Brief: Ferronordic To Expand To Germany As Dealer For Volvo Trucks And Renault Trucks

Ferronordic AB

12/09/2019 12:14

Sept 12 (Reuters) - Ferronordic Machines Ab  FNMA.ST :
    * FERRONORDIC INTENDS TO EXPAND TO GERMANY AS DEALER FOR
VOLVO
TRUCKS AND RENAULT TRUCKS
    * WOULD ACQUIRE OPERATIONS AT NINE OF VOLVO'S SITES IN
GERMANY
    * PURCHASE PRICE IS EXPECTED TO BE APPROX. SEK 250M*,
FINANCED
WITH A LOAN FROM NORDEA BANK
    * AMBITION IS THAT TRANSACTION WOULD BE COMPLETED BY END OF
2019
AND THAT FERRONORDIC WOULD TAKE OVER OPERATIONS AS OF JANUARY
2020
    * DEAL IS EXPECTED TO RESULT IN AN INCREASE OF GROUP'S NET
DEBT OF
APPROX. SEK 300M*
    * IN 2020, REVENUE CONTRIBUTION FROM NEW BUSINESS IS
EXPECTED TO
BE APPROX. SEK 1,3BN*
    * DURING INTEGRATION PHASE, NEW BUSINESS IS EXPECTED TO HAVE
NEGATIVE IMPACT ON GROUP'S EARNINGS AND CASH FLOWS
    * FERRONORDIC - IN 2020, NEW BUSINESS IS EXPECTED TO HAVE A
NEGATIVE IMPACT ON GROUP'S OPERATING PROFIT AND NET INCOME OF
APPROX. SEK -40M* AND SEK -50M*, RESPECTIVELY
    * NEGATIVE IMPACT ON OPERATING CASH FLOWS IN 2020 IS
EXPECTED TO
BE APPROX. SEK -40M
    * TRANSACTION IS NOT EXPECTED TO HAVE SIGNIFICANT IMPACT ON
FERRONORDIC'S EXISTING BUSINESS IN RUSSIA AND KAZAKHSTAN
    * EARNINGS AND OPERATIONAL CASH FLOWS OF NEW BUSINESS ARE
EXPECTED
TO TURN POSITIVE TOWARDS END OF 2021
    * REVISED FINANCIAL TARGETS: OPERATING MARGIN OF 6-8%
(CURRENTLY
7-9%)
    * DIVIDEND POLICY WOULD REMAIN UNCHANGED

Source text for Eikon:  ID:nWkrccTw8X 
Further company coverage:  FNMA.ST 

 (Gdynia Newsroom)
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