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Company PresentationMay 2020
Introduction to Ferronordic
2
Employees
Revenue (SEKm)1)
Outlets
2010 (start)
~160
1,184
6
Q1 2020
1,416
4,142
101
DevelopmentOverview
New machine revenue per customer type (2019)
Introduction to Ferronordic
Mining23%
General Construction and
Other28%
Forestry14%
Road Construction
18%
Quarries & Aggregates
12%
Oil & Gas5%
Russia/CIS Dealer of Volvo Construction Equipment Dealer of Terex, Dressta, Rottne and Mecalac Aftermarket dealer for Volvo Trucks and Renault
Trucks in parts of Russia Dealer for Volvo Penta in parts of Russia Sales of new and used construction equipment Service and technical support Sales of used trucks Growing contracting services business CIS markets currently include Kazakhstan2)
Germany Dealer of Volvo Trucks and Renault Trucks in parts
of Germany Sales of new and used trucks Service and technical support
Group Founded in 2010 Listed on Nasdaq Stockholm since 2017
1) Annualized.2) In Kazakhstan Ferronordic is a dealer of Volvo CE and Mecalac.
Strategic objectives
3
Value pyramid
Huge market at the edge of recovery
Population: ~144 million1)
Area: 16.4 million sq. km1)
Rich in oil and minerals World’s largest forest land A significant portion of the Federal Government income relates
to oil and gas Strong balance sheet and approx. USD 563 billion2) in
international currency reserves plus USD 120 billion in gold2)
12.5% government debt/GDP ratio (nominal 2019)
4
Russia at a glance Russia’s GDP development5)
Gold reserves (% of total)4)Coal reserves (% of total)3)Natural gas production (% of total)3)Oil production (% of total)3)
Sources: 1) World Bank 2) Russian Central Bank 3) BP Statistical Review of World Energy, June 2019 4) U.S. Geological Survey, Mineral Commodity Summaries, February 2020 5) Including the World Bank, IMF and OECD.
16,2%
13,0%12,1%
5,5% 5,0% 4,9% 4,2% 4,0%2,0%
USA
Saud
i Ara
bia
Russ
ia
Cana
da Iran
Iraq
UAE
Chin
a
Kaza
khst
an
21,5%
17,3%
6,2%4,8% 4,5% 4,2% 3,4% 3,1%
0,6%
USA
Russ
ia
Iran
Cana
da
Qat
ar
Chin
a
Aust
ralia
Nor
way
Kaza
khst
an
23,7%
15,2% 14,0% 13,2%
9,6%
3,5% 3,4% 3,3% 2,4%
USA
Russ
ia
Aust
ralia
Chin
a
Indi
a
Indo
nesia
Ger
man
y
Ukr
aine
Kaza
khst
an
20,0%
10,6%
6,4% 6,0% 5,2% 4,8% 4,2% 4,0%2,0%
Aust
ralia
Russ
ia
Sout
hAf
rica
USA
Indo
nesia
Braz
il
Peru
Chin
a
Kaza
khst
an
3,4%
1,3%0,6%
-3,8%
-0,7%
1,5% 2,3%1,3%
-5,5%
3,5%
2012 2013 2014 2015 2016 2017 2018 2019 2020e 2021e
Vast market with long term potential
Significant need to improve infrastructure
5
Road density in Russia and Kazakhstan is low Rail density is low tooRail density (km railway per 1,000 sq. km of land area)2)
Construction equipment market is expected to capitalize on the long-term growth in Russia and Kazakhstan
An important driver will be the need to improve aging infrastructure, the bulk of which was built in the Soviet era and needs to be upgraded
Russia is ranked 99 out of 141 countries in terms of road quality2)
Kazakhstan is ranked 93 out of 141 in terms of road quality2)
Signs that the government intends to create economic growth by increased infrastructure spending
Sources: 1) World Bank 2) Global Competitiveness Report 2019 3) Global Infrastructure Outlook, World Bank, Company estimates.
4 6 14 2343
67
129 132
172 180192
Kaza
khst
an
Russ
ia
Cana
da
Finl
and
Chin
a
USA
Swed
en
Pola
nd UK
Ger
man
y
Fran
ce
5 5 6 717 20 24
5361
75
96
122
Russ
ia
Cana
da
Kaza
khst
an
Chin
a
USA
Finl
and
Swed
en
Fran
ce
Pola
nd
Slov
akia
Ger
man
y
Czec
h Re
p.
Significant need to improve infrastructure
0%
1%
2%
3%
4%
5%
0
10
20
30
40
50
60
70
2015 2016 2017 2018 2019e 2020e 2021e 2022e
USD
b
Prevailing investment level Investment gapPrevailing investment as % of GDP Total investment needed as % of GDP
High need for increased infrastructure investmentInfrastructure spending levels in relation to GDP3)
Road density (km road per 100 sq. km land area)1)
Strategic objectives
6
National Projects
National Projects
[USD 400 bln]
Demography
[USD 49 bln]
Roads
[USD 75 bln]
Infrastructure
[USD 100 bln]Housing,
trade, digital economy and
others
[USD 90 bln]
Healthcare
[USD 27 bln]
Environment
[USD 64 bln]
Total budget of USD 400 bln
Designed to transform the economy and promote economic growth
Remain the government’s priority despite the uncertainty caused by the outbreak of COVID-19
Almost half of the budget earmarked for infrastructure, including the road network
Planned investment into roads and infrastructure amounts to approx. 10% of GDP
Aim to transform regional roads to improve links between Russian cities
The railway program includes high-speed rail and increase of the freight capacity between key logistical hubs
Waterways development plan aims at growing sea port capacity and developing the Northeast Passage
63%20%
14%
2%
USD 175 bln
Roads Railways Waterways Airports
Source: Russian Government Information Bulletin, February 2019.
Pent-up demand
7
Import of construction equipment to Russia (units)
Import of construction equipment to Russia (units)
Source: Russian import statistics (until February 2020) compiled by Volvo CE.Note: Excluding Chinese brands, bulldozers, rigid dump trucks and forestry machines.
Young market – sales of high-quality construction equipment only took off 2006/2007
Mainly local machines of lower quality
Pent-up demand
Import of high-quality brands gains momentum
1 1311 685
2 655
4 436
13 525
17 489
1 649
8 004
18 627
21 009 20 573
13 568
3 5734 354
8 426
10 31011 766 11 978
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM
Market starts to recoverafter 2014-2015 economic
downturn
Pent-up demand
8
Heavy truck registrations in Germany (units)
Source: Germany registrations data compiled by Volvo Trucks (until March 2020). Federal Statistical Office Germany (Destatis).* Truck toll mileage index is a fixed base index that traces the development of the mileage of heavy trucks (with four or more axles) on German federal motorways and is calculated from digital process data from the truck toll collection system.
Germany - Europe’s largest truck market
67 797
40 322
48 827
60 21855 167 55 215
58 57461 940
65 280 66 441 68 450 70 26465 395
-8,0
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM
Heavy truck registrations Average truck toll mileage index*
Strategic objectives
9
Leadership within the market for construction equipment and trucks
Geographic expansion
Expansion into related business
areas
Further development of contracting
services
Aftermarket absorption rate of at least 1.0 x
Strategic objectives
Strategic objectives
10
Strategic cornerstones
OPERATIONAL EXCELLENCE
□ Strong teams and high employee engagement
□ Safety and sustainability
□ Continuous improvement of practices and processes
□ Business driven digitalisation solutions
□ Close cooperation with manufacturers
GREAT TEAM
CUSTOMER ORIENTATION
□ Customer centricity□ Leading service and product availability□ Tailored customer solutions (including contracting
services)□ Financial services offerings□ Developed trade-in system□ Fleet and residual value management
SUPERIOR INFRASTRUCTURE
□ High density network – many points of presence
□ Mobile workshops and service vans/trucks
□ Well equipped, purpose-build facilities in select locations
□ Infrastructure to be used for all brands and business areas
BUILD ON STRONG BRAND – VOLVO
□ World leading manufacturer of trucks and construction equipment
□ Leading brand position in Russia
□ Development through additional strong brands
Strategic objectives
11
UN Sustainable Development Goals
Zero injury objective 6,810 hours invested in
Health & Safety trainings
57,000 hours of training and development
Equal opportunities employer: proportion of women in management positions increased from 13% to 17%
Contributing to economic growth and social development
Contributing to employment in remote regions
Providing service and equipment for building critical infrastructure
Minimum emissions and waste
High-quality, long-life, fuel-efficient machines
Maximizing uptime for efficient production
Recycling (Component rebuild center)
Customer support, training and contracting services for most efficient use
Anti-corruption program consisting of policies, procedures, trainings and zero tolerance policy
Code of Conduct Swedish Corporate Governance Code
Strategic development
12
2010-2013: Phase I – establishing platform
2014-2016: Phase II – streamlining to handle market decline
2017 and onwards: Phase III – leveraging market recovery and company maturity
1 1841)
2 421 2 403 2 483
3.9%2.8%
3.6%
2010 2011 2012 2013
Revenue (SEKm) Operating margin
12 outlets326 FTEs
75 outlets731 FTEs
Processes and procedures established
Establishment of countrywide platform
Building market awareness and market share
2 335
1 4691 658
4.4%5.9%
7.9%
2014 2015 2016
Revenue (SEKm) Operating margin
75 outlets767 FTEs
73 outlets 782 FTEs
Increased aftermarket focus
Reduction of unprofitable outlets
NWC efficiency focus
Adding brands and services
Digitalisation focus
Leveraging existing organization
Growing contracting services
High market potential
Continued aftermarket focus
Expansion of geography and customer offering
1) Annualized 2) 2011-2016 refer to adjusted EBIT, i.e. operating profit excluding amortization of transaction-related intangible assets and write-downs of non-current assets in Q4 2016.
Strategic development
74 outlets 847 FTEs
79 outlets 1,032 FTEs
92 outlets 1,239 FTEs
2) 2)
101 outlets 1,416 FTEs
2 567
3 241
3 7474 142
7.3%8.4%
9.5%8.5%
2017 2018 2019 LTM
Revenue (SEKm) Operating margin
Product offering
13
Bran
dEx
ampl
e pr
oduc
tPr
oduc
tYe
arAr
ea
Product offering
~56% of Q1 2020 revenue ~10% of Q1 2020 revenue
Volvo CE
Full VCE range
2010 (Russia)2019 (Kazakhstan)
All of Russia &Kazakhstan
Dressta
Bulldozers and pipe layers
2016
All of Russia
Rottne
Forwarders and harvesters
2016
All of Russia
Gensets
Own labelled diesel generators
(gensets)
2014
All of Russia
Mecalac
Backhoe loaders
2017 (Russia)2019 (Kazakhstan)
All of Russia &Kazakhstan
Volvo & Renault Trucks
Aftermarket
2012
11 locations in Russia
Volvo & Renault Trucks
Full Volvo & Renault Trucks
range
2020
~20% of German market for heavy
trucks
~25% of Q1 2020 revenue
Nationwide coverage
14
(90) Ferronordic outlets in Russia and Kazakhstan as of March, 2020
Russia and Kazakhstan coverage
Khabarovsk
Krasnoyarsk
Ekaterinburg
St .Petersburg
Moscow
Krasnodar
Murmansk
PetrozavodskArkhangelsk
N.Novgorod
Artyom
Kazan
Vologda
Voronezh
Chelyabinsk
Tver
Perm
Norilsk
Novosibirsk
SurgutRostov-on-Don Sovetskiy
Velsk
Tyumen
Tula
Yaroslavl
RyazanBelgorod
Smolensk
SyktyvkarKoryazhma
ArmavirUfa
Bratsk
Neryungri
Noviy Urengoy
Kaluga
Yakutsk
Blagoveshchensk
Varna
Cherepovets
Penza
Belovo
VorkutaMagadan
Chita
Elga
Mar-Kuel
Labytnangi
Makhachkala Orenburg
Kyumba
Karpogory
Ust-Omchug
Yagodnoe
Velikiy Novgorod
VysochaishyKemerovo
Irkutsk
Saransk
Kirov
Naberezhnye Chelny
Tomsk
Cheboksary
Ust-Ilimsk
Abakan
Samara
Kirovsk
Egvekinot
Udachniy
Aldan
Almaty
Nevinnomyssk
Yuzhno-SakhalinskKaraganda
Sharya
Aktobe
Atyrau
Berezovskiy
Novotroitsk
Nationwide coverage
15
(11) Ferronordic outlets in Germany as of March, 2020
Germany coverage
• Ferronordic expanded to become dealer for Volvo and Renault Trucks in Germany in January 2020
• Germany is Europe’s largest trucks market with 70,000 registrations in 2019
• Ferronordic’s sales area covers approx. 20% of the German market for heavy trucks
• The area includes some of the busiest and most developed parts of Germany, like Hannover and Frankfurt Rhine-Main, the second largest metropolitan region in the country
• It also includes a large part of Eastern Germany with fast growing cities, like Leipzig and Dresden
Moving towards further customer integration
16
Com
plex
ity o
f cus
tom
er d
eman
d
Ferronordic offering
Aftermarket focus
17
Offering
• Spare parts delivery• Telematics - through Care-Track; fuel efficiency control,
operator efficiency, fleet management• Operator training• Preventive maintenance service• Planned and unplanned repair• Overhaul • Providing new life to older machines• Diagnostics of machines• Remanufacturing of vital parts
Share of sales (Q1 2020) - Russia/CIS
Machine sales61%
Aftermarket 26%
Contracting services12%
Other 1%
Aftermarket sales (SEKm)
Aftermarket focus
Aftermarket sales
• Proactive customer coverage based on real-time data from the existing machine population
• Proprietary system transforms machine telematicsignals (e.g. VCE’s CareTrack) into sales leads on the mobile devices of sales and service staff
• Ferronordic’s presence in all Russian regions allows for fast delivery of parts and timely customer support
Share of sales (Q1 2020) - Germany
Truck sales69%
Aftermarket 25%
Other 6%
0
100
200
300
400
500
600
700
800
900
1 000
2015 2016 2017 2018 2019 Q1 20Russia/CIS Germany
Focus on connectivity and digitalization to create additional sales
18
We are in the forefront of using a system that utilizes telematics systems to maximize sales and increase customer satisfaction and fleet efficiency
Focus on connectivity and digitalisation to grow sales
Contracting services
19
Integrating with our customers
• Part of strategy of becoming increasingly integrated in the business of our customers
• In addition to supplying and maintaining machines, we provide customers with operators to carry out specific works
• Current projects cover excavation and transportation of earth and rock for mining customers
• Payment is based on volume of earth and rock transported
• Common in other parts of the world but relatively undeveloped in our markets. We believe demand may grow
• Machines used by Contracting services are on Ferronordic’s balance sheet (PP&E)
• Contracting service projects should be ROIC accretive to Ferronordic
Ope
rato
rsM
achi
neSe
rvic
ePa
ymen
tsPa
rts
Traditional methodOutsourcing method:Contracting services
The customer
Cost of machine, parts and service
Provided by:
Volume based (per tonne, cubic meter, etc.)
or the customer
or the customer
Provided by:
Contracting services
Focus on connectivity and digitalization to create additional sales
20
Contracting services - case study
Client: GV Gold, top 10 gold mining company in Russia
Location: Irkutsk region, Golets Vysochaishy,Vysochaishy mine
Project staff: 143 people (as at end of March 2020)
Fleet size: 35 units (28 haulers, 1 grader, 6 excavators)
Component rebuild center
21
• Opened in Ekaterinburg in Q4 2019 • Rebuild of engines and gearboxes for Volvo
CE and Volvo and Renault Trucks• Chop-off and rebuild of machines planned• Part of the center’s capacity is expected to be
used by Ferronordic’s contracting services business
• Components to be resold to customers with a warranty from Ferronordic or installed in used machines in “Volvo Certified Rebuild” program
• Some negative impact on profitability and cash flows expected in 2019 and 2020
• Positive contribution from 2021• Expected to contribute 3-5% of total sales
over time• First components produced and sold in Q1
2020
Volvo and Renault Trucks Russia
22
• Authorised aftermarket dealer for Volvo and Renault Trucks in parts of Russia
Currently operating in 11 locations
Platform capacity utilization
Cross-selling and customer service
• Used trucks business launched in 2019
Purchasing, restoring and selling used trucks
Mainly Volvo and Renault Trucks
Small scale but with potential to grow
24 units sold in 2019
Potential synergies with Germany
Volvo and Renault Trucks Germany
23
• Authorised dealer for Volvo Trucks and Renault Trucks in parts of Germany
• Ferronordic services and sells Volvo and Renault trucks, trades and restores used trucks and manages a trucks rental business
• Ferronordic will invest to grow and improve network in area
• Plan to apply Ferronordic’s business model to grow revenue and profitability
• Opportunities to grow Volvo and Renault Trucks market shares and increase share of aftermarket sales and improve profitability
• 248 employees in Ferronordic Germany; mostly sales representatives and mechanics
Strong development despite low level market
241) 2011-2016 refer to adjusted EBIT, i.e. operating profit excluding (i) amortization of transaction-related intangible assets and (ii) write-downs of non-current assets in Q4 2016.
1)
Russia/CIS: Strong resilience and growth in market with upside
113% 110%
73%
19% 23%
45%55%
63% 64%100%
71%95%
109%92%
140%
199%
291%
381% 385%
99% 103% 96% 61%69%
106%
134%
155% 160%
0%
50%
100%
150%
200%
250%
300%
350%
400%
2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM
Inde
x =
100
in 2
011
Market (units) Operating profit (SEK) Revenue (SEK)
Revenue development
25
Revenue Operating profit and operating margin1)
1) 2015-2016 refer to adjusted EBIT, i.e. operating profit excluding amortization of transaction-related intangible assets and write-downs of non-current assets in Q4 2016.
Development of revenue and operating profit
87
132
187
274
358 353
5,9%
7,9%
7,3%
8,4%
9,5%8,5%
0%
5%
10%
15%
20%
0
50
100
150
200
250
300
350
400
2015 2016 2017 2018 2019 LTM
SEKm
1 4691 658
2 567
3 241
3 747
3 867
275
0
750
1 500
2 250
3 000
3 750
4 500
2015 2016 2017 2018 2019 LTM
SEKm
Russia/CIS Germany
4 142
Efficient capital usage
26
Working capital development Net debt/(cash) development
Capital expenditure development Comments• Focus on working capital efficiency and return on invested capital• Asset light core business. Contracting services more capital intense• Increased working capital in 2019 mainly due to inventory build-up,
partly due to transition to take over importation from Volvo• Capex increase in 2019 mainly driven by investment in machines for
contracting services and expansion to Germany in Q4 2019• Working capital and net debt decline in Q1 2020 despite expansion in
Germany• IFRS 16 lease liabilities of SEK 98m as at Q1 2020• Net debt/EBITDA at 1.0 x as at Q1 2020
Cash flow and capital allocation
283
655 675734
660
8%
18% 18%20%
13%
0%
5%
10%
15%
20%
25%
0100200300400500600700800
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
SEKm
NWC NWC as % of LTM revenue*
-59
446 411
593531
-200
0
200
400
600
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
SEKm
47
8196
187173
1%2% 3%
5%4%
0%
3%
5%
8%
10%
0255075
100125150175200
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
SEKm
LTM capex LTM capex as % of LTM revenue*
* LTM revenue for Germany was annualized and calculated as four times the first quarter revenue.
Return on capital employed
271) Operating profit plus financial income (LTM) in relation to capital employed (equity and interest-bearing liabilities) (average LTM)Note: 2014-2016 refer to adjusted EBIT, i.e. operating profit excluding amortization of transaction-related intangible assets and write-downs of non-current assets in Q4 2016.
Return on capital employed
8%
13%
18%
23%
28%
33%
38%
43%
48%
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20
Return on capital employed
• Decrease in 2019 related to working capital build-up and IFRS 16
• German expansion added assets at end of 2019
• Q1 2020 includes negative contribution from Germany
1)
Growth in Russia/CISStart of operations in Germany
Revenue and operating profit growth in Russia/CIS
Negative earnings impact from Germany in line with our expectations
Strong cash flows from operating activities
Disruption from COVID-19 seen in March expected to increase going forward
Measures taken to reduce costs and strengthen liquidity
28
55%revenue increase
9%operating profit
decline
4.6%operating margin
-56%EPS decrease
Q1 2020 Income statement
29
SEK MMQ1 2019 Group
Q1 2020 Russia /
CISQ1 2020 Germany
Q1 2020 Group
% change Group
New units sold 196 229 172 401 105%
Revenue 723 843 275 1,118 55%
Gross Profit 146 156 27 183 25%
% Margin 20.2% 18.5% 9.7% 16.3% -3.9pp
Operating profit 56 60 -10 51 -9%
% Margin 7.7% 7.2% -3.5% 4.6% -3.2pp
Result 46 20 -56%
EPS 3.19 1.39 -56%
EBITDA 82 100 -1 99 21%
Ferronordic to report Russia/CIS and German operating segments and disaggregate contracting services revenue
Total revenue of SEK 1,118m
75% Russia/CIS and 25% Germany
63% Equipment and trucks, 26% aftermarket and 9% contracting services
Gross margin declined 3.9pp to 16.3% on lower margins in equipment sales in Russia/CIS, lower share of aftermarket and consolidation of Germany
SG&A expenses as share of revenue was 11.5% in Q1 2020 vs.11.9% in Q1 2019
Operating margin declined to 4.6% and operating profit declined 9% to SEK 51m on negative contribution from Germany
Result lower on higher net finance costs and forex losses in Russia/CIS
Revenue and margin development
30
LTM revenue in Russia/CIS reached highest ever point of SEK 3.9b
Revenue from German operations contributed incremental SEK 275m
Q1 2020 consolidated gross margin declined by 3.9pp YoY to 16.3%
Q1 2020 consolidated operating margin1)
decreased by 3.2pp to 4.6%, mainly due to negative margin contribution from Germany
1) 2016 refer to adjusted EBIT, i.e. operating profit excluding amortization of transaction-related intangible assets and write-downs of non-current assets in Q4 2016.
0
1 000
2 000
3 000
4 000
5 000
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20
Revenue Russia/CIS (Rolling 12 months)Revenue Consolidated (Rolling 12 months)
0%
5%
10%
15%
20%
25%
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20
Gross margin Russia/CIS Operating margin Russia/CISGross margin Group Operating margin Group
Margin trends
Revenue trends
Q1 2020 Cash flows
31
SEK MMQ1 2019 Group
Q1 2020 Russia / CIS
Q1 2020 Germany
Q1 2020 Group
Cash flows from:
Cash flows from operating activities before changes in working capital
87 102 (2) 101
Change in working capital (197) 14 23 37
Interest & Income tax paid (5) (35) (4) (39)
Net cash from operating activities (116) 82 18 99
Investing activities (19) (3) (2) (5)
Cash flows before Financing Activities (134) 78 16 95
Financing activities 196 (66) 77 12
Cash Flow (before FX fluctuations) 61 13 94 106
Net cash from operating activities increased
Operating profit growth and decline in working capital in Russia/CIS
Negative operating result and higher working capital in Germany
Higher tax and interest payments negatively impacted cash flows
Capex decreased
Cash flows from financing activities reflect net debt repayment in Russia/CIS and net draw in Germany
Q1 2020 Balance sheet
32
SEK MM
31 March 2019
31 December
2019
31March 2020
Property, plant & equipment 371 700 606
Cash & cash equivalent 402 519 639
Debt 215 845 935
Lease liabilities 127 268 234
Net Debt / (Cash) -59 593 531
Working capital 283 734 660
% of Revenue 8% 20% 13%
Shareholder equity 758 890 783
Total Assets 2,494 2,978 3,211
Equity / Assets 30% 30% 24%
PP&E decreased QoQ on depreciation and translation
Additions were mainly right-to-use assets in Germany in the amount of SEK 25m
Net debt in Russia/CIS decreased from SEK 397m to SEK 193m QoQ on operating cash flows and lower working capital
Working capital decreased from SEK 707m to SEK 525m QoQ on FX translation and higher payables
Net debt in Germany increased from SEK 196m to SEK 340m QoQ mainly on higher working capital
Working capital increased from SEK 27m to SEK 135m QoQ on higher inventories and receivables
Working capital at 13% of LTM revenue (annualized for Germany)
Net debt/EBITDA decreased to 1.0 x
Financial objectives and dividend policy
33
Dividend Policy
Financial objectives and dividend policy
• Ambition to distribute at least 25% of the result to shareholders• Board takes several factors into consideration when proposing
the dividend level, including expansion opportunities, financial position and investment needs
KPI Objective Q1 2020 LTM
Revenue Triple 2016 revenue in Russia/CIS by 2021
2.3 x 2016 revenue
Operating margin 6-8% 8.5%
Net Debt / EBITDA 0-2 x 1.0 x
34
OUTLOOK – CEO COMMENT
“The outbreak and the measures to contain the spread of COVID-19 have caused extraordinary uncertainty across our markets. For the rest of 2020, we are likely to face
various degrees of disruption in supply, demand and customer interfacing. To forecast the near-term development of our markets in this business environment is not meaningful. In
response to COVID-19, we are taking measures to maintain the highest level of service to our customers, protect our employees, strengthen liquidity and cut costs. We are confident that our
business model, which is built around a great team and a robust aftermarket business, will once again prove itself resilient. In a longer perspective, we remain positive as we believe that
the underlying fundamentals and business opportunities in our markets are strong”
Outlook
Ferronordic in the capital market
35
2017Volvo CE Russian distribution business was taken over
2010 2011 20133-year SEK 400m bond issued and listed on Nasdaq Stockholm
SEK 500m preference shares issued and listed on Nasdaq First North Premier
Ordinary shares listed on Nasdaq Stockholm and SEK 200m raised in IPO
2017
Ferronordic statistics• Shares outstanding: 14,532,434 • Listing: Nasdaq Stockholm • Market cap. as at 31 March 2020: SEK 1,224m • Net debt as at 31 March 2020: SEK 531m • Enterprise value: SEK 1,754m• Estimated effective free float: 60%• Dividend policy: 25% subject to capital allocation
alternatives
Analyst coverage
Bank Analyst Telephone
Carnegie Kenneth Toll +46 734 17 89 [email protected]
ABGSC Karl Bokvist +46 708 44 86 [email protected]
Nordea Carl Ragnerstam
Agnieszka Vilela
+46 101 562 [email protected]+46 101 572 [email protected]
Worksite Applications_2_Machine Performance 271114