INTERIM REPORT 1 JANUARY – 30 JUNE 2021
Record earnings in second quarter and continued good market prospects
2021 continues to be a strong year, and we reported an EBITDA of SEK 146 million for the second quarter, compared with SEK 52 million the last year. Net sales during the quarter amounted to SEK 826 million, an increase of SEK 281 million, (or 52 per cent) year on year. The increase is attributable to higher sales prices and increased capacity utilization.
The market for renovation remains strong and new construction has also increased in several of our key markets. Order intake during the quarter was high and capacity utilization was close to maximum. Increased raw material prices have been offset by increased prices for our products and margins have increased.
PERFORMANCE BY PRODUCT AREA
The market for renovations and improvements remains strong. Demand is and remains significant, which has resulted in shortages in parts of our product range. We are seeing a continued trend towards more exclusive products and increased interest in sustainability from consumers. The expansion of our capacity for linseed oil impregnation (Linax) is proceeding according to plan and our English distribution business is performing well.
The high demand for garden products continues and deliveries to the French market in particular have been at record highs. The market for windows and doors also remains strong and our capacity for 2021 is now almost completely sold out.
The market for sawn wood products has performed very strongly with sharp price increases as a result. Prices in the US market rose very sharply during the winter and spring and we are now seeing a fairly strong rebound. At the same time, prices in Europe and Japan continue to rise. Despite production increases, inventory levels remain low ahead of the autumn.
Despite increased raw material costs, we estimate that the margins for our sawmills will be good for the rest of the year.
Other (Energy & Logistics)
The market for pellets was disappointing during the previous year and remained so in early 2021. We are now seeing prices stabilise at low levels. This in combination with reduced raw material prices means that we expect a slightly better performance for the coming autumn and winter.
ACQUISITIONS AND INVESTMENTS
On 23 June, the UK-based Performance Timber Products Group (PTPG) was acquired. PTPG is one of the UK’s leading players in the premium wooden windows and doors segment. In addition to own production, the business encompasses sales of bespoke windows and doors, primarily for unique renovation projects, as well as retail sales through a well-developed network of 43 showrooms in the UK. The business will be part of the Joinery product area and is expected to have annual sales of approximately SEK 250 million.
This acquisition strengthens our position in the key UK market, simultaneously enabling an expansion of our existing operations in Latvia. The Board has today decided to invest approximately SEK 20 million in our door and window operations in Latvia to increase production capacity by 60 per cent. The investment will be ready by the spring of 2022.
During the summer, approximately SEK 35 million will be invested in our Latvian sawmill, Vika Wood, to further improve productivity.
We believe that the market will remain favourable for the rest of the year. The continued impact of the pandemic and relatively low interest rates mean that interest in renovation and new construction remains significant. Order intake for all product areas remains healthy and we expect full capacity utilisation during the third quarter. Seasonal sales volumes in the last quarter of the year, mainly for Wood Protection, are somewhat lower. At the same time, we expect a good cash flow for the rest of the year.
SECOND QUARTER (1 APRIL–30 JUNE)
- Net sales increased by 52% to SEK 826 million (545). The increase in net sales was mainly related to higher sales prices, but higher sales volumes also contributed positively.
- EBITDA amounted to SEK 146 million (52), an increase primarily related to higher sales prices for products in Wood Protection and Sawn Wood. The EBITDA margin was 17.7% (9.5).
- Operating profit amounted to SEK 128 million (35), corresponding to an operating margin of 15.5% (6.4).
- Profit for the period amounted to SEK 118 million (24).
- Earnings per share, before and after dilution, was SEK 0.34 (0.04).
INTERIM PERIOD (1 JANUARY–30 JUNE)
- Net sales increased by 32% to SEK 1,419 million (1,073). The increase in net sales was mainly related to higher sales prices, but higher sales volumes also contributed positively.
- EBITDA amounted to SEK 211 million (81), an increase primarily related to higher sales prices for products in Wood Protection and Sawn Wood. The EBITDA margin was 14.9% (7.5).
- Operating profit amounted to SEK 175 million (48), corresponding to an operating margin of 12.3% (4.5).
- Profit for the period amounted to SEK 171 million (30).
- Earnings per share, before and after dilution, was SEK 0.49 (0.10).
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 29 July, 2021 at 13:00 CET
|Interim Report, January–September
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.