News

Fortaco Group Holdco Plc’s Half-Year Review January-June 2023 (unaudited, IFRS): Growth and acquisitions continued

This release is a summary of Fortaco Group Holdco Plc’s Half-Year Review January-June 2023. The full release is attached and available on our website at https://investors.fortacogroup.com.

Figures in parentheses refer to the corresponding period of the previous year, unless otherwise stated.

Highlights: April-June 2023

• Net sales was EUR 95.9 million (comparable net sales growth 14.8 per cent).
• Recurring EBITDA was EUR 8.7 million (9.1 per cent of net sales, comparable growth in recurring EBITDA -2.2 per cent). EBITDA was EUR 7.4 million (7.7 per cent of net sales).
• Recurring EBITA was EUR 6.1 million (6.3 per cent of net sales, comparable growth in recurring EBITA -6.6 per cent). EBITA was EUR 4.8 million (5.0 per cent of net sales).
• Net debt was EUR 51.3 million and net debt to comparable recurring EBITDA 1.9x.
• Business activities remained high during the period, with clear comparable growth in net sales achieved. Profitability during the period was reasonably good, supported by good net sales, right pricing and efficiency.
• During the period, several structural business events took place:

On 23 May 2023, Fortaco announced that it has received an approval of the listing prospectus from the Finnish Financial Supervisory Authority concerning bonds issued 22 July 2022. Further it was announced that the application for the bonds to be admitted to trading on the corporate bonds list of Nasdaq Helsinki was submitted. The trading started 25 May 2023.

On 26 May 2023, Fortaco announced the signing of an agreement to acquire the entire share capital of Walter Mauser GmbH. The transaction has not closed at the time of publication of the half-year review, the transaction is expected to close during Q3 2023 and Fortaco will specify the impact of the acquisition to its financials guidance for 2023 after the closing of the acquisition. The transaction has not closed at the time of publication.

On 7 June 2023, Fortaco announced it was investigating the possibility to issue subsequent bonds under its existing bond framework. On 16 June 2023, it was announced that the bond issue was successful in the amount of EUR 27.5 million. The bond issue was closed and funds were received subsequent to the review period in July 2023 (see events after the reporting period).

On 7 June 2023, it was also announced that Fortaco signed a letter of intent to acquire the remaining 65 per cent share in Buisard S.A.S. The transaction has not closed at the time of publication of the half-year review.

On 21 June 2023, it was announced that Fortaco will invest in steel fabrication capacity in the Gliwice region of Poland. Construction is expected to start in H2 2023, with the start of operations during H2 2024.

Highlights: January-June 2023

• Net sales was EUR 192.1 million (comparable net sales growth 22.4 per cent).

• Recurring EBITDA was EUR 16.9 million (8.8 per cent of net sales, comparable growth in recurring EBITDA 19.4 per cent). EBITDA was EUR 14.8 million (7.7 per cent of net sales).
• Recurring EBITA was EUR 11.7 million (6.1 per cent of net sales, comparable growth in recurring EBITA 25.5 per cent). EBITA was EUR 9.6 million (5.0 per cent of net sales).

Key figures

Fortaco Group key financials

Guidance for 2023 (issued 23 May 2023 in prospectus)

For 2023, net sales are expected to exceed EUR 350 million (comparable net sales in 2022: EUR 332.4 million), with recurring EBITDA higher than comparable recurring EBITDA in 2022 (comparable recurring EBITDA in 2022: EUR 24.7 million).

Comments by Lars Hellberg, President & CEO

During the first half of year 2023, Fortaco’s successful growth continued. The growth of net sales was 22 percent in H1-2023, compared to the corresponding period in the previous year, and totaled to EUR 192 (157) million. Recurring EBITDA grew 19 per cent in H1-2023, compared to the corresponding period in the previous year, and was EUR 16.9 (14.2) million. The balance sheet key indicator of net debt versus EBITDA was on a good level at 1.9. We have good cash position, which enables sustainable business development.

We continued our acquisition path and made the strategic decision to acquire MauserCABS, an Austrian-based company, in May. In addition, Fortaco signed a letter of intent to acquire the rest of the shares in Buisard Cabins, of which we already own 35 per cent. Both transactions are expected to close in Q3-2023. In June, Fortaco successfully issued subsequent bonds in the amount of EUR 27.5 million to provide financial resources for ongoing acquisitions and strategic investments in accordance with our targets. I wish to thank our European bond investors – we are honored to have your trust.

We started several development and co-operation projects to strengthen our business and market position. The Poland Gliwice region capacity extension project is a greenfield investment that consists of a covered production area of 34,000 square meters and new equipment. With this investment, Fortaco expands its footprint for steel fabrication and vehicle cabin operations and gains additional efficiency based on a high degree of automation and strong operational excellence. Serial production is expected to start by the end of the third quarter of 2024. The earlier announced extension of the business site Holic in Slovakia, to build a high degree of automation and capacity, is progressing according to the investment plan. Fortaco Estonia OÜ and Systemair AS, the owner of the real estate housing Well Technology OÜ, signed an agreement where Fortaco Estonia expands its operations into the Well Technology building. Through this deal, Fortaco Estonia extends its capacity by 8,000 square meters of floor space. This strengthens Fortaco’s position as one of the largest, strategic partners for steel fabricated component OEMs (Original Equipment Manufacturers) in Europe. Serial manufacturing is expected to start at the beginning of 2024. Also, there are several implementations ongoing across Fortaco business sites for automation and digitalization to make tomorrow safer and better.

Our order book remained healthy and was EUR 72.2 million. However, we foresee, depending on the market segment and customers, dealers and OEMs aligning their inventories to adjust to the normalized supply chain delivery situation. However, the market segment causing disturbance is the marine and energy market, which is negatively impacting the capacity utilization of two Fortaco business sites. We are closely monitoring global, local, and several other indexes, to be prepared for potential capacity adjustments.

We have won additional business in the defense market and foresee growth opportunities in the short- and medium term in this segment. Additionally, Fortaco is currently introducing several new global OEM customers to be part of our customer portfolio, and acquisitions are expected to bring us additional, complementary customers. I would like to highlight Fortaco’s robustness, quality, and delivery performance, which make us an interesting strategic partner for our current and new customers.

We have seen an increased activity from our customers to start operations and localization in the United States. As previously announced, Fortaco’s strategic plan contains actions to offer the same business portfolio in the US as in Europe. The Fortaco team has explored the market and we expect the company to be present in the US in the near future. Our joint venture with Tata AutoComp in India is proceeding.

The first cabin samples are manufactured for customer approval, and production is planned to start by the end of 2023. We are expecting the joint venture to accelerate the growth of the local Indian market and exports.

Steel market prices are currently declining, and the margin impact is expected to be neutral for us. In the coming period, we strive to execute further sourcing synergies based on the business growth and acquisitions together with our professional supply chain.

Financial information

The company publishes the Interim Report for January-September 2023 on Monday, 30 November 2023.

Fortaco Group Holdco Plc

Board of Directors

Further information

Lars Hellberg, President & CEO
+358 40 572 9488
lars.hellberg@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
Web: investors.fortacogroup.com

Categories: Stock exchange releases

by Fortaco

Listing prospectus for Fortaco Group Holdco Oyj’s EUR 27,5 million subsequent senior secured bonds available; listing application submitted

Fortaco Group Holdco Oyj (the “Company“) issued on 22 July 2022 senior secured bonds with a principal amount of EUR 75 million (the “Bonds“) which have since been admitted to trading on the corporate bonds list of Nasdaq Helsinki Ltd under the trading code “FORJVAIH27”. The Company has on 3 July 2023 issued subsequent bonds in an amount of EUR 27.5 million under the terms and conditions of the Bonds (the “Subsequent Bonds“). In accordance with the terms and conditions of the Bonds, the Company shall apply for the Subsequent Bonds to be listed on the corporate bonds list of Nasdaq Helsinki Ltd.

The Finnish Financial Supervisory Authority has today approved the listing prospectus of the Subsequent Bonds (the “Prospectus“). The Prospectus is available in English on the Company’s website at investors.fortacogroup.com. The summary of the Prospectus has been translated into Finnish.

The Company has today submitted an application for the Subsequent Bonds to be admitted to trading on the corporate bonds list of Nasdaq Helsinki Ltd. Trading on the Subsequent Bonds is expected to commence on or about 25 August 2023 under the same trading code “FORJVAIH27” as the Bonds.

Pareto Securities AB acted as the bookrunner in connection with the issue of the Subsequent Bonds.

For further information, please contact:

FORTACO GROUP HOLDCO OYJ
Kimmo Raunio
Senior Executive Vice President & CFO
kimmo.raunio@fortacogroup.com
+358 40 593 6854

Distribution:
Nasdaq Helsinki
Principal media
www.fortacogroup.com

Categories: Stock exchange releases

by Fortaco

Learning from the Leader

Toyota has always been a great inspiration for Fortaco. ????

There is so much to learn from the global leader of automotive industry, even though we do not manufacture cars in big series.

Since 2018, Fortaco has been visiting Toyota - nearly 100 of our team members have taken part in their one- or three-day events which are focusing on Lean, people driven Leadership which is critical for the sustainable continuous improvement. ↗️

Some of the events were led by professor Jefrey K. Liker, the author of ”The Toyota Way”.

The driving theme is Toyota’s scientific approach to achieve goals and solve problems. To develop such daily routines, we need to have an understanding on every level of organization, including our top leaders and investors, managing directors, People & HR team, middle managers and support functions.

We are grateful for Toyota for openness, deployment of senior leaders, and sharing insight in Toyota Production System - Thank you! ☀️

by Fortaco Group

Inside information: Fortaco Group successfully issues subsequent bonds in an amount of EUR 27.5 million

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN CANADA, AUSTRALIA, HONG KONG, ITALY, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, JAPAN, THE REPUBLIC OF CYPRUS, THE UNITED KINGDOM OR THE UNITED STATES (OR TO ANY U.S. PERSON), OR TO ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE UNLAWFUL, EXCEPT AS SET FORTH HEREIN AND PURSUANT TO APPROPRIATE EXEMPTIONS UNDER THE LAWS OF ANY SUCH JURISDICTION.

Fortaco Group Holdco Oyj (the “Group”) has, following a bookbuilding process, successfully placed a subsequent bond issue (the “Subsequent Bond Issue” or the “Subsequent Bonds”) in an amount of EUR 27.5 million under the Group’s existing senior secured floating rate bond loan 2022/2027 with ISIN NO0012547274 (the “Bonds”). Following the Subsequent Bond Issue, the outstanding amount under the Bonds will be EUR 102.5 million. The transaction was met with strong demand from primarily new and existing institutional investors based in the Nordics and continental Europe and was placed at a price of 95.5% of par.

With reference to the press release issued on 7 June 2023, proceeds from the Subsequent Bond Issue will be applied towards financing the acquisitions of Walter Mauser GmbH and Buisard S.A.S, financing transaction costs, and financing general corporate purposes.

Settlement of the Subsequent Bond Issue is expected to be on or about 3 July 2023. In accordance with the terms and conditions of the Bonds, an application will be made for the Subsequent Bonds to be admitted to trading on the corporate bonds list of Nasdaq Helsinki Ltd.

Pareto Securities AB acted as sole bookrunner and Roschier Advokatbyrå and Gernandt & Danielsson acted as legal advisors in connection with the Subsequent Bond Issue.

For further information

Lars Hellberg

+358 40 572 9488

lars.hellberg@fortacogroup.com

Fortaco Group

Fortaco is the leading brand independent strategic partner to the heavy off-highway equipment and marine industries offering zero emission solutions, technology services, assemblies, vehicle cabins, and steel fabrications. Fortaco Group has operations in multiple European and Asian Business Sites and Technology Hubs, which are supporting our global customers. www.fortacogroup.com

Disclaimer

General

This release is for information purposes only and is not to be construed as an offer to purchase or sell or a solicitation of an offer to purchase or sell with respect to any securities of the Group. The distribution of this release and the related material concerning the issuance of the Bonds may, in certain jurisdictions, be restricted by law. No actions have been taken to register or qualify the Bonds, or otherwise to permit a public offering of the Bonds, in any jurisdiction. Any offering material or documentation related to the Bonds may be received only in compliance with applicable exemptions or restrictions. Persons into whose possession this release or any such offering material or documentation may come are required to inform themselves of and observe all such restrictions. This release and any such offering material or documentation may not be distributed or published in any country or jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction or would require actions under the laws of a state or jurisdiction. In particular, this release and any such offering material or documentation may not be distributed directly or indirectly, to or into Canada, Australia, Hong Kong, Italy, New Zealand, the Republic of South Africa, Japan, the Republic of Cyprus, the United Kingdom or the United States (or to any U.S. person (as defined below), or to any other jurisdiction in which such distribution would be unlawful, except as set forth herein and pursuant to appropriate exemptions under the laws of any such jurisdiction.

Neither the Group nor the sole bookrunner or any of their representatives have taken any actions to allow the distribution of this release in any jurisdiction where any action would be required for such purposes. The distribution of this release and any purchase of or application/subscription for Bonds or other securities of the Group may be restricted by law in certain jurisdictions, and persons into whose possession this release comes should inform themselves about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the applicable securities laws of any such jurisdiction. Neither the Group nor the sole bookrunner has authorized any offer to the public of securities, or has undertaken or plans to undertake any action to make an offer of securities to the public requiring the publication of an offering prospectus, in any member state of the European Economic Area and this release is not a prospectus for purposes of Regulation (EU) 2017/1129, as amended.

United Kingdom

In the event that this release is distributed in the United Kingdom, it shall be directed only at persons who are either (a) “investment professionals” for the purposes of Article 19(5) of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order“), (b) high net worth companies, unincorporated associations and other persons to whom it may lawfully be communicated in accordance with Article 49(2)(a) to (d) of the Order, or (c) persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any Bonds may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “Relevant Persons“). Any investment or investment activity to which this release relates will be available only to Relevant Persons and will be engaged in only with Relevant Persons. This release is not a prospectus for the purposes of Section 85(1) of the UK Financial Services and Markets Act 2000. Accordingly, this release has not been approved as a prospectus by the Financial Conduct Authority (the “FCA“) under Section 87A of the Financial Services and Markets Act 2000 and has not been filed with the FCA pursuant to the UK Prospectus Rules nor has it been approved by a person authorized under the Financial Services and Markets Act 2000.

United States

This release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. In the event that this release is distributed in the United States, it shall be directed only at persons who are “qualified institutional buyers” (“QIBs“) as defined in Rule 144A (“Rule 144A“) promulgated under the U.S. Securities Act of 1933, as amended (the “Securities Act“) in reliance upon Rule 144A under the Securities Act. The Bonds have not been and will not be registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction in the United States. Accordingly, the Bonds may not be offered, sold (directly or indirectly), delivered or otherwise transferred within or into the United States or to, or for the account or benefit of, U.S. Persons, absent registration or under an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Bonds are being offered and sold only (i) outside the United States to persons other than U.S. persons (which shall include dealers or other professional fiduciaries in the United States acting on a discretionary basis for non-U.S. beneficial owners (other than an estate or trust)) in reliance upon Regulation S under the Securities Act (“Regulation S“) and (ii) in the United States to QIBs in reliance upon Rule 144A under the Securities Act. As used herein, the terms “United States” and “U.S. person” have the meanings as given to them in Rule 902 of Regulation S under the Securities Act.

Categories: Stock exchange releases

by Fortaco

Resolutions of Fortaco Group Holdco Oyj’s shareholder on 14.6.2023 on the matters belonging to the General Meeting

Fortaco Group Holdco Oyj’s sole shareholder has made a unanimous written decision without convening a General Meeting in accordance with chapter 5, section 1 of the Finnish Companies Act (624/2006, as amended) in the following matters falling under the competence of the General Meeting.

1. Adoption of the financial statements

It was resolved to adopt the financial statements for the financial year from 12 April 2022 to 31 December 2022.

2. Treatment of profit shown on the balance sheet

It was resolved to approve the proposal of the Board of Directors and the recommendation of the Supervisory Board of Directors that the result of the financial year is transferred to the profit and loss account for the previous years and that no dividend shall be distributed.

3. Discharge from liability

It was resolved to discharge the members of the Supervisory Board of Directors and the Board of Directors as well as the Managing Director of the company from liability from the financial period form 12 April 2022 to 31 December 2022.

4. Number of members of the Supervisory Board of Directors, their election and remuneration

It was resolved that the number of ordinary members of the Supervisory Board of Directors shall be six (6).

It was resolved to elect Panu Routila (chair), Johann-Melchior Ritter und Edler von Peter, Marc Lindhorst, Markus Sjöholm, Sebastian Schatton and Mona Henning to the Supervisory Board of Directors of the company.

It was resolved that the members of the Supervisory Board of Directors shall be remunerated as follows:

• Panu Routila shall be paid an annual fee of EUR 52,800 in monthly instalments and
• Markus Sjöholm shall be paid an annual fee of EUR 40,000 in monthly instalments.

Other members of the Supervisory Board of Directors shall not be remunerated.

5. Number of members of the Board of Directors, their election and remuneration

It was resolved that the number of members of the Board of Directors shall be one (1) ordinary member and one (1) deputy member.

It was resolved to re-elect Lars Hellberg as ordinary member (chair) and Kimmo Raunio as deputy member of the Board of Directors.

It was resolved that the members of the Board of Directors shall not be remunerated.

6. Election of auditor

It was resolved to re-elect certified accountant corporation Ernst & Young Oy as the auditor of the company, responsible auditor being certified public accountant Anders Svennas.

7. Resolution on the remuneration of the auditor

It was resolved that the auditor is paid reasonable remuneration in accordance with the invoice approved by the company.

Fortaco Group Holdco Oyj

Board of Directors
Further information:
Lars Hellberg
President & CEO
+358 40 572 9488
lars.hellbergfortacogroup.com

Kimmo Raunio
Senior Executive Vice President & CFO
+358 40 593 6854
kimmo.raunio@fortacogroup.com

Distribution

Nasdaq Helsinki Oy

Principal media
http://investors.fortacogroup.com

Fortaco Group
Fortaco is the leading strategic partner in Europe to the heavy off-highway equipment and marine industries providing premium offerings, like zero emission solutions and technology, vehicle cabins, steel fabrications, and assemblies. Fortaco Group has operations in multiple European and Asian Business Sites and Technology Hubs, which are supporting our global customers. www.fortacogrop.com

Categories: Stock exchange releases

by Fortaco