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Martela 3rd qtr results - Sales down 1.4% and Company back in the black, just.

Friday 25 October 2013

Martela, the Finnish office furniture company, reported 3rd quarter revenue to 30 September 2013 was EUR 34.3 million (34.8), a decrease of 1.4 per cent on the previous year. Consolidated revenue for the nine months to September was EUR 95.4 million (101.9), a decline of 6.3 per cent. Sales in Finland declined cumulatively, but in the third quarter it reached the level of the previous year. By contrast, revenue in Poland and Sweden in the review period was up from the previous year’s figures, although the growth rate slowed a little in the third quarter. In other markets the transfer of the Danish business at the end of 2012 from the Martela subsidiary to a dealer slightly reduced (2.0%) consolidated revenue for the review period. In Russia, revenue growth continued, but revenue still remains low in terms of Group view.

The operating result for the third quarter was EUR 1.5 million (0.6). The operating result for January-September was EUR -2.5 million (-1.2). The consolidated third quarter operating result was boosted by EUR 0.9 million from the sale of a residential property in Nummela. Despite a reduction in Group’s costs, the January-September operating result was down from the previous year due to lower revenue and a reduced sales margin on the Group’s products. The lower sales margin was the result of a changed product mix compared with the comparison period. The Group’s third quarter profit performance returned to a positive track. Third quarter revenue reached the previous year’s level and, despite the slight weakening of the sales margin, the operating result, excluding the property sales gain, was of the same magnitude as a year earlier, due to the cost savings achieved.

The Group’s fixed costs have gradually fallen during the year as a result of the measures already taken. In the third quarter, the Group also began to plan further measures to reduce its costs, targeting an annual cost saving of approximately EUR 6 million. The plan will be actualized by the end of 2014 and the savings will be realized by the full effect during the year 2015. The Group’s cost structure is being adjusted to correspond to the company’s changed operating environment. As part of the savings programme, the company began codetermination negotiations in August, and these were completed at the start of October. The outcome of the negotiations was that the Group’s cost level will be reduced by costs equivalent to 35 employees by the end of 2014. Preparation of further measures to achieve the targeted savings is continuing. The principal measures under consideration are transfers of production between business locations and reorganising and improving the productivity of poorly performing businesses.

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