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Martela publishes strong H1 2014 results

Last Monday Finnish professional furniture maker Martela adjusted its turnover forecast for the year 2014. Today, Martela published strong results for the second quarter and first half of 2014.

Martela publishes H1 2014 results
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Consolidated revenue for the second quarter was EUR 34.1 million (EUR 29.3 million Q2 2013), an increase of 16.3% on the previous year.

Consolidated revenue for January-June was EUR 68.1 million (EUR 61.1 H1 2013), an increase of 11.5% on the previous year.

January-June revenue in Finland was down year on year, but revenue in Finland nevertheless increased slightly in the second quarter compared to the previous year. There were no significant large customer projects in the first six months in Finland, and revenue was largely from small and medium-sized deliveries.

As in the previous year, there were no major deliveries in Poland during the first half of 2014, and for this reason, the revenue generated also remained low.

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 the second quarter also saw some large deliveries. As a result of the major customer deliveries in Sweden and Norway, the consolidated revenue increased significantly during the first six months.
Revenue in Russia also continued to show year-on-year growth.

The consolidated operating result for the second quarter was EUR 0.4 million (EUR -2.6 million Q2 2013).

The operating result for January-June was EUR -1.0 million (EUR -4.0 million H1 2013).

Martela’s fixed costs decreased slightly on the previous year, as anticipated, due to the adjustment measures taken in 2013.

The January-June 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.

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 programme’s impact on costs 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.

In February 2014, as part of the savings programme, Martela concluded the first codetermination negotiations aimed at improving production efficiency. The efficiency improvements will be sought by production transfers between Martela’s units located in Nummela and Riihimäki in Finland, and in Warsaw, Poland.

In addition, negotiations to transfer the manufacture of certain products between the Swedish and Finnish production units were concluded in June 2014. These measures will create a distinct role for each of Martela’s production units and ensure a more flexible and efficient service for customers. The measures taken so far or in progress are expected to achieve the targeted annual savings of EUR 6 million.

It became increasingly clear during the first six months of the year that there is growing demand for activity based office solutions. Martela will thus continue to focus on providing ever higher quality comprehensive solutions and associated services in the field of activity based working. 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’s profit before taxes for January-June was EUR -1.3 million (EUR -4.6 million H1 2013), and its profit after taxes was EUR -1.4 million (EUR -4.5 million H1 2013).

The market according to Martela

The demand for office furniture in Finland and Sweden continued to be weak in the early part of the year. Demand in Finland and Sweden is still largely focused on office alteration and enhancement projects of different kinds rather than new offices.

Despite the weakness in the market, the Activity Based Office concept, which is well-suited for alteration and enhancement projects, has attracted considerable interest among customers in Sweden, Norway, Finland and Russia. The Polish market continued to be stable during the first half of the year.

Outlook

Martela anticipates that its revenue and operating result for 2014 will show an improvement on the previous year’s figures.

Source

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