In 2018 Moelven delivered its second-best operating result of all time. Operating income was NOK 586.2 million, an increase of NOK 165.8 million from 2017. Operating revenues were NOK 11,020.8 million, an increase of 2.3 per cent from the previous year.
Healthy growth for Moelven In 2018 Moelven delivered its second-best operating result of all time. Operating income was NOK 586.2 million, an increase of NOK 165.8 million from 2017. Operating revenues were NOK 11,020.8 million, an increase of 2.3 per cent from the previous year. PROFITABILITY 2018 was a very good year for Moelven, and the group has managed to build on the positive developments that have taken place after a major restructuring process that was initiated in 2014. Underlying operations further improved in 2018, where market conditions in our home markets and not least internationally have contributed to a healthy operating result. Moelven’s net interest-bearing liabilities have been reduced further in the past year, and equity has increased to 45.9 per cent. The return on capital employed (ROCE) is now at 19.0 per cent, and this is well above the target we set ourselves in 2014. Overall, Moelven’s operations provide a good foundation for providing our owners with good returns over time. The improvement and restructuring measures aimed at achieving our long-term goals will continue unabated in 2019 as well. Moelven’s three divisions operate in different markets, which affect them differently in terms of economic fluctuations. The Timber Division, which produces sawn timber, components and industrial wood, can look back on 2018 as a very good year. This is to a large extent due to developments in the world economy and strong demand for wood products. Wood is becoming constantly more popular as an input factor for industrial products and in the building industry. We are also seeing that the focus on renewable materials and climate-smart products is stimulating demand, which means the division’s products have good outlook. The Wood Division, which supplies building materials, sheet products, and façade, interior and outdoor products, also delivered an improved result from underlying operations in 2018. Demand has been satisfactory, although building activity in Sweden has dropped somewhat compared to 2017. The interest in wood for interiors is significant, and we believe that our customers will become even more concerned with how our products are made, and where they come from. We are therefore proud of our latest marketing effort, that encourages panel customer to “take nature home with them.” This is a message we believe will be important for consumers in the time ahead. In the Building Systems division, which includes glulam, building modules and system interiors, the results vary somewhat more between companies. These companies operate in different markets, and are therefore also affected by different market fluctuations. For the division as a whole, the result is slightly down on the previous year. Our glulam products are perhaps those that attract the most attention, something the world’s tallest wooden building, Mjøstårnet in Brumunddal, abviously has contributed to. With its 85.4 metres, the world record has been followed closely by expert communities, the media and the world at large, from the first breaking of the ground and until the final beam was hoisted into place in September, and up to the opening in the winter of 2019. PEOPLE Moelven’s most important resource is our people. At the end of 2018 we had 3,524 employees. It is essential for us that everyone should make it “home in one piece.” HSE work has the highest priority at Moelven, but we recognise that we are far from good enough. Although there has been a decline in injury rates in 2018, there is still some way to go before we reach our target of zero injuries. We will therefore work even more purposefully and systematically with HSE in 2019. If Moelven is to develop further, it is essential that we continue to adopt new technology. This is required to strengthen our competitiveness. This means that we who work at Moelven constantly have to keep developing our expertise. We are in an age where continuous learning is a part of everyday work, and this gives our employees a more varied and evolving journey with Moelven. SUSTAINABILITY At Moelven sustainability has been a natural part of our mindset, actually well before the term “sustainability” was first used. Managing a renewable resource like wood has been a key part of Moelven’s 120 year history. In 2018 we published a significantly upgraded report on the sustainability work in the company. We have strong ambitions, and this report describes what we are doing to reach our sustainability targets. To us at Moelven, sustainability is the same as competitiveness. It’s about managing our values in a manner that benefits the climate, and also our business. Several major investments saw the light of day in 2018, and these are characterised by a strong focus on sustainability. At Moelven Våler AS in Braskereidfoss, Norway’s first X-ray frame for sorting timber has arrived. Here every log is analysed, so that it may be used for what it is best suited. This means less waste and better utilisation of the natural resource. At Moelven Valåsen AB the first results from the major investment in “The digital sawmill” show that energy consumption drops and production is more efficient. The largest investment in 2018 was the establishment of Moelven Pellets AS, where a pellet factory and a bioenergy centre are under construction in connection with the sawmill at Moelven Soknabruket AS. This effort will be in full operation in 2020, and Moelven will then be able to fully exploit the residual raw material from the sawmill operation through local processing under our own auspices. INNOVATION 2018 was a year characterised by a number of innovation milestones. Mjøstårnet arose from the ground, and became proof of how new technology and construction methods can be used in tall wooden buildings. “The digital sawmill” project has resulted in two new patent applications. At the end of the year the robot line at Moelven Byggmodul AB in Säffle was nominated for the ‘Top five innovations’ award by the American organisation Hive 50. The production line is a good example of the industrialisation of building with wood in practice, and has resulted in a completely new way of building walls in modern module production. This was the first time an innovation outside of the USA was nominated to this award. These examples are all a reminder that Moelven sticks to the same recipe as before; always focusing on how we can develop our people, our products and production methods. It was the same ideas and the desire to develop that enabled Moelven to deliver the Olympic halls for the games at Lillehammer in 1994. It made the deliveries to the Gardermoen development possible, and the same technology has been further developed through the delivery of more than 200 wooden bridges. Mjøstårnet is the last chapter on this journey so far – a journey that is far from over. The road ahead Our industry is future-oriented. Moelven produces climate-smart products and solutions the world needs, and we are a key developer in the green competition field. In order to be competitive, we are completely dependent on good infrastructure. In Sweden the framework conditions for the wood processing industry is somewhat better than in Norway in some areas, and if Moelven is to contribute to the shift to green business development in Norway, this must be facilitated through a more cost-effective and sustainable infrastructure. It is in Moelven’s DNA to always adopt the opportunities that arise. This means that we are close to market developments and work to supply the right products. Along with continued internal focus on improving operations and the structure of the group, we shall be well prepared for the years ahead.