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2008-08-06 08:00:00 CEST 2008-08-06 08:13:18 CEST REGULATED INFORMATION Martela Oyj - Interim report (Q1 and Q3)MARTELA CORPORATION'S INTERIM REPORT, 1 JANUARY - 30 JUNE, 2008MARTELA CORPORATION INTERIM REPORT 6.8.2008 AT 9.00 a.m. MARTELA CORPORATION'S INTERIM REPORT, 1 JANUARY - 30 JUNE, 2008 Net revenue for January-June was EUR 69.4 million (60.2), an increase of 15.2 per cent. Operating profit was EUR 5.1 million (4.2), including non-recurring income from the sale of assets totalling EUR 0.7 million (2.8). The equity-to-assets ratio was 49.8 per cent (45.3) and gearing was 1.3 per cent (31.2). It is expected that the net revenue for 2008 will exceed last year's level, and that the whole year's operating profit before non-recurring items will be better than the previous year. Key figures -------------------------------------------------------------------------------- | | 4-6 | 4-6 | 1-6 | 1-6 | 1-12 | -------------------------------------------------------------------------------- | | 2008 | 2007 | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Revenue | 33.3 | 30.4 | 69.4 | 60.2 | 128.4 | -------------------------------------------------------------------------------- | Change in revenue % | 9.7 | 11.6 | 15.2 | 11.4 | 7.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 1.6 | 1.3 | 4.4 | 1.4 | 5.8 | | excluding non-recurring | | | | | | | items | | | | | | -------------------------------------------------------------------------------- | Operating profit % | 4.9 | 4.3 | 6.3 | 2.4 | 4.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on investment, % | | | 23.7 | 20.4 | 19.6 | -------------------------------------------------------------------------------- | Return on equity, % | | | 23.0 | 23.2 | 19.8 | -------------------------------------------------------------------------------- | Equity to asset ratio, % | | | 49.8 | 45.3 | 46.7 | -------------------------------------------------------------------------------- | Gearing, % | | | 1.3 | 31.2 | 16.0 | -------------------------------------------------------------------------------- | Average staff | | | 680 | 648 | 663 | -------------------------------------------------------------------------------- | Revenue/employee | | | 102.1 | 93.0 | 193.7 | -------------------------------------------------------------------------------- Accounting policies The interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, as approved by the EU. Market The demand for office furniture continued to grow in 2007 and in the first half-year of 2008. Office construction is expected to continue to be lively in the second half of 2008. Group structure There were no changes in Group structure during the review period or the comparison period. Segment reporting Martela has a single primary segment, namely the furnishing of offices and public spaces. Net revenue and result are as recorded in the consolidated financial statements. The Group's secondary reporting segment is its customers by geographical location. Net revenue Net revenue for January-June grew to EUR 69.4 million (60.2), an increase of 15.2 per cent. The large projects carried out during the first quarter contributed to this growth. Net revenue for the second quarter grew to EUR 33.3 million (30.4), an increase of 9.7 per cent. Growth was particularly strong in Finland, and in Poland and its neighbouring areas. During the first half-year, performance in Scandinavia was not according to plan and net revenue decreased by 12.5 per cent. Invoicing by main market areas -------------------------------------------------------------------------------- | | 4-6 | 4-6 | 1-6 | 1-6 | 1-12 | -------------------------------------------------------------------------------- | | 2008 | 2007 | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finland | 23.5 | 20.7 | 49.5 | 40.3 | 85.8 | -------------------------------------------------------------------------------- | Scandinavia | 5.2 | 5.9 | 10.9 | 12.4 | 26.4 | -------------------------------------------------------------------------------- | Poland and surrounding | 3.4 | 2.7 | 6.5 | 4.9 | 11.1 | | areas | | | | | | -------------------------------------------------------------------------------- | Other areas | 1.1 | 1.0 | 2.4 | 2.7 | 5.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | 33.2 | 30.3 | 69.3 | 60.3 | 128.7 | -------------------------------------------------------------------------------- Change in invoicing and proportion of consolidated invoicing -------------------------------------------------------------------------------- | | 1-6 | 1-6 | | | 1-12 | | -------------------------------------------------------------------------------- | | 2008 | 2007 | Change | Percenta | 2007 | Percentag | | | | | | ge | | e | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finland | 49.5 | 40.3 | 22.7 % | 71.4 % | 85.8 | 66.7 % | -------------------------------------------------------------------------------- | Scandinavia | 10.9 | 12.4 | -12.5 | 15.7 % | 26.4 | 20.5 % | | | | | % | | | | -------------------------------------------------------------------------------- | Poland and | 6.5 | 4.9 | 33.7 % | 9.4 % | 11.1 | 8.6 % | | surrounding | | | | | | | | areas | | | | | | | -------------------------------------------------------------------------------- | Other areas | 2.4 | 2.7 | -9.0 % | 3.5 % | 5.4 | 4.2 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | 69.3 | 60.3 | 14.9 % | 100.0 % | 128.7 | 100.0 % | -------------------------------------------------------------------------------- Consolidated result The consolidated result for the second quarter was according to plan and the operating profit was EUR 1.7 million (2.6). The result was increased by EUR 0.1 million in non-recurring income from the sale of assets (1.3). The result for the first half-year was a clear improvement and the operating profit was EUR 5.1 million (4.2). This includes EUR 0.7 million (2.8) in non-recurring income from the sale of assets. The sales gain recognised in early 2008 relates to the sale of land in Poland. The operating profit excluding non-recurring items was EUR 4.4 million (1.4). This year, profit has developed positively in Finland, and in Poland and its neighbouring areas. A decrease in net revenue in Scandinavia has negatively affected the area's profit performance. Profit before taxes rose to EUR 4.8 million (3.9), and profit after taxes was EUR 3.5 million (3.0). The operating profit percentage excluding non-recurring items was 6.3 per cent (2.4). Financial position The Group's financial position remained stable. At the end of the review period, net interest-bearing liabilities were EUR 13.0 million (15.4), and the net debt was EUR 0.4 million (8.4). At the beginning of 2008, the net debt was EUR 4.7 million. At the end of the review period, gearing was 1.3 per cent (31.2) and the equity-to-assets ratio was 49.8 per cent (45.3%) Net financial expenses were EUR -0.3 million (-0.3). Cash flow from operating activities in January-June was EUR 6.3 million (5.0). The end-of-period balance sheet total was EUR 63.0 million (59.9). Capital expenditure The Group's gross capital expenditure for January-June was EUR 1.6 million (1.8) 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. Staff In January-June, the group employed an average of 680 (648) persons, representing growth of 4.9 per cent. At the end of June, the Group employed 723 (689) persons. Average staff by region -------------------------------------------------------------------------------- | | 1-6 | 1-6 | 1-12 | -------------------------------------------------------------------------------- | | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finland | 518 | 516 | 518 | -------------------------------------------------------------------------------- | Scandinavia | 73 | 67 | 71 | -------------------------------------------------------------------------------- | Poland | 89 | 65 | 74 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group total | 680 | 648 | 663 | -------------------------------------------------------------------------------- Product development and collection Product development and collection management are the responsibility of two Group-level organisations: the Office product line, responsible for workstation furniture, and the Surroundings product line, responsible for furniture for surroundings and other public spaces. Exhibited at Martela's stand at the Stockholm Furniture Fair in February were new products representing both product lines, as well as two fascinating new concepts. The exhibited new 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. The surroundings furniture displayed for the first time featured the Skybar chair designed by Geir Sætveit and the Movie sofa by Rane Vaskivuori. The concepts presented by Martela in Stockholm were favourably received; both the Mybox desk by Iiro Viljanen and the Book shelf/space divider by Pekka Toivola aroused discussion and interest, as had been hoped for. At the Milan Furniture Fair in April, Martela set up its own exhibition with the theme “under THE tree”. The exhibition was named after The Tree space divider, designed by Professor Eero Aarnio. Shares During January-June, 483,137 (969,714) of the company's A shares were traded on the OMX Nordic Exchange Helsinki, corresponding to 13.6 per cent (27.3) of all A shares. The higher trading figure of the comparison period in 2007 was due partly to the acquisition of shares by Evli Alexander Management Oy for the three-year share-based incentive system. At that time, 143,166 shares were acquired for EUR 1.2 million in cash. The value of trading during the review period was EUR 4.4 million (8.3), and the share price was EUR 8.35 at the beginning and EUR 8.40 at the end of the period. During January-June the share price was EUR 10.05 at its highest and EUR 7.32 at its lowest. At the end of June, equity per share was EUR 7.65 (6.62). Treasury shares The company did not purchase any Martela shares for the treasury in January-June. On 30 June 2008, Martela owned 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. 2008 Annual General Meeting The Annual General Meeting was held on 1 April 2008. The meeting approved the financial statements and discharged the responsible parties from liability for the 2007 financial year. 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, a firm of 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 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 Companies' Act which entered into force on 1 September, 2006. 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 events requiring reporting have taken place since the January-June 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 growth and the consequent overall demand for office furniture. The price trend of purchased materials and components also affects the short-term outlook. The company's 2007 annual report presents the risks related to Martela's business operations in more detail. Outlook for 2008 The overall outlook for 2008 is still favourable. The outlook is supported, among other things, by the solid growth of sales and profit early in the year and the general positive trend in office construction. It is expected that the whole year's operating profit before non-recurring items will be better than the previous year. GROUP INCOME STATEMENT (EUR 1000) 2008 2006 2008 2007 2007 1-6 1-6 4-6 4-6 1-12 Revenue 69.419 60.240 33.329 30.373 128.445 Other operating income 0.981 2.961 0.252 1.280 3.023 Employee benefits expenses -16.248 -14.557 -8.368 -7.589 -28.723 Operating expenses -47.615 -42.839 -22.773 -20.705 -91.236 Depreciation and impairment -1.456 -1.564 -0.722 -0.788 -3.231 Operating profit/loss 5.081 4.241 1.719 2.571 8.278 Financial income and expenses -0.262 -0.320 -0.073 -0.154 -0.726 Profit/loss before taxes 4.818 3.921 1.645 2.417 7.552 Income tax -1.332 -0.910 -0.555 -0.704 -2.165 Profit/loss for the period 3.487 3.011 1.091 1.713 5.387 Basic earnings per share, eur 0.85 0.74 0.26 0.42 1.32 Diluted earnings per share, eur 0.85 0.74 0.26 0.42 1.32 GROUP BALANCE SHEET (EUR 1000) 30.6.2008 31.12.2007 30.06.2007 ASSETS Non-current assets Intangible assets 0.654 0.633 0.773 Tangible assets 14.148 14.151 14.286 Investments 0.039 0.053 0.054 Deferred tax assets 0.246 0.240 0.246 Pension receivables 0.035 0.035 0.018 Receivables 0.630 0.623 0.000 Investment properties 0.600 1.203 1.175 Total 16.353 16.938 16.552 Current assets Inventories 13.601 13.635 15.088 Receivables 20.425 23.536 21.322 Financial assets at fair value 2.033 2.004 1.979 through profit and loss Cash and cash equivalents 10.538 7.686 4.940 Total 46.597 46.861 43.329 Total assets 62.950 63.800 59.881 EQUITY AND LIABILITIES Equity attributable to shareholders of the parent 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 -0.085 -0.129 -0.143 Retained earnings 23.671 22.060 19.704 Treasury shares -0.721 -0.721 -0.721 Share-based incentives 0.157 0.067 0.000 Total 31.255 29.510 27.073 Non-current liabilities Interest-bearing liabilities 9.280 10.453 11.558 Deferred tax liability 1.486 1.553 0.529 Total 10.766 12.006 12.087 Current liabilities Interest-bearing 3.710 3.969 3.800 Non-interest bearing 17.218 18.315 16.922 Total 20.928 22.284 20.722 Total liabilities 31.695 34.290 32.808 Equity and liabilities, total 62.950 63.800 59.881 STATEMENT OF CHANGES IN EQUITY (EUR 1000) 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. 01.01.2007 7.000 1.116 0.117 -0.129 17.542 -0.721 24.925 Translation diff. -0.014 -0.014 Other change 0.173 0.173 Profit/loss for the period 3.011 3.011 Total rec. income and expense -0.014 3.184 3.170 Dividends -1.022 -1.022 30.06.2007 7.000 1.116 0.117 -0.143 19.704 -0.721 27.073 1.1.2008 7.000 1.116 0.117 -0.129 22.127 -0.721 29.510 Translation diff. 0.044 0.044 Other change 0.258 0.258 Profit/loss for the period 3.487 3.487 Total rec. income and expense 0.044 3.745 3.789 Dividends -2.044 -2.044 30.06.2008 7.000 1.116 0.117 -0.085 23.828 -0.721 31.255 CONSOLIDATED CASH FLOW STATEMENT (EUR 1000) 2008 2007 2007 1-6 1-6 1-12 Cash flows from operating activities Cash flow from sales 71.396 64.122 130.833 Cash flow from other operating income 0.277 0.243 0.550 Payments on operating costs -64.227 -59.012 -121.090 Net cash from operating activities before financial items and taxes 7.446 5.353 10.294 Interest paid -0.378 -0.374 -0.842 Interest received 0.117 0.021 0.082 Other financial items -0.020 -0.005 -0.021 Dividends received - 0.001 0.001 Taxes paid -0.897 -0.025 0.382 Net cash from operating activities (A) 6.268 4.972 9.895 Cash flows from investing activities Capital expenditure on tangible and intangible assets -1.321 -0.989 -2.256 Proceeds from sale of tangible and intangible assets 1.492 3.877 2.028 Proceeds from sale of shares in subsidiaries - - 2.150 Loans granted - -1.193 -1.193 Repayments of loans receivables 0.022 0.011 0.011 Net cash used in investing activities (B) 0.193 1.706 0.740 Cash flows from financing activities Proceeds from short-term loans - - 0.976 Repayments of short-term loans -0.482 -0.355 -1.704 Repayments of long-term loans -1.190 -2.296 -3.108 Dividends paid and other profit distribution -1.972 -1.022 -1.022 Net cash used in financial activities (C) -3.644 -3.672 -4.858 Change in cash and cash equivalents (A+B+C) 2.817 3.006 5.778 (+ increase, - decrease) Cash and cash equivalents at the beginning of period 9.691 3.911 3.911 Translation differences 0.063 0.002 0.002 Cash and cash equivalents at the end of period 12.571 6.919 9.691 SEGMENT REPORTING One primary segment has been defined for Martela, namely the furnishing of offices and public places. The revenue and result are as recorded in the consolidated financial statements. The Group's secondary reporting segment has been defined according to the geographical location of customers. TANGIBLE ASSETS 1.1-30.6.2008 Land Buildings Machinery Other Work in areas & equipment tangibles progress Acquisitions 0.000 0.020 0.823 0.005 0.569 Decreases 0.000 -0.008 -0.126 0.000 0.000 TANGIBLE ASSETS 1.1-30.6.2007 Land Buildings Machinery Other Work in areas & equipment tangibles progress Acquisitions 0.000 0.688 0.565 0.006 0.328 Decreases -0.614 -0.988 -0.022 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 2007 to the end of 2009. KEY FIGURES/RATIOS 2008 2007 2007 1-6 1-6 1-12 Operating profit/loss 5.081 4.241 8.278 - in relation to revenue 7.3 7.0 6.4 Profit/loss before taxes 4.818 3.921 7.552 - in relation to revenue 6.9 6.5 5.9 Profit/loss for the period 3.487 3.011 5.387 - in relation to revenue 5.0 5.0 4.2 Basic earnings per share, eur 0.85 0.74 1.32 Diluted earnings per share, eur 0.85 0.74 1.32 Equity/share, eur 7.65 6.62 7.22 Equity ratio 49.8 45.3 46.7 Return on equity * 23.0 23.2 19.8 Return on investment * 23.7 20.4 19.6 Interest-bearing net-debt, eur million 0.4 8.4 4.7 Gearing ratio 1.3 31.2 16.0 Capital expenditure, eur million 1.6 1.8 3.2 - in relation to revenue, % 2.3 3.0 2.5 Personnel at the end of period 723 689 655 Average personnel 680 648 663 Revenue/employee, eur thousand 102.1 93.0 193.7 Key figures are calculated according to formulae as presented in Annual Report 2007. * When calculating return on equity and return on investment the profit/loss for the period has been multiplied in interim reports. CONTINGENT LIABILITIES 30.6.2008 31.12.2007 30.6.2007 Mortgages and shares pledged 18.841 18.851 18.916 Guarantees 0.000 0.000 0.104 Other commitments 0.322 0.317 0.314 RENTAL COMMITMENTS 9.989 10.674 11.701 DEVELOPMENT OF SHARE PRICE 2008 2007 2007 1-6 1-6 1-12 Share price at the end of period, EUR 8.40 9.10 8.35 Highest price, EUR 10.05 9.56 10.35 Lowest price, EUR 7.32 6.39 6.39 Average price, EUR 9.04 8.53 8.64 This interim report has not been audited Helsinki, August 5, 2008 Martela Oyj Board of Directors Heikki Martela CEO For more information, please contact Heikki Martela, CEO, tel. +358 50 502 4711 Mats Danielsson, Finance Director, tel. +358 50 394 8575 Distribution OMX Nordic Exchange Main news media www.martela.com |
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