Finish producer of professional furniture, Martela, announced its results for Q3 of fiscal 2014.
Consolidated revenue for the third quarter was EUR 36.5 million (Q3 2013: 34.3 million), an increase of 6.5% on the previous year.
Consolidated revenue for January-September was EUR 104.7 million (2013: EUR 95.4 million), an increase of 9.7% on the previous year.
In Finland, revenue in the third quarter and during the first nine months was down year on year. There were no significant large customer projects in the review period in Finland, and revenue was largely from small and medium-sized deliveries.
Revenue in Poland increased in the third quarter, but in January-September it was at the level of the previous year.
By contrast, 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. The most significant deliveries in Sweden and Norway were made in the first quarter, but revenue grew substantially on the previous year also in the third quarter.
In Russia, revenue continued to grow on the previous year, but the weakening economic situation of the Russian market may cause a future weakening in Martela’s demand from Russia.
Major customer deliveries in Sweden and Norway and the significant increase in Business Unit International’s revenue were the main reasons for the substantial increase in consolidated revenue during the review period.
The consolidated operating result for the third quarter was EUR 2.2 million (Q3 2013: 1.5 million).
The operating result for January-September improved substantially and was EUR 1.2 million (2013: EUR ‑2.5 million).
Martela’s fixed costs decreased slightly from the previous year, as anticipated, due to the adjustment measures taken in 2013. The January-September sales margin on Martela’s products was unchanged from the previous year. The combined effect of these factors and the increase in revenue was a year-on-year improvement in Martela’s consolidated operating result.
According to Martela, the EUR 6 million savings programme launched in the autumn of 2013 has proceeded according to plan, and the measures taken so far or in progress are expected to achieve the targeted annual savings of EUR 6 million. Martela estimates that due to the timing of the measures the programme’s impact on costs in 2014 will be equivalent to about one third of the total savings target. The full impact of the savings will be felt in 2015.
As part of the savings programme, measures aiming to increase the efficiency of production were implemented during the review period. Production transfers between the Martela’s units located in Nummela and Riihimäki in Finland, in Warsaw, Poland, and in Bodafors, Sweden have proceeded according to plan, and most of these will be completed by the end of the year. These measures will create a distinct role for each of Martela’s production units and ensure a more flexible and efficient service for customers.
Martela’s profit before taxes for January-September was EUR 0.7 million (2013: EUR -3.3 million), and the profit after taxes was EUR 0.4 million (2013: EUR -3.1 million).
The Market according to Martela
The demand for office furniture in Finland and Sweden continued to be weak. Demand in Finland and Sweden is still largely focused on office alteration and enhancement projects of different kinds rather than new offices.
A weakening has been discernible in the Polish market during the third quarter. Property market activity has slowed down recently also in Russia.
Forward looking statements
The prevailing weak market conditions cause uncertainty about Martela’s fourth-quarter performance. Martela anticipates that its revenue and operating result for 2014 will show an improvement on the previous year’s figures.
According to Martela, demand for activity based office solutions strengthened further. Martela will thus continue to focus on providing ever higher quality comprehensive solutions and associated services in the field of activity based working. With its activity based office solutions Martela can reduce its customers’ property costs while increasing the job satisfaction and productivity of these customers’ employees.
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.