Martela Oyj - Interim report (Q1 and Q3)

MARTELA CORPORATION INTERIM REPORT 1 Jan–30 September 2016

MARTELA CORPORATION INTERIM REPORT            1 November 2016 at 8.30 a.m.



MARTELA CORPORATION INTERIM REPORT 1 Jan–30 September 2016

The January–September 2016 revenue was on the previous year’s level and the
operating result improved. Strategy was further refined. 

JULY–SEPTEMBER 2016

  -- Revenue EUR 35.2 million (7–9/2015: 38.7), change -9.1%
  -- Comparable operating result improved by 18.6% and was EUR 3.6 million (3.0)
  -- Comparable operating profit per revenue was 10.2 % (7.9 %)
  -- Result for the period improved by 12.9% and was EUR 2.7 million (2.4)
  -- Earnings per share amounted to EUR 0.67 (0.59)

JANUARY-SEPTEMBER 2016

  -- Revenue was on the previous year’s level at EUR 94.9 million (95.3), change
     -0.5%
  -- Comparable operating result improved by 134.2% and was EUR 4.6 million
     (2.0)
  -- Comparable operating profit per revenue was 4.9% (2.1%)
  -- Result for the period improved by 156.2% and was EUR 2.6 million (1.0)
  -- Earnings per share amounted to EUR 0.62 (0.24)

OUTLOOK FOR 2016 (NO CHANGE)

The outlook for 2016 has not changed. The Martela Group anticipates that its
revenue in 2016 will remain at the previous year’s level and its IFRS operating
result will show a slight year-on-year improvement. Due to normal seasonal
variations, the Group’s operating result accumulates mainly during the second
half of the year. 

KEY FIGURES, MEUR

                                2016  2015  Change  2016  2015  Change   2015
                                 7-9   7-9       %   1-9   1-9       %   1-12
Revenue                         35,2  38,7    -9,1  94,9  95,3    -0,5  132,8
                                                                             
Comparable operating result*     3,6   3,0    18,6   4,6   2,0   134,2    4,1
Comparable operating result %*  10,2   7,9           4,9   2,1            3,1
Operating result                 3,6   3,0    18,6   4,1   2,0   104,9    4,1
Operating result %              10,2   7,9           4,3   2,1            3,1
                                                                             
Result before taxes              3,5   2,9    23,1   3,6   1,5   150,1    3,4
Result for the period            2,7   2,4    12,9   2,6   1,0   156,2    2,5
                                                                             
Earnings/share, eur             0,67  0,59    13,6  0,62  0,24   158,3   0,61
                                                                             
Return on investment %          42,6  34,9          16,0   7,7           12,1
Return on equity %              46,8  47,1          14,5   6,4           11,6
Equity ratio %                                      46,3  36,8           40,9
Gearing %                                           -8,9  41,6           16,6

* Martela applies the European Securities and Markets Authority (ESMA)
guidelines on disclosing alternative performance measures. The guidelines took
effect on 3 July 2016. Martela discloses alternative performance measures to
illustrate the financial performance of its business operations and to improve
intra-period comparability. The alternative performance measures should not be
considered as substitute for the IFRS performance measures. The reconciliation
of the ESMA performance measures with the most directly reconcilable IFRS-based
items has been presented in the financial statements information of this
interim financial report. 

MATTI RANTANIEMI, CEO:

“Our business operations improved positively in the third quarter. The revenue
level and improved operating efficiency brought stability to Martela's
operations. The cash flow from our operations was also good. 

Revenue for January–September was EUR 94.9 million, which is at the previous
year’s level (95.3). Consolidated operating result increased by 18.6% in the
third quarter and was EUR 3.6 million (3.0). Comparable consolidated operating
result for the January–September period was EUR 4.6 million (2.0), which is an
improvement of 134.2% on the comparison period. Cash flow from operating
activities in January–September came to EUR 8.1 million (-1.0). 

With the positive development of Business Unit Finland & Sweden the
consolidated revenue for the review period was on the 2015 level. In contrast,
under the Business Unit International, Poland’s revenue declined clearly and
Norway’s slightly during the review period. The timing of the final major
projects in Russia to the third quarter increased the revenue of Russian
operations. Other exports grew. 

The discontinuation of Martela’s own sales operations in Poland and Russia,
announced in June, has proceed according to plan. The Warsaw production and
purchasing unit will continue operations and is an integral part of Martela’s
Customer Supply Management organisation. The closure of the Bodafors plant and
logistics centre in Sweden, which was announced earlier, is nearly completed. 

In the review period, we continued to refine the Group’s Lifecycle strategy.
Our new strategy corresponds to the way work is changing and is founded on
Nordic strengths. Our strategic direction is defined by our new mission “Better
working” and our new vision “People-centric workplaces”. Martela provides
workplaces designed to meet their users’ needs where the users and their
wellbeing are in the core. 

The division of responsibilities among the members of the Management Team was
adjusted during the period  to correspond to the company's strategy. 

In the remaining part of this year we will continue to focus on implementing
the Lifecycle strategy in the Nordic countries and on improving our
profitability. Due to the nature of its business, Martela’s operating result
accumulates mainly during the second half of the year. In 2016 this took place
in the beginning of the period in question.” 

MARKET

The demand for Martela’s products and services is fundamentally affected by the
general economic situation and by the extent to which companies and the public
sector need to use their space more efficiently and make their workplaces more
functional. 

The market situation in the third quarter was similar to that of the first part
of the year. 

On the Finnish market, the need for many companies to adjust their operations
to new business realities has generated an often-substantial need to develop
working environments. The Martela Lifecycle model responds well to such needs,
even when companies are faced with challenging changes in their business. To
this end, we have focused on our competence in workplace specification,
planning and maintenance services. We can offer even more carefully specified
workplaces that are a good fit for customer needs. As a result, the Finnish
market has still performed moderately well from Martela’s perspective, despite
being challenging. 

The positive performance of the Swedish economy offers Martela an opportunity
to increase its business there. In addition, in Sweden the Martela Lifecycle
model is seen as a good fit with market needs because in the same way as in
Finland, Swedish companies also understand the importance of shaping and
developing working environments to meet new business needs and challenges. 

REVENUE AND RESULT

Revenue and result for July-September 2016

Revenue declined in July–September by 9.1% and was EUR 35.2 million (38.7). The
revenue of the Business Unit Finland & Sweden declined by 5.0 % from the
previous year. Finnish revenue was on the previous year’s level, while in
Sweden it declined due to the timing of projects. The revenue of the Business
Unit International declined 31% from the previous year. In Poland and Norway
revenue declined while in Russia and other international operations it grew. 

The consolidated operating result for the third quarter grew by 18.6% and was
EUR 3.6 million (3.0). 

No costs with impact on comparability were recorded in the third quarter. Costs
from the discontinuation of the Polish and Russian operations were recorded in
the previous quarter. 

Operating result increased due to improvement in efficiency of operations.

Profit for the July–September period was EUR 2.7 million (2.4), and growth was
12.9%. 

Revenue and result for January-September 2016

Revenue for January–September was EUR 94.9 million, which is at the previous
year’s level (95.3). The revenue of the Business Unit Finland & Sweden grew by
5.2% on the previous year. Finnish revenue for the first three quarters was on
last year’s level while in Sweden the corresponding figure improved
year-on-year. The revenue of the Business Unit International declined 29.4%
from the previous year. In Poland and Norway revenue declined while in Russia
and other international operations it grew. 

As a result of the discontinuation of the Polish sales operation revenue has
declined in that market and the decline is expected to continue in the fourth
quarter. In the Russian market third-quarter performance was strong but as a
result of discontinuing sales operations in Russia revenue will fall in the
final quarter. 

The discontinuation of Martela’s own sales operations in Poland and Russia,
announced in June, has proceed according to plan. The Warsaw production and
purchasing unit will continue operations and is an integral part of Martela’s
Customer Supply Management organisation. The closure of the Bodafors plant and
logistics centre, which was announced earlier, is nearly completed. 

Comparable consolidated operating result for the January–September period was
EUR 4.6 million (2.0), which is 134.2% better than in the comparison period.
EUR 0.6 million was recorded in the second quarter in costs affecting
comparability, which arose from the discontinuation of the Polish and Russian
sales operations. As a result, the January–September IFRS operating result was
EUR 4.1 million (2.0), which is 104.9% better than in the comparison period. 

Profit for the July–September period was EUR 2.6 million (1.0), and growth was
156.2%. 

Martela’s full interim report for January - September 2016 is included in PDF
format as an attachment to this release. 



Martela Oyj
Board of Directors


Matti Rantaniemi
CEO

ATTACHEMENT: Martela’s interim report January – September 2016

For more information, please contact
Matti Rantaniemi, CEO, tel. +358 50 465 8194
Riitta Järnstedt, CFO, tel. +358 40 508 4993


Distribution
Nasdaq Helsinki
Main News Media

www.martela.com


Our strategic direction is defined by our mission “Better working” and our
vision “People-centric workplaces”. Martela provides people centric workplaces
where the users and their wellbeing  are in the core.  We will focus on the
Nordic countries, as the Nordic countries are forerunner in hybrid working
environments with common open work culture background and needs.

Liitteet:

2016 0111 interim report 1-9 2016.pdf