Operationally, Ferronordic now becomes a much smaller entity, with its remaining German and Kazakh operations generating annual sales of ~SEK 2bn, and it is currently around break-even on EBIT.
Valuation update: fair value range SEK 85-100 (35-55) per share
We step away from our prior SOTP valuation, which we mainly used as a tool to isolate the value of the now divested Russian business. We now argue that the remaining business should be valued similarly to industrial distributor peers, as the reason for Ferronordic's historically lower valuation was its high-risk Russian exposure. By applying an EV/EBIT range of 8-12x to the average of our '23e-'24e EBIT (to capture the EBIT growth in the still immature German business), we derive an EV range of ~SEK 440-660m. After adding the '22e net cash position, twe get an equity value range of SEK 85-100 (35-55) per share.
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