Ferronordic: Aftermarket to hold up, equipment sales down - ABG

RU equipment sales to fall off, aftermarket stronger
SEK 321m VCE payment added as a one-off
We expect Germany to reach positive EBIT in Q4e


We expect a sequential fall-off in earnings for Q3e

As new equipment inventory in Russia thins out, we expect this to be the first quarter where sales and earnings start falling off for Ferronordic. However, because spare part inventory still remains, high-margin aftermarket sales should hold up better, for a positive mix effect on margins. As inventory gradually thins out, we expect to also see the company cutting opex to adapt to the smaller organisation, leading to costs declining sequentially in Q3e. All in all, we expect sales of SEK 1,287m, down 23% y-o-y (-65% org, +41% FX, +2% M&A), and adj. EBIT of SEK 79m, for a margin of 6.1% (9.8% in Russia/CIS and -1.9% in Germany).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ferronordic/Equity-research/2022/11/ferronordic---aftermarket-to-hold-up-equipment-sales-down/