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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 5287 6044
Sales growth (%) 23,7 14,1 14,3
EBITDA 504 560 697
EBITDA margin (%) 10,9 10,6 11,5
EBIT adj 325 400 519
EBIT adj margin (%) 7 7,6 8,6
Pretax profit 276 362 504
EPS rep 15,25 19,63 27,31
EPS growth (%) -11,6 28,7 39,1
EPS adj 15,05 19,63 27,31
DPS 7,5 8 11
EV/EBITDA (x) 4,5 5,2 3,8
EV/EBIT adj (x) 7 7,2 5,1
P/E (x) 10,3 10,7 7,7
P/E adj (x) 10,5 10,7 7,7
EV/sales (x) 0,5 0,5 0,4
FCF yield (%) 28,2 9,4 14,1
Dividend yield (%) 4,8 3,8 5,3
Net IB debt/EBITDA 0 -0,3 -0,6
Lease adj. FCF yield (%) 26,5 8 12,4
Lease adj. ND/EBITDA -0,4 -0,6 -0,9
SEKm 2020 2021e 2022e
EBITA 328 400 519
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 328 400 519
Other financial items -5 -4 0
Net financial items -53 -38 -15
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 276 362 504
Tax -54 -77 -107
Net profit 222 285 397
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 222 285 397
EPS 15,25 19,63 27,31
EPS Adj 15,05 19,63 27,31
Total extraordinary items after tax 3 0 0
Tax rate (%) -19,6 -21,2 -21,2
Gross margin (%) 17,2 17,2 18,3
EBITDA margin (%) 10,9 10,6 11,5
EBITA margin (%) 7,1 7,6 8,6
EBIT margin (%) 7,1 7,6 8,6
Pretax margin (%) 5,9 6,8 8,3
Net margin (%) 4,8 5,4 6,6
Growth rates Y/Y 2020 2021 2022
Sales growth (%) 23,7 14,1 14,3
EBITDA growth (%) 2 11,1 24,4
EBIT growth (%) -8,2 21,9 29,7
Net profit growth (%) -11,6 28,7 39,1
EPS growth (%) -11,6 28,7 39,1
Profitability 2020 2021 2022
ROE (%) 26,1 31,9 35,3
ROE Adj (%) 25,8 31,9 35,3
ROCE (%) 19 26,6 29,9
ROCE Adj(%) 18,9 26,6 29,9
ROIC (%) 23,1 38,8 48,6
ROIC Adj (%) 22,9 38,8 48,6
Adj earnings numbers 2020 2021 2022
EBITDA Adj 501 560 697
EBITDA Adj margin (%) 10,8 10,6 11,5
EBITA Adj 325 400 519
EBITA Adj margin (%) 7 7,6 8,6
EBIT Adj 325 400 519
EBIT Adj margin (%) 7 7,6 8,6
Pretax profit Adj 273 362 504
Net profit Adj 219 285 397
Net profit to shareholders Adj 219 285 397
Net Adj margin (%) 4,7 5,4 6,6
Sales 4635 5287 6044
COGS -3837 -4379 -4940
Gross profit 797 907 1105
Other operating items -293 -347 -408
EBITDA 504 560 697
Depreciation on tangibles -136 -118 -134
Depreciation on intangibles 0 0 0
Depreciation and amortisation -176 -160 -178
Of which leasing depreciation -40 -42 -44
EO items 3 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 461 520 647
EBITDA lease Adj margin (%) 9,9 9,8 10,7
Leasing payments -40 -40 -50
SEKm 2020 2021e 2022e
EBITDA 504 560 697
Net financial items -53 -38 -15
Paid tax -54 -77 -107
Non-cash items -21 0 0
Cash flow before change in WC 377 445 575
Change in WC 316 -69 -39
Operating cash flow 693 377 536
CAPEX tangible fixed assets -57 -90 -103
CAPEX intangible fixed assets -2 -5 -5
Acquisitions and disposals 12 3 0
Free cash flow 646 285 428
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 0 0
Indefinite intangible assets 0 0 0
Definite intangible assets 8 9 8
Tangible fixed assets 416 392 366
Other fixed assets 65 60 60
Fixed assets 579 550 529
Inventories 1014 1189 1366
Receivables 431 495 552
Other current assets 0 0 0
Cash and liquid assets 604 768 1030
Total assets 2628 3002 3478
Shareholders equity 806 983 1263
Minority 0 0 0
Total equity 806 983 1263
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 1359 1553
Other current liabilities 44 44 44
Total liabilities and equity 2628 3002 3478
Net IB debt -20 -158 -420
Net IB debt excl. pension debt -20 -158 -420
Capital invested 792 831 850
Working capital 213 281 320
EV breakdown 2020 2021 2022
Market cap. diluted (m) 2287 3045 3045
Net IB debt Adj -20 -158 -420
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 2886 2624
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 165,4 187,8 186,5
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 4,7 5
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) -2,5 -16,1 -33,3
Net debt / market cap (%) -1 -5,2 -13,8
Equity ratio (%) 30,7 32,7 36,3
Net IB debt adj. / equity (%) -2,5 -16,1 -33,3
Current ratio (%) 147 156,8 167,6
EBITDA / net interest (%) 1066,5 1647 4644,1
Net IB debt / EBITDA (%) -4 -28,3 -60,3
Interest cover (%) 694,6 1176,4 3457,5
Lease liability amortisation -40 -40 -50
Other intangible assets 8 9 8
Right-of-use asset 91 89 95
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 -336 -598
Net IB debt / EBITDA lease Adj (%) -36,5 -64,6 -92,4
SEKm 2020 2021e 2022e
Shares outstanding adj. 15 15 15
Fully diluted shares Adj 15 15 15
EPS 15,25 19,63 27,31
Dividend per share Adj 7,5 8 11
EPS Adj 15,05 19,63 27,31
BVPS 55,49 67,62 86,93
BVPS Adj 54,92 67,02 86,36
Net IB debt / share -1,4 -10,9 -28,9
Share price 133,1 209,5 209,5
Market cap. (m) 1934 3045 3045
Valuation 2020 2021 2022
P/E 10,3 10,7 7,7
EV/sales 0,49 0,55 0,43
EV/EBITDA 4,5 5,2 3,8
EV/EBITA 6,9 7,2 5,1
EV/EBIT 6,9 7,2 5,1
Dividend yield (%) 4,8 3,8 5,3
FCF yield (%) 28,2 9,4 14,1
P/BVPS 2,84 3,1 2,41
P/BVPS Adj 2,87 3,13 2,43
P/E Adj 10,5 10,7 7,7
EV/EBITDA Adj 4,5 5,2 3,8
EV/EBITA Adj 7 7,2 5,1
EV/EBIT Adj 7 7,2 5,1
EV/cap. employed 1,6 1,8 1,4
Investment ratios 2020 2021 2022
Capex / sales 1,3 1,8 1,8
Capex / depreciation 43,2 80,6 80,3
Capex tangibles / tangible fixed assets 13,7 22,9 28,1
Capex intangibles / definite intangibles 20,9 60,8 59
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 32,7 30,1 36,6
Lease adj. FCF yield (%) 26,5 8 12,4

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 % 31 Dec 2020
Lars Corneliusson 7.2 % 7.2 % 31 Dec 2020
Per Arwidsson med närstående 5.6 % 5.6 % 31 Dec 2020
Avanza Pension 5.2 % 5.2 % 31 Dec 2020
Swedbank Robur Fonder 5.0 % 5.0 % 31 Mar 2021
Axel Johnson Gruppen 4.4 % 4.4 % 31 Dec 2020
Unionen 4.0 % 4.0 % 31 Dec 2020
Investor Asset Management BVBA 2.9 % 2.9 % 31 Dec 2020
East Capital AB 2.4 % 2.4 % 28 Feb 2021
Norges Bank 2.3 % 2.3 % 31 Dec 2020
Source: Holdings by Modular Finance AB

Insider list - Ferronordic

Name Quantity Code Date
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
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

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