Ferronordic Ab · OMXSTO:FNM
Ferronordic Ab — Q2 2022 Earnings Presentation
18 slides from Ferronordic Ab's earnings presentation, Aug 17, 2022
Slide 1: Second quarter 2022
~~ FERRONORDIC Second quarter 2022 August 2022
Slide 2: Evaluating strategic options
Evaluating strategic options Group • Business in Russia impacted by conflict in Ukraine with operating conditions becoming increasingly difficult • Revenue growth of 6% to SEK 1,691m, partly due to currency effects Russia/CIS • Equipment sales in units decreased by 64% • Revenue decreased by 20% in
Slide 3: The conditions for our business in Russia have continued to deteriorate
Q2 2022 The conditions for our business in Russia Evaluating strategic options have continued to • The conditions for our business in Russia have continued to deteriorate deteriorate • Further sanctions have been introduced and Volvo and other key partners keep sales to Russia suspended • We take al
Slide 4: Group summary financials
Q2 2022 Group summary financials SEK 1,691m Group revenue +6% to SEK 1,691m (+6%) revenue • Russia/CIS revenue -20% in local currency but +5% in SEK 1,315m • Equipment sales -32% (-48% in RUB), aftermarket sales +43% (+10%) and contracting services +98% (+52%) • German revenue +12% to SEK 375m (+8%
Slide 5: Russia/CIS operational highlights
Q2 2022 -32% Russia/CIS operational highlights in equipment sales (-48% in RUB) • In Q2 2022, the market for construction equipment declined by 37%1 • After 24 February and into April in Q2 2022, demand and prices remained firm, partly supported by customer efforts to manage risks from ruble volatil
Slide 6: Germany operational highlights
Q2 2022 German trucks Germany operational highlights market declined 6% Y-o-Y • Based on registrations of new trucks, the total German market for heavy trucks declined by 6% in Q2 20221 • Rigids declined by 16% while tractors grew by 3% • Supply remains constrained, which holds back market growth Af
Slide 7: Business development
Business development Marketing of electric Germany trucks from both • Marketing of electric trucks from both Volvo and Renault Trucks Volvo and Renault • Plans to launch a rental business for electric trucks, with a vision to offer Trucks sustainable transport services for our customers. • Continued
Slide 8: German network expansion
German network expansion Fulda • Transaction closed in January 2021 Limburg • Transaction closed in April 2021 Hannover Nordhausen Barleben • Transaction closed in June 2021 Dessau Nordhausen Service and sales hub in Hannover Leipzig Bautzen • Greenfield Kassel Görschen Dresden • Investments in 2021
Slide 9: Economic development
Economic development • Russia Russia’s economy • -4.0% GDP in Q2 20221 -4.0% in Q2 2022 • -6.0% GDP expected in 20222 • -3.5% GDP expected in 20232 • June inflation increased to 15.9% compared to 6.5% in 20213 Ruble appreciated 24% • Since April, the Central Bank has lowered the key rate 4 times: tw
Slide 10: Income statement
Q2 2022 Income statement Q2 2021 Q2 2021 Q2 2021 Q2 2022 Q2 2022 Q2 2022 % change • Total revenue of SEK 1,691m SEK MM Russia / Germany Group Russia / Germany Group Group o 78% Russia/CIS and 22% Germany CIS CIS FX (SEK/RUB, o 46% equipment and trucks, 28% 8.82 10.14 6.74 10.47 EUR/SEK) aftermarket,
Slide 11: Cash flows
Q2 2022 Cash flows • In Q2 2022, cash flows from operating Q2 2021 Q2 2022 Q2 2022 Q2 2022 activities decreased to SEK 39m (120) SEK MM Group Russia/CIS Germany Group • Lower cash flows were partly a result of an Cash flow from: increase in working capital from SEK140m to SEK 917m Y-o-Y as payables
Slide 12: Balance sheet
Q2 2022 Balance sheet SEK MM Q2 2021 Q1 2022 Q2 2022 • Assets and liabilities significantly affected by appreciation of RUB against FX (SEK/RUB, EUR/SEK) 8.54, 10.12 9.06, 10.34 5.04, 10.68 SEK 44% Q-o-Q and 41% Y-o-Y Property, plant and equipment 766 950 1,301 • PP&E increased Q-o-Q mainly due to R
Slide 13: Russia standalone financial statements
Russia standalone financial statements Q1 2022, Q2 2022 and preliminary July 2022 SEK MM Q1 2022 Q2 2022 31 Jul 2022 SEK MM 31 Jul 2022 FX (SEK / RUB) 9,06 5,04 6,03 FX (SEK / RUB) 5,59 ASSETS New units 22 Non-current PPE 529 829 721 Used units 23 Current: Total revenue 392 Inventories 861 977 732 E
Slide 14: NAV Russia 30 June 2022
SEKm 0 1 000 2 000 3 000 4 000 Cash and equivalents 345 Trade and other 729 receivables EBIT Q4 19 New (134m) and used 215 (81m) machine inventory Parts (634m) and other 763 (119m) inventory Contracting Services 477 PPE Other PPE 352 Other assets 499 Trade and other payables 982 NAV Russia 30 June 2
Slide 15: Financial objectives and dividend policy
Financial objectives and dividend policy Subject to potential review KPI Objective Last Twelve months (LTM) Double the 2020 revenue in its 1.5 x Revenue 1 current markets by 2025 (in SEK) 2020 revenue Operating margin Above 7% 7.6% Below 3 times (over a business Net debt / EBITDA 0.9 x cycle) The am
Slide 16: Outlook
Outlook The prospects for our operations in Russia continue to deteriorate. Business conditions are becoming increasingly difficult and we explore all strategic options. Our operations in Kazakhstan continue but are so far a smaller part of sales. In Germany, we believe that a recovery from the pand
Slide 17: Evaluating strategic options
Evaluating strategic options Group • Business in Russia impacted by conflict in Ukraine with operating conditions becoming increasingly difficult • Revenue growth of 6% to SEK 1,691m, partly due to currency effects Russia/CIS • Equipment sales in units decreased by 64% • Revenue decreased by 20% in
Slide 18: Ferronordic
n~ FERRONORDIC