Ferronordic: Russian reshuffle and RUB rescue - Nordea

We expect soft Q2 results on 17 August.

While we expect sales to increase by 7% (-17% organic), lifted by a strong RUB, we expect adjusted EBIT to drop by 46% y/y, mainly due to Volvo and Sandvik halting exports to Russia. By 2023, we forecast 85% lower adjusted EBIT versus 2021. Our 2022E-24E adjusted EBIT is 23-61% above Infront consensus, partly due to FX.

We raise our SOTP-based fair value range to SEK 28-61 (SEK 21-49), with the lower end based on our 2023 estimates and an inventory sell-off in 2022 valued at 1x EBIT. The upper end includes Germany at a 5% margin (up from 1.3% in 2023E, adding SEK 34 per share at 7x EBIT). We also project SEK 101 in value uplift if suppliers return to Russia (at 3x EBIT). The 2023E valuation is now 2.3x EV/EBIT. Marketing material commissioned by Ferronordic.

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