Revenue totalled EUR 29.9 million (26.9), an increase of 11.2 per cent. Growth
was strong in markets outside Finland. The result climbed to EUR 1.5 million
(-0.3), which includes EUR 1.6 million in gains from property sales. The
equity-to-assets ratio increased to 44.7 per cent (41.0). Growth is expected to
continue in 2007, and the result for the entire year is estimated to be an
improvement on last year.
Accounting policies
The Interim Report has been prepared in accordance with IAS 34, Interim
Financial Reporting, as approved by the EU.
Market
The market situation continued to be favourable in all the main market areas.
Group structure
There were no changes in Group structure during the review period or the
comparison period.
Segment reporting
One primary segment has been defined for Martela, namely the furnishing of
offices and public places. The revenue and result are as recorded in the
consolidated financial statements. The Group's secondary reporting segment has
been defined according to the geographical location of customers.
Revenue
Revenue in the first quarter increased to EUR 29.9 million (26.9), representing
growth of 11.2 per cent. Growth was strong in markets outside Finland.
Invoicing by main market areas, January-March
1-3/07 % 1-3/06 % Change %
Finland 19.6 65.3 % 19.0 70.6 % + 3.0 %
Scandinavia 6.5 21.8 % 5.1 18.9 % +28.1 %
Other regions 3.9 12.9 % 2.8 10.5 % +36.3 %
Total 30.0 100.0 % 27.0 100.0 % +11.1 %
The Polish unit's invoicing increased by 34.4 per cent and totalled EUR 2.2
million (1.6).
2 (8)
Quarterly invoicing by main market areas
1/05 2/05 3/05 4/05 1/06 2/06 3/06 4/06 1/07
Finland 16.3 17.0 17.0 20.6 19.0 18.4 19.5 26.1 19.6
Scandinavia 4.5 4.3 5.5 5.3 5.1 4.6 6.2 6.4 6.5
Other regions 3.2 2.9 2.5 3.5 2.8 4.3 3.0 4.3 3.9
Total 24.0 24.2 25.0 29.5 26.9 27.3 28.8 36.8 30.0
As expected and in line with previous years, invoicing for the first quarter of
2007 was at a clearly lower level than that for the preceding quarter.
Group's consolidated result
Overall profit performance was as anticipated. The consolidated result before
taxes was positive at EUR 1.5 million (-0.3). The result was improved by
non-recurring gains from property sales, totalling EUR 1.6 million. The review
period's operating profit excluding gains from property sales was EUR 0.1
million (-0.3).
Result by quarter-year
1/05 2/05 3/05 4/05 1/06 2/06 3/06 4/06 1/07
Revenue 23.9 24.1 25.0 29.3 26.9 27.2 28.8 36.8 29.9
Other income 0.3 0.1 0.1 0.5 0.2 0.6 0.1 0.5 1.7
Operating profit -0.2 -0.9 1.3 1.4 -0.1 0.9 0.8 2.8 1.7
Operating profit, % -1.0% -3.7% 5.1% 4.6% -0.2% 3.2% 2.9% 7.7% 5.6%
Result before -0.4 -0.9 1.1 1.2 -0.3 0.6 0.7 2.7 1.5
taxes
Capital expenditure
The Group's gross capital expenditure totalled EUR 1.3 million (0.4). EUR 0.7
million of the review period's capital expenditure is due to the partial
leasing back of the divested Bodafors plant property and the resulting lease
liabilities activated in the balance sheet. The remaining capital expenditure
mainly concerned production replacements and IT equipment.
Staff
At the end of the review period, the Group employed 628 people, which is almost
at the level of the year's beginning. During the first quarter, the Group
employed 629 people (611) on average.
Average staff by region 1/07 1/06 Change %
Finland 501 486 + 3.1
Scandinavia 64 72 - 11.1
Poland 64 53 + 20.8
Group total 629 611 + 2.9
3 (8)
Staff by quarter-year
1/05 2/05 3/05 4/05 1/06 2/06 3/06 4/06 1/07
Average staff 611 627 613 593 611 632 636 632 629
Staff at end of period 610 641 600 604 600 660 629 632 628
Revenue/person (EUR 1,000) 39.1 38.4 40.8 49.5 44.0 43.0 45.3 58.3 47.5
Share-based incentive programme
Martela's Board of Directors decided on 14 February 2007 on a share-based bonus
programme for key personnel for 2007-2009. The number of A shares that can be
earned through the system depends on the reaching of targets. The maximum bonus
for the whole system is 153,000 Martela Oyj A shares and cash to the amount
needed to cover taxes and similar charges, which amounts to approximately the
value of the shares to be paid. The company has outsourced management of the
bonus system to Alexander Management Oy, which acquired all the necessary
shares from the Helsinki Stock Exchange during the first quarter with a EUR 1.2
million loan granted by Martela.
Product development
During the first quarter, the new Pinta desk product family was launched. It
was introduced publicly for the first time at the Stockholm Furniture Fair in
February. The product family has a uniform desktop selection and allows the
base to be selected purposefully according to customer needs. In the same
connection, the possibilities to affect acoustics through different furniture
solutions were demonstrated and new chairs were presented.
The Surroundings business unit presented its furniture solutions for public
premises and lobbies for the first time at the Milan Furniture Fair in April.
Among the products presented were the Menu chair designed by Stefan Lindfors,
and the Sides chair designed by Samuli Naamanka.
Finance
The net cash generated by operating activities was EUR 2.6 (2.6) million. The
cash flow from investing activities was positive at EUR 0.8 million as a result
of gains from property sales. EUR 1.2 million in loans were granted to
Alexander Management Oy to finance the acquisition of shares for the
share-based bonus programme. Interest-bearing liabilities decreased by EUR 0.8
million and totalled EUR 16.4 million (19.0) at the end of the review period.
Liquid assets amounted to EUR 4.9 million (6.5) at the end of the review
period. The equity-to-assets ratio improved to 44.7 per cent (41.0), and
gearing improved correspondingly to 45.5 per cent (57.0).
Shares
During the review period, 670,567 (206,225) of the company's A shares were
traded on the Helsinki Stock Exchange, corresponding to 18.9 per cent (5.8) of
the entire stock. The value of the trading turnover was EUR 5.5 million (1.5).
The value of a share was EUR 6.50 at the beginning of the year and EUR 9.0
million at the end of the period. During the review period the share price was
EUR 9.56 at its highest and EUR 6.39 at its lowest. At the end of the first
quarter, equity per share was EUR 6.2.
4 (8)
Own shares
Martela did not purchase any of its own shares in the first quarter of 2007. On
31 March 2007, Martela owned 67,700 of its own A shares, which had been
purchased at an average price of EUR 10.65. Martela's holding of its own shares
amounts to 1.6 per cent of all shares and 0.4 per cent of all votes.
2007 Annual General Meeting
The Annual General Meeting of Martela Oyj was held on Tuesday, 20 March 2007.
The Meeting adopted the Financial Statements and discharged those responsible
for the accounts from further liability. The Annual General Meeting decided, in
accordance with the Board of Directors' proposal, to distribute a dividend of
EUR 0.25 per share. The Meeting appointed Heikki Ala-Ilkka, Tapio Hakakari,
Jori Keckman, Heikki Martela, Pekka Martela and Jaakko Palsanen to the Board of
Directors for the next term, and elected Matti Lindström as the staff
representative and Raimo Santala as his deputy. Reino Tikkanen, Authorized
Public Accountant, was elected as the auditor of the company, with KPMG Oy Ab
as the deputy auditor.
The Annual General Meeting also approved the Board of Directors' proposals
mentioned in the Meeting notice to authorise the Board to acquire and/or
dispose of the company's own shares.
The Board convened after the Annual General Meeting and elected Heikki
Ala-Ilkka as Chairman and Pekka Martela as Deputy Chairman.
Outlook for 2007
As a whole, the first quarter of 2007 progressed as expected. Revenue is
expected to continue growing, although not as steeply as in 2006. Revenue will
probably increase towards the end of the year, as in previous years. The result
is also expected to improve towards the end of the year, and the result for the
entire year is expected to be better than that of last year.
5 (8)
GROUP INCOME STATEMENT (EUR 1000)
2007 2006 2006
1-3 1-3 1-12
Revenue 29.867 26.868 119.727
Other operating income 1.681 0.216 1.429
Employee benefits expenses -6.968 -6.481 -27.562
Operating expenses -22.134 -19.838 -85.763
Depreciation and impairment -0.776 -0.815 -3.332
Operating profit/loss 1.670 -0.050 4.499
In relation to revenue, % 5.6 -0.2 3.8
Financial income and expenses -0.166 -0.243 -0.798
Profit/loss before taxes 1.504 -0.293 3.701
In relation to revenue, % 5.0 -1.1 3.1
Income tax -0.206 -0.036 -0.977
Profit/loss for the period 1.298 -0.329 2.723
In relation to revenue, % 4.4 -1.2 2.3
Basic earnings per share, eur 0.3 -0.1 0.7
Diluted earnings per share, eur 0.3 -0.1 0.7
GROUP BALANCE SHEET (EUR 1000) 31.3.2007 31.3.2006 31.12.2006
ASSETS
Non-current assets
Intangible assets 0.744 0.555 0.662
Tangible assets 15.414 18.456 15.784
Investments 0.054 0.072 0.062
Deferred tax assets 0.550 1.748 0.776
Pension obligations 0.018 0.000 0.018
Investment properties 1.160 1.150 1.166
Total 17.940 21.981 18.468
Current assets
Inventories 12.680 10.374 11.938
Receivables 21.167 14.884 24.792
Financial assets at fair value
through profit and loss 1.961 2.891 1.943
Cash and cash equivalents 2.909 3.596 1.968
Total 38.717 31.746 40.641
Total assets 56.656 53.727 59.109
EQUITY AND LIABILITIES
Equity attributable to shareholders
of the parent
Share capital 7.000 7.000 7.000
Share premium account 1.116 1.116 1.116
Other reserves 0.118 0.117 0.121
Translation differences -0.193 -0.129 -0.133
Retained earnings 17.935 14.490 17.542
Treasury shares -0.721 -0.721 -0.721
Total 25.255 21.873 24.925
6 (8)
Non-current liabilities
Interest-bearing liabilities 12.452 15.251 12.844
Deferred tax liability 0.149 0.261 0.175
Other non-current liabilities 0.000 0.000 0.000
Pension obligations 0.000 0.001 0.000
Total 12.601 15.513 13.019
Current liabilities
Interest-bearing 3.904 3.708 4.271
Non-interest bearing 14.896 12.632 16.894
Total 18.800 16.340 21.165
Total liabilities 31.401 31.854 34.184
Equity and liabilities, total 56.656 53.727 59.109
STATEMENT OF CHANGES IN EQUITY (EUR 1000)
Equity attributable to equity holders of the parent
Share Share Other Trans. Retained Treasury Total
capital premium reserves diff. earnings shares
account
01.01.2006 7.000 1.116 0.117 -0.108 15.432 -0.721 22.836
Translation diff. -0.021
-0.021
Profit/loss for
the period -0.329 -0.329
Total rec. income
and expense -0.021 -0.329 -0.350
Dividends paid -0.613 -0.613
31.03.2006 7.000 1.116 0.117 -0.129 14.490 -0.721
21.873
1.1.2007 7.000 1.116 0.121 -0.133 17.542 -0.721 24.925
Translation diff. -0.003 -0.060 -0.063
Profit/loss for
the period 1.298 1.298
Other change 0.117
0.117
Tot rec. income
and expense -0.003 -0.060 1.415 1.352
Dividends paid -1.022 -1.022
31.03.2007 7.000 1.116 0.118 -0.193 17.935 -0.721 25.255
CONSOLIDATED CASH FLOW STATEMENT (EUR 1000)
2007 2006 2006
1-3 1-3 1-12
Cash flows from operating activities
Cash flow from sales 33.969 30.427 114.537
Cash flow from other operating income 0.086 0.122 0.364
Payments on operating costs -31.282 -27.779 -113.292
Net cash from operating activities
before financial items and taxes 2.773 2.770 1.609
Interest paid -0.157 -0.148 -0.691
Interest received 0.011 0.008 0.048
7 (8)
Other financial items 0.005 -0.042 -0.084
Dividends received 0.000 0.000 0.003
Taxes paid -0.006 -0.001 -0.018
Net cash from operating activities (A) 2.626 2.588 0.867
Cash flows from investing activities 2007 2006 2006
1-3 1-3 1-12
Capital expenditure on tangible and
intangible assets -0.297 -0.191 -1.840
Proceeds from sale of tangible and
intangible assets 2.307 0.108 2.992
Loans granted -1.203 0.000 0.000
Repayments of loans receivables 0.000 0.000 0.006
Net cash used in investing activities (B) 0.808 -0.083 1.158
Cash flows from financing activities
Proceed from short-term loans 0.000 0.000 1.783
Repayments of short-term loans -0.268 -0.194 -1.546
Proceed from long-term loans 0.000 0.000 0.000
Repayments of long-term loans -1.255 -0.213 -2.689
Dividends paid and other profit distribution -0.939 -0.566 -0.613
Net cash used in financial activities (C) -2.462 -0.973 -3.065
Change in cash and
cash equivalents (A+B+C) 0.972 1.532 -1.041
(+ increase, - decrease)
Cash and cash equivalents at the beginning of
period 3.911 4.963 4.963
Translation differences -0.013 -0.007 -0.010
Cash and cash equivalents at the end of period 4.870 6.487 3.911
Tangible assets 1.1-31.3 2007
Land Buildings Machinery Other Work in
areas & equipment tangibles progress
Acquisitions 0.000 0.669 0.282 0.001 0.167
Decreases -0.591 -2.943 -0.033 -0.000 -0.000
KEY FIGURES/RATIOS
2007 2006 2006
1-3 1-3 1-12
Basic earnings per share, eur 0.3 -0.1 0.7
Diluted earnings per share, eur 0.3 -0.1 0.7
Equity/share, eur 6.2 5.4 6.1
Equity ratio 44.7 41.0 42.4
Return on equity 20.7 -5.9 11.4
Return on investment 16.3 -0.2 11.0
Interest-bearing net-debt, eur million 11.5 12.5 13.2
Gearing ratio 45.5 57.0 53.0
8 (8)
Capital expenditure, eur million 1.3 0.4 1.8
- in relation to revenue, % 4.2 1.3 1.5
Personnel at the end of period 628 600 632
Average personnel 629 611 626
Revenue/employee, eur thousand 47.5 44.0 191.3
CONTINGENT LIABILITIES
31.3.2007 31.3.2006 31.12.2006
Mortgages and shares pledged 19.418 20.529 20.739
Guarantees 0.103 0.111 0.115
Other commitments 0.318 0.304 0.323
Rental commitments 9.615 11.178 9.753
DEVELOPMENT OF SHARE PRICE 2007 2006 2006
1-3 1-3 1-12
Share price at the end of period, EUR 9.00 7.45 6.50
Highest price, EUR 9.56 8.16 8.16
Lowest price, EUR 6.39 7.20 5.99
Average price, EUR 8.25 7.47 6.82
This interim report has not been audited
Helsinki, April 24, 2007
Martela Oyj
Board of Directors
Heikki Martela
CEO
For more information, please contact
Heikki Martela, CEO, tel. +358 50 502 4711
Distribution
Helsinki Exchanges
Main news media
www.martela.com
