Finnish producer of professional furniture, Martela, published its results for Q1 2014.
Consolidated revenue for January-March was EUR 34.1 million, a growth by 7% compared with same quarter of last year (Q1 2013: EUR 31.9 million).
The operating result for the first quarter was EUR -1.4 million (Q1 2013: EUR -1.4 million). Martela’s fixed costs declined somewhat on the previous year as planned due to adjustment measures taken already in the previous year.
At the same time, however, the sales margin of Martela’s products was slightly lower than a year earlier, a result of large customer projects. As a result of all these factors, Martela’s consolidated operating result remained at previous year’s levels.
In the third quarter of 2013, Martela began to plan measures to reduce its costs, targeting an annual cost saving of about EUR 6 million. The savings programme will be implemented by the end of 2014, after which the full impact of the savings will be felt.
It is estimated that due to the timing of the measures the cost reduction impact of the programme in 2014 will be equivalent to about one third of the total savings target. The measures will allow Martela to adjust its cost structure to correspond to the company’s changed operating environment.
The result before taxes was EUR -1.5 million (Q1 2013: EUR -1.6 million), and the result after taxes was EUR -1.5 million (Q1 2013: EUR -1.7 million).
Martela’s financial position improved slightly from the situation at the turn of the year and remains stable. Interest-bearing liabilities at the end of the period amounted to EUR 15.1 million (13.6) and net liabilities were EUR 9.1 million (6.8). The gearing ratio at the end of the period was 44.9 per cent (28.5). and the equity ratio was 37.6 per cent (43.1). Net financial expenses were EUR 0.2 million (0.1).
The cash flow from operating activities in January-March was EUR 2.8 million (Q1 2013: EUR 3.4 million). The cash flow was strengthened by a decline in the working capital during the review period.
The balance sheet total at the end of the period was EUR 56.1 million (Q1 2013: EUR 56.0 million).
Martelas gross capital expenditure for January-March was EUR 0.7 million (Q1 2013: EUR 0.9 million) and was incurred on production replacements.
Martela employed an average of 793 (Q1 2013: 757) persons, an increase of 4.8%. The number of personnel was increased by the start-up of the production transferred to Poland. During this period. there were employees simultaneously engaged in the manufacturing of the same products in two different production plants. There was also an increase in the number of service production personnel in Finland.
There was a substantial decline in revenue in Finland. The Finnish market remained stagnant and there were no significant projects in Finland during the first quarter and most the revenue was generated by small and medium-sized deliveries.
Like the previous year, there were no major deliveries in Poland during the early months of 2014 and for this reason, the revenue generated by Martela’s operations in Poland also remained low.
However, there were major customer deliveries in Sweden and Norway during the review period and, as a result, the revenue of the Business Unit in these countries grew substantially from the previous year.
As a result of the major customer deliveries in Sweden and Norway, the consolidated revenue also increased during the first quarter.
In Russia, revenue continued to increase, compared with 2013, even though the figures remained fairly low.
According to Martela, ‘it became increasingly clear during the first quarter that there is growing demand for Activity Based Office solutions.’
Martela will thus continue to focus on providing even more high-quality comprehensive solutions and associated services in the Activity Based Working field.
Martela’s aim is to strengthen its pioneering position as a supplier of comprehensive solutions and as the leading service provider for offices and other working environments.
Martela anticipates that its revenue in 2014 will remain at the previous year’s level and that its operating result will show a year-on-year improvement. Due to normal seasonal variation, Martela’s operating result is weighted towards the second half of the year.