Interim Report Q3 2024People Green Innovation Technology

Sales revenues YTD decreased from NOK 1,651.6 million in 2023 to NOK 1,593.0 million in 2024 corresponding to a decrease of NOK 58.6 million (3.5 %). Adjusted operating profit decreased from NOK 171.4 million in 2023 to NOK 98.9 million in 2024.

The construction materials sector is currently experiencing the most challenging market conditions since the Second World War. A critical barometer for market size fluctuations is the residential construction companies' reports on the volume of houses sold and initiated. Over the past year, these figures stand at 14,466 and 14,036 units, respectively, against Norway's annual housing requirement of 30,000. Like many sectors, ours is influenced by various elements, including global unrest, rising interest rates, and pronounced inflation, leading many to defer their homebuilding plans. However, a silver lining exists in the increasing fundamental demand for housing. Consequently, when home sales are substantially below the necessary levels, the theoretical backlog of orders surges, which will eventually catalyze a robust upswing for the industry. It is a testament to Byggma Group's resilience that, despite the exceptionally challenging market conditions, the group has maintained solid profitability throughout the year to date.

Aneta Lighting continues to expand its presence, capturing market share and achieving robust sales growth despite a declining market. In the third quarter of 2024, the Lighting segment reported sales revenue of NOK 30.5 million, up from NOK 25.0 million in the same period last year, and an operating profit of MNOK 3.1, compared to MNOK 1.0 in the same period last year. This represents a sales growth of 22% and an operating margin of 10% for the quarter. Aneta Lighting exemplifies how to outperform the market by working smarter and more effectively than the competition.

Huntonit and Forestia are among the first 22 companies globally to adopt the official "Made in Norway" trademark. This origin brand has been developed based on both Norwegian and international benchmarks, such as "Swiss Made", "New Zealand Made", and "Seafood from Norway". By associating with positive Norwegian values such as sustainability, responsibility, equality, and natural beauty, the trademark aims to enhance the marketing and sales of Norwegian products.

As of 30 September, Byggma ASA and its related party Drangsland Kapital AS owns ca. 26.8 % of the share capital in Norske Skog ASA. Byggma aims to be a long-term owner in Norske Skog ASA. There are several synergy effects between Norske Skog and Byggma regarding process equipment, raw materials, logistics, product development and environment.

In 2022, Forestia made a strategic investment in a new 4,000 m² logistics center located at Braskereidfoss. This facility enables our clientele to consolidate orders and receive chipboard, OSB, and plywood boards in a single shipment. The statistics are a testament to the success of this initiative, and customer feedback underscores the added value this brings to both Forestia and our clients, alongside the environmental benefits derived from more efficient goods transportation. The rising sales figures for OSB and plywood reinforce the attractiveness of this solution to our customers, confirming its success.

Our product launches Forestia Premium Ceiling, Forestia Ergospon and Huntonit Pro Wall are still experiencing increasing sales in the market. These decorative interior products add more value for the customer and hence have high unit prices. The increasing sales of these products are consequently increasing the profitability of the group.

The Group is constantly identifying new valuable sustainability projects that reduce emissions to both air and water, which simultaneously are economically profitable for Byggma. In the third quarter, Byggma has intensified its commitment to sustainability by appointing a Director of Sustainability. See more in the Sustainability section in this report.

Forestia has been in dialogue with Innovasjon Norge to secure grants for a plant to process and clean wood waste for reuse in new woodchip boards. On 8 April 2022, Forestia was informed by the Minister of Finance, Trygve Slagsvold Vedum, and Minister of Trade and Industry, Jan Christian Vestre, that Innovasjon Norge's Board of Directors had approved a NOK 80 million grant for this project. This initiative will enhance Forestia's value, make its woodchip boards more circular by recycling wood waste, and reduce CO2 emissions. It will also lower sourcing risks by reducing dependence on raw materials from sawmills. Forestia is working with vendors to secure long-term supply agreements for the project.