Sales were SEK 1,694m (+4% vs. ABGSCe 1,636m, +5% vs. Infront cons 1,614m), Gross profit was SEK 286m (-3% vs. ABGSCe 296m) and EBIT was SEK 112m (-19%% vs. ABGSCe 139m, -10% vs. cons 124m). EBIT included one-off restructuring costs in Germany of SEK 4m (ABGSCe 3m, cons. 3m), meaning adj. EBIT amounted to 116m (-19% vs ABGSCe 142m, -9% vs. cons 127m) for a margin of 6.8% (ABGSCe 8.7%, cons 7.9%). Aftermarket sales held up well, which is reassuring, however new equipment sales were affected by supply constraints. We also saw negative seasonality effects in the newer Contracting Services segment due to harsh weather conditions in the winter months, which should continue to affect Q1’22e.
Estimate changes and outlook
The isolated Q4 numbers would imply negative consensus estimate revisions of 3-4% on EBIT for ’22e-’23e. Management reiterates that high commodity prices and infrastructure projects should drive market growth in 2022. They also mention the geopolitical situation in Russia, saying that yet the situation has not affected Ferronordic, but it does increase uncertainties.
Final thoughts and conference call details
The share is down 37% YTD, driven by higher perceived political risk due to the increasing tensions between Russia and the West. On our pre-Q4 estimates, the share now trades at 5x ’22e EV/EBIT, offering 14-16% ’22e-’23e lease adj. FCF yield.
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