Martela Corporation's Financial Statements Release, 1 January - 31 December 2015


MARTELA CORPORATION        FINANCIAL STATEMENTS RELEASE    4 February 2016 at 8.30 a.m.

 

MARTELA CORPORATION'S FINANCIAL STATEMENTS RELEASE, 1 JANUARY - 31 DECEMBER 2015

Consolidated revenue was down slightly, the operating result improved and was clearly positive.

Key figures:

  10-12 10-12 1-12 1-12  
EUR million 2015 2014 2015 2014  
           
 - Revenue 37.5 31.2 132.8 135.9  
 - Change in revenue, % 20.0 -15.2 -2.3 2.7  
 - Operating result 2.1 -1.1 4.1 0.2  
 - Operating result, % 5.6 -3.4 3.1 0.1  
 - Earnings/share, EUR 0.37 -0.27 0.61 -0.18  
 - Return on investment, % 24.8 -11.6 12.1 0.5  
 - Return on equity, % 27.6 -21.2 11.6 -3.4  
 - Equity ratio, %     40.9 38.1  
 - Gearing ratio, %     16.6 33.4  

The Martela Group anticipates that its revenue and operating result in 2016 will remain at the previous year’s level. Due to normal seasonal variation, the Group’s operating result is weighted towards the second half of the year.

Market

Economic conditions continued to be challenging in Finland and Russia during the final months of 2015. By contrast, in Sweden and Poland the general trend in the economy improved towards the end of the year, as did confidence that the economy would pick up in the short term. Although the general trend in the Finnish economy was weak during 2015, a significant number of companies nevertheless implemented office alteration projects. With the aid of the Martela Lifecycle model for these alteration projects and for life-cycle management of corporate working environments, Martela has been able to operate successfully even in the challenging Finnish market.

The improving situation in the Swedish and Polish economies has not yet been evident to any great extent in the demand for office furniture. The most significant projects in these markets are still alteration and enhancement projects. The market in Russia continued to be challenging and no improvement is anticipated in the short term.

In addition to office construction, the demand for Martela’s products and services is significantly affected by the general economic situation and by the extent to which companies need to use their office space more efficiently. The need to boost efficiency often leads to office alteration projects, which in turn generate demand for Martela’s products and services. The annual change in gross domestic product (GDP) can be regarded as a good indicator of the general trend in the economy. In Finland, the change in GDP was estimated to be about zero per cent in 2015. Most forecasts for the change in GDP in 2016 indicate a slight increase, which would mean that the Finnish economy will see a gradual, slow recovery. There is still no sign of a stronger recovery in the near future. 

Consolidated revenue and result

The Group’s fourth-quarter 2015 revenue was up, which was attributable particularly to the good performance of the company’s business operations in Finland. Consolidated revenue for the fourth quarter was EUR 37.5 million (31.2), an increase of 20.0 per cent on a year-on-year basis. Consolidated revenue for the full year 2015 was EUR 132.8 million (135.9), a decrease of 2.3 per cent on the previous year. Revenue in Finland increased significantly, both in the fourth quarter and for the full financial year. The favourable performance in Finland was due in part to the success of Martela’s Lifecycle model among customer companies. Business Unit Sweden and Norway achieved revenue growth in the final quarter of 2015, although revenue for the full twelve months was significantly down on the previous year’s figure. For Business Unit International the fourth quarter showed a slight decrease year-on-year. The business unit’s full-year revenue was down significantly, with much of this decrease being from the Russian market. Polish revenue also fell slightly. Due to the difficult situation in the market, no major improvement in demand in Russia is anticipated during 2016.

Business Unit Finland’s revenue was up by 10.6 per cent. Business Unit Sweden and Norway’s revenue was down by 19.5 per cent, and Business Unit International’s was down by 33.3 per cent. Movements in exchange rates did not have a significant impact on the Group’s revenue.

The Group’s fourth-quarter operating profit improved to EUR 2.1 million (-1.1). The cumulative full-year operating result increased considerably and was EUR 4.1 million (0.2), which was 3.1 per cent (0.1) of revenue.

The clear improvement in the Group’s January-December operating result was mainly due to the savings made in the cost structure as a result of the adjustment measures taken. The Group’s fixed costs were reduced during the year, as planned, in comparison with the previous year’s figures, and it was also evident that the EUR 6 million savings programme launched in autumn 2013 had been a success.

Business Unit Finland improved its operating result for the period as a consequence of improved revenue and the efficiency measures taken. In both Business Unit Sweden and Norway and Business Unit International, the operating result for the final quarter and for the full year was negative. The negative result was mainly due to the weak trend in revenue. Efficiency improvement measures were initiated in Poland (part of Business Unit International) in October, and the aim of these was to reorganise the sales structure, speed up the process of implementing Martela's Lifecycle strategy and reduce the unit’s costs.

In April 2015, Martela began a new savings programme, the goal being to reduce costs by EUR 4 million at the annual level by the end of 2016, with the cost savings taking full effect in 2017. The measures taken by the end of 2015 were as follows: Martela Corporation’s statutory employee negotiations concerning office staff were held in April 2015 (annual savings of EUR 1.2 million); efficiency measures launched in Poland in October (EUR 0.5 million); reorganisation of Martela’s office space (EUR 0.9 million); and efficiency measures at Kitee (EUR 0.9 million). The measures already introduced will allow the Group to achieve a total of EUR 3.5 million of the targeted savings of EUR 4 million. About one third of the savings that can be achieved with the measures taken so far was realised in the 2015 result, and about half will be achieved in 2016, with the remainder being realised during 2017. At the same time, however, the Group will continue in 2016 to invest in implementing and further developing its Martela Lifecycle model, which will increase fixed costs a little, preventing the Group’s cost level from falling by the full amount of the savings referred to above. Plans to bring about the final part of the savings programme are continuing.

Over the past year or more, interest in activity-based office solutions has continued to increase in Martela’s main market areas. The Group has introduced novel solutions suitable for activity-based offices and continues to invest in its ability to provide even more high-quality comprehensive solutions and services in the field of activity-based working. The Group has strengthened its pioneering position as a supplier of comprehensive solutions and as a leading service provider for offices and other working environments. 

The result before taxes was EUR 3.4 million (-0.6), and the result after taxes was EUR 2.5 million (-0.7).

Martela’s full report for January - December 2015 is included in PDF format as an attachment to this release. The report is also available on the company’s website at www.martela.com.

Martela Oyj
Board of Directors
Matti Rantaniemi
CEO

ATTACHEMENT: Martela’s report January – December 2015

For more information, please contact
Matti Rantaniemi, CEO, tel. +358 50 465 8194
Markku Pirskanen, CFO, tel. +358 40 517 4606

Distribution
Nasdaq Helsinki
Main News Media

www.martela.com
 

 

 


Attachments

Financial Statements Release 2015.pdf