Moelven Annual Report 1998
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ANNUAL REPORT 1998 contents ANNUAL REPORT 1998 the moelven group THE GROUP’S BUSINESS AREAS 3 ORGANISATION CHART 4 COMPANY ADDRESSES 55 annual report REPORT FROM THE BOARD OF DIRECTORS 5 KEY FIGURES 9 PROFIT AND LOSS ACCOUNT 10 CASH FLOW STATEMENT 11 BALANCE SHEET 12 ACCOUNTING PRINCIPLES 14 CALENDAR FOR COMPANY REPORTS IN 1999: NOTES TO THE ANNUAL ACCOUNTS 16 28 JANUARY Preliminary annual results for 1998 AUDITOR’S REPORT AND 5 MARCH Final annual results for 1998 CORPORATE ASSEMBLY’S STATEMENT 27 29 APRIL CORPORATE ASSEMBLY, BOARD OF Annual General Meeting Accounts for first quarter 1999 DIRECTORS AND GROUP MANAGEMENT 28 20 AUGUST Accounts for second quarter 1999 SHAREHOLDER MATTERS 29 29 OCTOBER Accounts for third quarter 1999 FEBRUARY 2000 business areas Accounts for fourth quarter 1999 Preliminary annual results for 1999 COMMENTS FROM THE GROUP’S We reserve the right to amend these dates. PRESIDENT AND CEO 31 Photo: Morten Brun TIMBER INDUSTRY DIVISION 32 Atelier Klingvall - SAWMILLS 34 Egil Bjerke Layout and production: - TIMBER PROCESSING 36 ærlig talt reklame as INTERIOR LAYOUT DIVISION 38 MOELVEN INDUSTRIER ASA LAMINATED TIMBER DIVISION 42 P.O.Box 134, N-2391 Moelv Tel: + 47 62 34 70 00 CONSTRUCTION AND CONTRACTING 46 Fax: + 47 62 36 92 80 Internett: http://www.moelven.com OTHER BUSINESSES 50 E-mail: [email protected] ENVIRONMENTALLY FRIENDLY INDUSTRY 52 HUGIN Online: http://www.huginonline.no/MOE Annual Report 1998 MOELVEN INDUSTRIER ASA 2 Contents the group’s BUSINESS AREAS Moelven Industrier ASA is a Norwegian - Moelven EuroTimber AS the structure of the industry has led manufacturing company listed on the sawmills to the establishment of Mocon AS Oslo Stock Exchange and with its head - Moelven EuroWood AS in Norway, comprising Moelven Limtre, office at Moelv, Norway. The Group timber processing Splitkon and Agder Limtre. The has 2,300 employees and a consoli- Laminated Timber Division also in- dated turnover of 3,300 million Nor- MOELVEN EUROTIMBER AS covers cludes Moelven Töreboda Limträ AB, wegian kroner (NOK). From 1 January the sawmills, while MOELVEN EURO- Sweden’s largest glulam manufacturer. 1999, Moelven’s operations have been WOOD AS is responsible for manufac- organised into five business areas: turing processed timber products. This THE CONSTRUCTION & CONTRACT- Sawmills, Timber Processing, Interior makes Moelven the largest single- ING DIVISION comprises construc- Layout, Laminated Timber, and Con- source supplier for builders’ merchants tion-related businesses operating in struction & Contracting. These five in the Scandinavian and Central Euro- the contract market. Moelven is Scan- business areas between them comprise pean markets. dinavia’s largest manufacturer and 38 independent subsidiaries in eight supplier of prefabricated building countries, the majority of them in THE INTERIOR LAYOUT DIVISION is modules for hotels, schools, nurseries, Norway and Sweden. Scandinavia’s leading manufacturer offices, hospitals and permanent or and supplier of interior layout systems temporary accommodation of any Through acquisition of the Westwood for commercial premises, with subsi- kind. This business area also includes Group and Notnäs AB, THE TIMBER diaries in Norway and Sweden. electrical and engineering businesses. INDUSTRY DIVISION has expanded to comprise nine sawmill operations THE LAMINATED TIMBER DIVISION and eight timber processing compa- is one of Europe’s leading manufac- nies in Sweden and Norway. With turers of laminated timber (glulam). effect from 1 January 1999, these sub- The division is involved in a joint sidiaries have been organised into two venture in Denmark, Limtræ Danmark separate companies: AS. The need for further changes in Annual Report 1998 MOELVEN INDUSTRIER ASA The Group’s business areas 3 organisation chart AT 4.3.1999 Turnover Business area Products Employees NOKm. Sawmills 1 600 Sawn timber 690 Timber Processing 650 Processed wood products, e.g. panelling, flooring, moulding, 268 components and building sections Interior Layout Division 480 Interior layout systems for commercial premises 462 Laminated Timber Division 370 All dimensions and glulam, standard and custom 325 Construction and Contracting 500 Prefabricated buildings, engineering and electro 460 Annual Report 1998 MOELVEN INDUSTRIER ASA 4 Organisation chart report OF THE BOARD OF DIRECTORS tax liability is NOK 2.7 million. As a FINANCIAL SITUATION result of Moelven’s acquisition of new At 31 December 1998 the Group’s total subsidiaries, the amount of deprecia- assets stood at NOK 1,852 million, an tion and interest payments has increa- increase of some NOK 650 million on sed to NOK 33 million. the previous year. The Group’s new Performance in the period from Swedish subsidiaries have total assets of September to December showed a around NOK 500 million, while the marked improvement on the first eight remaining increase of NOK 150 million months of 1998, with profits in large is a consequence of increased activity by parts of Moelven’s operations reaching the Construction & Contracting and the same levels as in the last four Interior Layout divisions and a general months of 1997. increase in the amount of capital tied The performance of Moelven’s new up by the Timber Industry division. This Bjarne Gulvik, Chairman subsidiaries in Sweden picked up is being gradually reduced over the first towards the end of 1998, with an half of 1999. The Group enjoys a improved result from operations of healthy cash position. OPERATING REVENUES AND PROFIT some NOK 30 million. These subsidiar- Net interest-bearing liabilities total- Consolidated operating revenues in ies had a negative impact of NOK 19 led NOK 684 million, in line with the 1998 was NOK 3,027 million (NOK million on the consolidated profit for estimates included in acquisition pro- 2,378 million in 1997). Of the total 1998. The restructuring process pro- spectuses. These liabilities therefore increase of NOK 650 million, NOK 440 ceeded as planned, but trends in the represent around 20% of operating million is attributable to Westwood AB timber industry as a whole failed to live income (a slight increase compared (Group) and Notnäs AB, acquired on up to expectations after some upward with 1997) but are expected to be 1 May 1998. The remainder of the movement in prices early in the second reduced in 1999. increase was contributed largely by the half of the year. This was due to a mark- Capital expenditure on fixed assets Interior Layout and Construction & ed disparity between raw-materials and equipment (excluding acquisitions) Contracting divisions. Within the latter costs and market prices for finished totalled NOK 104 million in 1998, in line division, NOK 100 million is attributable goods. A key factor in this connection with depreciation for the year. The to Byggsystem AB and Byggsystem AS, was the steady reduction in the prices Group’s equity capital is NOK 577 mil- acquired at the end of 1997. of sawmill by-products, primarily wood- lion (an increase of NOK 173 million on Operating profit after depreciation chips for the pulp industry. Four of the 1997), giving an equity-to-assets ratio of was NOK 53 million (NOK 125 million). Group’s sawmills also suffered from a 31.2%. In the light of its sound financial Ordinary depreciation amounted to shortage of timber supplies during the situation, the Group refinanced the bulk NOK 93 million, an increase of around autumn, which restricted their output. of its interest-bearing liabilities in 1998 NOK 20 million on 1997. Net interest The processing businesses enjoyed by taking out a multi-currency drawing payable was NOK 40 million, and net somewhat better profit margins than facility worth NOK 450 million and an pre-tax profit for the year was NOK 17 the sawmills in 1998. amortising loan of SEK 250 million. million. Pre-tax profit in 1997, excluding The Group’s laminated timber busi- These loans are being provided by net gains on asset sales of NOK 45 mil- nesses underwent extensive restructur- four banks and have terms of five and lion, was NOK 93 million. The Group’s ing in 1998. seven years respectively from the date Arthur J. Aasland Carl Graff-Wang Agnar Aas Per Stamnes Annual Report 1998 MOELVEN INDUSTRIER ASA Report of the Board of Directors 5 report OF THE BOARD OF DIRECTORS they were taken out. The loans have NOK 20 million (NOK 78 million) after Laminated Timber division in 1998 provided the Group with a long-term depreciation totalling NOK 56 million reflected the low prices resulting from source of finance on markedly better (NOK 39 million). substantial overcapacity in Europe and terms than it was previously possible to Moelven’s sawmills are performing continuing low levels of consumption in obtain. As a result, the Group’s Swedish better than most major players in the Japan. Poor profit figures necessitated a assets are now largely financed by industry, but profit margins need to complete restructuring of the industry Swedish liabilities. At the end of 1998 improve substantially. Synergy between in our domestic markets. In April 1998, the Group completed interest rate old and new subsidiaries will be a con- Moelven’s two glulam subsidiaries in swaps for parts of the new financing tributing factor in this regard. By the Denmark, Moelven Øresø Limtræ AS facility in Swedish kronor, with terms of beginning of 1999, timber supplies had and Moelven LNJ Limtræ AS, merged four and five years respectively. More returned to normal. Since the start of with Limtræ Lillehæden AS to form than half the Group’s interest-bearing the new year, the Timber Industry sub- Limtræ Danmark AS, in which Moelven liabilities now have a fixed rate of inter- sidiaries have been split into two sepa- holds 40% of the shares and ITH AS the est for two or more years, with nominal rate business areas: Sawmills and remaining 60%.