On 30 June 2020, the Supervisory Council of AS Nordic Fibreboard has approved the company’s 2019 audited annual report.

OVERVIEW OF OPERATING RESULTS

Revenue and operating results

Nordic Fibreboard recorded positive EBITDA of € 325 thousand for full year 2019 from continuing operations (vs positive € 428 thousand in 2018 from continuing operations). 2019 full year EBITDA includes one-off profit € 327 thousand from revaluation of investment property, whereas 2018 EBITDA included one-off expenses of increase provision reserves by € 25 thousand. Fibreboard profitability was substantially reduced due to the higher cost of its main raw material, woodchips and to leakages in one of its driers, which resulted in substantial higher consumption of energy during fourth quarter. Furniture retail EBITDA became even more negative compared to the closure of stores.

Net loss for full-year 2019 was € 1 127 thousand from continuing operations (2018: loss of € 360 thousand from continuing operations). Consolidated net sales for 2019 were € 13.33 million from continuing operations, being a 6% increase compared to 2018 (2018: € 12.53 million from continuing operations).

Fibreboard activities showed sales of € 11.75 million in 2019, this being 7% sales increase from previous year, when sales was € 11.01 million, due to securing new customers in display board and door core segments. We recorded sales increase in emerging markets in Asia and Africa while also continuing sales growth in EU due to securing new customers. Finland, our largest market, continued to experience sales decline despite Nordic Fibreboard keeping its market share within soft density fibreboard segment, thus reflecting the growth of other materials for use in the construction sector, mainly in new build of apartment.

Prior to the sale on 5 September 2019 of our furniture wholesale company Skano Furniture Factory, sales in this unit were € 1.22 million, compared to the full year 2018 sales of € 2.27 million.  This report considers the wholesale of furniture as a discontinued operations.

Furniture retail sales decreased by 1% compared to 2018 (from € 1.54 million to € 1.52 million). Sales dropped because Pärnu mnt salon in Tallinn, Tartu, Riga and Vilnius stores were closed in the second half of 2019. Furniture retail for 2019 were therefore negative EBITDA € 200 thousand (2018 result was negative EBITDA of € 104 thousand).

GROUP’S REVENUE BY ACTIVITY

GROUP’S REVENUE BY regions

The Group’s total sales have seen increases in some markets, such as European Union, Asia and Africa, while we recorded substantial sales decline in Middle East.

THE GROUP’S PROFIT/LOSS BY SEGMENTS

STATEMENT OF FINANCIAL POSITION AND CASH FLOW STATEMENT

As of 31.12.2019 the total assets of Nordic Fibreboard AS were € 9.1 million (31.12.2018: € 10.3 million). The liabilities of the company as of 31.12.2019 were € 7.5 million (31.12.2018: € 7.4 million), of which Nordic Fibreboard has borrowings of € 4.6 million as at 31.12.2019 (31.12.2018: € 4.8 million).

Receivables and prepayments amounted to € 1.4 million as at 31.12.2019 (31.12.2018: € 1.1 million). Inventories were € 0.9 million as of 31.12.2019 (31.12.2018: € 2.3 million).  Financial investments (ie Trigon Property Development shares) decreased from € 422 thousand as at 31.12.2018 to € 397 thousand as at 31.12.2019. Real Estate Investments were € 1.12 million (31.12.2018: € 0.18 million), property, plant, equipment and intangibles were € 5.2 million as of 31.12.2019 (€ 6.3 million as of 31.12.2018).

In 2019, the Group’s cash flows from operating activities totalled € 516 thousand € (2018: € 507 thousand). Investment activities resulted in cash outflows in amount of € 153 thousand in 2019, compared to outflows in amount € 275 thousand in 2018. Financing activities also resulted in cash outflows of € 410 thousand in 2019 (2018: € outflow 252 thousand). Net cash effect in 2019 € was negative 47 thousand, which is more negative compared to the 2018 outflows of € 20 thousand.

In 2019, investments in non-current assets totalled € 133 thousand. In 2018, the investments totalled € 270 thousand.

Performance of business units

NORDIC FIBREBOARD Ltd

Fibreboard sales for 2019 were € 11.75 million, which is 7% more than in 2018 (2018: € 11.01 million). We sold our products to customers in 39 countries during the year 2019. Sales growth in the EU were mainly driven by securing new customers in both the display board and the door core segments. Sales to Russia showed a modest increase in 2019, reflecting the slight increase in business confidence and business activity in that market. Middle East markets continue to experience subdued economic environment. In Asia we secured new customers in new countries, and in Africa we benefitted from a loss of a key competitor. Fibreboard recorded EBITDA of € 68 thousand for full year 2019 (2018: € 280 thousand), the reduced profitability in 2019 compared to 2018 were due to extra start-up costs being incurred as a result of working with new products for customers in the door core and display board segment, as well as the aforementioned increase in energy costs due to leakage in one of our driers.

THE SALES OF NORDIC FIBREBOARD LTD BY REGION

Interior finishing boards

Interior finishing boards are 100% produced under Isotex brand. Interior finishing boards are made of natural softboard, which is produced in Pärnu fibreboard factory’s main production line and the boards have milled tenons and the surface is covered with paper or textile. This technology enables to produce boards of different colours and patterns.

General construction boards

Wind-protection boards  and boards for door cores are the largest product groups at Pärnu softboard factory.  The main product group of Püssi fibreboard factory is boards for the pin board segment, which Nordic Fibreboard sells across several continents.

SKANO FURNITURE FACTORY: FURNITURE PRODUCTION AND WHOLESALE

On 05.09.2019 Nordic Fibreboard AS sold its subsidiary Skano Furniture Factory OÜ, thereby ending its production and wholesale of furniture. Nordic Fibreboard AS became the mother direct company of Skano Furniture OÜ after the sale of the Skano Furniture Factory OÜ. The main activity of Skano Furniture OÜ is retail of own products and furniture of third-party furniture in the Baltics. Skano Furniture Factory business activity was producing and wholesale of handmade furniture of solid wood. Skano Furniture Factory factory was located in Pärnu.

Prior to the sale on 5 September 2019 of our furniture wholesale company Skano Furniture Factory, sales in this unit were with intra-group transactions € 1.07 million, compared to the full 2018 sales of € 3.01 million. EBITDA for 2018 until 05.09.2019, was negative € 176 thousand (negative € 334 thousand for full-year 2018).

The sales of the furniture factory by country

SKANO FURNITURE: RETAIL SALES

Retail business was operated by a subsidiary Skano Furniture OÜ and its subsidiaries in Latvia and Lithuania. As of 31.12.2019 there were two stores left, one store in Tallinn and one store in Pärnu, both stores were closed 31.01.2020. Latvian and Lithuanian stores were closed 30.09.2019. The closure of these stores meant that the group was leaving the furniture retail sector.

Furniture retail sales 2019 decreased by 1% compared to 2018 (from € 1.54 million to € 1.52 million).

RETAIL SALES BY COUNTRY

* Latvian and Lithuanian stores were closed on 30.09.2019.

Total Furniture operations EBITDA for 2019 was negative € 200 thousand (in 2018 negative € 104 thousand).

FORECAST AND DEVELOPMENT

Nordic Fibreboard Ltd

In Fibreboard, we are pushing for sales of our various applications which have more global reach than our traditional sales of windboards and insulation boards sold mainly in our traditional markets of Finland, Russia and Estonia. The industrial segment offers more potential as customers are becoming more conscious of using environmentally friendly materials, such as our fibreboards. We see further upside potential in sales growth of display boards, especially in the dynamic Asian market.

Pärnu Riverside Development

We will continue to manage and develop the property on Suur-Jõe Street 48, Pärnu.

FINANCIAL RATIOS

EBITDA = Earnings before interest, taxes, depreciation and amortization
EBITDA margin = EBITDA / Revenue
Operating margin = Operating profit / Revenue
Net margin = Net profit / Revenue
Return on assets = Net profit / Total assets
Return on equity = Net profit / Equity
Debt-to-equity ratio = Liabilities / Total assets
Earnings per share = Net profit / Total shares
Price-earnings ratio = Last price / Earnings per share
Book value of a share = Equity / Total shares
Market to book ratio = Last price / Book value of a share
Market capitalization = Last price * Total number of shares
*http://www.nasdaqbaltic.com/

Consolidated statement of financial position

*The notes to the financial statements presented on pages 25 to 72 are an integral part of these consolidated financial statements.

Consolidated statement of profit or loss and other comprehensive income

*The notes to the financial statements presented on pages 25 to 72 are an integral part of these consolidated financial statements.

Consolidated statement of cash flows

*The notes to the financial statements presented on pages 25 to 72 are an integral part of these consolidated financial statements.

Consolidated statement of changes in equity

* More detailed information about share capital is disclosed in Note 13.
*The notes to the financial statements presented on pages 25 to 72 are an integral part of these consolidated financial statements.

PROPOSAL FOR COVERING OF LOSS 

The audited Annual Report of Nordic Fibreboard AS for 2019 is available on issuer’s home page www.nordicfibreboard.com . 

Torfinn Losvik
CEO & Chairman of the Management Board

Phone: + 372 56 99 09 88

E-mail: torfinn.losvik@nordicfibreboard.com

Attachment

• Nordic Fibreboard Annual Report 2019