Annual Report • Mar 1, 2013
Annual Report
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annual report
| Martela in brief4 |
|---|
| Key Figures4 |
| Managing director's review6 |
| Strategy and Values9 |
| Corporate responsibility10 |
| Business segments12 |
| Case Martelahouse12 |
| Business unit Finland14 |
| Business unit Sweden and Norway15 |
| Business unit International16 |
| Business unit Poland17 |
| Other operations18 |
| Personnel18 |
| Products and Communications19 |
| Kidex Oy20 |
| P .O . Korhonen Oy20 |
| Quality23 |
| Corporate Governance Statement24 |
| Organisation24 |
| Annual general meeting25 |
| Shares25 |
| Board of directors26 |
| Managing director26 |
| Members of the board27 |
| Group Management Team28 |
| Members of group management team28 |
| Financial reporting in the group30 |
| Auditing30 |
| Internal control30 |
| Risk management and internal audit30 |
| Risks31 |
| Management remuneration, benefits and incentive plans31 |
| Insider administration31 |
| Contact information32 |
| Information for shareholders34 | |
|---|---|
| Board of Directors' report35 | |
| Revenue by segment39 | |
| Average staff by region39 | |
| Consolidated Financial Statements, IFRS40 | |
| Consolidated comprehensive income statement40 | |
| Consolidated cash flow statement41 | |
| Consolidated balance sheet42 | |
| Statement of changes in equity43 | |
| Notes to the Consolidated Financial Statements44 | |
| Accounting principles for the consolidated | |
| financial statements44 | |
| Basis of preparation44 | |
| 1 . Segment reporting50 | |
| 2 . Other operating income51 | |
| 3 . Employee benefits expenses52 | |
| 4 . Depreciation and impairment53 | |
| 5 . Other operating expenses53 | |
| 6 . Research and development expenses53 | |
| 7 . Financial income and expenses54 | |
| 8 . Income taxes55 | |
| 9 . Earnings per share55 | |
| 10 . Intangible assets56 | |
| 11 . Tangible assets57 | |
| 12 . Acquisitions and investments in associated | |
| undertakings and associates59 | |
| 13 . Investment properties59 14 . Book values of financial assets and |
|
| liabilities by group60 | |
| 15 . Other financial assets61 | |
| 16 . Non-current liabilities61 | |
| 17 . Deferred tax assets and liabilities62 | |
| 18 . Inventories63 | |
| 19 . Current trade receivables and other receivables63 | |
| 20 . Financial assets at fair value through profit or loss63 | |
| 21 . Cash and cash equivalents64 | |
| 22 . Derivative contracts64 | |
| 23 . Equity64 | |
| 24 . Share-based payments65 | |
| 25 . Financial liabilities67 | |
| 26 . Pension obligations68 | |
| 27 . Current liabilities69 | |
| 28 . Management of financial risks70 | |
| 29 . Operating leases75 | |
| 30 . Pledges granted and contingent liabilities75 | |
| 31 . Related party transactions76 | |
| 32 . Five-year comparisons77 | |
| 33 . Key share-related figures78 | |
| 34 . Shares and shareholders78 |
| Parent Company Financial Statements, FAS81 | |
|---|---|
| Parent Company Income Statement81 | |
| Parent Company Balance Sheet81 | |
| Parent Company's Cash Flow Statement83 | |
| Notes to Parent Company Financial Statements84 | |
| Accounting policies for parent company financial | |
| statements84 | |
| 1 . Breakdown of revenue by market area, | |
| % of revenue85 | |
| 2 . Other operating income85 | |
| 3 . Materials and services85 | |
| 4 . Personnel expenses and number of personnel86 | |
| 5 . Depreciation and write-down86 | |
| 6 . Financial income and expenses87 | |
| 7 . Extraordinary items87 | |
| 8 . Income taxes87 | |
| 9 . Intangible assets88 | |
| 10 . Tangible assets89 | |
| 11 . Investments90 | |
| 12 . Receivables91 | |
| 13 . Changes in shareholders' equity92 | |
| 14 . Non-current liabilities93 | |
| 15 . Current liabilities94 | |
| 16 . Pledges granted and contingent liabilities95 | |
| Calculation to key figures96 | |
| Board of directors' proposal for the distribution of profit97 | |
| Auditor's report98 |
Martela Corporation supplies ergonomic and innovative furniture and provides services to modify and maintain premises . Martela's products and services improve the functionality and comfort of working environments and other environments such as schools, hotels and nursing homes . Martela's collection includes both classics and new innovations designed to meet changing needs in workplaces and work practices . Quick deliveries and an extensive distribution network support the efficiency of operations . Martela offers the widest
range of after-sales support and modification services in the sector .
Martela is a family company founded 68 years ago and its shares are quoted on NASDAQ OMX Helsinki Ltd . Martela is the largest company in its sector in Finland and one of the three largest in the Nordic countries . The company has production facilities in Finland, Sweden and Poland . In 2012, the Group's revenue was EUR 142 .7 million, and at the end of the year it employed 801 people .
| 2012 | 2011 | ||
|---|---|---|---|
| Revenue | Meur | 142 .7 | 130 .7 |
| Growth in revenue | % | 9 .2 | 20 .6 |
| Operating profit | Meur | -0 .9 | 2 .6 |
| - as a percentage of revenue | % | -0 .6 | 2 .0 |
| Pre-tax profit | Meur | -1 .8 | 1 .9 |
| as a percentage of revenue | % | -1 .3 | 1 .5 |
| Return on investment | % | -2 .7 | 6 .0 |
| Balance sheet, total | Meur | 64 .3 | 69 .7 |
| Equity ratio | % | 42 .6 | 44 .7 |
| Earning/share | eur | -0 .51 | 0 .39 |
| Equity/share | eur | 6 .68 | 7 .60 |
| Dividend/share | eur | 0 .20* | 0 .45 |
| Capital expenditure | Meur | 4 .0 | 6 .8 |
| Average personnel | 806 | 637 |
* Proposal of the Board of Directors
Since the global financial crisis, we have sought over the past couple of years to generate growth through new areas of business, including the Martela Outlet chain, our service business, the hotels and restaurants segment and our subsidiaries in Russia and Denmark . The cost of these steps and the detectable slackening of demand in the autumn meant that the 2012 result fell short of expectations .
In 2013 we will concentrate on our core business and on boosting its profitability . We do not intend to launch new growth areas . The prolonged uncertainty on the markets has continued, and the autumn saw the first signs of its impact on demand . Given the uncertainties in the economy, our assessment of demand is that 2013 will prove to be challenging .
Martela's main markets are Finland, Sweden, Norway, Poland and Russia . Our Danish subsidiary returned to operating on the basis of an importer model, as of the start of 2013 . This provides a more efficient cost structure and is therefore a better arrangement in Denmark, where our market share and revenue are relatively small . The market conditions and competition in Denmark are considered the toughest in the Nordic countries . We will continue operations there through our importer, serving major international customers and local customers .
The changes in working culture prompted by new technologies are seen by Martela as an thrilling opportunity . The spread of mobile working enables not only more effective use of space but also more extensive changes in work practices . There has been a move from personal rooms to open plan offices, and today we are experiencing the boom of so called activity-based offices . This trend has reduced the size and number of individual workdesks . Work involves a lot of different types of meetings and interactive situations . Spaces that accommodate such needs seems to meet well our customers merging needs . For Martela, a particularly important and positive trend is the desire of customers to improve the efficiency with which they use their premises .
With an increase in work that is not tied to a fixed location, new requirements are being placed on spaces and furniture designs . Customers are using their premises more efficiently, and this is increasing the demand for new types of solution for their work spaces . We have developed working environment solutions that reduce the customer's costs while also supporting employee wellbeing, the customer's business and the brand . Specifically, we introduced our new Martela Inspiring Office concept . This is now also an integral part of our head office, which was transformed into an activity-based office in September . The results speak for themselves, and I am confident this will encourage customers to take a fresh look at the way they work .
Martela has an important mission to improve the acoustic landscape of open plan offices and minimise the disturbance to work tasks that require concentration . Quieter open plan spaces will be more productive workplaces . The Martela Silence concept has been developed to offer furniture solutions for work tasks where concentration must be maximised and disturbance minimised . The new furniture for open plan offices has acoustic damping properties and can also serve as a location for informal meetings or exchanges . This versatile concept brings considerable flexibility, which in turn supports activity-based office solutions .
The Grundell companies were incorporated into the Martela Group at the end of 2011 . During the year, the service production units of Grundell and Martela were combined and the Group's service business reshaped to meet customer needs more effectively . We will be focusing strongly on our removal service sales with the Grundell brand .
The Martela Outlet business model has firmly established itself in Finland, and awareness of the chain has increased substantially . With the Martela Outlets we are able to serve smaller companies and homebased offices . The chain opened its seventh store during 2012 . The Martela Outlets are part of Martela's recycling service that allows us to care for furniture throughout its life cycle . Recycling is, for us, an essential part of our corporate responsibility, which we carefully monitor . The second of our responsibility reports was published in the spring .
Grundell and Martela Outlet form a distinct entity together with Martela, ensuring we can offer customers complete interiors and a full range of services for their furniture and premises . Grundell provides a highly professional service in removals and installation and assembly .
Our information system development project required considerable input during the year . This Group-wide investment is expected to boost the efficiency of our delivery chain . The system was introduced in Poland and Sweden, and in Finland preparations were made throughout the year for its introduction, which is due to take place in spring 2013 .
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Our partnership involvement in the World Design Cap ital Helsinki 2012 project included some very interest ing events and brought us new contacts . Martela's furniture and new concepts were visible during 2012 at locations including the WDC pavilion in Hel sinki and Helsinki Airport . In Moscow, we brought together Finnish and Russian design professionals for a three-day seminar at Russia's most impor tant design establishment, the Strelka Institute for Media, Architecture and Design . In Poland, we held a number of events aimed at the architectural community in the country's three largest cities
In Finland, customers and designers were invited to experience the Martela Inspiring Office concept in the newly organized Martelahouse, where we also presented some forthcom ing new products . In Sweden, we moved to new premises in Stockholm, and celebrated the opening of these during the Stockholm Furniture and Light Fair . At Turku in Finland, Martela also relocated and is now in a historic property in the city .
The solutions we developed during the year will bring new designs and ideas to the workplace and enable a more diverse working environment . Our Silence con cept, which we presented at the interna tional Stockholm Furniture and Light Fair in February 2013, offers Martela's ideas and solutions for the changes taking place in the modern work culture and practices .
May I offer my sincere thanks to our customers, partners, shareholders and all at Martela for an active year in which design was firmly in the spotlight .
7
Takkatie, Helsinki, February 2013
Heikki Martela Managing Director
Better Interiors
ViSiON Leading Finnish Interior Brand
We are a leader in inspiring spaces . We offer complete solutions with products and services in our home markets . We add value by strengthening customers' brands, motivating people, and raising efficiency . We focus on direct customer and specifier relationships . We renew our way-of-working by utilising experienced and fresh views .
Family business Passion for Innovations User Driven Design Finnish
Martela is committed to responsibility in everything it does . Responsibility is an essential part of our values, operating strategy and everyday actions on all levels of the organisation . For us responsibility means transparency, sustainability, respect for our environment, life cycle thinking and uncompromised user-driven approach in design and production, services that extend the lifespan of spaces and products, commitment to international agreements and recommendations, and looking after of our human resources and network of partners .
We look at responsibility through our promise, Inspiring Spaces . Our passion for innovation, which helps us build more and more inspiring workspaces for our clients, in turn help us to build a better tomorrow for everyone . Our solutions that increase productivity, work effectiveness and wellbeing promote responsible behaviour on both individual and organisational levels .
Martela's products are designed to last and to retain their visual appeal . Martela's services help customers manage their working environment and furniture over the full life cycle . The company's maintenance and recycling services extend the life of furniture items, frequently allowing them to be passed from one owner to another . Martela's efficient recycling process and the network of Martela Outlet stores allow customers to recycle their furniture responsibly and cost-effectively . Martela's working environment solutions also enhance employee wellbeing in the customer's workplace .
At the start of the year, Martela's Management Team approved the company's first corporate responsibility action plan, for 2012-2014 . During the year, Martela also published its second responsibility report in compliance with the GRI (Global Reporting Initiative) guidelines .
Martela's personnel were given training on implementing the Group's responsible business principles .
The largest share of the Martela Group's revenue goes to product and service suppliers in the form of payment for materials, goods and services . Most of the purchases for customer products are made from local suppliers in Finland, Sweden and Poland .
The second greatest share of the economic benefits is distributed among the personnel in the form of pay and indirect employee costs . Shareholders gain economic value in the form of annual dividends .
Martela's responsible approach to personnel management is guided by its human resources policy . Martela's success has been created by skilled and motivated employees who like their work . Through responsible personnel management the company ensures that the personnel factors critical to success are in place . The responsibility report contains a set of personnel indictors revealing the personnel structure and the turnover among personnel . The indicators also cover personnel skills, health, safety and incentive systems .
During the year, a Group-wide employee wellbeing programme was drawn up for improving wellbeing and preventing work-related problems . Job satisfaction is taken seriously throughout the delivery chain . Suppliers and their subcontractors are required to comply with the relevant national labour legislation and with ILO agreements .
Martela promotes environmental protection in its operations and complies with the requirements of the relevant legislation . Through continuous development the aim is to reduce adverse environmental effects and promote recycling . The company's environmental work is an integral part of everyday management, in accordance with ISO 14001 . Environmental certification has been granted for the operations of Martela's logistics units in Finland and Sweden by an independent certification body . On the Swedish and Norwegian markets certain key products have the esteemed Nordic Swan ecolabel . Based on the principle of openness, Martela supplies information to customers about the materials used in its products . Carbon footprint calculations have been made for the company's main products, and these indicate the origin and nature of the emissions .
More detailed information on the indicators connected with environmental responsibility is given in Martela's responsibility report . Environmental considerations are also taken into account in energy-saving measures and participation in charity work that supports environmental causes .
Better future by inspiring Spaces
Martelahouse in Helsinki was remodelled during the year in line with Martela's Inspiring Office concept . The entire premises were brought into active use and divided up into zones based on different work requirements . Besides improving the work environment, the changes improved the efficiency of use . The transformation of Martelahouse into an activity-based office was achieved with a space saving of about 20% . The space requirement per person was reduced by 25% .
Martela has also achieved similar results in customer projects . The Inspiring Office concept enables work to be performed in different spaces based on the nature of the tasks . By dividing the premises into private, semi-public and public zones, tasks requiring considerable concentration can be performed in peace, while teamwork and meetings can take place in other locations . Martela's privacy-enhancing furniture items improve the ability to work undisturbed in an open plan environment . The result is a
more dynamic and comfortable environment for working .
"Mobile technology means that you are no longer constrained by the conventional workstation approach . We look at solutions in terms of the requirements of the work tasks in question, to make sure that the end result genuinely supports the needs of employees and the customer's business," says Panu Ala-Nikkola, Director of Martela's Business Unit Finland .
In Finland, Martela has a network of 28 sales centres, of which 7 are Martela Outlet stores specialising in recycling . Martela offers the widest range of after-sales support and modification services in the sector and is the largest company of its kind in Finland . The Business Unit's turnover in 2012 was EUR 98 .1 million, up 10 .7% from the previous year . Its operating result was EUR 3 .9 million (EUR 6 .5 million) .
Martela occupies a strong position in the market as an innovative and comprehensive expert for services to modify and maintain premises . During the year, the Grundell companies boosted Martela's competitiveness in removals services, and the focus on services to modify and maintain premises brought growth in the offices segment . The welfare segment also grew, aided by the company's extensive solutions developed to meet welfare sector needs and by the new, convenient and comfortable product range .
Martela Outlet succeeded in identifying and establishing its own customer base . The chain opened its seventh store during the year, and the store serving the Helsinki metropolitan area was moved to larger premises . Recycling demonstrates that Martela takes its responsibilities seriously and focuses on the entire life cycle of furniture . The recycling service offers customers furniture recycling that is cost effective and complies with applicable regulations .
The operating year was characterised by development and by investment in our business activities, with significant system projects being carried out in 2012 . In Finland, the Group's new CRM system was introduced and investment was made in service improvement . Martela's Inspiring Office concept was introduced at the company's main offices, bringing a new impetus to our work and saving space at the same time .
Europe's leading provider of debtrelated administrative services, Lindorff, is steadily expanding its workforce. Martela operates as a partner for Lindorff, maintaining its premises and ensuring their efficient use. Through a single contact, Lindorff can access a comprehensive service that includes interior planning and modification, furniture supply and furniture maintenance and recycling. The premises are kept up to date to reflect changing needs, furthering the success of the business and its personnel.
| Business Unit Finland (meur) |
2012 | 2011 | Change % |
|---|---|---|---|
| Revenue | 98 .1 | 88 .6 | 10 .7 |
| Operating profit | 3 .9 | 6 .5 | |
| Investments | 0 .5 | 0 .7 | |
| Average personnel |
485 | 310 | 56 .5 |
This Business Unit is the second biggest at Martela . Sales take place through a network of dealers, and Martela also has its own sales and showroom facilities in three locations: Stockholm and Bodafors in Sweden and Oslo in Norway . The Business Unit's logistics centre and order handling are also located in Bodafors . In Norway, the marketing company located in Oslo operates as a support organisation for the Norwegian sales network . The Business Unit's turnover in 2012 was EUR 20 .1 million, down -2 .2% from the previous year . Its operating result was EUR -0 .7 million (EUR 0 .3 million) .
The Martela Silence concept, offering acoustic solutions, was expanded during the year with the addition of a number of innovative products designed for the needs of activity-based offices . The start of 2012 saw the launch in Sweden and Norway of the new height-adjustable Martela Silence desk, with a height adjustment that runs almost silently .
In February, during the Stockholm Furniture and Light Fair, Martela opened a new Stockholm showroom . The Martela Group's new enterprise resource planning (ERP) system was introduced in Sweden
in the spring . The system is being installed throughout the Group and will enable efficiency improvements and further development of business .
The offering of furniture that allows customer-specific solutions was strengthened during the year . The ability to combine efficient and flexible production with an extensive network of specialised subcontractors is Martela's strength . The same project delivery can combine a wide selection of standard furniture with tailor-made products .
Norway's largest financial services group, DNB, is investing in its flagship offices. The offices in Bergen were the first to have Martela's Silence concept installed. DNB decided to have the quiet, height-adjustable desks in its conference room too.
The business unit's main market areas are Russia, Denmark and Estonia . It also exports products to the Netherlands, Germany, the United Kingdom, Austria and Japan . In addition, the unit is responsible for managing the Group's international key accounts . Sales in Russia take place both directly and through a network of dealers . In other markets there are local importers .
On the Russian market, Martela offers innovative, comprehensive solutions for changing working environments and education environments . The pace of change in Russia's working culture is similar to that in Western Europe, which is why it offers potential for Martela . During the year, Martela focused not only on developing its own companies but also the dealer network .
Martela's companies in Moscow and St Petersburg continued to build up their business . In St Petersburg, contacts were created especially with architects and
international customers . During the first full year of operation, the focus in Moscow was similarly on establishing a network of relationships . Martela held a three-day design event in conjunction with the Finnish Embassy in Moscow and Russia's most important design establishment, the Strelka Institute for Media, Architecture and Design . The event drew 1,500 invited guests and brought publicity for Martela in the local media .
Martela's operations in Denmark were reorganised on the basis of an importer model as of January 2013 . On other export markets the number of dealers was successfully increased . Martela's well-designed products are increasingly of interest to architects around the world . As Martela strengthens its distribution network, the availability of its products will improve globally .
B2B-Center is Russia's largest online advertising operator. The company has a creative and inspiring working environment to help strengthen the commitment of its personnel. Martela was involved in the furnishing and modernisation of the company's Moscow premises. Adding to the unique look of the premises is the street art of various artists on its walls.
Martela has a significant position on the Polish market, being market leader within its particular segment . Martela serves its customers through a nationwide sales network that includes seven sales offices in the country's largest cities . The unit's headquarters are located in Warsaw . Its logistics centre, also in Warsaw, is responsible not only for managing logistics but for assembly of products as well . The Business Unit's turnover in 2012 was EUR 12 .7 million, down -1 .7% from the previous year . Its operating result was EUR -1 .2 million (EUR -0 .6 million) .
Martela's competitive advantages in Poland lie in its extensive sales network, direct customer relationships, excellent customer service and reliable deliveries . Major international companies are establishing subsidiaries in Poland and building new premises – despite the economic uncertainty in Europe, a second investment wave by western companies is under way . In Poland, Martela is perceived as a local operator, which has allowed us to serve the public sector as well . Thanks to locally based production and a local sales network, Martela is able to make quick deliveries at competitive prices and to make product changes on a flexible basis .
Investment was made in developing project sales during the year, and development of the Group's ERP and CRM systems also continued .
Martela offers its Polish customers all-inclusive solutions . Most premises in Poland have fitted carpets, and so Martela's product selection includes not only Martela furniture, representation of other recognised furniture brands, and auditorium seating, but also carpets and the related fitting services . Important contacts with architects were activated at the established Conscious Interior events organised in conjunction with local architectural associations in various cities .
| Business Unit Poland (meur) |
2012 | 2011 | Change % |
|---|---|---|---|
| Revenue | 12 .7 | 12 .9 | -1 .7 |
| Operating profit | -1 .2 | -0 .6 | |
| Investments | 0 .1 | 0 .1 | |
| Average personnel |
81 | 90 | -10 .0 |
The Sosnowiec Science and Technology Park offers an attractive environment for innovative technology companies. The Park's offices, work spaces, conference rooms, teaching rooms, lobby and auditorium were furnished with timelessly appealing furniture items in keeping with the modern style of the building.
Martela employed on the average 806 people in six countries . Although it operates internationally, Martela's roots are firmly in Finland . The company is well known for its high standards and reliability both in Finland and abroad . Martela's employment culture is that of a family-owned company in which everyone's contribution is appreciated and the owner has a face . Martela's attention to development and innovation has made it a leader in its field .
During the year, the integration of the Grundell companies as part of Martela was completed and a new, centralised service production unit was established . In connection with this, operations were reorganised, the number of employees was reduced and some job descriptions were modified to better reflect the activities of the new service production unit . The acquisition of Grundell brought Martela special expertise in removals services, and the newly established service production unit enabled a high quality customer service, efficient operations and achievement of the profit target .
Martela took steps to improve employee wellbeing, with the aim of helping its employees to cope at work . During the year, a wide-ranging employee wellbeing model was assembled, which defines the nature of employee wellbeing at Martela and identifies the means by which it can be enhanced . The model was introduced for employees at the start of 2013 . Employee wellbeing is also supported by early detection of problems, which aims to prevent the emergence of factors adversely affecting work and to support the health of employees and their ability to cope . An early intervention model was introduced in Finland and managers
and employees were given training in its use .
A pilot project in age management and employee wellbeing was also carried out in Finland . Martela's goal is that all employees should retire in good health . The age management model is intended to help employees aged 55 and above to cope at work by allowing greater flexibility in working hours and workload . The aim of the occupational wellbeing model is to improve employees' working capacity and reduce work-related stress, thus decreasing the related sickness absences and the risk of incapacity for work .
Martela's work satisfaction survey is carried out once every two years, the last one being in 2011 . The focus was instead on the 2012 supervisor survey . This is a survey to assess management skills and is also carried out every two years . The 2012 results reveal that these skills are at an excellent level .
Major development projects begun in 2011 were continued in 2012 . Martela is developing its Group-wide information systems to ensure that information is efficiently available anywhere and at any time . The joint personnel information system was expanded to include the units outside Finland, and managers were trained in its use . The system not only improves the effectiveness of management but also allows systematic surveys of personnel skills and effective utilisation of these . Personnel skills were supported through training, which was also provided via the Martela Learning virtual environment .
Work at Martela has become more project-based than before . Developing this project-based approach will be important
for achieving our strategic goals . Management models for managing individual projects and project portfolios were drawn up at Martela and introduced during the year . Projects are now managed, scheduled and resourced more clearly, which will ensure that projects in progress are those that are most appropriate in terms of Martela's strategy .
Martela's Products and Communications unit combines the Group's product development and product portfolio management and its brand management and marketing . The unit's operations are concentrated on understanding customer needs and on providing high quality solutions for changes in working environments .
The change in working culture towards mobile and multi-site working enables new types of solutions for working environments and more efficient use of spaces . The solutions that Martela offers for today's activity-based offices support both employee and business needs . Dividing an office into private, semi-public and public zones is a way of bringing the entire premises into active work use .
Martela's new products also take into account the changing requirements for performing work . Martela's Silence concept improves ergonomics by reducing detrimental interruptions to work . The new Silence products offer acoustic protection that allows employees to concentrate without interruption and also minimises the disturbance caused to others .
Ways of working are also changing outside the traditional office environment . As part of the World Design Capital Helsinki 2012 cooperation, Martela developed the Suvanto lounges at Helsinki Airport in conjunction with Finavia and other partners . The user-centric design allows air travellers a moment of peace and quiet . The Suvanto lounges provide a peaceful refuge for working or relaxing away from the crowds .
Martela's own collection can be excellently complemented by representatives of other strong brands . Customers can be supplied with just the right products that match their needs from a range of manufacturers . Cooperation with Artek was furthered by signing a distributor agreement that allows Martela to sell Artek furniture as part of its projects .
As one of the main partners in the World Design Capital Helsinki 2012 theme year, Martela received considerable publicity and gained new partners . Having been awarded a Fennia Prize 2012 Honorary Mention, Martela's Kuru chair was produced in a special WDC design and became an official WDC chair at public
events . The WDC year also included a design event at Milan organised with a number of partners .
In Finland, customers and architects gathered at the Open Day event in Martela House, where the key speaker was renowned Dutch designer Khodi Feiz . The products in Martela's Silence concept were received with considerable interest . The phone booths developed by the Finnish company Framery have already found their way into open plan offices through Martela's distribution channels .
Digital channels are playing a greater role in marketing, reflecting changes in customer behaviour . Martela's digital marketing tools were improved during the year . A new product information management system was introduced, the benefits of which will be seen in the form of improved customer service, for instance through a remodelled Martela website . Product information was also incorporated into new applications, including two apps published in App Store and optimised for iPads and iPhones . A simplified, easy to read Martela product catalogue is an application launched for customers and architects . In addition, the Koop chair can be tried out virtually in a room using an iPad 3D application .
Kidex Oy is a contract manufacturer of board-based furniture components such as cabinet and pedestal components and tabletops . The company's competitiveness is guaranteed by its top-class machinery and equipment, efficient operating model, ability to react quickly and skilled workforce . Kidex Oy's customers include the Martela Group companies and also furniture manufacturers which are not part of the Martela Group, especially manufacturers of kitchen, bathroom and shop furniture .
Kidex Oy operates as an active contract manufacturer for all the companies in the Martela Group . During the year, its competitiveness was improved by investing in a new laminate coating line and improving the order-delivery chain reliability and productivity . The goal is to grow with the other Martela Group companies and also within customer segments outside the Group .
In 2012, the company employed an average of 70 (70) people .
P .O . Korhonen Oy is a joint venture owned by Martela Corporation and Artek Oy . Martela owns 51% of the company, and Artek owns the remaining 49% . The joint enterprise focuses on the manufacture of products marketed and sold by Martela and Artek .
P .O . Korhonen Oy manufactures formpressed wooden furniture . The company's core competence consists of its unique treatment, moulding and form-pressing of
wood . It also has special expertise in surface finishing using environmentally friendly methods and offering a diverse range of colours . During the year, the production focus was on expanding the output of Artek products .
Both design companies benefit from the easily accessible, high-quality manufacturing operation and the technical knowhow . With the number of wooden chair manufacturers in Finland on the decline,
access to the company's own production facilities ensures that products are available and that classic items can still be made . Having locally based manufacturing it supports product development and allows quick, flexible and customer-oriented solutions, which is essential in international projects in particular .
In 2012, the company employed an average of 45 (46) people .
Quality is part of all operations at Martela . Quality improvement projects were undertaken in all the Group's units in 2012 . Quality improvement work is aimed at continuously improving both product quality and operating quality .
Martela's certified quality (ISO 9001) and environmental management (ISO 14001) systems form the basis for developing the company's operations . These certifications are awarded for a three-year period by an accredited external certification body .
All of Martela's units switched over to using the same customer relationship management (CRM) system during the year . Completely revised tools for dealing with
complaints were also added to the CRM system . These new tools allow more effective introduction of preventive measures, improved transparency and more comprehensive cost monitoring, among other things . Delivery reliability is one of the main quality indicators at Martela's customer interface, and attention is constantly being given to further improving this . Indeed, 2012 saw an improvement in delivery reliability .
Martela is continuing with the renewal of its enterprise resource planning (ERP) system . The new system was introduced in Martela's Business Unit Poland in 2011 and in its Swedish unit in 2012 . The new system not only supports operating efficiency but
also enhanced quality measurement and continuous improvement in operations . The system will be introduced in Finland during 2013 .
Kidex Oy introduced a new roller laminate coating line during the year, and this improved the visual quality of its products and reduced materials wastage . P .O . Korhonen Oy had earlier changed over to using only waterbased agents in its surface finishing line . For other surface treatment the company has made preparations to switch to fully watersoluble agents . Solvent emissions have thus been eliminated and the products are more environmentally friendly, without compromising on the high quality requirements .
| Martela Corporation | x | x | ||
|---|---|---|---|---|
| Martela AB | x | x | ||
| Kidex Oy | x | x | ||
| P .O . Korhonen Oy | x | x | ||
Martela Corporation is a Finnish limited liability company that is governed in its decision-making and management by Finnish legislation, especially the 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 Finnish Corporate Governance Code 2010 published by the Securities Market Association .
Martela Group's business area is the furnishing of offices and public premises, and the provision of related services . The Group is managed according to both its operational organisation and legal Group organisation . The Group's management is based primarily on an operational matrix organisation . Its sales operations and customer service are organised by business segment as follows:
Business Unit Finland is responsible for sales, marketing, service production and manufacturing in Finland . Martela has an extensive sales and service network covering the whole of Finland, with a total of 28 sales centres . The Business Unit has a logistics centre in Nummela .
Sales in Business Unit Sweden and Norway is handled through dealers . In addition, the Business Unit has its own sales and showroom facilities at three locations: Stockholm and Bodafors in Sweden and Oslo in Norway . The Business Unit's logistics centre and order handling are also located in Bodafors, Sweden . Sales office in Oslo acts as a support organisation of reseller network in Norway .
Business Unit Poland is responsible for the sales and distribution of Martela products in Poland and Eastern Central Europe . Sales in Poland are organized via the sales network maintained by the Business Unit . The company has altogether 7 sales centres in Poland . Business Unit Poland is based in Warsaw, where it has its logistics centre and administration .
The main market areas of Business Unit International are Russia, Denmark and Estonia, and it also exports products to the Netherlands, Germany and Japan . In addition, the unit is responsible for managing the Group's key international customer relationships . In Russia sales is organised through Martela subsidiaries, and in other markets through local authorised dealers .
The Business Units share Group-level processes:
• Product and Communication is responsible for the competitiveness of the product portfolio and its visual consistency and for the development of innovative products and the Group's marketing communications;
• Production and Logistics is responsible for the principles and technology of production management, Group procurement, quality and the environment;
• Group HR is responsible for ensuring that Martela has the correct number of skilled, motivated and committed employees . • Financial Administration and IT is responsible for Group financial planning and reporting and Group IT solutions .
Manufacturing takes place on an orderdriven basis at Martela . Management of the supply chain and product assembly have been concentrated in the company's logistics centres in Finland, Sweden and Poland . These logistics centres are part of the operational organisations of their respective business segments . The logistics centres rely on an extensive network of subcontractors when carrying out their acquisitions . The components and products needed by the centres are also produced at Group plant in Kitee and as well as at the joint venture in Raisio . Kidex Oy is a contract manufacturer of wood-based components, and roughly 24 per cent of its production goes to customers outside the Group . P .O . Korhonen Oy manufactures form-pressed wooden furniture for public premises and auditorium furniture .
* Since 1.1.2013
The General Meeting is the company's supreme decision-making body . The Annual General Meeting must be held within six months of the end of the financial year . The financial statements, Board of Directors' report and the auditor's report are presented at the Annual General Meeting . The Meeting decides on the approval of the financial statements, use of the profit shown on the balance sheet, discharging the members of the Board of Directors and the Managing Director from liability, the fees of the Board members and auditors and the number of members on the Board . The General Meeting also elects the Board of Directors and
the auditor . Other matters on the agenda for the General Meeting are mentioned in the notice of meeting .
Martela has two share series ('K shares' and 'A shares'), with each K share entitling its holder to 20 votes at a General Meeting and each A share entitling its holder to one vote . The redeeming of K shares is referred to in the Articles of Association . Private owners of K shares have a valid shareholder agreement that restricts the sale of these shares to other than existing holders of K shares . The company's total share capital on 31 December 2012 was EUR 7 million .
In January-December 2012, a total of 422 271 (681 344) of the company's A shares were traded on the NASDAQ OMX Helsinki exchange, corresponding to 11 .9 per cent (19 .2) of the total number of A shares .
The value of trading was EUR 2 .5 million (5 .0); the share price was EUR 5 .79 at the beginning of the year and EUR 5 .02 at the end of the year . During January-December the share price was EUR 7 .50 at its highest and EUR 5 .00 at its lowest . At the end of December, equity per share was EUR 6 .68 (7 .60) .
The Board of Directors, elected by the Annual General Meeting each year, is responsible for the management and proper arrangement of the operations of the company in compliance with the Limited Liability Companies Act and the Articles of Association . In accordance with the Articles of Association, the Board of Directors consists of no less than five and no more than nine members . There may be no more than two deputy members . The Board of Directors elects from among its members a Chairman and Vice Chairman to serve until the end of the next Annual General Meeting . More information on the composition of the Board and the background information concerning Board members can be found under Corporate Governance/Board of Directors . The Board has confirmed a Charter defining the duties of the Board, meeting practices, the matters to be dealt with at meetings, the targets set by the Board for its operations, a self-evaluation of these operations, and the Board's committees .
In accordance with the Charter, the matters dealt with by the Board of Directors include:
• composition of the Group Management Team
The Board convened nine times during the financial year . The average attendance of Board members was 97 per cent .
The Board reviews its own activities annually either self-assessment or assessment made by external consultant . In both cases a summary of the evaluations is jointly discussed at a Board meeting .
The Board has evaluated the independence of its members and determined that Heikki Ala-Ilkka, Tapio Hakakari, Pinja Metsäranta and Yrjö Närhinen are independent of the company . Of the company's largest shareholders, Heikki Ala-Ilkka, Tapio Hakakari, Pinja Metsäranta and Yrjö Närhinen are independent members of the Board .
The Board has formed from among its members a Compensation Committee which also has a written Charter . According to the Charter, the key duties of the Compensation Committee include:
• deciding, with authorisation from the Board, the salaries and bonuses of the Managing Director and the Group Management Team
The Board's Compensation Committee comprises Heikki Ala-Ilkka, Jaakko Palsanen and Tapio Hakakari .
The company has no separate audit committee . The Board of Directors sees to the audit committee duties specified in the Corporate Governance Code . The Board is of the view that its members have the necessary and sufficient information on the company's operations, and the Board monitors the company's reporting at each meeting . The Finance Director is present at meetings of the Board of Directors and functions as Board secretary . The Board chairman is in direct contact with the Finance Director as necessary .
The Board appoints Martela Corporation's Managing Director and decides on the terms and conditions of his service relationship, which are defined in a written Managing Director's service contract . The Managing Director is responsible for the operational management and supervision of the parent company and the Group according to the guidelines set by the Board .
In the pictures from left to right Ala-Ilkka Heikki, Martela Pekka, Hakakari Tapio, Martela Heikki, Metsäranta Pinja, Närhinen Yrjö and Palsanen Jaakko.
M .Sc . (Econ) Chairman of the Board of Martela Oyj since 2003, member of the Board since 2002 .
Chief Financial Officer of Onninen Oy 1996-2011 . Other key duties: Board member of Design Combus Oy .
Owns 15 000 Martela Oyj A shares .
M .Sc . (Econ)
Vice Chairman of the Board of Martela Oyj since 2003, Member of the Board since 1981, Chairman of the Board 2002-2003, Vice Chairman of the Board 1994-2001 .
Managing Director of Marfort Oy since 2002 and Managing Director of EcoRing Oy since 2011 . Other key duties: Board member of Marfort Oy, Auto Innovation Oy and EcoRing Oy .
Owns 8 Martela A shares and 69 274 Martela Oyj K shares .
Hakari Tapio born in 1953, LL .M Member of the Board of Martela Oyj since 2003 .
Other key duties: Member of the Boards of Etteplan Oyj, Opteam Yhtiöt Oy, Hollming Oy, Vice Chairman of the Board of Cargotec Oyj and Chairman of the Board of Enfo Oyj .
Owns 25 200 Martela Oyj A shares .
martela Heikki born in 1956, M . Sc . (Econ), MBA Member of the Board of Martela Oyj since1986 . Managing Director of Martela Oyj since 2002 . Other key duties: Member of the Board of Marfort Oy and the Association of Finnish Furniture and Joinery Industries . Owns 121 342 Martela Oyj A shares
and 52 122 Martela Oyj K shares .
Member of the Board since 2010 TAHITI – Art History as a Branch of Scholarship, online journal, editor in chief since 2011 . Other key duties: Secretary of the society of Art History in Finland
since 2009 . Owns 2000 Martela Oyj A shares .
Närhinen Yrjö, s 1969, BBA Member of the Board of Martela Oyj since 2012 .
CEO of Suomen Terveystalo Oy:n since 2010, before that has worked as the Managing Director of Oy Hartwall Ab and several years at Procter & Gamble . Other key duties:The chairman of the board of Terveyspalvelualan liitto TPL (Association of Health Service Industry) as well as a board member of Lääkäripalveluyritykset ry and Peurunka Foundation . Owns no Martela Oyj shares .
Palsanen Jaakko born in 1944, M .Sc . (Eng .) Member of the Board of Martela Oyj since 1993 . Owns 106 831 Martela Oyj A shares and 1 600 Martela Oyj K shares .
In the pictures from left to right Martela Heikki, Ala-Nikkola Panu, Kolinen Petteri, Luhtasela Jaakko, Olsson Anders, Ontronen Sirpa, Pirskanen Markku, Rutkowski Marcin and Savo Veli-Matti.
The Board of Directors and the Managing Director appoint the members of the Group Management Team . The Managing Director of Martela Corporation acts as the Chairman of the Group Management Team . The directors responsible for the main market areas and the Group's processes are also represented in the Group Management Team . The Group Management Team drafts and reviews strategies, budgets and investment proposals, monitors the financial situation of the Group and its business units and processes, and the attainment of operational targets and plans . The Group Management Team meets once a month .
martela Heikki, born in 1956, M .Sc . (Econ), MBA At Martela since 1993 and member of the Management team since 2002 . Member of the Board of Martela Oyj since 1986, Chairman of the Board 2000–2002, Managing Director of Martela Oyj since 1 March 2002 . Working experience: Martela-Morgana AB, Sweden, Managing Director 1993–1999, Oy Crawford Door Ab, Sales Director, 1987–1993 . Other key duties: Member of the Board of Marfort Oy and the Association of Finnish Furniture and Joinery Industries .
Owns 121 342 Martela Oyj A shares and 52 122 Martela Oyj K shares .
Director, Business Unit Finland Area of resposibility: Martela Branded Business In Finland (BU profit & Loss; sales, marketing, production and logistics) . At Martela and member of the Management team since 2001 . Working experience: Huhtamäki Oyj, sales, marketing and general management positions in Europe and Asia, both in business area and group responsibilities, 1990–2001 . Other key duties: Chairman of the Board of Aina Group Oyj . Owns 12 378 Martela Oyj A
shares .
A . (Design Leadership) Design Director, Products & Communication Area of responsibility: Group Product Portfolio, Marketing, R&D, Design, Corporate Responsibility and Martela Brand . At Martela and member of the Management team since 2007 . Working experience: Nokia Design, Design Manager 1993–1998, Senior Design Manager 1998–2007 . Owns 5 022 Martela Oyj A shares .
Production and Logistics Director Area of responsibility: Group production, logistics and purchasing At Martela since 1985 and member of the Management team since 1995 . Working experience: Oy Wärtsilä Ab, Nuutajärvi Glassworks, Development Manager 1981– 1985 . Owns 2 855 Martela Oyj A shares .
Olsson Anders, born in 1965, B . SC . (Eng .)
Director, Business Unit Sweden and Norway . Area of responsibility: Sales, production and logistics in Sweden and Norway . At Martela and member of the Management team since 2007 . Working experience: IBS Sverige AB, Business Unit Director, Sales and Marketing Director, 2005–2007 .
Owns 5 022 Martela Oyj A shares .
Ontronen Sirpa, born in 1961, M .Sc . (Psych .) HR Director Area of responsibility: Group HR At Martela and member of the Management team since 2002 . Working experience: Sonera Oyj, HR Manager, 2000–2002, PricewaterhouseCoopers, Management consultant 1995–2000 . Owns 7 769 Martela Oyj A shares .
M . Sc . (Econ) Chief Financial Officer (CFO) Area of responsibility: Group's Finance and IT operations . At Martela and member of the Management team since 2011 . Working experience: Componenta Oyj, Financial manager, Financial director, 1989–1998 . CFO at F-Secure Oyj 1998–2003, Finlayson & Co Oy 2003–2009 and Comptel Oyj 2009–2011 . Owns 7 000 Martela Oyj A shares .
Rutkowski marcin, born in 1969, M .Sc (Pharm) Director, Business Unit Poland Area of resposibility: Sales, production and logistics in Poland and
its neighbouring areas . At Martela and member of the Management team since 2013 . Working experience: Inter national Paper, Kimberly-Clark S .A ., Cussons (Paterson Zochonis plc), IPF (Provident S .A .) during 1993–2012, sales, marketing and business development positions both in business area and group responsibilities .
Owns no Martela Oyj shares .
Savo Veli-matti, born in 1964, B .Sc .(Eng .)
Director, Business Unit International
Area of responsibility: Sales in Russia and export to Denmark, Estonia and other European countries and Japan . At Martela and member of the Management team since 2002 .
Working experience: Paroc Oy Ab, different managerial positions in international trade in Europe and Asia, 1988–1997 and 1999–2002 . Owns 7 569 Martela Oyj A shares .
Martela Corporation's Board of Directors is provided with monthly reports on the financial performance and forecasts of the Group and its business units .The reports and forecasts are also presented by the Managing Director at Board meetings, where they are reviewed . For the purposes of reviewing the interim reports and annual financial statements, the Board of Directors receives the financial statement information and analyses in advance .
The Group Management Team meets once a month to evaluate the financial performance, outlook and risks of the Group and its business units .
The auditing of Group companies is carried out in accordance with the valid laws in each country and each company's articles of association . The principally responsible auditor of the parent company co-ordinates the auditing of the Group's subsidiaries together with the Group's Managing Director and Finance Director . The auditors of Martela Corporation and the Group are the authorised public accountants KPMG, with Ari Eskelinen, Authorised Public Accountant, as the principally responsible auditor . All the auditors of the Group's companies are in the KPMG chain . In 2012, a total of EUR 117,000 (135,000) was paid in fees for the Group's auditing, while EUR 151,000 (164,000) was paid for other services .
The reliability of financial reporting is one of the principal objectives of Martela Corporation's internal control .
The Managing Director is responsible for the operational management and supervision of the Group according to the guidelines set by the Board . The Managing Director heads the Group Management Team, the members of which comprise the directors responsible for the business units and processes . The Group Management Team drafts and reviews strategies, annual operating plans and investment proposals, monitors the financial situation of the Group and its business units and processes, and the attainment of operational targets and plans . The Group Management Team meets once a month .
Martela's strategy is updated and its targets defined on an annual basis . Strategic planning forms the basis of all planning at Martela and is carried out on a rolling basis for the forthcoming period of 2-3 years . Target setting is an internal control prerequisite because the targets of the companies, business units, functions and supervisors are derived from Group-level targets . For each business area, specific financial and non-financial targets are set in accordance with the business plan, and their attainment is monitored regularly through comprehensive reporting to executive management, for example .
The Finance Director has overall responsibility for financial reporting in the Group . Reporting to executive management is carried out separately and independently of business operations . For the purpose of monitoring and controlling business operations, the Group has appropriate and reliable enterprise resource planning (ERP) systems and other information systems based on these, as well as the systems of the subsidiaries . Controllers and financial managers (controller function) are responsible for financial reporting at the Group, company and business unit levels . At Martela, financial reporting is carried out in compliance with guidelines, laws and regulations in a consistent manner throughout the Group . The reliability of financial reporting depends on the appropriateness and reliability of financial and reporting processes and on the control measures taken to ensure these . In 2012, a key area of focus in internal control was the implementation of the Group's ERP system as well as in production processes and in inventory management .
The Finance Director is responsible for the maintenance and development of reporting processes and defining and implementing control measures . Control measures include guidelines, matching, management reviews and reporting on deviations . The Finance Director monitors compliance with defined processes and controls . He also monitors the reliability of financial reporting .
The Board of Directors approves Martela's strategy and annual operating plans . It also approves the principles and rules of risk management and risk limits, and monitors on a regular basis the effectiveness and sufficiency of internal control and risk management . Furthermore, the Board is responsible for the internal control of the financial reporting process .
Auditors and other external controllers assess the control measures in terms of the reliability of financial reporting .
Martela's Board of Directors has confirmed the principles of risk management . The purpose of risk management is to identify, monitor and manage risks that could pose a threat to business and to the achievement of business objectives . Group management has supreme operational responsibility for risk management policy .
In the Group, risks are analysed and decisions are made to manage these risks as a part of the regular monitoring carried out by the Board and the management teams as described above . Risks are also evaluated when planning and making decisions on significant projects and investments . Risk management is integrated with the strategy process as a separate stage of analysis . There is no separate risk management organisation, but the associated responsibilities are assigned in line with the rest of the business operations and organisation . The company's Board of Directors has included an annual review of risk management in its schedule of work .
The forming of a separate internal audit function has not been deemed appropriate . The fact that the company does not have an internal audit function has been taken into account in the audit plans of the company's auditors .
It is estimated that the greatest risks to the improvement of profit performance relate to the continuation of general economic development and the consequent overall demand for office furniture . In accordance with Martela's risk management model, risks are classified and reduced in different ways . The manufacture of Martela's products is largely based on the company performing the final assembly and using subcontractors for components . Production control is based on orders placed by customers, which means that there is no need for any large-scale warehousing . Risks of damage are covered by appropriate insurance policies, and these provide comprehensive coverage for property, business interruption, supplier interruption loss and loss liability risks . Martela uses the services of an external insurance broker to manage insurance matters . The services of an external partner are also used in legal matters .
Financial risks are discussed in the notes to the financial statements .
The fees paid to the Chairman and to the members of the Board in 2012 totalled EUR 30,000 and EUR 75,000, respectively . However, no fees are paid to Board members employed by the company .
The total salaries and other benefits paid to Martela Corporation's Managing Director in 2012 were EUR 245,000 (239,000) . In addition, the Managing Director received EUR 42,000 (22,000) as bonuses and sharebased incentives . The Managing Director is entitled to retire on a full pension at the age
of 60 . The period of notice of termination of contract is six months for both the Managing Director and the company . If the company gives notice of termination of contract, the Managing Director is entitled to one-off compensation equivalent to 18 months' salary .
Bonus and incentive plans based on annual or shorter term performance are in place in the Group to promote the achievement of short-term objectives . The amount of the incentive is influenced mainly by performance indicators .
The remuneration of the Managing Director and the Group Management Team consists of a fixed basic salary, annual performance pay and a long-term sharebased incentive plan . The Board of Directors decides the annual performance pay of the Managing Director and other key personnel of the Group as well as the terms and conditions of the long-term share-based incentive plan on the basis of a proposal by the Compensation Committee . The amount of performance pay for the Managing Director and the Group Management Team members is based not only on personal results but also on the financial performance of the entire Group and the unit . The annual performance pay of the Managing Director and the Group Management Team may be no more than 30-45 per cent of their annual taxable earnings excluding performance pay . The principal of one-over-one approval is observed within the Group, which means that all pay-related terms and conditions require approval from the supervisor or manager who appointed the person in question .
The Managing Director and Group management participate in a long-term share-based incentive plan . The plan offers Martela Corporation A shares when the targets set for the specified earnings period are attained . These periods are the calendar years 2010 and 2010-2012 .
Any incentives paid on the basis of the above scheme will be paid as a combination of shares and cash at the end of each earnings period . The maximum bonus for the entire scheme is 80,000 Martela Corporation A shares and an amount of cash that will cover taxes and similar charges, estimated at approximately the value of the shares to be paid . The extent to which the targets set for an earnings period are attained will determine how great a proportion of the maximum bonus will be paid to a key person . In 2011, key persons were given 21,870 Martela Corporation A series shares based on the 2010 earning period and in 2012 no shares were given (earning period 2010-2012) . See the notes to the financial statements for information on the share-based incentive plan's effect on the result for the year .
No other compensation is paid on the basis of membership of the Management Team or a subsidiary .
Martela observes the Guidelines for Insiders issued by NASDAQ OMX . In addition, the Board has adopted Group insider rules, which in some cases establish stricter requirements on processing insider information than the Guidelines for Insiders . For instance, the duration of the so-called closed window is 21 days at Martela, which is longer than the NASDAQ OMX minimum .
The following are considered as insiders subject to disclosure requirements: the members of the Board of Directors of the parent company, the Managing Director, the auditor, and the members of the Group Management Team . Company-specific permanent insiders are defined as people working in the Group in supervisory or expert duties, the execution of which requires regular access to information regarding the financial situation and outlook of the Group and its business units . Project-specific insider registers can be drawn up if necessary .
Martela Corporation has joined the SIRE system maintained by Euroclear Finland Ltd, and up-to-date information on the holdings of the insiders subject to the disclosure requirement is available on the Martela website .
martela Oyj Head office Takkatie 1 P .O .BOX 44 FI-00371 Helsinki tel . +358 (0)10 345 50 fax . +358 (0)10 345 5744 www .martela .fi
Tuotekatu 13, FI-21200 Raisio tel . +358 (0)10 345 7100 fax . +358 (0)10 345 7150 www .po-korhonen .fi
Savikontie 25 FI-82500 Kitee tel . +358 (0)10 345 7211 fax . +358 (0)10 345 7244 www .kidex .fi
martela Ab Brogatan 1 Box 7 SE-571 61 Bodafors tel . +46 (0) 380 37 19 00 fax . +46 (0) 380 37 08 32 www .martela .se
martela As Drammensveien 130 N-0277 Oslo tel . +47 23 28 38 50 fax +47 23 28 38 51 www .martela .no
martela Sp. z o.o. ul .Redutowa 25 PL-01-106 Warsaw tel . +48 801 080 045 fax +48 22/ 836 76 23 www .martela .pl
LLC martela SP V .O ., Malyj pr ., 22, lit A 199004, St . Petersburg tel . +7 812 600 05 18 www .martela .ru
Botanicheskiy pereulok 5, 129090 Moscow tel . +7 495 775 48 46 www .martela .ru
www.martela.com
The Annual General Meeting of Martela Oyj will be held on Thursday, 14 March 2013, starting at 3 p.m. at Takkatie 1, 00370 Helsinki. The names of shareholders wishing to attend the meeting should be entered in the shareholder register at the Finnish Central Securities Depository Ltd no later than 4 March 2013, and the shareholders should register with Johanna Suhonen at the Company's head office, tel. +358 (0)10 345 5301, by email [email protected], or by post to Martela Oyj, PL 44, FI-00371 Helsinki, no later than 4 p.m. on 11 March 2013.
The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.20 per share is to be distributed for the year ended 31 December 2012.
Only shareholders registered in the shareholder register maintained at the Finnish Central Securities Depository Ltd on the record date for dividend payment, 19 March 2013, will be entitled to the dividend proposed by the Board. Dividend payments will be made on 26 March 2013.
Martela will publish three interim reports in 2013:
January–March (Q1) on 26 April 2013 January–June (Q2) on 6 August 2013 January–September (Q3) on 25 October 2013
Martela's Annual and Interim Reports are available in Finnish and English on the Group's websites (www.martela.fi and www.martela.com).
Stock exchange releases will be published on the Martela Group's website immediately following publication. All stock exchange releases published during a financial year are available on the website in chronological order.
Consolidated revenue for the 2012 financial year was EUR 142.7 million (2011: 130.7 million), a year-on-year increase of 9.2 per cent. The operating result for the year was EUR -0.9 million (2.6) and the earnings per share EUR -0.51 (0.39). The cash flow from operating activities in 2012 was EUR 0.0 million (1.2). The equity ratio was 42.6 per cent (44.7) and the gearing ratio was 28.6 per cent (-2.6). The return on investment for the year was -2.7 per cent (6.0).
The demand for office furniture was still fairly high in Finland, Sweden and Poland during the first half of 2012, but significant uncertainty was seen in customers' decision-making after the summer, for the first time in the year. The effects of the uncertainty in the international economy grew distinctly towards the end of the year and became evident as a slackening in demand, especially on the Finnish market.
Statistics on office construction in Finland are available for the first three quarters (January-September) of 2012, and these indicate that 39 per cent more office space (square metres) was built than in the same period the previous year. At the same time, however, fewer building permits (-4%) were granted than a year earlier, and there were also 10 per cent fewer new office building starts. The figures also indicate a slight weakening in the construction outlook in late September.
The operations of Martela's Hungarian subsidiary, Irobadutor Martela Ktf, were discontinued in spring 2012.
The business assets of Martela's Danish subsidiary, Martela A/S, were sold on 31 December 2012 to the local dealer, who will continue to serve Martela's customers in Denmark. Martela A/S's figures are consolidated in full in the 2012 consolidated financial statements.
meur
There were no other changes in Group structure during the financial year.
The business segments are based on the Group's operating structure and internal financial reporting.
Sales between segments are reported as part of the segments' revenue. The segment results presented are their operating results, because tax items and financial items are not allocated by segment. The Group's assets and liabilities are not allocated or monitored by segment in the internal financial reporting. The revenue and operating result are as recorded in the consolidated financial statements.
Business Unit Finland is responsible for sales and marketing, service production and product manufacturing in Finland. Martela has an extensive sales and service network covering the whole of Finland, with a total of 28 sales centres. Business Unit Finland's logistics centre is in Nummela.
meur
Business Unit Sweden & Norway's sales are handled through dealers. In addition, the Business Unit has its own sales and showroom facilities at three locations: Stockholm and Bodafors in Sweden and Oslo in Norway. The Business Unit's logistics centre and order handling are also located in Bodafors. The sales company in Oslo acts as a supporting organisation for Norway's dealer network.
Business Unit Poland is responsible for the sales and distribution of Martela products in Poland and eastern Central Europe. Sales in Poland are organised via the sales network maintained by the Business Unit. The company has altogether 7 sales centres in Poland. Business Unit Poland is based in Warsaw, where it has its logistics centre and administration.
'Other segments' includes the business activities of Kidex Oy and Business Unit International. Business Unit International's main market areas are Russia, Denmark and Estonia. Exports are also made to the Netherlands, Germany and Japan. In addition, the unit is responsible for managing the Group's key international accounts. In Russia, sales are organised by the unit's own subsidiaries, and in other markets through local authorised importers.
Consolidated revenue in 2012 was EUR 142.7 million (130.7), an increase of 9.2 per cent on the previous year. This was partly due to the acquisition of the Grundell companies at the end of 2011, though revenue also grew in the traditional sales channels in Finland. By contrast, Martela did not manage to boost revenue on other main markets. Instead, revenue in both Business Unit Sweden and Norway and Business Unit Poland fell slightly year on year. The Martela Group's like-for-like revenue growth (excluding the Grundell acquisition) was 4.7 per cent for the year.
Business Unit Finland's revenue was up by 10.7 per cent. Business Unit Sweden & Norway's revenue was down by 1.0 per cent, and Business Unit Poland's by 1.2 per cent, calculated in local currencies. Movements in exchange rates did not have a significant impact on the Group's revenue.
The 2012 operating result was EUR -0.9 million (2.6), which was -0.6 per cent (2.0) of revenue. The Group's result was adversely affected by the investment in business development made during the year, and by the reorganisation of the Danish business in the latter part of the
year. In addition, demand did not reach the forecast level late in the year, especially in Finland, due to the general weakening of the economy. Following the acquisition of Grundell the previous year, the integration of service production proceeded as planned
The result before taxes was EUR -1.8 million (1.9), and the result after taxes was EUR -2.0 million (1.6).
Despite the weakened cash flow, the Group's financial position continues to be stable. The cash flow in 2012 was affected by the capital expenditure undertaken and by the weak profit trend. In the coming year, the Group will also be paying close attention to control its working capital more efficiently.
Interest-bearing liabilities at the end of the year were EUR 15.3 million (11.1) and net interest-bearing liabilities were EUR 7.8 million (-0.8). The gearing ratio at the end of the year was 28.6 per cent (-2.6) and the equity ratio was 42.6 per cent (44.7). Net financing costs amounted to EUR 0.6 million (-0.4).The current financing arrangements do not include any covenant obligations.
The cash flow from operating activities in 2012 was EUR 0.0 million (1.2).
The balance sheet total at the end of the year was EUR 64.3 million (69.7).
The Group's gross capital expenditure in 2012 totalled EUR 4.0 million (6.8). Martela's most important capital expenditure project during the year was the new enterprise resource planning (ERP) system, which was introduced in Sweden in spring 2012 and will be introduced in Finland in spring 2013. Another major project was the renewal of a key production line at Kidex Oy. Capital expenditure otherwise consisted of normal everyday maintenance and replacement expenditure.
The Group employed an average of 806 (637) people, a year-on-year increase of 26.5 per cent. The increase was mainly due to the incorporation of the Grundell companies into the Group on 31 December 2011. Salaries and fees in 2012 totalled EUR 31.0 million (24.7). Expenses arising from employee benefits are presented in more detail under note 3 of the notes to the financial statements.
The World Design Capital Helsinki 2012 theme year played a prominent role. New companies were brought together in the various joint projects involved.
In the first quarter, Martela added a number of new products to its PLUS+ product family for elderly users. The PLUS+ product family now has a wide range of well-designed products at competitive prices, bringing the company's selection in this segment to a new level. Martela also updated its school collection with a low-cost wooden school desk, and it added black as a new colour option for the BIG cabinets.
At its Open Day event in September, Martela presented the new Inspiring Office concept. The concept provides practical
solutions for the working environments of today's knowledge workers. As work becomes more mobile, the entire office functions as a workspace. Communication zones, quiet spaces and areas that encourage social interaction are integral to the Martela Inspiring Office concept. The office is divided into functional areas or zones.
Several new products were launched in the Martela collection at the September event, including items for workstations and other office spaces. The desk range was expanded with two new product families: the Alku at the more economical end, introducing fresh, youthful design to this hotly competitive market, and the Canti, a high-end product that uses Silence technology and high-quality, classic materials. Other new furniture items included the innovative PodSeat and PodSofa designed for lobby workspaces.
Martela also continued to invest heavily in its digital material. Two key development projects, namely renewal of the website and the product information system, were completed in 2012, so that in early 2013 customers will have access to better product information and can enjoy a more modern digital user experience.
Corporate responsibility is an integral part of Martela's values, operating principles and business strategy. Martela's products are designed to last in terms of both their visual appeal and practicality. Martela's services help customers manage their working environment and furniture over the full life cycle. The company's maintenance and recycling services extend the life of furniture items, frequently allowing them to be passed from one owner to another. Martela's efficient recycling process and the network of Martela Outlet stores allow customers to recycle their furniture responsibly and cost-effectively.
At the start of the year, Martela drew up a corporate responsibility action plan for 2012-2014. Martela also published its second responsibility report in compliance with the GRI (Global Reporting Initiative) guidelines.
In 2012, Martela's personnel were given training on implementing the Group's responsible business principles. This Martela Corporate Code of Conduct incorporates concrete guidelines and requirements for Martela's employees and for the company's partners. This training will in future be given every year.
Martela applies the ISO 9001:2000 standard in its operations and the ISO 14001:2004 standard in its environmental management.
Martela has two share series (K shares and A shares), 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 owners of K shares have a valid shareholder agreement that restricts the sale of K shares to other than existing holders of K shares. The total number of K shares is 604,800 and A shares 3,550,800.
During the financial year, 422,271 (681,344) of the company's A shares, or 11.9 per cent (19.2) of all A shares, were traded on NASDAQ OMX Helsinki.
The value of trading turnover was EUR 2.5 million (5.0), and the share price was EUR 5.79 at the beginning of the year and EUR 5.02 at the end of the year. During the year, the share price was EUR 7.50 at its highest and EUR 5.00 at its lowest. At the end of December, equity per share was EUR 6.68 (7.60).
Martela did not purchase any of its own shares in 2012. On 31 December 2012, Martela owned a total of 67,700 Martela A shares, purchased at an average price of EUR 10.65. Martela's holding of treasury shares amounts to 1.6 per cent of all shares and 0.4 per cent of all votes.
Share acquisition for the share-based incentive scheme and management of the scheme have been outsourced to an external service provider. These shares have been entered under equity in the consolidated financial statements for 2012. A total of 38,647 shares under the incentive scheme were still undistributed on 31 December 2012.
Martela Corporation's Annual General Meeting was held on 14 March 2012. The AGM approved the financial statements for 2011 and discharged the members of the Board of Directors and the Managing Director from liability. The AGM decided, in accordance with the Board of Directors' proposal, to distribute a dividend of EUR 0.45 per share. The dividends were paid on 26 March 2012.
The number of members on the Board of Directors was confirmed as seven. Heikki Ala-Ilkka, Tapio Hakakari, Heikki Martela, Pekka Martela, Pinja Metsäranta and Jaakko Palsanen were re-elected to the Board, and Yrjö Närhinen was elected as a new member. KPMG Oy Ab, Authorised Public Accountants, was appointed again as the company's auditor.
The AGM also 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 valid to the end of the 2013 Annual General Meeting.
The new Board of Directors convened after the Annual General Meeting and elected from its members Heikki Ala-Ilkka as Chairman and Pekka Martela as Vice Chairman.
Martela Corporation is a Finnish limited liability company whose decision-making and administration are governed by Finnish legislation, especially the Limited Liability
Companies Act, and by other regulations concerning public listed companies and the Martela Corporation Articles of Association.
The company complies with the NASDAQ OMX guidelines for insiders and the Corporate Governance Code 2010 for Finnish listed companies published by the Securities Market Association.
The company has published a report on its corporate governance in accordance with the Corporate Governance Code.
Further information on Martela's corporate governance can be viewed on the company's website and in its annual report.
It is estimated that the greatest risks concerning profit performance are related to general economic growth trends and the consequent overall demand for office furniture. In accordance with Martela's risk management model, the risks are classified and are guarded against in different ways. At Martela's production plants, product assembly is automated and based on component subcontracting, with the assembly carried out by Martela. Production control is based on orders placed by customers, which means that there is no need for any extensive warehousing. Risks of damage are covered with appropriate insurance and this provides comprehensive coverage for property, business interruption, supplier interruption loss and loss liability risks. Martela uses the services of an external insurance broker to manage insurance matters. The services of an external partner are also used in legal matters.
Finance risks are discussed in note 28 of the notes to the financial statements.
The greatest profit performance risk is related to the general economic uncertainty and the consequent effects on the overall demand for office furniture.
The risks are explained in more detail in the corporate governance section of the company's annual report.
On 7 January 2013, the Group began codetermination negotiations concerning all personnel in Martela Corporation and Muuttopalvelu Grundell Oy. The negotiations were concluded on 29 January 2013, and as a consequence a total of 9 people in the companies are to be made redundant or laid off until further notice, and all personnel will be subject to a fixed term layoff of 14-90 days, varying by job and business location.
No other significant reportable events have taken place since the financial year, and operations have continued according to plan.
The Martela Group anticipates that its revenue in 2013 will be at about the 2012 level, and that its operating result will show a year-on-year improvement.
The Board proposes that a dividend of EUR 0.20 per share be distributed for 2012. The company's liquidity is good and it is the Board's opinion that the proposed distribution of profit will not endanger the company's solvency. The notice of Annual General Meeting will be published in a separate stock exchange release.
Martela Corporation's AGM will be held on 14 March 2013 at 3 p.m. in Martela House, Helsinki. The notice of Annual General Meeting will be published in a separate stock exchange release.
| (meur) | Business Unit Finland |
Business Unit Sweden and Norway |
Business Unit Poland |
Other segments |
Total |
|---|---|---|---|---|---|
| 1.1.2012-31.12.2012 | |||||
| External Revenue | 98.1 | 20.1 | 12.7 | 11.9 | 142.7 |
| Internal Revenue | 0.0 | 2.2 | 0.0 | 13.2 | 15.4 |
| Total 2012 | 98.1 | 22.3 | 12.7 | 25.1 | |
| 1.1.2011-31.12.2011 | |||||
| External Revenue | 88.6 | 20.6 | 12.9 | 8.6 | 130.7 |
| Internal Revenue | 0.8 | 1.6 | 0.1 | 13.2 | 15.7 |
| Total 2011 | 89.4 | 22.1 | 13.0 | 21.9 | |
| External Revenue change % | 10.7% | -2.2% | -1.7% | 37.2% | 9.2% |
| 1-12/2012 | 1-12/2011 | |
|---|---|---|
| Finland | 637 | 458 |
| Scandinavia | 76 | 77 |
| Poland and Hungary | 81 | 93 |
| Russia | 12 | 9 |
| Group total | 806 | 637 |
| (EUR 1,000) | Note | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|---|
| Revenue | 1 | 142 686 | 130 685 |
| Other operating income | 2 | 409 | 417 |
| Changes in inventories of finished goods and work in progress | -193 | 445 | |
| Raw material and consumables used | -73 859 | -69 252 | |
| Production for own use | 278 | 49 | |
| Employee benefits expenses | 3 | -38 617 | -30 932 |
| Depreciation and impairment | 4 | -3 421 | -2 649 |
| Other operating expenses | 5 | -28 195 | -26 138 |
| Operating profit (-loss) | -912 | 2 625 | |
| Financial income | 7 | 73 | 118 |
| Financial expenses | 7 | -706 | -476 |
| Share of result in associated undertakings | 12 | -300 | -358 |
| Profit (-loss) before taxes | -1 845 | 1 909 | |
| Income taxes | 8 | -203 | -343 |
| Profit (-loss) for the financial year | -2 048 | 1 566 | |
| Other comprehensive income | |||
| Translation differences | 230 | -139 | |
| Total comprehensive income | -1 818 | 1 427 | |
| Allocation of profit (loss) for the financial year: | |||
| Equity holders of the parent | -2 048 | 1 566 | |
| Allocation of total comprehensive income: | |||
| Equity holders of the parent | -1818 | 1 427 | |
| Earnings per share for the profit attributable to the equity holders of the parent | |||
| Basic earnings/share, EUR | 9 | -0.51 | 0.39 |
| Diluted earnings/share, EUR | 9 | -0.51 | 0.39 |
| (EUR 1,000) | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| Cash flows from operating activities | ||
| Cash flow from sales | 143 990 | 127 452 |
| Cash flow from other operating income | 394 | 219 |
| Payments on operating costs | -143 434 | -125 790 |
| Net cash from operating activities before financial items and taxes | 950 | 1 881 |
| Interest paid | -514 | -290 |
| Interest received | 33 | 41 |
| Other financial items | -126 | -122 |
| Dividends received | 1 | 0 |
| Taxes paid | -346 | -318 |
| Net cash from operating activities (A) | -2 | 1 192 |
| Cash flows from investing activities | ||
| Capital expenditure on tangible and intangible assets | -3 504 | -2 627 |
| Proceeds from sale of tangible and intangible assets | 15 | 499 |
| Capital expenditure on other investments | -200 | -150 |
| Proceeds from sale of other investments | 0 | 145 |
| Capital expenditure on subsidiaries | -2 975 | 0 |
| Net cash used in investing activities (B) | -6 664 | -2 133 |
| Cash flows from financing activities | ||
| Proceeds from short-term loans | 10 876 | 3 000 |
| Repayments of short-term loans | -7 762 | -3 393 |
| Proceeds from long-term loans | 4 000 | 7 000 |
| Repayments of long-term loans | -3 103 | -2 421 |
| Dividends paid and other profit distribution | -1 822 | -1 812 |
| Net cash used in financing activities (C) | 2 189 | 2 374 |
| Change in cash and cash equivalents | -4 477 | 1 433 |
| Cash and cash equivalents at beginning of year 1) | 11 947 | 10 249 |
| Translation differences | 120 | -41 |
| Cash and cash equivalents at end of year 1) | 7 589 | 11 639 |
Cash and cash equivalents at the end of period do not include cash from acquisition (Eur 309 thousand) 2011.
| (EUR 1,000) | Note | 31.12.2012 | 31.12.2011 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 10 | 6 031 | 4 699 |
| Tangible assets | 11 | 12 881 | 13 652 |
| Investments in associates and associated undertakings | 12 | 42 | 42 |
| Available-for-sale financial assets | 14, 15 | 55 | 55 |
| Investment properties | 13 | 600 | 600 |
| Receivables | 14, 16 | 10 | 104 |
| Pension receivables | 26 | 55 | 155 |
| Deferred tax assets | 17 | 185 | 315 |
| Non-current assets, total | 19 859 | 19 622 | |
| Current assets | |||
| Inventories | 18 | 13 142 | 12 988 |
| Trade receivables | 14, 19 | 22 586 | 24 480 |
| Loan receivables | 14, 19 | 124 | 105 |
| Accrued income and prepaid expenses | 14, 19 | 1 041 | 561 |
| Current tax receivable | 0 | 0 | |
| Financial assets at fair value through | |||
| profit and loss | 14, 20 | 0 | 0 |
| Cash and cash equivalents | 21 | 7 589 | 11 947 |
| Current assets, total | 44 483 | 50 082 | |
| Assets, total | 64 342 | 69 704 | |
| EQUITY AND LIABILITIES | |||
| Equity attributable to equity holders of the parent | 23 | ||
| Share capital | 7 000 | 7 000 | |
| Share premium account | 1 116 | 1 116 | |
| Other reserves | 117 | 117 | |
| Treasury shares* | -1 050 | -1 050 | |
| Translation differences | -6 | -236 | |
| Retained earnings | 19 889 | 23 809 | |
| Equity, total | 27 066 | 30 756 | |
| Non-current liabilities | |||
| Deferred tax liabilities | 17 | 1 269 | 1 366 |
| Other non-current liabilities | 151 | 175 | |
| Financial liabilities | 14, 25 | 9 331 | 7 644 |
| Non-current liabilities, total | 10 751 | 9 185 |
| 14, 25 | 6 010 | 3 490 |
|---|---|---|
| 6 010 | 3 490 | |
| 14, 27 | 777 | 921 |
| 14, 27 | 8 268 | 10 564 |
| 14, 27 | 6 655 | 9 572 |
| 0 | 0 | |
| 14, 27 | 4 815 | 5 214 |
| 20 515 | 26 272 | |
| 37 276 | 38 947 | |
| 64 342 | 69 704 | |
* The shares acquired for and assigned to the share-based incentive scheme are shown in accounting terms as treasury shares. See notes, 23.
| (EUR 1,000) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Equity attributable to equity holders of the parent |
Share capital |
Share premium account |
Other reserves |
Treasury shares |
Transla tion diff. |
Retained earnings |
Equity, total |
|
| Equity 1.1.2011 | 7 000 | 1 116 | 117 | -1 212 | -97 | 24 243 | 31 167 | |
| Cash flow hedging | 0 | |||||||
| Taxes on items recognised in equity or transferred from equity |
0 | |||||||
| Total comprehensive income | -139 | 1 566 | 1 427 | |||||
| Dividends | -1 807 | -1 807 | ||||||
| Share-based incentives | 162 | -193 | -31 | |||||
| 0 | 0 | 0 | 162 | -139 | -434 | -411 | ||
| Equity 31.12.2011 | 7 000 | 1 116 | 117 | -1 050 | -236 | 23 809 | 30 756 | |
| Cash flow hedging | 0 | |||||||
| Taxes on items recognised in equity or transferred from equity |
0 | |||||||
| Total comprehensive income | 230 | -2 048 | -1 818 | |||||
| Dividends | -1 822 | -1 822 | ||||||
| Share-based incentives | -50 | -50 | ||||||
| 0 | 0 | 0 | 0 | 230 | -3 920 | -3 690 | ||
| Equity 31.12.2012 | 7 000 | 1 116 | 117 | -1 050 | -6 | 19 889 | 27 066 | |
Martela Group makes office furniture and designs and implements a wide range of solutions for the working environment.
The Group's parent company is Martela Oyj, a Finnish public limited company domiciled in Helsinki, street address Takkatie 1, FI-00370 Helsinki. Copies of the Group's financial statements are available at Takkatie 1, FI-00370 Helsinki, and on the Internet at Martela's home pages www.martela.com.
These financial statements were authorised for issue by the Board of Directors of Martela Oyj on February 5th 2013. The Finnish Limited Liability Companies Act permits the shareholders of a possibility 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 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 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.
Martela has adopted the following new or amended standards and IFRIC interpretations beginning 1 January 2012:
Amendments to IAS 12 Income Taxes (effective for financial years beginning on or after 1 January 2012): The amendments deal with the underlying assumption related to the recognition of deferred tax. Based on the amendments the carrying amount of an investment property carried at fair value is expected to be recovered primarily through sale in future rather than through use.
IFRS 7 (amendment) "Financial instruments: Disclosures" (effective from 1 July 2011). The amendment requires additional quantitative and qualitative disclosures relating to transfers of financial assets.
The above mentioned changes, amendments and interpretations do not have any material impact on Martela's financial reporting.
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. 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.
Associates are companies in which the Group has significant influence. Significant influence generally arises when Group controls more than 20% of a company's voting power or when Group otherwise has significant influence but no control. Associates are consolidated using equity method after significant influence has been acquired until significant influence ceases. Share of the result of associates is calculated as a percentage of the groups ownership and it is presented in a separate line in the statement of comprehensive income. Unrealised profits between group and associates are eliminated using the groups ownership percentage. Investment in associate includes also acquired goodwill.
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 post-acquisition equity are also recognised in other comprehensive income. Similar treatment is applied to intragroup 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.
Grants received from the states or other similar sources are recognised and
presented as other operating income when they meet the recognition criteria. Grants related to the acquisition of tangible and intangible assets are recognised as deductions from the carrying amount of the assets in question. Grants are recognised as income over the useful life of a depreciable / amortisable asset by way of a reduced depreciation / amortisation charge.
Revenue from sales of goods is recognised when the significant risks and rewards of ownership of the sold goods have been transferred to the buyer. In general, revenue is recognised at the time of delivery of the goods in compliance with contract terms. Revenue from the services rendered is recognised when the service has been performed.
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 on the basis of 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.
The accumulated actuarial gains and losses of defined benefit plans are recognised in profit or loss for the average remaining service period of personnel to the extent that they exceed the larger of the following: 10% of the present value of the defined benefit obligation or 10% of the fair value of the plan assets.
The Group has a single share-based incentive system in which 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. The determination of the fair value of the reward takes place in two parts under IFRS 2: a part settled as shares and a part settled as cash. The part settled as shares is recognised under equity and the cash share under liabilities. 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. The main temporary differences arise in the measurement of buildings at fair value in accordance with the exemption permitted by the IFRS 1 transition standard. 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 amount 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 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 capitalisation criteria are fulfilled these projects are capitalised. R&D-related equipment is capitalised in machinery and equipment.
An intangible asset is initially capitalised 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 Customership 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 or deemed 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. 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 year-end 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.
Land areas that are held for currently undetermined future use are classified as investment properties. They are measured at historical cost, less impairment losses.
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. 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.
Leases in which the Group has substantially all the risks and rewards incidental to ownership are classified as finance leases. Assets acquired under finance leases, less accumulated depreciation, are carried under tangible assets. These assets are depreciated over the shorter of the useful lives of the tangible assets and the lease term. Lease obligations are included in interest-bearing financial liabilities.
Leases in which substantially all the risks and rewards incidental to ownership of an asset remain with the lessor are classified as operating leases and payments made thereunder are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term.
Inventories are measured at the lower of cost and net realisable value. The value of inventories is determined by the FIFO method (first in, first out) and it includes all direct expenditure incurred by acquiring the inventories and also a part of the variable and fixed overhead costs of manufacture. 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.
Group's financial assets are classified into the following groups: financial assets at fair value through profit or loss, loans and receivables, and available-for-sale financial assets. 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.
Derivatives and investments in mutual fund units are classified as financial assets at fair value through profit or loss. Investments in mutual fund units are measured at fair value on the basis of published price quotations in an active market, and changes in the fair value are recognised in profit or loss in the year in which they arise. Derivatives that hedge accounting is not applied are classified as being held for trading purposes. The fair values of derivatives are based on share market prices at the end of the reporting period and the changes in the fair values are recognised in profit or loss for the period in which they arise. Martela Group has not applied hedge accounting in the financial years 2012 or 2011.
Loans and receivables include non-derivative financial assets with fixed or determinable payments that are not quoted in an active market or are not held by the Group for trading purposes. This category includes the Group's financial assets gained by transferring money, goods or services to debtors. They are originally recognised at fair value and subsequently measured at amortised cost. 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). In addition to
loan receivables, the category includes trade and other receivables.
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They include various unlisted shares that are measured at cost, when their fair value cannot be reliably determined. They are included in non-current assets.
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.
The Group recognises an impairment loss on trade receivables when evidence exists that a receivable cannot be collected in full. A debtor's substantial financial difficulties, the likelihood of insolvency and neglect of payments, for example, are indications of impairment. The impairment of a receivable is recognised in profit or loss under other operating expenses. If the impairment loss amount decreases in a later period, the recognised loss is reversed through profit or loss.
The Group classifies its financial liabilities in the following categories: financial liabilities measured at amortised cost (mainly includes borrowings from financial institutions and trade payables) and financial liabilities at fair value through profit or loss (derivative liabilities). 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.
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. If it is possible to receive compensation for part of the obligation from a third party, the compensation is recognised as a separate asset, but only when receipt of the compensation is virtually certain. The Group had no provisions at the end of the current year or at the end of the previous year.
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 estimates mainly relate on the utilisation of deferred tax assets against future taxable income, and on the measurement of assets. 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 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. 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 cash-generating unit exceeds the recoverable amount. 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.
An impairment loss in respect of goodwill is never reversed.
The IASB has published the following standards or interpretations that are not yet effective and that Martela has not yet adopted. Martela will adopt them as from their effective dates, if the effective date is the same as the beginning of the financial year, or if the effective date is different, they will be adopted as from the beginning of the following financial year.
IAS 1 "Presentation of items of other comprehensive income" (amendment to IAS1) (effective from 1 July 2012). The amendment changes the grouping of items presented in OCI. Items that would be reclassified to profit or loss at a future point in time would be presented separately from items that will never be reclassified.
IAS19 (amendment) "Employee benefits" (effective from 1 January 2013). The impact will be as follows: to eliminate the corridor approach and recognise all actuarial gains and losses in OCI as they occur; to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset).
IFRS 7 (amendment) "Financial instruments: Disclosures" (effective from 1 January 2013). The IASB and the FASB issued common disclosure requirements that are intended to help investors and other financial statement users to better assess the effect or potential effect of offsetting arrangements on a company's financial position. This amendment does not have any material impact on Martela's financial reporting.
IFRS 13 "Fair value measurement" (effective from 1 January 2013). The standard will not have any material impact on Martela's financial reporting.
Annual Improvements to IFRSs 2009-2011 (May 2012) (effective for financial years beginning on or after 1 January 2013): The annual improvements process provides a mechanism for minor and non-urgent amendments to IFRSs to be grouped together and issued in one package annually. The amendments cover in total five standards. Their impacts vary standard by standard but are not significant.
IAS 32 (amendment) "Financial instruments: Presentation" (effective from 1 January 2014). The amendments Offsetting Financial Assets and Financial Liabilities address inconsistencies in current practice when applying the offsetting criteria in IAS 32. This amendment does not have any material impact on Martela's financial reporting.
IFRS 10 "Consolidated financial statements" (effective from 1 January 2014) builds on existing principles by identifying the concept of control as the determining factor in whether the entity should be
included within the consolidated financial statements of the parent company. The change will not have any material impact on Martela's financial reporting.
IFRS 11 "Joint arrangements" (effective from 1 January 2014). The change will not have any material impact on Martela's financial reporting.
IFRS 12 "Disclosures of interest in other entities" (effective from 1 January 2014). The standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates and/or structured entities.
IAS 27 (revised) "Separate financial statements" (effective from 1 January 2014). The standards includes the provisions on separate financial statements that are left after the control provisions of IAS 27 have been included to new IFRS 10.
IAS 28 (revised) "Associates and joint ventures" (effective from 1 January 2014). The standard include requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS 11.
IFRS 9 "Financial Instruments" (effective from 1 January 2015). This standard is a part of a wider project to replace IAS 39 and the later phases will be issued mainly during 2012. New standard provides guidance in respect of classification and measurement of financial instruments. Later phases relate to impairment of financial instruments and hedge accounting. In Martela's estimation, this standard will not have any material impact on valuation of Martela's financial instruments compared with present IAS 39 but will have some effect on presentation of Martela's financial instruments. This standard has not yet been endorsed by EU.
Other changes or amendments to other published IFRS standards and IFRIC's do not have any material impact on Martela's financial reporting.
The business segments are based on the Group's internal organisational structure and internal financial reporting.
Sales between segments are reported as part of the segments' revenue. The segments' results presented are their operating profits because tax items and financial items are not allocated by segment. The Group's assets and liabilities are not allocated or monitored by segment in the internal financial reporting. Revenue and operating profit are as recorded in the consolidated financial statements.
Business Unit Finland is responsible for sales and marketing, service production and manufacturing in Finland. In Finland, Martela has an extensive sales and service network covering the whole of Finland, with a total of 28 service locations. The Business Unit's logistics centre is in Nummela.
Business Unit Sweden and Norway is responsible for sales in Sweden and Norway, handled through dealers. In addition, the Business Unit has its own sales and showroom facilities at three locations: Stockholm and Bodafors in Sweden and Oslo in Norway. The Business Unit's logistics centre and order handling are also located in Bodafors. Sales company in Oslo operates as a support organisation for the Norwegian sales network.
Business Unit Poland is responsible for the sales and distribution of Martela products in Poland and eastern Central Europe. In Poland, sales are organised through our own sales network. The company has altogether 7 service locations in Poland. The Business Unit Poland is based in Warsaw, where it has its logistics centre and administration.
| Segment revenue | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| Business Unit Finland | ||
| external | 98 054 | 88 588 |
| internal | 2 | 836 |
| Business Unit Sweden and Norway | ||
| external | 20 095 | 20 553 |
| internal | 2 222 | 1 582 |
| Business Unit Poland | ||
| external | 12 673 | 12 897 |
| internal | 1 | 57 |
| Other segments | ||
| external | 11 865 | 8 647 |
| internal | 13 170 | 13 219 |
| Total external revenue | 142 686 | 130 685 |
| Segment operating profit/loss | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
| Business Unit Finland | 3 871 | 6 468 |
| Business Unit Sweden and Norway | -720 | 290 |
| Business Unit Poland | -1 224 | -635 |
| Other segments | -3 044 | -2 262 |
| Other | 205 | -1 236 |
| Total operating profit/loss | -912 | 2 625 |
Other segments includes the revenues of Kidex and Business Unit International. Business Unit International is responsible for the Group's other export markets. The revenue of P.O. Korhonen was included in the figures for "Other segment" in 2010 and until the end of January 2011, but subsequently has not been included in segment reporting, due to changes in the Group structure. The item "other" includes non-allocated Group functions and non-recurring sales gains and losses.
(EUR 1,000)
| Non-current assets | Intangible assets 31.12.2012 |
Tangible assets 31.12.2012 |
|
|---|---|---|---|
| Finland | 6 028 | 11 724 | |
| Sweden | 0 | 636 | |
| Other regions | 3 | 521 | |
| Total | 6 031 | 12 881 | |
| Non-current assets | Intangible assets 31.12.2011 |
Tangible assets 31.12.2011 |
|---|---|---|
| Finland | 4 640 | 11 819 |
| Sweden | 0 | 1 096 |
| Other regions | 59 | 737 |
| Total | 4 699 | 13 652 |
| (EUR 1,000) | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| Gains on sale of tangible assets | 15 | 52 |
| Rental income | 62 | 53 |
| Public subsidies | 162 | 132 |
| Other income from operations | 170 | 180 |
| Total | 409 | 417 |
| (EUR 1,000) | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| Salaries and wages | -30 988 | -24 692 |
| Pension expenses, defined contribution plans | -4 692 | -3 497 |
| Pension expenses, defined benefit plans | -456 | -482 |
| Part paid as shares | 0 | -12 |
| Part paid as cash | 0 | 44 |
| Other salary-related expenses | -2 481 | -2 293 |
| Personnel expenses in the income statement | -38 617 | -30 932 |
| Other fringe benefits | -403 | -654 |
| Total | -39 020 | -31 586 |
A total of EUR -731 thousand for 2012 and EUR -1,797 thousand for 2011 were recognised in the result from incentives and salary-related expenses associated with the incentive scheme. Salaries and fees and share-based payments made to management are presented in more detail under Note 31 Related-party transactions.
| Personnel | 2012 | 2011 |
|---|---|---|
| Average personnel, workers | 391 | 251 |
| Average personnel, officials | 415 | 386 |
| Average personnel, total | 806 | 637 |
| Personnel at year end | 801 | 791 |
| Average personnel in Finland | 637 | 458 |
| Average personnel in Sweden | 54 | 54 |
| Average personnel in Norway | 4 | 4 |
| Average personnel in Denmark | 18 | 19 |
| Average personnel in Poland | 81 | 90 |
| Average personnel in Hungary | 0 | 3 |
| Average personnel in Russia | 12 | 9 |
| Total | 806 | 637 |
| (EUR 1,000) | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| Depreciation | ||
| Intangible assets | -654 | -380 |
| Tangible assets | ||
| Buildings and structures | -789 | -776 |
| Machinery and equipment | -1 931 | -1 493 |
| Depreciation, total | -3 374 | -2 649 |
| Impairment | -47 | 0 |
| Depreciation and impairment, total | -3 421 | -2 649 |
Other operating expenses are reported by type of expense. They include all sales, marketing, administration, production and product development expenses allocated to actual business operations.
Other operating expenses also include auditor's fees for auditing, EUR -117 thousand (EUR -135 thousand in 2011), for tax services EUR -14 thousand (EUR -5 thousand 2011) and for other services, EUR -137 thousand (Eur -159 thousand in 2011).
The income statement recognised research and development expenses of EUR -2,181 thousand in 2012 (EUR -2,104 thousand in 2011).
| (EUR 1,000) | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| Financial income | ||
| Dividend income on other financial assets | 1 | 0 |
| Interest income on loans and other receivables | 33 | 41 |
| Foreign exchange gain on loans and other receivables | 38 | 61 |
| Other financial income | 0 | 6 |
| Change in value of assets at fair value through profit and loss | 0 | 9 |
| Total | 73 | 118 |
| Financial expenses | ||
| Interest expenses on interest-bearing loans | -521 | -270 |
| Foreign exchange losses on loans and other receivables | -34 | -68 |
| Changes in the value of interest rate derivatives - no hedge accounting | 0 | 0 |
| Other financial expenses | -151 | -138 |
| Total | -706 | -476 |
| Financial income and expenses, total | -633 | -358 |
| Total exchange rate differences affecting profit or loss are as follows: | ||
| Exchange rate differences, sales (incl. in revenue) | 424 | -325 |
| Exchange rate differences, purchases (incl. in adj. of purchases) | -458 | -13 |
| Exchange rate differences, financial items | 4 | -7 |
| Exchange rate differences, total | -30 | -345 |
| (EUR 1,000) | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| Current taxes | -80 | -398 |
| Taxes for previous years | -71 | -74 |
| Change in deferred tax liabilities and assets | -52 | 129 |
| Total | -203 | -343 |
Reconciliation between the income statement's tax expense and the income tax expense calculated using the Martela Group's domestic corporation tax rate 24,5% for 2012 (26% for 2011).
| Profit before taxes | -1 845 | 1 909 |
|---|---|---|
| Taxes calculated using the domestic corporation tax rate | -452 | 496 |
| Different tax rates of subsidiaries abroad | 4 | -6 |
| Taxes for previous years | 71 | 74 |
| Recognition of unused tax losses not booked earlier | -99 | -410 |
| Tax-exempt income | -12 | -126 |
| Non-deductible expenses | 309 | 126 |
| Share of result in associated undertakings | -74 | 0 |
| Unbooked deferred tax assets on losses in taxation | 50 | 189 |
| Income taxes for the year in the income statement | -203 | 343 |
The basic earnings per share is calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of shares outstanding during the year.
| (EUR 1,000) | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| Profit attributable to equity holders of the parent | -2 048 | 1 566 |
| Weighted average number of shares (1,000) | 4 049 | 4 049 |
| Basic earnings per share (EUR/share) | -0.51 | 0.39 |
The company has no diluting instruments.
| (EUR 1,000) | 1.1.2012- 31.12.2012 |
1.1.2011- 31.12.2011 |
||||||
|---|---|---|---|---|---|---|---|---|
| Intangible assets |
Goodwill | work in progress |
Total | Intangible assets |
Goodwill | work in progress |
Total | |
| Acquisition cost 1.1. | 5 057 | 883 | 1 644 | 7 584 | 3 591 | 0 | 1 251 | 4 842 |
| Increases | 1 214 | 0 | 2 465 | 3 679 | 1 753 | 883 | 1 237 | 3 873 |
| Decreases | -645 | 0 | -1 666 | -2 311 | -284 | 0 | -844 | -1 128 |
| Exchange rate differences | 26 | 0 | 0 | 26 | -3 | 0 | 0 | -3 |
| Acquisition cost 31.12. | 5 652 | 883 | 2 443 | 8 978 | 5 057 | 883 | 1 644 | 7 584 |
| Accumulated depreciation 1.1. |
-2 885 | 0 | 0 | -2 885 | -2 791 | 0 | 0 | -2 791 |
| Accumulated depreciation, decreases |
617 | 0 | 0 | 617 | 284 | 0 | 0 | 284 |
| Depreciation for the year 1.1.-31.12. |
-654 | 0 | 0 | -654 | -380 | 0 | 0 | -380 |
| Exchange rate differences | -25 | 0 | 0 | -25 | 2 | 0 | 0 | 2 |
| Accumulated depreciation 31.12. |
-2 947 | 0 | 0 | -2 947 | -2 885 | 0 | 0 | -2 885 |
| Carrying amount 1.1. | 2 172 | 883 | 1 644 | 4 699 | 800 | 0 | 1 251 | 2 051 |
| Carrying amount 31.12. | 2 705 | 883 | 2 443 | 6 031 | 2 172 | 883 | 1 644 | 4 699 |
The Group's Goodwill EUR 883,000 (EUR 883,000 in 2011) relates to the Grundell acquisition Martela made in 31 December 2011. The cash generating unit is allocated fully to segment Business Unit Finland. The expected future cash flows will be generated through combining and streamlining service operations to improve the quality and efficiency of service processes and the efficiency of service logistics. With a simpler service chain it is also possible to implement more comprehensive product and service solutions and offering.
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 has been compared to the recoverable amount of the cash generating unit.
The recoverable amount of goodwill is determined based on value in use calculations. The value in use is calculated based on 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. The profitability used in the forecast period considers above mentioned synergies at a modest rate and the growth rate used, i.e. the growth factor, is on average 3,5%. The use of the testing model requires making estimates and assumptions concerning market growth and general interest rate level.
The used pre-tax discount rate is 12,4%, 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 0%. Based on the impairment tests there is no need to recognize an impairment loss.
The realization of an impairment loss would require the actual operating profit (EBIT) level to be 90% lower than the management's estimate at the end of reporting period, or that the discount rate was higher than 27%.
| (EUR 1,000) | ||||||
|---|---|---|---|---|---|---|
| 1.1.2012 - 31.12.2012 | Land areas | Buildings | Machinery and equipment |
Other tangible assets |
work in progress |
Total |
| Acquisition cost 1.1. | 67 | 24 909 | 33 599 | 34 | 327 | 58 936 |
| Increases | 0 | 271 | 1 196 | 0 | 682 | 2 149 |
| Decreases | 0 | -6 | -734 | 0 | -208 | -948 |
| Re-groupings | 0 | 0 | 0 | 0 | 0 | 0 |
| Exchange rate differences | -1 | 81 | 326 | 0 | 0 | 406 |
| Acquisition cost 31.12. | 66 | 25 255 | 34 387 | 34 | 801 | 60 543 |
| Accumulated depreciation 1.1. | 0 | -18 617 | -26 668 | 0 | 0 | -45 285 |
| Accumulated depreciation, decreases | 0 | 5 | 637 | 0 | 0 | 642 |
| Depreciation for the year 1.1.-31.12. | 0 | -789 | -1 931 | 0 | 0 | -2 720 |
| Re-groupings | 0 | 0 | 0 | 0 | 0 | 0 |
| Exchange rate differences | 0 | -24 | -275 | 0 | 0 | -299 |
| Accumulated depreciation 31.12. | 0 | -19 425 | -28 237 | 0 | 0 | -47 662 |
| Carrying amount 1.1. | 67 | 6 292 | 6 931 | 34 | 327 | 13 652 |
| Carrying amount 31.12. | 66 | 5 830 | 6 150 | 34 | 801 | 12 881 |
| 1.1.2011 - 31.12.2011 | Land areas | Buildings | Machinery and equipment |
Other tangible assets |
work in progress |
Total |
|---|---|---|---|---|---|---|
| Acquisition cost 1.1. | 68 | 24 404 | 32 551 | 24 | 994 | 58 041 |
| Increases | 0 | 518 | 3 688 | 15 | 572 | 4 793 |
| Decreases | 0 | 0 | -2 623 | -5 | -1 239 | -3 867 |
| Re-groupings | 0 | -13 | 0 | 0 | 0 | -13 |
| Exchange rate differences | -1 | 0 | -17 | 0 | 0 | -18 |
| Acquisition cost 31.12. | 67 | 24 909 | 33 599 | 34 | 327 | 58 936 |
| Accumulated depreciation 1.1. | 0 | -17 849 | -27 472 | 0 | 0 | -45 321 |
| Accumulated depreciation, decreases | 0 | 0 | 2 313 | 0 | 0 | 2 313 |
| Depreciation for the year 1.1.-31.12. | 0 | -776 | -1 493 | 0 | 0 | -2 269 |
| Re-groupings | 0 | 0 | 0 | 0 | 0 | 0 |
| Exchange rate differences | 0 | 8 | -16 | 0 | 0 | -8 |
| Accumulated depreciation 31.12. | 0 | -18 617 | -26 668 | 0 | 0 | -45 285 |
| Carrying amount 1.1. | 68 | 6 555 | 5 079 | 24 | 994 | 12 719 |
| Carrying amount 31.12. | 67 | 6 292 | 6 931 | 34 | 327 | 13 652 |
| 31.12.2012 | 31.12.2011 |
Carrying amount of productions machinery and equipment
3 155 3 311
Tangible assets include assets acquired through finance leases as follows:
| 1.1.2012 - 31.12.2012 |
1.1.2011 - 31.12.2011 |
||||
|---|---|---|---|---|---|
| Machinery and equipment |
Buildings | Total | Machinery and equipment |
Buildings | Total |
| 3 033 | 702 | 3 735 | 2 600 | 698 | 3 298 |
| 201 | 0 | 201 | 433 | 0 | 433 |
| -5 | 0 | 0 | 0 | 0 | 0 |
| 0 | 27 | 27 | 0 | 4 | 4 |
| 3 229 | 729 | 3 958 | 3 033 | 702 | 3 735 |
| -2 644 | -332 | -2 976 | -2 350 | -258 | -2 608 |
| 0 | 0 | 0 | 0 | 0 | 0 |
| -312 | -72 | -384 | -294 | -69 | -363 |
| 0 | -14 | -14 | 0 | -5 | -5 |
| -2 956 | -418 | -3 374 | -2 644 | -332 | -2 976 |
| 389 | 370 | 759 | 250 | 440 | 690 |
| 273 | 311 | 584 | 389 | 370 | 759 |
The plant of Bodafors, Sweden, was sold in 2007. Part of it was leased back on a long-term lease that is classified as a finance lease.
Martela Corporation acquired the removals company and interior planning services provider Muuttopalvelu Grundell Oy and Grundell Henkilöstöpalvelut Oy in a transaction dated 31 December 2011.
The Grundell acquisition resulted in goodwill booking of EUR 883,000. More information on the Goodwill is included in the Note 10 "Intangible assets".
As the acquisition took place on 31 December 2011, full annual revenue and profit impact of the reporting period is
included in the consolidated income statement. If the acquisition had been made at the beginning of the 2011 financial year, the consolidated revenue would have been EUR 6.8 million higher and the consolidated profit EUR 0.5 million higher in the 2011 financial year.
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| 1.1 | -358 | 0 |
| Share of result in associated undertakings | -300 | -358 |
| 31.12 | -658 | -358 |
| (EUR 1,000) | Domicile | Assets | Liabilities | Revenue | Result | Martela's share of result (%) |
|---|---|---|---|---|---|---|
| 2012 | ||||||
| P.O. Korhonen | Finland | 1 816 | 2 607 | 3 746 | -588 | 51 |
| (EUR 1,000) | Domicile | Assets | Liabilities | Revenue | Result | Martela's share of result (%) |
| 2011 | ||||||
| P.O. Korhonen | Finland | 1 884 | 2 088 | 3 013 | -704 | 51 |
On 17 January 2011, Artek Oy Ab and Martela Corporation signed an agreement to establish a joint enterprise. Under the shareholding agreement, Martela does not have control of the company as defined in IAS 27. Martela's consolidated income statement will only include Martela's share of the joint enterprise's profit or loss on the basis of Martela's holding, and this is reported in the consolidated income statement under 'share of result in associated undertakings'.
The land belonging to Kiinteistö Oy Ylähanka has been classified as investment property. The fair value of the land belonging to Kiinteistö Oy Ylähanka was EUR 600 thousand at the end of financial
year 2012 (EUR 600 thousand in 2011). The fair-values have not been appraised by a third-party valuer.
| (EUR 1,000) | Financial assets recognised at fair value through profit and loss |
Loans and other receiva bles |
Available for-sale financial assets |
Financial liabilities recognised at amortised acquisition cost |
Book values of balance sheet items |
Fair value | Note |
|---|---|---|---|---|---|---|---|
| 2012 balance sheet items | |||||||
| Non-current financial assets | |||||||
| Non-current non-interest bearing receivables |
10 | 10 | 10 | 16 | |||
| Other financial assets | 55 | 55 | 55 | 15 | |||
| Current financial assets | |||||||
| Trade and other receivables | 23 751 | 23 751 | 23 751 | 19 | |||
| Currency forward contracts | 0 | 0 | 22 | ||||
| Fund units | 0 | 0 | 20 | ||||
| Book value by group | 23 761 | 55 | 23 816 | 23 816 | |||
| Non-current financial liabilities | |||||||
| Interest-bearing liabilities | 9 331 | 9 331 | 9 331 | 25 | |||
| Other liabilities | 151 | 151 | 151 | ||||
| Current financial liabilities | |||||||
| Interest-bearing liabilities | 6 010 | 6 010 | 6 010 | 25 | |||
| Interest rate swaps | 0 | 0 | 22 | ||||
| Currency forward contracts | 0 | 0 | 22 | ||||
| Trade payables and other liabilities | 20 515 | 20 515 | 20 515 | 27 | |||
| Book value by group | 36 007 | 36 007 | 36 007 | ||||
| 2011 balance sheet items | |||||||
| Non-current financial assets | |||||||
| Non-current non-interest bearing receivables |
104 | 104 | 104 | 16 | |||
| Other financial assets | 55 | 55 | 55 | 15 | |||
| Current financial assets | |||||||
| Trade and other receivables | 25 146 | 25 146 | 25 146 | 19 | |||
| Currency forward contracts | 0 | 0 | 22 | ||||
| Fund units | 0 | 0 | 20 | ||||
| Book value by group | 25 250 | 55 | 25 305 | 25 305 | |||
| Non-current financial liabilities | |||||||
| Interest-bearing liabilities | 7 644 | 7 644 | 7 644 | 25 | |||
| Other liabilities | 175 | 175 | 175 | ||||
| Current financial liabilities | |||||||
| Interest-bearing liabilities | 3 490 | 3 490 | 3 490 | 25 | |||
| Interest rate swaps | 0 | 0 | 22 | ||||
| Currency forward contracts | 0 | 0 | 22 | ||||
| Trade payables and other liabilities | 26 272 | 26 272 | 26 272 | 27 | |||
| Book value by group | 37 581 | 37 581 | 37 581 |
Fair values of each financial asset and liability group are presented in more detail under the note indicated in the table. Derivatives (interest rate swaps and currency forward contracts) have been measured using generally accepted valuation models where inputs are based on verified market information (Level 2). They are not subject to hedge accounting and changes in fair values have been recognised in the income statement.
| (EUR 1,000) | ||
|---|---|---|
| Available-for-sale financial assets | 31.12.2012 | 31.12.2011 |
| Balance sheet value at beginning of year | 55 | 10 |
| Decreases | 0 | 45 |
| Balance sheet value at end of year | 55 | 55 |
Available-for-sale financial assets include investments in unlisted equities. They have been measured at acquisition cost because fair value cannot be assessed reliably.
| (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Loan receivables | 10 | 104 |
| 1.1.2012 | Recognised in income statement |
Recognised in equity |
Exchange rate differences |
Purchased/ sold enterprises |
31.12.2012 |
|---|---|---|---|---|---|
| 0 | 0 | 0 | 0 | 0 | 0 |
| 407 | -236 | 0 | 15 | 0 | 185 |
| 407 | -236 | 0 | 15 | 0 | 185 |
| 970 | -81 | 0 | 0 | 0 | 889 |
| 0 | 0 | 0 | 0 | 0 | 0 |
| 38 | -25 | 0 | 0 | 0 | 13 |
| 451 | -84 | 0 | 0 | 0 | 367 |
| 1 459 | -190 | 0 | 0 | 0 | 1 269 |
| -1 051 | -46 | 0 | 15 | 0 | -1 084 |
| Changes in deferred taxes during 2011 | 1.1.2011 | Recognised in income statement |
Recognised in equity |
Exchange rate differences |
Purchased/ sold enterprises |
31.12.2011 |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax losses carried forward | 0 | 0 | 0 | 0 | 0 | 0 |
| Other temporary differences | 361 | 46 | 0 | 0 | 0 | 407 |
| Total | 361 | 46 | 0 | 0 | 0 | 407 |
| Deferred tax liabilities | ||||||
| On buildings measured at fair value on the transition date |
1 115 | -145 | 0 | 0 | 0 | 970 |
| Cumulative depreciation difference | 0 | 0 | 0 | 0 | 0 | 0 |
| Pension obligations | 65 | -27 | 0 | 0 | 0 | 38 |
| Other temporary differences | 97 | 36 | 0 | 0 | 318 | 451 |
| Total | 1 277 | -136 | 0 | 0 | 318 | 1 459 |
| Deferred tax assets and liabilities, total | -916 | 182 | 0 | 0 | -318 | -1 051 |
| Due to set-off, divided in the balance sheet as follows: |
||||||
| Deferred tax assets | 298 | 315 | ||||
| Deferred tax liabilities | 1 214 | 1 366 | ||||
| Deferred tax assets and liabilities, total | -916 | -1 051 |
Deferred tax assets have not been recognised on unused tax losses that probably cannot be utilised in the future against taxable income. These losses including 2012 results total about MEUR 9,6 (9,2). These losses have no expiry date according to knowledge that is available today.
| (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Raw materials and consumables | 9 746 | 9 182 |
| Work in progress | 900 | 880 |
| Finished goods | 2 238 | 2 714 |
| Advances | 257 | 211 |
| Total | 13 142 | 12 988 |
The value of inventories has been written down by EUR -946 thousand in 2012 (EUR -1,337 thousand in 2011).
| (EUR 1,000) | 31.12.2012 | 31.12.2011 | |
|---|---|---|---|
| Trade receivables | 22 586 | 24 480 | |
| Loan receivables | 124 | 105 | |
| Accrued income and prepaid expenses | |||
| Personnel expenses | 105 | 170 | |
| Royalties | 11 | 24 | |
| Interest income | 0 | 0 | |
| Derivatives | 0 | 0 | |
| Other financial assets | 36 | -5 | |
| Advances | 161 | 142 | |
| Other | 728 | 230 | |
| Accrued income and prepaid expenses, total | 1 041 | 561 | |
| Current tax receivable | 0 | 0 | |
| Total | 23 751 | 25 146 |
The book values of trade receivables and receivables based on other than derivatives are estimated to correspond to their fair values.
| (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Fund units | 0 | 0 |
| (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Cash in hand and at bank | 7 589 | 11 947 |
| Deposits | 0 | 0 |
| Total | 7 589 | 11 947 |
Martela uses derivatives for hedging purposes but does not apply hedge accounting as in IAS 39.
The paid share capital entered in the Trade register is EUR 7,000,000. According to the Articles of Association, the maximum capital is EUR 14,000,000 and the minimum capital EUR 3,500,000.
The counter value of a share is EUR 1.68. The K shares carry 20 votes at a general meeting and the A shares 1 vote. Both share series have the same dividend rights.
| Changes in share capital | Number of shares |
Share capital |
Share premium account |
Treasury shares |
Treasury shares, share-based incentive system |
Total |
|---|---|---|---|---|---|---|
| 01.01.2011 | 4 027 383 | 7 000 | 1 116 | -721 | -490 | 6 905 |
| Acq.of shares for share-based inc.system* | ||||||
| Shares given* | 21 870 | 186 | 186 | |||
| Shares returned | -25 | -25 | ||||
| Share issue | ||||||
| 31.12.2011 | 4 049 253 | 7 000 | 1 116 | -721 | -329 | 7 066 |
| Acq.of shares for share-based inc.system* | ||||||
| Shares given* | ||||||
| Shares returned | ||||||
| Share issue | ||||||
| 31.12.2012 | 4 049 253 | 7 000 | 1 116 | -721 | -329 | 7 066 |
Martela Oyj owns 67,700 A shares purchased at an average price of EUR 10.65. The number of treasury shares is equivalent to 1.6% of all shares and 0.4% of all votes.
* Acquisition of shares for the share-based incentive scheme and the management of the scheme have been outsourced to an external service provider, Evli Alexander Management Oy until transferred to Martela's key personnel under the incentive scheme. Notwithstanding this legal formality, the shares will be treated in the consolidated financial statements for 2010 onwards under equity, as if the company had acquired its own shares. On 31 December 2012, 38,647 shares under the incentive scheme were still undistributed.
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 consist of reserve funds.
The parent company's distributable equity was EUR 31,723,270.95 on 31.12.2012.
Martela Corporation's Board of Directors resolved on 9 February 2010 and approved the terms for the share-based incentive scheme 2010-2012. The scheme has one (1) earning period made up of three (3) calendar years starting 1 January 2010 and ending on 31 December 2012. Rewards will be paid as combination of shares and cash. The Board have decided to divide the earning period by assigning a separate
target and reward for one (1) calendar year. The scheme offers key personnel an opportunity to receive the company's A shares (share) if they attain the targets set for them for the earning period. The earnings criteria for the earning period 2010 is EBIT. The reward will not be paid to key persons whose employment or service relationship with a Group company ends before the end of the earning period. After the introduction of the share ownership plan the earned shares have compulsory ownership of 3 years.
Earnings periods are 2010 and 2010-2012. The share ownership plan offers the key personnel a possibility to earn up to 80,000 shares.
In the earnings period 2010 the maximum reward is 24,000 of 80,000 shares. In addition to shares a cash payment up to an amount that is needed for taxes and tax-related costs arising from the reward will be paid.
Key charasteristics and terms of the Plan are described in the table below:
| Basic data | Earning period 2010 |
Earning period 2010-2012 |
|
|---|---|---|---|
| Grant date | February 9, 2010 | February 9, 2010 | |
| Form of the reward | Equity and cash | Equity and cash | |
| Target group | Key personnel | Key personnel | |
| Maximum number of shares | 24 000 | 80 000 | |
| Cash in terms of number of shares* | 27 064 | 90 213 | |
| Beginning of earning period | January 1, 2010 | January 1, 2010 | |
| End of earning period | December 31, 2010 |
December 31, 2012 |
|
| End of restriction period | April 30, 2013 | April 30, 2013 | |
| Vesting conditions | EBIT | EBIT | |
| Service until the end of restriction period |
Service until the end of restriction period |
||
| Required share ownership term in years | 2,0 | 0 | |
| Remaining vesting period (31 December 2012) | 0,3 | 0,3 | |
| Number of persons (31 December 2012) | 9 | 10 |
* The arrangement includes a share-based payment to be settled in cash.
| Number of shares 2012 | Earning period 2010 |
Earning period 2010-2012 |
||||
|---|---|---|---|---|---|---|
| Gross number of shares ** | 1.1.2012 | Changes | 31.12.2012 | 1.1.2012 | Changes | 31.12.2012 |
| Granted | 51 064 | 0 | 51 064 | 180 787 | 0 | 180 787 |
| Forfeited | 4 532 | 0 | 4 532 | 15 106 | 0 | 15 106 |
| Settled | 46 532 | 0 | 46 532 | 0 | 0 | 0 |
| Expired | 0 | 0 | 0 | 46 532 | 0 | 46 532 |
** Number of shares include cash-settled payments of the plan.
| Inputs to fair value measurement | Earning period 2010 |
Earning period 2010-2012 |
|---|---|---|
| Granted shares during the period (equity and cash) | 0 | 0 |
| Share price at the grant date | 7.34€ | 7.34€ |
| Expected dividends | 0.45€ | 1.35€ |
| Fair value of the share at the grant date *** | 6.89€ | 5.99€ |
| Share price at the end of period | 5.02€ | 5.02€ |
| Expexted forfeitures before settlement | 8.9% | 8.9% |
| Expected forfeitures after settlement | 0.0% | 0.0% |
| Expected fulfillment of earning criteria | 100.0% | 0.0% |
| Fair value of the expected reward at the grant date | 351 830€ | 1 019 574€ |
| Fair value of the expected reward 31 December 2012 | 341 769€ | 0€ |
| Expense recognised for the period 2012 | 109 657€ | -199 844€ |
*** Share price at the grant date deducted by the dividends expected to be paid during the earning period
IFRS2 requires an entity to measure the award at its fair value and recognised over the vesting period. As the award will be settled both in equity and in cash the amount entered in the balance sheet will be divided into equity and liability. The fair value of the liability incurred in respect of a cash-settled transactions is remeasured at each reporting date until the date of settlement.
| (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Non-current | ||
| Bank loans | 5 751 | 7 131 |
| Pension loans | 3 200 | 0 |
| Finance leases | 380 | 513 |
| Total | 9 331 | 7 644 |
| Current | ||
| Bank loans | 4 914 | 3 137 |
| Pension loans | 800 | 0 |
| Bank overdrafts used | 0 | 0 |
| Finance leases | 296 | 353 |
| Total | 6 010 | 3 490 |
The book values of debts are estimated to correspond to their fair values. Discounting has no material effect.
Mortgages and quarantees given by credit institutions and, to a minor degree, pledged shares in housing corporations owned by the company are used as collateral for bank loans and pension loans.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Finance lease liabilities are payable as follows: | ||
| Finance leases - total amount of minimum lease payments | ||
| Not later than one year | 471 | 449 |
| Later than one year and not later than five years | 647 | 887 |
| Later than five years | 0 | 0 |
| 1 118 | 1 336 | |
| Finance leases - present value of minimum lease payments | ||
| Not later than one year | 296 | 352 |
| Later than one year and not later than five years | 380 | 490 |
| Later than five years | 0 | 23 |
| 676 | 865 | |
| Unearned finance expense | 442 | 471 |
The average interest of financial leases was 4,8% in 2012 and 4,8% in 2011.
The Group's bank loans have either variable or fixed interest rates. The Group's average interest rate is 2,94% (3,68% in 2011). The current portions of debt are presented in more detail under Note 28 Management of financial risks.
The pension plans of foreign subsidiaries follow the local legislation and have been classified as defined contribution
plans. In addition, in Finland, the group has one supplementary pension plan classified as a defined benefit plan.
The following presents the impact of the group's defined benefit plans on the consolidated result and balance sheet, calculated in accordance with IAS 19.
| The amounts recognised in the balance sheet were determined as follows: | 1.1.2012 -31.12.2012 |
1.1.2011 -31.12.2011 |
|---|---|---|
| Present value of unfunded obligations | 0 | 0 |
| Present value of funded obligations | 3 271 | 2 451 |
| Fair value of plan assets | -2 422 | -1 828 |
| Deficit / Excess | 849 | 623 |
| Unrecognised actuarial gains (+) and losses (-) | -904 | -778 |
| Unrecognised past service costs | 0 | 0 |
| Pension liability in balance sheet | -55 | -155 |
| The amounts recognised in the income statement were determined as follows: | ||
| Current service cost | 215 | 233 |
| Interest cost | 120 | 103 |
| Expected return on plan assets recognised during the year | -88 | -73 |
| Actuarial gains (-) and losses (+) | 88 | 91 |
| Past service cost | 0 | 0 |
| Losses/profits on curtailment | 0 | 0 |
| Total | 335 | 354 |
| The actual return on plan assets (EUR 1,000) | 359 | -112 |
| Changes to present value of obligations: | ||
| Present value of funded obligations 1.1 | 2 451 | 2 345 |
| Current service cost | 215 | 233 |
| Interest cost | 120 | 103 |
| Actuarial gains (-) and losses (+) | 485 | -231 |
| Losses/profits on curtailment | 0 | 0 |
| Paid benefits | 0 | 0 |
| Present value of funded obligations 31.12 | 3 271 | 2 450 |
| Changes to fair values of the assets in the plan are as follows: | ||
| Fair values of plan assets 1.1. | 1 828 | 1 681 |
| Expected return on plan assets | 88 | 73 |
| Actuarial gains (-) and losses (+) | 271 | -185 |
| Contributions made by the employer to the plan | 235 | 259 |
| Losses/profits on curtailment | 0 | 0 |
| Fair values of plan assets 31.12. | 2 422 | 1 828 |
| Actuarial assumptions used were as follows: | 1.1.2012 - 31.12.2012 | 1.1.2011 - 31.12.2011 |
|---|---|---|
| Discount rate (%) | 3.00% | 4.50% |
| Expected return on plan assets (%) | 3.00% | 4.50% |
| Future salary increases (%) | 3.30% | 3.30% |
| Rate of pension increase (%) | 1.25% | 1.50% |
| Rate of inflation increase (%) | 2.00% | 2.00% |
| Present and fair values of obligations | 31.12.2012 | 31.12.2011 | 31.12.2010 | 31.12.2009 | 31.12.2008 |
|---|---|---|---|---|---|
| Present value of obligations | 3 271 | 2 451 | 2 345 | 1 493 | 1 185 |
| Fair value of plan assets | -2 422 | -1 828 | -1 681 | -1 182 | -983 |
| Deficit/excess | 849 | 623 | 664 | 311 | 202 |
| Experience adjustments to plan assets | -64 | 18 | -71 | -319 | 120 |
| Experience adjustments to plan liabilities | -114 | 81 | 200 | -198 | 196 |
The Group anticipates it will contribute EUR 240 thousand to the plan in 2013. An itemisation of plan assets is not available.
Amendments to IAS 19 will be applied from the beginning of 2013. These amendments are expected to have a following effect to Martela's financial reporting: recognition of unrecognised actuarial gains and losses to retained earnings due to abandonment of corridor method at the beginning of the comparative period amounting to EUR 0.8 million; in addition actuarial gains and losses recognised in income statement will be cancelled amounting to EUR 0.1 million deduction of pension expenses and re-measurement of the net defined benefit liability (asset) recognised to other comrehensive income amounting to EUR 0.2 million. Expected return on plan assets is determined already in 2012 using the same rate as used in discounting the defined benefit obligation thus this change in IAS 19 has no effect on Martela's future financial reporting.
| (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Advances received | 777 | 921 |
| Trade payables | 8 268 | 10 564 |
| Accrued liabilities and prepaid income | ||
| Personnel expenses | 4 560 | 4 445 |
| Derivatives | 0 | 0 |
| Interests | 43 | 15 |
| Other financial expenses | 0 | 0 |
| Royalties | 152 | 150 |
| Residual expenses | 905 | 878 |
| Other | 995 | 4 084 |
| Total | 6 655 | 9 572 |
| Tax payables | 0 | 0 |
| Other current liabilities | 4 815 | 5 214 |
| 20 515 | 26 272 |
The book values of trade and other non-interest bearing liabilities are also estimated to corrspond to their fair values. Discounting has no material effect. Other includes Grundell acquisition costs in 2011.
Financial risks are unexpected exceptions relating to currencies, 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 net assets. The general principles of risk management are approved by the Board of Directors and the practical implementation of financial risk management is the responsibility of the parent company's financial administration.
Market risks comprise the following three risks: currency risk, fair value interest rate risk and price risk. The associated fluctuations in exchange rates, market interest rates and market prices lead to changes in the value of financial instruments and hence they impact the result, balance sheet and cash flow of the Group. The Group does not apply hedge accounting as in IAS 39.
The Group has operations in Finland, Sweden, Norway, Russia, Poland and Denmark and it is therefore exposed to currency risks that arise in intra-group transactions, exports and imports, the financing of foreign subsidiaries and equity that is denominated in foreign currencies. Transaction risks arise when the cash flows of contracts made at the exchange rates of certain dates are realised at different exchange rates. Translation risks arise when the value of the capital invested in the parent company's foreign subsidiaries, annual profits and loans changes as a result of exchange rate fluctuations.
Martela's major trading currencies are the EUR, SEK, NOK and PLN. The SEK, NOK, PLN and DKK currency positions are reviewed mainly on a half-yearly basis. The Group's policy is to hedge the net positions remaining after reconciliation of forecast income and expenses. The hedging
instruments used are mainly forward contracts maturing within 3-12 months. The Group does not apply hedge accounting.
The main translation risks derive from equity or subordinated loans provided by the parent company to its subsidiaries in Sweden, Poland, Russia and Denmark. The company selectively hedges against translation risks by using currency loans and options. Hedging decisions are based on the estimated effect of each currency on the Group's result, cash flow and equity and on the hedging cost. There were no open hedge positions on the balance sheet date.
The following table presents currency risks per instrument and currency.
| EUR | SEK | PLN | NOK | |
|---|---|---|---|---|
| Trade receivables | 576 | 1 691 | 3 445 | 769 |
| Trade payables | -735 | -627 | -4 | -76 |
| Currency forward contracts | ||||
| Total | -159 | 1 064 | 3 441 | 693 |
| EUR | SEK | PLN | NOK | |
|---|---|---|---|---|
| Trade receivables | 256 | 376 | 2 956 | 859 |
| Trade payables | -557 | -673 | -2 | -50 |
| Currency forward contracts | 0 | 0 | ||
| Total | -301 | -297 | 2 954 | 809 |
Other currencies have minor impact.
The following table presents the average impact of a 10 per cent change in exchange rates on 31 December on the company's financial result before taxes and capital for 2012 (2011). The estimates are based on the assumption that no other variables change.
| Analysis of sensitivity to currency risk (EUR 1,000) | Impact on shareholders' equity | Impact on results |
|---|---|---|
| 31.12.2012 | ||
| EUR | 0 | +/- 16 |
| SEK | 0 | +/- 106 |
| PLN | 0 | +/- 344 |
| NOK | 0 | +/- 69 |
| Analysis of sensitivity to currency risk (EUR 1,000) | Impact on shareholders' equity | Impact on results |
|---|---|---|
| 31.12.2011 | ||
| EUR | 0 | +/- 30 |
| SEK | 0 | +/- 30 |
| PLN | 0 | +/- 295 |
| NOK | 0 | +/- 81 |
The Group's interest rate risks relate to the Group's loan portfolio and to changes in the value of the cash reserve due to interest rate variations. The duration of loans varies between 1-5 years. The Group can raise either fixed-interest or variable-interest loans and can use interest rate swaps. Excess
cash assets are invested in both short- and long-term fixed income funds.
The Group invests excess funds in short-term bank deposits at partner banks and in liquid, low-risk fixed income funds based on government treasury bills and commercial papers.
The Group has invested in fixed income funds, the value of which is
determined on the basis of price quotations published in active markets. Changes in fair value are recognised in the income statement in the financial statements.
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 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Fixed rate | ||
| Financial liabilities, incl. derivatives | 675 | 865 |
| Variable rate | ||
| Financial liabilities | 14 665 | 10 268 |
| Total | 15 340 | 11 133 |
Impact of a 1 per cent increase in interest rate on financial result before taxes and capital on the balance sheet date 31 December. Decrease in interest rate would have an opposite impact of equal size.
| Impact on results |
|---|
| -147 |
| 0 |
| Analysis of sensitivity to interest rate risks (EUR 1,000) | Impact on shareholders' equity | Impact on results |
|---|---|---|
| 31.12.2011 | ||
| Financial liabilities | ||
| Variable rate financial instruments | 0 | -103 |
| Derivatives | ||
| Interest rate swaps | 0 | 0 |
Available-for-sale shares included in financial assets are not deemed subject to resale price risk. Their book value is their original acquisition cost and their current sale price is estimated to be higher than their acquisition price. The shares are unlisted and they are not measured at fair value.
Credit risks arise from the possibility that a counterparty will not meet its contractual payment obligation. 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 Group's policy determines the investment policy and the credit rating requirements of customers and counterparties in investment transactions and derivative contracts. 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 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 any 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 established 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) | 2012 | 2011 |
|---|---|---|
| Available-for-sale financial assets | 55 | 55 |
| Financial assets recognised at fair value through profit and loss | 0 | 0 |
| Loans and other receivables | 23 751 | 25 146 |
| Cash and cash equivalents | 7 589 | 11 947 |
| Total | 31 395 | 37 148 |
The age distribution of Group trade receivables on the balance sheet date 31 December is presented in the following table.
| Age distribution of trade receivables (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Unmatured | 16 761 | 20 211 |
| Matured 1-30 days | 3 612 | 3 337 |
| Matured 31-60 days | 1 400 | 283 |
| Matured over 60 days | 813 | 649 |
| Total | 22 586 | 24 480 |
The maximum trade receivable credit risk amount on the balance sheet date 31 December by country or region.
| Distribution of trade receivables by country or region (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Finland | 14 509 | 16 436 |
| Scandinavia | 4 109 | 3 793 |
| European countries | 3 491 | 3 584 |
| Other regions | 477 | 667 |
| Total | 22 586 | 24 480 |
Credit risks from trade receivables are not concentrated.
The Group strives to assess and monitor the amount of funding required by business operations so that there are sufficient liquid assets for operating expenses and repayment of maturing loans. In addition,
the Group continually maintains sufficient liquidity by means of effective cash management solutions such as cash reserves and bank overdrafts. The refinancing risk is managed by balancing the maturity schedules of loans and bank overdrafts according to forecast cash flows and by using several banks in financial operations. There are no covenants attached to loans.
Cash and cash equivalents at the end of financial year totalled EUR 7,589 thousand, and unused bank overdrafts totalled EUR 3,493 thousand. Loans and payments mature as follows:
| 2013 | 2014 | 2015 | 2016 | 2017 | later | Total | |
|---|---|---|---|---|---|---|---|
| Bank loans | 1 414 | 851 | 700 | 4 200 | 0 | 0 | 7 165 |
| Pension loans | 800 | 800 | 800 | 800 | 800 | 0 | 4 000 |
| Financial leases | 295 | 181 | 86 | 91 | 22 | 0 | 675 |
| Trade payables | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Bank overdrafts | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Loan interest and quarantee fees | 347 | 277 | 241 | 204 | 36 | 0 | 1 105 |
| Total | 2 856 | 2 109 | 1 827 | 5 295 | 858 | 0 | 12 945 |
| Guarantees given* | 176 | 176 | 176 | 176 | 48 | 0 | 752 |
| Derivatives | 0 | 0 | |||||
| Total | 3 032 | 2 285 | 2 003 | 5 471 | 906 | 0 | 13 697 |
* Guarantees given to third-party on rents given to subsidiaries by the parent company.
It is the Group's objective to ensure an efficient capital structure that will secure its operating capacity in the capital markets in all circumstances irrespective of volatility. The Group's Board of Directors assesses the capital structure on a regular basis. The Group uses the equity ratio to monitor its capital structure. The Group's capital management is not subject to external
demands such as covenants, for example. The equity ratio formula is presented in the following table:
Key capital indicator to be monitored in capital management: Equity to assets ratio.
| Equity ratio (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Shareholders' equity | 27 066 | 30 756 |
| Balance sheet total - advance payments | 63 565 | 68 783 |
| Equity to assets ratio, % | 42.6 | 44.7 |
| (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Minimum lease payments under non-cancellable operating leases are as follows: |
||
| Not later than one year | 4 267 | 4 808 |
| Later than one year and not later than five years | 9 013 | 10 024 |
| Later than five years | 1 802 | 1 919 |
| 15 082 | 16 751 |
The group has leased many of the premises it uses. The lengths of operating leases are from 1 to 10 years, and normally they include the option to extend the lease after the initial expiry date. The income statement for 2012 includes rents paid on the basis of operating leases totalling EUR -5,602 thousand (EUR -4,734 thousand in 2011).
| (EUR 1,000) | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Debts secured by mortgages | ||
| Bank loans | 10 808 | 10 328 |
| Property mortgages | 9 194 | 7 849 |
| Corporate mortgages | 12 395 | 12 266 |
| Shares pledged | 4 | 4 |
| Total mortgages | 21 593 | 20 119 |
| Other pledges | ||
| Guarantees as security for rents | 336 | 2 041 |
| Collateral granted on behalf of others | ||
| Guarantees on behalf of associated undertakings | 537 | 498 |
| Domicile | holding (%) 31.12.2012 | Voting power (%) 31.12.2012 |
|
|---|---|---|---|
| Parent company | |||
| Martela Oyj | Finland | ||
| Subsidiaries | |||
| Kidex Oy | Finland | 100 | 100 |
| Grundell Henkilöstöpalvelut | Finland | 100 | 100 |
| Grundell Muuttopalvelut | Finland | 100 | 100 |
| Kiinteistö Oy Ylähanka | Finland | 100 | 100 |
| Martela AB, Bodafors | Sweden | 100 | 100 |
| Aski Avvecklingsbolag AB, Malmö | Sweden | 100 | 100 |
| Martela AS, Oslo | Norway | 100 | 100 |
| Martela SP. Z o.o., Warsaw | Poland | 100 | 100 |
| 000 Martela, Moscow | Russia | 100 | 100 |
| 000 Martela SP, St. Petersburg | Russia | 100 | 100 |
| Martela A/S, Copenhagen | Denmark | 100 | 100 |
Martela Group's related party comprise the CEO, members of the board and the group's management team. Members of the company's board and the CEO hold a total of 8.9% of the share capital and 17,3% of the votes.
| Management employee benefits (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Salaries and other short-term employee benefits | 1 499 | 1 385 |
| Benefits following end of employment | 146 | 136 |
| Share-based benefits | -39 | -29 |
| 1 606 | 1 492 | |
| Salaries and other short-term employee benefits | 2012 | 2011 |
| Board members | 105 | 105 |
| CEO | 280 | 261 |
| Management team members(excl. salary of CEO) | 1 076 | 990 |
| Fees paid to Board members: | ||
| Heikki Ala-Ilkka | 30 | 30 |
| Pekka Martela | 15 | 15 |
| Jaakko Palsanen | 15 | 15 |
| Jori Keckman | 2 | 15 |
| Tapio Hakakari | 15 | 15 |
| Yrjö Närhinen | 13 | 0 |
| Pinja Metsäranta | 15 | 15 |
| 105 | 105 |
Fees based on board membership are not paid to members employed by the company.
The CEO is entitled, if he wishes, to retire with a full pension after reaching the age of 60. Retirement benefits are included in pension expenses, defined benefit plans, presented in note 3. The period of notice is 6 months with respect to both the CEO and the company, and in the event of a dismissal by the company, the CEO is entitled to a lump-sum compensation equalling his salary for 18 months.
A new long-term share-based incentive scheme has been launched for the Managing Director and Group management, which covers the period from 2010 to the end of 2012. The incentive plan is based on the Group's overall profit performance during 2010-2012. Rewards based on this system will be paid as a combination of shares and cash. A total of EUR 0 thousand from this system has been recognised in the result for the year (EUR -32 thousand 2011).
| IFRS 2012 | IFRS 2011 | IFRS 2010 | IFRS 2009 | IFRS 2008 | ||
|---|---|---|---|---|---|---|
| Revenue | EUR million | 142.7 | 130.7 | 108.4 | 95.3 | 141.2 |
| Change in revenue | % | 9.2 | 20.6 | 13.7 | -32.5 | 9.9 |
| Export and operations outside Finland | EUR million | 41.2 | 40.9 | 32.7 | 29.2 | 38.1 |
| In relation to revenue | % | 28.8 | 31.3 | 30.2 | 30.6 | 27.0 |
| Exports from Finland | EUR million | 10.4 | 10.5 | 9.6 | 11.1 | 14.4 |
| Gross capital expenditure | EUR million | 4.0 | 6.8 | 4.7 | 2.2 | 2.9 |
| In relation to revenue | % | 2.8 | 5.2 | 4.4 | 2.3 | 2.1 |
| Depreciation | EUR million | 3.4 | 2.6 | 2.7 | 3.1 | 3.1 |
| Research and development | EUR million | 2.7 | 2.4 | 2.2 | 2.6 | 3.2 |
| In relation to revenue | % | 1.9 | 1.8 | 2.0 | 2.7 | 2.3 |
| Average personnel | 806 | 637 | 601 | 636 | 681 | |
| Change in personnel | % | 26.5 | 6.0 | -5.5 | -6.6 | 2.7 |
| Personnel at end of year | 801 | 791 | 625 | 606 | 670 | |
| Of which in Finland | 634 | 610 | 457 | 453 | 512 | |
| Profitability | ||||||
| Operating profit | EUR million | -0.9 | 2.6 | 1.3 | 0.8 | 10.9 |
| In relation to revenue | % | -0.6 | 2.0 | 1.2 | 0.8 | 7.7 |
| Profit before appropriations and taxes | EUR million | -1.8 | 1.9 | 1.1 | 0.4 | 10.2 |
| In relation to revenue | % | -1.3 | 1.5 | 1.0 | 0.4 | 7.2 |
| Profit for the year *) | EUR million | -2.1 | 1.6 | 0,6 | 0.1 | 7.5 |
| In relation to revenue | % | -1.4 | 1.2 | 0.6 | 0.1 | 5.3 |
| Revenue/employee | EUR thousand |
177.0 | 205.2 | 180.4 | 149.9 | 207.3 |
| Return on equity (ROE) | % | -7.1 | 5.1 | 2.0 | 0.4 | 23.8 |
| Return on investment (ROI) | % | -2.7 | 6,0 | 3.7 | 2.3 | 25.2 |
| Finance and financial position | ||||||
| Balance sheet total | EUR million | 64.3 | 69.7 | 56.7 | 55.6 | 64.9 |
| Equity | EUR million | 27.1 | 30.8 | 31.2 | 31.8 | 33.7 |
| Interest-bearing net liabilities | EUR million | 7.8 | -0.8 | -4.4 | -10.8 | -3.7 |
| In relation to revenue | % | 5.4 | -0.6 | -4.0 | -11.3 | -2.6 |
| Equity ratio | % | 42.6 | 44.7 | 55.6 | 57.4 | 52.2 |
| Gearing | % | 28.6 | -2.6 | -14.1 | -33.9 | -11.0 |
| Net cash flow from operations | EUR million | 0,0 | 1.2 | -0.1 | 10.8 | 11.8 |
| Dividends paid | EUR million | 1.8 | 1.8 | 1.8 | 2.4 | 2.0 |
*) Change in deferred tax liability included in profit for the year.
| IFRS 2012 |
IFRS 2011 |
IFRS 2010 |
IFRS 2009 |
IFRS 2008 |
||
|---|---|---|---|---|---|---|
| Earnings per share | EUR | -0.51 | 0.39 | 0.16 | 0.03 | 1.89 |
| Earnings per share (diluted) | EUR | -0.51 | 0.39 | 0.16 | 0.03 | 1.89 |
| Share par value | EUR | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 |
| Dividend | EUR *) | 0.20 | 0.45 | 0.45 | 0.45 | 0.60 |
| Dividend/earnings per share | % | -39.2 | 115.4 | 281.3 | 1500.0 | 31.7 |
| Effective dividend yield | % | 4.0 | 7.8 | 5.8 | 6.3 | 11.3 |
| Equity per share | EUR | 6.68 | 7.60 | 7.74 | 7.88 | 8.47 |
| Price of A share 31.12. | EUR | 5.02 | 5.79 | 7.77 | 7.13 | 5.29 |
| Share issue-adjusted number of shares | thousands | 4155.6 | 4155.6 | 4155,6 | 4155.6 | 4155,6 |
| Average share issue-adjusted number of shares |
thousands | 4155.6 | 4155.6 | 4155.6 | 4155.6 | 4155.6 |
| Price/earnings ratio (P/E) | -9.8 | 14.8 | 48.6 | 237.7 | 2.8 | |
| Market value of shares **) | MEUR | 20.3 | 23.4 | 31.3 | 28.1 | 21.1 |
*) Board proposal
**) Price of A shares used as value of K shares
The number of registered Martela Oyj shares on 31.12.2012 was 4,155,600. The shares are divided into A and K shares. Each A share carries 1 vote and each K
share 20 votes in a general shareholders' meeting. Both share series have the same dividend rights. The company's maximum share capital is EUR 14,000,000 and the minimum is EUR 3,500,000.
Martela Oyj's shares were entered in the book-entry register on 10.2.1995.
The counter-book value of each share is EUR 1.68. The A shares are quoted on the Small Cap list of the OMX Nordic Exchange in Helsinki. A trading lot is 100 shares. Martela Oyj has made a Liquidity Providing (LP) market-making agreement with FIM Pankki Oy.
| Distribution of shares 31.12.2012 | Number | Total EUR | % of share capital |
Votes | % of votes |
|---|---|---|---|---|---|
| K shares | 604 800 | 1 018 500 | 15 | 12 096 000 | 77 |
| A shares | 3 550 800 | 5 981 500 | 85 | 3 550 800 | 23 |
| Total | 4 155 600 | 7 000 000 | 100 | 15 646 800 | 100 |
| The largest shareholders by number of shares 31.12.2012 |
K series shares |
A series shares |
Number of shares |
% | Number of votes |
% of total votes |
|---|---|---|---|---|---|---|
| Marfort Oy | 292 000 | 232 574 | 524 574 | 12.6 | 6 072 574 | 38.8 |
| Ilmarinen Mutual Pension Insurance Company | 0 | 335 400 | 335 400 | 8.1 | 335 400 | 2.1 |
| OP-Suomi Arvo | 0 | 285 000 | 285 000 | 6.9 | 285 000 | 1.8 |
| Nordea Pankki Suomi Oyj | 0 | 185 490 | 185 490 | 4.5 | 185 490 | 1.2 |
| Palsanen Leena | 44 486 | 131 148 | 175 634 | 4.2 | 1 020 868 | 6.5 |
| Martela Heikki | 52 122 | 121 342 | 173 464 | 4.2 | 1 163 782 | 7.4 |
| Pohjola Vakuutus Oy | 0 | 160 294 | 160 294 | 3.9 | 160 294 | 1.0 |
| Oy Autocarrera Ab | 0 | 116 000 | 116 000 | 2.8 | 116 000 | 0.7 |
| Martela Matti T | 58 256 | 56 982 | 115 238 | 2.8 | 1 222 102 | 7.8 |
| Palsanen Jaakko | 1 600 | 106 831 | 108 431 | 2.6 | 138 831 | 0.9 |
| Sijoitusrahasto Nordea Suomi Small Cap | 0 | 92 530 | 92 530 | 2.2 | 92 530 | 0.6 |
| Fondita Nordic Micro Cap Placeringsf. | 0 | 89 300 | 89 300 | 2.1 | 89 300 | 0.6 |
| Lindholm Tuija | 43 122 | 32 841 | 75 963 | 1.8 | 895 281 | 5.7 |
| Martela Pekka | 69 274 | 8 | 69 282 | 1.7 | 1 385 488 | 8.9 |
| Martela Oyj | 0 | 67 700 | 67 700 | 1.6 | 67 700 | 0.4 |
| Evli Alexander Management Oy | 0 | 38 647 | 38 647 | 0.9 | 38 647 | 0.2 |
| Other shareholders | 43 940 | 1 498 713 | 1 542 653 | 37.1 | 2 377 513 | 15.2 |
| Total | 604 800 | 3 550 800 | 4 155 600 | 100.0 | 15 646 800 | 100.0 |
The list includes all shareholders holding over 5% of the shares and votes.
The company's Board of Directors and CEO together hold 8.9% of the shares and 17.3% of the votes.
Martela Oyj owns 67,700 A shares. Of these, 33,850 shares have been purchased at an average price of EUR 10.65 and 33,850 shares resulted from a share issue. The number of treasury shares is equivalent to 1.6% of all shares and 0.4% of all votes.
The Annual General Meeting has in 2012 re-authorised the Board of Directors to decide, for the following years, on raising the share capital, issuing convertible bonds and 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 of 415,560 of the company's A series shares.
| Number of shares | Number of share holders |
% of total share holders |
Number of shares |
% | Number of votes |
% of total votes |
|---|---|---|---|---|---|---|
| 1-500 | 1 654 | 74.9 | 302 026 | 7.3 | 312 666 | 2.0 |
| 501-1000 | 286 | 12.9 | 223 880 | 5.4 | 234 900 | 1.5 |
| 1001-5000 | 198 | 9.0 | 424 808 | 10.2 | 839 008 | 5.4 |
| Over 5000 | 71 | 3.2 | 3 203 840 | 77.1 | 14 259 180 | 91.1 |
| Total | 2 209 | 100.0 | 4 154 554 | 100.0 | 15 645 754 | 100.0 |
| of which nominee-registered | 7 | 193 318 | 193 318 | |||
| In the waiting list and collective account | 1 046 | 0.0 | 1 046 | 0.0 | ||
| Total | 4 155 600 | 100.0 | 15 646 800 | 100.0 |
| Number of share holders |
% | Number of shares |
% | Number of votes |
% | |
|---|---|---|---|---|---|---|
| Private companies | 95 | 4.3 | 935 359 | 22.5 | 6 483 359 | 41.4 |
| Financial and insurance institutions | 11 | 0.5 | 854 523 | 20.6 | 854 523 | 5.5 |
| Public corporations | 2 | 0.1 | 368 431 | 8.9 | 368 431 | 2.4 |
| Non-profit entities | 10 | 0.5 | 8 717 | 0.2 | 8 717 | 0.1 |
| Households | 2 081 | 94.2 | 1 974 349 | 47.5 | 7 917 549 | 50.6 |
| Foreign investors | 10 | 0.5 | 13 175 | 0.3 | 13 175 | 0.1 |
| Total | 2 209 | 100.0 | 4 154 554 | 100.0 | 15 645 754 | 100.0 |
| of which nominee-registered | 7 | 193 318 | 4.7 | 193 318 | ||
| In the waiting list and collective account | 1 046 | 0.0 | 1 046 | 0.0 | ||
| Total | 4 155 600 | 100.0 | 15 646 800 | 100.0 |
| (EUR 1,000) | Note | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|---|
| Revenue | 1 | 102 251 | 96 417 |
| Changes in inventories of finished goods and work in progress | -125 | 344 | |
| Production for own use | 278 | 56 | |
| Other operating income | 2 | 308 | 340 |
| Materials and services | 3 | -58 652 | -53 417 |
| Personnel expenses | 4 | -21 134 | -20 737 |
| Depreciation and impairment | 5 | -1 411 | -1 236 |
| Other operating expenses | -23 056 | -18 634 | |
| Operating profit (-loss) | -1 541 | 3 133 | |
| Financial income and expenses | 6 | -314 | -87 |
| Profit (-loss) before extraordinary items | -1 855 | 3 046 | |
| Extraordinary expenses | 7 | 184 | -940 |
| Profit (-loss) before appropriations and taxes | -1 671 | 2 106 | |
| Income taxes | 8 | -102 | -454 |
| Profit (-loss) for the financial year | -1 774 | 1 652 |
| (EUR 1,000) | Note | 31.12.2012 | 31.12.2011 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Intangible assets | 9 | ||
| Intangible rights | 530 | 557 | |
| Other long-term expenditure | 1 805 | 1 040 | |
| Advance payments | 2 443 | 1 644 | |
| 4 778 | 3 241 | ||
| Tangible assets | 10 | ||
| Land and water areas | 84 | 84 | |
| Buildings and structures | 2 430 | 2 511 | |
| Machinery and equipment | 2 525 | 2 558 | |
| Other tangible assets | 23 | 23 | |
| Advance payments and purchases in progress | 99 | 99 | |
| 5 161 | 5 275 | ||
| Investments | 11 | ||
| Shares in subsidiaries | 7 962 | 8 960 | |
| Receivables from subsidiaries | 14 324 | 14 324 | |
| Shares in associated undertakings | 250 | 250 | |
| Receivables from associated undertakings | 450 | 150 | |
| Other shares and participations | 15 | 15 | |
| 23 001 | 23 699 |
| Inventories | ||
|---|---|---|
| Materials and supplies | 6 794 | 6 694 |
| Work in progress | 558 | 582 |
| Finished goods | 1 437 | 1 426 |
| Advances paid to suppliers | 131 | 182 |
| 8 920 | 8 884 | |
| Non-current receivables | 12 | |
| Loan receivables | 328 | 416 |
| Current receivables | 12 | |
| Trade receivables | 18 697 | 20 097 |
| Loan receivables | 3 099 | 2 854 |
| Accrued income and prepaid expenses | 867 | 315 |
| 22 663 | 23 266 | |
| Cash and cash equivalents | 4 266 | 9 187 |
| 69 118 | 73 968 | |
| LIABILITIES | ||
| SHAREHOLDERS' EQUITY | ||
| Shareholders' equity | 13 | |
| Share capital | 7 000 | 7 000 |
| Share premium account | 1 116 | 1 116 |
| Reserve fund | 11 | 11 |
| Retained earnings | 33 497 | 33 667 |
| Profit for the year | -1 774 | 1 652 |
| Total | 39 850 | 43 446 |
| LIABILITIES | ||
| Non-current | 14 | |
| Loans from financial institutions | 5 600 | 6 808 |
| Pension loans | 3 200 | 0 |
| Accrued liabilities and prepaid income | 150 | 175 |
| Current | 15 | |
| Interest-bearing | ||
| Loans from financial institutions | 4 708 | 2 821 |
| Pension loans | 800 | 0 |
| Non-interest-bearing | ||
| Advances received | 448 | 627 |
| Trade payables | 6 457 | 8 671 |
| Accrued liabilities and prepaid income | 4 974 | 8 071 |
| Other current liabilities | 2 931 | 3 349 |
| 14 810 | 20 718 | |
| Liabilities, total | 29 268 | 30 522 |
| 69 118 | 73 968 |
| (EUR 1,000) | 1.1.-31.12.2012 | 1.1.-31.12.2011 |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Cash flow from sales | 102 111 | 93 106 |
| Cash flow from other operating income | 308 | 179 |
| Payments on operating costs | -102 733 | -90 914 |
| Net cash from operating activities before financial items and taxes | -314 | 2 371 |
| Interests paid and other financial payments | -325 | -93 |
| Taxes paid | -619 | -522 |
| Net cash from operating activities before extraordinary items | -1 258 | 1 756 |
| Net cash from operating activities (A) | -1 258 | 1 756 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Capital expenditure on tangible and intangible assets | -2 593 | -2 168 |
| Proceeds from sale of tangible and intangible assets | 1 | 31 |
| Investment in shares in subsidiaries | -2 900 | -66 |
| Investment in associated undertakings | -200 | -150 |
| Proceeds from other investments | 0 | 145 |
| Loans granted | -827 | -1 393 |
| Repayments of loan receivables | 0 | 300 |
| Net cash used in investing activities (B) | -6 519 | -3 301 |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Proceeds from short-term loans | 10 000 | 3 000 |
| Repayments of short-term loans | -6 500 | -3 000 |
| Proceeds from long-term loans | 4 000 | 7 000 |
| Repayments of long-term loans | -2 821 | -2 421 |
| Dividends and other profit distribution | -1 822 | -1 812 |
| Net cash used in financing activities (C) | 2 857 | 2 767 |
| CHANGE IN LIQUID FUNDS (A+B+C) (+ increase, - decrease) | -4 920 | 1 221 |
| Liquid funds at beginning of financial year 1) | 9 187 | 7 957 |
| Changes in fair value, investments | 0 | 9 |
| Liquid funds at end of financial year 1) | 4 266 | 9 187 |
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 account has been taken of increases in value, unless separately mentioned.
Transactions denominated in foreign currencies are recognised at the rate of exchange on the date of their occurrence, and 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.
Intangible assets are depreciated according to their estimated useful life in 3-10 years.
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.
Buildings and structures 20-30 years Machinery and equipment 4-8 years Other tangible assets 3-5 years
Stock exchange listed shares are recognised at market value and changes are entered in financial items. Other shares are recognised at cost. On the balance sheet date, Martela Oyj held no stock exchange listed shares. Investments in subsidiaries and associated undertakings are recognised at cost and permanent impairments are deducted.
Inventories are recognised at cost using the FIFO method. The value of inventories is reduced with respect to unsaleable items. The cost of finished goods includes not only the direct manufacturing costs, but also a share of the overhead costs of production.
Investments in fund units are classified as financial assets at fair value through profit and loss. Investments are measured at fair value on the basis of price quotations published on functioning markets, and changes in fair value are recognised in the income statement in the year in which they were incurred.
The company's derivatives include currency forward contracts and an interest rate swap agreement. The currency forward contracts are used to hedge the net position remaining after reconciliation of forecast revenues and expenses. The interest rate swap agreement relates to changing the floatingrate loan to a fixed-rate one. The fair values of derivatives are based on market prices on the balance sheet date and changes in the fair values are recognised in the income statement for the period in which they arise. More detailed information on derivatives is
given in Notes 22 and 14 of the Notes to the Consolidated Financial Statements.
The company's income taxes are recognised on an accrual basis and are calculated according to local tax legislation with adjustments from previous financial years. Deferred tax liabilities are reported in the Notes.
Revenue is recognised on an accrual basis. Direct taxes, discounts and exchange rate differences are deducted from sales income in calculating revenue.
Research and development expenses are recognised normally through profit or loss in the year they arise. R&D-related equipment is capitalised in machinery and equipment.
Proceeds from sale of assets, public subsidies and other income (e.g. rent income) than that from actual operations are recognised in "Other operating income". Losses from disposal of assets and other costs than those from actual operations are recognised in "Other operating expenses".
Extraordinary income and expenses are deemed as those based on events in the company that are extraordinary, non-recurring and substantial, such as group contribution and items related to corporate restructuring.
All leasing payments are treated as rent expenses.
The companies' pension security has been arranged through pension companies. Martela Oyj's CEO is entitled to transfer to a full pension after reaching the age of 60 years.
The treasury shares in the parent company's financial statements are reported as a deduction from equity.
| 2012 | 2011 | ||
|---|---|---|---|
| Finland | 92 | 90 | |
| Scandinavia | 5 | 6 | |
| Other | 3 | 4 | |
| Total | 100 | 100 |
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Gains on sale of fixed assets | 1 | 162 |
| Rental income | 54 | 40 |
| Public subsidies | 160 | 111 |
| Other operating income | 93 | 27 |
| Total | 308 | 340 |
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Purchases during the financial year | 53 525 | 51 028 |
| Change in inventories of materials and supplies | -171 | -2 440 |
| External services | 5 298 | 4 829 |
| Materials and supplies, total | 58 652 | 53 417 |
| Auditor's fees | ||
| Auditing | 79 | 55 |
| Tax services | 14 | 5 |
| Other services | 68 | 158 |
| Auditor's fees, total | 161 | 218 |
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Salaries, CEO | 287 | 260 |
| Salaries of boards of directors | 105 | 105 |
| Salaries of boards of directors and managing director, total | 392 | 365 |
| Other salaries | 16 413 | 16 152 |
| Pension expenses | 3 277 | 3 239 |
| Other salary-related expenses | 1 051 | 981 |
| Personnel expenses in the income statement | 21 133 | 20 737 |
| Fringe benefits | 373 | 539 |
| Total | 21 506 | 21 276 |
| Personnel | ||
| Average personnel, workers | 147 | 146 |
| Average personnel, officials | 251 | 238 |
| Average personnel, total | 398 | 384 |
| Personnel at year end | 395 | 389 |
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Depreciation according to plan | ||
| Intangible assets | 608 | 524 |
| Tangible assets | ||
| Buildings and structures | 93 | 92 |
| Machinery and equipment | 670 | 620 |
| Depreciation according to plan, total | 1 371 | 1 236 |
| Impairments | 41 | 0 |
| Depreciations and impairments, total | 1 412 | 1 236 |
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Financial income and expenses | ||
| Interest income on short-term investments | 18 | 26 |
| Interest income on short-term investments from Group companies | 131 | 132 |
| Foreign exchange gains | 24 | 13 |
| Other financial income | 0 | 0 |
| Interest expenses | -385 | -146 |
| Losses on foreign exchange | -17 | -25 |
| Other financial expenses | -85 | -96 |
| Change in value of assets recognised at | ||
| fair value through profit or loss | 0 | 9 |
| Total | -314 | -87 |
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Extraordinary income | ||
| Group contribution | -562 | 0 |
| Extraordinary expenses | ||
| Group contribution | 378 | 940 |
| Extraordinary items, total | -184 | 940 |
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Income taxes from operations | 31 | 380 |
| Taxes from previous years | 71 | 74 |
| Total | 102 | 454 |
Deferred taxes liabilities and assets have not been included in the income statement or balance sheet. Deferred tax assets due to matching differences and losses total EUR 0 thousand 2012 (EUR 0 thousand 2011).
| (EUR 1,000) | |||||
|---|---|---|---|---|---|
| 1.1.2012 - 31.12.2012 | Intangible rights | Other long-term expenses |
Work in progress | Intangible assets, total |
|
| Acquisition cost 1.1. | 2 683 | 3 117 | 1 644 | 7 443 | |
| Increases | 295 | 1 045 | 2 464 | 3 804 | |
| Decreases | 0 | 0 | -1 665 | -1 665 | |
| Acquisition cost 31.12. | 2 978 | 4 162 | 2 443 | 9 582 | |
| Accumulated depreciation 1.1. | -2 126 | -2 078 | 0 | -4 204 | |
| Re-groupings | 0 | 0 | 0 | 0 | |
| Accumulated depreciation, decreases | 0 | 0 | 0 | 0 | |
| Depreciation for the year 1.1.-31.12. | -322 | -280 | 0 | -602 | |
| Accumulated depreciation 31.12. | -2 448 | -2 358 | 0 | -4 806 | |
| Carrying amount 1.1. | 557 | 1 040 | 1 644 | 3 241 | |
| Carrying amount 31.12. | 530 | 1 805 | 2 443 | 4 778 | |
| 1.1.2011 - 31.12.2011 | Intangible rights | Other long-term expenses |
Work in progress | Intangible assets, total |
|---|---|---|---|---|
| Acquisition cost 1.1. | 2 467 | 2 090 | 1 251 | 5 807 |
| Increases | 216 | 1 027 | 1 237 | 2 480 |
| Decreases | 0 | 0 | -844 | -844 |
| Acquisition cost 31.12. | 2 683 | 3 117 | 1 644 | 7 443 |
| Accumulated depreciation 1.1. | -1 807 | -1 873 | 0 | -3 680 |
| Re-groupings | 0 | 0 | 0 | 0 |
| Accumulated depreciation, decreases | 0 | 0 | 0 | 0 |
| Depreciation for the year 1.1.-31.12. | -319 | -205 | 0 | -524 |
| Accumulated depreciation 31.12. | -2 126 | -2 078 | 0 | -4 204 |
| Carrying amount 1.1. | 660 | 217 | 1 251 | 2 128 |
| Carrying amount 31.12. | 557 | 1 040 | 1 644 | 3 241 |
| 1.1.2012 - 31.12.2012 | Land areas | Buildings | Machinery and equip ment |
Other tangible assets |
Work in progress |
Total |
|---|---|---|---|---|---|---|
| Acquisition cost 1.1. | 84 | 10 595 | 10 752 | 23 | 99 | 21 553 |
| Increases | 0 | 12 | 724 | 0 | 0 | 736 |
| Decreases | 0 | 0 | -641 | 0 | 0 | -641 |
| Acquisition cost 31.12. | 84 | 10 607 | 10 835 | 23 | 99 | 21 648 |
| Accumulated depreciation 1.1. | 0 | -8 084 | -8 195 | 0 | 0 | -16 279 |
| Accumulated depreciation, decreases | 0 | 0 | 559 | 0 | 0 | 559 |
| Depreciation for the year 1.1.-31.12. | 0 | -93 | -676 | 0 | 0 | -769 |
| Accumulated depreciation 31.12. | 0 | -8 177 | -8 312 | 0 | 0 | -16 489 |
| Carrying amount 1.1. | 84 | 2 511 | 2 558 | 23 | 99 | 5 275 |
| Carrying amount 31.12. | 84 | 2 430 | 2 524 | 23 | 99 | 5 160 |
| 1.1.2011 - 31.12.2011 | Land areas | Buildings | Machinery and equip ment |
Other tangible assets |
Work in progress |
Total |
|---|---|---|---|---|---|---|
| Acquisition cost 1.1. | 84 | 10 558 | 10 076 | 20 | 152 | 20 890 |
| Increases | 0 | 37 | 729 | 3 | 319 | 1 088 |
| Decreases | 0 | 0 | -53 | 0 | -372 | -425 |
| Acquisition cost 31.12. | 84 | 10 595 | 10 752 | 23 | 99 | 21 553 |
| Accumulated depreciation 1.1. | 0 | -7 992 | -7 614 | 0 | 0 | -15 606 |
| Accumulated depreciation, decreases | 0 | 0 | 39 | 0 | 0 | 39 |
| Depreciation for the year 1.1.-31.12. | 0 | -92 | -620 | 0 | 0 | -712 |
| Accumulated depreciation 31.12. | 0 | -8 084 | -8 195 | 0 | 0 | -16 279 |
| Carrying amount 1.1. | 84 | 2 566 | 2 463 | 20 | 152 | 5 285 |
| Carrying amount 31.12. | 84 | 2 511 | 2 558 | 23 | 99 | 5 275 |
Revaluations included in buildings total EUR 1,850 thousand in 2012 (EUR 1,850 thousand in 2011). Carrying amount of production machinery and equipment in 2012 total EUR 1,923 thousand (EUR 1,989 thousand in 2011).
| 1.1.2012 - 31.12.2012 | Subsidiary shares |
Shares in associated undertakings |
Other shares and partici pations |
Loan receivables |
Total |
|---|---|---|---|---|---|
| Balance sheet value at beginning of year | 8 960 | 250 | 15 | 14 474 | 23 698 |
| Increases | 0 | 0 | 0 | 300 | 300 |
| Decreases | -998 | 0 | 0 | 0 | -998 |
| Balance sheet value at end of year | 7 962 | 250 | 15 | 14 774 | 23 000 |
| 1.1.2011 - 31.12.2011 | Subsidiary shares |
Shares in associated undertakings |
Other shares and partici pations |
Loan receivables |
Total |
|---|---|---|---|---|---|
| Balance sheet value at beginning of year | 5 206 | 250 | 14 | 14 284 | 19 754 |
| Increases | 4 730 | 0 | 1 | 190 | 4 921 |
| Decreases | -976 | 0 | 0 | 0 | -976 |
| Balance sheet value at end of year | 8 960 | 250 | 15 | 14 474 | 23 698 |
| Subsidiary shares: | Parent company's holding % |
Voting power | No. of shares | Par value | Book value | |
|---|---|---|---|---|---|---|
| % | EUR 1,000 | |||||
| Kidex Oy | Finland | 100 | 100 | 200 | 2.208 teur | 2 208 |
| Muuttopalvelu Grundell Oy | Finland | 100 | 100 | 100 | 3 teur | 4 675 |
| Grundell Henkilöstöpalvelu Oy | Finland | 100 | 100 | 100 | 3 teur | 50 |
| Kiinteistö Oy Ylähanka | Finland | 100 | 100 | 510 | 9 teur | 8 |
| Martela AB, Bodafors | Sweden | 100 | 100 | 50 000 | 5.000 tsek | 550 |
| Aski avvecklingsbolag Ab, Malmö | Sweden | 100 | 100 | 12 500 | 1.250 tsek | 132 |
| Martela AS, Oslo | Norway | 100 | 100 | 200 | 200 tnok | 24 |
| Martela SP.z.o.o; Warsaw | Poland | 100 | 100 | 3 483 | 3.483 tpln | 135 |
| 000 Martela, Moscow | Russia | 100 | 100 | 3.700 trub | 90 | |
| 000 Martela SP, St. Petersburg | Russia | 100 | 100 | 3.700 trub | 90 | |
| Martela A/S | Denmark | 100 | 100 | 0 | ||
| Irodabutor Martela Kft | Hungary | 100 | 100 | 0 | ||
| Total | 7 962 | |||||
| Associated undertakings: | ||||||
| P.O. Korhonen Oy (former Fiota ) | Finland | 51 | 51 | 510 | 1 | 250 |
Other shares and participations: 15
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Non-current receivables | ||
| Receivables from associated undertakings | 0 | 88 |
| Loan receivables | 329 | 329 |
| Current receivables | ||
| Receivables from companies in same group | ||
| Trade receivables | 5 017 | 3 913 |
| Loan receivables | 3 099 | 2 842 |
| Accrued income and prepaid expenses | 93 | 0 |
| Receivables from associated undertakings | ||
| Trade receivables | 16 | 5 |
| Loan receivables | 0 | 12 |
| Other receivables | ||
| Trade receivables | 13 664 | 16 179 |
| Loan receivables | 0 | 0 |
| Accrued income and prepaid expenses | 774 | 315 |
| Current receivables, total | 22 663 | 23 266 |
Accrued income and prepaid expenses include prepaid royalties and expenses, as well as personnel expense and other assorted prepayments.
| Distribution of shares 31.12.2012 | Number | Total EUR | % of share capital |
Votes | % of votes |
|---|---|---|---|---|---|
| K shares (20 votes/share) | 604 800 | 1 018 500 | 15 | 12 096 000 | 77 |
| A shares (1 vote/share) | 3 550 800 | 5 981 500 | 85 | 3 550 800 | 23 |
| Total | 4 155 600 | 7 000 000 | 100 | 15 646 800 | 100 |
| Treasury shares | 67 700 | ||||
| No. of shares | 4 087 900 | ||||
| Shareholders' equity (EUR 1,000) | 2 012 | 2 011 | |||
| Share capital 1.1.and 31.12. | 7 000 | 7 000 | |||
| Share premium account 1.1 and 31.12. | 1 116 | 1 116 | |||
| Reserve fund 1.1 and 31.12. | 11 | 11 | |||
| Retained earnings 1.1. | 35 319 | 35 635 | |||
| Dividends | -1 840 | -1 807 | |||
| Profit for the year | -1 774 | 1 652 | |||
| Shares assigned on the basis of the share based incentive scheme* |
0 | -186 | |||
| Returned shares | 17 | 25 | |||
| Retained earnings 31.12. | 31 722 | 35 319 | |||
| Shareholders' equity, total | 39 849 | 43 446 |
The distributable equity of the parent company is EUR 31.723 thousand in 2012 (EUR 35.319 thousand 2011).
Treasury shares held by Martela Oyj are reported as a deduction from retained earnings. Martela Oyj owns 67,700 A shares and they were purchased at an average price of EUR 10.65. Market value of treasury shares on 31.12.2012: EUR 5.02/share; (5.79 EUR 2011), total EUR 340 thousand (EUR 392 thousand 2011).
* In the parent company balance sheet, the loan issued for the acquisition of shares has been treated as a loan receivable, and for the assigned shares, the acquisition cost has been recognised as a reduction in receivables and removed from equity. The acquisition cost of shares for the incentive scheme has been treated in the IFRS consolidated financial statements as an item comparable to treasury shares.
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Loans from financial institutions | 5 600 | 6 808 |
| Pension loans | 3 200 | 0 |
| Accrued expenses | 150 | 175 |
| 8 950 | 6 983 | |
| Changes and repayments of non-current liabilities | 2012 | 2011 |
| Loans from financial institutions |
Loans from financial institutions |
|
| Loans 1.1 | 6 808 | 2 629 |
| Proceeds | 0 | 7 000 |
| Repayments | -1 208 | -2 821 |
| Loans 31.12 | 5 600 | 6 808 |
| Pension loans | Pension loans | |
| Loans 1.1. | 0 | 0 |
| Proceeds | 4 000 | 0 |
| Repayments | -800 | 0 |
| Repayments | 2 013 | 2 014 | 2 015 | 2 016 | 2 017 | 2018- |
|---|---|---|---|---|---|---|
| Loans from financial institutions | 1 208 | 700 | 700 | 4 200 | 0 | 0 |
| Pension loans | 800 | 800 | 800 | 800 | 800 | 0 |
| Total | 2 008 | 1 500 | 1 500 | 5 000 | 800 | 0 |
Loans 31.12. 3 200 0
| (EUR 1,000) | 2012 | 2011 |
|---|---|---|
| Current liabilities | ||
| Liabilities to group companies | ||
| Trade payables | 1 692 | 1 682 |
| Accrued liabilities to group companies | 30 | 30 |
| Total | 1 722 | 1 712 |
| Liabilities to associated undertakings | ||
| Trade payables | 200 | 455 |
| Other current liabilities | ||
| Loans from financial institutions | 4 708 | 2 821 |
| Pension loans | 800 | 0 |
| Advances received | 448 | 627 |
| Trade payables | 4 565 | 6 534 |
| Other current liabilities | 2 930 | 3 349 |
| Accrued liabilities | 4 944 | 8 041 |
| Other current liabilities, total | 18 395 | 21 372 |
| Current liabilities, total | 20 317 | 23 539 |
Current liabilities are specified in Notes because items are combined in Balance Sheet.
| 2012 | 2011 | |
|---|---|---|
| Essential items of accrued liabilities | ||
| Personnel expenses | 2 760 | 2 833 |
| Interest and financing accruals | 43 | 15 |
| Royalties | 142 | 143 |
| Residual expenses | 249 | 187 |
| Taxes | 0 | 68 |
| Other accrued liabilities | 1 749 | 4 795 |
| Accrued liabilities, total | 4 943 | 8 041 |
| (EUR 1,000) | 2012 | 2011 | |
|---|---|---|---|
| Debts secured by mortgages | |||
| Bank loans | 6 808 | 9 629 | |
| Property mortgages | 4 990 | 7 848 | |
| Corporate mortgages | 8 200 | 8 200 | |
| Shares pledged | 4 | 4 | |
| Pension loans | 4 000 | 0 | |
| Property mortgages | 4 204 | 0 | |
| Total mortgages | 17 394 | 16 052 | |
| Other pledges | |||
| Guarantees as security for rents | 334 | 209 | |
| Guarantees given on behalf of companies in the same group | 1 556 | 1 662 | |
| Guarantees given on behalf of associated undertakings 537 498 |
|||
| Leasing commitments | |||
| falling due within 12 months | 926 | 959 | |
| falling due after 12 months | 915 | 1 119 | |
| Total | 1 841 | 2 078 | |
| Repurchase sureties | 0 | 0 | |
| Other commitments | |||
| Rent commitments | 10 416 | 12 636 |
| Earnings / share | = | Profit attributable to the 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 year end |
| Market value of shares outstanding, 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 expenses) x 100 Balance sheet total - Non-interest-bearing liabilities (average during year) |
| Equity ratio, % | = | Equity x 100 Balance sheet total - advances received |
| Gearing, % | = | Interest-bearing liabilities - cash and cash equivalents and liquid asset securities x 100 Equity |
| Average personnel | = | Month-end average calculation of the number of personnel in active employment |
| Interest-bearing net debt | = | Interest-bearing debt - cash and other liquid financial assets |
The parent company's distributable funds are EUR 31,723,270.95 of which the loss for the financial year is EUR -1,773,522.41. The Board of Directors proposes to the Annual General Meeting that the distributable funds be used as follows:
distribution of a dividend of EUR 0.20 per share, totalling EUR 817,580.00 to be left in shareholders' equity EUR 30,905,690.95
Helsinki, 5 February 2013
The Board of Directors' Report and the Financial Statements are signed by:
Heikki Ala-Ilkka Pekka Martela Heikki Martela Chairman of the Board Vice Chariman Managing Director
Jaakko Palsanen Tapio Hakakari Pinja Metsäranta
Yrjö Närhinen
We have today issued a report on the audit performed by us.
Helsinki, 5 February 2013 KPMG Oy Ab Ari Eskelinen Authorised Public Accountant This document is an English translation of the Finnish auditor's report. Only the Finnish version of the report is legally binding.
We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of Martela Oyj for the year ended 31 December, 2012. The financial statements comprise the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements.
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Liability Companies Act or the articles of association of the company.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.
Helsinki, 5 February 2013 KPMG OY AB Ari Eskelinen Authorized Public Accountant
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