Byggma ASA — Earnings Release 2021

Feb 24, 2022

BYGGMA ASA - Interim Report for the Fourth Quarter of 2021

BYGGMA ASA - Interim Report for the Fourth Quarter of 2021

The Group achieved a profit before tax in Q4 2021 of NOK 65.2 million, compared to NOK 59.4 million for the same period in 2020. Profit before tax for the whole year was NOK 221.2 million in 2021, compared to NOK 159.7 million in 2020. The operating profit for Q4 2021 was NOK 69.4 million, compared to NOK 58.1 million for the same period in 2020. The operating profit for the whole year was NOK 230.2 million in 2021, compared to NOK 192.6 in 2020.

The operating profit in Q4 2021 is higher for the Panels and the Beams segment compared to the same period in 2020. The Windows and the Lighting segment have lower operating profit.

The Group’s sales revenues in Q4 2021 amounted to NOK 631.9 million, which is NOK 83.9 million higher than for the same period in 2020. The trend in sales revenue in Q4 2021 is positive in all segments compared to the same period in 2020. For the whole year, sales revenues were NOK 2,344.3 million in 2021, compared to NOK 2,052.4 million in 2020.

Net financial expenses for the whole year amounted to NOK 9.0 million in 2021, which is an improvement of NOK 23.8 million compared to the same period in 2020. The main reason for the reduction in net financial expenses is the gain on the market value of the interest rate swap in 2021 of NOK 12.3 million, compared with the loss of NOK 13.3 in 2020. Net interest expenses (incl. payment for interest rate swaps) amounted to NOK 20.2 in 2021, which is NOK 1.9 million higher than in 2020. Of the interest expenses of NOK 20.2 million, interest on lease obligations amounted to NOK 4.0 million, which is NOK 0.4 million lower than for the same period in 2020.

The liquidity reserve as of 31 December 2021 amounted to NOK 316.1 million, a decrease of NOK 480.5 million from 1 January 2021. Paid dividend of NOK 558.6 million explains the lion’s share of the decrease. The Board of Directors will maintain its focus on capital and cost-efficiency.

Interest-bearing debtincreased from NOK 597.0 million as of 1 January 2021 to NOK 611.4 million as of 31 December 2021. In 2021, long-term borrowings of NOK 71.7 million was carried out, of which NOK 7.9 million are due to new lease agreements.

Investments made in tangible fixed assets and intangible assets in 2021 totalled NOK 90.4 million, which is NOK 29.2 million higher than in 2020. Of the investments made, capitalised lease agreements amounted to NOK 7.9 million.

Total assets decreased from NOK 2,131.9 as of 1 January 2021 to MNOK 1,828.2 as of 31 December 2021.

Booked equity as of 31 December 2021 was NOK 598.3 million (32.7%), which is a decrease of NOK 391.9 million compared to 1 January 2021 (46.4%). The reasons for the change in equity are due to the profit of the year of NOK 174.1 million, dividend payment of NOK 558.6 million and a negative conversion difference of NOK 4.6 million.

Outlook

The Covid-19 pandemic has had only limited consequences for Byggma as of Q4 2021. The inflow of orders is good, and production at the factories and deliveries to customers are generally going as planned. Group management and management of the individual subsidiaries are following the situation closely and have taken

measures to limit any negative consequences, which the outbreak may have for employees and operations. If building materials outlets close and construction projects stop, this may have an impact on Byggma. Furthermore, restrictions any countries may make on retail trade could have an impact on access to input factors in production and sales revenues from these countries. The availability of input factors to production is intact, and significant elements of the input factors come from Norway and Sweden.

The forecast for the sale of new housing in the Norwegian market shows a positive development of 2% in 2021 compared with the same period in 2020. Commission of newbuilds has increased 7% for the same period. The largest growth is in the detached houses market, with a growth of over 3% in sales and 18% in commissioning, while small houses have seen a negative growth of 7% in commissioning and 6% in sales in 2021 compared to the same period in 2020. This suggests a varied outlook for the company, as this is an important arena. The total market for sale/commissioning of houses showed 26,226/25,425 units in 2021. Q4 2021 shows a decline compared to the same period in 2020 of 21% in sales and 5% in commissioning. The decline could lead to lower activity towards the end of Q2 2022, but is expected to be around 26,000 units in 2022. Meanwhile, we are still experiencing high activity in commercial buildings and public buildings. The renovation and extension market is expected to be stable and on the same level as 2021. There is uncertainty connected to the steep price increase on timber, building materials, interest, and electricity.

We are still experiencing stable demand for Byggmas products outside Norway.

The market development has meant that the input factors for several of the segments are considerably more expensive. Byggma has notified price increases with effect from 1 April 2022.

Group management is continuously monitoring the situation in order to be able to implement cost reductions resulting from lower activity levels.

In order to ensure further growth, investment in the sale of the Group’s products outside Norway is an important part of Byggma’s strategy.

Innovation and technological development are vital components of the Group's growth strategy, driven by a forceful determination to invest in essential equipment and expertise to maintain its position as a leading player in the Nordic building materials market in the future. Byggma Group is firmly focused on achieving efficiency, dominance, and profitability.

Byggma is well positioned for implementing its enhancement processes for maintaining its position as a leading, efficient producer of building products. Several major investments have been made to streamline our processes. New investments in equipment have also been decided and this will enable greater efficiency. In principle, Byggma will be directing its investments toward digitisation and automation of the production processes, including the environment and sustainability.

It is an important part of Byggma’s strategy to strengthen its position as a leading original brand manufacturer of environmentally friendly and sustainable products in the Nordic building materials market.

Byggma Group aims to be an attractive employer. We will continue to focus on ensuring that all employees in the Group have the opportunity to realise their human potential through their employment at Byggma.

Vennesla 24 February 2022

The Board of Directors of BYGGMA ASA