Ferronordic: A new frontier - ABG

Adding Rudd to our estimates, sales +107-103% for '24e-'25e
9-7x '24e-'25e EV/EBIT and 2.0-1.4x ND/EBITDA
Q3 a disappointment on higher costs and NWC build-up


Adding Rudd to ests. makes Ferronordic a new company

We add the acquisition of US-based Rudd to our estimates. Rudd has a broad product offering within VCE, but also spans several other well-known brands such as Hitachi, Sandvik, and Link-Belt. Its sales area spans all or parts of nine US states, with a central warehouse in Louisville (Kentucky) from which parts can be transported to any branch overnight. Moreover, we find the US construction equipment market attractive due to its major government infrastructure programmes that should boost demand. Consolidating Rudd (from 30 November) lifts our '24e-'25e sales by 107-103%, while our EBIT estimates go from SEK +17m-55m to SEK 203m-257m (note that we also lower our Germany estimates following the Q3 miss). We stress, however, that due to having only limited line items for Rudd (sales, EBIT and EBT), the estimate uncertainty is fairly high. See our full overview of Rudd below.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ferronordic/Equity-research/2023/11/ferronordic---a-new-frontier/