Slides
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Company Presentation
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Ferronordic as an investment 2 ▪ Robust and scalable business model ▪ Strong brand portfolio and OEM relationships ▪ Sustainability integrated part of business model ▪ Positioned to benefit from trends in • Electrification • Infrastructure investment • Shared asset models ▪ Poised for organic growth and bolt-on acquisitions • US - Strong market with growth potential • Germany - Turnaround that will capture recovery • Network, brand and product extension opportunities ▪ Open for strategic M&A ▪ Experienced management to execute ▪ Value creation and dividend potential ▪ Stronger balance sheet ▪ Improving cashflows ▪ Growth and margin
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Introduction to Ferronordic Group • Founded in 2010 • Listed on Nasdaq Stockholm in 2017 • Dealer of Volvo CE in Kazakhstan from January 2019 • Dealer of Mecalac in Kazakhstan from January 2019 • Sales of new and used construction equipment • Service and technical support • Dealer of Volvo and Renault Trucks in parts of Germany from January 2020 • Sales of new and used trucks • Service and technical support • Rental business • Growing electric rental business and sustainable transport solutions Germany CIS USA Kazakhstan 3 • Rudd Equipment Company is the authorized dealer of Volvo CE in all or parts of nine states in eastern USA • The company also represents other brands such as Hitachi, Sandvik, Link-Belt Cranes and Bergmann • Sales of new and used construction and other equipment • Service and technical support • Rental business
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Introduction to Ferronordic 4 Development 2010 (Start) Employees Revenue (SEKm)1 Outlets ~160 1,184 6 Q1 2025 Employees Revenue (SEKm) Outlets 792 4,754 37 Revenue by activity (LTM) Revenue by industry - US (2024) 1) Annualized last twelve months (LTM). Equipment and Truck Sales 56% Aftermarket Sales 36% Other Revenue 7% Revenue by segment (LTM) Germany 35% Kazakhstan 4% USA 60% General Construction and Other 36% Road Construction 10% Quarriers & Aggregates 10% Government 10% Recycling & Waste 8% Lumber Sawmill 6% Agriculture & Landscaping 6% Other 12% Mining 2%
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Business model 5 New population New equipment sale New truck sale Rental solutions Service and parts Parts and service sales Service agreements Overhauls Rebuild Providing new life to older machines Remanufacturing of parts and components Used sale Used machine sale to customer Major component rebuilds sale Used equipment traded into sales area Used equipment traded out of sales area
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6 Vision, values and strategic cornerstones Vision: To be the leading service and sales company in our markets • To be the leading service and sales company in our markets • To support the growth and leadership of our customers • Respect • Quality • Excellence • Great team • Customer centricity • Building on strong brands • Operational excellence Vision Mission Values and operating principles Strategic cornerstones
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7 Strategic objectives Vision: To be the leading service and sales company in our markets Service and parts absorption rate of at least 1.0 x Expansion into related business areas Leadership in the market for construction equipment and trucks Industry leading digital service and sales platforms Sustainable transport services Geographic expansion
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Strategic cornerstones Great team Operational excellence ▪ Safety and sustainability ▪ Continuous improvement of practices and processes ▪ Business driven digital service and sales processes ▪ Close cooperation with manufacturers ▪ High employee engagement Building on strong brands 8 ▪ World-leading manufacturers of construction equipment and trucks ▪ Premium products – highest safety, minimal environmental impact ▪ Leading brand positions ▪ Broad & customized solutions ▪ Support customers’ growth ▪ Leading service and product availability ▪ Tailored customer solutions (including sustainable transport solutions and otherbusiness services) ▪ Work towards common goals ▪ Take initiative regardless of rank or position ▪ Fast-paced, dynamic, determined to create value ▪ Mutual trust, dialogue and openness Customer centricity
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Building on a great team 9 Agile sales teams Flat & flexible organization Top industry technicians Experienced management Performance management Training & development Talent management & succession planning Reward management Designing effective organizational structures Recruitment, selection & onboarding Great team
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Building on strong brands 10 Since 1985 USA 2019 Kazakhstan Product range Full VCE range Market USA Kazakhstan Volvo CE Since 1987 Product range Excavators and rigid haulers Market USA Link-Belt Cranes Product range Telescopic and lattice boom cranes Sandvik Product range Surface drill rigs Bergmann Product range Compact haulers Mecalac Since 2019 Product range Backhoe loaders Market Kazakhstan ~13% of 2020 Revenue Since 1980s Since 1970s Since 2020 Market USA Market USA Market USA Volvo Trucks Since 2020 Product range Full Volvo Trucks range Market Germany Renault Trucks Since 2020 Market Germany Product range Full Renault Trucks range Hitachi
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Aftermarket focus Aftermarket sales (SEKm) • Proactive customer coverage based on real- time data from the existing machine population • Proprietary system transforms machine telematic signals (e.g. VCE’s CareTrack) into sales leads on the mobile devices of sales and service staff • Ferronordic’s dense service networks across our sales areas in US, Germany and Kazakhstan allow for fast delivery of parts and timely customer support • Spare parts delivery • Telematics - through Care-Track; fuel efficiency control, operator efficiency, fleet management • Operator training • Preventive maintenance service • Planned andunplanned repair • Overhaul • Providing new life to older machines • Diagnostics of machines • Remanufacturingof vital parts Offering 11 Share of sales (LTM) Germany Machine Sales 54%Aftermarket 37% Other 9% Share of sales (LTM) USA Trucks Sales 58% Aftermarket 37% Other 5% Aftermarket sales 269 365 479 608 625 622 80 991 1 067 24 40 52 60 46 40 0 400 800 1 200 1 600 2 000 2020 2021 2022 2023 2024 LTM Germany Central Asia US
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Moving torward further customer integration Complexity of Customer Demand Ferronordic’s Offering Total Cost of Ownership BusinessConsultancy Business Services Open Platform Customised Solutions Segment Experience Grow in new Segment Finance Rental Services Part Sales Machine/Truck Sales Upcycling 12
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Automatic Lead Generation 13 Machine data Rules engine Sales leads Sales action Follow up Customer Equipment sales rep Service and parts sales rep
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Sustainability at Ferronordic 14 • Double materiality analysis conducted in 2024 • Preparations for European Sustainability Reporting Standards (ESRS) reporting in line with Corporate Sustainability Reporting Directive (CSRD) • Footprint and impact analysis underway to set sustainability objectives Environment ▪ Helping customers decarbonize ▪ Driving operational efficiency ▪ Contributing to a circular economy ▪ Building the infrastructure Social ▪ Focus on health and safety ▪ Training and development 16 out of 22 workshops in Germany were certified for renewable energy in 2023 In Germany, e-trucks accounted for 1.5% of new truck sales (in units) in 2024 ESG focus areas
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15 Key industry trends Infrastructure investments Electrification Green transition Electrification Equipment-as-a- Service Electrification Important strategy to reduce CO2 emissions and to transform the mobility industry Demand for investments driven by need to upgrade existing infrastructure and by new technologies Business model where trucks and equipment are offered to customers on flexible rental, subscription or pay-per-unit of transportation basis
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Oil production (% of total)4 World’s second largest market for construction equipment USA 16 • Population: ~335 million1 • Area: 9.8 million sq. km • World’s largest economy with 2024 GDP of USD 29tn2 • Accounts for approx. one-fourth of global output, one-tenth of global trade flows, one-fifth of global FDI stock and one-fifth of global energy demand • The US dollar is the most widely used currency in international transactions and is the world's reserve currency • Largest producer of oil & gas as well as other commodities • World’s largest gold reserves of 8,133 tonnes3 US at a glance Gold production (% of total)5 20% 12% 12% 6% 5% 5% 4% 4% 2% USA Saudi Arabia Russia Canada Iran Iraq China UAE Kazakhstan 12% 9% 9% 6% 5% 4% 4% 4% 4% China Russia Australia Canada USA Kazakhstan Mexico Ghana Uzbekistan Sources: 1) US Census Bureau 2) IMF 3) World Gold Council 4) Energy Institute (EI) Statistical Review of World Energy 2025 5) US Geological Survey, Mineral Commodity Summaries, January 2025 Gas production (% of total)4 26% 14% 6% 6% 5% 5% 4% 3% 1% USA Russia Iran China Canada Qatar Australia Norway Kazakhstan
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USA Network 17 MO IL IN OH PA WV KY Indianapolis Fort Wayne Corbin Prestonsburg Cincinnati Charleston Louisville Columbus Pittsburgh Clearfield St. Louis Evansville Cleveland MO IL IN KY OH WV PA (13) Ferronordic outlets in US as of May 2025 • In November 2023 Ferronordic acquired 100% of the shares in the Rudd Equipment Company • Rudd is one of the largest distributors of Volvo CE as well as other strong brands such as Hitachi, Sandvik, Link-Belt Cranes and Bergmann • The company’s sales area for Volvo CE covers all or parts of nine states: Kentucky; West Virginia (partly); Ohio; Indiana (partly); Western Pennsylvania; Eastern Missouri; Southern Illinois and several counties in Tennessee and Maryland • US is the world’s second largest market for construction equipment with substantive infrastructure investment programs • In 2024, the total market for Volvo Construction Equipment products (GPE) in Rudd’s sales area amounted to 3,770 units
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What makes Rudd special? 18 Outstanding sales team Widely acclaimed service In-house customer support center Training centers In-house apprentice and master technician programs Machine rebuilds High parts availability Component rebuilds and exchange components
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Growth opportunities 19 Grow market share Improve rental fleet efficiency Grow service and parts sales
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German GDP development2 Europe’s largest truck market Germany 20 • Population: ~84 million1 • World’s 3rd largest exporter in the world with exports over EUR 1.5tn1 • World’s 3rd largest economy with 2024 GDP of USD 4.7tn2 • Accounts for approx. one-fourth of EU total GDP • Accounts for approx. one-third of EU total industrial production • Europe’s key logistics hub, shaped by its geographical location, economic strength and advanced infrastructure • Strong focus on green transition and emobility Germany at a glance Sources: 1) Destatis 2) IMF 0,5% 0,4% 2,2% 1,7% 2,3% 2,7% 1,1% 1,0% -4,1% 3,7% 1,4% -0,3% -0,2% 0,0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025e
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German truck market Heavy truck registrations in Germany (units) 6 Sources: Germany registrations data compiled by Volvo Trucks (until March 2025). 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. 21 67 797 40 322 48 827 60 218 55 167 55 215 58 574 61 940 65 280 66 441 68 450 70 264 50 427 55 386 55 089 68 982 60 213 55 547 75 80 85 90 95 100 105 110 115 120 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 2020 2021 2022 2023 2024 LTM Heavy truck registrations Average truck toll mileage index*
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Germany Network 22 (20) Ferronordic outlets in Germany as of May 2025 Hanover Barleben Dessau Leipzig Görschen Dresden BautzenKassel Haiger Frankfurt Fulda Limburg Nordhausen Bergstrasse Bingen Bad Hersfeld Kirn Coswig Peine • Ferronordic expanded to become dealer for Volvo and Renault Trucks in Germany in January 2020 • Germany is Europe’s largest trucks market with 60,000 registrations in 2024 • Ferronordic’s sales area covers approx. 18% of the German market for heavy trucks • Expansion of service network and integration of acquired workshops mainly completed • Professional teams for service, sales and support • Service organization well positioned for growth Northeim • Potential for substantial increase of market share and population growth
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Strategy 23 Expand and improve the dealer network in our sales area1 Take full control of service and parts sales in our sales area2 Grow market share and population3 Increase efficiency in organization 4
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24 Driving organic growth Capture the population • Population analysis • Service contracts • Connectivity • Increasing mechanic productivity and workshop efficiency Price optimization • Dynamic pricing models • Special offers and targeted discounts where strategic
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25 Shift to electric EU law: Manufacturers must cut CO₂ emissions by 45% by 2030 for new trucks sold in the EU, compared to 2019 levels We assume at least 20% of all trucks registered in Germany by 2028 will be electric Volvo Trucks and Renault Trucks have leading market shares in e-trucks in Europe Shift to electric will help us to grow overall market share McKinsey: Prices for e-trucks will be lower than today but still 50% higher than today’s conventional trucks Revenue will grow significantly as we sell more electric trucks Subscription data: Repair and maintenance cost of e-trucks are similar or higher than for conventional trucks Potential for service and parts sales should remain stable Assumption: Transition will generate multiple new opportunities Thanks to our electric rental fleet, we are well situated to catch new opportunities 1) BEV is battery electric vehicle; FCEV is fuel-cell electric vehicle. Source: McKinsey, “The bumpy road to zero-emission trucks”
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26 • In December 2021 we placed our first order of 32 fully electric medium duty trucks from Volvo Trucks and Renault Trucks • Awarded up to EUR 23 million in government subsidies • Aim to develop a rental business dedicated to electric trucks ▪ Help customers transition to battery electric ▪ Become experts in sustainable transport solutions ▪ Develop in-house sustainable transport service capabilities • Fleet of 95 trucks at the end of 2024 Electric transport opportunity
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27 Market situation ▪ The customers of our customers increasingly want to and need to procure zero-emission transport solutions ▪ Logistics companies are reluctant to switch to electric trucks despite potential for lower TCOs and higher profitability Opportunity ▪ Fill the gap by providing sustainable transport services to transport buyers ▪ Use experience of dealer and supplier of contracting services in other markets to become leading service provider ▪ Leverage knowledge from sustainable transport business to increase sales of electric trucks Sustainable transport solutions
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Oil production (% of total)3 Key regional hub Kazakhstan 28 • Population: ~20 million1 • Area: 2.7 million sq. km1 • Major transport and logistics hub in the region linking Europe and Asia • Rich in oil & gas (20-25% of GDP and 60-70% of exports) • Large producer of gold, copper, zinc and chromium • Approx. USD 108 billion2 in international currency reserves and gold • Government gross debt/GDP ratio of 25% (2024)5 Kazakhstan at a glance Gold production (% of total)4 Kazakhstan’s GDP development5 20% 12% 12% 6% 5% 5% 4% 4% 2% USA Saudi Arabia Russia Canada Iran Iraq China UAE Kazakhstan 12% 9% 9% 6% 5% 4% 4% 4% 4% China Russia Australia Canada USA Kazakhstan Mexico Ghana Uzbekistan Sources: 1) World Bank 2) National Bank of Kazakhstan 3) Energy Institute (EI) Statistical Review of World Energy 2025 4) US Geological Survey, Mineral Commodity Summaries, January 2025 5) IMF • Kazakhstan’s infrastructure needs are increasing with its expanding economy, growing role as a regional hub and increasing population • In August 2024, the Kazakh government approved a National Infrastructure Plan until 2029, which includes 204 projects in energy, transport, digital and water infrastructure sectors worth nearly KZT 40t (USD 80b) 4,8% 6,0% 4,2% 1,2% 1,1% 4,1% 4,1% 4,5% -2,5% 4,3% 3,2% 5,1% 4,8% 4,9% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025e
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29 (4) Ferronordic outlets in Kazakhstan as of May 2025 Kazakhstan Network Aschaffenburg Aktobe Karaganda Almaty Astana
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7% Cash flow & capital allocation 30 Working Capital Development Net Debt/(Cash) Development Capital Expenditure Development Note: capex in US includes purchase of machines for rental and rental conversions 1 062 1 049 1 026 1 068 825 20% 21% 22% 23% 17% 0% 5% 10% 15% 20% 25% 0 200 400 600 800 1 000 1 200 Q1 2024 Q2 2024 Q3 2025 Q4 2024 Q1 2025 SEKm NWC NWC as % of LTM revenue 1 542 1 671 1 792 1 978 1 826 0 400 800 1 200 1 600 2 000 Q1 2024 Q2 2024 Q3 2025 Q4 2024 Q1 2025 SEKm 374 478 660 782 964 11% 13% 13% 17% 16% 0% 4% 8% 12% 16% 20% 0 200 400 600 800 1 000 Q1 2024 Q2 2024 Q3 2025 Q4 2024 Q1 2025 SEKm LTM capex LTM capex as % of LTM revenue
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New financial objectives and dividend policy 31 KPI Objective Revenue Double the 20241 revenue in current markets2 over 5 years (in SEK) Operating margin Above 6% Net debt / EBITDA Below 3 times (over a business cycle) Dividend policy The ambition is to pay at least 50% of net income if net debt/EBITDA is less than 1.0 x3, post dividend payment, and to pay at least 25% if net debt/EBITDA is more than 1.0 x3. 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. 1) Based on 2 x 6M 2024 revenue 2) Current markets are defined as Ferronordic’s current (Q2 2024) sales area in the US, Germany and Kazakhstan. They include expansion to other brands and products and expan sion of our network in and directly adjacent to our current area 3) After and including accounting for paying the dividend
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First quarter 2025
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Q1 2025: Steady despite uncertainty 2 3% Revenue growth SEK 13m Operating profit 1.1% Operating profit margin SEK -10.32 EPS Key Group and segment items: • Increased uncertainty in our markets and industry • Revenue increased by 3% to SEK 1,206m • Gross profit declined by 15%, partly due to revenue and product mix • Selling and administrative costs down, partly on cost reduction and lower sales commissions • Operating result decreased to SEK 13m, mainly on lower gross margin • Net debt decreased to SEK 1,826m
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Q1 2025 Group summaryfinancials1 Group revenue +3% to SEK 1,206m • US revenue +9% to SEK 762m (+6% in USD) • German revenue -9% to SEK 402m (-8% in EUR) • Kazakhstan revenue +26% to SEK 42m (+38% in KZT) Group operating profit decreasedto SEK 13m (21) • US operating profit decreased from SEK 60m to SEK 48m • German operating profit increased from SEK -12m to SEK -9m • Kazakhstan operating profit increased from SEK -3m to SEK 1m Net income decreased to SEK -150m, mainly driven by foreign exchange effects of SEK -129m Net debt decreased to SEK 1,826mmainly due to the repayment of loans and currency translation effects • 30% equity to total assets • Book equity of SEK 1,372m as at 31 March 2025 SEK 1,206m (+3%) revenue SEK 13m operating profit Net debt of SEK 1,826m 3 1 In Q1 2025 certain revenue and cost items have been reclassified, with some effects on comparable numbers in Q1 2024 for revenue, gross profit, SG&A and other income. For more details on this effect, please refer to the slide 12 in this presentation or the note on p.8 of the financial report for Q1 2025 .
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Q1 2025 US operational highlights1 • In Q1 2025, the market for larger construction equipment (GPE segment) in the US declined by 5% • In Ferronordic’s sales area, the market is estimated to have declined by 8%, mainly driven by lower sales of wheeled excavators • Ferronordic’s sales of new machines and conversions from rental fleet decreased by 6% in the GPE segment • We increased sales of crawler excavators and wheel loaders, however partly in fleet deals with lower gross margins • In Q1 2025, Ferronordic sold 71 new units, 20 used units and 30 units were converted to sales from the rental fleet • The service and parts business was largely stable • In April, we launched a new CRM system that will also form the basis for the implementation of our Automatic Lead Generation system in the US in the future • Investments and work on branding and marketing continued In Q1 2025, Ferronordic sold 71 new units, 20 used units and 30 units were converted to sales from rental The service- and parts business was stable in Q1 2025 Operating result amounted to SEK 48m 1 In Q1 2025 certain revenue and cost items have been reclassified, with some effects on comparable numbers in Q1 2024 for revenue, gross profit, SG&A and other income. For more details on this effect, please refer to the slide 12 in this presentation or the note on p.8 of the financial report for Q1 2025 .
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Q1 2025 5 1 ACEA statistics, based on registrations Germany operational highlights • Market remains challenging. Government spending plans however lead to some optimism • Based on registrations1, the total German market for heavy trucks declined by 28% in Q1 2025. Sales of tractor trucks declined more than sales of rigid trucks • New trucks registered in Ferronordic’s sales area decreased by 20% and represented approx. 19% of the total German market • Ferronordic’s sales of new trucks decreased by 6% to 148 units and by 15% to SEK 221m in revenue • Used truck sales in units declined 56% to 48, as Ferronordic reduced the scale of its used trucks business in 2024 • Total inventory declined 59% to SEK 211m at the end of Q1 2025 from SEK 519m at the end of Q1 2024 • Service and parts sales remained stable in the quarter • Demand for aftermarket services remains strong. We estimate that we could sell more service hours and parts if we had more qualified mechanics New truck sales in units decreased by 6% to 148 units Service and parts sales remained stable Used trucks sales in units fell by 56%
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Aftermarket sales declined Y-o-Y and Q-o-Q Q1 2025 Kazakhstan operational highlights • In Q1 2025, the market for larger construction equipment (GPE segment) in Kazakhstan grew by an estimated 37%, from a relatively low level in Q1 2024 • Kazakhstan sees growth in the mining and constructions sectors • Increased government spending on infrastructure, notably on Kazakhstan’s road network • Ferronordic continued to reduce its inventory. Total inventory declined by 68% Y-o-Y to SEK 80m at the end of Q1 2025 • Sales of new machines in units increased to 28 (5) in Q12025 • Sales of used construction equipment decreased to 3 (5) units • Service and parts sales were however lower Y-o-Y and Q-o-Q • Total revenue in Kazakhstan increased by 26% to SEK42m (34) 6 Sales of new machines in units increased to 28 (5) Sales of used construction equipment decreased to 3 (5)
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Group EBIT Y-o-Y 65 EBIT Q4 19 EBIT Q4 20 SEKm 7 21 2 -2 -4 -12 5 13 0 5 10 15 20 25 EBIT Q1 2024 US Germany Kazakhstan HQ EBIT Q1 2025
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Group assets by segment 8 Split by main items and segment as at 31.03.2025 * Including deferred tax assets 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 Real estate Rental fleet Other PP&E Goodwill Inventories Trade and other receivables Cash & equivalents Other assets* SEKm US Germany Kazakhstan Group
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Group liabilities by segment 9 Split by main items and segment as at 31.03.2025 * Including deferred tax liabilities SEK 1,372m SEK 94/share 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 Trade and other payables Bank loans VFS floor plan Lease liabilities Other liabilities* NAV SEKm US Germany Kazakhstan Group
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10 Q1 2025 Income statement • Total revenue up by +3% to SEK 1,206m o 63% US, 33% Germany and 4% Kazakhstan o 57% equipment and trucks, 37% aftermarket and 6% other • Gross profit down by -15% and gross margin decreased 3.4pp Y-o-Y to 16.3%, mainly on US segment2 • SG&A decreased by -11%, partly due to a reclassification of productive cost in the US from administrative expenses to cost of sales2 • As percentage of revenue, SG&A declined to 16.2% (18.7%) for Group • Operating margin decreased to 1.1% (1.8%) • Operating profit decreased to SEK 13m, mainly on US segment • Net income of SEK -150m, mainly driven by foreign exchange loss SEK MM Q1 2024 Q1 2024 Q1 2024 Q1 2024 Q1 2025 Q1 2025 Q1 2025 Q1 2025 % change Kazakhstan Germany US Group Kazakhstan Germany US Group Group FX (SEK/KZT, SEK/EUR, SEK/USD) 43.38 11.28 10.39 47.63 11.23 10.68 New units sold 5 157 81 243 28 148 71 247 2% Revenue 34 439 699 1,172 42 402 762 1,206 3% Gross profit 6 57 169 231 6 56 135 197 -15% % Margin 17.1% 12.9% 24.1% 19.7% 13.9% 13.9% 17.7% 16.3% -3,4pp Operating profit1 -3 -12 60 21 1 -9 48 13 -35% % Margin -10.2% -2.7% 8.6% 1.8% 3.5% -2.3% 6.3% 1.1% -0,7pp Net result for the period 70 -150 -314% EPS 4.83 -10.32 -314% EBITDA1 -2 4 108 86 2 13 95 83 -3% 1 Group operating profit and EBITDA includes Group costs not allocated on the reporting segments 2 In Q1 2025 certain revenue and cost items have been reclassified, with some effects on comparable numbers in Q1 2024 for reve nue, gross profit, SG&A and other income. For more details on this effect, please refer to the slide 12 in this presentation or the note on p.8 of the financial report for Q1 2025 .
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Q1 2025 Balance sheet • PP&E increased Y-o-Y mainly due to addition of rental fleet in the US and e-rental fleet in Germany • In Kazakhstan, net working capital decreased Q-o-Q from 55% to 47% on higher LTM revenue on lower inventories and receivables • In Germany, net working capital decreased Q-o-Q from 23% to 16% of LTM revenue, as a result of lower inventories and receivables • In US, net working capital decreased Q-o-Q from 21% to 17% of LTM revenue as inventory and receivables decreased and payables increased • Net debt decreased SEK 152m Q-o-Q to SEK 1,826m, mainly as the Swedish krona appreciated against the US dollar and the euro • Q-o-Q, equity / assets remained flat at 30% 11 SEK MM Q1 2024 Q4 2024 US Q1 2025 Q1 2025 FX SEK/EUR FX SEK/USD FX SEK/KZT 11.53 10.66 41.77 11.49 11.00 47.58 10.03 10.85 10.03 50.07 Property, plant and equipment 2,099 2,317 1,646 2,282 Cash and cash equivalents 217 363 29 232 Debt 1,681 2,276 1,940 2,003 Finance Leases 78 65 17 55 Net debt / (cash) 1,542 1,978 1,928 1,826 Working capital 1,062 1,068 484 825 % of Revenue 20% 23% 17% 17% Shareholders equity 1,698 1,499 98 1,372 Total Assets 5,076 4,941 2,946 4,540 Equity / Assets 33% 30% 3% 30%
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Changes in presentation of US segment 65 EBIT Q4 19 EBIT Q4 20 12 • In Q1 2025, certain revenue and cost items were reclassified to align the presentation of the income statement for the US segment to Group reporting guidelines • Column Q1 2024 ADJ in the table shows the effects that the reclassifications would have on the Q1 2024 income statement and the effects on the year-on- year comparisons with Q1 2025 • The reclassifications affect revenue, gross profit, gross margin, SG&A, other income and operating margin but has no effect on the operating profit Q1 Q1 Q1 Q1 Y-o-Y Y-o-Y SEK m 2025 2024 ADJ 2024 ADJ reported adjusted Revenue 762 699 47 746 9% 2% Equipment and truck sales 434 439 10 449 -1% -3% Service and parts sales 283 207 37 244 37% 16% Other revenue 45 53 53 -15% -15% Cost of sales -627 -530 -59 -589 18% 6% Gross profit 135 169 -11 157 -20% -14% Selling expenses -25 -21 - -21 22% 22% General and administrative expenses -72 -99 21 -77 -26% -6% Other income 12 11 -10 1 Other expenses -1 - - Operating profit 48 60 - 60 -21% -21% Gross margin 17,7% 24,1% 21,1% Operating margin 6,2% 8,6% 8,0%
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Financial objectives and dividend policy KPI Objective Q1 2025 LTM Revenue Double the 20241 revenue in current markets over 5 years (in SEK) 1.05x 2 x 6M 2024 revenue Operating margin Above 6% 0.3% Net debt / EBITDA Below 3 times (over a business cycle) 4.8 x Dividend policy The ambition is to pay at least 50% of net income if net debt/EBITDA is less than 1.0 x2, post dividend payment, and to pay at least 25% if net debt/EBITDA is more than 1.0 x2. 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. 13 1) Based on 2x 6M 2024 revenue. Current markets are defined as Ferronordic’s current (Q2 2024) sales area in the US, Germany and Kazakhstan. They include expansion to other brands and products and expansion of our network in and directly adjacent to our current area 2) After and including accounting for paying the dividend
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Outlook 14 Despite the current uncertainty, we remain optimistic about our US business and the long-term opportunities there. Demand is supported by a dynamic economy and a significant need to upgrade the country's infrastructure. We currently have no information about major infrastructure projects in our sales area in the US being cancelled or postponed. We see opportunities to further develop and expand our business in the US. The German economy remains weak. We have taken steps to reduce costs and make our organization and balance sheet more resilient. We are confident that aftermarket demand will remain strong and are optimistic about the long-term potential of the German market as well as the opportunities in e-mobility and sustainable transport solutions. Recently announced government spending plans could accelerate a recovery in Germany. Kazakhstan represents a minor part of the Group's operations. We continue to see good opportunities in the market.