Ferronordic Machines AB (publ) Interim Report January – September 2015

Press Release

Stockholm, 24 November 2015
IMPROVED RESULT AND STRONG CASH FLOW

THIRD QUARTER 2015

  ·
Revenue decreased by 39% (14% in rubles) to SEK 373m (SEK 616m)

  ·
Operating profit increased to SEK 31m (SEK 12m)

  ·
Operating margin was 8.3% (1.9%)

  ·
EBITDA amounted to SEK 45m (SEK 41m)

  ·
The after-tax result amounted to SEK 17m (SEK 0m)

  ·
Earnings per ordinary share amounted to SEK 0.47 (SEK -1.20)

  ·
Cash flow from operating activities amounted to SEK 183m (SEK -94m)

JANUARY - SEPTEMBER 2015

  ·
Revenue decreased by 39% (19% decrease in rubles) to SEK 1,068m (SEK 1,739m)

  ·
Operating profit amounted to SEK 43m (SEK 43m)

  ·
Operating margin was 4.0% (2.5%)

  ·
EBITDA amounted to SEK 97m (SEK 121m)

  ·
The after-tax result amounted to SEK 20m (SEK 13m)

  ·
Earnings per ordinary share amounted to SEK -1.73 (SEK -2.47)

  ·
Cash flow from operating activities amounted to SEK 161m (SEK -145m)

 SEK M              2015   2014    2015     2014
                     Q3     Q3      9M       9M
Revenue            372.9   615.6  1 068.4  1 738.9
EBITDA              45.1   41.3    96.7     121.0
Operating profit    31.1   11.9    43.1     43.5
After-tax result    17.2    0.5    20.2     12.8

Net Debt           (40.5)  244.7  (40.5)    244.7
Net Debt / EBITDA  (0.3х)  1.5х   (0.3х)    1.5х

COMMENTS BY LARS CORNELIUSSON, CEO AND PRESIDENT:

  ·
The market for new machines in Russia continues to be weak. Compared to last
year, the number of new units sold is down by about 70%. The falling oil price
in combination with the economic sanctions against Russia continue to limit
access to capital, resulting in postponed projects and difficulties for
customers to finance their investments. In view of this I think we have
delivered a strong result during the quarter, especially in terms of cash flow
and profitability. We also continue to gain market share. At the end of the
quarter, our total market share for the last twelve months was over 10%.

  ·
During the quarter we have seen a continued change in product mix, where the
lower sales of new machines is compensated by higher sales of parts and used
machines. In combination with the cost reductions made, this has led to a
significant improvement of our profit margins. We have also reduced our finance
costs. In total, this resulted in an after-tax margin of 4% compared to zero in
the third quarter last year.

  ·
Despite the weak market, we have seen a good cash flow during the year and
especially during the third quarter. The operating cash flow during the third
quarter amounted to SEK 183m. Thanks to this we managed to end the quarter with
a net cash position.

  ·
Unfortunately we do not see any signs that the market would recover in the short
term and thus expect the rest of 2015 and 2016 to continue to be challenging.
However, we remain optimistic about the long term prospects of the Russian
construction equipment market.

About Ferronordic Machines

Ferronordic Machines is the authorized dealer of Volvo Construction Equipment
and Terex Trucks in Russia. The company began its operations in June 2010 and
has expanded rapidly across Russia and is today well established in all federal
districts with almost 70 outlets and approximately 700 employees. In addition to
distributing and providing aftermarket support to Volvo Construction Equipment
machines, the company has also been appointed aftermarket dealer for Volvo and
Renault Trucks as well as dealer for Volvo Penta in certain parts of Russia. The
company has also signed up some other high quality brands such as Logset and
several attachment manufacturers. The vision of Ferronordic Machines is to be
regarded as the leading service- and sales company in the CIS markets. The
preference shares of Ferronordic Machines are listed on NASDAQ OMX First North
Premier. The company has appointed Avanza Bank AB as its Certified Advisor.

http://www.ferronordic.ru

For more information, please contact:

Anders Blomqvist, CFO and Head of IR, Tel: +46 8 5090 7280 pr@ferronordic.ru

Ferronordic Machines discloses the information herein pursuant to the Securities
Markets Act and/or the Financial Instruments Act. The information was submitted
for publication on 24 November 2015, 1:00pm CET.