MARTELA CORPORATION INTERIM REPORT, 1 January –

MARTELA CORPORATION      INTERIM REPORT     29 April 2015 at 8.30 a.m. MARTELA CORPORATION INTERIM REPORT, 1 January – 31 March 2015 In the first quarter revenue decreased considerably and the operating result remained at the previous year’s level Key figures:

New guidance: The Martela Group anticipates that its revenue in 2015 will remain at the previous year’s level or slightly decrease. The Group’s operating result is estimated to show a slight year-on-year improvement . The Group’s operating result is weighted towards the second half of the year due to normal seasonal variation, and this weighting was further emphasised by the timing of larger projects during 2015. Previous guidance: The Martela Group anticipates that its revenue in 2015 will remain at the previous year’s level and its operating result will show a slight year-on-year improvement . The Group’s operating result is weighted towards the second half of the year due to normal seasonal variation, and this weighting was further emphasised by the timing of larger projects during 2015. Market The overall demand for office furniture continued to be low in the review period in the Group’s main market areas: Finland, Sweden, Poland and Russia. Instead of new offices, demand currently focuses on alteration and enhancement projects, particularly in the Finnish and Swedish markets. This is reflected in an increasing interest in activity-based office solutions and the Martela Lifecycle model. Even though the overall demand continues to be low, the many office alteration projects that are at the planning stage in the Nordic countries are slightly improving the market situation. However, decision-making is being slowed down by the general economic uncertainty and long-term leases. In Russia, despite the slowing down of the property market and the uncertain economic situation, plans seem to have progressed and activity to have recovered in office construction, but decision-making has been particularly slow because of the prevailing situation. New statistics on office construction in Finland are not available, as Statistics Finland has discontinued its compilation of building and dwelling production data for the time being. In addition to office construction, general economic development and companies’ need to use their office space more efficiently have an essential effect on the demand for Martela’s products and services. The need to boost efficiency often leads to office alteration projects, which in turn generate demand for Martela’s products and services. The annual change in the volume of the gross domestic product can be regarded as a good indicator of general economic development. In Finland, this change was -0.1% in 2014. According to most predictions, the change in Finland’s gross domestic product is estimated to be near zero or only slightly positive in 2015. Judging from these predictions, strong recovery is not to be expected in the near future.   Consolidated revenue and result The Group’s revenue for January–March was EUR 26.7 million (34.1). Despite the challenging market situation in Finland, the Group’s net sales in Finland remained at the previous year’s level. The activity-based office solutions provided by Martela, as well as the Martela Lifestyle model, have been well received in Finland. There were no major customer projects in the first quarter in Finland. Instead, the revenue consisted of small and medium-sized deliveries. In Poland, the revenue decreased markedly year-on-year. As in the previous year, there were no major deliveries in Poland in early 2015. For this reason, the revenue generated by Martela’s operations in Poland remained low. In Sweden and Norway, Martela had major customer deliveries in the first quarter of 2014. In 2015, major deliveries will take place in the second half of the year. For this reason, the revenue generated by Business Unit Sweden & Norway decreased considerably year-on-year in the first quarter. As a result of this, as well as the decrease in the revenue in Poland and Russia, the Group’s revenue showed a downward trend in the first quarter. The Group’s operating result for the first quarter was EUR -1.3 million (-1.4). In autumn 2013, the Group launched a savings programme of EUR 6 million, which was completed in 2014. Approximately one-third of the savings were achieved in 2014, and the rest will be achieved during 2015. For this reason, the Group’s fixed costs decreased year-on-year according to plan, due to the adjustment measures implemented. At the same time, as a result of the production efficiency measures implemented in 2014, the sales margin on the Group’s products was slightly higher than in the previous year. Due to the measures taken, the Group’s operating result for the first quarter remained at the previous year’s level, even though its revenue decreased markedly. Measures to improve supply chain efficiency continued to be implemented in the first quarter. In January, Martela Corporation launched statutory employee negotiations to increase the efficiency of its logistics centre in Nummela and its subsidiary, Kidex Oy, in Kitee. As a result of the negotiations, personnel was reduced by four employees in the Nummela logistics centre and by 13 employees at Kidex. In addition, a decision was made to implement temporary lay-offs of no more than 90 days. The lay-offs concerned employees in Nummela and the entire staff at Kidex. The purpose of these measures is to adjust capacity to the market demand and the changes in the structure of the demand. Martela also launched a new savings programme in April, after the review period. The goal is to reduce costs by EUR 4 million a year by the end of 2016, so that the cost savings will take full effect in 2017. Statutory employee negotiations were launched as part of the savings programme, concerning all office employees at Martela Corporation in Finland. The negotiations may result in a reduction of no more than 20 employees as well as temporary lay-offs of no more than 90 days.   To enhance operational efficiency, a decision was made after the review period, on 29 April 2015, to integrate Business Unit Poland into Business Unit International. In future, Business Unit International will consist of sales operations in Poland and Russia as well as export to countries where Martela does not have a subsidiary. Over the past year, interest in activity-based office solutions has continued to increase in Martela’s main market areas. The Group has introduced modern solutions suitable for activity-based offices and continues to invest in its ability to provide even more high-quality comprehensive solutions and services in the field of activity-based working. The Group has strengthened its pioneering position as a supplier of comprehensive solutions and as a leading service provider for offices and other working environments.   The result before taxes was EUR -1.4 million (-1.5), and the result after taxes was EUR -1.5 million (-1.5). Martela’s full interim report for January - March 2015 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 Oyj Board of Directors Heikki Martela CEO  

ATTACHEMENT: Martela’s interim report January – March 2015 For more information, please contact Heikki Martela, CEO, tel. +358 50 502 4711 Markku Pirskanen, CFO, tel. +358 40 517 4606 Distribution Nasdaq Helsinki Main News Media www.martela.com