Page 25 - MELLBY_MAGASIN_2023_ENG_LOW_UPPSLAG

Ä LV S B Y H U S
Mature and experienced – and
gearing up for the future
For several years, Älvsbyhus has been the leader in the Swedish market for
prefabricated single-family homes – and 2023 was another successful year
in terms of earnings. Looking ahead, the company is preparing for more
volatile times. Declining order intake has led to closures, redundancies and a
greater focus on cost efficiency and sales.
Älvsbyhus builds quality houses at the lowest price on the
market, a business concept coined by founders Gunnar
and Göran Johansson. Three generations later, the family
business is being run by grandsons Kent and Stefan Johansson. This
year, Älvsbyhus is celebrating 80 years as a company in Sweden.
“We saw everything we need in our sawmill and also have drying
facilities, a cutting facility and a planing mill,” says Kent Johansson,
CEO of Älvsbyhus. “Our factory in Älvsbyn was built in the late 1950s.
The first house rolled out in 1960, and today we have an industrial area
within our gates that corresponds to about 55 football pitches.”
The company has been the market leader in its segment for 23
consecutive years. However, only 1,600 single-family houses were sold
in total in the whole of Sweden in 2023, which meant the company
missing out on first place by only 20 houses. After having overflowing
order books during the pandemic years, the company is now seeing
a sharp decline in orders. 2023 will be another good year in terms of
earnings as the revenue is derived from the order intake from 2022.
But as Älvsbyhus looks to the future, they are preparing for more
uncertainty.
FURTHER DECLINE IN NEW ORDERS EXPECTED
Like many other companies in the sector, Älvsbyhus is also being
affected by changes in interest rates, energy prices and higher costs in
the supply chains. Despite this, the company has managed to keep its
order books full for a longer period than many other companies, largely
thanks to its fixed price promise.
“When we sell a house to a customer, we guarantee a fixed price –
even when our backlog is up to two years old,” says Kent Johansson.
“Many others in the industry have an index-linked price with annual
increases even after an order is placed. This is one of the reasons why
customers still choose us. They know in advance what the cost will be.”
NORWAY NEW TO THE ‘BEST SELLER’ THRONE
Of Älvsbyhus’ three markets, Norway delivered the best sales results
for the Group during the year, which is a historical break in the trend.
The company delivered nearly 800 houses in 2023. 550 houses were
built in Sweden, 70 in Finland and 170 in Norway. The company had to
close down its Finnish factory and lay off 30 employees. It also had to lay
off staff at its Swedish factories in Älvsbyn and Bjärnum.
“Orders in Finland have been low for a long time, and overall sin-
gle-family house manufacturing has not been this low since the Second
World War,” says Kent Johansson. “We also see that the order intake is
decreasing in Sweden, and we’ve had to make the tough but necessary
decision to adjust the manufacturing rate and let more employees go.”
The closure in Finland only affects factory staff. Otherwise, the
Finnish organization with management, sales and marketing is intact,
but all manufacturing will take place in Älvsbyn from the beginning of
the year.
HIGH INTEREST RATES ARE THE NEW NORMAL
Recent events around the world have been a useful wake-up call for
Älvsbyhus in terms of the supply chain, and they are now working con-
tinuously to find new purchasing channels. There is a need and demand
for affordable houses that will continue, but Kent Johansson believes
that potential house buyers need to modify their expectations.
“We have a major housing shortage in Sweden,” he says. “What’s
required is an understanding that the new interest rate situation is the
new normal. We’ll have a mortgage rate of around four to five percent,
which is quite low compared with the 1990s. For people to accept this,
the Riksbank (Swedish central bank) would need to freeze interest
rates and thus allay fears of further increases, something we’re now
finally seeing.”
MAKING USE OF EXPERIENCE IN MORE DIFFICULT TIMES
Although 2024 is expected to be a significantly worse year than 2023,
Älvsbyhus is choosing to focus on the opportunities. The company has
lived through previous recessions and knows how to deal with them.
For example, they are now looking at the possibility of ‘stripping down’
certain house models to make them even more affordable – something
that turned into a bestseller in the 1990s. Going forward, the company
is investing in marketing, digitalization and participation in trade fairs
to generate more visibility for the brand. For the Hem & Villa trade
fair in 2024, Älvsbyhus is planning to build an entire house inside the
exhibition center to give visitors the full experience.
The profit for 2023 is slightly lower than the previous year, but still
gave a margin of more than 12 percent, which is quite unusual for the
industry. We’re financially robust and will manage to cope with even
more difficult times. We’re heading into 2024 with high hopes for our
sales. Once we turn up the production rate again, we’ll be ready to
welcome back the employees and the invaluable expertise that we had
to lay off,” Kent Johansson concludes.
Kent Johansson, CEO
25