Strong start for Rudd, but issues persist in Germany
Ferronordic reported Q4 sales of SEK 915m (-1% vs. ABGSCe, -3% vs. FactSet consensus), and there was a clear discrepancy between Germany and the US at the segment level. The US business, consisting of the newly acquired Rudd (consolidated at the end of Nov '23), impressed with sales 27% above our expectations and adj. EBIT of SEK 36m (ABGSCe 16m) for a margin of 11.7% (ABGSCe 6.4%). According to management, though, Rudd's full-year margin of 8.1% should be more representative of profitability going forward (which is also notably above our prior estimates). On the other hand, costs were up in Germany while sales were down on weak demand, resulting in adj. EBIT of SEK -28m (ABGSCe -11m), and Ferronordic expects the German truck market to decline in 2024. At the group level, adj. EBIT was SEK -15m (ABGSCe -11m, cons. -6m), and this excludes several one-off costs from restructuring fees (-23m), inventory impairments (-13m) and acquisition costs (-11m).
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