Martela Corporation’s Financial Statements 1 January

Martela Corporation’s Financial Statements 1 January – 31 December 2024

Martela Corporation, Financial Statements, 12.2.2025, at 8:00 a.m.

The January–December 2024 revenue and operating result decreased compared to previous year.

October–December 2024

Revenue was EUR 24.7 million (26.4), representing a change of -6.3%
Operating result was EUR -1.8 million (1.5)
Operating profit per revenue was -7.1% (5.8%)
The result for the period was EUR -2.6 million (1.0)
Earnings per share amounted to EUR -0.55 (0.22)

January–December 2024

Revenue was EUR 86.7 million (94.4), representing a change of -8.2%
Operating result was EUR -6.5 million (-2.4)
Operating profit per revenue was -7.5% (-2.5%)
The result for the period was EUR -8.7 million (-3.5)
Earnings per share amounted to EUR -1.87 (-0.77)

Outlook

Outlook for 2025

Martela anticipates its revenue to increase in full-year 2025 compared to previous year and comparable operating profit close to zero result.

Key figures, EUR million

	2024	2023	Change	2024	2023	Change
	10-12	10-12	%	1-12	1-12	%
Revenue	24.7	26.4	-6.3 %	86.7	94.4	-8.2 %
Operating result	-1.8	1.5	-215.3 %	-6.5	-2.4
Operating result %	-7.1 %	5.8 %		-7.5 %	-2.5 %
Result Before taxes	-2.3	1.2	-292.5 %	-8.2	-3.3
Result for the period	-2.6	1.0	-340.6 %	-8.7	-3.5

Earnings/share. EUR	-0.55	0.22	-337.15 %	-1.87	-0.77

Return on investment %	-27.5	21.1		-25.4	-7.5
Return on equity %	-107.2	35.6		-362.6	-31.3
Equity ratio %				2.5	20.0	-87.4 %
Gearing %				1 455.2	137.2	960.7 %

Ville Taipale, CEO:

“In general, 2024 was a very challenging year due to the unfavorable market situation in the industry. In the Nordic countries, weak economic development combined with uncertainty in interest rate developments caused caution in organisations' procurement decisions, and some projects were postponed to the coming years. Employment development, especially in Finland and Sweden, was weak and occupancy rates in the office property market were at a low level in all our main market areas. In addition, export trade was weighed down by customers' increased inventory levels. The Group's deliveries were lower than in the previous year, and the competitive situation caused by the smaller market decerased margins and profitability.

In the fourth quarter, however, customer demand strengthened and we saw cautious signs of decerasing uncertainty. The Group's total new orders increased in the fourth quarter by approximately 25% year-on-year. Received orders increased particularly strongly in Finland and Sweden in the fourth quarter, but decreased in Norway and other countries. In the fourth quarter, we won, among other things, several significant office development projects. The order backlog for the beginning of 2025 is clearly higher than the situation a year ago.

Our operating result weakened clearly in the fourth quarter compared to the corresponding period last year and amounted to EUR -1.8 million. EUR (+1.5). The weakening of operating result was affected by lower revenue and deliveries of some projects and products with weak margins. In addition, the tight competition also weighed down margins in general. Operating result for January-December was EUR -6.5 million and in the corresponding period of the previous year EUR -2.4 million. The strong decline in operating result was firstly due to lower revenue, which could not be fully compensated by the structural efficiency measures carried out in the first quarter. In addition, the tight competition decreased margins, especially towards the end of the year. The result for the early part of 2024 was also burdened to some extent by strikes and work stoppages in Finland.

In 2025 we will focus strongly especially on improving profitability and cash flow. On 3.1.2025, we announced the start of new planning aimed at improving efficiency and profitability, and concrete results are expected already during the first half of 2025.

The main focus will be on immediate efficiency and profitability improvement measures. We will continue to invest in active customer work and work closely with our value chain partners. We will continue to develop our service channels and maintain our circular economy service model and the offering of the sustainably designed products.

The year was much more challenging than expected, but our investments in business development and the positive feedback received from customers create confidence in the future. The work for the best working environments continues.”

Market situation

Economic development in the Nordic countries as a whole was weak in 2024 and especially in the first half of 2024, which was also reflected as cautious purchasing decisions of Martela's customers. During the latter part of the year, market demand gradually picked up after a quiet start to the year, but the tight competitive situation lowered margins. For 2025, we expect a slight strengthening of demand due to the increased pent-up need. The need for changes in office spaces arises as work methods evolve. The materialization of this need will increase demand for Martela's services and furniture in the future. Workspaces will continue to be adapted to meet the needs of multi-location hybrid work, with a focus on their functionality and attractiveness. However, there are still significant uncertainties related to the strengthening of the general economic situation, particularly regarding the geopolitical situation and the development of interest rates.

Revenue and operating result

Revenue and result for October–December 2024

Revenue for October–December was EUR 24.7 million (26.4) and decreased 6.3% compared to previous year. Revenue increased in Finland by 3.4%. Revenue decreased in Sweden by 11.5%, in Norway by 3.6% and in other countries by 49.6% compared to previous year.

The Group’s operating result in October–December was EUR -1.8 million (1.5).

The October–December result before taxes was EUR -2.3 million (1.2) and net result EUR -2.6 million (1.0).

Revenue and result for January–December 2024

Revenue for January–December was EUR 86.7 million (94.4) and decreased by 8.2% from previous year. Revenue decreased in Finland by 1.7%. in Sweden by 10.0%. in Norway by 31.1% and in Other countries by 32.7% compared to previous year.

The Group’s operating result in January–December was EUR -6.5 million (-2.4).

The January–December result before taxes was EUR -8.2 million (-3.3) and net result EUR -8.7 million (-3.5).

EVENTS AFTER THE END OF THE FINANCIAL YEAR

On January 3, 2025, the company announced that it was planning to streamline its operations. According to the release, the challenging market conditions in the industry over the past few years have affected Martela's operating environment, weakening business volume and profitability. The ongoing economic recovery is positively impacting the industry situation, but there are still uncertainties regarding the strength of the recovery in key market areas. For the reasons mentioned above, Martela is planning to streamline and reorganize its operations in order to mitigate the negative effects caused by the market situation, adjust its cost structure to match the prevailing conditions, and bring flexibility to the uncertainty driven by demand. The planned personnel savings and other cost-saving measures are expected to result in annual cost savings of approximately EUR 1.5 to 2.0 million. According to the preliminary estimate, the planned actions could lead to a permanent reduction of around 20 job positions. The planned measures will affect Martela Group's employees in Finland, Sweden, and Norway. Additionally, there are plans to use layoff procedures to achieve the necessary temporary flexibility. Martela is in close discussions with employees and employee representatives regarding the changes. The negotiation processes and their timelines will vary by country.

On January 17, 2025, the company announced preliminary information about its revenue and operating profit for 2024. The company stated that, according to preliminary unaudited financial statements, Martela Group's operating profit for the full year 2024 did not meet the level outlined in the guidance provided on December 11, 2024. According to the preliminary unaudited financial statements, both revenue and operating profit for the full year 2024 declined compared to the previous year. Revenue was approximately 87 million euros (94.4), and the operating loss was between EUR 6.3 and 6.7 million (-2.4).

On January 30, 2025, the company announced that it would streamline the composition of its executive team. The goal of the change is to enhance operations, standardize the development of Martela's products and services, and strengthen the position of Martela's products in the market. As part of this, technical product development will move from the Product & Design unit to the Operations business unit, and product portfolio management will be transferred to a new Brand, Products & Services unit. These changes will lead to adjustments in the group’s executive team. Eeva Terävä will begin as the leader of the new Brand, Products & Services unit on February 1, 2025. Kari Leino, who previously led the Product & Design unit, will continue as the product portfolio and design director in the Brand, Products & Services unit starting from February 1, 2025.

There are no other significant events to report after the period from January to December 2024, and operations have continued as planned.

SHORT-TERM RISKS

The company's most significant short-term risks that may affect operations are related to earnings development and, consequently, the development of liquidity. The key risks to earnings performance and liquidity are related to general economic uncertainty, which impacts the overall demand in Martela’s business environment and the relative success of Martela’s offerings in the broader market. Additionally, the decline in the overall market in recent years has increased price competition in the industry, which has put pressure on profitability. These factors combined increase uncertainty regarding overall demand and margins, reducing the predictability of Martela's product demand and margins. Due to the project-based nature of the industry, near-term forecasting has been challenging, and the difficulty of forecasting is further accentuated by the prevailing economic uncertainty.

PROPOSAL OF THE BOARD OF DIRECTORS FOR DISTRIBUTION OF PROFIT

The Board of Directors proposes to the Annual General Meeting that no dividend will be distributed for 2024.

ANNUAL GENERAL MEETING

The Annual General Meeting is planned to be held on Monday 7 April 2025. The notice of the Annual General Meeting will be published in a separate release later.

BRIEFING

A briefing will not be held, but additional information can be asked by telephone from CEO Ville Taipale and CFO Henri Berg on Wednesday February 12, 2025 from 12 a.m. to 2 p.m. EET.

The Annual Report for 2024 will be published on Martela’s website during week 11/2025.

Martela Corporation
Board of Directors

Ville Taipale
CEO

Further information
Ville Taipale. CEO. +358 50 557 2611
Henri Berg CFO. +358 40 836 5464

Distribution
Nasdaq OMX Helsinki
Key news media

www.martela.com

Martela is a Nordic leader specialising in user-centric working and learning environments. We create the best places to work and offer our customers the Martela Lifecycle solutions which combine furniture and related services into a seamless whole.

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