Martela Oyj - Interim report (Q1 and Q3)

MARTELA CORPORATION INTERIM REPORT, 1 January - 30 September 2012

MARTELA CORPORATION      INTERIM REPORT      26 October 2012 at 8.30 a.m.


MARTELA CORPORATION INTERIM REPORT, 1 January - 30 September 2012

Consolidated revenue up, operating result lower than previous year



Key figures:

                            7-9   7-9    1-9   1-9   1-12
EUR million                2012  2011   2012  2011   2011
- Revenue                  34.8  33.8  101.9  91.7  130.7
- Change in revenue, %      2.9  29.7   11.1  23.4   20.6
- Operating result          0.6   2.4   -1.2   0.7    2.6
- Operating result, %       1.7   7.0   -1.2   0.8    2.0
- Earnings per share, EUR  0.07  0.45  -0.49  0.02   0.39
- Return on investment, %   5.5  26.3   -4.4   2.1    6.0
- Return on equity, %       4.0  24.3   -9.1   0.4    5.1
- Equity ratio, %                       44.5  55.5   44.7
- Gearing, %                            35.9  -4.9   -2.6



The Martela Group expects to post year-on-year revenue growth for 2012, and an
operating result around zero or slightly positive. 

Market

In the third quarter, the effects of global economic uncertainty started to be
reflected in the demand for office furniture in the Nordic countries. Demand
was at a good level during the first half in Finland, Sweden and Poland, but
after the summer, uncertainty was observed in decision-making for the first
time this year. In Denmark, demand has been weak throughout the review period. 

Statistics on office construction are available for the first half of 2012, and
these also indicate a slowdown in construction. In terms of square metres, the
amount of new office space built in Finland in the first half of 2012 was 14
per cent less than in the previous year. In the same period the number of
building permits granted was also down by 6 per cent, and there were 9 per cent
fewer new office building starts than in 2011. 

Consolidated revenue and result

Consolidated revenue for the third quarter was EUR 34.8 million (33.8), an
increase of 2.9 per cent on the previous year. Revenue for January-September
rose to EUR 101.9 million (91.7), representing growth of 11.1 per cent. This
was partly due to the acquisition of the Grundell companies at the end of 2011.
Revenue also grew in the normal sales channels in Finland. The situation proved
challenging in the other main market areas, as revenue declined in Business
Unit Sweden & Norway and Business Unit Poland compared with the corresponding
period of 2011. The decline in revenue was especially notable in Business Unit
Poland due to revenue from a larger project having been recognized last year.
In terms of comparable figures (excluding acquisitions) the Martela Group's
revenue grew in the review period by 6.1 per cent. 

The operating profit for the third quarter declined and was EUR 0.6 million
(2.4). The operating profit for January-September declined substantially and
was EUR ‑1.2 million (0.7). This year, the Group has continued its investments
that were commenced last year to develop and increase its business, which has
raised fixed costs. The objective of these investments is particularly to
strengthen the Group's service business and sales channels. As the investments
have not yet generated enough return, the Group's operating result weakened
despite the increase in revenue. Moreover, we have not been able to
sufficiently compensate for the decrease in revenue that has taken place in our
foreign business units by adjusting expenses. Therefore, the operating results
of the main business units outside Finland have weakened substantially compared
with the previous year. 

Codetermination negotiations were initiated during the review period to
establish a new service production unit. The purpose of the unit is to improve
the efficiency of operations, simplify customer service and ensure high
quality. The negotiations were concluded on 20 April 2012 and as a result the
number of personnel in the Group will decrease by nine. In addition, six
permanent office employees will be transferred to service production as
permanent factory employees. 

The result before taxes for January-September was EUR ‑1.9 million (0.2), and
the result after taxes was EUR ‑2.0 million (0.1). 


Martela Corporation
Board of Directors
Heikki Martela
Managing Director

ATTACHMENT: Martela's interim report January-September 2012


Additional information
Heikki Martela, Managing Director, tel. +358 50 502 4711
Markku Pirskanen, CFO, tel. +358 40 517 4606


Distribution
NASDAQ OMX Helsinki
Main news media
www.martela.com

Attachments:

Release Q3 2012.pdf