Inside information 2 April 2025 at 11:30 EEST
Fortaco Group Holdco Oyj (the "Issuer" or "Fortaco" and together with its subsidiaries from time to time, the "Group") has instructed the agent for the Issuer's senior secured bonds with ISIN NO0012547274 (the "Bonds") to initiate a written procedure to request that holders of the Bonds vote in favour of certain amendments to the terms and conditions of the Bonds (the "Terms and Conditions"), including an extension of the tenor and an amendment of the interest rate under the Bonds (the "Written Procedure"). In connection with the Written Procedure, the Issuer is also providing a profit forecast for 2025 and long-term financial outlook.
Written Procedure
General market uncertainty and rising interest rates have negatively impacted the Group’s net sales and profitability in 2023 and 2024. Furthermore, certain new investments have taken longer than expected to ramp up and a recently acquired business has not performed as expected. As a consequence, the Group expects to face a liquidity shortfall during 2025 unless measures are taken to strengthen the balance sheet and reduce the cash interest burden.
The principal shareholder of the Issuer intends to proactively address the situation by injecting new equity, in connection with which certain changes are also sought to the Terms and Conditions of the Bonds. Therefore, the Issuer kindly requests that holders of Bonds vote in favour of inter alia (i) extending the tenor of the Bonds by two years (including amending the call structure to reflect the extended tenor of the Bonds), (ii) amending the interest rate during 2025 and 2026, and (iii) introducing the option to make voluntary partial redemptions of up to EUR 20 million, in each case on the principal terms and as further described in the notice of the Written Procedure.
Subject to the requests in the Written Procedure being duly approved, the principal shareholder of the Issuer will make an equity contribution to the Group of no less than EUR 20 million, which alongside the requested amendments will substantially strengthen the balance sheet and liquidity of the Group.
The largest holders of Bonds, in aggregate representing approximately 49 per cent of the outstanding nominal amount of Bonds, have indicated their support for the proposed amendments pursuant to the Written Procedure.
“The requested amendments to the terms and conditions of our bonds as well as the additional capital injection from our principal shareholder, One Equity Partners, will significantly strengthen our financial position and balance sheet,” says Mika Mahlberg, President & CEO of Fortaco. “In the past years, we have made strategic investments into our production facilities to ensure that we have the necessary capacity to fulfil our customers’ needs when the market situation improves and OEMs start to increase volumes again. We have started to see first signs of recovery impacting positively H2 2025 volumes for example in the defence industry. With the support from our strong owner we will be well-positioned to grow alongside our customers,” Mahlberg concludes.
The notice to the Written Procedure will be delivered to all bondholders through the CSD and is also available on the Issuer's investor website (https://investors.fortacogroup.com/bond/). To be eligible to vote in the Written Procedure, a person must be registered as a Bondholder on 10 April 2025. The last day for voting in the Written Procedure is 17 April 2025.
Pareto Securities is acting as financial advisor to the Issuer in connection with the Written Procedure.
Profit forecast for 2025 and long-term financial outlook
In connection with the Written Procedure, the Issuer has prepared a presentation providing certain information with respect to its trading as well as financial outlook for the period 2025-2027.
Profit forecast for 2025
Fortaco has not previously issued a profit forecast for 2025. Now, Fortaco estimates that its net sales will be in a range of EUR 335 – 350 (338, excluding divested businesses) million and recurring EBITDA in a range of EUR 20 – 23 (20, excluding divested businesses) million in 2025. On an LTM basis (excluding divested businesses), net sales is estimated to be in a range of EUR 318 – 328 million for Q1 2025, in a range of EUR 313 – 328 million for Q2 2025, and in a range of EUR 323 – 338 million for Q3 2025.
Long-term financial outlook
Fortaco hereby provides a long-term financial outlook for 2026 and 2027.
Net sales are expected to amount to approximately EUR 375–400 million in 2026 and approximately EUR 400–425 million in 2027. Recurring EBITDA is expected to amount to approximately EUR 35–39 million in 2026 and approximately EUR 44–48 million in 2027.
Further details and additional information are available in a company presentation published on the Issuer's investor website (https://investors.fortacogroup.com/reports/).
For further information
Mika Mahlberg
President & CEO
+358 40 548 3353
mika.mahlberg@fortacogroup.com
Kimmo Raunio
Senior Executive Vice President & CFO
+358 40 593 6854
kimmo.raunio@fortacogroup.com
