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2019 in brief

In 2019 the group continued its positive developments from previous years, and increased operating revenues to NOK 11.0 billion (10.8) and the operating result to NOK 586.2 million (420.4). The group's rate of return on employed capital increased to 19.0%, up from 14.2%.

Following five years with increases in operating revenues and improved results, 2019 was a year that saw a decline in operating revenue and results for the group as a whole. The backdrop is first and foremost reduced activity levels in module operations and lower prices and delivery volumes for sawn timber and building wood. For the group as a whole operating income dropped by 6.6 per cent to NOK 10.3 billion (11.0) and the operating result by NOK 42.4 per cent to NOK 335.4 million (586.2). The group's rate of return on employed capital dropped from 19.0% to 9.4%. The main objectives in Moelven’s long-term strategy plans are focused on creating a business with international competitiveness and a resilience that limits volatility in results and cash flow. The decline in profits from 2018 to 2019 was significant. In the context of the loss of activity in the module market and the price reduction in the international market for sawn timber, the board is nevertheless of the opinion that the long-term improvement work that forms the basis of the strategy is yielding results.

With exports to more than 40 countries and on several continents, Moelven is dependent on developments in the global economy. Combined, approx. 15 per cent of the group's turnover is in markets beyond Scandinavia, mainly in the euro zone, the UK, Middle East, North Africa and Asia. It is mainly sawn timber that is exported. For Timber in isolation the export share outside of Scandinavia is 45 per cent, and for Wood it is 10 per cent. Both price developments on the international market for sawn timber and exchange rate developments therefore have a major impact on the business. Both directly for export revenue, but also indirectly because international price levels rapidly impact the home market in Scandinavia.

In 2019 demand for sawn timber internationally has been good, although the economic downturn and trade war between the USA and China somewhat dampened activities. On the supply side, the overall supply of sawn timber has been at a level that has led to an imbalance in the marked and a decline in process compared to the previous year. Weak Scandinavian currencies, in particular against the Euro, have contributed to maintain good competitiveness for the export-oriented units.
The UK is an important export market for Moelven. Market activity was good in 2019, although the Brexit issue caused some uncertainty through the year. Moelven implemented measures early on to mitigate risk related to Brexit, and views uncertainty with regard to the UK going forward to be mainly related to economic developments.
The Wood division mainly sells its processed wood products on the industrial and building materials markets in Scandinavia.  Demand from this market has been satisfactory, although building activity has dropped somewhat compared to 2018. The division also has seven so-called combined units that use sawtimber as a raw material in their operations. Depending on the quality and dimensions of raw materials, this results in a certain volume of sawn timber that is not processed by the unit but sold externally. The share of sawn timber sold externally from the combined units increased in 2019 compared to the previous year, and is one of the reasons the division increased operating revenues.
Timber stocks at the start of the year were satisfactory with regard to planned production levels for the winter of 2019. Access to timber has generally been good throughout the year. At the end of 2019, inventories were somewhat higher than at the start of the year. Both timber prices and prices for chip and fibre products have been higher in 2019 than the previous year.
Building Systems operates exclusively in building and construction in Scandinavia. Deliveries are to professional players in both the new building and renovations, extensions and conversions markets. Market activities in these markets has declined somewhat in 2019, in particular in module projects for residential purposes. For the year as a whole, the overall demand for the division’s products and services were somewhat lower than in the previous year. At the turn of the year the total order backlog for the division was NOK 131 million higher than at the same time in 2018. The low market activity and an improved, yet still weak order situation, makes it necessary to uphold the capacity reductions that have been implemented in 2019.

Events in 2019
On 13 February a fire broke out in the lumber dryers at Moelven Trysil AS. The fire brigade was notified just after seven in the morning, and Moelven quickly gained control of all employees at the sawmill. No one was injured, but several of the dryers sustained significant damage. The least affected dryers returned to operation relatively quickly, and at the end of the first quarter, drying capacity was back at approximately 50 per cent of the level before the fire. Damage to the other dryers proved to be so extensive that when age was taken into account, it was decided to build new ones rather than replace the old ones. A waiting period and a deductible on the general and consequential loss insurance of approx. NOK 5 million was charged to the accounts in the first quarter. The new dryers were started up in November/December 2019.

Both Moelven Töreboda AB and Moelven Våler AS celebrated their 100-year anniversaries in the second quarter. At the same time, Moelven Limtre AS celebrated its 60th anniversary. The anniversaries underscore that there is much history and experience behind the products and services the group currently supplies. In May the 85.4 metre tall Mjøstårnet was awarded its official status as the world’s tallest wooden building. Chairman Steve Watts of the international Council on Tall Buildings and Urban Habitat, CTBUH, described Mjøstårnet as “a step into the future” that will have a great impact on the development of the cities of the future. Moelven Industrier ASA was established in 1899, and throughout its 120-year history, Moelven, with projects such as the Olympic halls for the 1994 games and more than 200 wooden bridges and two world records with “Treet” in Bergen and “Mjøstårnet” in Brumunddal, has moved the boundaries for what is possible to build from wood. As a symbol that one of the world’s leading centres of expertise in wood structures is in the Moelven group, the group donated the monument “Silva” to Ringsaker municipality. The monument is eight metres tall, eight metres in diameter, can be illuminated according to the season and is made from glulam beams from Moelven Limtre AS.

On Wednesday 22 May module number 90,000 left the Moelven Byggmodul AS factory. Since the current Moelven Byggmodul AS factory was built in 1975, the company has produced and supplied sustainable wood modules for the building and construction sector, public buildings, commercial buildings and buildings for residential purposes. After the acquisition of Moelven Byggmodul Hjellum AS, the apartment concept will be maintained by the latter, while Moelven Byggmodul AS has specialised its production for the building and construction sector and public and commercial buildings.

Rebuilding of the dry sorting line at Moelven Notnäs Ransby AB, Ransby department after the fire in November 2018 was completed according to plan. The new dry sorting line was put into operation in the summer of 2019.

In September the new bioenergy plant that Moelven Pellets AS has built at Sokna was put into operation. Commissioning went according to plan, and Moelven Soknabruket AS closed its old heating plant in October. The bio-energy centre’s two combustion boilers will have a total installed power of 24 MW, and will provide environmentally friendly thermal energy to both Moelven Soknabruket AS and Moelven Pellets AS’s new pellets factory. The pellets factory started trial production at the September/October turn of the month. The startup went according to plan, and the first deliveries took place as early as October. In the beginning of 2020 the requirements to ENplus certification of the pellets were met. A partnership agreement has been concluded with SCA for the delivery of pellets. The agreement entails that the Swedish SCA group acquires the entire production volume from the factory.

In September it was decided to further specialise operations at Moelven Løten AS. This will be done by moving the production of standard goods to Moelven Våler AS, while Moelven Løten AS will produce only specialty products from large pine logs from the turn of the year. The change means that operations will be reduced to one shift. Staffing has therefore been reduced by a total of seven people. Timber consumption will be reduced from approx. 90,000 m³ to 75,000 m³.

Following a thorough process, in September 2019 an agreement was signed for the procurement of a new management system for HSE, quality and the external environment. The supplier Landax provides a comprehensive tool to support all HSE work in Moelven. A common way of working will reinforce the way in which we follow up and implement preventive work. A course of implementation has been planned where different modules are introduced in phases. In the years ahead training and new ways of working will characterise much of the HSE work at Moelven.

On 30 September the Board of Moelven Eidsvold Værk AS decided to close down the company. Moelven Eidsvold Værk AS is a combined facility with both a sawmill and planing mill, and has 60 employees. Discontinuation will take place in 2020. In August 2019 employees were informed that a closure of the plant was being considered. The background was high operating costs and an extensive need for investments to make operations competitive in a more normal market situation than has been the case in recent years. Following a comprehensive study, one has not succeeded in finding alternative solutions that could justify further operations, and the decision to discontinue was therefore made.

In October Moelven was host for parts of the programme for SIKT 2019. SIKT is an annual conference where His Royal Highness Crown Prince Haakon invites young leaders and talents between 20 and 40 to participate. The SIKT conference gathers around 200 participants from all over the country, and represents trade and industry, entrepreneurs, the public sector, NGOs, culture, sports, the media and academia. The goal of the conference is that all participants can learn from each other and discuss common challenges and opportunities in the Norway of the future. Four of the group’s employees took part in the conference.

The glulam beams that were used as tables during the SIKT conference have subsequently been repurposed as part of the load-bearing structure for Tande Bridge across the E6 motorway south of Moelv.

In October 2019 the residential project “Cederhusen,” designed by BAU arkitekter and supplied by Moelven Byggmodul AB, was announced as winner of the 2019 Haninge Architectural Award. As justification for the nomination, which in itself is recognition of the architectural quality of module-based buildings, the jury stated that “‘Cederhusen’ is a wooden building that merges with its surroundings. The buildings tie the city and nature together in a pleasing way and create great variation in expression with a small selection of materials. With its long balconies and common roof terrace, all residents experience proximity to nature and views of the emerging district Vega in Stockholm.”
A good example of the strategy applied in practice is Moelven Modus’s new self-designed offices in Malmö. Newst! has named the office one of Sweden’s most attractive offices in 2019. When the office was designed, it was to create new standards not only for what an office can look like, but also to accommodate new work forms and patterns. In other words: “Innovation” and focus on “People.” In addition, Modus’s solutions are proven to be sustainable compared to traditional in situ solutions, particularly when the opportunities for reuse are exploited.

On 29 November Finansparken Bjergsted in Stavanger was officially opened. Finansparken Bjergsted is the new headquarters of Sparebank 1 SR Bank, and is northern Europe’s largest commercial building based on wooden load-bearing structures at 22,800 m². Both Moelven Limtre AS and Moelven Modus AS have had significant deliveries to the building with glulam load-bearing structures and interiors of Eco Panel and Multi Room solutions. The use of wood, both in load-bearing structures and as a part of the indoor environment, is an important contributory factor to the building in all likelihood being certified at the BREEAM Outstanding, which is the highest level for environmental certification of buildings.

Strategy – People, Innovation, Sustainability and Profitability
The sustainability and climate challenges the world is facing are attracting more and more attention. For the Moelven group sustainability and environmental impact have been central topics for a long time, and are a natural part of the culture and mindset in a business based on wood as a raw material. Starting from 2017, the group’s public reporting also includes a sustainability report in accordance with the GRI standards (Global Reporting Initiative) and climate accounts according to the GHG protocol (GreenHouse Gas). In society in general, increased knowledge and awareness of wood’s properties and opportunities, both as carbon storage and as a building material, has led to greater interest in climate-smart building with wood.
Among the Moelven group’s products and services, the deliveries from Wood and Building systems are most visible to the outside world. This concerns both processed wood building materials, bridges and other load-bearing structures in glulam and module-based apartment buildings. In addition, activity in infrastructure is high. Use of wood in connection with this is also on the increase, and is an important cause of the good demand for sawn timber, which is the main product of the Timber companies.

In 2018 a strategic decision was made to expand the group’s focus on own processing of residual raw materials. Previously, residual raw materials from the mechanised industry has mainly been sold to other industries or used for internal bio-energy purposes. Small-scale briquet production has also been carried out. The decision taken in the spring of 2018 entailed building a new pellets factory and a new bioenergy plant at Sokna outside Hønefoss, at an overall investment of NOK 270 million, of which Enova supports the bioenergy effort with NOK 66 million. The effort is employing groundbreaking solutions, where energy and chip products from Moelven’s sawmills in the region will be used for pellet production. Both the bioenergy plant and the pellets factory started up in the autumn of 2019. The pellets factory has provided 7 new jobs, and will double pellet production Norway when it reaches full production. The factory will be unique in that it is the first pellet factory in Norway that is fully integrated in a sawmill in terms of energy. A major proportion of the overall investment has been a brand new bio-energy plant that will both supplies the sawmill and the pellet factory with thermal energy. This means that the energy that otherwise would go to waste from the sawmill is used in the production of white pellets. Estimates show that by doing this, one may reduce energy consumption in pellet production by up to 37 per cent.

Hovdtall Tabell E

*LTI2-number: Number of injuries with and without absence per million worked hours, 12 months rolling.

The health, safety and environment strategy can be summarized in nine points:

  • Clear goals
  • Active leadership and active employee participation
  • Increased use of resources
  • Clear sharing of responsibility
  • Increased expertise
  • Underpinning systems
  • Unambiguous processes and rules
  • Incentives and consequences
  • Frequent information

With regard to business, the group is still in a phase where large parts of operations are doing well and improving results, while other parts of operations still fail to meet the requirements to profitability and returns that have been defined. It is thus important that the right priorities and choices are made, to have the best possible foundation for sustained profitability. The shareholder values in Moelven are best ensured and developed by the organization focusing on developing the units the company currently possesses, which in all likelihood will reach profitability targets in the course of an economic cycle. Further growth in the strategy period should take place by strengthening the basic business we already have. New investments must be adjusted to the strategic choices that have been made and take place within the applicable financial framework. Investments and growth will mainly take place on the basis of existing business areas.

Efforts on internal improvement work and restructuring in accordance with the action plan that was drawn up in the autumn of 2014 have proceeded with full strength in 2019. In addition, several organizational changes are being implemented, as well as major investment projects that will improve efficiency and profitability.

Moelven’s strategic framework summarises the corporate strategy and is used to clarify what work should be done and which priorities should be made to achieve the objectives.

Corporate governance

On 2 May 2019 Asbjørn Bjørnstad stepped down from the Board of Directors after 4 years. Gudmund Nordtun was elected as new board member, and since 2 May 2019 the board has consisted of Olav Fjell (chairman), Trond Stangeby (deputy chairman), Elisabeth Krokeide, Aud Ingvild Storås, Gudmund Nordtun, Martin Fauchald and Lars Håkan Karlsson.

Corporate governance at the Moelven Group is based on the current Norwegian recommendation for corporate governance of October 2018. The Board's report on the Group's policies and practice for corporate governance in accordance with section 3-3b of the Norwegian Accounting Act has been incorporated into the board’s account of corporate governance.  Comprehensive information on the group’s governing bodies is published at www.moelven.no and in note 27.

Corporate structure
In the second quarter the operations at the Timber division’s sales offices in the Netherlands and Poland were discontinued. The companies Moelven Nederland B.V. and Moelven Polska Sp.z.o.o were discontinued in 2019. Market responsibilities for the Netherlands and Poland have been transferred to Moelven Deutschland GmbH.

Moelven Multi3 AS will merge with Moelven Wood Prosjekt AS as of 1 January 2020. Both companies are a part of the Wood division and are wholly-owned subsidiaries in the group. The specialist expertise from Moelven Multi3 AS in the areas of fire-safe wood, finger joints and precut, as well as production of the ISO3 stanchion, will be continued in Moelven Wood Prosjekt AS, but the merger will rationalise both production and sales.

This is the Moelven Group

Ownership structure

At the turn of the year the Moelven group was owned by Glommen Mjøsen Skog SA (40.8%), Eidsiva Vekst AS (23.8%), Felleskjøpet Agri SA (15-9%), Viken Skog SA (11.9%), Mjøsen Skog SA (11.8%) and AT Skog SA (7.3%). Most of the remaining 0.4 per cent is owned by private individuals.

On 5 December 2019 it was announced that Eidsiva Vekst AS and Felleskjøpet Agri SA had entered into an agreement to sell their shareholdings of 23.8 per cent and 15.9 per cent respectively to the company Skog Holdco AS, which was owned by Viken Skog SA, AT Skog SA and Felleskjøpet Agri SA. Pursuant to the shareholding agreements that exist between the largest shareholders, there is a right of pre-emption between these if any of them want to sell their shares. Viken Skog SA with its 11.9 per cent of the shares and Glommen Mjøsen Skog SA, which after the merger between Glommen Skog SA and Mjøsen Skog SA own 40.8 per cent of the shares, both announced in the beginning of January 2020 that they wanted to exercise their right of pre-emption. The competition authorities approved the transaction in February, and the new ownership constellation was thus Glommen Mjøsen Skog SA 71.5 per cent, Viken Skog SA 20.8 per cent, AT Skog SA 7.3 per cent and other shareholders 0.4 per cent. Glommen Mjøsen Skog SA’s increased ownership share triggered a mandatory bid for the remaining shares subject to the shareholder agreements. At the end of February 2020 AT Skog SA announced that it would accept the bid, while Viken Skog SA retains its share. When the transaction with AT Skog SA has been concluded, Glommen Mjøsen Skog SA will own 78.8 per cent of the shares, Viken Skog SA 20.8 per cent and other shareholders 0.4 per cent.


Moelven is a Scandinavian Group. All production units are located in Scandinavia, which is also the primary market. Moelven's vision is to be the natural choice for people who wish to build and live Scandinavian, and the Group shall take the lead in developing buildings that are based on Scandinavian building traditions. Within this framework, activities are based on a desire and an ability to contribute to creating good spaces – good environments to live and work in, and for all social functions. Good Scandinavian environments are often close to nature in their form and content. Wood and other natural materials are essential parts of what Moelven makes and are dominant in the greater part of the product range. Moelven offers a broad range of natural and climate-smart products, systems and solutions with associated services related to homes and holiday homes, module-based buildings, building interiors and load bearing structures. The Scandinavian market accounts for 85 per cent of sales revenues, and 85 per cent of the Group's products and services are used for new building or renovation, conversion and extension of homes and commercial property. A large part of the remaining operation consists of sales of biomass for biofuel and for pulp, paper and particle board production. The Group also supplies wood products to the furniture, interior and packaging sectors.



The Group has its headquarters in Moelv in Norway and consists of 37 production companies in 46 production locations, and a number of offices for sales, service and fitting. Most of the production units are companies and workplaces with a strong local presence in rural communities in South East Norway and the western part of Central Sweden. The offices for sales, service and fitting are located in larger population centres around Norway, Sweden, Denmark, England and Germany. Production in Norway and Sweden is of approximately the same volume, but the Swedish units export a greater proportion of their production than the Norwegian. Out of a total of 3,399 (3,524) employees at the end of 2019, 1,691 (1,696) work in Norway, 1,680 (1,797) in Sweden, 20 (21) in Denmark and 8 (10) in other countries.


The Group is divided into three divisions: Timber, Wood and Building Systems, each of which focuses on one of the main segments of industry, trade and project. There is also an Other Businesses reporting area, which consists of the holding companies with group functions, supply businesses, fibre products and bioenergy companies.



The Timber division consists of 11 production companies and 3 sales offices, supplying industrial timber, components and chip products made from local spruce and pine. The customers are mainly industrial companies that buy intermediate products for their own production of construction timber, glulam, panels, flooring, mouldings, windows, packaging, board and paper products and for bioenergy. About 55 per cent of operating revenues come from Scandinavian customers. At the end of 2019, there were 629 (620) employees, 251 (249) of them in Norway, 370 (361) in Sweden and 8 (10) in other countries.



The Wood division comprises 16 production companies, 3 customer centres and one project sales company. The main products are white and impregnated building wood, external cladding, plywood, length-adapted products and chip products, as well as interior products such as mouldings, flooring and interior panels. Wood also trades in purchased products. Around 75 per cent of timber and board production is sold through the building products trade and wood processing industry. Wood is one of the leading suppliers to the Scandinavian market and about 90 per cent of its operating revenues come from Scandinavian customers. At the end of 2019, there were 1,114 (1,108) employees, 608 (601) of them in Norway, 486 (486) in Sweden and 20 (21) in Denmark.


Building Systems

The Building Systems division consists of 7 production companies at 12 production locations and a number of sales, service and fitting offices. Building Systems is divided into the business areas Glulam, Building Modules and System Interiors, all three of which are market leaders in Norway and Sweden. The division's building and contracting customers buy customised building modules, flexible interior solutions systems and associated services and advanced glulam structures.  In addition to bridges and load-bearing structures, the glulam unit also has considerable sales of standard laminated timber beams through the building products trade, as well as components for the prefabricated house industry. Operating revenues are primarily from Scandinavian customers. At the end of 2019, there were 1,494 (1,647) employees, 765 (788) of them in Norway and 729 (859) in Sweden. In order to ensure adequate flexibility in production capacity to meet seasonal and economic fluctuations in the market, the divisions use hired workers to some extent. Hired workers are not included in the employee figures. Hiring is from staffing companies who comply with the EU temporary agency work directive, and this entails that hired personnel are ensured the same terms as if they were employed by Moelven.


Other Businesses

Other businesses include Moelven Industrier ASA, with shared services for finance, accounting, insurance, communications, HR and ICT. Timber supply and sales of wood chips and energy products are organised as a common function for the Group's timber processing industry and are included with the companies Moelven Skog AB, Moelven Virke AS, Vänerbränsle AB, Moelven Bioenergi AS and Moelven Pellets AS. In addition there is the affiliate Weda Skog AB. At the end of 2019, there were 162 (130) employees, 67 (51) of them in Norway and 95 (79) in Sweden.

Social responsibility

The Board has processed and approved the Groups general strategy and guidelines relating to HSE, social responsibility, the environment and competition law. The discussion of these areas are included in the Board's explanation of principles and practice concerning social responsibility pursuant to the Accounting Act Section 3-3c that is published in the group’s Sustainability Report.

Operating revenues and results

årsberetning Driftsinntekter og resultater konsern EN

Operating revenues in 2019 dropped by 6.6 per cent compared to 2018. The main causes are reduced activity levels in module operations and lower prices and delivery volumes for sawn timber. In the module business, activity was lower in 2019 than in the previous year in particular for modules for apartment buildings. Sawn timber is the main product of the Timber division, and reduced prices are the main cause of the drop in operating revenues for the division. Sawn timber is however also an important input factor for many of the companies in Wood and Building Systems. Price developments for sawn timber thus impact the cost level in these divisions.

Raw material costs for the timber-consuming part of the group increased overall in 2019 compared to 2018. Overall, the prices for chip and fibre products also increased somewhat and reduced the cost effect from increased timber prices.
The operating result for 2019 declined by 32.3 per cent to NOK 335.4 million (586.2) and the operating margin dropped from 5.3 per cent to 3.3 per cent. In 2019 impairments of NOK 17.0 million have been implemented as a result of the decision in the third quarter of 2019 to discontinue operations at Moelven Eidsvold Værk AS. The operating result for 2018 includes impairments totalling NOK 66.1 million as a result of restructuring, and that indications of reduction in value were revealed in connection with impairment testing of fixed assets, and the fact that the value of future cash flows is lower than the book value.
The FIFO principle requires that inventory calculations are adjusted in line with developments in raw material costs. Along with an update of real value assessments of inventory, this has impacted the 2019 operating result with a total of NOK -32.8 million in the quarter (88.6 million). The items do not have any impact on cash flow.

The Group employs financial instruments as a hedge against short-term fluctuations in foreign exchange rates, interest rates and power prices. Non-cash items connected to fair value adjustments on unrealised hedging instruments in 2019 comprised NOK 23.7 million (NOK 51.5 million)

In the fourth quarter a change was made in the group’s procedures for hedging power prices. The change entailed that the market value of the hedging contracts is now covered by the exception rule in IFRS on procurement for own use, and is therefore no longer capitalised. As a result of this the positive market value that was capitalised as of 31/12/2018 was expensed in the financial results by NOK 30.8 million. The overall positive market value for non-capitalised hedging contracts for electrical power was NOK 13.2 million as at 31/12/2019.

The market value change also includes basis swap effects. For 2019 this comprised NOK 17.6 million (-0.2). Basis swaps are hedging instruments that when viewed for the entire term have a market value change equalling zero, and where the accounting effect therefore is reversed over time.


årsberetning timber tabell 1 E

Activity in the international sawn timber markets was very good at the beginning of 2019, but declined somewhat as the year progressed. At the same time the supply of lower qualities, particularly of spruce, has increased as a result of storm fellings and powder-post beetle attacks. The high supply of goods resulted in a fall in market prices, and this is main reason for the drop in operating revenues. Overall delivery volumes were lower than in 2018. Towards the end of the year, however, large sections of the industry scaled back production volumes, and this has helped improve the market balance. For the export-oriented units, which mainly are a part of the Timber division, continued weak currencies in both Sweden and Norway have contributed maintaining competitiveness. At the turn of the year the division overall had a relatively good order backlog, with price levels that indicate a levelling off of the falling trend that characterised all of 2019.

The UK is an important export market, particularly for the Swedish units in Timber. Even though there no longer is any doubt that the UK will leave the EU, great uncertainty still remains related to how this will impact economic developments in the longer term. Moelven has, to the extent this is possible before the trade agreements with the EU are in place, implemented measures to maintain deliveries.

Production volume in 2019 was lower than in the previous year, mainly due to planned lower production time and production constraints to balance inventories towards the end of the year. This resulted in higher unit costs than planned, despite the fact that the implementation of rationalisation and cost-reductions has followed scheduled plans. In addition to lost processing value as a result of reduced production, the result has been affected by value adjustments to inventories because of price developments. For the year as a whole, the profits have seen a negative effect of a value adjustment to inventories totalling NOK 21.2 million. The corresponding value adjustment in 2018 was NOK 12.3 million. The value adjustment has no cash flow effect.
Access to all assortments of forest raw materials was good in 2019. At the end of the year the timber stocks were higher than at the same time the previous year, and up towards the maximum level at certain units. Both timber prices and prices for chip and fibre products have been higher in 2019 than the previous year.

In the second quarter the operations at the Timber division’s sales offices in the Netherlands and Poland were discontinued. The companies Moelven Nederland B.V. and Moelven Polska Sp.z.o.o were discontinued in 2019. Market responsibilities for the Netherlands and Poland have been transferred to Moelven Deutschland GmbH.


årsberetning wood tabell 2 E

Activity in the building materials trade in Scandinavia dropped somewhat in 2019 compared to the previous year. It was mainly demand for construction wood that declined, while interior products saw good demand. Overall, delivery volumes for processed products from the Wood division were lower than in 2018. For the year as a whole, price levels were higher than in 2018, even with a slight decline towards the turn of the year. The price levels for processed products and increased deliveries of sawn timber from the combination units contributed to operating revenues increasing compared to the previous year.

Operating conditions were generally good throughout the year, but the fire at Moelven Trysil AS resulted in some operational disruptions at the plant in Trysil and partly at the units affected by the continuity plans. Excess costs and a waiting period until the consequential loss insurance took effect was charged to the accounts in the first quarter to the tune of NOK 5 million.

Overall production in the division was somewhat lower than in 2018. This is mainly due to the process of closing down operations at Moelven Eidsvold Værk AS, reduced drying capacity at Moelven Trysil AS after the fire in February and adjustment of the production plans at certain other units to balance inventories. At Moelven Trysil AS construction of new dryers has been according to schedule, and all were started up in the course of December.

Reduced production and operational disruptions led to unit costs increasing compared to 2018.

The planing mills in the division use mainly sawn timber as raw material. As a result of price trends for sawn timber internationally, the raw material costs for these units have been reduced through the year.

For the timber-consuming units in the division, access to all assortments of forest raw materials has been good throughout the year. At the end of 2019 the timber stocks were higher than at the same time the previous year, and up towards the maximum level at certain units. Both timber prices and prices for chip and fibre products have been higher in 2019 than the previous year.

Due to price developments the profits have seen a negative effect of a value adjustment to inventories totalling NOK 11.6 million. The corresponding value adjustment in 2018 was NOK 76.3 million. The value adjustment has no cash flow effect.

As a result of the decision made in the third quarter 2019 to discontinue operations at Moelven Eidsvold Værk AS, the year to date operating result has been charged with cost provisions totalling NOK 17.0 million.

The cumulative operating profit for 2018 has been charged by a total of NOK 66.1 million in impairments related to the decision in the third quarter of 2018 to discontinue Moelven Are AS, and conducted impairment tests on fixed assets in connection with the annual settlement that indicated a drop in value totalling NOK 52.5 million.

Building Systems

årsberetning byggsystemer tabell 3 E

At the turn of the year, the order backlog was NOK 131 million higher than at the same time in 2018. It is primarily the building module operations that is responsible for the improvement. However, slow market activity and a weak order situation at certain units still make it necessary to maintain the reduced capacity.

For the glulam operations in both Norway and Sweden activity levels dropped somewhat compared to the previous year. In both countries production costs are too high to achieve good results with the current activity and price levels. This means that there are high requirements to the implementation of rationalisation measures and concept adjustments going forward, and improvement projects have been implemented.

For the building module operations in Norway, activities in building and construction have been good in 2019, and production for this market segment has been satisfactory. The new robot line that has been installed at the factory in Moelv has started up, and will provide further rationalisation of operations in the time ahead. In the housing segment activity has been poor, and lay-offs were implemented throughout the first six months and up to August. The production was restarted, albeit with somewhat reduced capacity in August. Towards the end of the year the order situation improved further, but it will still take some time before the production rate and results reach the targeted level.

For the Swedish module operations, demand for more basic modules used in building and construction and leasing has been somewhat weaker than normal. The housing segment remains somewhat hesitant, but towards the end of 2019 there were signs of improvement. The order backlog also improved for the Swedish operations towards the end of the year, but an increase in production is still some way off. Overall for the operations in Sweden there has not been a basis to reverse the capacity adjustments that have been implemented in the course of 2019. Pursuant to Swedish legislation, layoffs are not permitted. In order to adjust capacity to the market conditions, redundancies are therefore necessary. Through lay-offs and terminations of agreements for hiring in personnel, overall capacity has been reduced by slightly more than 30 per cent in the course of the year.

For system interiors from Moelven Modus market activity has been good in both Norway and Sweden, particularly in and around the capitals and major cities. In Norway activity in certain other areas, such as northern and western Norway, have dropped to levels that may lead to a need to adjust capacity if they persist. In Sweden the situation is better, but price levels remain too low to create satisfactory profitability. The market’s focus on the environment has strengthened significantly, as well as requirements to flexibility and good design in activity-based working environments. Material choices and product documentation are becoming more and more important in connection with the environmental certification of buildings. All of this, in addition to the authorities’ focus on proper working conditions in the construction industry, is good for the business. In the course of 2019 s new painting line started up at the factory in Hulån in Sweden, and an investment was made in new production equipment for the production of Eco Panel at the factory in Norway. The investments will contribute to further rationalisation of production

Other businesses

årsberetning øvrige tabell 4 E

Other businesses include Moelven Industrier ASA, with shared services for finance, accounting, insurance, communications, HR and ICT. Timber supply and sales of wood chips and energy products are organised as a common function for the Group's timber processing industry and are included with the companies Moelven Skog AB, Moelven Virke AS, Vänerbränsle AB and Moelven Bioenergi AS. Moelven Pellets AS, which was established in June 2018 to manage construction and operation of the new pellet factory and energy centre in connection with Moelven Soknabruket AS, is also included in the area, but as of yet with no result items of significance. The energy centre started up in September, and the pellets factory started trial production in September/October. The first pellet deliveries took place in October. Starting up of the factory has gone according to plan throughout the fourth quarter.  A partnership agreement has been concluded with SCA for the delivery of pellets. The agreement entails that the Swedish SCA group acquires the entire production volume from the Moelven Pellets AS factory at Sokna.

Fluctuations in operating revenues in the area of Other Businesses are largely due to the level of activity within timber supply and sales of wood chips and energy products. These are mainly internal sales, which do not materially affect the results within the business area. In order to safeguard the supply of timber and market opportunities for wood chip and energy products in regions without local demand for pulp wood and wood chips, Moelven is to a certain extent involved in the purchase resale of this, based on established train solutions for transport, among other things. The business is based on fixed agreements on both the customer and supplier sides.

Investments, balance sheet and financing

During 2019, total investments were NOK 478.7 million (NOK 497.4 million). The high investment rate is in accordance with the investment programme in the group’s strategy plan. The most extensive single investment in 2019 has been Moelven Pellets AS’s construction of a new pellet factory and energy centre at Sokna outside Hønefoss. The project is included in the overall investment amount by NOK 169 million in 2019.

Depreciations and impairments for 2019 comprised NOK 294.4 million (346.5). For 2019 the total includes NOK 17.0 million related to the discontinuation of operations at Moelven Eidsvold Værk AS, and overall for 2018 NOK 66.1 million related to the discontinuation of Moelven Are AS and valuation pursuant to IAS 36.

At the end of 2019, the book value of the Group's total assets was NOK 5,518.0 million (NOK 5,302.3 million). In addition to high investments in 2018/2019 and the accounting effects of the implementation of IFRS 16 – Leasing, increased inventories are the main reason of the increase in total assets.

Cash flow from operating activities was NOK 466.3 million (653.1) in 2019, corresponding to NOK 3.60 per share (NOK 5.04). The change compared to last year is due to weaker earnings and natural fluctuations in working capital items. Cash flow from working capital items was NOK 14.3 million (-167.5).

Net interest-bearing liabilities were NOK 1,136.4 million (NOK 721.4 million) at the turn of the year. Leasing is included in net interest-bearing liabilities in the amount of NOK 198.8 million (NOK 43.4 million). The increase from 31/12/2018 is mainly due to the balancing of all leases in accordance with IFRS 31.12.2018 – Leasing, which was implement from 16 January 2019.

The liquidity reserve was NOK 951.0 million (NOK 1,239.4 million). In the Group's main financing the available loan facility varies in time with the natural fluctuations in the Group's tied-up capital through the year. The main funding is due on 17 June 2021 and the process on refinancing this has been initiated.

Equity at the end of 2019 amounted to NOK 2,368.2 million (NOK 2,435.3 million), equivalent to NOK 18.3 (NOK 18.7) per share. The equity ratio was 42.9 per cent (45.9 per cent). The dividend for 2018 of NOK 1.74 per share (0.68), totalling NOK 225.4 million (88.1), was paid and charged to equity in the second quarter 2019 (2018). Parts of the Group's equity are linked to ownership interests in foreign subsidiaries, principally in Sweden, and are thereby exposed to exchange rate fluctuations. The scope and consequences of likely exchange rate fluctuations are within acceptable risk limits. In 2019 the change was NOK -30.8 million (-17.3 million). Approximately half of the Group's assets are recognised in SEK. The total assets thus also change based on the exchange rate, and the equity ratio in percent is therefore less impacted by exchange rate fluctuations than the nominal equity. 


The Group's profits and balance sheet are affected by several external factors that can be influenced by Moelven to a greater or lesser extent.

The Group's profits and balance sheet are affected by several external factors that can be influenced by Moelven to a greater or lesser extent.

For some of the risk areas that affect the Group, there are functioning financial markets where the risk of fluctuations can be reduced. This applies, for example, to interest rates, exchange rates and electricity. The Group's financial policy is that it is the industrial activities rather than financial transactions that shall create the conditions necessary for profitability. The main aim of the guidelines for the use of financial instruments is to reduce fluctuations and create more predictability. In other areas, such as raw materials, finished goods and projects, other methods of hedging risk must be used. As far as possible, fixed price contracts or index linking of contracts is used, for example. The Group's composition of units directed at different primary markets also has the effect of reducing risk. The primary markets are seldom affected by economic fluctuations at the same time, while the cost side can still benefit from economies of scale.

årsberetning Risiko Sensitivitetstabell E

Prices of finished goods

The units of the Moelven Group operate in markets with free competition and many players. The creation of prices therefore occurs freely in the marketplace, and assuming unchanged volumes a change in process will affect the group as shown on the sensitivity table.


Sawn timber prices

The Moelven Group's units annually use around 4.5 million cubic metres sawn spruce and pine in production. The total value is approximately NOK 2,500 million, including transport costs. Spruce and pine account for approximately equal portions of the round timber. Moelven does not own any forest, but buys all its timber from external suppliers. These suppliers are in turn dependent on functioning markets within an acceptable transport distance, as well as satisfactory price levels for both sawn timber and pulpwood. The cost of timber is by far the biggest single cost for the Group, and changes in timber prices have an immediate and substantial impact on margins. This involves both a price risk and a volume risk. The Group therefore focuses on entering into price agreements that as far as possible correlate timber prices with expected changes in the price of finished goods.


Prices of chips and biomass

The price of cellulose chips and biomass, which come from saw and planing production in Timber and Wood, is of great significance for the Group's revenues. Even though work is constantly going on to improve the utilisation of raw material, only about half of each log becomes industrial timber after passing through a sawmill. The remaining half is cellulose chipping and sawdust, in addition to various dry fractions. Part of this is used for our own energy production, while the

rest is sold to the particle board, bioenergy and fibre industries. Since a change in the profit margin for these products has a direct influence on the Group's results, the distance to the customers and access to efficient logistics solutions for road and rail transport are of great importance.


Electricity prices

The price of electric power is another important factor that affects the Group's profitability. About 225 GWh of electric power a year is bought via the Group's electricity suppliers According to the Group's finance policy, the need for electric power shall be secured against price fluctuations so as to ensure stability and predictability. The anticipated power requirement is hedged within stated maximum and minimum levels through bilateral agreements with electricity suppliers with a 5 year maximum horizon.


Interest rate risk

The Group's net interest-bearing debt is subject to interest rate risk. The bulk of the debt in SEK, which is why interest rates in Sweden are most important for the development of the Group's interest expense. The Group companies will be financed with loans from the parent company. All external borrowing is done by the parent company, which also makes hedging in accordance with financial policy. The hedging instruments that can be used are ordinary interest rate swaps, FRAs and composite swaps of types that are normally used for such purposes. The extent of hedging is measured in terms of the combined duration of outstanding debt and hedging arrangements. The total duration should be minimum of 12 months and maximum 60 months shall not be entered into hedging agreements with a maturity of more than 10 years.

Exchange rate risk

About 15 per cent of the Group's operating revenues come from markets outside Scandinavia and carry exchange rate risks.

Additionally, there is significant internal and external trade within the group with both raw materials and finished products between Sweden and Norway. The most important currency crosses are EUR/SEK, GBP/SEK, SEK/NOK and EUR/NOK. Moelven uses forward contracts to counteract large cash flow fluctuations as a result of variations in exchange rates. Because of the hedging strategy that has been chosen, changes must be long-term so as to have the full effect on the Group's profitability, and during the hedging period operational adaptations may be made to compensate for the external changes. During the hedging period, operational adaptations may be made to compensate for the external changes. About half of the Group's total balance sheet is connected to activities in Sweden. The balance sheet figures will therefore be affected by the prevailing exchange rate between the Swedish and Norwegian kroner. A large part of equity is secured against this in that share investment in most of the Group's Swedish subsidiaries is financed in Swedish krona. At the end of 2019, the total equity that is exposed to exchange rate risk amounted to SEK 1,302.3 million (SEK 1,371.5 million).


Credit risk

It is the Group's policy that credit sales over a certain size shall be secured in the form of either guarantees or credit insurance. In practice, credit insurance is used most. There are internal guidelines and follow-up routines for unsecured sales, which only occur when no other security is possible.


Liquidity risk

The group’s foreign capital financing comprises a long term credit facility from June 2016 with an overall scope of NOK 850 million and SEK 750 million. The loan agreement included options to extend the term by up to two years. These were exercised in 2017 and 2018 respectively. Further extension is not possible, and the loan agreement’s final maturity is in June 2021. The refinancing process has been initiated and will be completed by the end of the second quarter of 2020 according to plan.

The loan agreement includes normal default clauses with regard to dividends, equity, net equity value and debt ratio. As at 31 December 2019, the Group's key figures were significantly better than the levels at which the default clauses are triggered. In addition to the long-term drawing facilities, the group also has short term credit facilities in its bank systems, amounting altogether to about NOK 312 million, which is renewed annually.


Risk of damage and interruption to production

The Group has a policy for industrial insurance that is centrally managed and which is followed by all companies. This policy gives guidelines for insurance cover, preventive measures, risk review and preparation of continuity plans. The continuity plans become key plans if a fire/damage should occur. The plans cover immediate efforts, disaster management and the ability to continue deliveries to customers. Through its industrial insurance, the Group is covered for financial loss exceeding NOK 3 million per individual claim.
On 13 February 2019 a fire broke out in the lumber dryers at Moelven Trysil AS. The fire brigade was quickly notified, and Moelven quickly gained control of all employees at the sawmill. No one was injured, but several of the dryers sustained significant damage. The least affected dryers returned to operation relatively quickly, and at the end of the first quarter, drying capacity was back at approximately 50 per cent of the level before the fire. Damage to the other dryers proved to be so extensive that when age was taken into account, it was decided to build new ones rather than replace the old ones. Using established continuity plans, the operational disruption was limited by using capacity at other plants.
A waiting period and a deductible on the general and consequential loss insurance of approx. NOK 5 million was charged to the accounts in the first quarter. The new dryers were started up in November/December 2019.


Information technology
In an increasingly connected world with increasing digitization both in general in society but also in businesses like Moelven, an ongoing assessment of IT risk is important. Interconnected value chains increase efficiency, productivity and quality, but also increase vulnerability to digital service outages. With increasing threats both domestically and internationally and recent years’ media reported incidents following IT attacks against businesses and public institutions, Moelven devoted extra attention to IT security and risk last year. Moelven follows basic principles of IT security, and constantly works to identify and monitor risks, protect systems and data, maintain IT security and prepare and manage any incidents and recover from these.

Risk of loss of reputation

Moelven strongly emphasises maintaining a good reputation, and this is closely monitored by corporate management. Openness is what characterises the way the Group relates outwardly to society and the media and inwardly to employees of the Group. This applies whether it concerns positive or negative circumstances for Moelven, in line with Moelven's brand platform. There is financial risk linked to any loss of Moelven's reputation. The reputation risk is not quantified.


Risk of loss of environmental costs

The activities of the Moelven Group follow the prevailing legislation and regulations with regard to emissions and waste management. The Group has made provisions in the accounts for all known obligations related to environmental impact. One of the purposes of the Group's sustainability policy is to minimize the risk of negative impact on the natural environment and thus the potential environmental cost as well.

Climate risk

The global climate crisis will have an increasing impact on Moelven. The risk is changing both for Moelven and society at large. At the same time, great opportunities are arising for those that are a part of the green shift.

Moelven is to a certain extent exposed to transition risk. In general, changes to regulations, policy and reputation will have a potentially positive effect for Moelven, as wood products are considered an important component of the green shift. There are good opportunities to expand the market and offer new products and services. At the same time it is clear that competition for climate-friendly building materials is increasing, with constantly new products, solutions and players on the market.

Moelven is exposed to significant acute physical climate risk. Extreme weather can harm standing forest, which in turn can have a potential effect on quality, price levels and access to timber. Floods are also relevant as many of Moelven’s sawmills are in close proximity to rivers and waterways. These are known problems that have been subject to strategic work for many years. Chronic physical climate risk, such as increased volatility in weather conditions, more precipitation and increased average temperatures can also affect Moelven. In the short term such harvesting can be affected by wet and warm winters, and in the longer term raw material quality can be affected.

Moelven has conducted a climate risk and opportunity survey to better understand how the company will be affected by these global trends and how the company shall ensure long-term value-creation ahead in time. The analysis is based on the reporting recommendations of the “Task Force on Climate-related Financial Disclosures” (TCFD). TCFD was initiated by the G20 countries’ “Financial Stability Board” to help companies and owners better understand how climate changes are affecting management, strategy, risk and objectives.


The Board of Directors’ role
The Board of Directors’ responsibilities and tasks follow current legislation and the rules of procedure for Moelven Industrier ASA. This gives the Board the overall responsibility to ensure competent control of the company’s operations. The relationship to climate risk and climate opportunities falls within this. In accordance with the current rules of procedure, the Board annually reviews and adopts the company’s policy for sustainable operations and code of conduct. These provide guidelines for how Moelven shall integrate considerations to the outside world in value creation. The sustainability policy also stipulates that Moelven shall publish its results and progress in the area through an annual sustainability report. The sustainability report is processed and adopted by the Board along with the company’s annual accounts and the report of the Board of Directors. No separate board committees have been established with regard to climate risk and sustainability.

The role of management
The CEO is responsible for the day-to-day management of Moelven’s operations and follows the guidelines provided by the Board.
Monitoring and control of climate and sustainability issues is organised under economy and finance in corporate management, where responsibility for internal control and risk management is otherwise located. In addition group- and/or division-wide functions for control and follow-up have been established where this is appropriate. Examples are raw materials supply, the raw materials certification schemes PEFC™ and FSC®, energy follow-up and HSE.
There are also examples of climate related issues that are closely integrated in the day-to-day operational activities. This applies in particular to product certifications, operation permits, etc. Moelven has a decentralised organisational model where most of the operative units are independent legal entities. The local boards and company management have independent responsibility for the follow-up of climate and sustainability issues at the unit level.

Strategy and scenario analysis

In the risk assessment and strategy process, Moelven is considering the short-, medium- and long-term time horizons: Short-term 0-5 years, medium long-term 5-10 years and long-term 10-30 years. The definition follows the time frame stipulated by the IEA in the World Energy Outlook. The short term viewpoint is in line with Moelven’s existing strategic outlook. In the medium long-term the investments and assets are considered in terms of possible trends and risks towards 2030, with a change in global policy and markets related to climate action. The long-term view is also relevant as several European countries have existing targets of virtually zero emissions in 2050. Both Norway and Sweden have committed to emissions cuts through the 2015 Paris Agreement. In June 2017 Norway adopted the Climate Act, whose key objective is to reduce greenhouse gas emissions by at least 40 per cent by 2030 from the benchmark year of 1990. In addition, Norway shall be a low-emission society in 2050 with a reduction in greenhouse gas emissions of 80-95 per cent. Among other things, the EU has proposed a new framework, the European Green Deal, which proposes adopting an ambition that the whole of EU shall become carbon neutral by 2050.

Risks and opportunities have been identified through scenario development, where Moelven has developed two scenarios for the short, medium-long and long term. Scenario 1 describes a world that implements measures to limit global warming to well below two degrees by the end of the century, in accordance with recommendations from the IPCC. This scenario mainly uses data from the IEA’s Sustainable Development Scenario and the IPCC’s RCP 4.5.

Scenario 2 describes a world that wants to act, but is struggling to implement effective measures, which leads to a global warming of between 2.5 to 3.5 degrees. This scenario mainly uses data from the IEA’s Stated Policies and the IPCC’s RCP 8.5. In addition to the IPCC and IEA estimates, both scenarios include local factors and alternative sources, as Moelven operational areas may diverge from global perspectives. For example, Norway may implement measures in accordance with recommendations from the IPCC, while global policy and initiatives are not yet structured in accordance with a world that limits the global warming to well below two degrees.

Årsberetning Klimarisiko Tabell 1 E

Moelven is particularly exposed to physical climate risk, technology risk and reputation risk. Physical climate risk comes from changes in weather and climate, and with regard to Moelven this will mainly affect raw material access and the frequency and the severity of floods. Raw material access can be impacted through extreme weather, where a historic example is the hurricane Gudrun in 2005 that felled forest equivalent to one year’s normal harvesting in Sweden. Forest fire is also a risk factor that increases in line with increased average temperatures and drought periods. Harvesting can also be affected by long, mild winters, due to challenges related to accessibility in the forest. This risk has affected Moelven in the past, and it is assumed that the risk level will increase in time with climate changes.

Today wood materials are perceived to be among the most sustainable building materials, but Moelven can risk increased competition in the area due to technology developments in other sectors. Examples are the use of carbon capture in the cement and concrete industry or the use of sustainable hydrogen in steel electrolysis. Moelven has little impact on this risk, but already has a well-established brand as a manufacturer of sustainable building materials. The risk is already present, with competing products that are clearly marketed as sustainable. The risk is expected to significantly increase if carbon capture is adopted for cement production in Norway, and that the plans for emissions-free production of steel is realised in Sweden.

Moelven also faces a potential reputation risk, where there are great expectations that the forestry industry and bio-economy shall act as an accelerator for the green shift. In order for this to materialise, it is important that the authorities’ instruments assist the industry to develop further, including through facilitation of increased efficiency in transport and long-term framework conditions. At the same time, new requirements are being considered on the sustainable management of forests at the EU level, which potentially may have consequences for Moelven’s operations and external stakeholders view of Moelven. 

Moelven is actively working on the risks in order to reduce the consequences and likelihood that they occur as summarised in the below table:

Årsberetning Klimarisiko Tabell 2 E

By comparing the two scenario, Moelven will have better conditions for long-term value creation in scenario 1 (low emissions). Physical climate risk is lower in this scenario, and one may expect increased demand for the group’s products. Scenario 2 means increased unpredictability both in terms of physical and transitional risk that will impose increased requirements on Moelven’s risk and opportunity management to ensure long-term value creation. 

Identified opportunities

The climate changes and the green shift also afford significant new opportunities for Moelven. It is difficult to quantify the opportunities, as these must be assessed on a case-by-case basis. However, in general it is natural to believe that the opportunities exceed the potentially negative risk, if Moelven actively grasps the opportunities that climate change and the green shift will provide.

Årsberetning Klimarisiko Tabell 3 E

Risk management

In 2019 Moelven carried out the first climate risk and opportunity assessment. The process has been organised under finance in corporate management. In order to quantify the risk, Moelven has used its own risk framework that is based on the COSO framework, with the same risk categories that are used for other risk assessments in the company. Risk is reported with the categories High, Medium and Low.

The exact consequence and likelihood has not been reported, as the quality of the analyses is considered to be insufficiently mature for external publication. Consequence and likelihood are therefore jointly reported in the categories high, medium and low based on the following consequence categories.

Årsberetning Klimarisiko Tabell 4 E

The results of the assessment of climate risk and opportunities in 2019 have been evaluated by corporate management and the board, and these assessments will form the basis for strategic discussions in the short, medium and long term. In the course of 2020 Moelven will establish a new internal control system at the group level, and the climate risk process will be integrated in this. This will allow climate risk and opportunities to be managed in the same manner as other risks and opportunities in the group and play a part in the group’s strategy and budget processes.

Key figures and objectives

Description   2019 2018 2017 Objectives for 2022
Total CO2 emissions tCO2-eq 243,443 246,646 235,785 214,443
Scope 1 tCO2-eq 13,053 17,555 10,741 8,000
Scope 2 (location-based) tCO2-eq 3,348 3,105 2,539 3,013
Scope 2 (market-based) tCO2-eq 118,270 115,784 116,307 106,443
Scope 3 tCO2-eq 112,120 113,306 122,017 101,975
GEVA tCO2-eq / EBITDA -17% 50% -14% -5% per year
Energy consumption of fossil fuels in Moelven MWh 39 61 44 -5% per year
Electricity consumption MWh 229 230 231 208
Load filling rate Wood Sverige   58.2 59.9 59.7 61
Load filling rate F-load Wood Norge   45.1 45.4 45.2 45

For details related to the greenhouse gas accounts, see the 2019 sustainability report.

GEVA (Greenhouse gas Emissions per Value Added) is an expression for the relationship between greenhouse gas emissions and value added. Calculations have been made that show an annual reduction of 5%, i.e. that the greenhouse gas emissions will be less compared to value added, is required in order for it to be possible to reach the goals of the Paris Agreement. Moelven has tied its sustainability strategy to the Paris Agreement, and is thus committed to working for such a reduction. GEVA measured for a single year provides little value in terms of information, as it is the long.term development that is emphasised.

The biomass boiler that provides thermal energy for Moelven Valåsen AB was put out of operation in 2018 due to a fire.

A backup solution involving an oil-based heating system was established to ensure energy supplies.

The consumption of fuel oil in the period the backup solution

was operative is the main reason for the increase of

scope 1 emissions and the GEVA value in 2018. The new biomass boiler that was built after the fire has been in operation throughout 2019, and has made a strong contribution to the reduction in CO2 emissions within scope 1 compared to 2018. A slight increase in the use of fossil energy sources at certain other units, in combination with reduced EBITDA for the group as a whole, prevented the GEVA value to drop to the 2017 level. However, within the existing strategy, measures have been planned that will contribute to a further reduction in the strategy period.

Employees, health, safety and the environment

For a detailed description of the HSE area, please refer to the Board's explanation of principles and practice concerning social responsibility pursuant to the Accounting Act Section 3-3c published in the group’s Sustainability Report.

Effect on the external environment

For a detailed description of how the group's activities impact the external environment, please refer to the Board's explanation of principles and practice concerning social responsibility pursuant to the Accounting Act Section 3-3c published in the group’s Sustainability Report.


Moelven views innovation as the entire process from an idea arises until the customer has bought a new product or service that

represents an added value, or a new production process is implemented.
Moelven's innovation focus is mainly to engage in development and innovation linked to a specific application of a product or in a production process. The group does itself engage in basic research, but participates in projects where this is deemed appropriate. The R&D projects must contribute to strengthen the various business areas in the group and reduce business risk. This may also entail participation in innovation projects outside of our own value chain, but in projects that support Moelven’s operations and opportunities for growth. One example is the two ongoing projects at Moelven Töreboda AB to develop and improve building systems and acoustics in tall wooden buildings. This will contribute to improve Moelven Töreboda’s self-developed system Trä8 further. The two projects were started in October 2017, and will continue for five and three years respectively. The “Prowood” project is being carried out in cooperation with Företagsforskarskolen Prowood, where the purpose is to support and increase the competitive strength of the Swedish timber industry. The project is included in the European “Acoutect” project, which is a partnership between 12 European universities and businesses, including Chalmer’s Tekniska Högskola and Eindhoven’s Tekniska Högskola. Two doctoral fellows have been hired for the project, which ties activities to the remaining academic community.

Another research project where Moelven is a participant is “BioNext.” This is a research project under the auspices of the Research Council of Norway and the Norwegian University of Life Sciences (NMBU). The other participants in the project are Sintef Energi AS, Statkraft Varme AS, Handelshøyskolen BI, Avinor AS, Glommen Mjøsen Skog SA, University of Utrecht and Linneuniversitetet. The main objective of BioNext is to identify and assess commercial, regulatory and technical solutions towards a financially viable forest bioenergy sector.


In order for the group’s mission statement to “give people good rooms” is to be upheld over time, it is essential that products and processes continuously develop in step with the outside world. Responsibility for is with corporate management. The group must facilitate innovation and provide resources, support and coordination. The innovation processes are conducted in the individual business areas where expertise is greatest. Where there are larger parts of the Moelven group that will benefit from the innovation area, joint projects are carried out. Examples of this is the in the research centre FME ZEN (Zero Emission Neighbourhood), which shall develop zero emission solutions for urban areas. Over a period of 8 years, and with a budget of NOK 400 million, the centre shall find smart solutions for everything from production and distribution of heat and electricity within neighbourhoods, to finding tools for planning zero emission areas. Moelven’s expertise in using wood in buildings contributes to build pilot areas with climate-smart materials and to document CO2 benefits. In 2019 it was decided to initiate a case study based on input from Moelven, among others. The goal is to find good objective and applicable methods for examining CO2 footprints for buildings in wood and concrete respectively throughout the building’s lifetime, and to compare these. One of the factors that complicates such comparisons is that different building methods are used depending on the choice of material. Moelven’s view is that wood’s inherent good environmental properties, including carbon storage, is a positive contribution to reduce CO2 emissions, and that the use of wood in future buildings therefore is a part of the solution to the climate crisis. Moelven is also working for the research programme to investigate yet another case concerning the extension of existing buildings using wood as a topic. Preserving the buildings we already have, and resolving new needs by extending or remodelling, will be more economical and provide a smaller climate footprint than demolishing in order to build new buildings. It also is a good fit in concepts related to land use and densification. Overall both building with wood but at the same time not using no more wood than necessary, matches Moelven’s sustainability strategy of being a climate positive business.


Moelven is also member and co-owner of Norwegian Wood Cluster SA (NWC), which is an industrial cluster in the forestry and timber industry value chain. NWC is owned by Glommen Mjøsen Skog SA, Statskog SF, Gausdal Bruvoll SA, Moelven Industrier ASA, Hunton Fiber AS, Forestia AS, Boligpartner AS, Kontur Arkitekter AS, Begna Bruk SA and NTNU.  NWC is registered as a cooperative enterprise with a non-financial object. The cluster agreement was signed on 13 February 2017, the company was founded on 9 August 2017 and started operations on 1 September 2017.

NWC’s objective is to develop the cluster through close cooperation into an internationally leading industrial cluster for industrial, sustainable wooden buildings. The cluster partnership aims to give participants access to key production factors, ideas and impulses for innovation through interaction and cooperation, increase added value and profitability amongst the cluster partners and promote their common interests to public authorities. Moelven’s participation in Norwegian Wood Cluster will provide the group with a platform for development along with other players and be an important contribution to the group’s R&D work going forward.


Through its subsidiary Moelven Van Severen AS, Moelven is also a participant in Woodworks! Norwegian Forest and Wood Cluster, which is a comprehensive forestry and wood-based industry cluster originating in Trøndelag. From 2020 the Arena Skog project has extended its scope and is now called Arena Pro. The Arena project will give the cluster an extra boost and support the aggressive development already underway to increase the use of wood and wood fibre in existing and new product and market areas. The potential is considerable. This not only contributes to larger market areas for the forestry industry, but also to making other industries more sustainable , in keeping with the premises of the bioeconomy.

Product development and product innovation

The laminated timber area has been at the forefront of developing new products and technical solutions for many years.

The newest development project that has been initiated in Glulam is Moelven Töreboda AB’s collaboration with the innovation company Modvion to develop modular windpower towers from glulam. Windpower generally becomes more profitable the higher the windmills can be built. Winds are stronger and more stable at heights, and larger rotor blades can power a larger generator. The first prototype of a glulam windpower tower is 30 metres tall and will be assembled on Björkö in the Gothenburg archipelago in the spring of 2020. The project’s objective is to develop a concept that allows one to build 150 metre tall windpower towers from glulam.

It would not have been possible to build the world’s tallest wooden building, the 85.4 metre tall Mjøstårnet in Brumunddal, as it stands today without technical solutions developed by both Moelven Limtre AS in Moelv and Moelven Töreboda Limträ AB in Töreboda.

The Trä8 system, which is a key component of Mjøstårnet, has been under development at Moelven Töreboda AB for several years. Trä8 is a glulam-based building system for tall wooden buildings. In addition to the actual glulam structure, the system takes into account modern requirements with regard to fire safety, acoustics and engineering methods. The joint technology used in the joints of the large load bearing structures was developed at Moelven Limtre AS in connection with construction of the skating rinks for the Olympic Games in Lillehammer. Fire safety is very important, and is one of the advantages of glulam. Glulam is a compact material, and in the event of a fire, external charring of the glulam will act as insulation and cause the core temperature to rise very slowly. This means that a glulam load bearing structure retains its load bearing properties very well in the event of a fire. The structures in Mjøstårnet are scaled to withstand a full fire in a fire cell without causing the building to collapse.

The products developed in the mechanised wood industry must in most cases be packed in some sort of protection against the elements. It is not practically possible to have direct deliveries from manufacturer to customer with no intermediate storage where the products may be exposed to precipitation, dirt or sunlight. In order to preserve quality and thus value, packaging is used that meets specific requirements to waterproofing, UV protection and tearing strength. Moelven currently uses a polyethylene film as cover packaging. In order to minimise the climate footprint, a variety that is made from 95 per cent recycled plastic is used. At the same time, work is being done to find alternative and even more sustainable solutions. There are working products on the market that are made from reinforced paper laminated with a layer of polyethylene and polypropylene. However, the products are costly and difficult to recycle due to their complex composition. At Moelven Valåsen AB a trial is being carried out where the sawn timber packages and covered by PE laminated liquid carton and the sides treated with wax as simple protection against humidity. The PE laminated liquid carton is recyclable when fibre is separated from the PE component. The trials are promising, but much development remains before this solution can replace current plastic packaging based on recycled plastic.


In Wood product development is of great importance in order for the choice of products to both follow the shifting market trends and satisfy requirements toward quality and functionality.

The goal is to offer customers the market's best, most diverse and most modern product range in wood. Innovation work is divided into two main directions. One aims to develop modern products that contribute towards inspiration and new trends at the end-user. Development may focus both on design, use of material, environmental properties and degree of processing. One example is surface-treated cladding where demand has increased rapidly. Because surface treatment takes place industrially and in a controlled environment, the production process becomes more environmentally sustainable while also providing more added value for the end user. The other main direction aims to simplify work with the products at the building site. Examples of such solutions are preprocessed internal panels with concealed nails, various floor solutions, sheet products with reduced widths to ease handling, ready cut lengths, etc.

Product development and process innovation

The Moelven group continually works to rationalize and improve processes at all stages from purchasing to finished product. For the project part of the glulam business, the use of new technology to process individual elements in the load-bearing structures is a precondition to provide complex, high-quality systems. For the part of glulam that is directed at the building products trade and for the processing units in Wood, the logistics systems are of great importance. Transport is one of the major sources of greenhouse gas emissions in Sweden and Norway, and represents a third of the emissions, according to Naturvårdsverket in Sweden and the Norwegian Environment Agency. Rationalisation of transport provides reduced costs and environmental impact, while the customer is ensured access to a broad product range with short delivery times. In addition to work to rationalise transport, Moelven is also working on finding alternatives to traditional means of transport based on fossil fuels. For this reason, in 2019 Moelven in cooperation with LBC Logistik AB has taken the initiative for the first biogas truck in the Swedish forestry industry. The biogas truck will be delivered in the spring of 2020 and will operate in the area Värmland-Stockholm-Gothenburg. The procurement will allow Moelven to develop experience and expertise on how biogas trucks can be used on a larger scale to reduce the climate footprint from the transport industry.

Wood pellets are no longer a particularly innovative product, but both process development and innovation were key when Moelven Pellets AS built the new pellet factory and energy centre at Sokna outside Hønefoss. The goal of the project was to integrate the pellet factory and energy centre in the sawmill concept at Moelven Soknabruket AS in a manner that entails that energy consumption and costs related to the production of white wood pellets are reduced to a level much lower than what is customary in the industry. The use of only pure residual raw materials from the sawmills provide pellets of the best quality class (Premium/EN Plus A1). In addition, the factory enables logistics solutions that are significantly more climate friendly than previously due to very short transport distances for both the raw materials and significantly reduced transport distances for the finished product, which is shipped from the port of Drammen. Within the energy concept, innovation and new ways of thinking was necessary both due to demanding targets for low energy consumption and due to the cold climate. Compared to other pellet factories, through an innovative energy concept with integration towards the sawmill operations, Moelven’s factory will have a significantly lower specific energy consumption compared to other factories. Similar plants that are in operation today have been installed in Central Europe, with a significantly milder climate than in Norway. Before the construction of Moelven Pellets AS’s plant, no one has had operational experience with as cold a climate as at Sokna. It has therefore been necessary with development and adjustment of both the energy centre and the drying plant for chips for pellet production.


An important focus area in the development of the group is to employ new technology and exploit the opportunities inherent in new digital solutions. In the project “The Smart Digital Sawmill,” Moelven has collaborated with a handful of technology partners in linking the entire value chain at Moelven Valåsen AB to a Big Data solution. Real-time data from all underlying systems and machinery are fed into one and the same system, where advanced analysis and machine learning technologies exploit the information in ways one has previously been unable to do.

“The Smart Digital Sawmill” now comprises the template for deploying similar solutions at several of the group’s companies.


For the timber-consuming units in Timber and Wood, it is primarily the optimisation of the production processes that is of key importance. The goal of safeguarding the values inherent in the raw materials is key with regard to both environmental and financial sustainability. The use of X-ray photography, camera sorting and mechanical strength sorting are tools that contribute to optimizing raw material utilization. At Moelven Våler AS in Braskereidfoss, Norway’s first timber intake with X-ray sorting arrived in 2018. On the Swedish side Moelven Valåsen AB has similar equipment. Here every log is analysed, so that it may be used most efficiently. This means less waste and better utilisation of the natural resource.


The Moelven group has spent considerable resources on adopting modern IT tools to optimise operations and maintenance in industrial operations. The downtime system Axxos has been further developed and new functionality and associated concepts have been brought into use. Axxos makes it easier to identify causes of lost time or lost operational availability, so that measures for process or machine improvement can be implemented. In order to achieve a better overview of the machinery installations and thus more efficient maintenance, the selected maintenance system that is fully integrated with the downtime system has been introduced. In this manner necessary maintenance can quickly be implemented to rectify discrepancies identified in the downtime system.


For the module and interior businesses it is important to exploit the competitive advantage inherent in the module concept rather than traditional building concepts: Industrial production of the modules indoors and shorter overall building time because several processes can take place simultaneously, and the modules can be quickly assembled at the building site. Development and refinement of technical solutions for production, connection of technical installations and assembly at the building site is important to operate profitable industrial production of module-based building solutions, and to exploit the advantages the concept provides. In connection with the conversion of Moelven Byggmodul AB's production facility in Säffle, new and improved production equipment was developed in cooperation with local suppliers. Besides capacity and efficiency improvements, the utilization of robot technology has enabled major improvements in HSE and logistics. The robot line, which was a significant part of the project, was then the first delivery of Randek AB’s ZeroLabor Robotic System. The industrial mindset and experiences from the project in Säffle have been used as a template for investments in a robot line at the module factory in Moelv.

Allocation of the net profit for the year

The Board of Directors' dividend policy is based on Moelven's shareholders receiving a predictable and satisfactory cash return on their share investment. The policy provides guidelines for how much of the profit, or of distributable equity in years with a loss, shall be distributed as a dividend. The Group's net profit for 2019 was NOK 188.4 million (451.2). The equity ratio was 42.9 per cent (45.9 per cent). The Group has adequate equity to disburse a dividend in accordance with the applicable dividend policy. Based on the results for 2019 and taking into account the normal seasonal variations in the Group's employed capital and equity ratio, the Board proposes a dividend of NOK 0.72 (1.74) per share to the annual general meeting. This totals NOK 93,269,724 (225,401,834).

The parent company Moelven Industrier ASA, which distributes a dividend for the Group, had a net profit of NOK 67.4 million (312.7) for the year in 2019 after the receipt of group contributions and share dividends from subsidiaries. The company has sufficient distributable equity and liquidity for the distribution of the dividend.

Events after the balance sheet date

No events have occurred after the balance sheet date that affects the accounts that have been presented.

Going concern assumption

In accordance with the requirements in the Norwegian accounting legislation, the Board of Directors confirms that the prerequisites have been met for preparation of the accounts under the assumption that the Company will continue as a going concern and that the annual accounts have been prepared under this assumption.


Although activity in the world economy has declined somewhat, there is still growth. Growth is expected to continue, but at a slightly slower rate in the next years. The trade conflict between the USA and China appears to be moving towards a solution. In the USA the economy is still improving, although the growth rate is lower and uncertainty greater than previously. However, building activity and demand for sawn timber remains high. Moelven has only occasional deliveries to the United States, but the group sees a positive effect from an improved global market balance. The growth rate in China and Japan is decreasing, partly due to the trade war that has been ongoing between China and the US. A solution to the trade situation will send a positive signal to the economy. In other parts of Asia, however, there are signs of increasing activity. For the British there is no longer any doubt that Brexit will be carried out, although it is still unclear how this will happen. Moelven has as far as possible implemented measures to ensure that deliveries to the UK can be maintained in the event of Brexit. Uncertainty relating to the consequences of Brexit are thus primarily related to economic developments in the UK after implementation.

The Middle East and North Africa are important export markets for Moelven, but remain characterised by conditions that complicate international trade. In general, positive and stable developments in international demand for industrial wood are expected.

In Norway the mainland economy is at a normal level, while activity in Sweden has declined. The rest of Europe still has a marginal positive growth rate.

In mid-March 2020 it is clear to most people that the Covid-19 pandemic may have a great impact on developments in the world economy, but how great and how extensive the impact will be is impossible to tell. So far Moelven has not been significantly affected, but may in time be affected by failing logistics systems and an economic downturn. The Moelven Group has as far as possible introduced measures to both limit infection in society in general and to protect own employees and the business against operational disruptions as a result of the epidemic. Restrictions have been introduced with regard to travel activities, large gatherings, hygiene, etc., but beyond this operation of the business is being maintained in accordance with the original business plan for 2020.

NOK and SEK remain at a level that contributes to improve competitiveness on the export markets.

In Norway demand for processed products in 2020 is expected to remain on a par with 2019, albeit with regional differences. Construction activity in and surrounding the major cities is expected to remain high. In Sweden the need for new homes remains high, but activity in the new building market remains hesitant as in Norway. The order situation for building module operations remains weak, and it is taking time to finally clarify the projects that are on the market. Activity in the renovation, conversion and extension market remains good. Increased interest for wood as a building material contributes to maintain activity levels.

Timber inventories and the supply situation in Moelven’s geographies at the start of 2020 are good in both Norway and Sweden. Continued good access to raw material in the winter season is expected.

The Group's composition, with divisions that experience different impacts from economic fluctuations and units that operate in different markets, provides the Group with a good starting point for further improvements. The group has a long-term goal of a return on capital employed of 13 per cent over an economic cycle. Parts of the strategic programme for operations improvements and structuring of the group is being pushed ahead to counter weaker economic developments than assumed by the strategy plan. This will contribute to continued strengthened profitability in the underlying operations. The Board is of the opinion that the Group has adequate solvency and access to liquidity over the long term to introduce the necessary measures to develop the Group in line with the strategy plan. For 2020 as a whole the Board expects a level of activity and result on a par with 2019, although the coronavirus pandemic has introduced uncertainty.


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