MARTELA CORPORATION INTERIM REPORT 29 APRIL 2016 AT 8.30 A.M.
MARTELA CORPORATION INTERIM REPORT, 1 January – 31 March 2016
During the first quarter, the revenue and the operating result improved slightly on last year.
Key figures:
| 1–3 | 1–3 | 1–12 | |
| EUR million | 2016 | 2015 | 2015 |
| - Revenue | 27.8 | 26.7 | 132.8 |
| - Change in revenue, % | 4.3 | -21.8 | -2.3 |
| - Operating result | -0.1 | -1.3 | 4.1 |
| - Operating result, % | -0.5 | -4.9 | 3.1 |
| - Earnings/share, EUR | -0.07 | -0.36 | 0.61 |
| - Return on investment, % | -1.7 | -15.1 | 12.1 |
| - Return on equity % | -5.5 | -30.1 | 11.6 |
| - Equity-to-assets ratio % | 42.8 | 37.7 | 40.9 |
| - Gearing ratio, % | 3.9 | 31.3 | 16.6 |
The Martela Group anticipates that its revenue and operating result for 2016 will remain at the previous year’s level. Due to normal seasonal variations, the Group’s operating result accumulates mainly during the second half of the year.
Market
The market situation prevailing at the end of 2015 continued into the first quarter of 2016. Finland’s general economic environment remains challenging, although some recovery was discernible late in 2015 with a slight upturn in GDP. The Russian economy continues to be weak. In contrast, the national economies of Sweden and Poland continued to develop favourably.
The weak Finnish economy on the one hand and the need for companies to rapidly adjust their operations to the new business realities on the other have generated an often-substantial need to develop working environments. The Martela Lifecycle model can respond to companies’ needs to effectively develop their working environments even when they are faced with significant changes in their business. As a result, the Finnish market has still performed moderately well from Martela’s perspective, despite being challenging.
While the Swedish and Polish markets have fared considerably better in recent times than that of Finland, change and efficiency projects are usually given precedence there, too. Quicker development of working environments to meet new business needs and objectives has gained a key role also in Sweden and Poland.
The demand for Martela’s products and services has been fundamentally affected by the general economic situation and by the extent to which companies need to use their office space more efficiently and make their working environments more functional. The annual change in gross domestic product (GDP) can be regarded as a good indicator of the general economic trend. In Finland, the change in GDP was slightly positive in 2015. Most GDP forecasts for 2016 indicate a similar trend, which would mean that the Finnish economy will see a continued, slow recovery. It is true, however, that prognoses concerning this recovery have become more uncertain in the past quarter.
Consolidated revenue and result
Consolidated revenue for January-March was EUR 27.8 million (26.7). However, the revenue in Finland – which was generated mainly by small and medium-sized deliveries – showed a slight decline on 2015. In contrast, revenue increased significantly in Sweden. Two major customer deliveries were made in Sweden in the review period and, as a result, good growth was attained in this market area. Thanks to the success in Sweden, the overall revenue of the Business Unit Finland & Sweden increased 8.3 per cent on last year. During the review period, Poland’s revenue under the Business Unit International declined substantially, however. And while the other countries in this Business Unit were able to increase their revenue somewhat, it was not enough to prevent the overall revenue of Business Unit International from decreasing by 17.8%. Nevertheless, the positive performance of Business Unit Finland & Sweden meant that the consolidated revenue grew slightly.
The Group’s operating result for the first quarter was EUR -0.1 million (-1.3). The operating result was boosted by the slight increase in revenue and the significant reduction in the Group’s fixed costs as a result of the savings programmes implemented. At the same time, the sales margin of the Group’s products was slightly lower than a year earlier, due to the composition of the revenue in the review period. Measures implemented during the two preceding review periods were successful particularly in improving the result of the Group’s production units.
Measures to improve supply chain efficiency continued to be implemented in the first quarter. In March Martela initiated co-determination negotiations at its Bodafors facility in Sweden concerning improvements to the efficiency of operations at the Martela Ab logistics centre in Bodafors. The negotiations were completed after the end of the review period in April and a decision was made to reduce the staff at the logistics centre in Bodafors by 16 persons. The purpose of the measures is to create a more flexible supply chain in response to the changed and more varied customer demand and to implement the Martela Lifecycle strategy more effectively. In addition to improving the supply chain, the planned measures target a EUR 0.5 million reduction in annual costs. The savings are part of the EUR 4.0 million savings programme Martela announced in April 2015. With the measures to be implemented in Sweden, the entire programme has now been completed. About one third of the savings were achieved in 2015 and about half will be achieved in 2016, with the remainder being realised during 2017.
User-oriented activity-based offices are an increasingly popular solution for corporate offices. Martela has introduced many new solutions for activity-based office environments and continues to focus on developing modern solutions and services. The Group has also invested heavily on the competence in specification, design and maintenance of working environments. This helps it to offer even more carefully specified working environments that are a good fit for customer needs. With proper specification and design customer companies can create cost-efficient working environments that increase job satisfaction.
The result before taxes was EUR -0.3 million (-1.4), and the result after taxes was EUR -0.3 million (-1.5).
Martela’s full interim report for January - March 2016 is included in PDF format as an attachment to this release. The interim report is also available on the company’s website at www.martela.com.
Martela Oyj
Board of Directors
Matti Rantaniemi
CEO
ATTACHEMENT: Martela’s interim report January – March 2016
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
