Fortaco Group Holdco Plc's Business Review 28 May 2025 at 2:00 p.m. EEST
This release is a summary of Fortaco Group Holdco Plc's Business Review for January-March 2025. The full release is attached and available on our website at https://investors.fortacogroup.com.
Unless stated otherwise, comparison figures in parentheses refer to the corresponding period in the previous year.
Financial highlights: January-March 2025
Reported financials
- Order intake was EUR 93.3 (107.8) million.
- Net sales were EUR 82.3 (105.8) million.
- Recurring EBITDA was EUR 1.2 (4.5) million, i.e. 1.4 (4.3) per cent of net sales.
- EBITDA was EUR 0.3 (3.2) million, i.e. 0.3 (3.1) per cent of net sales.
Financials excluding divested businesses
Note: The financials presented below are based on the "New Fortaco" scope, i.e. excluding the marine, energy and heavy project businesses in Jászberény, Hungary and Kalajoki & Sepänkylä, Finland, which have been divested during 2024.
- Order intake was EUR 93.3 (99.3) million.
- Net sales were EUR 82.3 (98.1) million. The decrease in net sales was due to continuing weak market demand.
- Recurring EBITDA was EUR 1.2 (5.4) million, i.e. 1.4 (5.5) per cent of net sales.
- EBITDA was EUR 0.3 (4.1) million, i.e. 0.3 (4.2) per cent of net sales.
Operational highlights
- Group-wide performance improvement program focused on identifying and executing both profitability and cashflow improvement opportunities continued with full focus and is expected to deliver results as planned going forward 2025.
- Investments in Narva (Estonia), Holic (Slovakia) and Gliwice (Poland) were completed and operations were started.
Key figures
Fortaco Group key financials
EUR million unless otherwise noted | 1-3/25 | 1-3/24 | 1-12/24 | Last 12 months |
Net sales | 82.3 | 105.8 | 356.5 | 333.0 |
EBITDA | 0.3 | 3.2 | 7.6 | 4.6 |
% of net sales | 0.3% | 3.1% | 2.1% | 1.4% |
EBITA | -3.7 | -0.6 | -7.4 | -10.5 |
% of net sales | -4.5% | -0.5% | -2.1% | -3.2% |
Non-recurring items | 0.9 | 1.3 | 11.1 | 10.7 |
Recurring EBITDA | 1.2 | 4.5 | 18.6 | 15.3 |
% of net sales | 1.4% | 4.3% | 5.2% | 4.6% |
Recurring EBITA | -2.8 | 0.7 | 3.7 | 0.2 |
% of net sales | -3.4% | 0.7% | 1.0% | 0.0% |
Financial position | ||||
Return on Capital Employed % (ROCE) | -5.0% | 1.2% | 1.6% | 0.1% |
Equity ratio % | 9.5% | 20.9% | 12.7% | 9.5% |
Net debt | 156.8 | 93.5 | 150.0 | 156.8 |
Net gearing % | 542.9% | 133.9% | 384.9% | 542.9% |
Net debt / last 12 months recurring EBITDA | 10.3x | 6.1x | 8.1x | 10.3x |
Guidance for 2025
After the review period, Fortaco issued a profit forecast for 2025. 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 million in 2025 (EUR 20 million excluding divested businesses).
President & CEO Mika Mahlberg's comments
The year 2025 began as expected in a challenging market environment. In the first quarter, our comparable order intake decreased by 6 per cent year on year, and our comparable net sales decreased to EUR 82.3 (98.1) million.
Operational profitability was below the comparison period's level. Our comparable recurring EBITDA was EUR 1.2 (5.4) million or 1.4 (5.5) per cent of net sales. In addition to lower net sales, the result was burdened by the ongoing ramp-up of our business site in Gliwice in Poland, the costs of which will impact our profitability also in the second and third quarter.
The result was also weakened by the performance of our Breitenau business site in Austria, which was lower than in the comparison period as the site's turnaround process is still ongoing.
Fortaco's business and margin improvement programme, Fortaco 25, is proceeding as planned, and its profitability impacts are expected to materialise from the second half of 2025 onwards. The programme has already had positive cash flow impacts during the first months of the year, and we are satisfied with its progress. We continue our strong efforts to improve the profitability of our core business.
Despite the challenging start of the year, some of Fortaco's customer segments are showing positive signs of market activation, and some capacity allocations for the latter half of the year have already been made. The market situation appears favourable particularly in the mining and defence industries, although the unpredictability of the United States' customs policy creates significant uncertainty in all industries, making it difficult to predict market development. Fortaco, however, operates mainly as a partner to European machinery manufacturers and has only a small amount of direct trade into the US. This reduces the direct impacts of US customs policy on the company.
Smart innovation advances strategy implementation
During the review period, Fortaco implemented its strategy by presenting a new SmartCabin product at the Bauma fair in Germany. The new cabin, which is designed by Fortaco and can be used in different vehicles, is targeted to customers who want to make use of pre-designed high-quality cabin technology. The SmartCabin reduces customers' R&D needs through its integration possibilities and reduces expenses by, e.g., combining several different data feeds into a single display.
Importance of sustainability for customers continues to increase
In the first quarter of 2025, Fortaco continued to execute its sustainability programme. In March, we published our first Corporate Sustainability Reporting Directive (CSRD) compliant Sustainability Statement as part of our 2024 Annual Report. In 2025, key actions of our sustainability work include, among other things, reviewing our climate and environmental impacts and finalising our climate programme, developing our data collection and reporting, and continuing the integration of sustainability into supplier processes.
Our customers are showing increasing interest towards emission-free solutions, and defining a sustainable portfolio is one of our actions for 2025. This supports our strategic ambition to make the heavy off-highway equipment industry emission-free.
Our balance sheet strengthened significantly
After the review period in April, we carried out a written procedure regarding certain changes to the terms and conditions of Fortaco's bonds. In connection with the written procedure, the company's sole shareholder has made a EUR 20 million equity investment in the company, which together with the other changes to the terms and conditions of the bonds significantly strengthens the Group's balance sheet and liquidity.
After the review period on 23 May, we also sold our subsidiary in Serbia and thereby our marine and energy focused Business Site Gruza to the Norwegian Entec Evotec AS. The sale of Business Site Gruza was the final step in the strategic evaluation of our marine, energy, and heavy project businesses, which has thereby been completed.
Despite the challenging market environment, my first quarter as the CEO of Fortaco has been rewarding, and I want to thank our customers and owner for their trust. At the same time, I extend my thanks to our partners for seamless cooperation and to the entire personnel of Fortaco for their hard work and commitment during the first months of the year.
Mika Mahlberg
President & CEO
Changes in management
Lars Hellberg was appointed as a member of Fortaco's Supervisory Board as of 3 January 2025.
Mika Mahlberg was appointed President & CEO and member of the Board of Directors as of 3 January 2025.
Events after the review period
After the review period, on 2 April 2025, Fortaco announced that it would initiate written procedure with respect to its senior secured bonds. The written procedure regarded certain amendments to the terms and conditions of the company's bonds, including an extension of the tenor by two years, amending the interest rate during 2025 and 2026, introducing the option to make voluntary partial redemptions of up to EUR 20 million at a price of 101 per cent, together with certain other amendments.
On 2 April 2025, the company also provided a profit forecast for 2025 and long-term financial outlook. 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.
Fortaco also provided 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.
On 17 April 2025, Fortaco announced having successfully completed the written procedure in relation to the company's outstanding senior secured bonds. The amendments approved in the written procedure will become effective when the applicable conditions precedents, including the equity contribution of no less than EUR 20 million to be made by the principal shareholder of the company, have been satisfied.
On 7 May 2025, Fortaco announced that the EUR 20 million equity contribution had been made and other conditions precedent had been satisfied and that the amendments approved in the written procedure had become effective.
On 23 May 2025, Fortaco announced the sale of its subsidiary in Serbia and thereby the marine and energy focused Business Site Gruza to the Norwegian Entec Evotec AS. The sale of Business Site Gruza is the final step in the strategic evaluation of Fortaco's marine, energy, and heavy project businesses. The transaction is subject to some customary closing conditions and is expected to be closed in June 2025.
On 27 May 2025, Fortaco signed an agreement to extend the maturity of EUR 7.5 million super senior revolving credit facility with two years, new maturity of the facility being June 2027.
Financial reporting in 2025
In 2025, Fortaco will publish the following financial reports:
Half-Year Review January-June 2025 on Friday 29 August 2025
Business Review January-September 2025 on Wednesday 26 November 2025
Fortaco Group Holdco Plc
Board of Directors
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
Distribution
Nasdaq Helsinki Oy
Financial Supervisory Authority
Main media
investors.fortacogroup.com
Fortaco Group
Fortaco is the leading European full-solution provider for OEMs in the off-highway equipment industries. Pioneering the design and production of assemblies, cabins, steel fabrications, and zero emission solutions, we offer cutting-edge technology for enhanced productivity. We empower off-highway machines to use fossil-free steel and our customers to optimize their operations and move towards a greener future. Fortaco Group has operations in multiple European and Asian business sites and technology hubs, which support our global customers. www.fortacogroup.com
