BUSINESS REVIEW JANUARY-MARCH 2024

The market demand in Fortaco’s main markets remained soft in the first quarter of the year. Net sales increased by 10 per cent to EUR 105.8 (96.1) million, driven by the successful acquisitions of MauserCABS and Buisard Cabins in autumn 2023. The underlying market growth excluding the impact of the acquisitions was clearly negative. This was mainly due to the reduction of customer orders in most of Fortaco’s main market segments. 

In the first quarter, recurring EBITDA was EUR 4.3 million, i.e. 4.0 per cent of net sales. Excluding the marine, energy, and heavy project businesses that are under strategic review, recurring EBITDA was EUR 5.2 million. The profitability was burdened by declining market conditions, losses incurred in the businesses that are under strategic review and negative currency impact due to strengthening Polish Zloty. We are continuing our actions to further increase the efficiency of operations, adjust capacity and improve profitability. We are also carrying out price increases to compensate for the inflationary pressures on our cost base. 

OEMs (Original Equipment Manufacturers) and their distributors are still digesting their abnormally high inventories and the continuing geopolitical uncertainty, combined with the postponement of interest rate cuts by the central banks, are keeping our customers cautious and prolonging sales processes. However, our customer pipeline looks strong and we are confident that when the market situation improves, we will be in a good position to benefit from the ensuing growth. 

Investing for growth 

Fortaco continues to execute investments e.g. in a steel fabrication capacity in our new factory in Gliwice, expanding a vehicle cabin capacity in the Holic factory, Slovakia, and expanding operations in Narva, Estonia. These investments will support our strategy to expand technology offerings and to ensure we can serve our customers’ ever-expanding needs. At the same time, we are making our contribution to ensuring Europe has a competitive and future-proof manufacturing industry so we can grow and win together. These investments ensure that we can maintain our excellent delivery accuracy and have the needed capacity to fulfil our customers’ needs when the markets eventually pick up. 

In March, we further strengthened our financial position by successfully placing a subsequent bond issue in the amount of EUR 25.0 million and by receiving an equity injection of EUR 10 million from the owner. The bond issue was met with a strong demand from primarily new and existing institutional investors based in the Nordics and continental Europe. Following the bond issue, the outstanding amount under the bonds is EUR 127.5 million. 

A solid financial position enables us to carry out our expansion strategy, including the target of expanding our geographical footprint beyond Europe and extending our offering to cover new customer segments.