Ferronordic: German weakness persists, US outlook better - ABG

Rudd delivers SEK 60m EBIT in its first full quarter (ABGSCe 68m)
EBIT down by 9-7% for '24e-'26e, lower top line but higher margin
14x '24e EV/EBIT goes to 8x in '25e as Germany improves


First full quarter with Rudd; EBIT SEK 60m vs. cons at 29m

Ferronordic's Q1 revenue came in 13% below FactSet consensus and EBIT came in at SEK 21m vs. consensus at 29m. The softer numbers were driven in part by continued weakness in the German truck market, which the company cannot fully compensate for with higher aftermarket sales. The weakness looks likely to persist throughout 2024, although we note that the implemented savings program in Germany should provide some relief from Q2. In its first full quarter the US business (Rudd) reported a higher margin than expected, but on a lower top line, resulting in EBIT of SEK 60m vs. our estimate of 68m, making Q1'24 the first EBIT-positive quarter at the group-level since Q4'22. Management also gave a more optimistic outlook for the US, citing major infrastructure spending programs that should support construction equipment demand.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ferronordic/Equity-research/2024/5/ferronordic---german-weakness-persists-us-outlook-better/