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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 4635 5829 6506
Sales growth (%) 23,7 25,8 11,6
EBITDA 504 639 736
EBITDA margin (%) 10,9 11 11,3
EBIT adj 325 465 558
EBIT adj margin (%) 7 8 8,6
Pretax profit 276 418 543
EPS rep 15,25 21,68 29,47
EPS growth (%) -11,6 42,1 35,9
EPS adj 15,05 21,9 29,47
DPS 7,5 8 11
EV/EBITDA (x) 4,5 5,1 4,1
EV/EBIT adj (x) 7 7,1 5,4
P/E (x) 10,3 10,9 8
P/E adj (x) 10,5 10,8 8
EV/sales (x) 0,5 0,6 0,5
FCF yield (%) 28,2 8 13,2
Dividend yield (%) 4,8 3,4 4,7
Net IB debt/EBITDA 0 -0,2 -0,6
Lease adj. FCF yield (%) 26,5 6,9 11,8
Lease adj. ND/EBITDA -0,4 -0,5 -0,9
SEKm 2020 2021e 2022e
EBITA 328 462 558
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 328 462 558
Other financial items -5 -4 0
Net financial items -53 -44 -15
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 276 418 543
Tax -54 -103 -115
Net profit 222 315 428
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 222 315 428
EPS 15,25 21,68 29,47
EPS Adj 15,05 21,9 29,47
Total extraordinary items after tax 3 -3,2 0
Tax rate (%) -19,6 -24,6 -21,2
Gross margin (%) 17,2 17,6 18,1
EBITDA margin (%) 10,9 11 11,3
EBITA margin (%) 7,1 7,9 8,6
EBIT margin (%) 7,1 7,9 8,6
Pretax margin (%) 5,9 7,2 8,4
Net margin (%) 4,8 5,4 6,6
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 23,7 25,8 11,6
EBITDA growth (%) 2 26,9 15,2
EBIT growth (%) -8,2 40,7 20,9
Net profit growth (%) -11,6 42,1 35,9
EPS growth (%) -11,6 42,1 35,9
Profitability 2020 2021 2022
ROE (%) 26,1 34,6 36,6
ROE Adj (%) 25,8 35 36,6
ROCE (%) 19 30 31,4
ROCE Adj(%) 18,9 30,2 31,4
ROIC (%) 23,1 41,9 49,9
ROIC Adj (%) 22,9 42,2 49,9
Adj earnings numbers 2020 2021 2022
EBITDA Adj 501 643 736
EBITDA Adj margin (%) 10,8 11 11,3
EBITA Adj 325 465 558
EBITA Adj margin (%) 7 8 8,6
EBIT Adj 325 465 558
EBIT Adj margin (%) 7 8 8,6
Pretax profit Adj 273 421 543
Net profit Adj 219 318 428
Net profit to shareholders Adj 219 318 428
Net Adj margin (%) 4,7 5,5 6,6
Sales 4635 5829 6506
COGS -3837 -4806 -5330
Gross profit 797 1023 1176
Other operating items -293 -384 -440
EBITDA 504 639 736
Depreciation on tangibles -136 -118 -134
Depreciation on intangibles 0 0 0
Depreciation and amortisation -176 -178 -178
Of which leasing depreciation -40 -42 -44
EO items 3 -3 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 461 603 686
EBITDA lease Adj margin (%) 9,9 10,3 10,6
Leasing payments -40 -40 -50
SEKm 2020 2021e 2022e
EBITDA 504 639 736
Net financial items -53 -44 -15
Paid tax -54 -103 -115
Non-cash items -21 0 0
Cash flow before change in WC 377 493 606
Change in WC 316 -98 -36
Operating cash flow 693 395 570
CAPEX tangible fixed assets -57 -99 -111
CAPEX intangible fixed assets -2 -6 -5
Acquisitions and disposals 12 -14 0
Free cash flow 646 276 454
Dividend paid -62 -109 -116
Share issues and buybacks 0 0 0
Other non cash items 76 1 0
Decrease in net IB debt 613 138 262
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 0 17 17
Indefinite intangible assets 0 0 0
Definite intangible assets 8 9 8
Tangible fixed assets 416 384 366
Other fixed assets 65 60 60
Fixed assets 579 559 547
Inventories 1014 1311 1470
Receivables 431 541 593
Other current assets 0 0 0
Cash and liquid assets 604 760 1048
Total assets 2628 3172 3658
Shareholders equity 806 1012 1324
Minority 0 0 0
Total equity 806 1012 1324
Long-term debt 351 349 349
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 5 5 5
Other long-term liabilities 1 2 2
Short-term debt 84 84 84
Accounts payable 1188 1498 1672
Other current liabilities 44 44 44
Total liabilities and equity 2628 3172 3658
Net IB debt -20 -150 -438
Net IB debt excl. pension debt -20 -150 -438
Capital invested 792 870 894
Working capital 213 311 347
EV breakdown 2020 2021 2022
Market cap. diluted (m) 2287 3437 3437
Net IB debt Adj -20 -150 -438
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 2267 3287 2999
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 165,4 201 190,5
Capital invested turnover (%) 404,9 651,3 719,1
Capital employed turnover (%) 273,2 354,5 348,8
Inventories / sales (%) 24,9 20,8 21,1
Customer advances / sales (%) 0,9 0,8 0,7
Payables / sales (%) 22,7 24,1 24,1
Working capital / sales (%) 10,2 4,5 5,1
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -2,5 -14,8 -33,1
Net debt / market cap (%) -1 -4,4 -12,7
Equity ratio (%) 30,7 31,9 36,2
Net IB debt adj. / equity (%) -2,5 -14,8 -33,1
Current ratio (%) 147 153,4 165,7
EBITDA / net interest (%) 1066,5 1905,1 4909,6
Net IB debt / EBITDA (%) -4 -23,4 -59,5
Interest cover (%) 694,6 1375,9 3722,9
Lease liability amortisation -40 -40 -50
Other intangible assets 8 9 9
Right-of-use asset 91 90 96
Total other fixed assets 65 60 60
Leasing liability 148 177 177
Total other long-term liabilities 6 7 7
Net IB debt excl. leasing -168 -327 -615
Net IB debt / EBITDA lease Adj (%) -36,5 -54,3 -89,6
SEKm 2020 2021e 2022e
Shares outstanding adj. 15 15 15
Fully diluted shares Adj 15 15 15
EPS 15,25 21,68 29,47
Dividend per share Adj 7,5 8 11
EPS Adj 15,05 21,9 29,47
BVPS 55,49 69,67 91,14
BVPS Adj 54,92 67,9 89,38
Net IB debt / share -1,4 -10,3 -30,1
Share price 133,1 236,5 236,5
Market cap. (m) 1934 3437 3437
Valuation 2020 2021 2022
P/E 10,3 10,9 8
EV/sales 0,49 0,56 0,46
EV/EBITDA 4,5 5,1 4,1
EV/EBITA 6,9 7,1 5,4
EV/EBIT 6,9 7,1 5,4
Dividend yield (%) 4,8 3,4 4,7
FCF yield (%) 28,2 8 13,2
P/BVPS 2,84 3,39 2,6
P/BVPS Adj 2,87 3,48 2,65
P/E Adj 10,5 10,8 8
EV/EBITDA Adj 4,5 5,1 4,1
EV/EBITA Adj 7 7,1 5,4
EV/EBIT Adj 7 7,1 5,4
EV/cap. employed 1,6 2 1,6
Investment ratios 2020 2021 2022
Capex / sales 1,3 1,8 1,8
Capex / depreciation 43,2 77,1 86,4
Capex tangibles / tangible fixed assets 13,7 25,8 30,2
Capex intangibles / definite intangibles 20,9 66,9 60,7
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 32,7 35,5 36,6
Lease adj. FCF yield (%) 26,5 6,9 11,8

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Media

Ferronordic - Company presentation with CFO Erik Danemar
Ferronordic - Company presentation with CFO Erik Danemar

Main shareholders - Ferronordic

Main shareholders Share capital % Voting shares % Verified
Håkan Eriksson (Skandinavkonsult) 15.6 % 15.6 % 31 Dec 2020
Lars Corneliusson 7.2 % 7.2 % 30 Jun 2021
Per Arwidsson med närstående 5.6 % 5.6 % 31 Dec 2020
Avanza Pension 5.0 % 5.0 % 18 Aug 2021
Swedbank Robur Fonder 5.0 % 5.0 % 31 Aug 2021
Axel Johnson Gruppen 4.4 % 4.4 % 31 Dec 2020
Unionen 4.0 % 4.0 % 30 Jun 2021
Investor Asset Management BVBA 2.9 % 2.9 % 31 Dec 2020
Carnegie Fonder 2.0 % 2.0 % 31 Aug 2021
Futur Pension 1.5 % 1.5 % 30 Jun 2021
Source: Holdings by Modular Finance AB

Insider list - Ferronordic

Name Quantity Code Date
Erik Eberhardson - 7 000 SELL 16 Jul 2021
Martin Konrad Bauknecht + 1 000 BUY 3 Jun 2021
Carl Erik Mikael Danemar + 15 500 ALTM 28 May 2021
Henrik Carlborg + 15 500 SUBS 28 May 2021
JONATHAN TUBB + 12 000 ALTM 28 May 2021
Ceren Wende + 1 158 ALTM 28 May 2021
JONATHAN TUBB - 694 SELL 12 May 2021
Dan Håkan Ulf Eliasson + 630 BUY 6 Apr 2021
Henrik Carlborg + 2 201 BUY 18 Dec 2020
Dan Håkan Ulf Eliasson + 168 BUY 18 Dec 2020

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