Ferronordic delivered a strong Q3 report, with sales and adjusted EBIT both up 47% y/y, and 10% and 22% above Infront consensus, respectively. The strong earnings were driven by Russia/CIS with a margin of above 13%, while Germany was still loss making at SEK -32m (NRI of SEK -17m). However, we find it encouraging that management reiterated its guidance for a break-even result in Germany by the end of the year, coupled with the significant market share gains lately. We fine-tune our sales estimates by 1% for 2021-23 but raise adjusted EBIT by 5-9%. We up our multiples-based fair value range to SEK 288-381 (264-327), for a 2022E EV/EBIT of 6-8x. Marketing material commissioned by Ferronordic.
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