Ferronordic's Q3 report was better than we expected, driven by good sales mix in Russia/CIS. Germany, where most of our SOTP value is derived, is still loss-making and suffered from steeper supply chain problems than we forecasted, but the region did increase its gross margin by 4 pp q/q aided by aftermarket sales. We lower 2022E-24E sales by 2-12%, mainly due to unit supply depleting rapidly in Russia. We lift 2022E-23E EBIT by 4-10%, due to better mix, but we lower 2024E EBIT by 3% due to lower sales. We cut our SOTP-based fair value range to SEK 21-55 (24-56). The lower end is based on our 2023 estimates and the upper end includes Germany at a 5% margin (up from ~2% in 2023E). Marketing material commissioned by Ferronordic.
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