 -56,9
Interest cover (%) 664,1 1040 3518,4
N/A N/A N/A
SEKm 2020 2021e 2022e
Shares outstanding adj. 15 15 15
Fully diluted shares Adj 15 15 15
EPS 16,96 20,39 27,8
Dividend per share Adj 5 8 9
EPS Adj 16,2 20,39 27,8
BVPS 73,97 89,36 109,16
BVPS Adj 73,21 88,7 108,58
Net IB debt / share 4,6 -10,1 -28,4
Share price 133,1 175 175
Market cap. (m) 1934 2543 2543
Valuation 2020 2021 2022
P/E 10,3 8,6 6,3
EV/sales 0,56 0,46 0,36
EV/EBITDA 4,8 4 2,9
EV/EBITA 7,1 5,8 4
EV/EBIT 7,1 5,8 4
Dividend yield (%) 2,9 4,6 5,1
FCF yield (%) 24,7 13,1 17
P/BVPS 2,37 1,96 1,6
P/BVPS Adj 2,39 1,97 1,61
P/E Adj 10,8 8,6 6,3
EV/EBITDA Adj 4,9 4 2,9
EV/EBITA Adj 7,3 5,8 4
EV/EBIT Adj 7,3 5,8 4
EV/cap. employed 1,3 1,1 0,9
Investment ratios 2020 2021 2022
Capex / sales 1,8 1,8 1,8
Capex / depreciation 61,4 64,4 69,1
Capex tangibles / tangible fixed assets 14,2 17,6 21,9
Capex intangibles / definite intangibles 55,2 59,8 81,5
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 24,5 28,6 33,2
N/A N/A N/A

Equity research

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Media

Ferronordic - Company presentation with CFO Erik Danemar
Ferronordic - Company presentation with CFO Erik Danemar (in English)

Main shareholders - Ferronordic

Main shareholders Share capital % Voting shares % Verified
Håkan Eriksson (Skandinavkonsult) 15.6 % 15.6 % 30 Sep 2020
Lars Corneliusson 7.2 % 7.2 % 31 Dec 2020
Per Arwidsson med närstående 6.1 % 6.1 % 30 Sep 2020
Avanza Pension 5.2 % 5.2 % 31 Dec 2020
Swedbank Robur Fonder 5.0 % 5.0 % 31 Dec 2020
Axel Johnson Gruppen 4.4 % 4.4 % 30 Sep 2020
Unionen 4.0 % 4.0 % 31 Dec 2020
East Capital AB 3.0 % 3.0 % 30 Nov 2020
Investor Asset Management BVBA 2.9 % 2.9 % 31 Dec 2020
Norges Bank 2.3 % 2.3 % 31 Dec 2020
Source: Holdings by Modular Finance AB

Insider list - Ferronordic

Name Quantity Code Date
Henrik Carlborg + 2 201 BUY 18 Dec 2020
Dan Håkan Ulf Eliasson + 168 BUY 18 Dec 2020
Dan Håkan Ulf Eliasson + 644 BUY 8 Dec 2020
Dan Håkan Ulf Eliasson + 200 BUY 8 Dec 2020
Dan Håkan Ulf Eliasson + 353 BUY 2 Dec 2020
Nadezhda Arzumanova + 17 000 ALTM 30 Nov 2020
Onur Gucum + 17 000 ALTM 30 Nov 2020
JONATHAN TUBB + 12 000 ALTM 30 Nov 2020
Dan Håkan Ulf Eliasson + 500 BUY 27 Nov 2020
Dan Håkan Ulf Eliasson + 1 600 BUY 25 Nov 2020

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