2009-04-29 08:00:00 CEST
2009-04-29 08:00:02 CEST
REGULATED INFORMATION
Martela Oyj - Interim report (Q1 and Q3)
MARTELA CORPORATION'S INTERIM REPORT, 1 JANUARY - 31 MARCH, 2009
MARTELA CORPORATION STOCK EXCHANGE RELEASE 29.4.2009 at 09.00 a.m.
MARTELA CORPORATION'S INTERIM REPORT, 1 JANUARY - 31 MARCH, 2009
Consolidated net revenue for January-March was EUR 24.0 million (36.1), a
decrease of 33.4 per cent. Operating profit was EUR -0.1 million (3.4),
including a gain of EUR 0.0 million (0.6) from the sale of assets. Cash flow
from operating activities in January-March was EUR 7.7 million (2.7). The
equity-to-assets ratio was 54.7 per cent (47.2) and gearing improved
significantly and was -27.9 per cent (7.7).
Key figures
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| | 1-3 | 1-3 | 1-12 |
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| EUR million | 2009 | 2008 | 2008 |
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| Net revenue | 24.0 | 36.1 | 141.2 |
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| Change in revenue % | -33.4 | 20.8 | 9.9 |
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| Operating profit excluding | -0.1 | 2.8 | 10.2 |
| non-recurring items | | | |
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| Operating profit % | -0.3 | 7.7 | 7.2 |
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| Return on investment, % | 0.2 | 31.1 | 25.2 |
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| Return on equity, % | -2.7 | 32.2 | 23.8 |
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| Equity to asset ratio, % | 54.7 | 47.2 | 52.2 |
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| Gearing, % | -27.9 | 7.7 | -11.0 |
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| Earnings per share, eur | -0.06 | 0.59 | 1.89 |
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| Earnings per share (diluted), eur | -0.06 | 0.59 | 1.89 |
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| Average staff | 649 | 660 | 681 |
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| Revenue/employee (EUR 1.000) | 37.0 | 54.7 | 207.3 |
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Accounting policies
The interim report has been prepared in accordance with IAS 34, Interim
Financial Reporting, as approved by the EU. As from 1 January 2009, Martela
Group has applied the following new and amended standards: IFRS 8, Operating
Segments and IAS 1, Presentation of Financial Statements. In other respects, the
accounting policies are the same as those applied in the 2008 financial
statements.
Market
The demand for office furniture decreased in comparison with the figure for the
same quarter in 2008. New office construction in 2008 was slower than in the
previous year and fewer building permits were granted, too.
Group structure
There were no changes in Group structure during the review period or the
comparison period.
Segment reporting
The segments presented in the interim report comply with the company's new
segment division. The comparison year's 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 presented are their operating profits, because tax items and
financial items are not allocated by segment. The Group's assets and liabilities
are not allocated or monitored by segment for the purposes of internal financial
reporting. Net revenue and operating profit are as recorded in the consolidated
financial statements.
Business Unit Finland is responsible for sales and marketing, service production
and manufacturing in Finland. There are 24 service locations in Finland, 9 of
which are Martela's and the rest are entrepreneur-run Martela centres. The
Business Unit's logistics centre is located 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. The company has altogether 7
sales centres in Poland. The Business Unit's principal export countries are
Ukraine, Hungary, 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 and administration.
Net revenue
Net revenue for January-March was EUR 24.0 million (36.1), a decrease of 33.4
per cent. The drop in net revenue was partly due to the exceptionally large
projects carried out in Finland during the previous year's comparison period.
Exchange rate fluctuations also contributed to the change in consolidated net
revenue. The effect of exchange rate movements was approximately 3 percentage
units.
Net revenue by segment
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| EUR million | | | | | |
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| | Business | Business | Business | Other | Total |
| | unit | unit | unit | segments | |
| | Finland | Sweden & | Poland | | |
| | | Norway | | | |
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| 1.1.2009-31.3.2009 | | | | | |
--------------------------------------------------------------------------------
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| External Revenue | 17.1 | 4.3 | 1.6 | 1.0 | 24.0 |
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| Internal Revenue | 0.0 | 0.0 | 0.0 | 4.2 | 4.2 |
--------------------------------------------------------------------------------
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| Total 2009 | 17.1 | 4.3 | 1.6 | 5.2 | |
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| 1.1.2008-31.3.2008 | | | | | |
--------------------------------------------------------------------------------
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| External Revenue | 25.3 | 5.3 | 3.1 | 2.4 | 36.1 |
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| Internal Revenue | 0.0 | 0.1 | 0.0 | 5.0 | 5.1 |
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| Total 2008 | 25.3 | 5.4 | 3.1 | 7.4 | |
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| External revenue | -32.3 | -18.7 | -48.2 | -60.8 | -33.4 |
| change % | | | | | |
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Other segments include PO Korhonen Oy, Kidex Oy and Business Unit International,
which is responsible for export markets.
Change in external revenue and percentage of consolidated net revenue
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| | 1-3 | 1-3 | | | 1-12 | |
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| EUR million | 2009 | 2008 | Change | Percenta | 2008 | Percentag |
| | | | % | ge | | e |
--------------------------------------------------------------------------------
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| Business unit | 17.1 | 25.3 | -32.3 | 71.3 | 101.4 | 71.9 |
| Finland | | | | | | |
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| Business unit | 4.3 | 5.3 | -18.7 | 18.1 | 18.7 | 13.2 |
| Sweden & Norway | | | | | | |
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| Business unit | 1.6 | 3.1 | -48.2 | 6.7 | 12.7 | 9.0 |
| Poland | | | | | | |
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| Other segments | 1.0 | 2.4 | -60.8 | 3.9 | 8.4 | 5.9 |
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| Total | 24.0 | 36.1 | -33.4 | 100.0 % | 141.2 | 100.0 % |
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Consolidated result
The consolidated operating profit for the first quarter was EUR -0.1 million
(3.4). The operating profit decreased from the previous year mainly due to the
fall in revenue. The 2008 first-quarter figure includes EUR 0.6 million in
non-recurring income from the sale of assets.
Profit before taxes was EUR -0.2 million (3.2), and profit after taxes was EUR
-0.2 million (2.4). The operating profit excluding non-recurring items was -0.3
per cent of net revenue (7.7).
Operating profit by segment
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| | 1-3 | 1-3 | 1-12 |
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| EUR million | 2009 | 2008 | 2008 |
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| Business Unit Finland | 1.6 | 3.7 | 14.5 |
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| Business Unit Sweden & Norway | -0.2 | -0.7 | -1.6 |
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| Business Unit Poland | -0.3 | -0.1 | -0.6 |
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| Other Segments | -0.2 | 0.2 | -0.4 |
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| Other | -1.0 | 0.3 | -1.1 |
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| Total | -0.1 | 3.4 | 10.8 |
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Other segments include PO 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 remains strong. At the end of the first quarter,
net interest-bearing liabilities were EUR 10.4 million (13.9), and net debt was
EUR -8.7 million (2.3). At the end of the quarter, the gearing ratio was -27.9
per cent (7.7) and the equity-to-assets ratio was 54.7 per cent (47.2). Net
financial expenses were EUR -0.1 million (-0.2).
Cash flow from operating activities in January-March was EUR 7.7 million (2.7).
The balance sheet total at the end of the first quarter was EUR 56.9 million
(63.5).
Capital expenditure
The Group's gross capital expenditure totalled EUR 0.4 million (0.9) in
January-March. The capital expenditure mainly concerned production replacements
and IT investments.
Staff
In January-March, the Group employed an average of 649 (660) persons, a
year-on-year decrease of 1.7 per cent.
Average staff by region
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| | 1-3 | 1-3 | 1-12 |
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| | 2009 | 2008 | 2008 |
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| Finland | 492 | 503 | 520 |
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| Scandinavia | 64 | 74 | 71 |
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| Poland | 93 | 83 | 90 |
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| Group total | 649 | 660 | 681 |
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Product development and Martela's collection
Product development and the management of Martela's collection are the
responsibility of two Group-level organisations: Brand & Product Portfolio,
which is responsible for collection and brand management, and Product
Development and Marketing, which is responsible for the development of
innovative products and the Group's marketing communications.
At the Stockholm Furniture Fair in February, Martela's theme was ‘The Light of
Snow'. We exhibited a number of new products at our snow-white stand. The Spot
series by Pekka Toivola and Iiro Viljanen was complemented with easily movable
screens, side tables and workstation desks. The Big cabinet by Pekka Toivola
also serves as a space divider. Pinta ES, a pure and simple design, is the
newest addition to the range of electrically adjustable desks. New products were
also introduced in the surroundings furniture ranges: the Form conference chair
by Jukka Setälä, and the SoftX lobby furniture series by Julia Läufer and Marcus
Keichel. As a concept product we exhibited the Tree W space divider, designed by
Professor Eero Aarnio and featuring LED illumination.
At the Milan Furniture Fair in April, Martela set up its own exhibition under
the theme ‘Black Swan'. The name came from the Swan XL lamp, another Eero Aarnio
design. Another new product introduced at Milan was the Diagonal, an innovative
piece of furniture for public spaces providing flexible seating for groups of
people or private conversations alike. Diagonal is the brainchild of o4i, a
Stockholm-based design office.
Shares
During January-March, 229,046 (137,640) of the company's A shares were traded on
the NASDAQ OMX Helsinki Ltd exchange, corresponding to 6.5 per cent (3.9) of all
A shares. The value of trading was EUR 1.4 million (1.1), and the share price
was EUR 5.29 at the beginning and EUR 5.73 at the end of the first quarter.
During the quarter the share price was EUR 6.82 at its highest and EUR 5.21 at
its lowest. At the end of March, equity per share was EUR 7.79 (7.33).
On 5 March 2009, ODIN Forvaltning AS announced that the holdings of funds
managed by ODIN in Martela Corporation fell to 2.85 per cent following a share
transaction made on 5 March 2009.
Treasury shares
The company did not purchase any of its own shares in January-March. On 31 March
2009, Martela owned a total of 67,700 of 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.
Acquisition of shares for the share-based incentive scheme and the management of
the scheme have been outsourced to an external service provider, Evli Alexander
Management Oy. These shares have been treated in the consolidated financial
statements for 2008 and 2009 under equity. On 31 December 2008, 104,282 shares
under the incentive scheme were still undistributed.
2009 Annual General Meeting
The Annual General Meeting was held on 17 March 2009. The meeting approved the
financial statements and discharged the responsible parties from liability for
the 2008 financial year. The AGM decided, in accordance with the Board of
Directors' proposal, to distribute a dividend of EUR 0.60 per share, totalling
EUR 2,452,740. 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, 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 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 first
quarter, and operations have continued according to plan.
Short-term risks
The greatest risk to profit performance is related to the continuation of the
general economic uncertainty and the consequent effects on the overall demand
for office furniture.
Outlook for 2009
General economic uncertainty will affect the company's performance in 2009.
Revenue will decrease from the previous year, and operating profit will also be
lower than in 2008. During the year, the company will examine its cost structure
for improvements and increase the efficiency of its operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1 000)
2009 2008 2008
1-3 1-3 1-12
Revenue 24.019 36.090 141.153
Other operating income 0.131 0.729 1.422
Employee benefits expenses -7.148 -7.880 -31.452
Operating expenses -16.304 -24.842 -97.154
Depreciation and impairment -0.758 -0.734 -3.115
Operating profit/loss -0.060 3.362 10.854
Financial income and expenses -0.110 -0.189 -0.651
Profit/loss before taxes -0.171 3.173 10.202
Income tax -0.051 -0.777 -2.666
Profit/loss for the period -0.221 2.396 7.537
Basic earnings per share, eur -0.06 0.59 1.89
Diluted earnings per share, eur -0.06 0.59 1.89
Allocation of net profit for the period:
To equity holders of the parent -0.221 2.396 7.537
OTHER COMPREHENSIVE INCOME
Translation differences -0.154 0.084 -0.357
Total comprehensive income -0.375 2.480 7.180
Allocation of total comprehensive
income
To equity holders of the parent -0.375 2.480 7.180
GROUP BALANCE SHEET (EUR 1 000) 31.03.2009 31.12.2008 31.03.2008
ASSETS
Non-current assets
Intangible assets 0.728 0.724 0.682
Tangible assets 13.044 13.461 14.279
Investments 0.039 0.039 0.054
Deferred tax assets 0.315 0.304 0.242
Pension receivables 0.072 0.072 0.035
Receivables 0.000 0.000 0.623
Investment properties 0.600 0.600 0.600
Total 14.798 15.200 16.514
Current assets
Inventories 10.017 10.825 13.015
Receivables 13.000 24.252 22.420
Financial assets at fair value 1.054 1.038 2.003
through profit and loss
Cash and cash equivalents 18.053 13.581 9.559
Total 42.125 49.696 46.997
Total assets 56.923 64.896 63.511
EQUITY AND LIABILITIES
31.03.2009 31.12.2008 31.03.2008
Equity
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 -0.640 -0.486 -0.045
Retained earnings 24.661 27.335 22.379
Treasury shares -1.610 -1.610 -0.721
Share-based incentives 0.371 0.270 0.100
Total 31.015 33.742 29.946
Non-current liabilities
Interest-bearing liabilities 7.689 8.024 10.160
Deferred tax liability 1.367 1.403 1.521
Total 9.057 9.427 11.681
Current liabilities
Interest-bearing 2.754 2.869 3.717
Non-interest bearing 14.098 18.858 18.167
Total 16.852 21.727 21.884
Total liabilities 25.908 31.154 33.565
Equity and liabilities, total 56.923 64.896 63.511
STATEMENT OF CHANGES IN EQUITY (EUR 1 000)
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.
01.01.2008 7.000 1.116 0.117 -0.129 22.127 -0.721 29.510
Translation diff. 0.084 0.084
Other change 0.000 0.000
Profit/loss for 2.396 2.396
the period
Total rec. income 0.084 2.396 2.480
and expense
Dividends -2.044 -2.044
31.03.2008 7.000 1.116 0.117 -0.045 22.479 -0.721 29.946
1.1.2009 7.000 1.116 0.117 -0.486 27.605 -1.610 33.742
Translation diff. -0.154 -0.154
Other change 0.101 0.101
Profit/loss for -0.221 -0.221
the period
Total rec. income
and expense -0.154 -0.120 -0.274
Dividends -2.453 -2.453
31.03.2009 7.000 1.116 0.117 -0.640 25.032 -1.610 31.015
CONSOLIDATED CASH FLOW STATEMENT (EUR 1000)
2009 2008 2008
1-3 1-3 1-12
Cash flows from operating activities
Cash flow from sales 33.890 36.816 138.477
Cash flow from other operating income 0.131 0.729 0.687
Payments on operating costs -25.712 -34.793 -124.654
Net cash from operating activities
before financial items and taxes 8.309 2.753 14.510
Interest paid -0.133 -0.169 -0.844
Interest received 0.088 0.051 0.268
Other financial items 0.009 -0.016 -0.060
Taxes paid -0.585 0.075 -2.116
Net cash from operating activities (A) 7.688 2.694 11.758
Cash flows from investing activities
Capital expenditure on tangible and
intangible assets -0.360 -0.174 -2.206
Proceeds from sale of tangible and
intangible assets 0.000 0.000 1.489
Repayments of loans receivables 0.000 0.023 0.022
Net cash used in investing activities (B) -0.360 -0.152 -0.694
Cash flows from financing activities
Proceeds from short-term loans 0.006 0.000 0.129
Repayments of short-term loans -0.270 -0.233 -0.795
Repayments of long-term loans -0.291 -0.456 -3.365
Dividends paid and other profit distribution -2.248 0.000 -1.972
Net cash used in financial activities (C) -2.803 -0.689 -6.003
Change in cash and
cash equivalents (A+B+C) 4.524 1.853 5.061
(+ increase, - decrease)
Cash and cash equivalents at the beginning of
period 14.620 9.691 9.691
Translation differences -0.037 0.018 -0.132
Cash and cash equivalents at the end of period 19.107 11.562 14.620
SEGMENT REPORTING (EUR 1 000)
Segment revenue 2009 2008 2008
1-3 1-3 1-12
Business Unit Finland
external 17.129 25.284 101.430
internal 0.000 0.000 0.000
Business Unit Sweden and Norway
external 4.342 5.309 18.689
internal 0.044 0.072 0.301
Business Unit Poland
external 1.616 3.119 12.722
internal 0.007 0.006 0.049
Other segments
external 0.931 2.377 8.312
internal 4.239 5.016 21.379
Total external revenue 24.019 36.090 141.153
Segment operating profit/loss 2009 2008 2008
1-3 1-3 1-12
Business Unit Finland 1.635 3.749 14.517
Business Unit Sweden and Norway -0.211 -0.662 -1.599
Business Unit Poland -0.280 -0.117 -0.549
Other segments -0.164 0.141 -0.421
Other -1.040 0.252 -1.094
Total operating profit/loss -0.060 3.362 10.854
TANGIBLE ASSETS 1.1-31.3.2009
Land Buildings Machinery Other Work in
areas & equipment tangibles progress
Acquisitions 0.000 0.010 0.207 0.017 0.082
Decreases 0.000 0.000 0.000 0.000 0.000
TANGIBLE ASSETS 1.1-31.3.2008
Land Buildings Machinery Other Work in
areas & equipment tangibles progress
Acquisitions 0.000 0.001 0.451 0.000 0.329
Decreases 0.000 0.000 -0.004 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
2009 2008 2008
1-3 1-3 1-12
Operating profit/loss -0.060 3.362 10.854
- in relation to revenue -0.3 9.3 7.7
Profit/loss before taxes -0.171 3.173 10.202
- in relation to revenue -0.7 8.8 7.2
Profit/loss for the period -0.221 2.396 7.537
- in relation to revenue -0.9 6.6 5.3
Basic earnings per share, eur -0.06 0.59 1.89
Diluted earnings per share, eur -0.06 0.59 1.89
Equity/share, eur 7.79 7.33 8.47
Equity ratio 54.7 47.2 52.2
Return on equity * -2.7 32.2 23.8
Return on investment * 0.2 31.1 25.2
Interest-bearing net-debt, eur million -8.7 2.3 -3.7
Gearing ratio -27.9 7.7 -11.0
Capital expenditure, eur million 0.4 0.9 2.9
- in relation to revenue, % 1.6 2.5 2.1
Personnel at the end of period 643 659 670
Average personnel 649 660 681
Revenue/employee, eur thousand 37.0 54.7 207.3
Key figures are calculated according to formulae as presented in Annual Report
2008.
* When calculating return on equity and return on investment the profit/loss for
the period has been multiplied in interim reports.
CONTINGENT LIABILITIES
31.03.2009 31.12.2008 31.03.2008
Mortgages and shares pledged 14.548 14.566 18.866
Guarantees 0.000 0.000 0.000
Other commitments 0.324 0.332 0.318
RENTAL COMMITMENTS 8.246 8.964 10.240
DEVELOPMENT OF SHARE PRICE 2009 2008 2008
1-3 1-3 1-12
Share price at the end of period, EUR 5.73 8.56 5.29
Highest price, EUR 6.82 8.78 10.05
Lowest price, EUR 5.21 7.36 5.10
Average price, EUR 6.24 8.20 8.30
This interim report has not been audited
Helsinki, 29 April 2009
Martela Corporation
Board of Directors
Heikki Martela
CEO
Additional information
Heikki Martela, CEO, tel. +358 50 502 4711
Mats Danielsson, Finance Director, tel. +358 50 394 8575
Distribution
NASDAQ OMX Nordic
Main news media
www.martela.com
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