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. I n 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
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.
