MARTELA CORPORATION STOCK EXCHANGE RELEASE 28.4.2010 at 8.30 a.m.
MARTELA CORPORATION'S INTERIM REPORT, 1 JANUARY - 31 MARCH 2010
Consolidated revenue for January-March was EUR 22.6 million (24.0), a decrease
of 6.1 per cent on the corresponding period in 2009. Operating profit for the
same period was EUR -1.1 million (-0.1). The cash flow from operating activities
in January-March was EUR 0.0 million (7.7). The equity ratio was 57.2 per cent
(54.7) and the gearing ratio was -30.1 per cent (-27.9).
Key figures
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| | 1-3 | 1-3 | 1-12 |
--------------------------------------------------------------------------------
| EUR million | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net revenue | 22.6 | 24.0 | 95.3 |
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| Change in revenue % | -6.1 | -33.4 | -32.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit excluding | -1.1 | -0.1 | 0.8 |
| non-recurring items | | | |
--------------------------------------------------------------------------------
| Operating profit % | -4.8 | -0.3 | 0.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on investment, % | -10.7 | 0.2 | 2.3 |
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| Return on equity, % | -12.9 | -2.7 | 0.4 |
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| Equity to asset ratio, % | 57.2 | 54.7 | 57.4 |
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| Gearing, % | -30.1 | -27.9 | -33.9 |
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| Earnings per share, eur | -0.24 | -0.06 | 0.03 |
--------------------------------------------------------------------------------
| Earnings per share (diluted), eur | -0.24 | -0.06 | 0.03 |
--------------------------------------------------------------------------------
| Average staff | 590 | 649 | 636 |
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| Revenue/employee (EUR 1.000) | 38.2 | 37.0 | 149.9 |
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Accounting policies
This interim report has been prepared in accordance with IFRS recognition and
measurement principles, but not all the IAS 34 requirements have been complied
with. The interim report should be read in conjunction with the 2009 financial
statements.
Market
The demand for office furniture decreased in comparison with the figure for the
same period in 2009. There were fewer new starts in office construction in 2009
than in the previous year, and fewer building permits were granted.
Group structure
There were no changes in Group structure during the review period or during the
same period the previous year.
Segment reporting
The segments presented in the interim report comply with the company's segment
division. The comparison year's figures have also been rendered in the same way.
The business segments are based on the Group's internal organisational structure
and internal financial reporting.
Sales between segments are reported as part of the segments' revenue. The
segments' results presented are their operating profits, because tax items and
financial items are not allocated by segment. The Group's assets and liabilities
are not allocated or monitored by segment in the internal financial reporting.
Revenue and operating profit are as recorded in the consolidated financial
statements.
Business Unit Finland is responsible for sales and marketing, service production
and manufacturing in Finland. Martela has an extensive sales and service network
covering the whole of Finland, with a total of 24 service locations. The
Business Unit's logistics centre is in Nummela.
Business Unit Sweden and Norway is responsible for sales in Sweden and Norway,
handled through about 70 dealers. In addition, the Business Unit has its own
sales and showroom facilities at three locations: Stockholm and Bodafors in
Sweden and Oslo in Norway. The Business Unit's logistics centre and order
handling are also located in Bodafors.
Business Unit Poland is responsible for the sales and distribution of Martela
products in Poland and eastern Central Europe. Sales in Poland are organized via
the sales network maintained by the Business Unit. The company has altogether 7
sales centres in Poland. The Business Unit's principal export countries are
Ukraine, Hungary, the Czech Republic and Slovakia, in each of which sales are
handled by established dealers. Business Unit Poland is based in Warsaw, where
it has its logistics centre and administration.
Revenue
Consolidated revenue for January-March was EUR 22.6 million (24.0), a decrease
of 6.1 per cent on the previous year. The revenue of Business Unit Sweden and
Norway was down by 14.2 per cent, while that of Business Unit Poland was down by
14.4 per cent, calculated using local currencies. The overall effect of exchange
rate movements on consolidated revenue was approximately +2 percentage points.
Revenue by segment
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| EUR million | | | | | |
--------------------------------------------------------------------------------
| | Business | Business | Business | Other | Total |
| | unit | unit | unit | segments | |
| | Finland | Sweden & | Poland | | |
| | | Norway | | | |
--------------------------------------------------------------------------------
| 1.1.2010-31.3.2010 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| External Revenue | 15.1 | 4.0 | 1.6 | 1.9 | 22.6 |
--------------------------------------------------------------------------------
| Internal Revenue | 0.0 | 0.3 | 0.0 | 3.6 | 3.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total 2010 | 15.1 | 4.3 | 1.6 | 5.5 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1.1.2009-31.3.2009 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| External Revenue | 17.1 | 4.3 | 1.6 | 1.0 | 24.0 |
--------------------------------------------------------------------------------
| Internal Revenue | 0.0 | 0.0 | 0.0 | 4.2 | 4.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total 2009 | 17.1 | 4.3 | 1.6 | 5.2 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| External revenue | -11.9 | -7.3 | -3.0 | 101.6 | -6.1 |
| change % | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other Segments includes PO Korhonen Oy, Kidex Oy and Business Unit
International, which is responsible for export markets.
Change in external revenue and percentage of consolidated revenue
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | | | 1-12 | |
--------------------------------------------------------------------------------
| EUR million | 2010 | 2009 | Change | Percenta | 2009 | Percentag |
| | | | % | ge | | e |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Business unit | 15.1 | 17.1 | -11.9 | 66.9 % | 63.9 | 67.0% |
| Finland | | | | | | |
--------------------------------------------------------------------------------
| Business unit | 4.0 | 4.3 | -7.3 | 17.8 % | 15.8 | 16.6 % |
| Sweden & Norway | | | | | | |
--------------------------------------------------------------------------------
| Business unit | 1.6 | 1.6 | -3.0 | 6.9 % | 9.5 | 9.9 % |
| Poland | | | | | | |
--------------------------------------------------------------------------------
| Other segments | 1.9 | 1.0 | 101.6 | 8.4 % | 6.2 | 6.5 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 22.6 | 24.0 | -6.1 | 100.0 % | 95.3 | 100.0 % |
--------------------------------------------------------------------------------
Consolidated result
Operating profit for the first quarter was EUR -1.1 million (-0.1). The
year-on-year decrease in operating profit was mainly due to the fall in revenue.
Profit before taxes was EUR -1.1 million (-0.2), and profit after taxes was EUR
-1.0 million (-0.2).
Operating profit excluding non-recurring items was -4.8 per cent of revenue
(-0.3).
Operating profit by segment
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 1-12 |
--------------------------------------------------------------------------------
| EUR million | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Business Unit Finland | 0.2 | 1.6 | 3.9 |
--------------------------------------------------------------------------------
| Business Unit Sweden & Norway | -0.3 | -0.2 | -1.0 |
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| Business Unit Poland | -0.4 | -0.3 | -0.7 |
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| Other Segments | -0.2 | -0.2 | -1.0 |
--------------------------------------------------------------------------------
| Other | -0.4 | -1.0 | -0.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | -1.1 | -0.1 | 0.8 |
--------------------------------------------------------------------------------
Other Segments includes PO Korhonen Oy, Kidex Oy and Business Unit
International, which is responsible for export markets. The item ‘Others'
includes non-allocated Group functions and non-recurring sales gains and losses.
Financial position
The Group's financial position is strong. At the end of the review period,
interest-bearing liabilities were EUR 8.1 million (10.4), and net liabilities
were EUR -8.7 million (-8.7). The gearing ratio was -30.1 per cent (-27.9) and
the equity ratio was 57.2 per cent (54.7). Net financing costs amounted to EUR
0.0 million (-0.1).
The cash flow from operating activities in January-March was EUR 0.0 million
(7.7).
The balance sheet total at the end of the review period was EUR 51.2 million
(56.9).
Capital expenditure
The Group's gross capital expenditure in January-March totalled EUR 0.6 million
(0.4). The capital expenditure mainly concerned production replacements and IT
investments.
Personnel
The Group employed an average of 590 (649) persons, a year-on-year decrease of
9.1 per cent.
Average personnel by region
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 1-12 |
--------------------------------------------------------------------------------
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finland | 441 | 492 | 479 |
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| Scandinavia | 56 | 64 | 62 |
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| Poland | 90 | 93 | 94 |
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| Russia | 3 | 0 | 1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Group total | 590 | 649 | 636 |
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Product development and Martela's collection
Product development and the management of Martela's collection are the
responsibility of two Group-level organisations. Brand & Product Portfolio is
responsible for management of the collection and brand. Product Development and
Marketing is responsible for the development of innovative products and the
Group's marketing communications.
Early 2010 has seen the launch of some interesting new products. A larger James+
chair was added to the James task chair range. The versatile adjustments
possible with this task chair, which is the work of Iiro Viljanen, are designed
to enhance the wellbeing of the chair's users. The MyBox desk and the Book space
divider/shelf, previously presented as concepts, are now in production. These
new products share the characteristics of versatility and new and innovative
thinking. MyBox's desk screen, designed by Iiro Viljanen, can be locked, so the
items on the desk can be stored safely and the desk cleared for a meeting, for
example. Designed by Pekka Toivola, Book combines the characteristics of a space
divider and a storage unit in a new way. The overall look and scope can be
easily varied by combining the elements in various ways.
In Finland, the service product range was expanded at the beginning of the year
with an innovative addition. Martela raised its total service for office
premises to a new level, presenting a new solution for managing office property.
The method, which uses radio frequency identification (RFID), is a unique way of
managing office property. The product has been very well received by our
customers.
Shares
During January-March, 287,682 (229,046) of the company's A shares were traded on
the NASDAQ OMX Helsinki Ltd exchange, corresponding to 8.1 per cent (6.5) of all
A shares.
The value of trading turnover was EUR 2.2 million (1.4), and the share price was
EUR 7.13 at the beginning of the year and EUR 7.45 at the end of the first
quarter. During January-March the share price was EUR 8.60 at its highest and
EUR 7.05 at its lowest. At the end of March, equity per share was EUR 7.22
(7.79).
Treasury shares
The company did not purchase any Martela shares in January-March. On 31 March
2010, Martela owned a total of 67,700 Martela A shares, purchased at an average
price of EUR 10.65. Martela's holding of treasury shares amounts to 1.6 per cent
of all shares and 0.4 per cent of all votes.
Acquisition of shares for the share-based incentive scheme and the management of
the scheme have been outsourced to an external service provider, Evli Alexander
Management Oy. These shares have been entered under equity in the consolidated
financial statements for 2009. On 31 March 2010, 57,625 shares under the
incentive scheme were still undistributed.
2010 Annual General Meeting
The Annual General Meeting of Martela Corporation was held on Tuesday 16 March
2010. The meeting approved the financial statements for 2009 and discharged the
members of the Board of Directors and the Managing Director from liability. The
AGM decided, in accordance with the Board of Directors' proposal, to distribute
a dividend of EUR 0.45 per share.
Heikki Ala-Ilkka, Tapio Hakakari, Jori Keckman, Heikki Martela, Pekka Martela,
Jaakko Palsanen and new member Pinja Metsäranta were elected as members of the
Board of Directors. KPMG Oy Ab, Authorised Public Accountants, was elected as
the company's auditor.
The AGM also approved the Board of Directors' proposals, detailed in the meeting
notice, to authorise the Board to acquire and/or dispose of Martela shares. The
AGM decided, in accordance with the Board of Directors' proposal, to amend the
company's Articles of Association (with respect to delivery of the meeting
notice).
The new Board of Directors convened after the Annual General Meeting and elected
Heikki Ala-Ilkka as Chairman and Pekka Martela as Vice Chairman.
Post-balance sheet events
No significant reportable events have taken place since the January-March period
and operations have continued according to plan.
Short-term risks
The greatest risk to profit performance is related to the continuation of
general economic uncertainty and the consequent effects on the overall demand
for office furniture.
Outlook for 2010
Low demand will have an effect on the company's revenue and operating profit in
2010. The company will continue to review its cost structure and to improve its
operating efficiency.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1 000)
2010 2009 2009
1-3 1-3 1-12
Revenue 22.563 24.019 95.349
Other operating income 0.072 0.131 0.746
Employee benefits expenses -6.424 -7.148 -25.988
Operating expenses -16.603 -16.304 -66.206
Depreciation and impairment -0.686 -0.758 -3.109
Operating profit/loss -1.078 -0.060 0.793
Financial income and expenses -0.040 -0.110 -0.365
Profit/loss before taxes -1.118 -0.171 0.427
Income tax 0.133 -0.051 -0.291
Profit/loss for the period -0.985 -0.221 0.137
Other comprehensive income
Translation differences 0.134 -0.154 0.077
Total comprehensive income -0.851 -0.375 0.214
Basic earnings per share, eur -0.24 -0.06 0.03
Diluted earnings per share, eur -0.24 -0.06 0.03
Allocation of net profit for the period:
To equity holders of the parent -0.985 -0.221 0.137
Allocation of total comprehensive
income:
To equity holders of the parent -0.851 -0.375 0.214
GROUP BALANCE SHEET (EUR 1 000) 31.03.2010 31.12.2009 31.03.2009
ASSETS
Non-current assets
Intangible assets 0.930 0.716 0.728
Tangible assets 11.660 11.862 13.044
Investments 0.038 0.038 0.039
Deferred tax assets 0.313 0.262 0.315
Pension receivables 0.197 0.197 0.072
Investment properties 0.600 0.600 0.600
Total 13.738 13.675 14.798
Current assets
Inventories 8.853 9.408 10.017
Receivables 11.798 13.210 13.000
Financial assets at fair value 1.098 1.094 1.054
through profit and loss
Cash and cash equivalents 15.739 18.211 18.053
Total 37.488 41.923 42.125
Total assets 51.227 55.598 56.923
EQUITY AND LIABILITIES
31.03.2010 31.12.2009 31.03.2009
Equity
Share capital 7.000 7.000 7.000
Share premium account 1.116 1.116 1.116
Other reserves 0.117 0.117 0.117
Translation differences -0.275 -0.409 -0.640
Retained earnings 21.859 24.672 24.661
Treasury shares -1.212 -1.200 -1.610
Share-based incentives 0.512 0.466 0.371
Total 29.117 31.762 31.015
Non-current liabilities
Interest-bearing liabilities 2.979 3.518 7.689
Deferred tax liability 1.216 1.305 1.367
Total 4.195 4.823 9.057
Current liabilities
Interest-bearing 5.109 5.008 2.754
Non-interest bearing 12.806 14.006 14.098
Total 17.915 19.014 16.852
Total liabilities 22.110 23.837 25.908
Equity and liabilities, total 51.227 55.598 56.923
STATEMENT OF CHANGES IN EQUITY (EUR 1 000)
Equity attributable to equity holders of the parent
Share Share Other Trans. Retained Treasury Total
capital premium reserves diff. earnings shares
account and share-
based inc.
01.01.2009 7.000 1.116 0.117 -0.486 27.605 -1.610 33.742
Total compr. -0.154 -0.221 -0.375
income
Dividends -2.453 -2.453
Share-based inc. 0.101 0.101
31.03.2009 7.000 1.116 0.117 -0.640 25.032 -1.610 31.015
1.1.2010 7.000 1.116 0.117 -0.409 25.138 -1.200 31.762
Other change -0.012 -0.012
Total compr. 0.134 -0.985 -0.851
income
Dividends -1.828 -1.828
Share-based inc. 0.046 0.046
31.03.2010 7.000 1.116 0.117 -0.275 22.371 -1.212 29.117
CONSOLIDATED CASH FLOW STATEMENT (EUR 1000)
2010 2009 2009
1-3 1-3 1-12
Cash flows from operating activities
Cash flow from sales 24.340 33.890 104.678
Cash flow from other operating income 0.072 0.131 0.489
Payments on operating costs -24.080 -25.712 -92.273
Net cash from operating activities
before financial items and taxes 0.332 8.309 12.894
Interest paid -0.063 -0.133 -0.516
Interest received 0.013 0.088 0.166
Other financial items 0.010 0.009 -0.002
Taxes paid -0.263 -0.585 -1.780
Net cash from operating activities (A) 0.028 7.688 10.762
Cash flows from investing activities
Capital expenditure on tangible and
intangible assets -0.563 -0.360 -1.663
Proceeds from sale of tangible and
intangible assets 0.000 0.000 1.004
Net cash used in investing activities (B) -0.563 -0.360 -0.659
Cash flows from financing activities
Proceeds from short-term loans 0.000 0.006 0.008
Repayments of short-term loans -0.156 -0.270 -0.781
Repayments of long-term loans -0.291 -0.291 -2.273
Dividends paid and other profit distribution -1.650 -2.248 -2.390
Net cash used in financial activities (C) -2.098 -2.803 -5.436
Change in cash and
cash equivalents (A+B+C) -2.633 4.524 4.667
(+ increase, - decrease)
Cash and cash equivalents at the beginning of
period 19.304 14.620 14.620
Translation differences 0.166 -0.037 0.017
Cash and cash equivalents at the end of period 16.837 19.107 19.304
SEGMENT REPORTING (EUR 1 000)
Segment revenue 2010 2009 2009
1-3 1-3 1-12
Business Unit Finland
external 15.092 17.129 63.898
internal 0.000 0.000 0.000
Business Unit Sweden and Norway
external 4.026 4.342 15.834
internal 0.299 0.044 0.457
Business Unit Poland
external 1.567 1.616 9.465
internal 0.000 0.007 0.015
Other segments
external 1.878 0.931 6.151
internal 3.606 4.239 16.464
Total external revenue 22.563 24.019 95.348
Segment operating profit/loss 2010 2009 2009
1-3 1-3 1-12
Business Unit Finland 0.185 1.635 3.854
Business Unit Sweden and Norway -0.301 -0.211 -0.966
Business Unit Poland -0.411 -0.280 -0.668
Other segments -0.237 -0.164 -0.985
Other -0.315 -1.040 -0.442
Total operating profit/loss -1.078 -0.060 0.793
Other segments include P.O. Korhonen Oy, Kidex Oy and Business Unit
International, which is responsible for export markets. The item “Other”
includes non-allocated Group functions and non-recurring sales gains and
losses.
TANGIBLE ASSETS 1.1-31.3.2010
Land Buildings Machinery Other Work in
areas & equipment tangibles progress
Acquisitions 0.000 0.000 0.223 0.000 0.065
Decreases 0.000 0.000 0.000 0.000 0.000
TANGIBLE ASSETS 1.1-31.3.2009
Land Buildings Machinery Other Work in
areas & equipment tangibles progress
Acquisitions 0.000 0.010 0.207 0.017 0.082
Decreases 0.000 0.000 0.000 0.000 0.000
RELATED PARTY AND SHARE-BASED INCENTIVE PROGRAMME
The CEO and the group's management and some key-persons are included in a long-
term incentive scheme, extending from 2010 to the end of 2012.
KEY FIGURES/RATIOS
2010 2009 2009
1-3 1-3 1-12
Operating profit/loss -1.078 -0.060 0.793
- in relation to revenue -4.8 -0.3 0.8
Profit/loss before taxes -1.118 -0.171 0.427
- in relation to revenue -5.0 -0.7 0.4
Profit/loss for the period -0.985 -0.221 0.137
- in relation to revenue -4.4 -0.9 0.1
Basic earnings per share, eur -0.24 -0.06 0.03
Diluted earnings per share, eur -0.24 -0.06 0.03
Equity/share, eur 7.22 7.79 7.88
Equity ratio 57.2 54.7 57.4
Return on equity * -12.9 -2.7 0.4
Return on investment * -10.7 0.2 2.3
Interest-bearing net-debt, eur million -8.7 -8.7 -10.8
Gearing ratio -30.1 -27.9 -33.9
Capital expenditure, eur million 0.6 0.4 2.2
- in relation to revenue, % 2.5 1.6 2.3
Personnel at the end of period 583 643 606
Average personnel 590 649 636
Revenue/employee, eur thousand 38.2 37.0 149.9
Key figures are calculated according to formulae as presented in Annual Report
2009.
* When calculating return on equity and return on investment the profit/loss for
the period has been multiplied in interim reports.
CONTINGENT LIABILITIES
31.03.2010 31.12.2009 31.03.2009
Mortgages and shares pledged 14.643 14.480 14.548
Guarantees 0.000 0.000 0.000
Other commitments 0.261 0.256 0.324
RENTAL COMMITMENTS 7.838 7.971 8.246
DEVELOPMENT OF SHARE PRICE 2010 2009 2009
1-3 1-3 1-12
Share price at the end of period, EUR 7.45 5.73 7.13
Highest price, EUR 8.60 6.82 8.00
Lowest price, EUR 7.05 5.21 5.21
Average price, EUR 7.73 6.24 6.98
This interim report has not been audited
Martela Corporation
Board of Directors
Heikki Martela
Managing Director
Additional information
Heikki Martela, Managing Director, tel. +358 50 502 4711
Mats Danielsson, Finance Director, tel. +358 50 394 8575
Distribution
NASDAQ OMX Helsinki
Main news media
www.martela.com
Attachments
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