Pölkky Oy’s CEO’s review

Pölkky Oy’s CEO’s review

Pölkky – Roots for Quality Living

Pölkky produces comfort from the norther forests, quality of life to homes and public buildings, and promotes well-being globally through ecological construction.

Pölkky is Northern Finland’s largest private wood processing company. The Pölkky Group’s sawmills and further processing facilities are in the country’s best raw timber region in Kuusamo, Taivalkoski and Kajaani. In Oulu, Pölkky has a pressure treatment facility.

Our turnover is EUR 160 million per year. Pölkky is a strong export company. Our business generates export revenue of almost EUR 100 million per year. Pölkky Group employs 420 people. The net profit for the financial year 2020 was weak, but nevertheless we at Pölkky are satisfied with our achievements, development, and realization of strategic goals and progress.

Financial position and revenue performance

We started the financial year 2020 in a challenging sawn timber market and labor market situation. The profitability of the business was significantly weaker than planned during January, February and March.

The pandemic brought uncertainty and reduced predictability. The decision to keep the production facilities running through the summer proved to be the right one. Operational capacity was maintained, and deliveries were transported successfully despite challenges.

In the second half of the financial year, the sawn timber and further processing markets strengthened, and demand and deliveries increased. Despite the recovery of the market, the result for the year remained unprofitable.

In the financial year 2020, the Pölkky Group’s turnover was EUR 160 million (EUR 168 million). Net loss for the financial year was EUR 0.2 million (EUR 0). The Group’s financial position weakened, with an equity ratio of 28.6% (33.8%).

The weaker-than-expected result for the financial year was mainly due to market disturbances caused by the pandemic, and labor market disturbances. Strong partnerships built on trust have developed our business in this challenging, exceptional time. We will create successful future together.

The new era of Pölkky

The company has a new, profitable growth strategy. The corporate restructuring, the development of the management system and internal processes, as well as the investment and development program will create growth and increase operational efficiency and business profitability. Pölkky’s production companies and raw material sourcing company merge with Pölkky corporation on September 1st, 2021. The company’s board work has been further strengthened with the election of a new member, Peter Nygård. The operational organizational changes needed to implement the new strategy are ready.

Pölkky is growing by developing further processing businesses and renewing sawing technology. The first development project of the investment program, Taivalkoski’s ultra-modern planing mill, is nearly completed and the production will start in June 2021. The planing mill will increase the company’s turnover by approximately EUR 30 million and significantly improve profitability.

In the financial year 2020, we invested significantly in digitalization and system development. There are development projects in wood procurement, production management, customer relationship management, project management, ICT infrastructure and information security. Technology development is a very central part of our business development work.

The competence, motivation and well-being of our employees are the success factors of our company. We invest in people and develop our skills to meet the demands of a changing working life. Maintaining and developing well-being at work is paramount and emphasized during these difficult, exceptional circumstances. We strengthen our safety and responsibility work in our company and with our partners.

Our over 50-year-old brand is a valuable asset to the company. A strong and distinctive brand creates the conditions for business to be continuing and profitable. We have invested in clarifying the brand and using it stronger in marketing. Our new slogan, Roots for Quality Living, sums up Pölkky’s characteristics, world of values ​​and the value we produce for our customers.

Determined towards the future, outlook for the financial year 2021

We are currently operating at full capacity, still in exceptional circumstances. We look to the future and move forward according to our strategic plans. Our goal is to build a more profitable business, in a customer-oriented manner, and with skilled, motivated, and healthy employees.

The sawn timber and wood products markets have a good outlook for the current financial year, demand is strong, and prices are strengthening. The company’s comparable net sales are growing, and profitability is improving. We have acquired an FSC certificate for Pölkky, which enables better sales of our end products in various market situations and responds to consumers’ growing concern about the origin of the raw material. To produce quality products, we need quality raw material in all market situations. Now is a good time to sell timber.

Petteri Virranniemi,

Pölkyn toimitusjohtaja Petteri Virranniemi

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