Martela Oyj - Interim report (Q1 and Q3)

MARTELA CORPORATION INTERIM REPORT, 1 January - 30 September 2013

MARTELA CORPORATION        INTERIM REPORT         25 October 2013, 8.30 a.m.



MARTELA CORPORATION INTERIM REPORT, 1 January - 30 September 2013

Group's third quarter revenue at previous year's level, and revenue and
operating result for January-September down from previous year 

Key figures:



                            7-9   7-9    1-9    1-9   1-12
EUR million                2013  2012   2013   2012   2012
- Revenue                  34.3  34.8   95.4  101.9  142.7
- Change in revenue %      -1.4   2.9   -6.3   11.1    9.2
- Operating result          1.5   0.6   -2.5   -1.2   -0.9
- Operating result %        4.4   1.7   -2.6   -1.2   -0.6
- Earnings per share, EUR  0.34  0.07  -0.77  -0.49  -0.51
- Return on investment, %  14.5   5.5   -8.7   -4.4   -2.7
- Return on equity, %      22.4   4.1  -17.2   -9.3   -7.2
- Equity ratio, %                       38.2   43.3   41.2
- Gearing, %                            61.1   39.8   33.1


The Martela Group expects its revenue for 2013 to be down year on year and its
operating result to be at or slightly below the 2012 level. 

* Operating result for July-September/2013 includes a gain of EUR 0.9 million
from the sale of property. 

Market

The demand for office furniture in Finland continued to be weak in the third
quarter. At present, demand in Finland is focused largely on various office
alteration and enhancement projects instead of new offices. Also in Sweden the
market has gradually weakened during the year. By contrast, the Polish market
has been at a normal level. 

Statistics on office construction are available for the first half year of
2013, and they indicate that 42 per cent fewer office buildings were completed
in Finland in terms of square metres in the first six months than in the same
period a year earlier. In the same period, however, there were approximately 74
per cent fewer office building permits granted and new office building starts
than the previous year. In all, the amount of office construction activity was
at a low level in the first half year, but the trend in the second quarter was
slightly positive compared with the very weak first quarter figures. 

Consolidated revenue and result

Third quarter revenue was EUR 34.3 million (34.8), a decrease of 1.4 per cent
on the previous year. Consolidated revenue for January-September was EUR 95.4
million (101.9), a decline of 6.3 per cent. Revenue in Finland declined
cumulatively, but in the third quarter it reached the level of the previous
year. By contrast, revenue in Poland and Sweden in the review period was up
from the previous year's figures, although the growth rate slowed a little in
the third quarter. In other markets the transfer of the Danish business at the
end of 2012 from the Martela subsidiary to a dealer slightly reduced (2.0%)
consolidated revenue for the review period. In Russia, revenue growth
continued, but revenue still remains low in terms of Group view. 

The operating result for the third quarter was EUR 1.5 million (0.6). The
operating result for January-September was EUR -2.5 million (-1.2). The
consolidated third quarter operating result was boosted by EUR 0.9 million from
the sale of a residential property in Nummela. Despite a clear reduction in the
Group's costs, the January-September operating result was down from the
previous year due to lower revenue and a reduced sales margin on the Group's
products. The lower sales margin was the result of a different product
breakdown compared with the comparison period. The Group's third quarter profit
performance returned to a positive track. Third quarter revenue reached the
previous year's level and, despite the slight weakening of the sales margin,
the operating result, excluding the property sales gain, was of the same
magnitude as a year earlier, due to the cost savings achieved. 

The Group's fixed costs have gradually fallen during the year as a result of
the measures already taken. In the third quarter, the Group also began to plan
further measures to reduce its costs, targeting an annual cost saving of
approximately EUR 6 million. The plan will be actualized by the end of 2014 and
the savings will be realized by the full effect during the year 2015. The
Group's cost structure is being adjusted to correspond to the company's changed
operating environment. As part of the savings programme, the company began
codetermination negotiations in August, and these were completed at the start
of October. The outcome of the negotiations was that the Group's cost level
will be reduced by costs equivalent to 35 employees by the end of 2014.
Preparation of further measures to achieve the targeted savings is continuing.
The principal measures under consideration are transfers of production between
business locations and reorganising and improving the productivity of poorly
performing businesses. As previously stated, the Group will nevertheless be
investing resources at the same time in improving its ability to offer even
better comprehensive solutions and services, especially to meet the growing
customer need for Activity Based Office solutions. 

The Group's result before taxes for January-September was EUR -3.3 million
(-1.9), and the result after taxes was EUR -3.1 million (-2.0). 


Martela's full interim report for January-September  2013 is included in PDF
format as an attachment to this release. The interim report is also available
on the company's website at www.martela.com. 


Martela Corporation
Board of Directors
Heikki Martela
Managing Director


ATTACHMENT: Martela's interim report January-September 2013


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:

Interim Report Q3.pdf