CEO's comments
Moelven earned NOK 420 million from operations in 2017. This is an earnings improvement of NOK 125 million compared with the previous year. Operating revenue for the full year rose by 4.5 per cent to NOK 10,768 million.
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OPERATING PROFIT 420 Mill NOK
OPERATING REVENUE 10.768 Mill NOK
Operating profit

295.0

mill. nok
Operating revenue

10,309.7

mill. nok

Positive development for Moelven

Moelven earned NOK 420 million from operations in 2017. This is an earnings improvement of NOK 125 million compared with the previous year. Operating revenue for the full year rose by 4.5 per cent to NOK 10,768 million.

For Moelven, 2017 was a year in which the positive development from 2016 continued. Internally, we have continued to improve underlying operations and, externally, we have benefited from good market conditions.

The restructuring work we started in 2014 has produced results. During the last year, we have reduced our net interest-bearing debt and increased our equityratio to 41.5 per cent. The return on capital employed (ROCE) is now at 14.2 per cent. All of this is well within the target we set ourselves in 2014. It gives a good basis for being able to provide our owners with a good return on investment over time.

The improvement and restructuring measures aimed at achieving our long-term goals will continue in 2018 as well.

Efforts aimed at reducing injuries have been given high priority for several years. When one looks at Moelven’s progress on HSE, the figures tell us two things. The number of reports of hazardous situations and near accidents has risen in the last year. This shows there is a greater focus on HSE. However, there are still far too many injuries at Moelven, and the development during 2017 has not been satisfactory.

We are more than 3,500 employees and all of us should “come home safe”. We have a shared responsibility here, and the effort to reduce injuries will be important in the time to come.

How have Moelven’s divisions done in 2017?

All three of Moelven’s divisions have shown clear improvements in profitability, despite the fact that they operate in different markets that are impacted differently by economic cycles.

The improvement work in the Timber division continued in 2017. The main tasks involve primarily developing and improving its competitiveness in the global markets. During the year, it has been pleasing to see the improvements in profitability that have taken place, amongst others at Moelven Dalaträ AB and at Moelven Årjäng Såg AB.

The Wood division continues to benefit from a growing market for building materials. In particular, there is an increase in the demand for products that require minimal processing after assembly.

Moelven Vänerply AB is Scandinavia’s only plywood producer, and is another company in the Wood division with a positive development. We have invested more than NOK 100 million in modernising its machinery since we acquired the company in 2011. The investments has increased capacity and productivity, which in turn has produced a good return. In order to further improve the technical standard and increase the share of prefabricated products, additional investments will be made.

Moelven’s Building Systems division is experiencing a higher level of activity, especially within Modular Buildings and Laminated Timber.

The glulam-technology, which took off 30 years ago in connection with the Olympic Winter Games in Lillehammer in 1994, has been a great journey so far. Since the Lillehammer Winter Olympics, we have developed technology that has taken us from the Vikingship arena to the construction of Gardermoen international airport and onwards, via innumerable wooden bridges, to the “Treet” apartment block in Bergen and now the world’s tallest wooden building, “Mjøstårnet” in Brumunddal.

At just above 80 metres tall, “Mjøstårnet” will be an international landmark building. Moelven is proving that the high rises of the future can be built of wood. We are very proud of this. The building and technology are being noticed far beyond the borders of Norway and the Nordic region.

What does the future look like for Moelven?

Sustainability and the environment are gaining more attention in society. Wood and its characteristics are often emphasized in order to meet both public requirements and, not least, end-users’ expectations for environmentally friendly products. This contributes to an increase in the demand for wood products.

With solid, well-run operating units and a positive market development with a focus on sustainable business, we believe that Moelven is facing a positive future.

We must continue our internal improvements for increased efficiency and profitability, but ensure that we deliver products and solutions that are sought in the market. We must continue to focus on quality and reliability and further develop our competitive edge.

Technology brings Moelven into Industry 4.0 - the fourth industrial revolution. The development is fast and provides exciting opportunities for the Group. “The smart digital sawmill” is a two-year project at our largest sawmill, Moelven Valåsen AB. The purpose is to use technology that enables increased yield and increased capacity by reducing the number of production stops and reducing energy consumption. We are looking forward to following the project and the results in the year to come.

The technological development has also been implemented, among other things, by increasing the level of robotization in the production of modules. At Moelven Byggmodul AB in Säffle, a new production line has been built with a high degree of robotization. The production line has contributed to an increase in capacity of 80%. This has meant that the need for employees by the way has increased, and in total we have created 40 new jobs. We are now well in the process of transferring experience and knowledge to other units in Moelven.

We must also be more forward-thinking in the way we work. For example, we must be better at thinking holistically, also regarding the working careers of our employees. We are now entering a time when continuous learning will be a natural part of the job. Global changes affect us faster than before. This means that in the future, skills must be learned, unlearned and learned again several times.

Internally, we have developed education programs for our employees so that they can further develop the skills they possess. The digitization of the value chain continues, and places great demands on new skills. In order to meet the future need of skilled personnel resources, we have also established our own trainee programme. We strongly believe in this. We notice that more and more people want to work in Moelven. our employees so that they can further develop the skills they possess.

Our industry is forward-looking, and with framework conditions in line with those of our international competitors, we will be well-equipped for the future. The infrastructure is of great importance to our business. Looking at our colleagues in Sweden, they have better framework conditions regarding infrastructure than we have in Norway. If the domestic industry is to be a driver for Norway in the future, a cost-effective infrastructure must be facilitated.

We will continue to focus on continuous operational improvements. If our in-house work is successful and we seize opportunities in the market, then we will have a good starting point for the future.

Morten Kristiansen
CEO
Moelven Industrier AS

Result

Main figures

HSE

Go to ANNUAL ACCOUNTS
News

"An amazing experience!”

It is safe to say that Stein Morten Velta was more than surprised to receive a formal invitation from the Norwegian government to a state dinner in the National Opera to celebrate the 80th birthdays of both King Harald and Queen Sonja.

"An amazing experience!”

It is safe to say that Stein Morten Velta was more than surprised to receive a formal invitation from the Norwegian government to a state dinner in the National Opera to celebrate the 80th birthdays of both King Harald and Queen Sonja.

Stein Morten works in production at Moelven Østerdalsbruket AS in Koppang and was surprised by how much he enjoyed the event.

“I felt like a very small fish in a huge pond, it was all a bit surreal. But it didn't take long before I saw someone else from Koppang. He works for the post office and is in charge of developing new stamps, so had been invited because of his job,” explains Stein Morten.

Stein Morten was seated at a table of ten together with Gerhard Heiberg and his wife, only a few tables away from the guests of honour.

“Gerhard Heiberg knows King Harald from hunting trips and sports and had lots of stories to tell. Before the event, I was worried that the mood would be a bit stiff, but it all went so quickly, and I had a great time. The food was delicious. We had crayfish from Skreia as a starter,” says Stein Morten.

Stein Morten Velta was invited as a people's representative, selected as an employee representative at a cornerstone company in Hedmark county.

Bø school named School of the Year

The award for School Building of the Year 2017 was won by Hå municipality. The award was announced at Danish NOHRCON’s conference, “Building the schools of the future”.

Bø school named School of the Year

The award for School Building of the Year 2017 was won by Hå municipality. The award was announced at Danish NOHRCON’s conference, “Building the schools of the future”.

The school façade has around 4,500 square metres of cladding made from Canadian cedar from Moelven Wood Prosjekt AS. The new primary school, Bø in Hå municipality in Jæren, won the award in competition with four other schools.

“The jury's assessment was based on the combination of materials, good outdoor areas and the flexibility of space to allow for different forms of organisation. Several other schools provided stiff competition, and the final award was determined by a public vote,” explains Product Manager Winfried Schaal in Moelven Wood Prosjekt AS.

Durable cladding

Sales Manager Fred Karlsen in Moelven Wood Prosjekt AS, who has been responsible for monitoring the project for Moelven, explains that the customer was looking for façade cladding that was durable and did not require a lot of maintenance.

“They assessed a number of alternatives but decided on a superior façade solution in cedar,” he confirms.

Fred Karlsen worked on the project for more than two and a half years.

Growth in demand for cedar

He explains that Norwegians, Swedes and Danes are starting to show an interest in cedar, and that this type of wood was relatively unusual in Scandinavian buildings only a few years ago.

“Cedar was used as a construction material for both homes and boats by the indigenous people in the north-west of North America, from Oregon to Alaska. So, this is an old type of wood, known for its use without any form of treatment. It has a long life and is resistant to fungus and rot. It is very rewarding to see a Norwegian school with cedar cladding win a Danish award,” confirms Fred Karlsen.

Pine and spruce

Traditionally, façades in Norway, Sweden and Denmark have been clad with spruce panelling or pine cladding. However, over the past three to five years, we have received an increasing number of requests for other types of wood for façades.

“Scandinavians have obviously become more aware of building traditions farther south in Europe. You only have to go south to Denmark to see that cedar is far more common there than in Norway,” says Fred Karlsen.

The team behind the project

The project was supplied by Partner Tre AS. Sola Bygg is the contractor and Hå municipality the building owner. Lars Haakanes from the firm of architects, Ola Roald AS, drew the first lines for the new school building. He has monitored the project until completion for the first day of school in 2016 and explains that quality for the pupils has been priority number one.

“It can be a bit overwhelming for young children to have their first day in a new, large school. By using wood cladding both indoors and outdoors, the aesthetic qualities of the wood make the building feel smaller. The wooden cladding also helps the building to breathe and improves the indoor climate,” explains Lars Haakanes.

550 pupils

The new Bø primary school in Hå municipality in Jæren was completed and opened its doors to pupils in the autumn of 2016. The school has capacity for 550 pupils, of which around 20 attend the ATO section (section for adapted education). The school also has an adjacent multi-purpose hall. The school has been designed in a cruciform shape, with the “heart” of the school at the meeting point of the different wings. Outdoors, the main material on the façades is cedar.

NOHRCON is a private-owned and independent organisation that arranges courses and conferences. They organise more than 100 events per year in Denmark, Norway, Sweden and Germany. The company has specialised in two segments that are practically interconnected: public procurement and the building and property market.

Moving warehouse from Malmö to Hässleholm

Moelven's expansion continues by integrating storage and distribution for building material merchants and industry with a larger product range from Hässleholm.

Moving warehouse from Malmö to Hässleholm

Moelven's expansion continues by integrating storage and distribution for building material merchants and industry with a larger product range from Hässleholm.

Moelven has seen a substantial increase in the sales of board materials to Swedish industry and building material merchants in recent years. In November 2016, Moelven acquired DLH’s Swedish business in Hässleholm.

“The number of customers is on the increase, and volumes and product range are following the same trend for expansion,” says Managing Director Mikael Axelsson in Moelven Wood AB.

Even stronger supplier
The company is witnessing growth in relation to both building material merchants and industrial customers.

“With the acquisition of DLH, we obtained a 23,000 m2 facility providing excellent opportunities in Hässleholm. This allowed us to merge our storage and distribution activities for southern Sweden in one location, making us an even stronger supplier. As a result, we are closing our warehouse in the centre of Malmö, which unfortunately means that the warehouse employees in Malmö are superfluous,” explains Mikael Axelsson.

Sales office remaining in Malmö

At the same time, he underlines that Moelven Wood's sales office will remain in Malmö, even when the company has moved its storage and sawmill operations out of the city.

“We are doing so well that we have quite simply grown out of the warehouse buildings. We have been looking for larger warehouse facilities in the Malmö area for several years now. The acquisition of DLH in Hässleholm provided the perfect solution for storage and format sawing,” confirms Sales Director Jerry Oldén in Moelven Wood Industri in Malmö.

This growth is obviously very welcome and means that the company now needs to increase its manpower in the department that sells products to industry.

More efficient orders and delivery

South Sweden is an important market for Moelven Wood, and proximity to the customers is of decisive importance.

“The capacity to offer building material merchants in South Sweden an efficient distribution system and more complete range of wood-based building and furnishing materials from one location is an important step forward for us. The capacity for co-loading is positive, and we can provide customers with a much more efficient order and delivery process. On 1 April, we will take a further step forward and expand our product range in Hässleholm to include interior panelling and a larger range of boards,” concludes Mikael Axelsson.

About Moelven Wood AB
Moelven Wood in Sweden manufactures and sells wood-based building and furnishing materials and has a leading position within the sale and distribution of products for building material merchants and industry. Revenue in Sweden is approximately SEK 1,200 million. Wood-based board materials represent a significant percentage of revenue.

The Company

The Moelven Group has its head office in Moelv, Norway, and comprises 37 production units located in 46 production locations, in addition to several offices for sales, service and installation.

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