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    FNM   SE0005468717

FERRONORDIC AB (PUBL)

(FNM)
  Report
Delayed Nasdaq Stockholm  -  11:29 2022-09-23 am EDT
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Ferronordic : Year-end Report January - December 2020

02/19/2021 | 03:40am EDT

Interim Report January - September 2018

Year-end report January - December 2020

Strong equipment sales and cash flow

Units sold in Russia/CIS up 17% in recovering market

Strong organic growth offset by weaker ruble

Operating margin lower on revenue mix and ramp-up in contracting services

Germany affected by Covid restrictions and restructuring costs

Strong cash flow leads to net cash position

Updated financial objectives and proposed dividend of SEK 7.5 per share

Selected key Group ratios*

SEK M

Revenue Operating profit Result for the period Earnings per share

Gross margin Operating margin

Return on capital employed Working capital / Revenue Net debt / (cash)

Q4 2020**

%

12M 2020**

%

1,185 65 44 3.05 15.8% 5.5% 20% 5% -20

960 95 57 3.95 21.0% 9.9% 27% 20% 593

23% -31% -23% -23%

4,635 328 222 15.25 17.2% 7.1% 20% 5% -20

3,747 358 251 17.26 20.7% 9.5% 27% 20% 593

24% -8% -12% -12%

* Definitions and purposes of the key ratios are presented on page 27. ** Q4 and 12M 2020 include consolidation of operations in Germany

CEO comment

Lars Corneliusson CEO

Total revenue in Russia/CIS grew 34% in RUB terms but was flat in in SEK

In January, we appointed a new country manager to Germany

The German trucks market showed signs of recovery

The Board has updated Ferronordic's financial targets and dividend policy and recommends a dividend of SEK 7.5 per share

In a longer perspective, we remain positive

In 2020, the global pandemic presented our business with uncertainty and market disruption. Against this backdrop, our business in Russia/CIS demonstrated great resilience and delivered its best year to-date in terms of result and cash flows. Meanwhile, we continued to develop our German operations, which we started in January 2020. Despite challenging conditions, we managed, working closely with our partners, to deliver uninterrupted service to our customers throughout 2020. I am proud of the results we achieved during the year.

In Q4 2020, we gained further market share in Russia/CIS. Unit sales of new machines in units increased by 17% in a market that grew by 6%. The aftermarket business continued uninterrupted but was negatively affected by Covid-restrictions and a sharp decline in the ruble. In contracting services, we ramped up our new project in Norilsk. We also completed the expansion of our component and machine rebuild center and supplied components both to external customers and our own contracting services business.

Total revenue grew 34% in local currency in Q4 2020 but was flat in in SEK due to a sharp decline in the ruble. The operating margin declined slightly on lower share of aftermarket sales in the revenue mix and lower margin in contracting services, mainly driven by ramp-up costs and use of subcontractors in the new project.

In Germany, the truck market showed signs of recovery during the quarter. Total revenue remained largely flat compared to Q3 2020 as higher truck sales were offset by lower aftermarket sales. The operating result was negatively impacted by restructuring and transaction costs. We continue to develop the business despite extensive restrictions. In January, we announced the appointment of a new country manager, as well as the acquisition of two new workshops in strategic locations.

For the group as a whole, revenue was up 23% during the quarter while operating profit declined 31%, mainly because of the negative contribution from Germany. Strong cash flows reversed SEK 83m of net debt at the end of Q3 2020 to net cash of SEK 20m at the end of Q4 2020.

In view of our strong performance and financial position during 2020, as well as looking forward, the Board has updated Ferronordic's financial targets and dividend policy (p. 11) and recommends a dividend of SEK 7.5 per share.

While uncertainty remains on both supply and demand sides of our business, we currently expect the markets in Russia/CIS and Germany to recover in 2021. In Russia/CIS, our optimism is supported by stronger commodity prices and increased activity on the so-called national projects in Russia but checked by risks of potential changes in taxation. In a longer perspective, we believe that the underlying fundamentals and business opportunities in our markets are strong.

New machines (units sold)

350

300

250

200

150

100

50 -

Q1

Q2

Q3

201820192020

Revenue (SEK m)

Q4

1 200

1 000

800

600

400

200 -

Q1

2018

Q22019

Q32020

Operating margin (%)

Q4

Q3

Q1

Q2201820192020

Q4

In Q4 2020, we delivered 289 new units, which is an increase of 17%Operating profit from the operations in Russia/CIS decreased by 5% to SEK 91m

Working capital declined from 8% to 3% of revenue in Q4 2020

Russia/CIS

In Q4 2020, the total market for our main product groups (measured in units) grew by 6% Y-o-Y as uncertainty eased, commodity prices improved and investment programs were restarted. Our new machine sales in units grew by 17% to 289 machines as we gained further market shares. We increased our sales of articulated haulers, but also of excavators and wheel loaders, which partly is reflected in a decrease in average sales price of -5% Y-o-Y (+27% in RUB). The aftermarket business was affected by Covid-restrictions, and by problems to adjust to the sharp decline in the ruble. In contracting services, we mobilized people and machines for the new project in Norilsk.

Revenue in Russia/CIS in Q4 was flat at SEK 951m (SEK 950m) but up 34% in local currency. Equipment sales increased by 5% (+40% in RUB), aftermarket sales decreased by -16% (+12%) and contracting services increased by 15% (+54%). The aftermarket share of revenue declined 5pp to 22%, while contracting services increased 2pp to 13%. The gross margin declined to 17.8% (21.1%), mainly as a result of the changed revenue mix and lower margins in contracting services.

Selling, general and administrative expenses declined by 23% Y-o-Y thanks to weaker ruble and cost reduction measures launched earlier during 2020. As a percent of revenue, these costs declined 2.6pp to 8.6% (11.2%). As a result of lower gross margin, only partly offset by lower costs, the operating margin decreased to 9.5% (10.0%) and the operating profit decreased by 5% to SEK 91m (SEK 95m).

Cash flows from operations were positive as working capital as percent of revenue declined from 8% in Q3 to 3% in Q4 2020. As a result, a net cash position of SEK 205m related to the Russia/CIS operations in Q3 increased to SEK 351m in Q4 2020.

In 2020 as a whole, new machine sales in units increased by 15% in a market that declined 4%. Revenue declined by -2% to SEK 3,652m (SEK 3,737m) with a gross margin of 19.5% (20.7%). The operating profit grew 10% to SEK 394m (SEK 358m), with an operating margin of 10.8% (9.6%).

Russia/CIS

SEK M New units Revenue Gross profit Operating profit Gross margin

Operating margin

Q4 2020

%

12M 2019

289

247

950

200

95

21.1%

10.0%

17%

1106

3,652

714

394

19.5%

10.8%

965

951

0%

3,737

169

- 16%

773

91

-5%

358

17.8%

20.7%

9.5%

9.6%

%

15%-2%-8%10%

New trucks (units sold)

175

170

165

160

155

150

145

140

135

130

Q1

Q2 Q32020

Revenue (SEK m)

Q4

300

250

200

150

100

50 -

Q1 Q2 Q32020

Operating margin (%)

Germany

In Q4 2020, the German market for heavy trucks, based on registrations, increased by 4% Y-o-Y and 17% Q-o-Q. Market growth was driven by the tractor segment. Our sales area represented approx. 19% of the total German market and grew 6% Y-o-Y and 13% Q-o-Q. We sold 162 new units in Q4 2020, which is 7% more than in Q3 2020. Our market shares remained largely unchanged.

Q4

Compared to the previous quarter, equipment sales increased by 8% while aftermarket sales declined by 11%, partly because of lower activity due to a renewed lock-down. Total revenue in Germany increased 2% Q-o-Q to SEK 233m, of which 62% related to equipment sales, 27% aftermarket sales and 11% other revenue, mainly consisting of rental of trucks and sales of passenger cars. The gross margin stood at 7.7%, down from 9.8% in Q3 2020, mainly as a result of lower margins on new trucks sales and a lower share of aftermarket sales.

  • 0,0%SG&A in Q4 2020 include restructuring costs of SEK 3.6m and

-2,0%

-10,0%

-12,0%

-4,0%

-6,0%

-8,0%

Q1

Q2

Q3

Q4

2020

During the fourth quarter, the German market for heavy trucks grew 4% Y-o-YRevenue in Germany amounted to SEK 233m, of which 62% related to sales of trucks and 27% to aftermarket sales

transaction costs of SEK 1.2m. Other expenses include a write-off of fixed assets and bad debt of SEK 3.0m. As a result of the lower gross margin and the additional costs, the operating margin in Q4 declined to -10.7%, compared to -7.3% in Q3 2020. The operating loss amounted to SEK -25m.

Cash flows from operating activities in Q4 2020 were negative due to the negative result and to an increase in working capital from SEK 67m to SEK 93m, or from 7% to 9% of the annualised revenue. Net debt attributable to Germany increased from SEK 290m at the end of Q3 2020 to SEK 333m at the end of Q4 2020.

For 2020, revenue in Germany amounted to SEK 983m with a gross margin of 8.5%. The operating result amounted to SEK -66m, corresponding to an operating margin of -6.7%.

Germany

%

SEK M

New units

-

Revenue

-

Working capital increased to

Gross profit

-

SEK 93m and net debt increased to

Operating profit

-

SEK 333m during the fourth quarter

Gross margin

Operating margin

Q4 2020

%

12M 2019

162

0

10

1

0 - -

-

631

983

84

-66

8.5%

-6.7%

-

233

-

10

18

-

1

-25

-

0

7.7%

-

-10.7%

-

Comments on the Group results

The following foreign exchange rates have been used when translating Q4 2020 (Q4 2019) results to the presentation currency:

  • Average rates of RUB/SEK 8.84 (6.62) and SEK/EUR 10.28 (10.66) have been used to translate income statements.

  • End of period rates of RUB/SEK 9.04 (6.64) and SEK/EUR 10.04 (10.43) have been used to translate balance sheets.

The depreciation of the RUB since 4Q 2019, of 33% on the average and 36% on the end-of-period rates respectively, has impacted both income statement and balance sheet items.

Revenue

Revenue increased by 23% to SEK 1,185m (SEK 960m), partly as a result of the consolidation of the Group's operations in Germany

As a net result of lower gross margin on higher revenues, gross profit in Q4 2020 decreased by 7% to SEK 187mThe consolidated operating profit for the quarter decreased by 31% Y-o-Y to SEK 65m

In Q4 2020, the revenue of the Group increased by 23% to SEK 1,185m (SEK 960m). Revenue in Russia/CIS was largely unchanged at SEK 951m (SEK 950m) while the consolidation of the operations in Germany added revenue of SEK 233m (SEK 10m) (the operations in Germany were acquired at the end of 2019). Sales of equipment and trucks increased by 29% while aftermarket sales increased by 5%. Revenue from contracting services increased by 15% in Q4, mainly due to the addition of the new project in Norilsk.

During 2020, the Group revenue increased by 24% to SEK 4,635m (SEK 3,747m). Revenue in Russia/CIS declined by 2% to SEK 3,652m (SEK 3,737m) while the German operations added revenue of SEK 983m (SEK 10m). The sales of equipment and trucks increased by 21% in 2020 while aftermarket sales by increased by 23% and contracting services by 22%.

Gross profit and operating profit

In Q4 2020, the gross margin for the Group decreased from 21.0% to 15.8% as a result of lower gross margin in Russia/CIS (17.8% in Q4 2020 vs 21.1% in Q4 2019) and lower gross margin (7.7%) in Germany. As a result of lower margin on higher revenue, gross profit in Q4 2020 decreased by 7% to SEK 187m (SEK 202m).

As % of revenue, SG&A expenses decreased from 11.1% in Q4 2019 to 10.5% in Q4 2020. The operating profit for Q4 2020 decreased 31% Y-o-Y to SEK 65m (SEK 95m). The operating margin during the quarter decreased from 9.9% to 5.5%, partly due to lower margin in Russia/CIS of 9.5% (10.0%), but mainly due to lower operating margin in Germany of -10.7%.

During 2020, the gross profit increased by 3% Y-o-Y to SEK 797m (SEK 775m). The gross margin decreased from 20.7% in 2019 to 17.2% in 2020, partly as a result of lower gross margin in Russia/CIS (19.5%) and partly as a result of the consolidation of a lower gross margin (8.5%) in Germany.

The consolidated operating margin declined from 9.5% to 7.1%

The result for the quarter decreased by 23% to SEK 44m

Earnings per share for the quarter amounted to SEK 3.05.

Cash flows from operating activities after taxes and interest increased to SEK 179m (SEK 3m) during the quarter

As a % of revenue, SG&A was lower at 10.4% compared to 10.7% in 2019, as lower costs in Russia/CIS (10.7% vs 9.1%) were only partly offset by higher SG&A cost to revenue percentage of 15.1% in Germany. At SEK 328m (SEK 358m), the operating result in 2020 was 8% lower compared to 2019, mainly due to an operating loss in Germany of SEK 66m. The consolidated operating margin declined from 9.5% to 7.1%, as a higher margin in Russia/CIS of 10.8% (9.6%) was offset by a negative margin of -6.7% in Germany.

Result

In Q4 2020, mainly as a result of a lower net debt position, net finance costs decreased from SEK 19m in Q4 2019 to SEK 6m. Foreign exchange losses (net) increased from SEK 2m in Q4 2019 to SEK 3m in Q4 2020. As a result of this and the lower operating profit, the result before income tax for Q4 2020 decreased by 25% to SEK 56m (SEK 75m). The result for the quarter decreased by 23% to SEK 44m (SEK 57m).

In 2020, mainly as a result of a lower net debt position, net finance costs were SEK 4m lower than during 2019. Foreign exchange losses (net) were SEK 5m in 2020 compared to foreign exchange gains (net) of SEK 12m in 2019. Because of this and the lower operating profit, the result before income tax for 2020 decreased by 13% to SEK 276m (SEK 318m). The net result for Russia/CIS for 2020 increased by 11% to SEK 280m (SEK 251m) while the German operations generated a net loss of SEK 58m. In total, the result for the year 2020 thus decreased by 12% to SEK 222m (SEK 251m).

Earnings per share

Earnings per share for the fourth quarter amounted to SEK 3.05 (SEK 3.95).

Earnings per share during 2020 amounted to SEK 15.25 (SEK 17.26).

Cash flows

During the quarter, cash flows from operating activities increased to SEK 179m (SEK 3m). The positive cash flows was partly a result of a decrease in working capital of SEK 141m from SEK 354m to SEK 213m, or from 8% to 5% of revenue. In Russia/CIS, the reduction in working capital during the quarter was mainly a result of higher payables, but also of lower receivables, only partly offset by higher inventories. In Russia/CIS, the increase in payables significantly exceeded the increase in inventories and receivables in Q4 2020. As a

Working capital decreased from SEK 354m to SEK 213m during the quarterCash flows from operating activities during 2020 increased to SEK 693m (SEK -330m)

percentage of revenue, working capital in Russia/CIS declined to 3% (from 8% in Q3 2020 and 19% in Q4 2019). This is below the historical average as well as the lower end of the expected working capital range from 5% to 15% of revenue. In Germany, by contrast, working capital increased in Q4 2020 as a decrease in payables and increase in inventory more than offset a decrease in receivables. As a result, working capital increased to 9% (from 7% in Q3 2020) as a % of revenue.

The strong cash flows from operations were supported by lower interest paid for the Group, but partly offset by higher income tax paid.

Cash flows from investing activities in Q4 2020 amounted to SEK -15m (SEK -105m). The high investments in Q4 2019 reflect the Group's acquisition of property, plant and equipment from Volvo in connection with the expansion to Germany. For more on investments in contracting services, see also below in the section on financial position.

Interest received in Q4 2020 was higher than during Q4 2019 thanks to a higher cash position and despite lower deposit rates.

During the year 2020, cash flows from operating activities increased to SEK 693m (SEK -330m), partly as a result of the positive operating result, and partly as a result of lower working capital compared to the end of 2019. The lower working capital was mainly a result of lower inventories and higher payables. In Russia/CIS, SEK 521m were released from working capital in 2020 and working capital as a % of revenue declined from 20% at the end of 2019 to 5% at the end of 2020. The build-up of working capital during 2019, which was partly related to Ferronordic taking over the responsibility of importation of machines and spare parts to Russia from Volvo, was thus partly reversed during the same period of 2020.

Cash flows from investing activities during 2020 amounted to SEK -47m (SEK -179m). A large part of the investments in 2019 relate to acquisition of assets for the expansion to Germany. Apart from the Germany acquisitions, acquisition of property, plant and equipment was also lower during 2020 compared to 2019. This was partly a result of a deliberate reduction of capex to strengthen the Group's financial position given a more uncertain outlook following the outbreak of Covid-19. For more on investments in contracting services, see also below in the section on financial position.

Financial position

On 31 December 2020, cash and cash equivalents amounted to SEK 604m, an increase of SEK 84m from to the end of 2019 and an increase of SEK 64m from the end of Q3 2020. The high cash balance reflected stronger cash flows from operations and lower investments.

Interest-bearing liabilities (including lease liabilities and effects of IFRS-16) at the end of the quarter amounted to SEK 583m, adecrease of SEK 529m compared to the end of 2019. The decrease was mainly due to a repayment of loans in Russia/CIS. Interest bearing liabilities also include liabilities in the German operations amounting to SEK 68m that were transferred from payables to borrowings in 2020. As such transfers were non-cash, they are not reflected in cash flows.

Net debt declined from SEK 593m to net cash SEK 20m in Q4 2020

Equity at 31 December 2020 amounted to SEK 806m

The parent company's result for the quarter increased to SEK 7m (SEK 0m)

The number of full-time equivalent employees at the end of Q4 2020 was 1,469

Net debt declined from SEK 593m at the end of 2019 to net cash of SEK 20m at the end of 2020.

Property, plant and equipment decreased by SEK 8m during the quarter from SEK 515m to SEK 507m, mainly as an effect of translation following the weakening of the Russian ruble, but also due to depreciation in the amount of SEK 39m. The main additions consisted of additional machines for contracting services in the amount of SEK 54m in 2020 (of which SEK 11m in Q4 2020). The increased number of machines for contracting services was reflected in the Group's statement of cash flows as a change in working capital, as the machines were transferred to property, plant and equipment from inventory (a non-cash operation).

On 31 December 2020, equity amounted to SEK 806m, a decrease of SEK 84m compared to the end of 2019. The decrease, offset by the positive result, was mainly a result of negative foreign exchanges differences in the amount of SEK 247m, reflecting the 36% depreciation of the Russian ruble in 2020. The dividend of SEK 62m in Q4 2020 also reduced equity.

Parent company

During Q4 2020, the revenue of the parent company decreased to SEK 20m (SEK 52m) mainly due to lower intra-group sales of machines from the parent to its subsidiaries. Administrative expenses increased to SEK 12m (SEK 5m), mainly as a result of professional services, travel, taxes and staff changes. The result for the quarter increased to SEK 7m (SEK 0m), mainly due to finance income received from its Russian subsidiary.

In 2020, the revenue of the parent company decreased to SEK 116m (SEK 144m), mainly due to lower intra-group sales of machines from the parent to its subsidiaries. Administrative expenses amounted to SEK 30m (SEK 15m), mainly as a result of professional services, travel and taxes and staff changes. The result amounted to SEK -2m (SEK 0m).

Employees

At the end of 2020, the number of full-time equivalent employees in the Group was 1,469, of which 1,200 related to Russia/CIS, 257 to Germany and 12 occupied group functions. At the end of 2019, the number of full-time equivalent employees was 1,239, of which 1,189 related to the Russia/CIS and 50 to Germany. The headcount increase in Russia/CIS was a net result of an increase in headcount in contracting services and the component rebuild centre, and a decrease in support and administrative functions.

Expansion to Germany

The integration of Ferronordic's business in Germany is ongoing

In January, Ferronordic appointed Martin Bauknecht Managing Director of the German business

Ferronordic started operations in Germany in January 2020 after it had acquired partly existing organisations and infrastructure from the Volvo Group and Auto-Haas, a private Volvo and Renault trucks dealer. We are now investing significant resources to integrate these structures into our organisation and processes. By investing into a better service network within our part of Germany, we see opportunities to increase the market shares for Volvo and Renault Trucks and, over time, gain a higher share of the total aftermarket sales. As aftermarket sales increases, profitability of the German business is expected to improve. As a result of the business disruption caused by the outbreak of Covid-19 in 2020, some of the planned changes and improvements will take longer than previously estimated.

Management changes

In January, Martin Bauknecht was appointed managing director of the German business and new member of the Group Management Team, effective 3 February 2021. Before joining Ferronordic, Martin was CEO of Raiffeisen Technik GmbH, a dealer of agricultural machinery in Germany that he turned from loss to profit. Before that he held various positions with MAN Truck and Bus. He has a degree in Economics and Business Administration from the University of Hohenheim. Martin will be based in Frankfurt.

Henrik Carlborg, Business Development Director and previous Managing Director Germany, has returned to focus on the overall business development of the Group, including the continued expansion and improvement of the service network in Germany.

Acquisitions in Germany

In line with Ferronordic's strategy to expand and improve its service network in Germany, the Group has recently announced two acquisitions.

On 28 December 2020, it was announced that Ferronordic had signed an agreement to acquire Truck Center Röhn GmbH ("TCR"), an authorised Volvo and Renault Trucks workshop in Fulda, Hessen. In 2019, TCR generated a revenue of approx. EUR 3.9m (*SEK 40m) with an operating profit of approx. EUR 0.6m (*SEK 6m) and 15% operating margin. The expected purchase price amounts to EUR 4.1m (*SEK 41m), based on EUR 2.3m (*SEK 23m) of expected net asset value and EUR 1.8m (*SEK 18m) of goodwill. The transaction was completed in January 2021. Ferronordic also agreed in principle with the seller to build an additional workshop for Ferronordic in Bad Hersfeld, Hessen.

On February 4 2021, it was announced that Ferronordic had signed an agreement to purchase the business of Bus und Truck Service GmbH, an authorised Volvo and Renault Trucks workshop in Nordhausen in central Germany. Over the last three years, Bus und Truck Service GmbH generated an average revenue of around EUR 1.5m (*SEK 15m) per year. The transaction is structured as an asset deal, where Ferronordic purchases inventories, tools and equipment from the seller. The real estate is not included in the transaction and will be leased by Ferronordic. The total purchase price amounts to EUR 0.65m (*SEK 6.6m), of which EUR 0.45m (*SEK 4.6m) corresponds to the expected net value of the purchased assets and EUR 0.2m (*SEK 2.0m) is goodwill. The transaction is expected to be completed by May 2021.

Ferronordic will continue to seek opportunities to expand and improve its network in Germany

Ferronordic will continue to seek opportunities to expand and improve its network in Germany. While the Group's preferred strategy is to lease real estate, Ferronordic will also consider business acquisitions including fixed assets and greenfield projects, where Ferronordic would buy and develop land plots to build workshops.

Events after the reporting date

In January, the Russian Ministry for Industry and Trade proposed an increase to the so-called utilisation or scrapping fee. This charge is levied in a fixed amount and depends on the type of machine. As a percent, the fee therefore impacts lower price machines more. At this point, it has not been confirmed if, when, on what machines and by how much the increase of the fee may apply.

Except as described above or elsewhere in this report, no events have occurred after the reporting date that require disclosure in the financial statements.

Risks and uncertainties

As described in the 2019 annual report, Ferronordic is exposed to a number of risks. Some of these risks have intensified as a result of the outbreak and spread of COVID-19. There have been no significant changes to what was stated in the 2019 annual report. The parent company is indirectly subject to the same risks and uncertainties as the Group.

Major events

On 11 March 2020, WHO declared the outbreak of COVID-19 a global pandemic. From mid-March, authorities have issued recommendations and regulations to restrict movement and social contacts in order to contain the spread of the virus. Governments have launched initiatives to support businessesand protect their economies. Companies, including our suppliers, competitors and customers, have taking measures to adapt to an uncertain operating environment. The path of the virus and the measures to halt it cannot be predicted and we cannot exclude further supply or demand side disruption in our business.

Outlook

While uncertainty remains on both supply and demand sides of our business, we currently expect the markets in Russia/CIS and Germany to recover in 2021. In Russia/CIS, our optimism is supported by stronger commodity prices and indications of increased activity on the so-called national projects in Russia but checked by potential changes in taxation. In a longer perspective, we believe that the underlying fundamentals and business opportunities in our markets are strong.

Updated financial objectives and dividend policy

Ferronordic's Board has decided to update the Group's financial objectives and its dividend policy

Ferronordic's Board has decided to update the Group's financial objectives and its dividend policy.

Ferronordic's financial objectives should be aligned with and support its strategic objectives:

  • Leadership in the market for construction equipment and trucks

  • Geographic expansion

  • Expansion into related business areas

  • Expansion and development of contracting services

  • Industry leading digital service and sales platforms

  • Aftermarket absorption rate of at least 1.0 x

By executing on its strategy, Ferronordic has become a more mature and diversified business. It operates across three markets and represents several leading brands next to Volvo. It has developed vertically by investing in a component and machine rebuild center, growing its rental and used businesses, and significantly expanding its contracting services business. It has developed a digital sales platform to support its service organisation and its customers. Ferronordic has potential to continue to grow, with significant contributions from contracting services and Germany. As contracting services and rental operations tie up more capital in machinery and as network infrastructure in Germany is owned or leased for long periods, Ferronordic's business model becomes more asset and capital intensive. As Ferronordic continues to pursue its strategic objectives, its updated financial objectives reflect its current position and strategic direction in 2020-2025.

Ferronordic's updated financial objectives are:

  • Double the 2020 revenue in its current markets by 2025

  • Operating margin above 7%

  • Net debt/EBITDA below 3 times (over a business cycle)

The board has also decided on a new dividend policy, according to which the ambition should be to pay at least 50% of net income if net debt/EBITDA is less than 1.0, post dividend payment, and to pay at least 25% if net debt/EBITDA is more than 1.0. The board will take several factors into account when proposing the level of dividend including legal requirements, the articles of association, the group's expansion opportunities, its financial position and other investment needs.

Annual report and Annual general meeting

Ferronordic's 2020 annual report will be available on the Company's website around 16 April 2021.

The annual general meeting in Ferronordic AB (publ) (AGM) will be held in Stockholm on Wednesday, 12 May 2021. Notice to attend the AGM will be made in accordance with the articles of association around 12 April 2021.

Dividend

For the AGM 2020, the Board intends to propose a dividend of SEK 7.5 per share.

Presentation of the report

Ferronordic's year-end report for 2020 was published on 19 February 2021 at 07.30 CET and will be accessible at www.ferronordic.com.

Ferronordic invites investors, analysts and the media to a presentation where Lars Corneliusson, CEO, and Erik Danemar, CFO, comment on this report.

The presentation will be held on 19 February 2021 at 10:00 CET and can be followed via telephone conference or audiocast.

The presentation will be held in English and will be followed by a questions and answers session. Questions can be asked via the telephone conference or in written form via the audiocast. No preregistration is required.

To participate via telephone, please dial-in no later than five minutes prior to the announced time.

Dial-in numbers:

Germany:

+49 69 138 034 52

Russia:

+8 800 500 01 33

Sweden:

+46 8 505 583 73

Switzerland:

+41 225 80 59 76

United Kingdom:

+44 333 300 92 70

United States:

+1 833 249 84 04

The presentation can also be viewed https://tv.streamfabriken.com/ferronordic-q4-2020

liveatAfterwards, a recording of the presentation will be available at the same page.

Condensed Consolidated Statement of Comprehensive Income

Q4 2020 SEK '000

Revenue Cost of sales Gross profit Selling expenses

General and administrative expenses Other income

Other expenses Operating profit Finance income Finance costs

Foreign exchange gains/(-losses) (net)

1 184 647 (997 642) 187 005 (55 081) (69 033)

Result before income tax

Income tax

Result for the period

5 814 (3 246) 65 459 3 040 (9 142) (3 277) 56 080 (11 783) 44 297

Other comprehensive result

Items that are or may be reclassified to profit or loss: Foreign currency translation differences for foreign operations

(26 898)

Other comprehensive result for the period, net of tax

Total comprehensive result for the period

(26 898) 17 399

Earnings per share

Basic and diluted earnings per share (SEK)

Q4 2019 SEK '000

Twelve months 2020 SEK '000

960 137 (758 461) 201 676 (38 891) (67 548)

3 575 (3 689) 95 123 848 (19 408) (1 603) 74 960 (17 505) 57 455

4 634 726 (3 837 282)

797 444 (218 655) (263 527)

24 159 (11 186) 328 235 11 914 (59 169) (5 415) 275 565 (53 873) 221 692

(3 876)

(3 876) 53 579

(246 870)

(246 870) (25 178)

Twelve months 2019 SEK '000

3 747 142 (2 972 212)

774 930 (161 852) (237 946)

8 354 (25 898) 357 588 6 458 (58 148)

12 458 318 356 (67 537) 250 819

92 576

92 576

343 395

3.05

3.95

15.25

17.26

Condensed Consolidated Statement of Financial Position

31 December

30 September

31 December

2020

2020

2019

SEK '000

SEK '000

SEK '000

ASSETS Non-current assets Property, plant and equipment Intangible assets

Deferred tax assets

506 522

8 211

64 604

514 641

9 593

59 743

700 330

11 679

51 287

Total non-current assets

579 337

583 977

763 296

Current assets Inventories

Trade and other receivables Prepayments

Cash and cash equivalents

1 014 180

393 486

37 119

603 504

955 958

433 458

39 166

539 260

1 289 887

321 544

83 506

519 361

Total current assets

2 048 289

1 967 842

2 214 298

TOTAL ASSETS

2 627 626

2 551 819

2 977 594

EQUITY AND LIABILITIES Equity

Additional paid in capital Translation reserve Retained earnings Result for the period

1 297

615 136

(368 964)

337 240

221 692

612 136 (342 066)

399 003 177 395

1 297

612 136

(122 094)

148 184

250 819

TOTAL EQUITY

806 401

847 765

890 342

Non-current liabilities Borrowings

Deferred income Deferred tax liabilities Long-term lease liabilities

351 326

578

5 117

70 893

320 838

1 667

5 151

100 077

205 296

7 174

6 622

171 847

Total non-current liabilities

427 914

427 733

390 939

Current liabilities Borrowings

Trade and other payables Deferred income Provisions

Short-term lease liabilities

84 029

1 187 974

18 524

25 579

77 205

122 486

1 037 555

16 826

20 430

79 024

639 280

917 279

21 453

22 282

96 019

Total current liabilities

1 393 311

1 276 321

1 696 313

TOTAL LIABILITIES

1 821 225

1 704 054

2 087 252

TOTAL EQUITY AND LIABILITIES

2 627 626

2 551 819

2 977 594

Year-end report January - December 2020

Condensed Consolidated Statement of Changes in Equity

SEK '000

Attributable to equity holders of the company

Share capital

Additional paid in capital

Translation reserve

Retained earnings

Total equity

Balance 1 January 2020

1 297

612 136

(122 094)

399 003

890 342

Total comprehensive result for the period

Result for the period

221 692

221 692

Other comprehensive result

Foreign exchange differences

-

(246 870)

-

(246 870)

Total comprehensive result for the period

(246 870)

221 692

(25 178)

Contribution by and distribution to owners

Dividend on shares

-

-

(61 763)

(61 763)

Warrant issue

3 000

-

-

3 000

Total contributions and distributions

-

3 000

-

(61 763)

(58 763)

Balance 31 December 2020

1 297

615 136

(368 964)

558 932

806 401

SEK '000

Attributable to equity holders of the company

Share capital

Additional paid in capital

Translation reserve

Retained earnings

Total equity

Balance 1 January 2019

1 297

612 136

(214 670)

257 177

655 940

Total comprehensive result for the period

Result for the period

250 819

250 819

Other comprehensive result

Foreign exchange differences

92 576

92 576

Total comprehensive result for the period

92 576

250 819

343 395

Contribution by and distribution to owners

Dividend on shares

(108 993)

(108 993)

Total contributions and distributions

-

-

-

(108 993)

(108 993)

Balance 31 December 2019

1 297

612 136

(122 094)

399 003

890 342

16

Condensed Consolidated Statement of Cash Flows

Cash flows from operating activities

Result before income tax

Adjustments for: Depreciation and amortisation

(Gain)/loss from impairment of receivables

Profit on disposal of property, plant and equipment Finance costs

Finance income

Foreign exchange losses/(gains) (net)

Cash flows from operating activities before changes in working capital and provisions Change in inventories

Change in trade and other receivables Change in prepayments

Change in trade and other payables Change in provisions

Change in deferred income

Cash flows from operating activities before interest and tax paid

Income tax paid Interest paid

Cash flows from operating activities Cash flows from investing activities

Proceeds from sale of property, plant and equipment Interest received

Acquisition of property, plant and equipment Acquisition of intangible assets

Acquisition of business

Cash flows from investing activities Cash flows from financing activities Dividend on ordinary shares Proceeds from borrowings Repayment of loans Financing received Leasing financing paid

Cash flows from financing activities

Net change in cash and cash equivalents

Cash and cash equivalents at start of the period Effect of exchange rate fluctuations on cash and cash equivalents

Cash and cash equivalents at end of the periodQ4

Q4

2020 SEK '000

2019 SEK '000

56 080

40 340

(704)

(279)

9 142

(3 040)

3 277 104 816

(119 792)

25 604

691

196 989

  • 6 074

  • 1 214 215 596 (28 117) (8 450) 179 029

565

3 040

(18 679)

450 - (14 624)

(61 763)

76 461

(81 039)

-

(33 265)

(99 606)

64 799

539 260

(555)

603 504

74 960

41 031

18

(871)

19 408

(848)

1 603 135 301

(140 842)

68 943

(53 233)

43 813

(4 657)

(3 649) 45 676

(23 493) (19 196)

2 987

620

801

(84 922)

(991)

(20 813)

(105 305)

- 453 716 (22 340)

- (22 232)

409 144

306 826

209 793

2 742

519 361

Twelve months 2020 SEK '000

275 565

175 753

  • 1 454

  • 1 379

59 169

(11 914)

5 415 506 821

(93 322)

(175 222)

35 534

543 300

8 170

(2 542) 822 739 (71 363) (58 833) 692 543

2 729

11 908

(59 654)

(1 718)

- (46 735)

(61 763)

466 489

(868 882)

-

(113 651)

(577 807)

68 001

519 361

16 142

603 504

Twelve months 2019 SEK '000

318 356

136 305

  • 8 934

  • 7 023

58 148

(6 458)

(12 458) 509 850

(483 726)

70 515

(62 292)

(218 130)

  • (1 865)

  • (2 008)

(187 656)

(85 143) (57 565)

(330 364)

  • 2 119

  • 6 395

(162 242)

(4 310)

(20 813)

(178 851)

(108 993)

1 276 497

(474 553)

70 018

(73 249)

689 720

180 505

356 589 (17 733) 519 361

Key Ratios

Q4 2020

Q4 2019

Twelve months 2020

Twelve months 2019

Revenue, SEK'000 Revenue growth, %

1 184 647 23.4%

960 137 -5.8%

4 634 726

3 747 142

23.7% 15.6%Gross margin, % EBITDA, SEK'000 EBITDA margin, % Operating profit, SEK'000 Operating margin, %

Result for the period, SEK'000 Undiluted earnings per share, SEK Diluted earnings per share, SEK

15.8%

21.0%

17.2% 20.7%

105 799

136 154

503 988

493 893

8.9%

14.2%

10.9%

13.2%

65 459

95 123

328 235

357 588

5.5%

9.9%

7.1%

9.5%

44 297

57 455

221 692

250 819

3.05

3.95

15.25 17.26

3.05

3.95

15.25 17.26

Net debt/(cash), SEK'000 Net debt/EBITDA, x Capital employed, SEK'000 Return on capital employed, % Working capital, SEK'000 Working capital/Revenue, %

(20 051)

593 081

(20 051)

593 081

(0.0)

1.2

(0.0)

1.2

1 389 854

2 002 784

1 389 854

2 002 784

20.0%

26,8%

20,0%

26,8%

212 708

733 923

212 708

733 923

4.6%

19.6%

4.6%

19.6%No. of employees at close of period

1 469

1 239

1 469

1 239

Ferronordic presents certain key ratios in its interim reports which are not defined according to IFRS. The company considers these ratios to provide valuable supplementary information for investors and the company's management as they enable the assessment of relevant trends.

Ferronordic's definitions of these measures may differ from other companies' definitions of the same terms. These ratios should therefore be seen as a supplement rather than as a replacement for measures defined according to IFRS. The definition and purpose of each key ratio are presented on page 27.

Parent Company Income Statement

Q4 2020 SEK '000

Q4 2019 SEK '000

Twelve monthsTwelve months

2020 SEK '000

2019 SEK '000

Revenue Other income Cost of sales Gross profit Administrative expenses Operating profit Finance income Finance costs

Foreign exchange gains/(-losses) (net)

Result before income tax

Income tax

Result for the period

19 6012 339(14 873)

7 067(12 225)

(5 158)11 818

(723)(128)

5 808

884

6 692

The total comprehensive result for the period is the same as the result for the period.

51 975 - (45 859)

6 115 (5 036) 1 079 9 (45) (254) 789 (300) 490

116 306 2 339 (96 373) 22 272 (30 389)

(8 116) 13 095 (863) (9 293)

144 100 - (121 764)

22 337 (15 126)

7 210 155 (181) (7 268)

(5 178) (84)

3 082 (309)

(2 096)

(393)

Parent Company Balance Sheet

31 December

31 December

2020

2019

SEK '000

SEK '000

ASSETS Non-current assets

Intangible assets

768

993

Property, plant and equipment

-

-

Financial assets

Holdings in group companies

163 908

158 785

Loans to group companies

2 597

2 638

Deferred tax assets

20 106

17 024

Total financial assets

186 611

178 447

Total non-current assets

187 379

179 440

Current assets

Trade and other receivables

36 316

81 839

Prepayments

634

823

Cash and cash equivalents

16 733

39 327

Total current assets

53 683

121 989

TOTAL ASSETS

241 062

301 428

EQUITY AND LIABILITIES

Equity

Restricted equity

Share capital

1 297

1 297

Unrestricted equity

Share premium reserve

625 148

622 148

Retained earnings

(444 060)

(381 905)

Result for the period

(2 096)

(393)

TOTAL EQUITY

180 290

241 148

Current liabilities

Borrowings

32 725

-

Trade and other payables

28 047

60 280

Total current liabilities

60 772

60 280

TOTAL LIABILITIES

60 772

60 280

TOTAL EQUITY AND LIABILITIES

241 062

301 428

Basis of presentation and summary of significant accounting policies

1. Accounting Policies

Ferronordic applies the International Financial Reporting Standards (IFRS) as adopted by the EU. This report has been prepared in accordance with IAS 34, the Swedish Annual Accounts Act and recommendation RFR 2 (only parent company), issued by the Swedish Financial Reporting Board.

Ferronordic has changed its accounting policies in respect of operating segments. For details please see Note 1 Operational segments and revenue.

Other new or revised standards that come into effect 2020 or later are not expected to have any significant effect on Ferronordic's financial statements.

Except as described above, the same accounting and valuation principles were applied in the preparation of this report as in the preparation of the 2019 annual report (with regard to the 2019 financial year).

2.

Determination of fair values

The basis for determination of fair value of financial assets and liabilities is disclosed in note 5 in the 2019 annual report. The fair values of the Group's financial assets and liabilities approximate their respective carrying amounts.

3.

Seasonal Variations

Ferronordic's revenue and earnings are affected by seasonal variations in the construction industry in Russia/CIS. Q1 is typically the weakest for sales of machines as activity in construction projects is constrained during the winter months. On the other hand, the demand in aftermarket (sales of parts and services) is usually strong since many customers use the quiet period to service their machines. This is usually followed by an increase during Q2 as contracts start to be put out for tender and customers prepare for the more active summer period. Q3 tends to be slower with regard to both machine sales and aftermarket. In Q4, activity usually strengthens as customers make year-end capital spending decisions. In Germany, seasonal trends are less significant.

4.

Ferronordic AB (publ)

Ferronordic AB (publ) and its subsidiaries are sometimes referred to as the Group or Ferronordic. Ferronordic AB (publ) is also sometimes referred to as the company or Ferronordic. Any mentioning of the Board is a reference to the Board of Directors of Ferronordic AB (publ).

Notes 1.

Operational segments and revenue

(i)Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The chief operating decision-maker, who is responsible for allocating resources and assessing financial performance of the operating segments, has been identified as the Group Executive Management Team. Until 2019, the Group had one reportable segment: Equipment Distribution. Starting from Q1 2020, and following the Group's expansion of its operations to Germany, the Group recognises two separate reportable segments: Russia/CIS and Germany. The new segments are partly managed separately due to differences in markets, logistics, supply chains, products, customers and marketing strategies. For each segment, the Group's management reviews internal reports on at least a monthly basis. Russia/CIS comprises of sales of new and used construction and other equipment, aftermarket sales, rental, contracting services and other services in Russia and CIS (the Commonwealth of Independent States) and currently in Russia and Kazakhstan. Germany comprises of sales of new and used trucks, aftermarket sales, rental and other services in Germany. The accounting policies of the segments are the same as described in Note 4 of the annual report 2019. Group overhead costs, such as Group executive management costs, are allocated between the segments using principles set forth by the CODM. Information regarding the results of each segment is included below. The performance of each segment is mainly evaluated based on revenue, gross profit, gross margin, EBITDA, operating profit and operating margin, as included in internal management reports that are reviewed by the Group's Executive Management Team. The Group had no inter-segment revenues during the periods presented.

The Group did not disclose operating segments in its financial statements for 2019 and earlier. Due to the recognition of the reportable segments, the Group has restated the previously reported financial statements for the three and twelve months that ended on 31 December 2019 and as at 31 December 2019.

Russia/CIS

Germany

TotalSEK'000

Q4 2020 SEK '000

Q4 2019 SEK '000

Q4 2020 SEK '000

Q4 2019 SEK '000

Q4 2020 SEK '000

Q4 2019 SEK '000

External revenue Gross profit EBITDA Operating profit Profit(loss) before tax Result for the period Gross margin Operating margin

951 269

950 158

168 963

200 236

233 378 18 042

9 979 1 440

1 184 647

960 137

187 005

201 676

121 740

136 187

  • (15 941)

    90 511

    95 156

  • (25 052)

(33) (33)

105 799

136 154

65 459

95 123

56 080

74 960

17.8% 9.5%

21.1% 10.0%

7.7% -10.7%

14.4% -0.3%

44 297 15.8% 5.5%

57 455 21.0% 9.9%

Russia/CIS

Germany

TotalSEK'000

Twelve months 2020 SEK '000

Twelve months 2019 SEK '000

Twelve months 2020 SEK '000

Twelve months 2019 SEK '000

Twelve months 2020 SEK '000

Twelve months 2019 SEK '000

External revenue Gross profit EBITDA Operating profit Profit(loss) before tax Result for the period Gross margin Operating margin

3 651 930

3 737 163

713 756

773 490

532 739

493 926

394 430

357 621

982 796 83 688 (28 751) (66 195)

9 979 1 440

4 634 726

3 747 142

797 444

774 930

(33) (33)

503 988

493 893

328 235

357 588

275 565

318 356

19.5% 10.8%

20.7% 9.6%

8.5% -6.7%

14.4% -0.3%

221 692 17.2% 7.1%

250 819 20.7% 9.5%

Russia/CIS

Germany

Inter-segment

Total

31 December 2020 SEK'000

31 December 2019 SEK'000

31 December 2020 SEK'000

31 December 2019 SEK'000

31 December 2020 SEK'000

31 December 2019 SEK'000

31 December

2020 SEK'000

31 December 2019 SEK'000

TOTAL ASSETS TOTAL LIABILITIES

2 171 964 1 320 620

2 624 206 1 733 968

463 900 503 204

353 388 353 284

(8 238) (2 599)

- -2 627 626 1 821 225

2 977 594 2 087 252

(ii)

RevenueDisaggregation of revenue

Russia/CISSEK'000

Q4 2020 SEK '000

Q4 2019 SEK '000

Germany Q4 2020 SEK '000

Q4 2019 SEK '000

Total Q4 2020 SEK '000

Q4 2019 SEK '000

Equipment and trucks sales Aftermarket sales Contracting services Other revenue Total revenues

618 462

589 457

144 794

0

763 256

589 457

204 662

244 129

62 636

9 979

267 298

254 108

124 738

108 107

0

0

124 738

108 107

3 407

8 465

25 948

0

29 355

8 465

951 269

950 158

233 378

9 979

1 184 647

960 137

SEK'000

Russia/CIS Twelve months 2020 SEK '000

Germany

TotalTwelve months 2019 SEK '000

Twelve months 2020 SEK '000

Twelve months 2019 SEK '000

Twelve months 2020 SEK '000

Twelve months 2019 SEK '000

Equipment and trucks sales Aftermarket sales Contracting services Other revenue Total revenues

2 305 594

2 418 302

628 556

0

2 934 150

2 418 302

864 459

915 075

268 867

9 979

1 133 326

925 054

460 984

378 075

0

0

460 984

378 075

20 893

25 711

85 373

0

106 266

25 711

3 651 930

3 737 163

982 796

9 979

4 634 726

3 747 142

In Russia/CIS, equipment and trucks sales include sales of new and used construction equipment, attachments and diesel generators. Aftermarket sales include sales of service and parts. Contracting services include only revenue from contracting services operations. Other revenue consist mainly of rental revenue.

In Germany, equipment and trucks sales include sales of new Volvo and Renault trucks, Renault light commercial vehicles and used trucks. Aftermarket sales include sales of service and parts. Other revenue consists mainly of rental revenue and also sale of passenger cars.

Russia/CIS

Germany

Total

Q4

Q4

Q4

Q4

Q4

Q4

Number of units sold

2020

2019

2020

2019

2020

2019

New units

289

247

162

-

451

247

Used units

76

66

11

-

87

66

Total units

365

313

173

-

538

313

Russia/CIS

Germany

Total

Twelve

Twelve

Twelve

Twelve

Twelve

Twelve

months

months

months

months

months

months

Number of units sold

2020

2019

2020

2019

2020

2019

New units

1 106

965

631

-

1 737

965

Used units

269

195

34

-

303

195

Total units

1 375

1 160

665

-

2 040

1 160

In Russia/CIS, new units include the full range of construction equipment and diesel generators. Used units include construction equipment and trucks.

In Germany, new units include Volvo and Renault trucks as well as sales of Renault light commercial vehicles. Used units include Volvo and Renault trucks, as well as other trucks and light commercial vehicles. Sales of passenger cars are included in other revenue and are not included in the new or used unit count.

2. Events after the reporting date

Information regarding events after the reporting date is set out in the front part of this report.

3.

Contingencies

The Group has no material contingencies. The parent company has issued a number of guarantees, all as security for the subsidiaries' obligations vis-à-vis suppliers and banks.

4.

Related party transactions

There have been no significant changes in the relationships or transactions with related parties for the Group or the parent company compared with the information disclosed in the 2019 Annual Report.

5.

Earnings per share

The calculation of earnings per share is based on the result attributable to the shareholders and thus is calculated as the result for the period divided by the average number of shares outstanding.

Q4 2020 SEK '000

Q4 2019 SEK '000

Twelve monthsTwelve months

2020 SEK '000

2019 SEK '000

Result for the period

44 297

57 455

221 692

250 819

Result attributable to shareholders Average number of shares during the period before and after dilution Earnings per share before and after dilution

44 297

57 455

221 692

250 819

14 532 434 3.05

14 532 434 3.95

14 532 434 15.25

14 532 434 17.26

The Board of Directors and the Managing Director declare that the report for the fourth quarter of 2020 provides a true and fair overview of the Group's and the parent company's operations, financial position and performance, and describes material risks and uncertainties facing the parent company and the companies in the Group.

Stockholm, 19 February 2021

Staffan Jufors

Magnus Brännström

Annette Brodin Rampe

Chairman

Director

Director

Lars Corneliusson

Erik Eberhardson

Håkan Eriksson

Director

Director

Director

Lars Corneliusson

Managing Director

This report has not been reviewed by the Group's independent auditors.

About Ferronordic

Ferronordic is a service and sales company in the areas of construction equipment and trucks. It is the dealer of Volvo Construction Equipment and certain other brands in all of Russia and Kazakhstan, aftermarket partner of Volvo Trucks and Renault Trucks in part of Russia, and dealer of Volvo Trucks and Renault Trucks in part of Germany. The company also offers contracting services where it owns and operates equipment to carry out works for customers. Ferronordic began its operations in 2010 and now has more than 90 outlets and about 1,400 employees. Ferronordic's vision is to be regarded as the leading service and sales company in its markets. The shares in Ferronordic AB (publ) are listed on Nasdaq Stockholm.

www.ferronordic.com

Financial Calendar 2021/2022

Interim report January-March 2021

12 May 2021

Annual General Meeting 2021

12 May 2021

Interim report January-June 2021

12 August 2021

Interim report January-September 2021

12 November 2021

For more information, please contact:

Erik Danemar, CFO, Tel: +46 73 660 72 31, or email: erik.danemark@ferronordic.com

Ferronordic AB (publ)

Nybrogatan 6 114 34 Stockholm

Corporate ID no. 556748-7953 Phone: +46 8 5090 7280

This information is information that Ferronordic AB (publ) is obliged to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication on 19 February 2021, 07:30 CET.

Financial information for individual quarters

The financial information below regarding individual quarters during the period 1 January 2018 - 31 December 2020 is collected from Ferronordic's interim reports for the relevant quarters.

Key ratios

Certain key rations in Ferronordic's interim reports are not defined according to IFRS. The company considers these ratios to provide valuable supplementary information for investors and the company's management as they enable the assessment of relevant trends. Ferronordic's definitions of these measures may differ from other companies' definition of the same terms. These ratios should therefore be seen as a supplement rather than as a replacement for measures defined according to IFRS. As the amounts in the tables below have been rounded off to SEK m, the calculations do not always add up due to rounding.

Key ratios defined according to IFRS

SEK m (if not stated otherwise)

Revenue

Result for the period

Basic and diluted earnings per share (SEK)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2018

2018

2018

2018

2020

2020

2020

2020

614

817

791

1 019

  • 723 1 100

    • 964 960

      46

    • 73 74 57

  • 3.19 5.03

  • 5.09 3.95

1 118

1 203

1 129

1 185

30

54

61

64

20

76

81

44

1.93

2.71

4.17

4.40

1.39

5.24

5.57

3.05

Key ratios not defined according to IFRS

SEK m (if not stated otherwise)

Revenue growth (%)

Gross margin (%) EBITDA

EBITDA margin (%)

Results from operating activities Operating margin (%)

Net debt / (cash)

Net debt/EBITDA (x) Capital employed

Return on capital employed (%) Working capital

Working capital/Revenue (%)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2018

2018

2018

2018

2020

2020

2020

2020

18%

35%

22% (6%)

20.2%

20.1%

21.4% 21.0%

82

126

150 136

11.3%

11.4%

15.6% 14.2%

56

98

109 95

7.7%

8.9%

11.3% 9.9%

(59)

446

  • 411 593

    (0.2x)

    1.1x

  • 0.9x 1.2x

    1 101

    1 376

  • 1 457

    2 003

    33%

    33%

  • 34% 27%

    283

    655

  • 675 734

    8%

    18%

  • 18% 20%

11%

4%

26%

68%

55%

9%

17%

23%

19.0%

19.3%

20.3%

17.6%

16.3%

17.2%

19.6%

15.8%

48

77

91

105

99

152

147

106

7.8%

9.5%

11.5%

10.3%

8.9%

12.6%

13.0%

8.9%

41

68

80

84

51

105

107

65

6.7%

8.3%

10.1%

8.3%

4.6%

8.7%

9.5%

5.5%

(264)

(204)

(298)

(303)

531

230

83

(20)

(1.2x)

(0.9x)

(1.1x)

(0.9x)

1.0x

0.4x

0.2x

0x

688

630

654

710

1 952

1 846

1 470

1 390

34%

37%

40%

41%

23%

23%

25%

20%

181

162

64

47

660

476

354

213

7%

6%

2%

1%

13%

10%

8%

5%

Reconciliation of key ratios

The tables below show reconciliations of certain important key ratios.

Net debt / (Net cash)

SEK m (if not stated otherwise)

Long term borrowings

Long term lease liabilities

Long term lease liabilities (after IFRS 16)

Short term borrowings Short term lease liabilities

Short term lease liabilities (after IFRS 16)

Total Interest bearing liabilities Cash & cash equivalents

Net debt / (cash)

Net debt / EBITDA (times)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2018

2018

2018

2018

2020

2020

2020

2020

0

0

0 205

25

60

86 110

53

51

56 62

215

462

397 639

26

38

53 64

23

25

28 32

0

0

0

0

410

349

321

351

20

23

17

28

95

79

53

32

0

0

0

0

64

56

47

39

0

0

0

0

525

400

122

84

21

23

23

26

41

43

44

44

0

0

0

0

34

36

35

33

41

46

40

54

342 402

635 189

  • 620 1 112

  • 210 519

1 169

963

622

583

306

250

338

357

639

733

539

604

(264)

(204)

(298)

(303)

(59)

(0.2)

446 1.1

411 0.9

593 1.2

531

230

83

(20)

(1.2)

(0.9)

(1.1)

(0.9)

1.0

0.4

0.2

(0.0)

Capital employed

SEK m (if not stated otherwise)

Long term interest bearing liabilities Short term interest bearing liabilities Shareholder equity

Capital employed

Average capital employed EBIT

Interest income Result LTM

Return on capital employed (%)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2018

2018

2018

2018

2020

2020

2020

2020

20

23

17

28

78 264 758

111 524 741

  • 142 377

  • 478 735

  • 837 890

569

484

421

422

21

23

23

26

600

480

202

161

647

584

614

656

783

883

848

806

688

630

654

710

1 101

  • 1 376

    • 1 457

      • 2 003

        895

  • 1 003

    • 1 055

    • 1 356

    56

    98

    109 95

    2

    2

    1 1

    297

    327

33%

33%

355 364 34% 27%

1 952

1 846

1 470

1 390

595

554

587

681

1 526

1 611

1 464

1 696

41

68

80

84

51

105

107

65

1

1

2

3

2

5

2

3

205

208

234

281

359

368

368

340

34%

37%

40%

41%

23%

23%

25%

20%

Working capital

SEK m (if not stated otherwise)

Inventory

Trade and other receivables Prepayments

Trade and other payables Deferred income Provisions Working capital

Revenue LTM

Working capital / Revenue (%)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2018

2018

2018

2018

2020

2020

2020

2020

691

712

755

741

1 295

358

20

1 360 489 36

1 168

1 290

351 322

31 84

1 362

1 191 830 917

15

14

15 24

23 21

23 22

1 293

1 134

956

1 014

245

342

258

303

575

436

433

393

16

13

14

17

46

27

39

37

745

877

935

982

1 211

1 076

1 038

1 188

12

14

14

15

19

19

17

19

12

14

15

17

23

27

20

26

181

162

64

47

283 3 350 8%

655 3 633 18%

675 3 806 18%

734 3 747 20%

660

476

354

213

2 630

2 663

2 828

3 241

4 969*

4 765*

4 650*

4 635

7%

6%

2%

1%

13%

10%

8%

5%

* For the calculation of this ratio, annualised revenue was used for Germany

Definitions of and purposes of alternative key ratios not defined by IFRS

New units sold: Number of new machines and trucks sold.

Used to measure and compare number of new units sold during relevant period.

Revenue growth: Growth in revenue compared to the same period last year, expressed in percentage.

Used for comparison of growth between periods as well as comparisons with the market as a whole and with the company's competitors.

Gross margin: Gross profit in relation to revenue.

Provides a measurement of the contribution from the ongoing business.

EBITDA: Operating profit activities excluding depreciation, amortisation and write-downs.

Provides a measurement of the result from the ongoing business.

EBITDA margin: EBITDA in relation to revenue.

Relevant key ratio in evaluating the Group's value creation.

Operating profit: Result before financial items and taxes.

Provides a measurement of the result from the ongoing business.

Operating margin: Operating profit in relation to revenue.

Relevant key ratio in evaluating the Group's value creation.

Net debt / (Net cash): Interest-bearing liabilities (including lease liabilities) less cash and cash equivalents.

Provides a measurement for the Group's net debt position.

Net debt / EBITDA: Net debt / (net cash) in relation to EBITDA for the last twelve months.

Shows to what extent EBITDA covers net debt. Used to evaluate financial risk.

Capital employed: Total equity and interest-bearing liabilities.

Shows the capital invested in the Group's business.

Return on capital employed: Adjusted EBIT plus financial income (for the last twelve months) in relation to capital employed (average during the last twelve months).

Shows how effectively the capital employed is used.

Working capital: Current assets excluding cash and cash equivalents, less non-interest bearing current liabilities.

Shows the amount of working capital tied up in the ongoing business.

Working capital / Revenue: Working capital in relation to revenue during the last twelve months.

Shows how effective the working capital is used in the business.

Disclaimer

Ferronordic Machines AB published this content on 19 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 February 2021 08:39:04 UTC.


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Sales 2022 5 947 M 528 M 528 M
Net income 2022 137 M 12,2 M 12,2 M
Net Debt 2022 405 M 36,0 M 36,0 M
P/E ratio 2022 3,38x
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Capitalization 443 M 39,4 M 39,4 M
EV / Sales 2022 0,14x
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Nbr of Employees 1 818
Free-Float 63,6%
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Last Close Price 30,50 SEK
Average target price 59,50 SEK
Spread / Average Target 95,1%
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Lars Corneliusson President, Chief Executive Officer & Director
Erik Danemar Chief Financial Officer & Head-IR
Staffan Jufors Chairman
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