Good results and continued good market prospects

First quarter
The year has started off well, and we report EBITDA results for the first quarter of the year of SEK 65 million, compared with SEK 29 million year-on-year. Demand for our products has been healthy, and price increases that strengthened our margins could be implemented.

performance by product area
Wood Protection
The market is strong, and our subsidiaries have a high delivery rate for the season. Renovation and improvement activity levels remain favourable, driving demand primarily for impregnated timber. In particular, we note increased demand for Linax, our wood treated with linseed oil, and fire-retardant wood. We are also seeing industrial construction, which slowed down a year ago, now gaining momentum. Commercial and logistics operations in the UK have increased their share of products sold from the Group’s Wood Protection and Joinery product areas.
Joinery
In the Joinery product area, strong demand for garden products and outdoor furniture has been a positive factor. The trends for windows and doors are good, where we are regarded as a premium supplier in a quality-conscious market. The same applies to houses and modular houses.
Sawn Wood
Strong demand characterizes this product area, and our two sawmills in the Baltics are working at full capacity. As a consequence of the strong market, the prices for sawn products have increased. At present, we have good access to raw materials.
Other (Energy & Logistics)
The pellet operation is the area that is not living up to expectations, primarily owing to two relatively mild winters in a row that have resulted in a build-up of stock with price pressure as a consequence. There is a trend toward new areas of application such as stall bedding in parallel with initiatives in e-commerce. The port business in the UK is developing in accordance with plans.

from sawmill company to ownership company
One key event during the period took place in early March, when we communicated a new strategic orientation and new financial targets that reflect the Group’s growth and profitability ambitions. This in turn resulted in a review of strategy occasioned by the structural transaction carried out in 2020 when the Group’s Swedish sawmill business was sold thereby enabling an initiative in continuing operations.
Going forward, Bergs will serve as an active ownership company, developing independent subsidiaries with clear responsibility for results. This is an orientation the Group has pursued in recent years, but it is now being clarified. The ambition is to increase the pace of development for products and services, with a greater degree of processing and more stable margins with a more predictable market situation.

future prospects
We judge this favourable market continuing in the second and third quarters as well. Order intake for our products is strong, and we are planning to fully utilise capacity. Interest in wood as a material is increasing and is promoting continued positive market performance for our product areas.

 
First quarter (1 January–31 March)

• Net sales increased by 12% to SEK 593 million (528). The higher net sales were mainly related to higher sales prices.
• EBITDA amounted to SEK 65 million (29), an increase primarily related to higher sales prices for products in Wood Protection and Sawn Wood. The EBITDA margin was 11.0% (5.5).
• Operating profit amounted to SEK 47 million (13), corresponding to an operating margin of 7.9% (2.5).
• Earnings for the period amounted to SEK 53 million (6).
• Earnings per share, before and after dilution, was SEK 0.15 (0.06). Earnings per share, before and after dilution, including discontinued operations, was SEK 0.02 the first quarter 2020.
• Cash flow from operating activities amounted to SEK -108 million (-6), negatively affected by seasonally high working capital.
• Financial net debt totalled SEK 94 million (695) as of 31 March 2021.
• Strategic orientation and new financial targets that reflect the Group’s growth and profitability ambitions were communicated in March.

 
The Group’s key performance indicators

Contact information
Further information concerning this press release will be provided by the President and CEO, Peter Nilsson, on telephone number +46 70 315 09 27 or Anders Marklund, CFO, 070-284 47 96.

The information is such that Bergs Timber AB (publ) is required to make public pursuant to the Securities Markets Act. The information was submitted for publication on 5 May, 2021 at 13:00 CET

Calendar

 
About Bergs

An international wood products Group
The Bergs Group consists of independent subsidiaries, with clear responsibilities for results, that develop, produce and market processed wood for various applications.

With years of experience in wood and a great deal of competence in processing, Bergs promotes building a sustainable society based on renewable raw materials from sustainably cultivated forests in the Baltic Sea region.

Operations are conducted in Sweden, Estonia, Latvia and the UK, and the Group’s products are sold in some 20 countries. The largest markets consist of Scandinavia, the Baltic countries, the UK and France. The head office and Group management are located in Sweden.

The company’s share has been listed on Nasdaq Stockholm since 1984.

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