Martela Corporation’s Financial Statements 1 January – 31 December 2023

Martela Corporation, Financial Statements, 14.2.2024, at 8:00 a.m.

The January–December 2023 revenue and operating result decreased compared to previous year.

October–December 2023

• Revenue was EUR 26.4 million (27.1), representing a change of -2.8%
• Comparable operating result was EUR 1,5 million (0.2)
• Operating result was EUR 1,5 million (0.2)
• Operating profit per revenue was 5.8% (0.6%)
• The result for the period was EUR 1.2 million (0.7)
• Earnings per share amounted to EUR 0.22 (0.15)

January–December 2023

• Revenue was EUR 94.4 million (106.7), representing a change of -11.5%
• Comparable operating result was EUR -2.4 million (1.0)
• Operating result was EUR -2.4 million (-2.5)
• Operating profit per revenue was -2.5% (2.3%)
• The result for the period was EUR -3.5 million (-2.6)
• Earnings per share amounted to EUR -0.77 (0.57)

Outlook

Outlook for 2024

Martela anticipates its revenue to increase in full-year 2024 compared to previous year and operating result to be positive.

Key figures, EUR million

Ville Taipale. CEO:

“The high inflation and increased interest rates that started last year impacted negatively also in the fourth quarter this year. Economic development in the Nordic countries was modest in 2023, which was also reflected as cautiosness in Martela's customers' purchasing decisions. However, the impact of the challenging market situation on Martela's business was clearly more moderate than in the first half of the year. Our net sales decreased slightly in the fourth quarter to EUR 26.4 million, which was 2.8% lower than in the same period last year. This achievement can be described as good in a difficult market situation. Our net sales in January-December totalled EUR 94.4 million, which was 11.5% lower than in the last year.

The Group's new orders decreased slightly in the fourth quarter compared to the corresponding period of the previous year. In the fourth quarter, orders increased in “Others” and decreased in Finland, in Sweden and in Norway.

Our comparable operating result increased clearly in the fourth quarter compared to the same period last year and was EUR 1.5 million (0.2). The strengthening of comparable operating result was mainly due to improved productivity and operational efficiency, which allowed us to compensate for the small decrease in net sales.  Comparable operating result for January-December was EUR -2.4 million (1.0). The result for the full year period was burdened particularly by the low level of net sales in the first half of the year. In addition, profitability in the first half of the year has been burdened by investments in development projects, that support long-term growth.

We have reacted to the challenging market situation by adjusting our cost level during the second half of the year. The efficiency improvements have mainly been implemented through temporary lay-off procedures and other cost-saving as well as productivity improvement measures. It is unclear how long the uncertainty in the market will continue, and we must be able to adjust our cost level to the prevailing conditions also in the future. Therefore, on January 3, 2024, the we announced plans to streamline and to reorganize our operations to mitigate the adverse effects of the market situation and adjust our cost structure to the prevailing circumstances. The reorganisation also aims to improve the service experience of Martela's customers.

Major changes are underway in the ways of working and thus in working environments, which are increasing demand for Martela's products and services. The pandemic accelerated and permanently changed the meaning of the office. Companies are looking for more attractive and diverse working environments, while more and more attention is paid to home office furnishings and ergonomics.

We will continue to lead the way, in collaboration with our customers, in creating the best and more flexible work environments that improve employee experience, efficiency, innovation and lower total cost of ownership.

We respond to our customers' increased demand for flexibility with our "Workplace as a Service concept”, which we have continued to develop actively. Interest in the service model has been encouraging and we expect the service model to have a positive impact on the development of our business.

The second half of the year, and especially the Q4 results, clearly showed that with our updated strategy, we are on the right track. This strengthens our position and creates confidence in Martela's future in the current market situation. The entire personnel is committed to the determined implementation of the strategy, and it is a good to continue from the current situation.”

Market situation

Economic development in the Nordic countries was modest in 2023, which was also reflected as cautiosness in Martela's customers' purchasing decisions. Market conditions are expected to remain uncertain in 2024 due to inflation and interest rate developments, and the resulting caution. On the other hand, the upward pressure on prices caused by the war in Ukraine and challenges in the availability of raw materials have eased.

However, market uncertainty and simultaneous changes in the way of working is likely to create demand for Martela's change services. Premises will be modified to meet the needs of multi-location hybrid work and investments will be made in their attractiveness.

Revenue and operating result

Revenue and result for October–December 2023

Revenue for October–December was EUR 26.4 million (27.1) and decreased 2.8% compared to previous year. Revenue decreased in Finland by 9.9% in Norway by 41.1%. But in Sweden revenue increased by 22.7% and in other countries by 82.3% compared to previous year.

The Group’s operating result in October–December was EUR 1.5 million (0.2).

The October–December result before taxes was EUR 1.2 million (-0,1) and net result EUR 1.0 million (0.7).

Revenue and result for January–December 2023

Revenue for January–December was EUR 94.4 million (106.7) and decreased by 11.5% from previous year. Revenue decreased in Finland by 9.6%. in Sweden by 14.3%. in Norway by 7.7% and in Other countries by 21.9% compared to previous year.

The Group’s operating result in January–December was EUR  -2.4 million (2.5). In comparative period operating result was positively impacted by EUR 1.5 million IFRS gain on sale and leaseback agreement related to the Nummela production and logistic center. taking into account cost of sales. Comparable operating result without non-recurring items in January–December was EUR -2.4 million (1.0). The result for the full year period was burdened particularly by the low level of net sales in the first half of the year. In addition, profitability in the first half of the year has been burdened by investments in development projects.

The January–December result before taxes was EUR -3.3 million (1.3) and net result EUR -3.5 million (2.6). 

EVENTS AFTER THE END OF THE FINANCIAL YEAR

On January 3, 2024, the company announced plans to streamline and reorganize its operations to mitigate the adverse effects of the market situation and adjust its cost structure to the prevailing circumstances. The reorganisation also aims to improve the service experience of Martela's customers. The planned organisational changes and other cost-saving measures are estimated to result in annual cost savings of approximately EUR 2 million. The majority of these are expected to be realized by 2024 and the full savings targets would be achieved by 2025 At the same time, the company announced that it will continue to invest in strategic key areas such as workplace services, digitalization, circular economy, and internationalization

No other significant events requiring reporting have taken place  since the January–December period.

SHORT-TERM RISKS

The principal risk regarding profit performance and liquidity development relates to the general economic uncertainty and the consequent effects on the overall demand in Martela’s operating environment. The market situation continues to be negatively affected by uncertainty about the development of inflation and interest rates. Due to the project-based nature of the sector, forecasting short-term development is challenging in normal circumstances. This challenge is further accentuated by the increased economic uncertainty.

PROPOSAL OF THE BOARD OF DIRECTORS FOR DISTRIBUTION OF PROFIT

The Board of Directors proposes to the Annual General Meeting that no dividend will be distributed for 2023.

ANNUAL GENERAL MEETING

The Annual General Meeting is planned to be held on Friday 5 April 2024. The notice of the Annual General Meeting will be published in a separate release later.

BRIEFING

A briefing will not be held. but additional information can be asked by telephone from CEO Ville Taipale and CFO Henri Berg on Wednesday February 14. 2024 from 12 a.m. to 2 p.m. EET.

Martela Corporation

Board of Directors

Ville Taipale

CEO

Further information

Ville Taipale. CEO. +358 50 557 2611

Henri Berg CFO. 4

Distribution

Nasdaq OMX Helsinki

Key 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 focus on the Nordic countries. as the Nordic countries are forerunner in hybrid working environments with common open work culture background and needs.

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