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2011-02-09 07:32:50 CET 2011-02-09 07:33:50 CET REGULATED INFORMATION This message has been corrected. Click here to view the corrected message Martela Oyj - Financial Statement ReleaseMARTELA CORPORATION'S FINANCIAL STATEMENTS RELEASE, 1 JANUARY - 31 DECEMBER 2010MARTELA CORPORATION FINANCIAL STATEMENTS RELEASE 9 February 2011 at 8.30 a.m. MARTELA CORPORATION'S FINANCIAL STATEMENTS RELEASE, 1 JANUARY - 31 DECEMBER 2010 Consolidated revenue for January-December amounted to EUR 108.4 million (95.3), an increase of 13.7 per cent on the previous year. Operating profit for the corresponding period was EUR 1.3 million (0.8). The cash flow from operating activities in January-December came to EUR -0.1 million (10.8). The equity ratio was 55.6 per cent (57.4) and the gearing ratio was -14.1 per cent (-33.9). Corporate restructuring during 2010 On 29 September 2010, Martela Corporation acquired the business operations of Martela A/S, its long-term partner and importer of its products in Denmark. The deal reinforces Martela Corporation's role and position as a supplier of comprehensive services on the Danish market. The business was handed over to Martela on 1 November 2010. In the deal, assets of DKK 1.9 million were transferred to Martela A/S, Martela Corporation's subsidiary. No goodwill arose in connection with the deal. The revenue of the acquired business was DKK 5.5 million in 2010. The operations of Pa-Ri Materia Oy, acquired by Martela Corporation in June, were transferred to Martela on 1 August 2010. Since the founding of Martela Poistomyynti, Martela has worked closely with Pa-Ri Materia to improve the recycling of used furniture. Through the deal, Pa-Ri Materia's stocks worth EUR 1,0 million and equipment worth EUR 0.2 million were transferred to Martela Corporation. Goodwill based on synergies of EUR 0.3 million were also entered in connection with the deal. In August 2010, Martela Corporation established a subsidiary in Hungary. Key figures (EUR million) 10-12 10-12 1-12 1-12 2010 2009 2010 2009 Net revenue 34.0 24.2 108.4 95.3 Change in revenue % 40.4 -41.0 13.7 -32.5 Operating profit excluding non-recurring items 1.0 0.4 1.3 0.8 Operating profit % 2.8 1.5 1.2 0.8 Return on investment, % 3.7 2.3 Return on equity, % 2.0 0.4 Equity to asset ratio, % 55.6 57.4 Gearing, % -14.1 -33.9 Earnings per share, eur 0.16 0.03 Earnings per share (diluted), eur 0.16 0.03 Average staff 601 636 Revenue/employee (EUR 1.000) 180.4 149.9 Accounting policies This financial statements release has been prepared in accordance with IAS 34, applying the same policies as were applied for the 2009 financial statements. The annual figures presented in this financial statements release have been audited. Market There were no significant changes in demand for office furniture in our key markets during 2010. The first signs of recovery in office construction are evident, but the impact of this on Martela will be delayed. Measured in terms of floor space fewer office buildings were completed in Finland in 2010 compared with the previous year (-10%). In the same period, more building permits were issued (+20%) than the previous year and new office building starts were also markedly up on 2009 (+66%). Group structure In August 2010, Martela Corporation established a subsidiary in Hungary. In the summer, Martela Corporation acquired an non-operating Danish company which acquired the operations and name of Martela A/S, Martela's former Danish import company in September 2010. No other changes have taken place in the group structure. Segment reporting The segments presented in the financial statements comply with the company's segment division. The comparison period figures have also been rendered in the same way. The business segments are based on the Group's internal organisational structure and internal financial reporting. Sales between segments are reported as part of the segments' revenue. The segments' results are their operating profits, because tax items and financial items are not allocated to the segments. The Group's assets and liabilities are not allocated or monitored by segment in the internal financial reporting. Revenue and the operating result are as recorded in the consolidated financial statements. Business Unit Finland is responsible for sales, marketing, service production and manufacturing in Finland. Martela has an extensive sales and service network covering the whole of Finland, with a total of 28 sales centres. The Business Unit has a logistics centre in Nummela. Business Unit Sweden and Norway is responsible for sales in Sweden and Norway, handled through about 70 dealers. In addition, the Business Unit has its own sales and showroom facilities at three locations: Stockholm and Bodafors in Sweden and Oslo in Norway. The Business Unit's logistics centre and order handling are also located in Bodafors. Business Unit Poland is responsible for the sales and distribution of Martela products in Poland and Eastern Central Europe. Sales in Poland are organized via the sales network maintained by the Business Unit and as of August 2010, a Martela subsidiary and sales centre has been established in Hungary. The company has altogether 7 sales centres in Poland. The Business Unit's principal export countries are Ukraine, the Czech Republic and Slovakia, in each of which sales are handled by established dealers. Business Unit Poland is based in Warsaw, where it has its logistics centre and administration. Revenue Consolidated revenue in January-December was EUR 108.4 million (95.3), an increase of 13.7 per cent on the previous year. The revenue of Business Unit Sweden and Norway was up by 8.0 per cent, while that of Business Unit Poland was down by -9.0 per cent, calculated in local currencies. The overall effect of exchange rate movements on consolidated revenue was approximately +2.8 percentage points. Fourth-quarter revenue rose to EUR 34.0 million (24.2), an increase of 40.4 per cent. Segment revenue (EUR million) Business Business unit Business Other Total unit Sweden & unit segment Finland Norway Poland s 1.1.2010-31.12.2010 External Revenue 71.8 18.6 9.3 8.7 108.4 Internal Revenue 0.1 1.0 0.0 15.5 16.6 Total 2010 71.9 19.6 9.3 24.2 1.1.2009-31.12.2009 External Revenue 63.9 15.8 9.5 6.2 95.3 Internal Revenue 0.0 0.5 0.0 16.5 17.0 Total 2009 63.9 16.3 9.5 22.7 External revenue 12.3 % 17.4 % -1.9 % 42.1 % 13.7 % change % Change in external revenue and share of total revenue 1-12 1-12 1-12 2010 2009 Change% Percentage 2009 Percentage Business unit Finland 71.8 63.9 12.3 % 66.2 % 63.9 67.0% Business unit Sweden & 18.6 15.8 17.4 % 17.1 % 15.8 16.6 % Norway Business unit Poland 9.3 9.5 -1.9 % 8.6 % 9.5 9.9 % Other segments 8.7 6.2 42.1 % 8.1 % 6.2 6.5 % Total 108.4 95.3 13.7 % 100.0 % 95.3 100.0 % Other Segments includes P.O. Korhonen Oy, Kidex Oy and Business Unit International, which is responsible for export markets. Consolidated result Cumulative operating profit excluding non-recurring items was EUR 1.3 million (0.8). Fourth-quarter operating profit was EUR 1.0 million (0.4). Profit before taxes was EUR 1.1 million (0.4), and profit after taxes was EUR 0.6 million (0.1). Operating profit excluding non-recurring items was 1.2 per cent of revenue (0.8). Operating profit by segment (EUR million) 1-12 1-12 2010 2009 Business Unit Finland 5.0 3.9 Business Unit Sweden & Norway -0.0 -1.0 Business Unit Poland -1.4 -0.7 Other Segments -0.5 -1.0 Other -1.8 -0.4 Total 1.3 0.8 Other Segments includes P.O. Korhonen Oy, Kidex Oy and Business Unit International, which is responsible for export markets. The item “Others” includes non-allocated Group functions and non-recurring sales gains and losses. Financial position The Group's financial position is strong. Interest-bearing liabilities at the end of the period amounted to EUR 5.9 million (8.5) and net liabilities were EUR -4.4 million (-10.8). The gearing ratio at the end of the year was -14.1 per cent (-33.9), and the equity ratio was 55.6 per cent (57.4). Net financial expenses were EUR -0.2 million (-0.4). The cash flow from operating activities in January-December was EUR -0.1 million (10.8). The balance sheet total at the end of December was EUR 56.7 million (55.6). Capital expenditure The Group's gross capital expenditure for January-December was EUR 4.7 million (2.2). In addition to production replacement investments, Martela invested in a new enterprise resource planning system during the period. Personnel The Group employed an average of 601 (636) persons, a decrease of 5.5 per cent. Average staff by region 1-12 1-12 2010 2009 Finland 451 479 Scandinavia 54 62 Poland and Hungary 91 94 Russia 5 1 Group total 601 636 Products and communications At the beginning of 2011, Martela combined its design, product development, marketing, corporate responsibility and brand organisations and product management into a single Products & Communication (PCO) unit. Petteri Kolinen, Martela's Design Director, has been appointed to head the new unit. The aim is to harmonise processes from management of product collections to product development, and from brand management to marketing. The first half of 2010 saw the launch of some interesting new products. A larger James+ chair was added to the James task chair range. The versatile range of adjustments possible with this task chair, which is designed by Iiro Viljanen, enhance the wellbeing of the chair's user. The MyBox desk and the Book space divider/shelf, previously presented as concepts, are now in production. These new products share the characteristics of versatility and new and innovative thinking. The MyBox desk, designed by Iiro Viljanen, has a lid that can be closed to protect the work items on the desk, with the lid's upper surface at the same time serving as a fresh desk top that can be used for a meeting, for example. Designed by Pekka Toivola, Book combines the characteristics of a space divider and a storage unit in a new way. The overall look and scope can be easily varied by combining the elements in various ways. In Finland, the service product range was expanded at the beginning of the year with an innovative addition to the services available for office premises. This consisted of a new system for keeping track of office furniture for inventory and other purposes. The system is based on radio frequency identification (RFID) and is a unique way of managing office property. The new system has been very well received by our customers. During 2010 the Martela Outlet chain was established in Finland to serve the needs of small businesses and private individuals. Recycling operations were acquired from Martela's partner, Martela Poistomyynti, and its two stores, which were given a clear concept and distinct image. Martela Outlet had four stores and the fifth one was opened in January 2011. Martela Outlet sells recycled Martela furniture which has been refurbished; the furniture is reasonably-priced and good as new. The more efficient reuse of furniture items also benefits businesses undergoing change who need a responsible solution that makes financial sense when recycling old furniture. Accountability According to our environmental policy, we supply products that are durable, guarantee a high-quality working environment and have the lowest possible environmental impact during their life cycle. We develop our manufacturing processes to reduce energy consumption and minimise emissions and risks to the environment. Our products are mainly recyclable and we continuously increase the share of recycled material in our production. We also reduce environmental impact by providing furniture rental, maintenance and recycling services. We manage our environmental work with an ISO 14001 certified environmental management system and we report our results annually. We promote environmental awareness among our staff, and our material and component suppliers. We require responsible management of environmental matters from all our suppliers. Shares Martela has two share series ('K shares' and 'A shares'), with each K share entitling its holder to 20 votes at a General Meeting and each A share entitling its holder to one vote. Private owners of K shares have a valid shareholder agreement that restricts the sale of the series' shares to other than existing holders of K shares. The total number of K shares is 604,800 and A shares is 3,550,800. In January-December, a total of 1,182,411 (811,183) of the company's series A shares were traded on NASDAQ OMX Helsinki Ltd, corresponding to 33.3 per cent (22.8) of the total number of series A shares. The value of trading turnover was EUR 8.4 million (5.7), and the share price was EUR 7.13 at the beginning of the year and EUR 7.77 at the end of the period. During January-December the share price was EUR 8.60 at its highest and EUR 6.26 at its lowest. At the end of December, equity per share was EUR 7.74 (7.88). Treasury shares Martela did not purchase any of its own shares for the treasury in 2010. On 31 December 2010, Martela owned a total of 67,700 Martela A shares, purchased at an average price of EUR 10.65. Martela's holding of treasury shares corresponds to 1.6 per cent of all shares and 0.4 per cent of all votes. Acquisition of shares for the share-based incentive scheme and the management of the scheme have been outsourced to an external service provider. These shares were entered under equity in the consolidated financial statements for 2010. On 31 December 2010, 60,517 (57,625) shares under the previous share-based incentive scheme for 2007-2009 were still undistributed. These shares will be included in the new share-based incentive scheme for 2010-2012. 2010 Annual General Meeting The Annual General Meeting of Martela Corporation was held on 16 March 2010. The meeting approved the financial statements for 2009 and discharged the members of the Board of Directors and the Managing Director from liability. The AGM decided, in accordance with the Board of Directors' proposal, to distribute a dividend of EUR 0.45 per share. Heikki Ala-Ilkka, Tapio Hakakari, Jori Keckman, Heikki Martela, Pekka Martela, Jaakko Palsanen and new member Pinja Metsäranta were elected as members of the Board of Directors. KPMG Oy Ab, 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 Martela shares. The authorization is for a maximum of 415,560 own A series shares acquired for the company. The authorization will be valid to the end of the 2011 Annual General Meeting. The AGM decided, in accordance with the Board of Directors' proposal, to amend the company's Articles of Association with respect to delivery of the meeting notice. The new Board of Directors convened after the Annual General Meeting and elected Heikki Ala-Ilkka as Chairman and Pekka Martela as Vice Chairman. Corporate Governance Martela Corporation is a Finnish limited liability company that is governed in its decision-making and management by Finnish legislation, especially the Finnish Limited Liability Companies Act, by other regulations concerning public listed companies, and by its Articles of Association. The company complies with the guidelines for insiders of NASDAQ OMX and the Corporate Governance Code 2010 for Finnish listed companies published by the Finnish Securities Market Association. The company has drawn up a report on its corporate governance system that is in line with the latest Corporate Governance Code. Further information on Martela's corporate governance: http://www.martela.com/In_English/Investors/Corporate_Governance Short-term risks The greatest risk to profit performance is related to the continuation of general economic uncertainty and the consequent effects on the overall demand for office furniture. Proposal of the Board of Directors for distribution of profit The Board proposes that a dividend of EUR 0.45 per share be distributed for 2010. The company's liquidity is good and it is the Board's opinion that the proposed distribution of profit will not endanger the company's solvency. The notice of Annual General Meeting will be published in a separate stock exchange release. Outlook for 2011 We anticipate the revenue of the Martela Group will increase in 2011 and profit will improve. Growth will come mainly from new businesses of which the most significant are the Danish subsidiary Martela A/S and Martela Corporation's Outlet chain. Events after the end of the financial year Artek Oy Ab and Martela Corporation signed an agreement on 17 January to establish a new company. On 1 February 2011, the new joint venture acquired the business of P.O. Korhonen, a subsidiary of Martela. The established joint venture will concentrate on manufacturing products marketed and sold by Martela and Artek. Martela will own 51%, and Artek 49%, of the new company. On the basis of the shareholder agreement Martela does not have control of the business, as stated in IFRS 3 and IAS 27. The new company, P.O. Korhonen, will operate as a contract manufacturer, focusing on the manufacture of wooden furniture using form-pressing technology. The joint venture will invest approximately EUR 500,000 in production technology in the beginning of the year. With the aid of a new surface treatment line it will be possible to develop efficient and environmentally friendly surface treatment methods. The company's revenue for 2011 is estimated at EUR 4-5 million. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1000) 2010 2009 2010 2009 1-12 1-12 10-12 10-12 Revenue 108 392 95 349 34 032 24 241 Other operating income 252 746 50 126 Employee benefits expenses -27 886 -25 988 -8 163 -6 255 Operating expenses -76 781 -66 206 -24 271 -16 929 Depreciation and impairment -2 664 -3 109 -695 -819 Operating profit/loss 1 313 793 953 365 Financial income and expenses -229 -365 -18 -85 Profit/loss before taxes 1 084 427 935 281 Income tax -446 -291 2 -151 Profit/loss for the period 638 137 937 129 Other comprehensive income Translation differences 312 77 73 57 Total comprehensive income 950 214 1 010 186 Basic earnings per share, eur 0,16 0,03 0,23 0,03 Diluted earnings per share, eur 0,16 0,03 0,23 0,03 Allocation of net profit for the period: To equity holders of the parent 638 137 937 129 Allocation of total comprehensive income: To equity holders of the parent 950 214 1 010 186 GROUP BALANCE SHEET (EUR 1000) 31.12.2010 31.12.2009 ASSETS Non-current assets Intangible assets 2 051 716 Tangible assets 12 721 11 862 Investments 260 38 Deferred tax assets 298 262 Pension receivables 250 197 Receivables 17 0 Investment properties 600 600 Total 16 197 13 675 Current assets Inventories 10 449 9 408 Receivables 19 793 13 210 Financial assets at fair value through profit and loss 1 107 1 094 Cash and cash equivalents 9 142 18 211 Total 40 492 41 923 Total assets 56 689 55 598 EQUITY AND LIABILITIES Equity Share capital 7 000 7 000 Share premium account 1 116 1 116 Other reserves 117 117 Translation differences -97 -409 Retained earnings 23 496 24 672 Treasury shares -1 212 -1 200 Share-based incentives 747 466 Total 31 167 31 762 Non-current liabilities Interest-bearing liabilities 3 197 3 518 Deferred tax liability 1 214 1 305 Other liabilities 240 0 Total 4 651 4 823 Current liabilities Interest-bearing 2 670 5 008 Non-interest bearing 18 201 14 006 Total 20 871 19 014 Total liabilities 25 522 23 837 Equity and liabilities, total 56 689 55 598 STATEMENT OF CHANGES IN EQUITY (EUR 1000) Equity attributable to equity holders of the parent Share Share Other Transl Retaine Treasur Total . d y capita premiu reserve diff. earning shares l m s s accoun t 1.1.2009 7 000 1 116 117 -486 27 605 -1 610 33 742 Other change -410 410 0 Total comprehensive 77 137 214 income Dividends -2 390 -2 390 Share-based 196 196 incentives 31.12.2009 7 000 1 116 117 -409 25 138 -1 200 31 762 1.1.2010 7 000 1 116 117 -409 25 138 -1 200 31 762 Other change -12 -12 Total comprehensive 312 638 950 income Dividends -1 814 -1 814 Share-based 281 281 incentives 31.12.2010 7 000 1 116 117 -97 24 243 -1 212 31 167 CONSOLIDATED CASH FLOW STATEMENT (EUR 1000) 2010 2009 Cash flows from operating activities 1-12 1-12 Cash flow from sales 103 207 104 678 Cash flow from other operating income 225 489 Payments on operating costs -102 873 -92 273 Net cash from operating activities before financial items and taxes 559 12 894 Interest paid -277 -516 Interest received 47 166 Other financial items -31 -2 Taxes paid -361 -1 780 Net cash from operating activities (A) -63 10 762 Cash flows from investing activities Capital expenditure on tangible and intangible assets -4 354 -1 663 Proceeds from sale of tangible and intangible assets 459 1 004 Capital expenditure on other investments -250 0 Proceeds of sale of other investments 31 0 Net cash used in investing activities (B) -4 114 -659 Cash flows from financing activities Proceeds from short-term loans 0 8 Repayments of short-term loans -506 -781 Repayments of long-term loans -2 297 -2 273 Dividends paid and other profit distribution -1 813 -2 390 Net cash used in financing activities (C) -4 616 -5 436 Change in cash and cash equivalents ( A+B+C) -8 793 4 667 (+ increase, - decrease) Cash and cash equivalents in the beginning of the period 19 304 14 620 Translation differences -261 17 Cash and cash equivalents at the end of period 10 249 19 304 SEGMENT REPORTING Segment revenue 2010 2009 2010 2009 1-12 1-12 10-12 10-12 Business Unit Finland external 71 780 63 898 22 300 16 419 internal 140 0 140 0 Business Unit Sweden and Norway external 18 584 15 834 5 725 4 712 internal 1 001 457 456 136 Business Unit Poland external 9 289 9 465 3 077 2 034 internal 28 15 28 -29 Other segments external 8 739 6 151 2 930 1 075 internal 15 477 16 464 4 170 3 863 Total external revenue 108 392 95 348 34 032 24 240 Segment operating profit/loss 2010 2009 2010 2009 1-12 1-12 10-12 10-12 Business Unit Finland 5 024 3 854 3 003 1 038 Business Unit Sweden and Norway -34 -966 341 -34 Business Unit Poland -1 371 -668 -352 -368 Other segments -495 -985 -608 -1 038 Others -1 811 -442 -1 431 767 Total operating profit/loss 1 313 793 953 365 Other Segments includes P.O. Korhonen Oy, Kidex Oy and Business Unit International, which is responsible for export markets. The item “Others” includes non-allocated Group functions and non-recurring sales gains and losses. 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 2010 to the end of 2012. KEY FIGURES/RATIOS 2010 2009 1-12 1-12 Revenue, EUR million 108,4 95,2 Change in revenue, % 13,7 -32,5 Exports and international operations, 32,7 29,2 EUR million In relation to revenue, % 30,2 30,6 Operating profit/loss, EUR million 1,3 0,8 In relation to revenue, % 1,2 0,8 Profit/loss before taxes, EUR million 1,1 0,4 In relation to revenue, % 1,0 0,4 Profit/loss for the period, EUR million 0,6 0,1 In relation to revenue, % 0,6 0,1 Gross capital expenditure on fixed assets, 4,7 2,2 EUR million In relation to revenue, % 4,4 2,3 Research and development expenses, EUR million 2,2 2,6 In relation to revenue, % 2,0 2,7 Average personnel 601 636 Change in personnel, % -5,5 -6,6 Personnel at year end 625 606 Turnover/employee, EUR thousand 180,4 149,9 Return on equity, % 2,0 0,4 Return on investment, % 3,7 2,3 Equity ratio, % 55,6 57,4 Interest-bearing net-debt, EUR million -4,4 -10,8 Gearing ratio, % -14,1 -33,9 Key share-related figures Number of shares, at the end of period (1000) 4 155,6 4 155,6 Basic earnings per share, EUR 0,16 0,03 Diluted earnings per share, EUR 0,16 0,03 Price/earnings ratio (PE) 48,6 237,7 Equity per share, EUR 7,74 7,88 Dividend/share, EUR 0,45 * 0,45 Dividend/earnings, % 281,3 1 500,0 Effective dividend yield, % 5,8 6,3 Price of A-share 31.12, EUR 7,77 7,13 * Proposal of the Board of Directors The largest shareholders, 31.12.2010 No.of shares % of total A+K-series votes Marfort Oy 524 574 38,8 Ilmarinen Mutual Pension Insurance Company 335 400 2,1 OP-Suomi Arvo 285 000 1,8 Fondita Nordic Micro Cap 205 000 1,3 Nordea Pankki Suomi Oyj 179 081 1,1 Palsanen Leena 175 634 6,5 Martela Heikki 169 234 7,4 Pohjola Vakuutus Oy 160 294 1,0 Oy Autocarrera Ab 116 000 0,7 Martela Matti T 115 238 7,8 Palsanen Jaakko 93 781 0,8 Lindholm Tuija 77 454 5,7 Martela Pekka 69 282 8,9 Martela Oyj 67 700 0,4 Evli Alexander Management Oy 60 517 0,4 Apteekkien eläkekassa B-osasto 55 000 0,4 Other shareholders 1 466 411 14,7 Total 4 155 600 100,0 The number of registrated Martela Oyj shares on 31.12.2010 was 4.155,600. The shares are divided into A and K shares. Each A share carries one vote and each K share 20 votes in a general shareholders' meeting. The company's Board of Directors and CEO together hold 8,9% of the shares and 17.3% of the votes. CONTINGENT LIABILITIES 31.12.2010 31.12.2009 Mortgages and shares pledged 14 899 14 480 Guarantees 0 0 Other commitments 385 256 Rental commitments 8 086 7 971 DEVELOPMENT OF SHARE PRICE 2010 2009 1-12 1-12 Share price at the end of period, EUR 7,77 7,13 Highest price, EUR 8,60 8,00 Lowest price, EUR 6,26 5,21 Average price, EUR 7,57 6,98 Annual Report 2010 will be published on Martela's homepages during the week 9. The first Interim Report for the period January 1 - March 31, 2011 will be published on April 27, 2011. Martela Corporation Board of Directors Heikki Martela, CEO For more information,please contact Heikki Martela, CEO, tel. +358 50 502 4711 Distribution NASDAQ OMX Helsinki Main News Media www.martela.com |
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