Ferronordic (FNM) CMD 2024 summary

Strategic Direction and Business Model

• Operates a scalable model with strong OEM relationships, focusing on organic growth and bolt-on acquisitions in the US and turnaround in Germany.

• Sustainability and electrification are integrated, with growing electric truck sales and ESRS/CSRD preparations.

• Service and parts absorption rate of at least one remains a core objective, ensuring aftermarket gross profit covers fixed costs.

• Expansion into related business areas, digital service platforms, and geographic growth are prioritized.

• Experienced management and a diverse board support execution and value creation.

M&A and Expansion

• M&A strategy targets cultural fit, value addition, growth potential, and scale advantages.

• US entry via Rudd Equipment acquisition leverages a strong dealer network and high infrastructure demand.

• US expansion focuses on organic growth, network improvements, and potential further acquisitions.

• German operations aim for network expansion, market share growth, and efficiency improvements.

• Cost reduction program in Germany achieved SEK 60 million annual savings by Q2 2024.

Market and Operational Highlights

• US: Rudd Equipment operates 13 branches in 9 states, serving construction, mining, and infrastructure projects.

• US growth opportunities include increasing market share in excavators, expanding rental fleet, and boosting service/parts sales.

• Germany: Service and parts sales up 126% from 2020 to 2023; network expansion and efficiency drive future growth.

• Electric trucks expected to reach at least 20% of new registrations in Germany by 2028, with leadership ambitions and pilot projects underway.

• Aftermarket business leverages digital tools, service contracts, and connectivity for productivity and customer retention.