Quarterly report
4/2004
The world's longest wooden bridge in laminated timber across the river Glomma at Flisa.
•Increase in operating revenues for 2004 to NOK 5773,2 million (4 864,1),
for the 4
thquarter NOK 1.380,1 million (1.251,4)
•Operating profit for 2004 at NOK 70.3 million (100.6), for the 4
thquarter
NOK 6.2 million (6.8)
•Stable prices for spruce; further decline in prices for pine
•Non residental building market still slow, yet solid order book for both Moelven
Modular Buildings and Moelven System Interiors at year end
•Increase in operating revenues for 2004 to NOK 5773,2 million (4 864,1),
for the 4
thquarter NOK 1.380,1 million (1.251,4)
•Operating profit for 2004 at NOK 70.3 million (100.6), for the 4
thquarter
NOK 6.2 million (6.8)
•Stable prices for spruce; further decline in prices for pine
•Non residental building market still slow, yet solid order book for both Moelven
Modular Buildings and Moelven System Interiors at year end
Per 31.12 4thQuarter 2004 2003 2002 2004 2003 2002 Intangible assets 0.2 15.3 -1.3 9.6 29.2 32.7 Tangible assets 0.5 -31.3 35.8 1,137.6 860.9 803.5 Financial assets -13.7 -29.1 12.5 116.6 125.4 152.3
Total fixed assets -13.0 -45.1 47.0 1,263.8 1,015.5 988.5
Stocks 38.6 58.5 58.9 908.3 708.2 665.0
Receivables and deposits -180.5 -221.9 -281.3 712.1 639.8 486.7
Total current assets -141.9 -163.4 -222.4 1,620.4 1,348.0 1,151.7
Total assets -154.9 -208.5 -175.4 2,884.2 2,363.5 2,140.2
Share capital* 0.0 0.0 0.0 647.7 579.8 579.8
Other equity and capital -48.4 -63.5 -14.9 425.1 343.7 338.7
Total equity -48.4 -63.5 -14.9 1,053.4 923.5 918.5
Long-term liabilities -102.1 -137.8 -175.3 1,012.3 738.6 578.5
Current liabilities -4.4 -7.2 14.8 818.5 701.4 643.2
Total liabilities -106.5 -145.0 -160.5 1,811.4 1,440.0 1,221.7
Total equity and liabilities -154.9 -208.5 -173.9 2,884.2 2,363.5 2,140.2
Net interest bearing debt -68.7 -122 -124 872.3 624 498
Capital employed -98.3 -185 -137 1,943.7 1,594 1,418
Net working capital -129.3 -132 -145 1,128.7 895 742
NOK mill.
Change in 4thQuarter
Changes in total equity for the Group
Opening balance 1,101.8 987.0 933.4 923.5 918.5 878.9
Profit/loss -23.9 -16.8 17.0 -2.5 32.2 71.4
Total from share issue before minority 0,0 0.0 0.0 117.9 0.0 0.0
Foreign currency translation -1.9 -6.5 -2.3 -5.0 12.7 0.0
Provisions for dividend -19.4 -17.9 -29.8 -20.5 -17.9 -29.8
Puchase/sale - Own shares 0,0 0.0 0.8 38.3 0.0 0.8
Change in reclassified assets -3.5 -22.2 0.0 1.0 -22.2 0.0
Minority interests 0.0 -0.1 -0.6 0.7 0.2 -2.8
Changes for year/period -48.7 -63.5 -14.9 129.9 5.0 39.6
Total equity 1,053.4 923.5 918.5 1,053.4 923.5 918.5
*129,542,384 shares at NOK 5.-, adjusted to account for 1,100 own shares.
The quarterly report has been prepared using the same accounting principles as those used in the annual accounts and according to NGAAP.
NOK mill. 2004 2003 2002 2004 2003 2002
Operating revenues 1,380.1 1,251.4 1,175.3 5,773.2 4,864.1 4,618.4
Depreciation 47.4 36.0 37.6 177.5 146.1 147.4
Cost of goods sold 907.2 784.5 682.3 3,667.3 3,020.7 2,772.7
Operating expenses 1,381.3 424.1 423.5 1,858.1 1,596.7 1,558.9
Operating profit 6.2 6.8 31.9 70.3 100.6 139.4
Income from associates -1.3 -3.5 0.2 -3.7 -5.9 -0.4
Interest and other financial income 3.1 -2.3 3.2 10.6 14.7 9.2
Interest and other financial expenses -16.6 -4.6 -12.4 -60.6 -44.9 -49.1
Operating result before tax -8.6 -3.6 22.9 16.6 64.5 99.1
Estimated tax cost 15.0 13.2 5.9 19.0 32.3 27.7
Minority interests 0.3 -0.2 0.6 0.7 -0.3 2.8
Net profit -23.2 -17.0 17.6 -1.8 31.9 74.2
Proforma, incl. Are-Group 2003 and 2002
Operating revenues 1,380 1,405 1,355 5,773 5,564 5,239
Depreciation 47 41 48 178 177 179
Operating profit 6 14 43 70 128 177
Net Operating margin (in %) 0.4 1.0 3.2 1.2 2,0 3.0
Total assets 2,962 2,986 2,690 2,884 2,829 2,615
Equity (in %) 36.5 39.0 35.0 36.5 35.0 39.0
No. of employees 3,201 3,176 3,418 3,191 3,150 3,420
Total Profit and Loss Account
2004 2003 2002 2004 2003 2002
Net operating margin (in %) 0.4 0.5 2.7 1.2 2.1 3.0
Gross operating margin (in %) 3.9 3.4 5.9 4.3 5.1 6.2
Return on capital employed (in %) 1.2 1.7 8.6 3.7 6.8 9.1
Earnings per share (in NOK) -0.18 -0.15 0.15 -0.02 0.28 0.64
Cash flow per share (in NOK) 0.28 0.36 0.49 1.41 1.96 2.05
Inv. in fixed assets, excl. acquisition (NOK mill.) 57 57 41 199 189 119
Equity ratio (in%) 36.5 39.1 42.9 36.5 39.1 42.9
Total oper. revenue outside Scandinavia (in %) 21 22 26 21 22 25
Number of employees 3,201 2,878 3,112 3,191 2,853 3,108
Number of shareholders 991 998 999 989 996 999
Average number of shares 129 541 284 115 954 584 115 953 313126 778 028 115 954 584 115 953 313 NOK mill.
Total
2004 2003 2002 2004 2003 2002
Net cash flow from operations 96.0 152.9 198.8 66.5 116.5 405.1
Cash from operating result 37.5 41.9 56.9 178.3 227.7 237.9 Cash flow from working capital 58.5 111.0 141.9 -111.8 -111.2 167.2
Cash flow from/to investments -97.5 -42.9 -35.1 -180.8 -176.7 -110.8
Cash flow from/to financing -50.5 -173.3 -208.4 86.0 68.6 -303.2
Net cash flow for the period -52.0 -63.3 -44.7 -28.3 8.4 -8.9
Liquid funds -52.5 -63.7 -44.7 16.6 45.4 37.4
Unutilised credit facilities 158.8 235.1 183.3 889.8 630.8 733.8
Available liquid funds 106.3 171.4 138.4 906.4 676.2 769.3
Net. investments from acquisitions and sales
Fixed assets - - -5.1 294.8 20.0 -5.1
Current assets - - -0.1 274.0 36.7 -0.1
Liquid funds - - 0.3 32.5 0.6 0.3
Total assets - - -4.9 601.3 57.3 -4.9
Equity - - 1.0 186.4 -0.3 1.0
Interest bearing debt - - -5.5 248.0 44.3 -5.5
Interest free debt - - -0.4 166.9 13.3 -0.4
Total capital - - -4.9 601.3 57.3 -4.9
NOK mill.
Total Change in 4thQuarter
2002: Sale of Norra Ny Skogs AB and Moelven Iberica SA. Acquisition of Nordisol Akustik in Karlstad AB.
2003: Aquisition of Finnforest Danmark A/S, Plyfa Göteborg AB and Woodpaint in Karlstad AB. Deconsolidation of Aicher GMBH as associated company. 2004: Aquisition of Are-Group and Mobilarum AB.
4thQuarter
Quarterly in 2002 - 2004 Quarterly in 2002 - 2004
Cash Flow Statement
Key figures
Highlights
In 2004, the Board has continued the last years’ efforts to improve the position of the Group’s business areas. Scandinavia is still viewed as the Group's domestic market, and production is nearly equally distrib-uted between Sweden and Norway. The profitability continued the development from the second half of 2003, and the result in 2004 was not satisfactory. Efforts were made also in 2004 to improve the structure of the Group's businesses and to increase the efficiency of its opera-tions. As a step in the internal con-solidation of the Group's businesses, the Kværnum sawmill and the Gol and Hen planing mills were closed down. The closings were achieved without reducing the overall output of the Moelven Timber Group.
Operating revenues and
profit
The Group's operating revenues totalled NOK 5 773.2 million, com-pared to NOK 4 864.1 million in 2003. Operating profit was NOK 70.3 million, which is a decrease from NOK 100.6 the year before. Pro forma operating revenues and oper-ating profit for 2003 (including the acquisition of the Are Group) were NOK 5 564 million and NOK 128 million, respectively. The main rea-son for the decrease in profit is the continued slow market for
non-resi-dential buildings which means that despite the measures implemented for the Moelven Building Group, the division was not able to sustain the same level of profitability as earlier. The imbalance in prices between raw materials and finished goods for the Moelven Timber Group had a negative impact on the sawmills' profitability. Even though the planing mills and glulam factories have been developing favourably, the Moelven Timber Group posted an overall decrease in profit. Net financial costs increased from NOK 30.2 million in 2003 to NOK 50.0 million in 2004. The increase is primarily due to the higher net interest-bearing debt incurred as a result of acquisitions.
Pre-tax profit totalled NOK 16.6 million (64.5), while losses after taxes totalled NOK 2.5 million (plus NOK 32.2), corresponding to NOK -0.02 per share (plus 0.28). The fig-ure for taxes for year includes a cor-rection regarding a change in tax rules for gains or losses on shares. Payable taxes totalled NOK 5.5 mil-lion (0.5). Cash flow from profit and loss items was NOK 178.3 million (227.7), corresponding to NOK 1.41 per share (1.96).
Operating revenues for the fourth quarter alone totalled NOK 1 380.1 million (1 251.4), with operating profit at NOK 6.2 million (6.8). Pro forma operating revenues and oper-ating profit for 2003 - including the Are Group - were NOK 1 405 million and NOK 14 million, respectively.
Business areas
Moelven Timber GroupAll of the businesses in the Moelven Timber Group process timber and manufacture wood-based building materials. This business area is divid-ed into Timber (sawmills), Wood (planing mills) and Laminated Timber (glulam factories). Operating rev-enues totalled NOK 4 559.9 million (3 554.3), and operating profit totalled NOK 78.2 million (93.2). Pro forma figures for 2003, which include fig-ures from the Are Group, show a turnover of NOK 4 255.0 million and an operating profit of NOK 120,6 mil-lion.
Operating revenues in the fourth quarter alone totalled NOK 1 059.7 million (879.4), and operating profit was NOK 12.0 million (1.6). Comparative pro forma figures for 2003 were NOK 1 033.0 million and NOK 8.8 million.
Continuing the negative trend from the end of 2003, the sawmills in Timber had a difficult year in 2004. The imbalance between the cost of raw materials and the price of fin-ished goods for the Swedish sawmills processing red wood made it
extremely difficult to achieve satis-factory profits for these units. The price trend for spruce has been stable to positive. A number of cost cutting and efficiency measures were imple-mented during the year and are expected to have effect in 2005.
Although the planing mills have posted improved figures compared to the year before, the results are still
NOK mill. 2004 2003 2002 2004 2003 2002 Operating revenues
Moelven Timber Group 1,059.7 879.4 826.1 4,559.9 3,554.3 3,380.8
Timber - sawmills 760.6 610.3 601.6 3,075.9 2,398.1 2,360.1 Wood - processing 454.5 312.1 295.0 1,983.8 1,363.0 1,273.8 Laminated Timber 101.2 93.8 99.4 387.2 386.1 364.6
Operating profit/loss
Moelven Timber Group 12.0 1.6 34.8 78.2 93.2 129.1
Timber - sawmills 5.5 17.1 28.0 30.6 92.3 93.6 Wood - processing 3.8 -16.1 6.4 32.0 -0.6 40.6 Laminated Timber 2.7 0.6 0.4 15.6 1.5 -5.1
4thQuarter Total
Moelven Timber Group
not satisfactory. Solid demand and market activity made it possible to increase prices and still retain a sta-ble level of activity.
The laminated timber businesses posted a significantly better result in 2004 than in 2003, and the improve-ment can be attributed to an exten-sive process involving both capacity adjustments and a greater focus on the domestic market. Laminated tim-ber production at one of the Group's three glulam factories in Norway was closed down during the year and the plant was sold to Moelven MassivTre AS, in which the Group has a 47 per cent stake. Moelven MassivTre AS is in the process of commercialising the production and sale of solid wood ele-ments. Production started in October. Moelven Building Group The Moelven Building Group sup-plies system solutions for the non-residential building market as an industrialised alternative to tradi-tional on-site constructions. The companies in the Moelven Building Group are divided into Moelven Modular Buildings (module-based buildings) and Moelven System Interiors (flexible system interiors). Operating revenues totalled NOK 1 253.5 million (1 340.7), and operating profit was NOK 29.8 million (37.0). Operating revenues in the fourth quarter alone totalled NOK 333,0 million (380.8), with operating profit at NOK 5.2 million (8.4).
The market for module-based apartment buildings is growing, and this is an important focus area for companies in the Modular Building Group. Developments have come furthest in Sweden, where modules for several independant building
projects, as well as to BoKlok, have been delivered. BoKlok is a coopera-tion between Ikea and Skanska, with the objective of building qualitatively sound, but inexpensive apartment complexes. Major deliveries to oil and gas-related projects in Norway continued in 2004, and are expected to continue in 2005. The increase in deliveries to residential building projects is also expected to continue in the Norwegian market, and a new production line dedicated to the pro-duction of such modules was started up in the summer of 2004. The order stock at the end of the year was sat-isfactory for both the Swedish and Norwegian units.
2004 has been a year with a sta-ble, but low level of market activity for the companies producing system interiors. The low level of new-build activity in the non-residential build-ing market meant that adjustments had to be made in both capacity and concept. Most adjustments to capaci-ty were carried out in Sweden, while adjustments to concept were made both in Sweden and Norway, and involved increasing focus on rehabili-tation, remodelling and additions. Other businesses
This business area includes the Group's parent company, as well as joint service units in Norway and Sweden, such as Information, Personnel, IT, R&D, Insurance and Finances. Some minor businesses and assets that do not belong to the Group's core business area are also included. The book value of assets that do not belong to the core busi-ness totals NOK 45 million. In all, operating revenues amounted to NOK 69.8 million (46.6), and
operat-ing loss was NOK 37.7 million (29.6). Operating revenues in the fourth quarter alone totalled NOK 16.6 mil-lion (12.8), and operating loss was NOK 11.0 million (-3.3).
Employees
At the end of the year, the Group had a total of 3 191 employees (2 853). 1 706 (1 686) of these are employed in Norwegian companies, 1 466 (1 147) in Swedish, 17 (17) in Danish and 2 (3) in other countries. The rate of absenteeism due to illness in 2004 was 6.32 per cent (7.06), or 44 991 (48 090) full workdays. Compared with previous years, the decrease is due to the lower instance of long-term absences, lasting more than 16 days. In 2004, the rate of long-term absenteeism totalled 3.08 per cent (4.24). The number of injuries resulting in absences totalled 83 (80), which corresponds to 20.4 (16.7) injuries (resulting in absences) per million work-hours.
Investments, balance
sheet and financing
Investments totalling NOK 57 million (57) were made in the fourth quarter. Accumulated investments for the year totalled NOK 199 million (188.8), which corresponds to 3.4 per cent of operating revenues (3.9). In addition to investments, an increase in assets totalling NOK 294.8 million came about as a result of the acquisitions. At the end of the year, the Group's total assets totalled NOK 2 884.2 million (2 363.5).
Shareholders’ equity totalled NOK 1 053.4 million (923.5), corresponding to an equity ratio of 36.5 per cent (39.1). Capital employed totalled NOK
Total
2004 2003 2002 2004 2003 2002
Operating revenues
Moelven Building Group 333.0 380.8 336.9 1,253.5 1,340.7 1,241.5
Modular Buildings 194.8 217.8 175.6 736.5 762.9 655.8 Modular System Interiors 139.0 163.7 161.6 520.4 579.8 586.0
Operating profit/loss
Moelven Building Group 5.2 8.4 13.1 29.8 37.0 41.7
Modular Buildings -3.9 5.9 4.0 7.6 15.7 10.3 Modular System Interiors 9.1 2.5 9.1 22.2 21.3 31.4
4thQuarter
Moelven Building Group
SENDER:
Moelven Industrier ASA P.O. Box 134, NO-2391 Moelv Tel. +47 62 34 70 00 Fax. +47 62 36 92 80 Internett: http://www.moelven.com E-mail: [email protected] HUGIN Online: http://www.huginonline.no/MOE/
Moelven Industrier ASA is a Scandinavian
indus-trial group that supplies products and associated
services to the Scandinavian building market. The
Group's businesses employ 3.200 persons and have
a total annual turnover of some NOK 5.8 billion.
The Group's close to fortyfive business units are
organised into two business areas: the Moelven
Timber Group and the Moelven Building Group.
Moelven is a member of Finnforest Corporation
Oyj.
Finnforest is the largest wood products industry
cor-poration in Europe. Its annual turnover is close to
2 billion euros and the number of employees is
8 000. Finnforest is a core business of its owner the
Metsäliitto Group. Finnforest offers wood-based
product and service solutions to its customers in the
building and construction, industrial, distribution,
DIY and retailing segments. Finnforest serves in
over 20 countries. Main geographical markets are
the UK, Germany, France, Scandinavia and
Finland. In Scandinavia the operations are the
responsibility of Moelven Industrier ASA, which is
Finnforest’s majority-owned Norwegian subsidiary.
More information: www.finnforest.com and
www.moelven.com.
1 943.7 million (1 593.1). Netinterest-bearing debt at the end of the year was NOK 872.3 million (623.8), and liquidity reserves totalled NOK 906.4 million (676.2). The increase in the total balance is primarily due to the acquisition of the Are Group and Mobilarum.
Allocation of profit
The Board wishes to maintain a sta-ble dividend policy and believes that even though the Group posted a loss, equity is at a sufficient level to justify the payment of dividends. For 2004, the Board proposes to pay NOK 0.15 per share (0.15) in divi-dends. In all, the proposed dividends amount to NOK 19.4 million (17.9).
The parent company, Moelven Industrier ASA, which will be paying the dividends on behalf of the Group, had a profit of NOK 82.9 million in 2004. Any additional amounts beyond the proposed dividend will be transferred to other equity.
Outlook
The Board expects demand in the Scandinavian markets for wood-based construction material for new housing and leisure homes and reno-vation materials for this sector to remain stable in the coming year. The activity in the non-residential building market was slow at the start of the year and only minor changes are expected in 2005. European
plan-ing mills are expected to sustain a high level of activity. The Board therefore expects a good level of activity for the sawmills, while prices for certain raw materials and processed products are expected to remain at a level that will necessi-tate the implementation of additional efficiency measures. Although the same level of activity as in 2004 is expected to continue in the first half of 2005, the Board anticipates a somewhat better overall result in 2005.
Jessheim, 2 February 2005
Board of Directors, Moelven Industrier ASA
