Annual Report • Mar 8, 2024
Annual Report
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MARTELA CORPORATION Business ID 0114891-2
12/31/2023
| Board of Directors' Report | 1-8 |
|---|---|
| Consolidated comprehensive income statement (IFRS) |
9 |
| Consolidated balance sheet (IFRS) |
10-11 |
| Consolidated cash flow statement (IFRS) |
12 |
| Statement of changes in equity | 13 |
| Notes to the consolidated financial statements (IFRS) | 14-48 |
| Five year financial indicators for the Group | 49 |
| Key share-related figures |
50 |
| Formulas to key figures | 51 |
| Shares and shareholders | 52-53 |
| Parent Company Income Statement (FAS) | 54 |
| Parent Company Balance Sheet (FAS) Parent Company's Cash Flow Statement (FAS) |
55-56 57 |
| Notes to the Parent Company Financial Statements (FAS) Proposal of the Board of Directors for distribution of profit and signatures on Board of Directors Report |
58-76 |
| and Financial Statements | 77 |
Auditor 's note
Used accounting books
The Group's revenue for the financial year was EUR 94,4 million (106,7). The operating result for the year was EUR - 2.4 million (2,5). Operating result of the comparison period includes nonrecurring gain EUR 1.5 million from the sale and leaseback agreement regarding Nummela production and logistic centre, taking into account the cost of sales. Earnings per share were EUR -0.77 (0.57). Cash flow from operating activities totalled EUR 0.3 (2.1) million. The equity-to-assets ratio was 20.0 per cent (24.7) and gearing was 137.2 per cent (58.6). The return on investment for the year was -7.5 per cent (9.1).
Martela is one of the Nordic leaders in the workplace industry. Martela designs and implements best workplace and learning environments. Martela supplies user-centric solutions into today's workplaces – mobile work and activity based offices. Martela also offers the widest selection of services supporting changes in interior planning as well as supporting maintenance. Our total offering comprises of the change of the whole workplace from its specification and planning to implementation and maintenance.
In line with its Lifecycle strategy Martela creates high-quality services for workplaces and learning environments along the full lifecycle. Our offering includes workplace and learning environment specification and planning, implementation and furnishing as well as continuous measurement and optimization.
Martela's service model related to furnishings and changes in premises responds to the constantly growing need for flexibility. Increasingly, instead of large one-off investments, space changes are under more process-like development. In this change, Martela has highlighted the circular economy model, flexible Workplace as a Service and development of digital sales channels, as strategic focus areas.
The biggest product launch of the year was the versatile Ella chair family, launched in the spring. Ella was designed by Antti Kotilainen and is, among others, a natural complement to the popular Sola chair family. Due to its timeless design and material options, Ella is suitable for offices, cafés and other public spaces. Ella chairs are made of carefully selected materials with a long service life. The recycling and reuse of materials has been taken into account in the manufacturing process from the very beginning. Ella has aroused admiration among users, influencers and suppliers and is becoming a modern classic in Martela's selection. In addition to Ella, the height-adjustable Jojo table designed by Iiro Viljanen was launched on the market, which increases ergonomics, especially in learning environments, and the Sola product family grew with the hefty Sola Grande armchair.
EUR -1.6 (-1.6) million has been entered in the Group profit and loss statement as reasearch and development expenses.
Economic development in the Nordic countries was modest in 2023, which was also reflected as cautioness 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.
There was no changes in the group structure in 2023.
The January–December 2023 revenue was EUR 94.4 million (106.7), a decrease of -11.5% from previous year. Compared to the previous year, revenues decreased by area as follows; in Sweden -14.3 % in Finland -9.6 % in Norway -7.7 % and in Other countries -21.9 %.
The Group's operating result for the January-December was EUR -2.4 million (2.5). The January–December result before taxes was EUR -3.3 million (1.3 ).
The cash flow from operating activities in January–December was EUR 0.3 million (2.1).
At the end of the period, interest-bearing liabilities stood at EUR 18.2 million including EUR 16.8 million lease liabilities according to IFRS 16. At the end of comparison period the interest bearing liabilities stood at EUR 19.4 million including EUR 17.6 million lease liabilities according to IFRS 16. Net liabilities were EUR 13.1 million (8.1). At the end of the period, short-term limits of EUR 0.0 million were in use (0.0). Short-term cash limits of EUR 0.3 million (0,3) would have been available for utilization.
In 2022 the impact of the sale and leaseback agreement, regarding Nummela production and logistic center, on lease liabilities according to IFRS 16 was, at the moment of registration, EUR 13.0 million. Selling price of the asset was EUR 15 million.
The gearing ratio at the end of the period was 137.2 % (58.6%) and the equity ratio was 20.0% (24.7%). Financial income and expenses were EUR -0,9 million (-1.1).
The balance sheet total stood at EUR 55.7 million (62.3) at the end of the period.
The Group's gross capital expenditure for January–December came to EUR 2.3 million (0.9).
VP Sales and Marketing and member of the Management Team Johan Westerlund resigned and left his position at the end of January 2023. Kimmo Hakkala was appointed VP Sales and Marketing and member of the Management Team. Hakkala started in his position on 1.2.2023. Suvi-Maarit Kario was appointed Martela Corporation's VP Human Resources and Sustainability and a member of the Management Team. Kario started in her position on 7.8 2023. Kalle Lehtonen, CFO and member of the Management Team, resigned and left his position on 24.8.2023. Henri Berg was appointed CFO and member of the Management Team. Berg started in his position on 2.10.2023. From this moment onwards Group Management Team has consisted of CEO Ville Taipale, CFO Henri Berg, VP Sales and Marketing Kimmo Hakkala, VP Operations Kalle Sulkanen, VP Human Resources and Sustainability, VP Brand & Design Kari Leino and VP Design Studio Eeva Terävä.
The Group employed an average of 403 people (403), being at the same level as last year. Personnel on average employed in Finland was 326 (328), in Sweden 29 (27), in Norway 15 (14) and in group other countries 33 (34).
The number of employees in the Group was 386 (400) at the end of the review period. Personnel costs in January– December totalled EUR 23 million (23.6).
Responsibility forms an integral part of Martela's strategy and operations. The VP, Human Resources and Sustainability is responsible for the corporate responsibility as well as quality, environmental and occupational health and safety management system of the Group. Sustainability Steering Group supervises corporate responsibility with members from the Management Team and the Sustainability Director as the secretary.
More detailed information on the Group's corporate responsibility principles, goals and achievements can be found in a separate Sustainability Report published annually. The 2023 GRI indicators connected sustainability reporting will be published after the annual report.
Already since 2011, Martela's corporate responsibility has been guided by the Martela Corporate Code of Conduct approved and annually reviewed by the Board of Directors. The principles contain references to international corporate responsibility commitments. The company has engaged itself in the UN Global Compact challenge, which aims at promoting human rights, rights in working life, environmental protection and the eradication of corruption and bribery.
As Martela operates in an international market, it also takes into account any international treaties, commitments and recommendations that concern its work. The most important ones are:
Since 2011, the practical activities of the company have been guided by the corporate responsibility policies approved by the Management Group concerning matters related to personnel, the environment and supply chain management. The principles and policies published on Martela's website www.martela.com/about-us/sustainability/corporateresponsibility are reviewed and, when necessary, updated annually under the coordination of the Sustainability Steering Group. The principles and policies cover social and employee matters and matters related to respecting human rights and eradication of corruption and bribery.
The Martela Lifecycle model takes into account the entire life cycle of the workplace. Martela supports the sustainability of its client companies by offering workplace solutions based on circular economy principles.
The Group units have the ISO 9001 quality, ISO 14001 environmental and ISO 45001 occupational health and safety management system certifications, granted by an independent party, to ensure continuous improvement, meeting customer expectations and that environmental and work safety aspects are controlled.
In the manufacturing process, there is an emphasis on a strong supplier chain. Martela's own manufacturing is focused on final assembly and remanufacturing production at its logistics centre in Nummela, Finland, which also houses most of the company's R&D and purchasing. The assembly of upholstery components takes place at Martela's own plant in Poland. The manufacture of table top and storage components takes place mainly at Kidex Oy, Martela's subsidiary located in Kitee, Finland.
The Martela headquarters in Otaniemi, Espoo, houses sales and support functions in addition to the Group administration. Martela has several sales offices in Finland, Sweden and Norway. In other countries, the sale of Martela's products takes place mostly through a dealer network.
The purchasing of products and services from service providers accounts for more than 70% of Martela Group's turnover. A network of around hundred reliable suppliers delivers materials and components for Martela labelled products.
Around a quarter of the Group's turnover goes on salaries and social security payments. Martela values local manufacturing and employment. As the share of its service business is growing, the company will keep creating more new jobs close to its markets. The distribution of financial value will be discussed in further detail in the forthcoming Sustainability Report.
Martela's Environmental Policy, approved by the Group Management Team, aims to decrease the company's environmental impacts and promote recycling. The policy gives instructions on taking environmental matters into account in the development of its offering, through which the company will also have an indirect impact on the environmental effects of its customers.
The essential environmental aspects in Martela's operations are presented in the materiality assessment found in the Sustainability Report. Martela has the best opportunities to influence the reduction of greenhouse gas emissions and energy use in its market area through its customers' premises. Martela is constantly working to help its customers create facilities that support knowledge work and improve space efficiency. Therefore, Martela's most important environmental goal is to offer its customers the Martela Lifecycle model, which supports customers' space efficiency.
Sustainability reporting focuses on the direct and indirect impacts of its own operations, because Martela does not have the means to measure the effects of improved space efficiency and reduced energy use among its customers.
Martela's most significant climate impact arises from the use of materials related to products and services offered to customers. Martela's greenhouse gas emissions decreased from previous year and totalled 8.3 million kilos. Of these emissions, 75% were related to the use of materials purchased for products delivered to customers (scope 3), 4%
arose from the indirect use of energy (scope 2) and 9% were related to the delivery of finished products to customers (scope 1). The energy intensity per turnover within the scope of Martela's calculation was less than 300 GJ/million €.
The durability, recyclability and recycling of furniture are at the heart of Martela's operations. Martela's furniture has been designed to be refurbished and restored, and their materials can be recycled or used to produce energy. As part of its comprehensive service, Martela also offers a furniture recycling service to its customer companies. When designing new facility solutions for customers, their old furniture can either be included in the new design or recycled responsibly through Martela. Used furniture in good condition is cleaned and refurbished at the Nummela remanufacturing facility and then made available to corporate and private customers through the Martela Outlet online service and shops. In 2022, around 23,700 pieces of used furniture found new homes through the Martela Outlet chain.
There are no significant environmental risks in Martela's own operations, but global changes in, for example, energy sources, pricing, availability of materials and changes in the way of working may affect Martela's operations in the future.
Environmental goals, their realisation and more detailed environmental metrics are published annually in the Sustainability Report.
Martela's vision is to create the best places to work. This goal is enabled by competent and committed personnel who feel good. Martela's people management principles are based on company values and responsible management and leadership practices.
The key objectives of personnel competence development is to develop customer excellence and experience in every touch point and to improve operational performance. From supply chain view point, during 2023 the cooperation between the functions and the related processes were crystallized to enhance the order-delivery efficiency.
Hybrid work under expert professions is still in transition phase in organizations. So too in Martela. The rules of hybrid work has been specified to better support different ways of working, taking into account both individual and teamwork needs. The principle of the flexible working is to provide the balance between in-office and remote work and employees are encouraged to work in different places in accordance with the nature of work. The new premises at Martela's head office meet the needs of hybrid work and support working together, a sense of community and work that requires concentration.
A safe working environment and working conditions are of primary importance for the well-being of the personnel. The basis of a safe work environment is adequate familiarization with work tasks, up-to-date instructions and the necessary safety training. Martela's personnel will have safety training relevant to their work, enabling them to perform their work in a professional and safe manner. Working safely is important in all kind of work but its importance is emphasized especially in production, removal and installation services. Employees are encouraged to actively report all safety near misses and incidents as they provide valuable information to improve occupational safety. During 2023, personnel's well-being, functional capacity and coping at work were further enhanced by piloting mental well-being support services for everyday challenges.
The job satisfaction of the personnel and the effectiveness of the actions chosen to improve the same are measured with annual People Spirit survey. The survey measures, among other things, job motivation, commitment, leadership and operative culture, and employer image. Despite the prevailing uncertainty and challenging environment, the personnel's job satisfaction and engagement improved compared to the previous survey result. Clear strengths are the meaningfulness of one's own work, received feedback and pride over Martela's products and services. The management and operating culture as well as the employer image have also developed positively. Although the personnel's possibility to participate in developing processes and availability of information have improved since the previous survey, there is room for improvement compared to the benchmark norm. Overall, the results show that the measures to strengthen job satisfaction as well as leadership and operative culture are on the right path.
Martela's Sustainability Report contains a comprehensive description of the social and people related matters.
Matters related to respecting human rights are discussed in, for example, the company's People Policy and Sustainability Policy for Supply Chain. The main principle is to offer equal opportunities to all of employees and to treat each employee fairly. In the requirements for the suppliers, the focus is on observing national legislation and ILO conventions, depending on which of them is found more demanding from the viewpoint of employee rights. No breaches of respecting human rights have been observed in Martela's operations or supply chain.
Martela's products are manufactured on the basis of customer orders, which means that the supply chains are short and that the acquisitions mainly take place from the neighbouring areas and from elsewhere in Europe. In Europe, where there is a long tradition of follow-up of working conditions and labour legislation, the risks related to respecting human rights are smaller. The social risks of Martela's suppliers have been thoroughly investigated and are always reviewed when selecting new suppliers and in conjunction with supplier evaluation.
Analysis of sustainability aspects is an important part of continuous interaction with suppliers. In Martela's sustainability policy for the supply chain updated at the end of 2023, the definitions of social responsibility were further specified. The policy is communicated with each purchase order. Additionally, for the most important suppliers, compliance is checked on a risk-based basis. Martela annually assesses the risks of social responsibility in its supply chain through country-specific sustainability indicators and, on the basis of these, plans the necessary measures for verifying social responsibility on a supplier-by-supplier basis.
In recent years Martelahas regularly participated in the EcoVadis evaluation. In 2022, Martela was awarded the EcoVadis Gold rating. The results of the next assessment will be completed in February-March 2024. EcoVadis is the world's largest sustainability rating agency. Its assessment includes 21 sustainability criteria grouped into four themes: environment, labour and human rights, ethics and sustainable procurement. The rating criteria are based on international sustainability standards, such as the ten principles of the UN Global Compact, the International Labour Organisation (ILO) Conventions, the Global Reporting Initiative (GRI) standards and the ISO 26000 standard.
The 2023 sustainability training was implemented in the autumn and was attended by 83% of the personnel. The training was used to study the employees commitment to Martela's Code of Conduct and awareness of the procedures when noticing behaviour against its principles. Study showed 99% commitment to the principles and almost 90% of respondents were aware of procedures when noticing actions against the principles. No communication on grievance was received during 2023 through any available Martela whistleblowing channel.
Matters related to prevention of corruption and bribery are discussed in, for example, the Corporate Code of Conduct and Sustainability Policy for Supply Chain. Martela does not accept bribery in any form in its business in any of its market areas. Giving or receiving bribes is not permitted under any circumstances.
All transactions are recorded through the financial management/bookkeeping of each subsidiary. Martela's and all its subsidiaries bookkeeping and transactions are subject to an annual statutory audit. The bookkeeping is transparent to the CFO of the Group.
Martela has two share series, A and K, with each K share entitling its holder to 20 votes at a General Meeting and each A share entitling its holder to one vote. Private holders of K shares have shareholder agreement that restricts the sale of K shares to any party outside the existing holders of K shares. There is a total of 604,800 K shares and a total of 3,968,695 A series, together 4,573,495 shares.
In January–December, a total of 1,122,349 (2,286,583) of the company's series A shares were traded on the NASDAQ OMX Helsinki exchange, corresponding to 28.3% (58.4) of the total number of series A shares. The value of trading turnover was EUR 2.1 million (6.5), and the share price was EUR 1.28 at the end of the period (2.45). During January–December the share price was EUR 2.72 at its highest and EUR 1.22 at its lowest. At the end of December, equity per share was EUR 2.09 (3.07).
During 2023, Martela did not receive any notifications pursuant to Chapter 9, Section 5 of the Finnish Securities Markets Act.
During 2022 Martela has received one notification in accordance with the Finnish Securities Market Act Chapter 9, Section 5. On March 10, 2022, Martela received an announcement from Isku Yhtymä Oy, according to which the total number of Martela Corporation shares owned by Isku Yhtymä Oy has increased above 10% of the shares in Martela plc, as a result of share transactions concluded on March 10, 2022.
More information on the Martela Corporation shares and shareholders can be found under note 27 of the Notes to the financial statements.
Martela did not purchase any of its own shares in January–December 2023.
Based on the share issue authorization granted by the Annual General Meeting on 29.3.2023, the Board of Directors of Martela Corporation has decided to issue 53,881 new series A shares to the company itself without consideration. The shares issued by the company have been used to pay rewards according to the company's Performance-based Matching Share Plan 2021-2023, announced on March 23, 2021, for 32 key individuals, based on the earning period of 2022.
A total of 11,657 of Martela shares held by the company have been conveyed on May, 23 2022, without consideration to the 34 key individuals participating in the Performance-based Matching Share Plan 2021-2023, announced on March 23, 2021. Conveyance of the shares relates to the earning period 2021.
On December 31, 2023, Martela owns a total of 1,425 Martela A shares and its holding of treasury shares amounted to 0.03% of all shares and 0.01% of all votes. Out of the shares, 379 were purchased at an average price of EUR 10.65 and 1 046 were transferred from Martela Corporation's joint account to the treasury shares.
Members of the Board, CEO and Management Team hold at 31.12.2023 total of 91 049 Martela Oyj A -shares and 1 073 K -shares, which represents 2.2% of the total amount of shares and 0.8% of the voting rights.
Board of directors decided on March 18, 2021 on new share based incentive plan directed to key employees of the company. Purpose of the plan is to unite shareholders and key employees objectives on long-term basis as well as to commit key employees to execute company's strategy. Plan's objective is to offer to key employees competitive model to earn company's shares.
The new Performance-based Matching Share Plan 2021–2023 consists of three performance periods, covering the financial years of 2021, 2022 and 2023, respectively. The rewards to be paid based on the plan will amount to an approximate maximum total of 718,000 Martela Corporation series A shares including also the proportion to be paid in cash. Approximately 40 persons, including the CEO and other Martela's Management Team members, were belonging to the target group of the plan. The rewards will be paid partly in Martela Corporation series A shares and partly in cash. The cash proportions of the rewards are intended for covering taxes and tax-related expenses arising from the rewards to the participants. In general, no reward is paid if the participant's employment or director contract terminates before the reward payment. The reward to be paid on the basis of the plan will be capped if the limits set by the Board of Directors for the share price are reached. During the performance periods 2021 and 2022 and 2023, the rewards were based on the Group's Earnings before Interest and Taxes (EBIT).
As part of the implementation of the Performance-based Matching Share Plan 2021—2023, the Board of Directors have resolved on March 18, 2021 a directed share issue to persons participating to the plan. Decision on the share issue is based on the authorization given by annual general meeting on March 18,2021. Total number of shares subscribed was 305 700 A -shares with a subscription price of EUR 2.73 per share. On June 23 2022 the Board of Directors resolved new directed share issue to a new member of the group management team, where total number of shares subscribed was 11 574 A -shares with a subscription price of EUR 2.88 per share. Decision on the share issue was based on the authorization given by annual general meeting on March 17,2022.
As part of the implementation of the Performance-based Matching Share Plan 2021—2023, the Board of Directors has resolved to grant plan participants interest-bearing loans in the maximum total amount of 686, 000 euros to finance the acquisition of the company's shares. The maximum amount of the loan is 70 per cent of the participant´s investment in shares. The loans will be repaid in full on 31 December 2025, at the latest.
In 2023 total number of shares distributed based on the rewards of the programme was 53 881 and in year 2022 the number of the distributed shares were 11 657.
Martela Corporation's Annual General Meeting was held on Wednesday, March 29, 2023. The Meeting approved the Financial Statements, discharged the members of the Board of Directors and CEO from liability for the year of 2023 and approved remuneration report for 2023. The Annual General Meeting resolved, in accordance with the proposal of the Board of Directors, to distribute a dividend of EUR 0.10 per share.
The Annual General Meeting confirmed that the Board of Directors will consist of six members and Mr. Jan Mattsson, Mr. Eero Martela, Ms Hanna Mattila, Ms. Katarina Mellström, Mr. Johan Mild and Ms. Anni Vepsäläinen be re-elected as members of the Board of Directors. The Annual General Meeting resolved a monthly compensation of EUR 3,700
be paid for the Chairman of the Board and EUR 1,850 for the Board Members, and an additional compensation of EUR 1,600 per year to the Board members belonging to a committee.
Authorized Public Accountant Ernst & Young Oy was re-elected as the company's auditor. The remuneration of the auditor will be paid according to the invoice that has been accepted by the Audit Committee of the company.
The Board of Directors proposal that the Company's articles of association are amended so that the domicile of the Company is changed to Espoo and that an addition is made to the articles of association concerning possible remote participation in the general meeting as an alternative or without convening a physical meeting were approved.
The Annual General Meeting authorized the Board in accordance with the proposal of the Board of Directors to decide on the repurchase of a maximum of 450,000 Company's own A shares in one or several occasions. Own shares will be repurchased in public trading maintained by Nasdaq Helsinki Ltd at the market price of the shares as per the time of repurchase or otherwise at a price formed on the market. Own shares may be repurchased when necessary as a part of the Company's salary and incentive scheme, for use in conjunction with corporate acquisitions and other business arrangements, if the Board deems this is in the interest of the shareholders in light of the company's share indicators, or if the Board deems it is an economical way of using liquid assets, or for some other similar purpose. The share repurchase authorization includes the right to repurchase shares otherwise than in proportion of the shareholdings. The authorization cancels any previous unused authorizations to repurchase the Company's own shares. This share repurchase authorization will be valid until the closing of the next Annual General Meeting, however, no longer than until 30 June 2024.
The General Meeting authorized the Board of Directors to decide upon the issuance of shares and the issuance of special rights entitling to shares as referred to in Chapter 10 Section 1 of the Companies Act in one or several tranches, either against payment or without payment. The aggregate number of shares to be issued, including the shares to be received based on special rights, cannot exceed 450 000 of the Company's A-series shares. The Board of the Directors may resolve to issue new shares or to transfer own shares possibly held by the company. The maximum amount of the authorization corresponds to approximately 10 per cent of all shares in the Company. The Board of Directors is authorized to decide on all other matters related to the issuance of shares and special rights entitling to shares, including the right to deviate from the pre-emptive right of shareholders to subscribe for shares to be issued. The authorization is proposed to be used for the purposes of paying purchase prices of corporate acquisitions, share issues and issues of option rights and other special rights entitling to shares. This authorization remains valid until the closing of the next Annual General Meeting, however, no longer than until 30 June 2024.
The Board of Directors elected by Martela Corporation's Annual General Meeting had its organizational meeting after the Annual General Meeting and elected from among its members Johan Mild as the Chairman and Katarina Mellström as the Vice Chairman of the Board.
Martela Corporation is a Finnish limited liability company that is governed in its decision-making and management by Finnish legislation, especially the Finnish Limited Liability Companies Act, by other regulations concerning public listed companies, and by its Articles of Association. The company complies with the NASDAQ OMX Guidelines for Insiders and the Corporate Governance Code 2020 for Finnish listed companies published by the Securities Market Association. Company has published its Corporate Governance report as a separate document in company's website. More information on Martela's governance can be found on the company's website.
Martela Responsibility Report includes extensively the non-financial information (NFI) required by the accounting law. The Responsibility Report of 2023 will be published after the Annual Report.
The principal risk regarding profit performance relates to the general economic uncertainty and the consequent effects on the overall demand in Martela's operating environment. Due to the project-based nature of the sector, forecasting short-term developments is challenging. In accordance with Martela's risk management model, the risks are classified and guarded against in different ways.
Company regulary evaluates and monitors the finanicng need of its operations in order to secure sufficient liquid funds to run the operations and to facilitate other liabilities, like long-term rental agrements related payments. Sudden negative changes in the demand of company's products and services or changes in the overall market environment can however cause that companys liquid funds will not be sufficient to finance the operations.
Production of Martela's products is based on orders placed by customers, supply chain is short and purchases are mainly from neighbouring area and from other parts of Europe. Extensive warehousing is not needed. The product assembly is automated and based on component subcontracting and on assembly carried out by Martela.
Risks of damage are covered with appropriate insurance and this provides comprehensive coverage for property, business interruption, supplier interruption loss and loss liability risks. The services of an external partner are used in insurance as well as in legal matters.
Finance risks are discussed in note 22 of the notes to the financial statements.
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.
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.
Martela anticipates its revenue to increase in full-year 2024 compared to previous year and operating result to be positive.
The Board of Directors proposes to the Annual General Meeting that no dividend will be distributed for 2023.
Martela Corporation's AGM is planned to be held on Friday 5 April 2024. The notice of the Annual General Meeting will be published in a separate release.
(EUR 1000 )
| Note 1 Jan–31 Dec 2023 1 Jan–31 Dec 2022 | |||
|---|---|---|---|
| Revenue | 1 | 94 389 | 106 710 |
| Other operating income | 2 | 149 | 2 293 |
| Changes of inventories of finished goodsand work in progress | 1 420 | 3 516 | |
| Raw material and consumables used | -56 219 | -69 548 | |
| Production for own use | 513 | 2506 | |
| Employee benefits expenses | 3 | -22 995 | -23 557 |
| Other operating expenses | 4 | -12 865 | -13 639 |
| Depreciation and impairment | 5 | -6 773 | -5 790 |
| Operating profit (-loss) | -2 380 | 2 491 | |
| Financial income | 7 | 645 | 126 |
| Financial expenses | 7 | -1 557 | -1 268 |
| Profit (-loss) before taxes | -3 292 | 1 349 | |
| Income taxes | 8 | -222 | 1205 |
| Profit (-loss) for the financial year | -3 514 | 2 554 | |
| Other comprehensive income: | |||
| Items that will not later be recognised through profit or loss | |||
| Items resulting from remeasurement of the net debt related to defined benefit plans | 45 | 103 | |
| Taxes from items that will not later be recognised through profit or loss | 0 | -22 | |
| Items that may later be recognised through profit or loss | |||
| Translation differences | -415 | 190 | |
| Other comprehensive income for the period | -370 | 270 | |
| Total comprehensive income | -3 883 | 2 824 | |
| Allocation of profit (-loss) for the financial year | |||
| Equity holders of the parent | -3 514 | 2 554 | |
| Allocation of total comprehensive income | |||
| Equity holders of the parent | -3 883 | 2 824 | |
| Earnings per share of the profit attributable to the equity holders of the parent | |||
| Basic earnings/share, EUR | 9 | -0,77 | 0,57 |
| Diluted earnings/share, EUR | 9 | -0,77 | 0,57 |
| Note | 31 Dec 2023 | 31 Dec 2022 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 10 | 4 334 | 4 278 |
| Tangible assets | 11 | 14 408 | 13 312 |
| Non-current financial assets | 12 | 539 | 553 |
| Deferred tax assets | 13 | 3 003 | 2 860 |
| Non-current assets, total | 22 283 | 21 003 | |
| Current assets | |||
| Inventories | 14 | 9 235 | 11 781 |
| Trade receivables and other receivables | 12, 15 | 19 115 | 18 248 |
| Cash and cash equivalents | 5 053 | 11 295 | |
| Current assets, total | 33 403 | 41 324 | |
| ASSETS, TOTAL | 55 686 | 62 327 |
| (EUR 1 000) | Note | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity attributable to holders of the parent | 16 | ||
| Share capital | 7 000 | 7 000 | |
| Share premium account | 1 116 | 1 116 | |
| Reserve for invested unrestricted equity | 995 | 995 | |
| Other reserves | -9 | -9 | |
| Treasury shares* | -4 | -4 | |
| Translation differences | -1 071 | -655 | |
| Retained earnings | 1 530 | 5 406 | |
| Equity, total | 9 557 | 13 850 | |
| Non-current liabilities | |||
| Pension obligations | 19 | 105 | 115 |
| Financial liabilities | 12, 18 | 13 812 | 14 686 |
| Provisions | 20 | 269 | 229 |
| Non-current liabilities, total | 14 187 | 15 030 | |
| Current liabilities | |||
| Financial liabilities | 12, 18 | 4 287 | 4 612 |
| Advances received | 21 | 7850 | 6278 |
| Trade payables | 12, 21 | 9 440 | 9 569 |
| Accrued liabilities and prepaid income | 12, 21 | 6 789 | 7 893 |
| Income tax payable | 0 | 1 213 | |
| Other current liabilities | 12, 21 | 3 507 | 3 824 |
| Provisions | 20 | 67 | 57 |
| Non-interest-bearing current liabilities, total | 31 941 | 33 447 | |
| LIABILITIES, TOTAL | 46 128 | 48 477 | |
| EQUITY AND LIABILITIES, TOTAL | 55 686 | 62 327 |
* The treasury shares acquired for and assigned to share-based incentive scheme are shown in accounting terms as treasury shares. See notes 16.
0 0
| (EUR 1 000) | Note | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Cash flow from sales | 94 980 | 113 434 | |
| Cash flow from other operating income | 144 | 282 | |
| Payments on operating costs | -93 128 | -110 881 | |
| Net cash from operating activities before financial items and taxes | 1 996 | 2 835 | |
| Interest paid | -784 | -472 | |
| Interest received | 29 | 23 | |
| Other financial items | -244 | 4 | |
| Taxes paid | -677 | -319 | |
| Net cash from operating activities (A) | 320 | 2 072 | |
| Cash flows from investing activities | |||
| Capital expenditure on tangible and intangible assets | -2 332 | -902 | |
| Proceeds from sale of tangible and intangible assets | 0 | 11 124 | |
| Net cash used in investing activities (B) | -2 332 | 10 222 | |
| Cash flows form financing activities | |||
| Proceeds from short-term loans | 0 | 33 | |
| Repayments of short-term loans | 18 | -417 | -5 000 |
| Repayments of lease liabilities | -3 457 | -2 728 | |
| Proceeds from long-term lease liabilies | 0 | 4 000 | |
| Repayment of long-term loans | 18 | 0 | -1 900 |
| Cash proceeds from issuing shares | 0 | 10 | |
| Dividends paid | -452 | 0 | |
| Net cash used in financing activities (C) | -4 326 | -5 586 | |
| Change in cash and cash equivalents (A+B+C), increase +, decrease - | -6 338 | 6 708 | |
| Cash and cash equivalents at the beginning of year | 11 295 | 4 926 | |
| Translation differences | 96 | -339 | |
| Cash and cash equivalents at the end of year | 5 053 | 11 295 |
(EUR 1 000)
| Reserve for | ||||||||
|---|---|---|---|---|---|---|---|---|
| Share | invested | |||||||
| Equity attributable to equity holders of the parent |
Share capital | premium account |
unrestricted equity |
Other reserves |
Treasury shares |
Translation diff. |
Retained earnings |
Equity total |
| Equity 1 Jan 2022 | 7 000 | 1 116 | 962 | -9 | -128 | -846 | 2 665 | 10 761 |
| Profit (-loss) for the financial year | 2 554 | 2 554 | ||||||
| Other items of comprehensive income adjusted by tax effects | ||||||||
| Translation differences | 190 | 190 | ||||||
| Items resulting from remeasurement of the net | ||||||||
| debt related to defined benefit plans (incl. Deferred taxes) |
80 | 80 | ||||||
| 80 | 270 | |||||||
| Other comprehensive income for the period | 190 190 |
2 634 | 2 824 | |||||
| Total comprehensive income Share issue |
33 | 33 | ||||||
| Share-based incentives | 124 | 107 | 231 | |||||
| Equity 31 Dec 2022 | 7 000 | 1 116 | 995 | -9 | -4 | -656 | 5 406 | 13 849 |
| Equity 1 Jan 2023 | 7 000 | 1 116 | 995 | -9 | -4 | -656 | 5 406 | 13 849 |
| Profit (-loss) for the financial year | -3 514 | -3 514 | ||||||
| Other items of comprehensive income adjusted by tax effects | ||||||||
| Translation differences | -415 | -415 | ||||||
| Items resulting from remeasurement of the net | ||||||||
| debt related to defined benefit plans (incl. | ||||||||
| Deferred taxes) | 45 | 45 | ||||||
| Other comprehensive income for the period | -415 | 45 | -370 | |||||
| Total comprehensive income | -415 | -3 469 | -3 884 | |||||
| Share issue | 33 | 0 | ||||||
| Share-based incentives | 44 | 44 |
Dividends paid -452 -452 Equity 31 Dec 2023 7 000 1 116 995 -9 -4 -1 071 1 530 9 558
More information in Notes 16 Equity and 17 share-based payments.
Martela Corporation supplies ergonomic and innovative furniture solutions and provides interior planning services.
The Group's parent company is Martela Oyj, a Finnish public limited company domiciled in Espoo, street address Miestentie 1, 02150 Espoo. The company's A shares are listed on Nasdaq Helsinki. The Group's financial statements are available online at Martela's home pages www.martela.com. These financial statements were authorized for issue by the Board of Directors of Martela Oyj on February 13, 2024. The Finnish Limited Liability Companies Act permits the shareholders to approve or reject the financial statements in the general meeting that is held after publishing the financial statements. As well, the general meeting has a possibility to amend the financial statements.
Martela's consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as on December 31, 2023. As referred to in the Finnish Accounting Act and in ordinances issued pursuant to the provisions of this Act, the International Financial Reporting Standards refer to the standards and their interpretations adopted in accordance with the procedure laid down in Regulation (EC) No 1606/2002 of the EU. The notes to the consolidated financial statements also conform with additional requirements of the Finnish accounting and company legislation.
The consolidated financial statements are presented in thousands of euros and have been prepared on the historical cost basis except as disclosed in the accounting policies. All presented figures have been rounded, which is why the sum of individual figures might deviate from the presented sum. The key financial indicators have been calculated using exact figures. Martela's consolidated financial statements cover the full calendar year, and this represents the financial period for the parent company and the Group companies.
The preparation of the financial statements in conformity with IFRS requires Group management to make certain estimates and to use judgement when applying accounting policies. The section "Accounting policies requiring management's judgement and key sources of estimation uncertainty" refers to the judgements made by management and those financial statement items on which judgements have a significant effect.
The consolidated financial statements include the parent company, Martela Oyj, and all the subsidiaries in which the parent company controls, directly or indirectly, more than 50 per cent of the voting power of the shares, or otherwise has control. Martela is considered to be in control of a subsidiary when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Subsidiaries are included in the consolidated financial statements by using the acquisition method. The intra-group transactions, unrealised margins on intra-group deliveries, intra-group receivables and liabilities and profit distribution are eliminated.
Transactions in foreign currencies are translated at the exchange rate prevailing on the date of the transaction – in practice, for transactions taking place within any given month, a rate is used that approximates the rate of the transaction date. At the end of the reporting period, the monetary assets and liabilities are translated into functional currencies at the exchange rate at the end of the reporting period. Exchange rate gains and losses related to business operations are treated as adjustments to the purchases and sales. Exchange rate gains and losses in financing are treated as adjustments to financial income and expenses.
The statements of comprehensive income and cash flows of foreign subsidiaries for the period are translated into euros at the average rates for the financial year, and the balance sheets at the average rates of the European Central Bank at the end of the reporting period. The translation of the profit or loss and comprehensive income for the period at different exchange rates in the statement of
comprehensive income and in the balance sheet causes a translation difference which is recognised in other comprehensive income. The exchange rate differences arising from the elimination of the cost of the foreign subsidiaries and the exchange rate differences arising from the translation of postacquisition equity are also recognised in other comprehensive income. Similar treatment is applied to intra-group non-current loans which in substance are equity and form a part of the net investment in the operation in question. When a subsidiary is disposed of, all or in part, the accumulated translation differences are reclassified to profit and loss as part of the gain or loss on disposal.
Furniture is mainly delivered as installed at customer. The control of the furniture is transferred to the customer when the deliverables form the contract are fulfilled, i.e. the furniture is delivered and installed at customer and the customer has approved the delivery. The significant risks and rewards of ownership of the furniture is also transferred to the buyer through the approval of the delivery. Revenue from sold goods is recognised as the control of the goods is transferred to the buyer according to the agreement. The normal warranty for standard Martela produced products in normal use is five years and for other standard products two years.
Consultative services consist of workshops and interviews for specification of the demands placed on the work environment and interior planning services. The deliverable is fulfilled and the control is transferred to the customer as the product of the service is delivered to the customer. Revenue from consultative services is recognised as the deliverable is fulfilled.
In removals services the value of the service is received by the customer as Martela provides the service. In such cases the revenue is recognised over time. The removal services provided by Martela are mainly short in duration. In case a removal services project lasts for several months is the revenue recognised based on either invoicing of the achieved project milestones or based on actual work hours registered for the project.
The transaction prices for the sold goods and services are defined for each deliverable on the sales orders and no variable considerations are in use. Martela does not have capitalized costs for obtaining or of fulfilling customer contracts. Sales receivables are typically due latest within two months from invoicing. The customer contracts do not include significant financing components provided by Martela.
Revenue consists of income from customer contracts according to IFRS 15 and income from customer contracts that are classified as leases based on the contract contents, and are treated in accordance to IFRS 16.
Leases in which substantially all the risks and rewards incidental to ownership of an asset remain with the lessor are classified as operative lease contracts and recognised as revenue in the statement of comprehensive income on a straight-line basis over the lease term.
The Group has arranged defined contribution plans and defined benefit plans for retirement. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. Contributions made to defined contribution plans are recognised in profit or loss as an expense as incurred.
The obligations of defined benefit plans are calculated separately for each plan. The projected unit credit method is used in the calculation. Pension costs are recognised as an expense over the service period of personnel based on calculations performed by qualified actuaries. In calculating the present value of a pension obligation, the market yield of corporate high-grade bonds or the interest
rate of government bonds are used as the discount rate. Their maturity corresponds to a significant extent with the maturity of the computed pension liability.
Pension expenses (service cost in the period) and the net interest for the net debt related to the defined benefit pension plan are recognised through profit or loss. Pension expenses are included in employee benefit expenses. Items resulting from the remeasurement of the net debt (or net asset) related to the defined benefit plan are recorded in items of other comprehensive income in the financial period during which they emerge. These include actuarial gains and losses and returns on assets included in the plan, among other items. Past service costs are recognised in expenses through profit or loss on the earlier of the following dates: the date when the plan is amended or reduced, or the date when the entity recognises the reorganisation expenses related to this or the benefits related to the termination of the employment relationship.
In the Group's share-based incentive system, with vesting periods 2021, 2022 and 2023, payments are made in a combination of shares and cash. Share rewards are measured at fair value at the grant date and recognised as expenses over the vesting period. The vesting conditions are taken into account in the number of shares which are expected to vest by the end of the validity period. Measurements are adjusted at the end of each reporting period and the settlement is recognised under equity. The expense determined at the time of granting the share-based incentives is based on the Group's estimate of the number of shares which are expected to vest by the end of the vesting period. The assumed vesting takes account of the maximum incentive, the assumed achievement of non-market-based earnings targets and the reduction of persons participating the plan. The Group updates the estimate of the final number of shares at the end of each reporting period. Their impact on profit or loss is presented in the statement of comprehensive income under employment benefits expenses.
Operating profit is the Group's profit from operations before financial items and income taxes. Exchange rate differences arisen in the translation of trade receivables and payables denominated in foreign currencies are included in operating profit.
The taxes recognised in the consolidated statement of comprehensive income include current tax based on the taxable income of the Group companies for the financial year, taxes for previous years and the change in deferred taxes. For transactions and other events recognised in profit or loss, any related tax effects are also recognised in profit or loss. For transactions and other events recognised outside profit or loss (either in other comprehensive income or directly in equity), any related tax effects are also recognised either in other comprehensive income or directly in equity, respectively. Deferred tax assets and liabilities are recognised on temporary differences between the tax bases and IFRS carrying values of assets and liabilities in the financial statements. A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against which it can be used. Deferred tax liabilities are recognised to the full extent in the balance sheet. Deferred taxes are measured by using the tax rates enacted or substantively enacted by the end of the reporting period.
Goodwill resulting from business combinations represents the excess of the consideration transferred over the fair value of the net identifiable assets acquired.
Goodwill is tested annually or more frequently if there are indications that the value might be impaired. Testing is performed at least at the end of each financial year. For this purpose goodwill is allocated to cash generating units. An impairment loss is recognised whenever the carrying amount of cash-generating unit exceeds the recoverable amount. Impairment losses are recognised in the comprehensive income statement. An impairment loss in respect of goodwill is never reversed.
Research and development is active and continuous in the Group and if individual development projects are of such a scope in relation to operations and if the capitalization criteria are fulfilled these projects are capitalized. Research expenditure is recognised as an expense when incurred. R&Drelated equipment is capitalised in machinery and equipment. There has been no development costs that met the capitalization criteria during the financial year.
An intangible asset is initially capitalized in the balance sheet at cost if the cost can be measured reliably and it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group. Other intangible assets include software licences, IT-programmes, patents and other corresponding rights. Patents, licences and other rights are measured at historical cost, less amortisation and any impairment.
The useful lives of intangible assets are as follows:
| Licences | 3 – 5 years |
|---|---|
| IT-programmes | 3 – 10 years |
| Customer ship | 4 years |
| Brands | 6 years |
| Patents and other corresponding rights | 10 years |
Amortisation is recognised using the straight-line method.
Land, buildings, machinery and equipment constitute the majority of tangible assets. They are measured in the balance sheet at historical cost, less accumulated depreciation and any impairment. When a part of an item of property, plant and equipment (accounted for as a separate asset) is renewed, the expenditure related to the new item is capitalised and the possibly remaining balance sheet value removed from the balance sheet. Other expenditure arising later is capitalised only when future economic benefits will flow to the Group. Other expenditure for repairs or maintenance is expensed when it is incurred. Those borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. A tangible asset once classified as held for sale is not depreciated. Land is not depreciated. The estimated depreciation periods are as follows:
| Buildings | 15 - 30 years |
|---|---|
| Machinery and equipment | 3 - 8 years |
The residual values and useful lives of tangible assets are reviewed at least at each financial yearend and, if necessary, are adjusted to reflect changes in the expected future economic benefits. Gains and losses from the sale or disposal of tangible assets are recognised in profit and loss and presented under other operating income or other operating expenses.
The carrying amounts of assets are assessed at the end of each reporting period to observe whether there are any indications that an asset may be impaired. If such indications exist, the recoverable amount of the asset will be estimated at the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised if the balance sheet value of an asset or a cash-generating unit exceeds the recoverable amount of it. Impairment losses are recognised in the statement of comprehensive income.
If there are indications that impairment losses no longer exist or that they have diminished, the recoverable amount is estimated. An impairment loss previously recognised in the statement of comprehensive income is reversed if the estimates used in measuring the recoverable income have changed. However, an impairment loss cannot be reversed to an extent more than what the carrying amount of the asset or cash-generating unit would be without recognition of an impairment loss.
Martela's lease contracts consist mainly of office spaces, cars and IT-equipment. The lease contracts of cars and IT-equipment are time limited whereas the contracts for office spaces are open ended as well as time limited. The lease contracts do not include variable lease payments.
Lease agreements, for which the lease period is beyond 12 months, are according to IFRS 16 recognised on the balance sheet as a right-of-use assets and lease liabilities. The right-of-use assets decreased with the accumulated depreciations are recognised as tangible assets. The right-of-use assets are depreciated over the lease period or an estimated period if longer. Estimated rental periods, are used for lease agreements of indefinite duration. The estimated rental periods are 2 years for rented offices and sales facilities and 1 year for warehouses. Martela applies the exemptions to IFRS 16 and does not apply IFRS 16 to short-term leases for which the lease term ends within 12 months and leases of low‑value assets, which are not offices or warehouses in use by Martela. The payments for these are recognised as equal instalments over the rental period in the consolidated statement of comprehensive income.
The lease liabilities have been discounted at the borrowing rate.
Company also operates as lessor of furniture. Accounting principles of these are described under revenue recognition principles.
Martela Oyj has, during the comparison year, signed an sale and leaseback agreement regarding the Nummela production and logistic centre. A sales and leaseback transaction is an operation, in which the Group sells an asset, and simultaneously enters into a lease agreement with the buyer-lessor regarding the right to use the building. If the buyer-lessor has gained control over the asset subject to the agreement and the transfer is classified as an IFRS 15 sale, The Group recognises the fixed asset item arising from the lease to the amount, which is the relative share of the asset's previous book value related to the rights of use retained by it.
The profit is limited to the share of the total profit that is related to the rights transferred to the buyerlessor.
Inventories are measured at the lower of cost and net realisable value. The value of inventories is determined by using weighted average purchase prices and it includes all direct expenditure incurred by acquiring the inventories and also a part of the production overhead costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
Inventory value includes adjustments caused by obsolescence.
Group's financial assets are classified into the following groups: financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and financial assets measured at amortised costs. The classification depends on the purpose of acquiring the financial assets, and they are classified at the time of initial acquisition. All purchases and sales of financial assets are recognised and derecognised on the trade date. The Group derecognises financial assets when it has lost its right to receive the cash flows or when it has transferred substantially all the risks and rewards to an external party.
Financial assets measured at amortised costs include assets that are held in a business model whose object is achieved by holding the assets and collecting contractual cash flows until the due date. The cash flow from the assets consists of solely payments of principal and interest on the principal amount outstanding. They are originally recognised at fair value and subsequently measured at amortised cost. The group recognises a deduction in the financial assets recognised at amortised cost based on expected credit losses. These assets are included in either current or non-current financial assets (they are included in the latter if they mature over 12 months later). The category includes loan, trade and other receivables that are not derivatives.
Cash and cash equivalents comprise cash in hand, in banks and in demand bank deposits, as well as other current, very liquid investments. Items qualifying as cash and cash equivalents have original maturities of three months or less from the date of acquisition.
At the end of each reporting period, the Group assesses whether objective evidence exists of the impairment of an individual financial asset or a group of financial assets. Impairment will be recognised through profit or loss.
A simplified model according to IFRS 9 is used in assessing the expected credit losses on trade receivables: credit losses are recognised to an amount that represents the expected credit losses for the full lifetime. The expected credit losses are assessed based on historical information on credit losses and on the information on the future financial circumstances available on the review date.
The Group classifies its financial liabilities as financial liabilities measured at amortised cost (mainly includes borrowings from financial institutions, IFRS 16 lease liabilities and trade payables) . Financial liabilities are initially recognised at fair value and are subsequently measured either at amortised cost or at fair value, based on the classification made. Financial liabilities are included in current and non-current liabilities and they can be interest-bearing or non-interest-bearing. Bank overdrafts are included in current interest-bearing liabilities. Financial liabilities are regarded as current, unless the Group has an absolute right to postpone the repayment of the debt until a minimum of 12 months after the end of the reporting period. Financial liabilities (in full or in part) are not eliminated from the balance sheet until the debt has ceased to exist – in other words, when the obligation specified in the agreement has been fulfilled or rescinded or ceases to be valid.
The Group uses derivative financial instruments, to hedge its electricity price risk. The Group doesn't apply hedge accounting, but derivatives are recognized at fair value through the statement of profit or loss at each balance sheet date according to the closing rate of the period. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The change in fair value is recognised in income statement in raw material and consumables used.
Outstanding ordinary shares are shown as share capital. The share capital consists of K and A series shares. The shares of both series have identical dividend rights but K series shares confer 20 votes and A series shares 1 vote at general meetings of shareholders.
Expenses related to the issuance and acquisition of own equity instruments are presented as deductions from equity. If Martela Oyj buys back its own equity instruments, their cost is deducted from equity.
Dividends proposed by the Board of Directors are not recorded in the financial statements but the related liability is only recognised when approved by a general meeting of shareholders.
A provision is recognised when the Group has a legal or constructive obligation as a result of a past event, it is probable that on outflow of economic benefits will be required to settle the obligation and the amount can be estimated reliably. The amount recognised as a provision is equal to the best estimate of the expenditure required to settle the present obligation at the end of the reporting period.
In preparing the financial statements it is necessary to make forward-looking estimates and assumptions which may not, in fact, turn out to be true. In addition, it is necessary to use judgement
in applying accounting policies to the financial statements. The foremost estimates concern the utilisation of deferred tax assets against future taxable income and the assumptions used in the impairment testing. Other estimates requiring management's judgement mainly concerns the amount of non-marketable inventories, impairment of trade receivables, the amount of guarantee provisions and the definition of the lease period in lease contracts of indefinite duration under IFRS 16. Estimates and assumptions are based on management's current best knowledge at the end of the reporting period, reflecting historical experience and other reasonable assumptions.
The carrying amounts of non-current assets are assessed at the end of each reporting period to observe whether there are any indications that the balance sheet value of an asset or a cashgenerating unit exceeds the recoverable amount of it.
If such indications exist, the recoverable amount of the asset will be estimated at the higher of its fair value less costs to sell and its value in use. Value in use is calculated based on discounted forecast cash flows. An impairment loss is recognised if the balance sheet value of an asset or a cashgenerating unit exceeds the recoverable amount of it. Impairment losses are recognised in the statement of comprehensive income.
If there are indications that impairment losses no longer exist or that they have diminished, the recoverable amount is estimated. An impairment loss previously recognised in the statement of comprehensive income is reversed if the estimates used in measuring the recoverable income have changed. However, an impairment loss cannot be reversed to an extent more than what the carrying amount of the asset or cash-generating unit would be without recognition of an impairment loss. Goodwill is tested for impairment annually regardless of whether there is any indication of impairment.
An impairment loss in respect of goodwill is never reversed. (Note 10)
The recoverable amounts of cash generating units have been determined using calculations based on value in use. In the calculations, forecast cash flows are based on financial plans approved by management, covering a period of five years. The central assumptions concern development of growth and profitability. The cash flows beyond the five-year period are estimated based on 1,5% growth.
The prerequisites for recognition of deferred tax receivables are assessed at the end of each reporting period. Assumptions made by the managers of the Group companies on taxable income in future financial periods have been taken into account when evaluating the amount of deferred tax assets. Various internal and external factors can have a positive or negative effect on deferred tax assets. These include restructuring in the Group, amendments to tax laws (such as changes to tax rates or a change to the period of utilisation of confirmed deductible tax losses) and changes to the interpretations of tax regulations. Deferred tax assets recognised in an earlier reporting period are recognised in expenses in the consolidated statement of comprehensive income if the unit in question is not expected to accumulate sufficient taxable income to be able to utilise the temporary differences, such as confirmed tax losses, on which the deferred tax assets are based.
Deferred tax assets are not recorded for taxation losses in subsidiaries.
Financial Statements in Annual Report are prepared in ESEF format, in which it is marked up with XBRL tags according to ESEF taxonomy. The machine readable material is not audited.
In 2023 and thereafter, the Group has adopted the following new and revised standards and interpretations issued by the IASB:
Amendments to the standard IAS 12 Income Taxes: Deferred taxes on transactions for which companies recognise both an asset and a liability. Amendment specifies how company account for deferred tax on transactions such as leases.
Amendments to IAS 1 Presentation of financial statements: The amendment clarifies when the change in accounting policy is material and how entities apply the concept of materiality in making decisions about accounting policy disclosures. The changes did not have a significant impact on the consolidated financial statements.
Amendments to the standard IAS 8, Accounting principles, changes and errors in accounting estimates: Definition of accounting estimates. The change clarifies the definition and application of the accounting estimate. The changes did not have a significant impact on the consolidated financial statements.
Amendments to IAS 12 Income Taxes – Pillar 2: The model rules regarding Pillar 2 will enter into force in Finland on January 1, 2024 with the new legislation on corporate minimum tax, which will bring into force the Council directive on ensuring a global minimum tax level for multinational corporations and large domestic corporations (Pillar 2). Martela Oyj is not covered by the legislation.
Amendments to the standard IAS 1, Classification of liabilities into current and non-current. The standard change clarifies how debts should be classified as short-term or long-term when the company has the right to postpone the payment of the debt for at least 12 months.
Amendments to the IFRS16 standard Leases: lease liabilities in sales and leasebacks. The change requires the seller-lessee to subsequently value the lease liabilities arising from the sublease in a way that does not record any part of the profit or loss related to the seller-lessee's right of use. The new requirements do not prevent the seller-lessee from recording a profit or loss in the income statement related to the partial or complete termination of the lease agreement.
Amendments to the IAS 7 standard Cash flow statement and to the IFRS 7 standard Financial instruments: Delivery financing arrangements. The aim of the change is to provide additional information on the use of supplier financing arrangements, which will allow investors to assess the effects on the company's debts, cash flows and liquidity risk. The change gives instructions to identify a situation in which the currency cannot be considered as freely exchangeable and instructs in these situations to take this into account in the exchange rate used in reporting and to provide additional information on the matter.
The new IFRS standards, changes to standards and IFRIC interpretations listed above that come into effect on or after 1 January 2024 are not estimated to have a material impact on the group.
consolidated figures as a single segment and in addition reports revenue by country. Revenue will be reported by the location of a customer in following countries: Finland, Sweden, Norway and Other countries. As a result of harmonising and combining processes, the organisation, reporting and systems, as of 2017 the company reports
| (EUR 1 000) | ||
|---|---|---|
| Revenue by area | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
| Finland | 67 313 | 74 501 |
| Sweden | 9 561 | 11 155 |
| Norway | 6 992 | 7 575 |
| Other areas | 10 523 | 13 479 |
| Total | 94 389 | 106 710 |
| 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 | |
|---|---|---|
| Income from the sale of goods | 77 653 | 91 615 |
| Income from the sale of services | 16 736 | 15 095 |
| Total | 94 389 | 106 710 |
Revenue includes EUR 4 287 thousand (2 228) income from furniture which is based on customer agreements and is classified as rental income. Comparison year figure has been corrected. Previously released figure was EUR 1 327 thousand.
| Assets and liabilities from contracts with customers | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Trade receivables | 16 218 | 15 810 |
| Accrued income based on customer contracts | 281 | 933 |
| Prepayments based on customer contracts | 7 850 | 6 278 |
| Information about geographical regions | ||
|---|---|---|
| Non-current assets (EUR 1000) | Intangible assets | Tangible assets |
| 31 Dec 2023 | 31 Dec 2023 | |
| Finland | 4 334 | 14 093 |
| Sweden | 0 | 106 |
| Other regions | 0 | 208 |
| Total | 4 334 | 14 408 |
| Non-current assets | Intangible assets | Tangible assets |
| 31 Dec 2022 | 31 Dec 2022 | |
| Finland | 4 278 | 13 025 |
| Sweden | 0 | 150 |
| Other regions | 0 | 138 |
| Total | 4 278 | 13 312 |
| (EUR 1 000) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|
| Gains on sale of tangible assets | 0 | 69 |
| Gain on the sale and leaseback agreement | 0 | 1 930 |
| Rental income | 58 | 239 |
| Public subsidies | 6 | 13 |
| Other income from operations | 85 | 43 |
| Total | 149 | 2 293 |
| (EUR 1 000) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|
| Salaries and wages | -18 505 | -18 933 |
| Pension expenses, defined contribution plans | -2 876 | -2 949 |
| Pension expenses, defined benefit plans | -70 | -105 |
| Expenses of matching share plan | -275 | -297 |
| Other salary-related expenses | -1 270 | -1 273 |
| Personnel expenses in the income statement | -22 995 | -23 557 |
| Other fringe benefits | -499 | -381 |
| Total | -23 494 | -23 938 |
A total of EUR 769 thousand for 2023 and EUR 1 142 thousand from 2022 were recognised in the result from the incentives and salary-related expenses associated with the incentive scheme. Salaries and fees and share-based payments are presented in more detail under note 24 Related-party transactions.
More information about share-based incentive programme is in note 17.
| Personnel | 2023 | 2022 |
|---|---|---|
| Personnel on average, workers | 194 | 200 |
| Personnel on average, officials | 209 | 203 |
| Personnel on average, total | 403 | 403 |
| Personnel at year-end | 386 | 400 |
| Personnel on average in Finland | 326 | 328 |
| Personnel on average in Sweden | 29 | 27 |
| Personnel on average in Norway | 15 | 14 |
| Personnel on average in Poland | 33 | 34 |
| Total | 403 | 403 |
494 510
Other operating expenses are reported by type of expense.
| (EUR 1000) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|
| Freight | -1 237 | -1 465 |
| Travel | -611 | -561 |
| Administration | -2 041 | -2 582 |
| IT | -3 217 | -2 768 |
| Marketing | -640 | -862 |
| Electricity and heating | -330 | -311 |
| Unrealised loss of electricity derivatives | -52 | -78 |
| Other real estate | -1 089 | -1 053 |
| Royalties | -646 | -850 |
| Other | -3 002 | -3 107 |
| Total | -12 865 | -13 639 |
| Auditors' fees | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
| Auditing | -173 | -129 |
| Other services | -18 | -15 |
| Total | -191 | -144 |
Auditors' fees are included in administration expenses.
| (EUR 1 000) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|
| Depreciation | ||
| Intangible assets | -1 267 | -1 005 |
| Tangible assets | ||
| Buildings and structures | -170 | -324 |
| Machinery and equipment | -1 273 | -936 |
| Depreciation, total | -2 710 | -2 265 |
| Depreciation of right-of-use assets according to IFRS 16 | ||
|---|---|---|
| Buildings and structures | -2 628 | -2 157 |
| Machinery and equipment | -1 435 | -1 369 |
| Depreciation, total | -4 063 | -3 526 |
The income statement includes research and development expenses of EUR -1,573 thousand (EUR -1,625 thousand 2022).
| (EUR 1 000) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|
| Financial income | ||
| Interest income on loans and other receivables | 29 | 23 |
| Foreign exchange gain on loans and other receivables | 615 | 103 |
| Other financial income | 1 | 0 |
| Total | 645 | 126 |
| Financial expenses | ||
| Interest expenses from financial liabilities measured at amortised cost | -25 | -166 |
| Foreign exchange losses on loans and other receivables | -533 | -327 |
| Interest expenses of lease liabilities according to IFRS 16 | -694 | -387 |
| Other financial expenses | -304 | -389 |
| Total | -1 557 | -1 268 |
| Financial income and expenses, total | -912 | -1 142 |
| Total exchange rate differences affecting profit and loss are as follows: | ||
| Exchange rate differences, sales (included in revenue) | -39 | -347 |
| Exchange rate differences, purchases (included in adj. of purchases) | -81 | 23 |
| Exchange rate differences, financial items | 81 | -224 |
| Exchange rate differences, total | -38 | -548 |
| (EUR 1 000 ) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|
| Income taxes, financial year | -175 | -1 385 |
| Taxes for previous years | -86 | -116 |
| Change in deferred tax liabilities and assets | 39 | 2 705 |
| Total | -222 | 1 205 |
Reconciliation between the income statement's tax expense and the income tax expense calculated using the Martela Group's domestic corporation tax rate 20.0%.
| Profit before taxes | -3 292 | 1 349 |
|---|---|---|
| Taxes calculated using the domestic corporation tax rate | -658 | 270 |
| Deferred taxes | -39 | -2 705 |
| Different tax rates of subsidiaries abroad | -17 | -36 |
| Taxes for previous years | 86 | 116 |
| Recognition of unused tax losses not booked earlier | 0 | 1 089 |
| Tax-exempt income | 6 | 3 |
| Non-deductible expenses | 58 | -504 |
| Unbooked deferred tax assets on losses in taxation | 838 | 356 |
| Other items | -51 | 207 |
| Income taxes for the year in the p/l (+ = expense, - = profit) | 222 | -1 205 |
Income taxes in the comparison year in income statement are positive, due to use of confirmed losses, for which deferred tax assets have not been recognised previous periods, as well as a realised sale and leaseback transaction that took place during the period, for which deferred tax receivable has been recognised.
The basic earnings per share is calculated dividing the profit attributable to equity holders of the parent by the weighted average number of shares outstanding during the year.
| (EUR 1 000) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|
| Profit attributable to equity holders of the parent | -3 514 | 2 554 |
| Weighted average number of shares (1,000) | 4 572 | 4 518 |
| Basic earnings per share (EUR/share) | -0,77 | 0,57 |
The company has no diluting instruments December 31, 2023 or December 31, 2022. For more information on weighted average number of shares see note 16.
| (EUR 1 000) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 | ||||||
|---|---|---|---|---|---|---|---|---|
| Intangible assets |
Goodwill | Work in progress |
Total | Intangible assets |
Goodwill | Work in progress |
Total | |
| Acquisition cost 1 Jan | 15 479 | 883 | 724 | 17 086 | 15 360 | 883 | 159 | 16 402 |
| Increases | 926 | 2 166 | 3 092 | 227 | 2 424 | 2 652 | ||
| Decreases | -1 769 | -1 769 | -108 | -1 860 | -1 968 | |||
| Acquisition cost 31 Dec | 16 405 | 883 | 1 121 | 18 409 | 15 479 | 883 | 724 | 17 086 |
| Accumulated depreciation 1 Jan | -12 808 | 0 | 0 -12 808 |
-11 814 | 0 0 |
-11 814 | ||
| Depreciation for the year | -1267 | -1 267 | -994 | -994 | ||||
| Exchange rate differences | ||||||||
| Accumulated depreciation 31 dec | -14 075 | 0 | 0 -14 075 |
-12 808 | 0 0 |
-12 808 | ||
| Carrying amount 1 Jan | 2 671 | 883 | 724 | 4 278 | 3 546 | 883 | 159 | 4 588 |
| Carrying amount 31 Dec | 2 330 | 883 | 1 121 | 4 334 | 2 671 | 883 | 724 | 4 278 |
The Group's Goodwill EUR 883 thousand (EUR 883 thousand 2022) relates to the Grundell acquisition Martela made December 31, 2011. The expected future cash flows will be generated through more extensive service solutions encompassing also products and the already implemented profit improving actions. The revenue growth is also supported by the renewed strategy of Martela that increases the emphasis on service within the Group.
Goodwill is tested annually or more frequently if there are indications that the amount might be impaired. In assessing whether goodwill has been impaired, the carrying value of the cash generating unit Muuttopalvelu Grundell Oy has been compared to the recoverable amount of the cash carrying unit.
The recoverable amount of the goodwill is determined based on the value in use calculations. The value in use is calculated based on the discounted forecast cash flows. The cash flow forecasts rely on the plans approved by the management concerning profitability and the growth rate of revenue. The plans cover a five-year period taking into account the recent development of the business.
In impairment testing the average growth is estimated to be 1.5% and EBIT 9.9%. The use of testing model requires making estimates and assumptions concerning market growth and general interest rate level. The used post-tax discount rate is 10.0% (9.6%) which equals the weighted average cost of capital.
The cash flows after the five-year period have been forecasted by estimating the future growth rate of revenue to be 1.5%. Based on the impairment test there is no need to recognise an impairment loss.
The carrying value of the cash generating unit is EUR 13.1 million higher than the book value according to the performed impairment test. No predictible changes in any assumpions, have any significant impact on the result of the goodwill testing.
| Buildings | Machinery and |
Machinery and equipment IFRS |
Machinery and equipment IFRS |
Other tangible | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 Jan–31 Dec 2023 | Land areas | Buildings | IFRS 16 | equipment | 16 | 16 WAAS* | assets | Work in progress | Total | |
| Acquisition cost 1 jan | 4 | 23 616 | 12 407 | 34 075 | 2 691 | 7 839 | 23 | 1 80 656 |
||
| Increases | 13 | 1 272 | 586 | 1 536 | 3 918 | 7 325 | ||||
| Decreases | 0 | -9 | 0 -102 |
-1373 | -1 | -1 486 | ||||
| Exchange rate differences | -43 | -43 | ||||||||
| Acquisition cost 31 Dec | 4 | 23 620 | 13 636 | 34 661 | 4 124 | 10 383 | 23 | 0 86 452 |
||
| Accumulated depreciation 1 Jan | 0 | -23 003 | -8 214 | -32 865 | -1 853 | -1 407 | 0 | 0 -67 343 |
||
| Accumulated depreciation, decreases | 0 | 0 93 |
672 | 0 | 0 765 |
|||||
| Depreciation for the year | 0 | -170 | -1 795 | -359 | -834 | -2 348 | 0 | 0 -5 506 |
||
| Exchange rate differences | 48 | -8 | 0 | 0 40 |
||||||
| Accumulated depreciation 31 Dec | 0 | -23 173 | -9 961 | -33 224 | -2 601 | -3 083 | 0 | 0 -72 044 |
||
| Carrying amount 1 Jan | 4 | 614 | 4 193 | 1 210 | 838 | 6 430 | 23 | 0 13 312 |
||
| Carrying amount 31 Dec | 4 | 448 | 3 676 | 1 437 | 1 523 | 7 298 | 23 | 0 14 408 |
and in which company according to the standard operates as lessor. *WAAS, Workplace as a Service-business area assets, that are classified as operative leasing contracts according to IFRS 16
| Machinery | Machinery and | Machinery and | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Buildings | and | equipment IFRS | equipment IFRS | Other tangible | |||||
| 1 Jan–31 Dec 2022 | Land areas | Buildings | IFRS 16 | equipment | 16 | 16 WAAS* | assets | Work in progress | Total |
| Acquisition cost 1 Jan | 83 | 24 046 | 9 099 | 33 645 | 2 814 | 2 421 | 35 | 77 | 72 220 |
| Increases | 103 | 3 565 | 475 | 162 | 6 070 | 10 375 | |||
| Decreases | -80 | -533 | -257 | -45 | -285 | -653 | -11 | -76 | -1 940 |
| Exchange rate differences | 0 | ||||||||
| Acquisition cost 31 Dec | 4 | 23 616 | 12 407 | 34 075 | 2 691 | 7 839 | 24 | 1 | 80 656 |
| Accumulated depreciation 1 Jan | 0 | -22 670 | -6 212 | -32 251 | -1 563 | -558 | 0 | 0 | -63 253 |
| Accumulated depreciation, decreases | 0 | 176 | 24 | 261 | 236 | 0 | 0 | 698 | |
| Depreciation for the year | 0 | -332 | -2 178 | -639 | -550 | -1 086 | 0 | 0 | -4 787 |
| Exchange rate differences | 0 | 0 | 0 | ||||||
| Accumulated depreciation 31 Dec | 0 | -23 003 | -8 214 | -32 865 | -1 853 | -1 407 | 0 | 0 | -67 343 |
| Carrying amount 1 Jan | 83 | 1 376 | 2 887 | 1 395 | 1 250 | 1 863 | 35 | 77 | 8 967 |
| Carrying amount 31 Dec | 4 | 614 | 4 193 | 1 210 | 838 | 6 430 | 23 | 0 | 13 312 |
*WAAS, Workplace as a Service-business area assets, that are classified as operative leasing contracts according to IFRS 16 and in which company according to the standard operates as lessor.
| (EUR 1 000) | Financial assets measured at amortised costs |
Financial liabilities measured at amortised cost |
Financial assets measured at fair value through profit or loss |
Book values of balance sheet items |
Fair value | Hierarchy level |
Note | |
|---|---|---|---|---|---|---|---|---|
| 2023 balance sheet items | ||||||||
| Non-current financial assets | ||||||||
| Loan receivables | 532 | 532 | 532 | 2 | ||||
| Current financial assets | ||||||||
| Trade and other receivables | 16 218 | 16 218 | 16 218 | 2 15 |
||||
| Book value by group | 16 750 | 16 750 | 16 750 | |||||
| Non-current financial liabilities | ||||||||
| Interest-bearing liabilities | 13 776 | 13 776 | 13 776 | 2 18 |
||||
| Derivatives designated as hedging instruments | 36 | 36 | 36 | 1 | ||||
| Current financial liabilities | ||||||||
| Interest-bearing liabilities | 4 272 | 4 272 | 4 272 | 2 18 |
||||
| Derivatives designated as hedging instruments | 15 | 15 | 15 | 1 | ||||
| Trade payables and other liabilities | 12 947 | 12 947 | 12 947 | 2 21 |
||||
| Book value by group | 30 995 | 52 | 31 046 | 31 046 | ||||
| (EUR 1 000) | Financial assets measured at amortised costs |
Financial liabilities measured at amortised cost |
Financial assets measured at fair value through profit or loss |
Book values of balance sheet items |
Fair value | Hierarchy level |
Note | |
| 2022 balance sheet items | ||||||||
| Non-current financial assets | ||||||||
| Loan receivables | 546 | 2 | ||||||
| 546 | 546 | |||||||
| Current financial assets | ||||||||
| Trade and other receivables Book value by group |
15 810 16 356 |
15 810 16 356 |
15 810 16 356 |
2 15 |
||||
| Non-current financial liabilities | ||||||||
| Interest-bearing liabilities | 14 678 | 14 678 | 14 678 | 2 18 |
||||
| Derivatives designated as hedging instruments | 8 | 8 | 8 | 1 18 |
||||
| Current financial liabilities | ||||||||
| Interest-bearing liabilities | 4 542 | 4 542 | 4 542 | 2 18 |
||||
| Derivatives designated as hedging instruments Trade payables and other liabilities |
13 393 | 70 | 70 13 393 |
70 13 393 |
1 18 2 21 |
Derivatives designated as hedging instruments have been bought in order to manage the risk concerning the electricity price.
Other financial assets include investments in unlisted equities. They have been measured at acquisition cost as fair value cannot be assessed reliably. The book values of trade receivables and receivables other than those based on derivatives are estimated to essentially correspond to their fair values due to the short maturity of the receivables.
The book values of debts are estimated to correspond to their fair values. Interest rate level has no material effect. The book values of trade and other non-interest-bearing liabilities are also estimated to correspond to their fair values. Discounting has no material effect. Fair values of each financial asset and liability group are presented in more detail under the note indicated in the table above.
Assets and liabilities recognised at fair value in the financial statements are categorised into three levels in the fair value hierarchy
based on the inputs used in the valuation technique to determine their fair value. The three levels are:
Level 1. Quoted prices(unadjusted) in active markets for identical assets or liabilities.
Level 2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly e.g. discounted cash flows or valuation models.
Level 3. Inputs for the asset or liability that are not based on observable market data and the fair value determination is widely based on management's judgement and the use of that in commonly approved valuation models.
| Changes in deferred taxes during 2023 | 1 Jan 2023 | Recognised in the income statement |
Recognised in the other comprehensive income |
Recognised in the retained earnings |
31 Dec 2023 |
|---|---|---|---|---|---|
| Deferred tax assets | |||||
| Right of use asset | 2 454 | 0 | 2 454 | ||
| Pension obligations | 3 | 0 | -12 | -9 | |
| Other temporary differences | 425 | 212 | 0 | 116 | 753 |
| Total | 2 882 | 212 | -12 | 116 | 3 198 |
| Deferred tax liabilities | |||||
| Right of use asset | 7 | 184 | 191 | ||
| On buildings measured at the fair value of the transition date | 16 | -12 | 0 | 0 | 4 |
| Total | 23 | 172 | 0 | 0 | 195 |
| Deferred tax assets and liabilities, total | 2 859 | 40 | -12 | 116 | 3 003 |
| (EUR 1 000 ) | |||||
| Changes in deferred taxes during 2022 | 1 Jan 2022 | Recognised in | Recognised in the | Recognised in | 31 Dec 2022 |
| the income statement |
other comprehensive income |
the retained earnings |
|||
| Deferred tax assets | |||||
| Right of use asset | 28 | 2 426 | 2 454 | ||
| Pension obligations | 26 | 0 | -22 | 0 | 3 |
| Other temporary differences | 287 | 165 | 0 | -27 | 425 |
| Total | 340 | 2 591 | -22 | -27 | 2 883 |
| Deferred tax liabilities | |||||
| Right of use asset | 5 | 2 | 7 | ||
| On buildings measured at the fair value of the transition date | 132 | -116 | 0 | 0 | 16 |
| Total | 137 | -116 | 0 | 0 | 23 |
| Deferred tax assets and liabilities, total | 204 | 2 707 | -22 | -27 | 2 860 |
Deferred tax assets have not been recognised on unused tax losses that probably cannot be utilised in the future against taxable income. The amount of such losses is EUR 22.1 million (21.8 in 2022) including current year results.
According to current knowledge these losses have no expiration date. The losses mainly originate from foreign subsidiaries.
| (EUR 1 000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Raw materials and consumables | 7 777 | 10 060 |
| Work in progress | 399 | 1 281 |
| Finished goods | 1 059 | 440 |
| Total | 9 235 | 11 781 |
The value of inventories has been written down by -381 thousand (-430 thousand 2022) due to obsolescence.
In the valuation of inventories the fair value of an item as well as its usage in current product portfolio offered is monitored. Should the current product portfolio no longer carry the product to which the item is used the item is written down. If the product is still on sale but there has been decision to finish its selling, it will be written down to equal half of its value.
| (EUR 1 000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Trade receivables | 16 218 | 15 810 |
| Accrued income and prepaid expenses of | ||
| Personnel expenses | 91 | 99 |
| Uninvoiced revenue | 445 | 1 115 |
| Prepaid expenses | 1 869 | 927 |
| Tax receivables | 491 | 297 |
| Accrued income and prepaid expenses total | 2 897 | 2 438 |
| Total | 19 115 | 18 248 |
The age distribution of Group trade receivables on the balance sheet date 31 December is presented in the following table:
| Incl. credit loss | Incl. credit loss | ||||
|---|---|---|---|---|---|
| Age distribution of trade receivables (EUR 1 000) | 2023 provision | 2022 provision | |||
| Undue | 12 279 | 74 | 12 608 | 101 | |
| 0-6 months overdue | 3 723 | 97 | 2 877 | 17 | |
| 6-12 months overdue | 128 | 299 | 142 | 2 | |
| 12-24 months overdue | 74 | 50 | 89 | 5 | |
| Over 24 months overdue | 14 | 64 | 94 | 5 | |
| Total | 16 218 | 584 | 15 810 | 129 |
A provision is made to the trade receivables according to following, unless it is highly likely to receive payment for the receivable: undue receivables 0.5%, 0-6 months overdue 2%, 6-12 months overdue 10%, 12-24 months overdue 50% and over 24 months overdue 100%.
At the end of the financial year, there were a total of EUR 584 thousand in provisions for bad debts, of which the group's EUR 290 thousands is related to the bankruptcy of a Norwegian customer.
The sales invoices are interest-free and the most general payment term is 14 days, while the payment term in the biggest invoices is 30 days.
The maximum trade receivable credit risk amount on the balance sheet date 31 December by country or region:
| Region (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Finland | 9 704 | 9 827 |
| Scandinavia | 5 188 | 4 689 |
| Other European countries | 1 256 | 1 241 |
| Other regions | 70 | 53 |
| Total | 16 218 | 15 810 |
Credit risks from trade receivables are not concentrated.
In 2023 credit losses of EUR -535 thousand (EUR -192 thousand 2022) has been recognised as expenses and are presented in other operating expenses.
The paid share capital entered in the Trade register is EUR 7,000,000. The counter value of a share is 1.53 (1.55). The K shares carry 20 votes at the annual general meeting and the A-shares 1 vote each. Both share series have the same dividend rights.
| (EUR 1 000) | |||||||
|---|---|---|---|---|---|---|---|
| Changes in share capital | Number of shares | Share capital | Share premium account |
Reserve for invested unrestricted |
Treasury shares |
Total | |
| A shares | K shares | equity | |||||
| 1 Jan 2022 | 3 890 158 | 604 800 | 7 000 | 1 116 | 962 | -128 | 8 950 |
| Shares of directed share issue | 11 574 | 33 | 124 | 157 | |||
| 31 Dec 2022 | 3 913 389 | 604 800 | 7 000 | 1 116 | 995 | -4 | 9 108 |
| Shares of directed share issue | 53 881 | ||||||
| 31 Dec 2023 | 3 967 270 | 604 800 | 7 000 | 1 116 | 995 | -4 | 9 108 |
Martela Oyj owns 1,425 (1,425) A-shares purchased at an average price of 10.65. The number of treasury shares is equivalent to 0.03% (0.03) of all shares and 0.01% (0.01) of all votes.
A total of 11,657 of Martela shares held by the company have been conveyed without consideration to the 34 key individuals participating in the Performance-based Matching Share Plan 2021—2023, announced on March 23, 2021.
The subscription price of the directed share issue has been registered in reserve for invested unrestricted equity.
Company has decided on a paid directed share issue March 17, 2022, in which 11,574 of series A shares have been subscribed.
The share subscription price TEUR 33, has been credited to the company's reserve for invested unrestricted equity.
Company has decided on a paid directed share issue March 29, 2023, in which 53,881 of series A shares have been subscribed without consideration. The shares issued to the company have been used to pay incentives according to the company's incentive plan.
Acquisition of shares for the share-based incentive scheme and the management of the scheme have been outsourced to an external service provider.
Translation differences in equity comprises translation differences of financial statements of foreign subsidiaries when translated into euros and of investments in foreign units. Other reserves consists of reserve funds.
The share premium account is a fund established in accordance with the previous Finnish Companies Act. According to the present Liability Companies Act (effective from September 1, 2006) it is included in restricted shareholders' equity and can no longer be accumulated. The share premium account can be reduced in accordance with the regulations on the reduction of share capital, and it can be used as a fund increase to increase share capital. The acquisition cost of treasury shares is deducted from shareholders' equity (including the related transaction costs).
The parent company's distributable equity was 16,372 thousand on December 31, 2023.
The prerequisite for participating in the plan is that a participant acquires the company´s series A shares up to the number determined by the Board of Directors. In order to implement the plan, the Board of Directors decided on a share issue against payment directed to the target group. Approximately 40 persons, including the CEO and other Martela's Management Team members, belong to the target group of the plan. The Performance-based Matching Share Plan 2021–2023 consists of three performance periods, covering the financial years of 2021, 2022 and 2023, respectively.
In the plan, the target group is given an opportunity to earn Martela Corporation series A shares based on performance and on their personal investment in Martela Corporation series A shares.
The Board of Directors decides on the plan's performance criteria and targets to be set for each criterion at the beginning of a performance period. During the performance period 2022 and 2023, the rewards are based on the Group's Earnings before Interest and Taxes (EBIT). The potential rewards based on the plan will be paid after the end of each performance period.
The rewards to be paid based on the plan will amount to an approximate maximum total of 718,000 Martela Corporation series A shares including also the proportion to be paid in cash. The cash proportions of the rewards are intended for covering taxes and taxrelated expenses arising from the rewards to the participants.
| Program | Share-based incentive programme 2021–2023 | ||
|---|---|---|---|
| Type | Share | ||
| Instrument | Earning period 2021 |
Earning period 2022 |
Earning period 2023 |
| Issuing date | 6.5.2021 | 6.5.2021 | 6.5.2021 |
| Maximum amount, pcs | 718 000 | 718 000 | 718 000 |
| Dividend adjustment | No | No | No |
| Grant date | 18.3.2021 | 18.3.2021 | 18.3.2021 |
| Beginning of earning period | 1.1.2021 | 1.1.2022 | 1.1.2023 |
| End of earning period | 31.12.2021 | 31.12.2022 | 31.12.2023 |
| End of restriction period | 31.5.2022 | 31.5.2023 | 31.5.2024 |
| Vesting conditions | Share ownership, employment until the end of vesting date, EBIT |
Share ownership, employment until the end of vesting date, EBIT |
|
| Maximum contractual life, yrs | 1.4 | 1.4 | 1.4 |
| Remaining contractual life, yrs | 0.0 | 0.4 | 1.4 |
| Number of persons at the end of reporting year | 36 | 35 | 30 |
| Payment method | Cash & Equity | Cash & Equity | Cash & Equity |
| Changes during the period 2021 | Earning period 2021 |
Earning period 2022 |
Earning period 2023 |
| 1 Jan 2021 | |||
| Outstanding at the beginning of the reporting period, pcs | 153 014 | 154 486 | 157 046 |
| Changes during the period | |||
| Granted | 0 | 0 | |
| Forfeited | 46 742 | 45 410 | |
| Shares given | 23 305 | 107 744 | |
| Lost during the period | 129 709 | ||
| Outstanding at the end of the period | 0 | 0 | 111 636 |
| Effects from the share based incentive programme on the financial year 2022 (EUR 1 000) | 2023 | ||
| Expenses for the financial year, share-based payments, equity settled | 43 612 |
IFRS 2 requires an entity to measure the award at its fair value and recognised over the vesting period. The award is recognised in equity in its full extent. The fair value of the share-based scheme when granted was the value of a company's share, EUR 2.85 per share (6.5.2021) and EUR 2.71 per share (23.6.2022).
| (EUR 1 000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Non-current | ||
| Derivatives designated as hedging instruments | 36 | 8 |
| Lease liabilities | 13 776 | 14 678 |
| Total | 13 812 | 14 686 |
| Current | 31 Dec 2023 | 31 Dec 2022 |
| Loans from financial institutions | 1 207 | 1 624 |
| Derivatives designated as hedging instruments | 15 | 70 |
| Lease liabilities | 3 065 | 2 918 |
| Total | 4 287 | 4 612 |
Current loans consist of factoring loan in 2023.
More information in note 23 Pledges granted and contingent liabilities.
More inforamation on Derivatives designated as hedging instruments is given in note 12 and 22.
| 31 Dec 2023 | 31 Dec 2022 | |
|---|---|---|
| Lease liabilities are payable as follows: | Lease liabilities | Lease liabilities |
| Lease liabilities - total amount of minimum lease payments | ||
| No later than one year | 3 672 | 3 756 |
| Later than one year and no later than five years | 8 777 | 8 771 |
| Later than five years | 7 246 | 9 637 |
| Total | 19 695 | 22 165 |
| Lease liabilities - present value of minimum lease payments | ||
| No later than one year | 3 065 | 2 896 |
| Later than one year and no later than five years | 7 159 | 6 882 |
| Later than five years | 6 617 | 7 818 |
| Total | 16 841 | 17 596 |
| Unearned finance expense | 2 854 | 4 569 |
| Amounts recognised in profit or loss (EUR 1 000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Interest on lease liabilities | -694 | -387 |
| Expenses related to short-term leases | -985 | -1 063 |
| Non-cash changes | |||||||
|---|---|---|---|---|---|---|---|
| Fair value of Derivatives | |||||||
| designated as hedging | Transfer between | Lease liabilities | Lease liabilities | ||||
| Changes in net debt 2023 | 1 Jan 2023 | Cash flows | instruments | groups | increase | decrease | 31 Dec 2023 |
| Long-term liabilities total | 14 685 | 0 28 |
-2 485 | 1 584 | 0 | 13 812 | |
| Short-term liabilities total | 4 612 | -417 | -54 | 2 644 | 1 063 | -3 561 | 4 287 |
| Total liabilities from the financing activities | 19 297 | -417 | -26 | 159 | 2 647 | -3 561 | 18 099 |
| Non-cash changes | |||||||
|---|---|---|---|---|---|---|---|
| Fair value of Derivatives | |||||||
| designated as hedging | Transfer between | Lease liabilities | Lease liabilities | ||||
| Changes in net debt 2022 | 1 Jan 2022 | Cash flows | instruments | groups | increase | decrease | 31 Dec 2022 |
| Long-term liabilities total | 1 790 | -1 900 | 8 1 900 |
12 886 | 14 685 | ||
| Short-term liabilities total | 10 952 | -4 967 | 70 | -1 900 | 3 467 | -3 011 | 4 612 |
| Total liabilities from the financing activities | 12 743 | -6 867 | 78 | 0 16 354 |
-3 011 | 19 297 |
Martela's defined benefit plans concern its operations in Finland. The arrangements are made through insurance companies. The plans are partly funded.
On the balance sheet, the commitment to those insured is presented as a pension liability, and the part of this liability that falls under the responsibility of insurance company is presented as an asset. As the funds belong to the insurance companies, they cannot be itemised in Martela's consolidated financial statements.
In insurance arrangements, the amount of funds is calculated using the same discount rate used for the determination of pension liabilities. This means that a change in discount rate does not pose a significant risk. In addition, an increase in life expectancy does not pose a significant risk for Martela, as insurance companies will bear most of the impact of this.
The pensions are fixed to 2017 salary levels and accounted for accordingly.
| Changes in defined benefit liability | Present value of the defined benefit liability |
Fair value of the funds included in the plan |
Net debt of the defined benefit liability |
|||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| 1 Jan | 1 380 | 2 597 | -1 364 | -2 469 | 16 | 128 |
| Recognised in profit or loss | ||||||
| Service cost in the period | 40 | 79 | 40 | 79 | ||
| Past service cost | 0 | 0 | 0 | 0 | ||
| Interest expense or income | 51 | 26 | -52 | -25 | -1 | 1 |
| Settlements | -357 | -613 | 357 | 613 | ||
| -266 | -508 | 305 | 588 | 39 | 80 | |
| Recognised in other comprehensive income | ||||||
| Items resulting from remeasurement: | ||||||
| Gains (-) or losses (+) resulting from changes in demographical assumptions |
0 | 0 | 0 | 0 | ||
| Actuarial gain (-) and losses (+) resulting from changes in financial assumptions |
-8 | -717 | -8 | -717 | ||
| Experience based profits (-) or losses (+) | -15 | 8 | -15 | 8 | ||
| Return on the funds included in the plan, excluding items in interest expenses or income (+/-) |
607 | 53 | 607 | |||
| -709 | 53 53 |
607 | 30 | -102 | ||
| Other items | -23 | |||||
| Employer's payments (+) | 0 | 0 | -71 | -89 | -71 | -89 |
| Benefits paid | -10 | 0 | 10 | 0 | 0 | 0 |
| -10 | 0 | -61 | -89 | -71 | -89 | |
| 31 Dec | 1 071 | 1 380 | -1 067 | -1 364 | 13 | 16 |
The Group anticipates that it will pay a total of EUR 30 thousand to defined benefit pension plans in the financial period of 2024.
The following table illustrates the effects of changes in the most significant actuarial assumptions on the funds related to the defined benefit pension liability and plans.
| Defined benefit liability | Fair value of the funds included in the plan |
|
|---|---|---|
| The | ||
| The assumption | assumption is | |
| Effect of a change in the assumption employed | is growing | growing |
| Discount rate (0.5% change) | -6,5 % | 6,0 % |
| Increase in salaries (0.5% change) | N/A | N/A |
| Morality rate (a change of 5% points) | -0,9 % | -0,8 % |
The weighted average of the duration of the plans is 14.2 years.
| (EUR 1 000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Long-term provisions | 269 | 229 |
| Short-term provisions | 67 | 57 |
| Total | 337 | 286 |
| Provisions 1 Jan | 286 | 295 |
| Net change in provisions | 50 | -9 |
| Provisions 31 Jan | 337 | 286 |
The normal warranty for standard Martela produced products is five years. The warranty provision has been calculated as an estimate of the 5-year warranties for Martela products and the sale of Martela products.
| (EUR 1 000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Financial liabilities | 4 287 | 4 612 |
| Advances received | 7 850 | 6 278 |
| Trade payables | 9 440 | 9 569 |
| Total | 21 577 | 20 459 |
| Accrued liabilities and prepaid income of | ||
| Personnel expenses | 4 243 | 4 431 |
| Interests | 0 | 0 |
| Royalties | 214 | 205 |
| Residual expenses | 2 331 | 4 465 |
| Tax liability based on taxable income for the period | 0 | 1 213 |
| Other | 1 | 6 |
| Total | 6 789 | 9 106 |
| Other current liabilities | 3 507 | 3 824 |
| Other | 3 507 | 3 824 |
| Provisions* | 6 | 57 |
| Current liabilities | 31 941 | 33 447 |
*For more information see note 20.
Financial risks are unexpected exceptions relating to exchange rates, liquidity, customer liquidity, investments and interest rates. The objective of financial risk management is to ensure that the company has sufficient financing on a cost-efficient basis and to reduce the adverse effects of financial market fluctuations on the Group's result and net assets. The general principles of risk management are approved by Board of Directors and the practical implementation of financial risk management is on the responsibility of the parent company's financial administration.
Market risks comprise the following three risks: Currency risk, interest rate risk and price risk. The associated fluctuations in exchange rates, market interest rates and market prices may lead to changes in the fair value of financial instruments and in the future cash flows and hence they impact the result and balance sheet of the Group.
The increased volatility in electricity price 2022 and 2023 has led to the decision to enter into contracts for electricity derivatives.
The Group has operations in Finland, Sweden, Norway and Poland and it is therefore exposed to currency that arise in intra-group transactions, exports and imports, the financing of foreign subsidiaries and equity that is denominated in foreign currencies. Translation risks result from incoming cash flows denominated in foreign currencies. Translation risk arise when the value of the capital invested in the parent company's foreign subsidiaries, annual profits and loans change as a result of exchange rate fluctuations.
Martela's major trading currencies are EUR, SEK, NOK and PLN. The SEK, NOK and PLN currency positions are reviewed mainly on a half-yearly basis. The Group's policy is to hedge the net positions remaining after reconciliation if seen necessary. The Group has not hedged against transaction risks during the financial periods of 2023 and 2022.
The following table presents currency risks per instrument and currency.
| EUR | SEK | NOK | |
|---|---|---|---|
| Trade receivables | 0 | 2 236 | 1702 |
| Trade payables | 0 | 642 | 40 |
| Total | 0 | 2 878 | 1 742 |
| Transaction risks per instrument and currency 31 Dec 2022 (EUR 1 000) | EUR | SEK | NOK |
| Trade receivables | 0 | 2 398 | 2437 |
| Trade payables | 0 | 216 | 57 |
| Total | 0 | 2 613 | 2 494 |
The impact of other currencies is minor.
The following table presents the average impact of 10 per cent change in exchange rates on 31 December on the company's financial result before taxes and capital for 2023 (2022). The estimates are based on the assumption that no other variables change.
| Analysis of sensitivity to transaction risk (EUR 1 000) | Impact on result |
|
|---|---|---|
| 31 Dec 2023 | ||
| EUR | +/- 0 | |
| SEK | +/- 288 | |
| NOK | +/- 174 | |
| Analysis of sensitivity to transaction risk (EUR 1 000) | Impact on result |
|
| 31 Dec 2022 | ||
| EUR | +/- 0 | |
| SEK | +/- 261 |
NOK +/- 249
The following table presents the distribution of the Group's financial instruments into fixed interest rate and variable interest rate on the balance sheet date.
| Financial instruments (EUR 1000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Fixed rate | ||
| Lease liabilities | 16 841 | 17 596 |
| Financial liabilities incl derivatives | 1 258 | 1 702 |
| Total | 18 099 | 19 297 |
Available-for-sale shares included in financial assets are not deemed subject to resale price risk.
Credit risk arises from the possibility that a counterparty will not meet its contractual payment obligations. Hence the seriousness of the risk is determined on the basis of the counterparty's creditworthiness. The objective of credit risk management is to minimise the losses that would arise should the counterparty not meet its obligations.
The turnover and maturity structure of Group's companies trade receivables are reported monthly and are monitored by the parent company's financial management.
The principles of credit risk management are confirmed by Martela's Board of Directors. Risk management is based on the authorisations given to the organisation.
Credit risks related to the company's trade and other receivables are minimised by using short terms of payment, effective collection measures and accounting for the counterparty's creditworthiness. Supply agreements are used when the customer company is unknown and the available credit information is insufficient. In this context a supply agreement is an agreement which secures and receivables arising from an order by withholding the right of ownership with Martela Oyj until the customer has paid the sale price in full.
Supply agreements are only used in sales in Finland. A customer may also be required to make prepayment before sold products are delivered if it is considered necessary in light of the potential credit risk associated with the customer. Counterparties may also be granted to credit limits. The creditworthiness of customers is monitored regularly on the basis of payment history and credit rating.
Collateral may be required from certain customers based on their creditworthiness and in the case of exports, for example, Martela may use confirmed irrevocable Letters of Credit.
The book value of financial assets corresponds to the maximum amount of the credit risk.
The maximum financial asset credit risk amount on the balance sheet date 31 December is presented in the following table:
| Maximum financial asset credit risk (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Financial assets measured at fair value through profit or loss | 7 | 7 |
| Non-current loan receivables | 532 | 546 |
| Trade receivables and other receivables | 19 115 | 18 248 |
| Cash and cash equivalents | 5 053 | 11 295 |
| Total | 24 707 | 30 096 |
See note 15 for additional information on trade receivables and the related credit loss provisions.
The group aims to constantly evaluate and monitor the amount of financing required by the business, so that the group has enough liquid assets to finance operations, including long-term commitments - such as leases - to fulfill obligations. In addition, the group aims to continuously maintain sufficient liquid assets with the help of effective cash management solutions, such as cash reserve and working capital optimization. The refinancing risk is managed in part by using several leasing and rental contract partners in financing operations. Sudden changes in the financial market or in Martela's operating environment may negatively affect the group's liquidity and how the company is able to meet its payment obligations. In addition, the profitability of the group's business and the cash flow of the business affect the development of the group's liquidity
Cash and cash equivalent at the year-end 2023 were EUR 5,053 thousand.
| Contractual cash flows mature as | 2024 | 2025 | 2026 | 2027 | 2028 | Later | Total | Balance sheet |
|---|---|---|---|---|---|---|---|---|
| follows (EUR 1 000): | value | |||||||
| Lease liabilities | 3 672 | 2 698 | 2 171 | 2 009 | 1 900 | 7 246 | 19 695 | 16 841 |
| Trade payables | 9 440 | 9 440 | 9 440 | |||||
| Total | 13 112 | 2 698 | 2 171 | 2 009 | 1 900 | 7 246 | 29 135 |
Cash and cash equivalent at the year-end 2022 were EUR 11,295 thousand.
| Contractual cash flows mature as | 2023 | 2024 | 2025 | 2026 | 2027 | Later | Total | Balance sheet |
|---|---|---|---|---|---|---|---|---|
| follows (EUR 1 000): | value | |||||||
| Lease liabilities | 3 756 | 2 889 | 2 135 | 1 896 | 1 852 | 9 637 | 22 165 | 17 596 |
| Trade payables | 9 569 | 9 569 | 9 569 | |||||
| Total | 13 325 | 2 889 | 2 135 | 1 896 | 1 852 | 9 637 | 31 734 |
It is the Group's objective to ensure an effective capital structure that will secure its operating capacity in the capital markets in all circumstances irrespective of volatility. The Group's Board of Directors assess the capital structure on a regular basis, The Group uses the equity ratio to monitor its capital structure.
The equity ratio formula is presented in the following table:
| Equity ratio | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Shareholders' equity | 9 558 | 13 850 |
| Balance sheet total - advance payments | 47 836 | 56 049 |
| Equity to assets ratio % | 20,0 | 24,7 |
| (EUR 1 000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Debts secured by mortgages | ||
| Corporate mortgages | 9 895 | 9 888 |
| Total mortgages | 9 895 | 9 888 |
| Other pledges | ||
| Guarantees as security for rents | 854 | 892 |
| Commitments | ||
| Rental commitments | 589 | 527 |
Martela Group's related party transactions comprise the CEO, members of the Board and the Group's management team, as well as their family members. Martela Group's related parties also include a shareholder who holds at least 20% of the company's total number of votes.
Members of the Board own a total of 9,783 shares (18,009) and hold a total of 0.2% (0,4%) of the shares and 0.2% (0,4%) of the votes. Persons in the management own a total of 91,049 (132,564) Martela Corporation shares as at December 31, 2023.
As part of the implementation of the Performance-based Matching Share Plan 2021-2023, described in note 17, Board of Directors has
resolved to grant plan participants interest-bearing loans to finance the acquisition of the company's shares. Maximum amount of the loan
is 70 per cent of the participant´s investment in shares. Loan is to be repaid the latest by December 31, 2025 and interest is 12-month Euribor, however not below 0%. Management has been granted loan in total EUR 137,888.02 (256,107.95), of which EUR 69,999.93 (69,999.93) has been granted to CEO and other management EUR 67,888.09 (186,108.02).
| Group structure | Domicile | Holding (%) 31 Dec 2022 |
Of votes (%) 31 Dec 2022 |
Sales company |
Production company |
|---|---|---|---|---|---|
| Parent company | |||||
| Martela Oyj | Finland | x | x | ||
| Subsidiaries | |||||
| Kidex Oy | Finland | 100 | 100 | x | x |
| Muuttopalvelu Grundell Oy | Finland | 100 | 100 | x | |
| Martela AB, Nässjö | Sweden | 100 | 100 | x | |
| Aski Avvecklingsbolag AB, Malmö | Sweden | 100 | 100 | ||
| Martela AS, Oslo | Norway | 100 | 100 | x | |
| Martela Sp.z o.o., Varsova | Poland | 100 | 100 | x | x |
| Tehokaluste Oy | Finland | 100 | 100 | x |
The Group has determined key persons in management to be: Members of the Board of Directors CEO Group's Management Team
The table below presents the employee benefits received by key persons in management. Employee benefits are presented with the accrual method.
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Management employee benefits | ||
| Salaries and other short-term employee benefits | -1 184 | -1 140 |
| Share-based benefits | -121 | -36 |
| Total | -1 305 | -1 176 |
| Salaries and fees | 2023 | 2022 |
| Board members | -162 | -152 |
| CEO | -314 | -288 |
| Management team members (excl. CEO) | -829 | -736 |
| Total | -1 305 | -1 176 |
| Fees paid to Board members: | 2023 | 2022 |
|---|---|---|
| Andersson Minna* | 0,0 | -5,5 |
| Martela Eero | -23,4 | -22 |
| Mattson Jan | -23,4 | -22 |
| Mellström Katarina | -23,4 | -22 |
| Mild Johan | -45,1 | -42,4 |
| Vepsäläinen Anni | -23,4 | -22 |
| Mattila Hanna** | -23,4 | -16,5 |
| Total | -161,9 | -152,4 |
*Member of Board until Q1 2022.
**Member of Board from Q2 2022.
Fees based on board membership are not paid to members employed by the company.
| Salaries, fees and pension commitment to CEO | 2023 | 2022 |
|---|---|---|
| Salaries and fees | -314 | -288 |
| Statutory earnings-related pension payment (TyEL) on salaries | -65 | -49 |
Salaries include also share-based incentives.
company, the CEO is entitled, besides of the notice period, to a lump-sum compensation equalling his salary for 6 months. The period of notice is 6 months with respect to both the present CEO and the company, and in the event of dismissal by the company, the CEO and the Group management team has long term share-based incentive programme, in which is possible to receive Martela A shares when the set targets are met.
More information in note 17 Share-based payments.
| Martela Group 2019-2023 | 2023 | 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|---|---|
| Revenue | MEUR | 94,4 | 106,7 | 91,9 | 88,4 | 106,2 |
| Change in revenue | % | -11,5 | 16,1 | 4,0 | -16,8 | 3,0 |
| Export and operations outside Finland | MEUR | 27,1 | 34,5 | 22,1 | 16,3 | 23,1 |
| In relation to revenue | % | 28,8 | 32,3 | 24,1 | 18,5 | 21,7 |
| Exports from Finland | MEUR | 27,7 | 34,2 | 21,9 | 16,1 | 22,7 |
| Gross capital expenditure | MEUR | 2,3 | 0,9 | 0,4 | 1,2 | 2,3 |
| In relation to revenue | % | 2,4 | 0,8 | 0,4 | 1,4 | 2,1 |
| Depreciation | MEUR | 6,8 | 5,8 | 5,4 | 6,5 | 4,9 |
| Research and development *) | MEUR | 1,6 | 1,6 | 1,6 | 1,4 | 1,6 |
| In relation to revenue *) | % | 1,7 | 1,5 | 1,7 | 1,6 | 1,5 |
| Personnel on average | 403 | 403 | 419 | 451 | 494 | |
| Change in personnel | % | 0,0 | -3,9 | -7,1 | -8,7 | -3,1 |
| Personnel at the end of year | 386 | 400 | 400 | 435 | 464 | |
| of which in Finland | 312 | 324 | 326 | 362 | 385 | |
| Profitability | ||||||
| Operating profit | MEUR | -2,4 | 2,5 | -1,3 | -4,0 | -2,0 |
| In relation to revenue | % | -2,5 | 2,3 | -1,4 | -4,5 | -1,9 |
| Profit before taxes | MEUR | -3,3 | 1,3 | -2,3 | -4,8 | -2,7 |
| In relation to revenue | % | -3,5 | 1,3 | -2,5 | -5,4 | -2,5 |
| Profit for the year * | MEUR | -3,5 | 2,6 | -2,4 | -4,8 | -2,5 |
| In relation to revenue | % | -3,7 | 2,4 | -2,6 | -5,4 | -2,4 |
| Revenue / employee | TEUR | 234 | 265 | 219 | 196 | 215 |
| Return on equity | % | -31,3 | 20,8 | -21,3 | -34,7 | -14,7 |
| Return on investment | % | -7,5 | 9,1 | -4,7 | -13,2 | -6,4 |
| Finance and financial position | ||||||
| Balance sheet total | MEUR | 55,7 | 62,3 | 51,1 | 52,1 | 55,9 |
| Equity | MEUR | 9,6 | 13,9 | 10,8 | 11,6 | 16,1 |
| Interest-bearing net liabilities | MEUR | 13,1 | 8,1 | 8,1 | 4,3 | 5,0 |
| In relation to revenue | % | 13,9 | 7,5 | 8,8 | 4,9 | 4,7 |
| Equity ratio | % | 20,0 | 24,7 | 22,2 | 23,3 | 28,8 |
| Gearing | % | 137,2 | 58,6 | 74,8 | 36,5 | 31,5 |
| Net cash flow from operations | MEUR | 0,3 | 1,9 | -3,4 | 5,7 | 6,3 |
| Dividends paid | MEUR | 0,5 | 0,0 | 0,0 | 0,0 | 0,4 |
*) The figures for the comparison years 2019-2022 have been adjusted in relation to the previously published due to reclassification
| 2023 | 2022 | 2021 | 2020 | 2019 | ||
|---|---|---|---|---|---|---|
| Earnings per share | EUR | -0,77 | 0,57 | -0,53 | -1,16 | -0,61 |
| Earnings per share (diluted) | EUR | -0,77 | 0,57 | -0,53 | -1,16 | -0,61 |
| Share par value | EUR | 1,53 | 1,55 | 1,55 | 1,68 | 1,68 |
| Dividend | EUR | 0,00*) | 0,10 | 0,0 | 0,0 | 0 |
| Dividend/earnings per share | % | 0,0 | 17,7 | 0 | 0,0 | 0,0 |
| Effective dividend yield | % | 0,00 | 0,04 | 0 | 0,00 | 0,00 |
| Equity per share | EUR | 2,09 | 3,07 | 2,39 | 2,81 | 3,80 |
| Price of A share 31 Dec | EUR | 1,28 | 2,45 | 2,29 | 3,09 | 3,36 |
| Share issue-adjusted number of shares | tpcs | 4 573,50 | 4 519,61 | 4 508,04 | 4 155,60 | 4 155,60 |
| Average share-issue adjusted number of shares | tpcs | 4 573,50 | 4 519,61 | 4 508,04 | 4 155,60 | 4 155,60 |
| Price/earnings ratio | -1,67 | 4,34 | -4,32 | -2,66 | -5,48 | |
| Market value of shares **) | MEUR | 5,85 | 11,07 | 10,29 | 12,80 | 13,92 |
*) Proposal by the Board of Directors for year 2023
**) Price of A shares used as value of K shares
| Earnings / share | = | Profit attributable to equity holders of the parent |
|---|---|---|
| Average share issue-adjusted number of shares | ||
| Price /earnings multiple (P/E) | = | Share issue-adjusted share price at year-end Earnings / share |
| Equity / share, EUR | = | Equity attributable to the equity holders of the parent Share issue-adjusted number of shares at year-end |
| Dividend / share, EUR | = | Dividend for the financial year Share issue-adjusted number of shares at year-end |
| Dividend / earnings, % | = | Dividend / share x 100 Earnings / share |
| Effective dividend yield, % | = | Share issue-adjusted dividend / share x 100 Share issue-adjusted share price at the year-end |
| Market value of shares, EUR | = | Total number of shares at year end x share price on the balance sheet date |
| Return on equity, % | = | Profit/loss for the financial year x 100 Equity (average during the year) |
| Return on investment, % | = | (Pre-tax profit/loss + interest expenses + other financial items) x 100 Balance sheet total - Non-interest-bearing liabilities (average during the year) |
| Equity ratio, % | = | Equity x 100 Balance sheet total - advances received |
| Gearing, % | = | Interest-bearing liabilities - cash, cash equivalents and liquid asset securities x 100 Equity |
| Personnel on average | = | Month-end average number of personnel in active employment |
| Interest-bearing net debt | = | Interest-bearing debt - cash and other liquid financial assets |
The number of registered Martela Oyj shares on December 31, 2023 was 4,573,495. The shares are divided into A and K shares. Each A share carries 1 vote and each K share 20 votes in annual general shareholders' meeting. Both share series have the same dividend rights.
Martela Oyj's shares were entered in the book-entry register on February 10, 1995. The counter-book value of each share is EUR 1.53 (1.55). The A shares are quoted on the Small Cap list of Nasdaq Helsinki.
| Distribution of shares 31 Dec 2023 | Number, pcs | Total EUR | % of Share Capital |
Votes | % of votes |
|---|---|---|---|---|---|
| K shares | 604 800 | 925 682 | 13 | 12 096 000 | 75 |
| A shares | 3 968 695 | 6 074 318 | 87 | 3 968 695 | 25 |
| Total | 4 573 495 | 7 000 000 | 100 | 16 064 695 | 100 |
| The largest shareholders by number of shares 31 Dec 2023 |
K series shares | A series shares | Total number of shares |
% | Number of votes |
% of total votes |
|---|---|---|---|---|---|---|
| Marfort Oy | 292 000 | 232 574 | 524 574 | 11,5 | 6 072 574 | 37,8 |
| Isku-Yhtymä Oy | 0 | 452 900 | 452 900 | 9,9 | 452 900 | 2,8 |
| Kelhu Markku Juhani | 0 | 200 000 | 200 000 | 4,4 | 200 000 | 1,2 |
| Martela Heikki Juhani | 52 122 | 130 942 | 183 064 | 4,0 | 1 173 382 | 7,3 |
| Palsanen Leena Maire Sinikka | 6 785 | 131 148 | 137 933 | 3,0 | 266 848 | 1,7 |
| Palsanen Jaakko Antero | 1 600 | 132 140 | 133 740 | 2,9 | 164 140 | 1,0 |
| Aurasmaa Artti Eljas Henrikki | 0 | 114 223 | 114 223 | 2,5 | 114 223 | 0,7 |
| Seflo Ab | 0 | 91 760 | 91 760 | 2,0 | 91 760 | 0,6 |
| Meissa-Capital Oy | 0 | 86 487 | 86 487 | 1,9 | 86 487 | 0,5 |
| Nordea Nordic Small Cap Fund | 0 | 76 286 | 76 286 | 1,7 | 76 286 | 0,5 |
| Lindholm Tuija Elli Annikki | 43 122 | 28 221 | 71 343 | 1,6 | 890 661 | 5,5 |
| Lehtonen Kari Heikki Juhani | 0 | 70 000 | 70 000 | 1,5 | 70 000 | 0,4 |
| Martela Pekka Kalevi | 69 274 | 8 | 69 282 | 1,5 | 1 385 488 | 8,6 |
| Väätäjä Kaj Tapani | 0 | 66 654 | 66 654 | 1,5 | 66 654 | 0,4 |
| Tuuli Markku Juhani | 0 | 54 349 | 54 349 | 1,2 | 54 349 | 0,3 |
| Andersson Minna Sinikka | 49 200 | 0 | 49 200 | 1,1 | 984 000 | 6,1 |
| Taipale Ville Juhani | 0 | 47 934 | 47 934 | 1,0 | 47 934 | 0,3 |
| Lehtonen Kalle Petteri | 0 | 46 032 | 46 032 | 1,0 | 46 032 | 0,3 |
| Martela Mari Kaarina | 20 219 | 9 596 | 29 815 | 0,7 | 413 976 | 2,6 |
| Martela Ille Ilari | 13 218 | 8 368 | 21 586 | 0,5 | 272 728 | 1,7 |
| Muut osakkeenomistajat | 57 260 | 1 989 073 | 2 046 333 | 44,7 | 3 134 273 | 19,5 |
| Total | 604 800 | 3 968 695 | 457 395 | 100 | 16 064 695 | 100 |
The list includes all shareholders holding over 1% of the shares or votes.
The Board of Directors hold 0.2% of shares and 0.2% of votes.
Martela Oyj owns 1,425 pcs A shares. Out of the shares 379 were purchased at an average price of EUR 10.65 and 1,046 were transferred from Martela Corporation's joint account to the treasury shares reserve based on the decision by AGM on March 13, 2018. The number of treasury shares is equivalent to 0.03% of all shares and 0.01% of all votes.
The Annual General Meeting has in 2023 re-authorised the Board of Directors to decide, for the following year, on share issue, on acquiring and/or disposing of the company's shares in deviation from the pre-emptive rights of shareholders.
The AGM approved the Board of Directors' proposals, detailed in the meeting notice, to authorise the Board to acquire and/or dispose of Martela shares. The authorisation is for a maximum 450,000 of the company's A series shares.
| Number of | % of total | Number of | % | Number of | % of Votes | |
|---|---|---|---|---|---|---|
| Shares, pcs | shareholders | shareholders | shares | votes | ||
| 1-500 | 2 373 | 79,1 | 294 236 | 6,4 | 301 836 | 1,9 |
| 501-1,000 | 269 | 9,0 | 216 205 | 4,7 | 220 005 | 1,4 |
| 1,001-5,000 | 254 | 8,5 | 610 892 | 13,4 | 843 452 | 5,3 |
| Over 5,000 | 104 | 3,5 | 3 440 962 | 75,2 | 14 475 402 | 90,1 |
| Total | 3 000 | 100,0 | 4 562 295 | 99,8 | 15 840 695 | 98,6 |
| of which nominee-registered | 9 | 71 253 | 1,6 | 71 253 | 0,4 | |
| In the waiting list and collective account | 6 | 11 200 | 0,2 | 224 000 | 1,4 | |
| Total | 4 573 495 | 100,0 | 16 064 695 | 100,0 |
| Number of | % of total | Number of | Number of | |||
|---|---|---|---|---|---|---|
| shareholders | shareholders | shares | % | votes | % of Votes | |
| Private companies | 97 | 3,2 | 1 417 829 | 31,0 | 6 965 829 | 43,4 |
| Financial and insurance institutions | 11 | 0,4 | 112 987 | 2,5 | 158 855 | 1,0 |
| Non-profit entities | 5 | 0,2 | 3 161 | 0,1 | 3 161 | 0,0 |
| Households | 2 875 | 95,8 | 2 946 703 | 64,4 | 8 677 103 | 54,0 |
| Foreign investors | 12 | 0,4 | 10 362 | 0,2 | 35 747 | 0,2 |
| Total | 3 000 | 100,0 | 4 491 042 | 98,2 | 15 840 695 | 98,6 |
| of which nominee-registered | 9 | 71 253 | 1,6 | 71 253 | 0,4 | |
| In the waiting list and collective account | 6 | 11 200 | 0,2 | 224 000 | 1,4 | |
| Total | 4 573 495 | 100,0 | 16 064 695 | 100,0 |
| (EUR 1 000) | Note | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|---|
| Revenue | 1 | 93 038 | 107 311 |
| Change in inventories of finished goods and work in progress | 3 | 289 | -1 525 |
| Production for own use | 425 | 2 382 | |
| Other operating income | 2 | 761 | 14 078 |
| Materials and services | 3 | -71 696 | -82 878 |
| Personnel expenses | 4 | -12 956 | -12 944 |
| Other operating expenses | 5 | -11 889 | -11 974 |
| Depreciation and impairment | 6 | -2 534 | -6 640 |
| Operating profit (-loss) | -4 563 | 7 809 | |
| Financial income and expenses | 7 | -2 931 | -595 |
| Profit (-loss) before appropriations and taxes | -7 494 | 7 214 | |
| Group contributions | 8 | 2 000 | -3 135 |
| Depreciation difference and Group contributions | 2 000 | -3 135 | |
| Income taxes | 9 | 25 | -179 |
| Profit (-loss) for the financial year | -5 470 | 3 900 |
1597 3 154
| (EUR 1 000) ASSETS |
Note | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Intangible assets | 10 | ||
| Intangible rights | 1 254 | 925 | |
| Goodwill | 520 | 650 | |
| Other long-term expenditure | 902 | 1 597 | |
| Advance payments | 1 121 | 724 | |
| 3 798 | 3 896 | ||
| Tangible assets | 11 | ||
| Buildings and structures | 12 | 0 | |
| Machinery and equipment | 3 011 | 2 868 | |
| Other tangible assets | 23 | 23 | |
| 3 046 | 2 892 | ||
| Investments | 12 | ||
| Share is subsidiaries | 9 324 | 10 907 | |
| Receivables from subsidiaries | 3 760 | 3 895 | |
| Other shares and participations | 7 | 7 | |
| 13 091 | 14 809 | ||
| CURRENT ASSETS | |||
| Inventories | |||
| Materials and supplies | 6 338 | 8 459 | |
| Work in progress | 237 | 923 | |
| Finished goods | 1 735 | 760 | |
| Advances paid to suppliers | 146 | 35 | |
| 8 455 | 10 177 | ||
| Non-current receivables | 13 | ||
| Loan receivables | 532 | 546 | |
| Current receivables | 13 | ||
| Trade receivables | 17 416 | 17 880 | |
| Loan receivables | 2 000 | 0 | |
| Prepaid expenses | 406 | 1 013 | |
| Accrued income | 2 329 | 2 071 | |
| 22 152 | 20 964 | ||
| Cash and cash equivalents | 4 771 | 10 787 | |
| 55 845 | 64 071 |
| (EUR 1 000) | Note | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | |||
| Shareholders' equity | 14 | ||
| Share capital | 7 000 | 7 000 | |
| Share premium account | 1 116 | 1 116 | |
| Reserve fund | 11 | 11 | |
| Invested unrestricted equity fund | 995 | 995 | |
| Retained earnings | 20 847 | 17 398 | |
| Profit for the year | -5 470 | 3 900 | |
| Total | 24 500 | 30 421 | |
| Compulsory reservations | |||
| Other compulsory reservations | 269 | 229 | |
| LIABILITIES | |||
| Non-current | 15 | ||
| Accrued liabilities and prepaid income | 128 | 108 | |
| 128 | 108 | ||
| Current | 16 | ||
| Loans from financial institutions | 1 207 | 1 624 | |
| 1 207 | 1 624 | ||
| Advances received | 289 | 369 | |
| Trade payables | 18 070 | 17 834 | |
| Accrued liabilities and prepaid income | 7 874 | 10 039 | |
| Other current liabilities | 3 508 | 3 448 | |
| 30 947 | 31 689 | ||
| Liabilities, total | 31 076 | 33 420 | |
| 55 845 | 64 071 |
| (EUR 1 000) | 1 Jan–31 Dec 2023 | 1 Jan–31 Dec 2022 |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Cash flows from sales | 97 236 | 108 725 |
| Cash flow from other operating income | 711 | 1 158 |
| Payments on operating costs | -100 445 | -107 988 |
| Net cash from operating activities before financial items and taxes | -2 498 | 1 895 |
| Interests paid and other financial payments | -74 | -408 |
| Interests received | 31 | 44 |
| Other financial icomes and expenses | -151 | -247 |
| Taxes paid | -157 | 0 |
| Cash flow due to extraordinary items (net) | -351 | -611 |
| Net cash from operating activities (A) | -2 849 | 1 284 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Capital expenditure on tangible and intangible assets | -2 166 | -422 |
| Proceeds from sale of tangible and intangible assets | 0 | 15 117 |
| Investments on subsidiary shares | 0 | -3 002 |
| Loans granted to subsidiaries | -132 | 0 |
| Net Cash used in investing activities (B) | -2 298 | 11 693 |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Repayments of current loans | -417 | -6 900 |
| Paid share issue | 0 | 10 |
| Dividends paid | -452 | 0 |
| Net cash used in financing activities (C) | -869 | -6 890 |
| CHANGE IN CASH AND CASH EQUIVALENTS (A+B+C) (+ increase, - decrease) | -6 016 | 6 087 |
| Cash and cash equivalent at the beginning of financial year* | -10 787 | 4 700 |
| Cash and cash equivalent at the end of financial year* | 4 771 | 10 787 |
*Includes cash and bank receivables
MARTELA OYJ'S FINANCIAL STATEMENTS have been prepared in accordance with Finnish Accounting Standards (FAS). Items in the financial statements have been recognised at cost. No assets have been recorded to appreciated values, unless separately mentioned.
Transactions denominated in foreign currencies are recognised at the rate of exchange on the date of their occurrence. Receivables and liabilities in the balance sheet are translated at the average rate on the balance sheet date. Exchange rate differences arising from trade receivables are recognised in revenue and those of trade payables in adjustment items for purchases. Exchange rate differences arising from balance sheet financial items, such as loans, are recognised in exchange rate differences of finance. Shareholders loans denominated in foreign currency to subsidiaries are considered as investments. Currency exchange rate differences are hence not recognised in parent company financial statements. Exchange rate differences related to shareholder loans are recognised in the Consolidated financial statements.
Intangible assets are reported in the balance sheet at cost and depreciated according to the plan (by straight line method). Intangible assets are depreciated according to their estimated useful life in 3–10 years. Goodwill is depreciated by straight-line method in 10 years. Martela AB goodwill depreciation time has been changed from ten to five years based on the impairment test and the goodwill is fully depreciated.
Buildings, machinery, equipment and other tangible assets are reported in the balance sheet at cost. No depreciation is recognised on revaluations of buildings or on land areas. Otherwise, depreciation is calculated on a straight line basis according to the estimated useful life. The change in accumulated depreciation difference is presented as a separate item in the parent company's profit and loss statement and the accumulated depreciation difference as a separate item in the balance sheet.
| Buildings and structures | 20-30 years |
|---|---|
| Machinery and equipment | 4-8 years |
| Other tangible assets | 3-5 years |
Goodwill and investments in subsidiaries are tested for impairment annually regardless if there are any indications that the amount might be impaired. The recoverable cash amount from the subsidiaries is based on value in use calculations in the testing. The forecasted cash flows are based on 5-year financial plans approved by management. The central assumptions of the plans comprise of subsidiary growth- and profitability assumptions. The cash flows beyond the five-year period is estimated based on 1,5 % growth.
Inventories are recognised at weighted average purchase prices. The value of inventories is reduced with respect to nonmarketable items. The cost of goods includes also a share of the overhead costs of production.
The company income taxes are recognised on accrual basis and are calculated according to local tax legislation with adjustments from previous financial years. In the financial statements the company does not recognise deferred tax receivables or deferred tax liabilities.
The amount of the unrecorded deferred tax asset arising from the loss to be confirmed for the financial year is EUR 496 thousand.
Revenue is recognised on accrual basis. Direct taxes, discounts and exchange rate differences are deducted from sales income in calculating revenue.
Research and development expenses are recognised normally in profit or loss in the year they arise. Research and development-related equipment is capitalised in machinery and equipment.
Proceeds from sale of assets, public subsidies and other income (e.g. rent income) are recognised in "Other operating income". Losses from disposal of assets and other costs are recognised in "Other operating expenses".
All leasing payments are reported as rent expenses.
In the effective share-based incentive programme there are three earning periods, which are 2021, 2022 and 2023, and payment are made as a combination of shares and cash.
The treasury shares held by the parent company are reported as a deduction from equity.
The normal warranty for standard Martela produced products is five years. The warranty provision (EUR 337 thousand) has been calculated as an estimate of the five-year warranties for Martela products and the sale of Martela products.
| 2023 | 2022 | |
|---|---|---|
| Finland | 71 | 69 |
| Scandinavia | 18 | 19 |
| Other | 11 | 12 |
| Total | 100 | 100 |
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Rental income | 50 | 233 |
| Other operating income | 77 | 360 |
| Sale profit of Nummela property | 0 | 12 870 |
| Other operating income, Group | 634 | 615 |
| Total | 761 | 14 078 |
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Purchasing during the financial year | -52 534 | -67 384 |
| Change in inventories of materials and suppliers | -2 121 | 453 |
| External services | -16 752 | -17 473 |
| Materials and supplies, total | -71 408 | -84 404 |
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Salaries, CEO | -314 | -288 |
| Pension expenses | -65 | -49 |
| Salaries of Board and directors | -162 | -152 |
| Salaries of Board and directors and managing director, total | -541 | -489 |
| Other salaries | -10 277 | -10 295 |
| Pension expenses | -1 756 | -1 791 |
| Other salary-related expenses | -383 | -369 |
| Personnel expenses in the income statement | -12 956 | -12 944 |
| Fringe benefits | -253 | -184 |
| Total | -13 209 | -13 128 |
| Personnel | ||
| Personnel on average, workers | 49 | 49 |
| Personnel on average, officials | 148 | 146 |
| Personnel on average, total | 197 | 196 |
| Personnel at the year end | 192 | 194 |
Salaries of Board and directors are not income subject to pension.
| (1 000 eur) | 2023 | 2022 |
|---|---|---|
| Auditor's fees | ||
| Auditing | -173 | -113 |
| Other services | -18 | -14 |
| Auditor's fees, total | -191 | -127 |
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Depreciation according to plan | ||
| Intangible assets | -1 412 | -5 893 |
| Tangible assets | ||
| Buildings and structures | -1 | -2 |
| Machinery and equipment | -1 121 | -744 |
| Depreciation according to plan, total | -2 534 | -6 640 |
| Depreciations and impairments, total | -2 534 | -6 640 |
2216,36764
0
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Financial income and expenses | ||
| Interest income from short-term investments | 29 | 21 |
| Interest income from short-term investments from Group companies | 3 | 23 |
| Foreign exchange gains | 549 | 22 |
| Interest expenses | -131 | -351 |
| Losses on foreign exchange | -448 | -166 |
| Other financial expenses | -147 | -145 |
| Impairment | -2 785 | 0 |
| Total | -2 931 | -595 |
Based on the goodwill testing write-down of Martela AB's shares EUR 2,785 thousand.
1953,23888
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Appropriations | ||
| Group contributions, received | 2 000 | 0 |
| Group contributions, given - /received + | 0 | -3 135 |
| Group contributions total | 2 000 | -3 135 |
| Appropriations, total | 2 000 | -3 135 |
| (EUR 1 000) | 2023 | 2022 | |
|---|---|---|---|
| Income taxes from operations | 0 | -179 | |
| Taxes from previous years | 25 | 0 | |
| Total | 25 | -179 |
| (EUR 1 000) | |||||
|---|---|---|---|---|---|
| 1 Jan–31 Dec 2023 | Intangible rights | Goodwill | Other long-term | Work in progress | Intangible assets |
| expenses | total | ||||
| Acquisition cost 1 Jan | 5 425 | 9 200 | 12 471 | 724 | 27 820 |
| Increases | 914 | 0 | 0 | 2 166 | 3 080 |
| Decreases | 0 | 0 | 0 | -1 769 | -1 769 |
| Acquisition cost 31 Dec | 6 338 | 9 200 | 12 471 | 1 121 | 29 131 |
| Accumulated depreciation 1 Jan | -4 501 | -8 550 | -10 872 | 0 | -23 924 |
| Depreciation for the year 1 Jan 31 Dec | -585 | -130 | -695 | 0 | -1 409 |
| Accumulated depreciation 31 Dec | -5 086 | -8 680 | -11 567 | 0 | -25 333 |
| Carrying amount 1 Jan | 925 | 650 | 1 597 | 724 | 3 898 |
| Carrying amount 31 Dec | 1 254 | 520 | 902 | 1 121 | 3 798 |
| 1 Jan–31 Dec 2022 | Intangible rights | Goodwill | Other long-term | Work in progress | Intangible assets |
| expenses | total | ||||
| Acquisition cost 1 Jan | 5 404 | 9 200 | 12 535 | 158 | 27 297 |
| Increases | 128 | 0 | 104 | 2 633 | 2 865 |
| Decreases | -108 | 0 | -167 | -2 068 | -2 343 |
| Acquisition cost 31 Dec | 5 425 | 9 200 | 12 471 | 724 | 27 820 |
| Accumulated depreciation 1 Jan | -4 043 | -3 680 | -10 309 | 0 | -18 033 |
| Depreciation for the year 1 Jan–31 Dec | -458 | -4 870 | -564 | 0 | -5 891 |
| Accumulated depreciation 31 Dec | -4 501 | -8 550 | -10 872 | 0 | -23 924 |
| Carrying amount 1 Jan | 1 362 | 5 520 | 2 224 | 158 | 9 266 |
| Carrying amount 31 Dec | 925 | 650 | 1 597 | 724 | 3 896 |
| (EUR 1 000) | |||||
|---|---|---|---|---|---|
| 1 Jan–31 Dec 2023 | Land areas | Buildings | Machinery and | Other tangible | Total |
| equipment | assets | ||||
| Acquisition cost 1 Jan | 0 | 8 770 | 15 943 | 23 | 24 737 |
| Increases | 0 | 13 | 1 267 | 0 | 1 280 |
| Decreases | 0 | 0 | 0 0 |
0 | |
| Acquisition cost 31 Dec | 0 | 8 784 | 17 210 | 23 | 26 016 |
| Accumulated depreciation 1 Jan | 0 | -8 770 | -13 074 | 0 | -21 845 |
| Depreciation for the year 1 Jan–31 Dec | 0 | -1 | -1 124 | 0 | -1 125 |
| Accumulated depreciation 31 Dec | 0 | -8 771 | -14 198 | 0 | -22 970 |
| Carrying amount 1 Jan | 0 | 0 | 2 869 | 23 | 2 892 |
| Carrying amount 31 Dec | 0 | 12 | 3 011 | 23 | 3 046 |
| 1 Jan–31 Dec 2022 | Land areas | Buildings | Machinery and equipment |
Other tangible assets |
Total |
|---|---|---|---|---|---|
| Acquisition cost 1 Jan | 80 | 10 632 | 13 435 | 23 | 24 170 |
| Increases | 0 | 0 | 2 508 | 0 | 2 508 |
| Acquisition cost 31 Dec | 0 | 8 770 | 15 943 | 23 | 24 737 |
| Accumulated depreciation 1 Jan | 0 | -8 769 | -12 328 | 0 | -21 096 |
| Accumulated depreciation on decreases | 0 | 0 | 0 | 0 | 0 |
| Depreciation for the year 1 Jan–31 Dec | 0 | -2 | -746 | 0 | -748 |
| Accumulated depreciation 31 Dec | 0 | -8 770 | -13 074 | 0 | -21 845 |
| Carrying amount 1 Jan | 80 | 1 864 | 1 107 | 23 | 3 074 |
| Carrying amount 31 Dec | 0 | 0 | 2 869 | 23 | 2 892 |
Carrying amount of production machinery and equipment in 2023 was EUR 28 thousand (58 in 2022).
Nummela property has been sold 3 August 2022.
| (EUR 1 000) 1 Jan–31 Dec 2023 |
Subsidiary shares |
Other shares and participations |
Shareholder loan receivables |
Total | |
|---|---|---|---|---|---|
| Balance sheet value at beginning of year | 10 907 | 7 | 3 895 | 14 809 | |
| Increases | 1 202 | 0 | 0 | 1 202 | |
| Decreases / Impairment | -2 785 | 0 | -135 | -2 920 | |
| Balance sheet value at end of year | 9 324 | 7 | 3 760 | 13 091 |
| 1 Jan–31 Dec 2022 | Subsidiary shares |
Other shares and participations |
Shareholder loan |
Total | ||
|---|---|---|---|---|---|---|
| receivables | ||||||
| Balance sheet value at beginning of year | 7 405 | 7 | 4 396 | 11 808 | ||
| Increases | 3 501 | 0 | 500 | 4 001 | ||
| Decreases / Impairment | 0 | 0 | -1 001 | -1 001 | ||
| Balance sheet value at end of year | 10 907 | 7 | 3 895 | 14 809 | ||
| Subsidiary shares | Parent | Of total | Number of | Par value | Book value | |
| holding, % | votes, % | shares | ( 1,000) | (EUR 1,000) | ||
| Kidex Oy | Finland | 100 | 100 | 200 | EUR 2,208 | 2 208 |
| Muuttopalvelu Grundell Oy | Finland | 100 | 100 | 100 | EUR 8 | 4 440 |
| Martela AB, Nässjö | Sweden | 100 | 100 | 50 000 | SEK 5,000 | 426 |
| Aski avvecklingsbolag AB, Malmö | Sweden | 100 | 100 | 12 500 | SEK 1,250 | 48 |
| Martela AS, Oslo | Norway | 100 | 100 | 200 | NOK 200 | 2 066 |
| Martela Sp.z o.o., Varsova | Poland | 100 | 100 | 3 483 | PLN 3,483 | 135 |
| Tehokaluste Oy | Finland | 100 | 100 | 1 | EUR 0 | 0 |
| Total | 9 324 | |||||
Other shares and participations 7
Shareholder loan receivable Martela AB EUR 3,760 thousand. Write down Martela AB shares EUR 2,785 thousand.
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Non-current receivables | ||
| Loan receivables | 532 | 546 |
| Current receivables | ||
| Receivables from Group companies | ||
| Trade receivables | 1 756 | 2 665 |
| Loan receivables | 2 000 | 0 |
| Prepaid expenses | 406 | 1 013 |
| Receivables from others | ||
| Trade receivables | 15 660 | 15 215 |
| Accrued income and prepaid expenses | 2 329 | 2 071 |
| Current receivables, total | 22 152 | 20 964 -22658 |
| Accrued income and prepaid expenses, main items | 2023 | 0 2022 |
| Related to personnel expenses | 92 | 99 |
| Related to payments in advance | 1 422 | 613 |
| Other accrued income or prepaid expenses | 446 | 280 |
| Periodization of revenue | 369 | 1 079 |
| Accrued income and prepaid expenses total | 2 329 | 2 071 |
| Related party loan | 2023 | 2022 |
| Loan 1 Jan | 256 | 223 |
| Increases | 0 | 33 |
| Decreases | -118 | 0 |
The Board of Directors has decided to grant an interest-bearing loan to finance the acquisition of the company's shares. The maximum amount of the loan is 70 per cent of the investment in shares. The loan will be repaid in full on 31 December 2025, at the latest. The interest rate is 12 months euribor but not below 0%.
The loan granted to the board of directors is EUR 138 thousand (256 thousand in 2022), of which the CEO loan EUR 70 thousand and others EUR 68 thousand (153 thousand in 2022).
| Distribution of shares 31 Dec 2023 | Number of shares |
Total EUR | % of share capital |
Votes | % of Votes |
|---|---|---|---|---|---|
| K-shares (20 votes/share) | 604 800 | 925 682 | 13 | 12 096 000 | 75 |
| A-shares (1 vote/share) | 3 968 695 | 6 074 318 | 87 | 3 968 695 | 25 |
| Total | 4 573 495 | 7 000 000 | 100 | 16 064 695 | 100 |
| Treasury shares | 1 425 | ||||
| Number of shares outstanding | 4 572 070 | ||||
| Shareholders' equity | 2023 | 2022 | |||
| Restricted equity | |||||
| Share capital 1 Jan and 31 Dec | 7 000 | 7 000 | |||
| Share premium account 1 Jan and 31 Dec | 1 116 | 1 116 | |||
| Unrestricted equity | |||||
| Reserve fund 1 Jan and 31 Dec | 11 | 11 | |||
| Invested unrestricted equity fund 1 Jan | 995 | 962 | |||
| Share issue | 0 | 33 | |||
| Invested unrestricted equity fund 31 Dec | 995 | 995 | |||
| Retained earnings 1 Jan | 21 298 | 17 398 | |||
| Profit (-loss) for the year | -5 470 | 3 900 | |||
| Dividends paid | -452 | 0 | |||
| Retained earnings 31 Dec | 15 377 | 21 298 | |||
| Shareholders' equity total | 24 500 | 30 421 |
The distributable equity of the parent company is EUR 16,372 thousand in 2023.
A total of 11,657 of Martela shares held by the company have been conveyed without consideration to the 34 key individuals participating in the Performance-based Matching Share Plan 2021—2023, announced on March 23, 2021. Conveyance of the shares relates to the earning period 2021. Following the directed share issue on March 23, 2022, the number of treasury shares stands at 1,425 shares
Treasury shares held by Martela Oyj are reported as a deduction from retained earnings. Martela Oyj owns 1,425 A shares (1,425 in 2022). Out of the shares 379 were purchased at an average price of EUR 10.65 and 1,046 were transferred from Martela Corporation's joint account to the treasury shares reserve based on the decision by AGM on March 13, 2018.
Market value of treasury shares on December 31, 2023 was EUR 1.28 per share (2.45), a total of EUR 1.8 thousand (3.5 thousand in 2022)
Company has executed right issue (March 17, 2022) in which 11,574 pcs new A shares has been subscribed. Issue price of new shares, in total EUR 33 thousand, has been booked in invested unrestricted equity fund.
Company has decided on a paid directed share issue (March 29, 2023) in which 53,881 of series A shares have been subscribed without consideration.
The shares issued to the company have been used to pay incentives according to the company's incentive plan.
| 2023 | 2022 |
|---|---|
| 108 | |
| 108 | |
| 92 | 100 |
| 128 128 |
The company has purchased electricity derivatives, of which long-term liabilities 2023 amount to EUR 36,5 thousand (EUR 8 thousand) and short-term liabilities amount to EUR 15 thousand (EUR 69,5 thousand).
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Current liabilities | ||
| Liabilities to Group companies | ||
| Trade payables to Group companies | 11 028 | 10 219 |
| Accrued liabilities to Group companies | 1 768 | 1 622 |
| Other current liabilities Group companies | 3 283 | 3 635 |
| Total | 16 079 | 15 476 |
| Other current liabilities | ||
| Loans from financial institutions | 1 207 | 1 624 |
| Advances received | 289 | 369 |
| Trade payables | 7 042 | 7 614 |
| Other current liabilities | 3 508 | 3 448 |
| Accrued liabilities | 2 824 | 4 782 |
| Total | 14 869 | 17 837 |
| Current liabilities, total | 30 947 | 33 313 |
Current liabilities are specified in notes because items are combined in Balance sheet.
| Essential items of accrued liabilities | 2023 | 2022 |
|---|---|---|
| Personnel expenses | 1 819 | 1 871 |
| Royalties | 175 | 176 |
| Taxes from accounting period | 0 | 182 |
| Residual expenses | 829 | 2 553 |
| Accrued liabilities, total | 2 824 | 4 782 |
| (EUR 1 000) | 2023 | 2022 |
|---|---|---|
| Debts secured by mortgages | ||
| Factoring loan | 1 207 | 1 624 |
| Corporate mortgages | 7 191 | 7 191 |
| Shares pledged | 7 191 | 7 191 |
| Other pledges | ||
| Guarantees as security for rents | 854 | 892 |
| Total | 854 | 892 |
| Other liabilities | ||
| Residual value liabilities related to the service business | 2 715 | 1 809 |
| Total | 2 715 | 1 809 |
| Leasing commitments | ||
| Falling due within 12 months | 764 | 692 |
| Falling due after 12 months | 1 085 | 642 |
| Total | 1 849 | 1 334 |
| Rent commitments | 16 970 | 17 927 |
Company has signed new premises lease contract on May 24, 2021 which estimated starting date is April 1, 2022. Contract is valid at least until March 31, 2029, and the monthly rent is EUR 37,823.
Company has signed Nummela property sale and leaseback contract on August 3, 2022. Contract is valid untill April 31, 2033, and the monthly rent is EUR 124,082.
Proposal of the Board of Directors for distribution of profit
Distributable funds of the parent company are EUR 16 372 762,75 of which loss of the period is EUR 5 469 587,76 The Board of Directors proposes to the AGM that, distributable funds are used as follows:
Helsinki 13.2.2024
Signatures on Board of Directors Report and Financial Statements
Johan Mild Katarina Mellström Ville Taipale Chairman of Board of Directors Vice-Chair of the Board of Directors CEO
Eero Martela Jan Mattsson Anni Vepsäläinen
Hanna Mattila
Auditor's note Audit opinion of conducted statutory audit has been issued today
Helsinki 13.2.2024
Ernst & Young Oy Authorized Public Accountant Firm
_____________________________
Osmo Valovirta Authorized Public Accountant
List of accounting records, types of vouchers and storage methods 1.1.-31.12.2023
| Monthly journal and general ledger | electronic form Microsoft D365 | |
|---|---|---|
| Account ledger lists | electronic form D365 | |
| Bank vouchers | B0/BA | bank statements Opus Capita |
| Bank vouchers | B0/BA | bank statements Nomentia |
| cash-vouchers as paper documents | ||
| Sales invoices | 45,55/1000* electronic form Microsoft D365 | |
| 25,35/1000* electronic form Microsoft D365 | ||
| as paper documents | ||
| Purchase invoices | PPP | electronic form Mediusflow |
| Payroll accounting with vouchers | GPA | electronic form |
| Memo vouchers | JE | electronic form |
| VAT calculations | TX | electronic form |
| Fixed assets | FAD | electronic form |
| Accounting notes | LT | electronic form |
Microsoft D365 has been used in the accounting.
In cash management has Opus Capita been used and in purchase invoices Mediusflow. Microsoft D365 and Opus Capita has been used in electronic archiving.
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