Market and Customers

Nordic Modular is a leader in the area of production, sale and rental of modular buildings in the Nordic countries.

Nordic Modular - Relocatable buildings for professional customers

Submarkets

Depending on tenure status and application, the market is divided into various submarkets. Temporent, Flexator and Nordic Modular Leasing. Sweden is the primary market, but some operations are also conducted in Norway, Denmark and Finland.

Temporent rents out temporary modular units with a primary focus on offices, schools and preschools. The modular systems are sophisticated and offer the customer advantages over competing products on the market. The customers consist primarily of municipalities and major companies.

Flexator manufactures and sells everything from permanent, advanced buildings for professional purposes to site huts. The focus is on in-house designed relocatable buildings offering cost benefits to the customers. Areas of application include everything from site huts to high-quality offices, homes for the elderly, schools and preschools. The customers are principally municipalities, county councils and major companies. Flexator also manufactures the modules rented out by Temporent.

Nordic Modular Leasing offers Flexator’s Swedish customers long-term leasing of relocatable buildings on certain conditions. Buildings under lease contracts terminated by the customer are rented out again or sold second-hand to new customers. Customers consist mainly of municipalities. The rental of temporary residences in small flats is run via the subsidiary, Hagtornet Modul AB, and the associated company, Ungabostäder Haninge AB.

Driving Forces

About three quarters of Nordic Modular’s sales are attributable to the public sector, whose need for premises is governed, to a great extent, by demographic factors, such as an increasing proportion of elderly people among the population and changes in birth rate and migration. The variation is greater locally than on the national level. On the corporate side, demand is driven mostly by the general economic conditions.

Shorter planning horizons when assessing future needs for relocatable buildings is driving up the long-term demand for our range of rental buildings. Companies, in their increased need for capital rationalisation, have shown increasing interest in steering away from fixed expenses and toward variable expenses; likewise, savings in the public sector also lead to a preference for variable expenses.

Flexator’s product range entails several advantages over traditional building techniques. The ability to relocate preserves the value of the buildings and enables leasing. The cost benefits offered by our standardised modular buildings, called catalogue buildings, also make possible the realisation of many projects, which would otherwise not be feasible on commercial grounds.

Competitors

Temporent’s leading competitors are Expandia, Cramo Adapteo, Ramirent Temporary Space and Indusgruppen. Flexator often finds itself in competition with building contractors for traditional turnkey contracts for stationary buildings. Moelven Byggmodul is the leading competitor for relocatable buildings. Nordic Modular Leasing does not compete with equivalent offerings, but rather with standard lending and individual finance companies that offer individual financial leasing. To some extent, Finnish Parmaco can be considered to compete in Sweden with its long-term rental agreements regarding newly produced buildings.

Developments during 2017

Once again, our business model demonstrated its strength and the Nordic Modular Group made its best profit to date. It is true that the net sales dropped, but EBITDA increased.

We benefited once again from the underlying demographic driving forces and the strong economy. The downturn in the market for the sale of newly produced homes never managed to have an impact on the production line during the year. For this reason, we could concentrate on increasing the eficiency in our way of working and creating resources to satisfy the strong demand.

Temporent is the Group’s motor and the development for the business ran smoothly during 2017. The rented fleet grew, whilst the utilisation rate rose and the rental revenues increased. At the same time, extensive investments were made to increase the rentable fleet.

In Flexator, both the sales and proit fell. The drop is explained by a dip in the sales, delayed planning permission with postponed deliveries as a consequence, increased internal work on measures
for increasing the eficiency, frozen internal prices and production change-over in Gråbo. The product mix at the Anneberg factory was favourable, with a large share of catalogue buildings. Towards the end of the year, the order stock grew to a reassuring level, but with a lower share of catalogue buildings.

Nordic Modular Leasing’s order inlow and investments in new rental units increased, which meant that both the rental revenues and EBITDA increased.

Go to top