Annual Report 2023

GROWTH CONTINUE

Fortaco is three times bigger today than 10 years ago when established, and one of the European leaders in the cabin industry and steel fabricated components.

GROWTH CONTINUE

Fortaco is three times bigger today than 10 years ago when established, and one of the European leaders in the cabin industry and steel fabricated components.

Fortaco continued with over 98 per cent delivery accuracy on a continuous basis.

Fortaco celebrated its 10th anniversary at the beginning of 2023. I am very proud of having been a team member all these years. Together we have experienced a lot in building Fortaco. Since its establishment, the company is three times bigger now and one of the European leaders in the cabin industry and steel fabricated components.

2023 was another year with a lot of deliveries. Our organic growth continued, and we accelerated the acquisition of Buisard cabins in Sablé, France, from 35 per cent ownership to 100 per cent. We acquired MauserCABS in Breitenau, Austria. In addition, a cornerstone ceremony took place in Gliwice, Poland, where we are constructing a new, highly-efficient steel fabrication operation.

Fortaco continued with over 98 per cent delivery accuracy on a continuous basis. The people engagement score at Fortaco has improved to a level being equal to the average score in Europe. We report our financial performance like a listed company, every quarter since our bond is listed on the Helsinki Nasdaq.

Together with Tata AutoComp and key customers, we inaugurated a cabin manufacturing factory in Pune, India. We are increasing the level of robotization and expanding capacity in Holic, Slovakia by 100 per cent through a factory extension. We are also increasing robotization and expanding capacity in Narva, Estonia by 30 per cent through an acquisition of a new factory hall close to existing operations.

We have introduced Fortaco’s Sustainability Program and appointed a Sustainability Manager who will lead Fortaco to be a recognized circular economy enabler.

We have introduced Fortaco’s Sustainability Program and appointed a Sustainability Manager who will lead Fortaco to be a recognized circular economy enabler. We will implement a climate program, and our Zero Emission Solutions function will deliver customers new business, like electrification-related solutions. We will use an increased amount of renewable and recyclable raw materials. We have won new, global customers to broaden our capabilities and offerings.

Yes, we have achieved a lot, thanks to our customers, business partners, the Fortaco family team, and Fortaco Supervisory Board.

The year 2023 started positively with a high order intake, and we could foresee strong performance. Together with our customers, we negotiated to transfer the abnormal inflation and fluctuation in steel prices to customers. However, the market indicated softening after the summer due to several reasons. First, the abnormally high volume and capacity increases during recent years caused delivery constraints in the supply chain. Second, most customers had built abnormal inventories in-house and through dealers to maximize short-term deliveries, and, during the autumn, we experienced an  alignment back to normal. The softening and decline in the market became visible due to global situations like Ukraine, Israel, and the high inflation rate, etc.

Net sales continued to grow and was 374 million euros. Growth originated from the volume growth during the first half of the year and from the acquisitions. Recurring EBITDA was 24.4 million euros. Pro forma net sales and recurring EBITDA were 420 million euros and 37.3 million euros respectively. Pro forma financials include the full-year impact of acquisitions and exclude the financials of the marine, energy, and heavy project business, which is under strategic review.

Fortaco has started a strategic evaluation of its marine, energy, and heavy project business as these are not considered to have strategic importance for Fortaco. The business sites operating in these segments are located in Finland, Hungary, and Serbia. The profitability of this business continued to be negatively impacted due to low order intake and the current customers’ strategic restructuring. The cumulative net sales and EBITDA of the segment for the full year 2023 amounted to EUR 40 million and -6 million respectively. The strategic evaluation is expected to be completed during H1 2024.

Fortaco has established a new business, Zero Emission Solutions.” This is our critical cornerstone to support the climate program.

Fortaco has established a new business, Zero Emission Solutions. Its offerings include fossil-free steel, smart steel of lower weight and material usage, Smart Weld to research future welding technologies, integrated thermal management for electrification, and battery charging, battery cages and assembly, and off-grid charging capabilities, etc. This is our critical cornerstone to support the climate program in collaboration with our customers and business partners.

Fortaco’s plan for 2024 and beyond is to enter the US market and thereby become an international strategic Tier 0.5 partner to our current and future customers.

I would like to thank our customers and business partners for their trust. Also, I thank our employees for their dedication to the path toward achieving our common goals.

Trust in Tomorrow.

Lars Hellberg

President & CEO