Ferronordic (FNM) Q3 2024 earnings summary

Executive summary

• Group revenue rose 77% year-over-year to SEK 1,141 million, mainly due to the US acquisition and strong US performance.

• US segment contributed SEK 686 million in revenue and SEK 53 million in operating profit.

• German segment faced a 35% revenue decline and a 60% drop in new truck deliveries due to a 40% market contraction.

• Operating profit reached SEK 2 million; excluding a SEK 31 million inventory impairment in Germany, operating profit was SEK 32 million.

• Net income was SEK -88 million, mainly due to significant foreign exchange losses and higher finance costs.

• Net debt increased to SEK 1,792 million, mainly from the US acquisition and rental fleet expansion.

Financial highlights

• Total revenue: SEK 1,141 million (+77% YoY); gross profit: SEK 204 million (+171% YoY); gross margin: 17.9% (+6.2pp YoY).

• Operating profit: SEK 2 million (SEK 32 million excluding German impairment); operating margin: 0.1%.

• Net income: SEK -88 million, mainly due to FX losses; EPS: SEK -6.07.

• SG&A up 72% YoY, reflecting US business integration; SG&A/revenue at 16.3%.

• Q3 cash flow from operations: SEK 427 million; Q3 cash and equivalents: SEK 360 million.

Outlook and guidance

• Optimism for continued US growth, supported by infrastructure investments and large construction projects.

• German market remains weak, but cost reductions and a leaner organization provide stability; long-term normalization expected.

• Kazakhstan seen as a small but promising market for future growth.

• New financial targets: double 2024 revenue by 2029, operating margin above 6%, net debt/EBITDA below 3x.