MARTELA CORPORATION STOCK EXCHANGE RELEASE 12.2.2009
at 09.00 a.m.
MARTELA CORPORATION'S FINANCIAL STATEMENTS RELEASE, 1 JANUARY - 31 DECEMBER 2008
Consolidated revenue for January-December was EUR 141.2 million, an increase of
9.9 per cent on the previous year's figure (EUR 128.4 million). Operating profit
was EUR 10.9 million (8.3), including EUR 0.7 million (2.5) in gains from the
sale of assets. The equity ratio was 52.2 per cent (46.7) and gearing was -11.0
per cent (16.0).
Key figures
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| | 10-12 | 10-12 | 1-12 | 1-12 |
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| EUR million | 2008 | 2007 | 2008 | 2007 |
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| Net revenue | 41.1 | 37.0 | 141.2 | 128.4 |
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| Change in revenue % | 11.0 | 0.4 | 9.9 | 7.3 |
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| Operating profit excluding | 3.8 | 2.6 | 10.2 | 5.8 |
| non-recurring items | | | | |
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| Operating profit % | 9.3 | 7.0 | 7.2 | 4.5 |
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| Return on investment, % | | | 25.2 | 19.6 |
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| Return on equity, % | | | 23.8 | 19.8 |
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| Equity to asset ratio, % | | | 52.2 | 46.7 |
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| Gearing, % | | | -11.0 | 16.0 |
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| Earnings per share, eur | 1.89 | 1.32 |
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| Earnings per share (diluted), eur | 1.89 | 1.32 |
| | | |
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| Average staff | | | 681 | 663 |
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| Revenue/employee (EUR 1.000) | | | 207.3 | 193.7 |
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Accounting policies
Martela Corporation's consolidated financial statements have been prepared in
compliance with the International Financial Reporting Standards (IFRS). The IAS
and IFRS standards and SIC and IFRIC interpretations valid on 31 December 2008
have been applied in the preparation of the financial statements.
Market situation
The demand for office furniture continued to be good during the year. There were
fewer new starts in office construction in 2008 than in the previous year, and
also fewer building permits were granted.
Group structure
There were no changes in Group structure during 2008, and this was also the case
in 2007.
Segment reporting
Martela has a single primary segment, namely the furnishing of offices and
public spaces. The revenue and result are as recorded in the consolidated
financial statements. The Group's secondary reporting segment is its customers
by geographical location.
Revenue
Revenue for January-December rose to EUR 141.2 million (128.4), a year-on-year
increase of 9.9 per cent. Significant contributors to this revenue growth were
the various major projects carried out during the year. Revenue for the fourth
quarter increased to EUR 41.1 million (37.0), up 11.0 per cent. Revenue growth
was particularly strong in the Finnish market.
The revenue trend in Scandinavia was not according to plan in 2008, decreasing
by 19.7 per cent on the previous year's figure.
Invoicing by main market area
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| | 10-12 | 10-12 | 1-12 | 1-12 |
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| EUR million | 2008 | 2007 | 2008 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finland | 32.2 | 24.8 | 104.1 | 85.8 |
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| Scandinavia | 5.3 | 7.2 | 20.6 | 26.4 |
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| Poland and surrounding areas | 2.8 | 3.8 | 12.3 | 11.1 |
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| Other areas | 1.8 | 1.3 | 5.2 | 5.4 |
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| Total | 42.1 | 37.1 | 142.2 | 128.7 |
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Change in invoicing and percentage of consolidated invoicing
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| | 1-12 | 1-12 | | |
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| EUR million | 2008 | 2007 | Change | Percentage |
--------------------------------------------------------------------------------
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| Finland | 104.1 | 85.8 | 21.3 | 73.2 |
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| Scandinavia | 20.6 | 26.4 | -21.9 | 14.5 |
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| Poland and surrounding | 12.3 | 11.1 | 10.4 | 8.6 |
| areas | | | | |
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| Other areas | 5.2 | 5.4 | -1.0 | 3.7 |
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| Total | 142.2 | 128.7 | 10.6 | 100.0 % |
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Consolidated result
The consolidated result for the fourth quarter was according to plan, and the
operating profit came to EUR 3.8 million (2.6).
The full-year result showed a good improvement, and operating profit totalled
EUR 10.9 million (8.3). The result includes EUR 0.7 million (2.5) in
non-recurring income from the sale of assets. The sales profit made in the first
half of the year was from the sale of land in Poland. Operating profit excluding
non-recurring items totalled EUR 10.2 million (5.8). Profit development has been
positive in Finland and in Poland and its neighbouring areas in 2008. In
Scandinavia, the decrease in revenue has adversely affected profit development.
Profit before taxes rose to EUR 10.2 million (7.6), and profit after taxes was
EUR 7.5 million (5.4).
Operating profit excluding non-recurring items was 7.2 per cent of revenue
(4.5).
Financial standing
The Group's financial standing strengthened further. Interest-bearing
liabilities at the end of the financial year amounted to EUR 10.9 million (14.4)
and net liabilities were EUR -3.7 million (4.7). The gearing ratio at the end of
the year was -11.0 per cent (16.0), and the equity ratio was 52.2 per cent
(46.7). Net financial expenses were EUR -0.7 million (-0.7).
The cash flow from operating activities in January-December was EUR 11.8 million
(9.9).
During the year, the company decided to launch a project to reduce the amount of
working capital, and we expect the project to produce results principally during
2009.
The end-of-year balance sheet total was EUR 64.9 million (63.8).
Capital expenditure
The Group's gross capital expenditure for January-December was EUR 2.9 million
(3.2) and mainly concerned production replacements and IT investments. Of the
capital expenditure for the comparison period in 2007, EUR 0.7 million was
attributable to the ownership rearrangement at the Bodafors plant, as a result
of which the long-term lease liability for the part leased back by Martela was
activated in the consolidated balance sheet in accordance with the IFRS rules.
Personnel
The Group employed an average of 681 (663) persons, representing an increase of
2.7 per cent.
Average number of personnel by region
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| | 1-12 | 1-12 |
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| | 2008 | 2007 |
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| Finland | 520 | 518 |
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| Scandinavia | 71 | 71 |
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| Poland | 90 | 74 |
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| Group total | 681 | 663 |
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Product development and collection
Product development and management of the collection are the responsibility of
two Group-level organisations: the Office product line, which is responsible for
workstation furniture, and the Surroundings product line, which is responsible
for surroundings and other public-space furniture.
At the Stockholm Furniture Fair in February, Martela exhibited new products
representing both product lines, as well as two fascinating new concepts. The
exhibited pieces of workstation furniture were the James task chair designed by
Iiro Viljanen and the Pinta ES, the newest member of the Pinta range, by Pekka
Toivola and Iiro Viljanen. New surroundings furniture displayed for the first
time comprised the Skybar chair designed by Geir Sætveit and the Movie sofa by
Rane Vaskivuori. The concepts we exhibited at Stockholm were well received. In
particular, the Mybox desk designed by Iiro Viljanen and the Pekka Toivola's
Book shelf/space divider generated welcome discussion and considerable interest.
At the Milan Furniture Fair in April, Martela set up its own exhibition on the
theme ‘under THE Tree'. The name is from the space divider The Tree, designed by
Professor Eero Aarnio.
Shares
In January-December, a total of 787,491 (1,159,509) of the company's series A
shares were traded on the NASDAQ OMX Helsinki exchange, corresponding to 22.2
per cent (32.7) of the total number of series A shares. The higher trading
figure in 2007 was due partly to the acquisition in the first quarter of shares
by Evli Alexander Management Oy for the three-year share-based incentive system.
A total of 143,166 shares were acquired for EUR 1.2 million.
The value of trading was EUR 6.5 million (10.0), and the share price was EUR
8.35 at the beginning and EUR 5.29 at the end of the year. During
January-December the share price was EUR 10.05 at its highest and EUR 5.10 at
its lowest. At the end of December, equity per share was EUR 8.47 (7.22).
On 23 May 2008, Nordea Investment Fund Company Finland Ltd announced that its
holding in Martela Corporation fell to 0.57 per cent following a share
transaction made on 22 May 2008.
Treasury shares
Martela did not purchase any of its own shares for the treasury in 2008. On 31
December 2008, Martela owned a total of 67,700 of its own series 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 reward system and the management of that
system have been outsourced to an external service provider, Evli Alexander
Management Oy. The shares are the property of Evli Alexander Management Oy until
they are transferred to Martela's key personnel under the incentive system.
Notwithstanding this legal formality, the shares are presented in the 2008
financial statements under equity, as if Martela had acquired its own shares. In
2007, they were treated as loan receivables from Evli Alexander Management Oy.
On 31 December 2008, 104,282 shares under the incentive system were still
undistributed.
2008 Annual General Meeting
The Annual General Meeting, held on 1 April 2008, adopted the financial
statements and discharged those responsible for the accounts from further
liability. The AGM decided, in accordance with the Board of Directors' proposal,
to distribute a dividend of EUR 0.50 per share, totalling EUR 2,043,950. Heikki
Ala-Ilkka, Tapio Hakakari, Heikki Martela, Pekka Martela, Jori Keckman and
Jaakko Palsanen were elected as members of the Board of Directors for the next
term. 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, for authorising the Board to acquire and/or dispose of the company's own
shares.
Furthermore, the AGM decided, in accordance with the Board of Directors'
proposal, to amend the company's Articles of Association pursuant to the new
Limited Liability Companies Act, which entered into force on 1 September 2006.
The new Board of Directors convened after the Annual General Meeting and, from
among its members, elected Heikki Ala-Ilkka as Chairman and Pekka Martela as
Vice Chairman.
Post-balance sheet events
Martela has begun codetermination talks in order to adjust the parent company's
factory and office employee resources in line with the lower level of demand.
The reductions would be implemented as temporary lay-offs and redundancies
affecting the entire personnel. The number of redundancies is estimated to total
about 30 people. The need for lay-offs and redundancies is due to the general
economic uncertainty, which has increased significantly.
Short-term risks
The greatest risk to profit performance is related to the continuation of global
economic uncertainty and the consequent overall demand for office furniture.
2009 Annual General Meeting and the Board's proposal for distribution of profit
Martela Corporation's AGM will be held on Tuesday, 17 March 2009. The Board of
Directors will propose to the General Meeting that the Board be authorised to
acquire Martela shares. The Board will also propose that a dividend of EUR 0.60
per share be distributed for 2008. The liquidity is good and, in the Board of
Director's view, the proposed distribution of dividend does not pose a risk to
the Company's financial standing. The parent company's distributable equity at
the end of the 2008 financial year amounts to EUR 37,969,142.88. Shareholders
registered in the shareholder register maintained at the Finnish Central
Securities Depository on the record date for dividend payment, Friday, 20 March
2009, will be entitled to the dividend as proposed by the Board. The Board will
propose that the dividend be paid on Friday, 27 March 2009. The notice of the
Annual General Meeting will be published in a separate stock exchange bulletin.
Board composition and auditors
Shareholders representing a total of over 50 per cent of the company's votes
have informed the company that they will be proposing the following current
members to be elected to the Board: Heikki Ala-Ilkka, Tapio Hakakari, Jori
Keckman, Heikki Martela, Pekka Martela and Jaakko Palsanen. The aforementioned
shareholders have also announced that they will propose that KPMG Oy, Authorised
Public Accountants, be elected as the company's auditor until the end of the
next AGM.
Outlook for 2009
The general economic uncertainty has increased significantly and will affect the
company's performance in 2009. Revenue will be down on the previous year's
figure, and operating profit will also be lower than in 2008. During 2009, the
company will re-examine its cost structure and improve the efficiency of its
operations.
GROUP INCOME STATEMENT (EUR 1000)
2008 2007 2008 2007
1-12 1-12 10-12 10-12
Revenue 141.153 128.445 41.077 36.992
Other operating income 1.422 3.023 0.281 0.068
Employee benefits expenses -31.452 -28.723 -8.382 -7.834
Operating expenses -97.154 -91.236 -28.352 -25.819
Depreciation and impairment -3.115 -3.231 -0.803 -0.825
Operating profit/loss 10.854 8.278 3.822 2.582
% of turnover 7.7 6.4 9.3 7.0
Financial income and expenses -0.651 -0.726 -0.194 -0.181
Profit/loss before taxes 10.202 7.552 3.627 2.401
% of turnover 7.2 5.9 8.8 6.5
Income tax -2.666 -2.165 -0.525 -0.714
Profit/loss for the period 7.537 5.387 3.102 1.686
% of turnover 5.3 4.2 7.6 4.6
Basic earnings per share, eur 1.89 1.32 0.78 0.41
Diluted earnings per share, eur 1.89 1.32 0.78 0.41
GROUP BALANCE SHEET (EUR 1000) 31.12.2008 31.12.2007
ASSETS
Non-current assets
Intangible assets 0.724 0.633
Tangible assets 13.461 14.151
Investments 0.039 0.053
Deferred tax assets 0.304 0.240
Pension receivables 0.072 0.035
Receivables 0.000 0.623
Investment properties 0.600 1.203
Total 15.200 16.938
Current assets
Inventories 10.825 13.635
Receivables 24.252 23.536
Financial assets at fair value through
profit and loss 1.038 2.004
Cash and cash equivalents 13.581 7.686
Total 49.696 46.861
Total assets 64.896 63.800
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Share capital 7.000 7.000
Share premium account 1.116 1.116
Other reserves 0.117 0.117
Translation differences -0.486 -0.129
Retained earnings 27.335 22.060
Treasury shares -1.610 -0.721
Share-based incentives 0.270 0.067
Total 33.742 29.510
Non-current liabilities
Interest-bearing liabilities 8.024 10.453
Deferred tax liability 1.403 1.553
Total 9.427 12.006
Current liabilities
Interest-bearing 2.869 3.969
Non-interest bearing 18.858 18.315
Total 21.727 22.284
Total liabilities 31.154 34.290
Equity and liabilities, total 64.896 63.800
STATEMENT OF CHANGES IN EQUITY (EUR 1000)
Share Share Other Trans. Retained Treasury Total
capital premium reserves diff. earnings shares
account and share-
based inc.
01.01.2007 7.000 1.116 0.117 -0.129 17.542 -0.721 24.925
Translation diff. 0.000
Profit/loss for
the period 5.387 5.387
Other change 0.220 0.220
Total recognized
income and expense
for the fin.year 5.607 5.607
Dividends -1.022 -1.022
31.12.2007 7.000 1.116 0.117 -0.129 22.127 -0.721 29.510
1.1.2008 7.000 1.116 0.117 -0.129 22.127 -0.721 29.510
Translation diff. -0.357 -0.357
Profit/loss for
the period 7.537 7.537
Other change -0.122 -0.889 -1.011
Total recognized
income and expense
for the fin.year -0.357 7.415 -0.889 6.169
Dividends -1.937 -1.937
31.12.2008 7.000 1.116 0.117 -0.486 27.605 -1.610 33.742
CONSOLIDATED CASH FLOW STATEMENT (EUR 1000)
2008 2007
1-12 1-12
Cash flows from operating activities
Cash flow from sales 138.477 130.834
Cash flow from other operating income 0.687 0.550
Payments on operating costs -124.654 -121.090
Net cash from operating activities
before financial items and taxes 14.510 10.294
Interest paid -0.844 -0.842
Interest received 0.268 0.082
Other financial items -0.060 -0.021
Dividends received 0.000 0.001
Taxes paid -2.116 0.381
Net cash from operating activities (A) 11.758 9.895
Cash flows from investing activities
Capital expenditure on tangible and
intangible assets -2.206 -2.256
Proceeds from sale of tangible and
intangible assets 1.489 2.028
Proceeds from sale of shares in subsidiaries 0.000 2.150
Loans granted 0.000 -1.193
Repayments of loans receivables 0.022 0.011
Net cash used in investing activities (B) -0.694 0.740
Cash flows from financing activities
Proceeds from short-term loans 0.129 0.976
Repayments of short-term loans -0.795 -1.704
Repayments of long-term loans -3.365 -3.108
Dividends -1.972 -1.022
Net cash used in financing activities (C) -6.003 -4.858
Change in cash and
cash equivalents (A+B+C) 5.061 5.778
(+ increase, - decrease)
Cash and cash equivalents at the beginning of
period 9.691 3.911
Translation differences -0.132 0.002
Cash and cash equivalents at the end of period 14.620 9.691
KEY FIGURES/RATIOS
2008 2007
1-12 1-12
Revenue EUR million 141.2 128.4
Change in revenue, % 9.9 7.3
Exports and international operations, 38.1 42.8
EUR million
In relation to revenue, % 27.0 33.3
Gross capital expenditure on fixed 2.9 3.2
assets, EUR million
In relation to revenue, % 2.1 2.5
Research and development expenses, 3.2 3.1
EUR million
In relation to revenue, % 2.3 2.4
Average personnel 681 663
Change in personnel, % 2.7 5.9
Personnel at year end 670 655
Turnover / employee, EUR thousand 207.3 193.7
Return on equity, % 23.8 19.8
Return on investment, % 25.2 19.6
Equity ratio, % 52.2 46.7
Interest-bearing net-debt, EUR million -3.7 4.7
Gearing ratio, % -11.0 16.0
Key share-related figures
Number of shares, at the end of period (1000) 4155.6 4155.6
Basic earnings per share, EUR 1.89 1.32
Diluted earnings per share, EUR 1.89 1.32
Price/earnings ratio (PE) 2.8 6.3
Equity per share, EUR 8.47 7.22
Dividend/share, EUR 0.60* 0.50
Dividend/earnings, % 31.7 37.9
Effective dividend yield, % 11.3 6.0
Price of A-share 31.12. EUR 5.29 8.35
*) Proposal of the Board of Directors
The largest shareholders, 31.12.2008
No.of shares % of total
(A+K-series) votes
Marfort Oy 524 574 38.8
Ilmarinen Mutual Pension Insurance Company 335 400 2.1
OP
Suomi Arvo 273 700 1.7
Odin Finland 218 400 1.4
Fondita Nordic Micro Cap Placeringsf 205 000 1.3
Palsanen Leena 199 634 9.6
FIM Fenno Mutual Fund 188 897 1.2
Martela Heikki 163 450 7.4
Pohjola P & C Insurance company 160 294 1.0
Martela Matti 115 238 7.8
Suomen Argentor Oy 112 735 0.7
Oy Autocarrera Ab 111 820 0.7
Evli Alexander Management Oy 104 282 0.7
Lindholm Tuija 86 954 5.8
Palsanen Jaakko 85 468 0.7
Martela Pekka 69 282 8.9
Other shareholders 1 200 472 10.1
Total 4 155 600 100.0
The number of registered Martela Oyj shares on 31.12.2008 was 4.155,600.
The shares are divided into A and K shares. Each A share carries 1 vote and
each K share 20 votes in a general shareholders' meeting.
The company's board of directors and CEO together hold 8.6% of the shares and
17.2% of the votes.
Segments
2008 (EUR 1,000)
Geographical segments Finland Scandinavia Other Elim. Unalloc. Total
areas
Turnover 103.161 20.501 17.491 141.153
Segment assets 58.290 5.784 4.779 -6.215 2.258 64.896
Capital expenditure 2.506 0.161 0.258 2.925
2007 (EUR 1,000)
Geographical segments Finland Scandinavia Other Elim. Unalloc. Total
areas
Turnover 85.503 26.551 16.391 128.445
Segment assets 52.337 8.197 6.791 -8.197 4.672 63.800
Capital expenditure 2.088 0.843 0.317 3.248
CONTINGENT LIABILITIES
31.12.2008 31.12.2007
Mortgages and shares pledged 14.566 18.851
Guarantees - -
Other commitments 0.332 0.317
Rental commitments 8.964 10.674
DEVELOPMENT OF SHARE PRICE 2008 2007
1-12 1-12
Share price at the end of period, EUR 5.29 8.35
Highest price, EUR 10.05 10.35
Lowest price, EUR 5.10 6.39
Average price, EUR 8.30 6.64
Annual Report 2008 will be published on Martela's homepages during the week 10.
The first Interim Report for the period January 1 - March 31, 2009 will be
published on April 29, 2009.
Helsinki, 11 February 2009
Martela Corporation
Board of Directors
Heikki Martela
CEO
Additional information
Heikki Martela, CEO, tel. +358 50 502 4711
Mats Danielsson, Finance Director, tel. +358 50 394 8575
Distribution
NASDAQ OMX Nordic
Main news media
www.martela.com
MARTELA CORPORATION'S FINANCIAL STATEMENTS RELEASE, 1 JANUARY - 31 DECEMBER 2008
| Source: Martela Oyj
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