Q4 expectations
We expect Ferronordic to report Q4 sales of SEK 925m, up 44% q-o-q as the quarter will include one month with newly-acquired Rudd in the numbers. Even with Rudd included, which we estimate will contribute SEK 16m to EBIT in Q4, we do not think this will be enough for Ferronordic to be EBIT-positive. The company has flagged for continued high opex in the German business, which according to management should then come down in '24e. All in all, we expect EBIT of SEK -11m, for a margin of -1.2% (-4.4% in Q3). We then expect EBIT to turn positive (SEK +40m) in Q1'24 as Rudd will be included for the full three months and contribute an estimated SEK 53m. As for cash flow, apart from the payment for Rudd weighing on numbers, we also expect higher working capital since, to our understanding, Rudd has a higher working capital need than Ferronordic's other segments.
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