Ferronordic: Solid US demand expected, Germany weaker - ABG

Mixed markets; US strong but Germany weaker
'24e-'26e EBIT down 4-3% on lowered Germany estimates
Share trading at 14-9x '24e-'25e EV/EBIT


Q1e: we expect US to hold up while Germany struggles

For Q1e, we expect there to be a discrepancy between Ferronordic's two main markets - the US and Germany. In the US, we anticipate solid construction equipment demand for both Q1e and throughout '24e thanks to major infrastructure spending programmes in combination with fairly high commodity prices. The German economy has been sluggish, however, with PMIs in the low 40s, and as such we expect weak truck demand. This translates to estimated sales of SEK 1,440m for the quarter, down 11% organically y-o-y, but in total up 128% (note that Germany is considered organic while the US business is recently acquired). Moreover, with Q1 being the first quarter with the US business consolidated for the full three months, this should make for a positive group-level EBIT for the first time since Q4'22; we estimate SEK 30m, for a margin of 2.1% (-2.2%).