Interim report 1 January – 30 September 2020
IMPROVED EARNINGS AND STRONG CASH FLOW
Demand in the third quarter remained strong for the majority of the Group’s products. It was especially strong for products in the DIY market and in renovation. This has benefited Bergs’s specialisation in pressure-treated wood, garden products, windows, doors and timber for construction. The volumes for our core markets in the UK, US, France, Sweden and Latvia have increased. The prices for wood products have increased in pace with strong demand and limited supply. Sales prices for sawdust, pellets and wood chips fell as a result of an excess supply of wood for pulp and energy.
EBITDA for the quarter, including earnings from discontinued operations and earnings from the sale of the Swedish sawmill business, totalled SEK 149 million. Earnings from the sale amounted to SEK 87 million. EBITDA, adjusted for earnings from the sale, amounted to SEK 62 million, an improvement of SEK 44 million year-on-year. The improved earnings are an effect of higher margins for the sawmills and high sales volumes of processed wood products to the DIY sector.
As a result of the divestment of the Swedish sawmill business and inventory reductions in other operations, cash flow for the quarter was strong and has substantially strengthened our financial position. Net financial debt at the end of the quarter was SEK 11 million, compared with SEK 664 million year-on-year.
THIRD QUARTER (1 JULY–30 SEPTEMBER) *
• Net sales increased by 12% to SEK 518 million (463). The higher net sales were mainly related to higher sales volumes of processed wood products to the DIY sector.
• EBITDA amounted to SEK 53 million (31). Adjusted EBITDA (adjusted for items affecting comparability) amounted to SEK 53 million (21), an increase primarily related to higher margin for sawn products but also to higher sales volumes for the DIY sector. Adjusted EBITDA margin was 10.2% (4.5).
• EBITDA, including earnings from discontinued operations prior to the sale of the Swedish sawmills, amounted to SEK 62 million (28). Adjusted EBITDA amounted to SEK 62 million (18), corresponding to an EBITDA margin of 8.7% (2.5).
• Operating profit amounted to SEK 31 million (12). Adjusted operating profit amounted to SEK 31 million (2).
• Cash flow from operating activities, including discontinued operations, amounted to SEK 167 million (151). The cash flow was positively affected by lower working capital.
• Earnings per share, before and after dilution, was SEK 0.08 (0.01). Earnings per share, before and after dilution, including discontinued operations, was SEK 0.27 (-0.01).
• The sale of the Swedish sawmill business to Vida was finalised on 1 September. The earnings from the sale totalled SEK 87 million and was recognised in earnings from discontinued operations.
INTERIM PERIOD (1 JANUARY–30 SEPTEMBER) *
• Net sales declined by 4% to SEK 1,591 million (1,651), mainly related to lower sales volumes and lower sales prices for sawn products.
• EBITDA amounted to SEK 134 million (127). Adjusted EBITDA amounted to SEK 134 million (106). Lower sales volumes and sales prices for sawn products were offset by lower costs for raw material. Higher sales volumes to the DIY sector contributed positively. Adjusted EBITDA margin was 8.4% (6.4).
• EBITDA, including earnings from discontinued operations prior to the sale of the Swedish sawmills, amounted to SEK 173 million (169). Adjusted EBITDA amounted to SEK 186 million (148), corresponding to an adjusted EBITDA margin of 7.6% (5.9).
• Operating profit amounted to SEK 79 million (81). Adjusted operating profit amounted to SEK 79 million (60).
• Cash flow from operating activities, including discontinued operations, amounted to SEK 304 million (145).
• Earnings per share, before and after dilution, was SEK 0.18 (0.18). Earnings per share, before and after dilution, including discontinued operations, was SEK 0.36 (0.22).
The group's key performance indicators
| AMOUNTS IN SEK million | 2020 Jul–Sep 3 months |
2019 Jul–Sep 3 months |
2020 Jan–Sep 9 months |
2019 Jan–Sep 9 months |
2019 Jan–Dec 12 months |
| Net sales | 518 | 463 | 1,591 | 1,651 | 2,056 |
| EBITDA | 53 | 31 | 134 | 127 | 133 |
| Adjusted EBITDA (adjusted for items affecting comparability) | 53 | 21 | 134 | 106 | 115 |
| Adjusted EBITDA margin, % | 10.2 | 4.5 | 8.4 | 6.4 | 5.6 |
| Operating profit | 31 | 12 | 79 | 81 | 73 |
| Operating margin, % | 6.0 | 2.6 | 5.0 | 4.9 | 3.6 |
| Adjusted operating profit | 31 | 2 | 79 | 60 | 55 |
| Adjusted operating margin, % | 6.0 | 0.4 | 5.0 | 3.6 | 2.7 |
| EBITDA incl. discontinued operations | 149 | 28 | 261 | 169 | 172 |
| Adjusted EBITDA incl. discontinued operations | 62 | 18 | 186 | 148 | 154 |
| Adjusted EBITDA margin incl. discontinued operations, % | 8.7 | 2.5 | 7.6 | 5.9 | 4.8 |
| Earnings per share, before and after dilution, SEK | 0.08 | 0.01 | 0.18 | 0.18 | 0.13 |
| Earnings per share, including discontinued operations, SEK | 0.27 | -0.01 | 0.36 | 0.22 | 0.13 |
| Equity per share, SEK | 3.54 | 3.30 | 3.54 | 3.30 | 3.18 |
For complete report, go to www.bergstimber.com
Contact
Questions regarding the interim report can be answered by President and CEO Peter Nilsson on telephone number 070-315 09 27 or CFO Anders Marklund 070-284 47 96.
The information in this interim report is such that Bergs Timber AB (publ) is required to disclose in accordance with the EU Market Abuse Regulation. The information was submitted for publication on November 3, 2020 at 1:00 pm. The interim report is available on the company's website, www.bergstimber.com
| Financial calendar | |
| Year-end report for 2020 | 3 February 2021 |
| Interim report January-March 2021 | 5 May 2021 |
| Interim report January-June 2021 | 29 July 2021 |
| Interim report January-September 2021 | 28 October 2021 |
This is Bergs
– an international wood products Group
With wood as a raw material, Bergs produces processed wood products from sustainably managed forests in the Baltic Sea region. With years of experience in wood and a great deal of competence in processing, we promote building a sustainable society with renewable materials.
Our operations – conducted through wholly owned subsidiaries in Sweden, Estonia, Latvia and the UK – encompass sawmills and processing as well as distribution and logistics.
The Group has sales of approximately SEK 2.0 billion and around 850 employees. Bergs is listed on Nasdaq Stockholm, and its head office is in Vimmerby, Sweden.
www.bergstimber.com
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