• Q2e: Sales of SEK 1,159m & adj. EBIT of SEK 41m
• FX raises '26e-'28e adj. EBIT 0%/3%/3%
• Trading at 14-9x 26e-'27e EV/EBIT (peers at 18-16x)

Undemanding Q2 comps

We expect Ferronordic to deliver Q2 sales of SEK 1,159m (vs. SEK 1,088m in Q2'25, +7% y-o-y, +3% q-o-q), with the previous adverse FX effects easing sequentially (-3% in Q2e vs -6% in Q1). We forecast adj. EBIT of SEK 41m (break-even in Q2'25), for a margin of 3.6%. We note that the earnings comps are undemanding, with Q2'25 adj. EBIT soft across all segments. We estimate leverage to decline to 3.2x EBITDA in the quarter, partly on a NWC release from German inventory, as the German truck orders postponed in Q1 are delivered.

Estimates raised on FX

We make minimal estimate changes, with '26e-'28e sales upgraded 1%/2%/2% and adj. EBIT upgraded 0%/3%/3% on FX. On July 17, Volvo announced production ramp-ups in conjunction with its Q2 report. Importantly, it also upgraded its full-year guidance for the European heavy-duty registrations for the third consecutive quarter, from 310,000 to 315,000. Volvo's commentary on solid European order intake supports our German estimates into H2'26. Additionally, Volvo & Renault heavy-duty registrations in Germany rose 7% y-o-y in the quarter, with total heavy-duty registrations up 10%. During the quarter, we saw continued strength in US ISM PMIs (53.3 in June) and management continues to see solid demand among underlying drivers such as infrastructure and data centres within its territories.

Trading at 14-9x EV/EBIT

We expect a positive operational development for Ferronordic during the rest of '26e, with continued momentum in the US alongside an emerging recovery in Germany. We also find the possibility of further bolt-on M&A attractive. The share is up +39% YTD, compared with +7% for OMXSGI. The valuation presently sits at 14-9x '26e-'27e EV/EBIT, which can be compared to our heavy equipment distributor peer group at 18-16x.