6
CEO’s review
5
Highlights
of the year
4
Martela 2020
9
Martela
Lifecycle
Martela in brief 3
Martela 2020 4
Highlights of the year 5
CEO’s review 6
Operational environment 8
Martela Lifecycle 9
Board of Directors’ report and
nancial statements 10
Contents
2Martela 2020
CEO’s review
MARTELA ANNUAL REPORT 2020
Operational environment Financial Statements Governance
Martela is a Nordic leader specialising in user-cen-
tric working and learning environments. We offer
our customers a single point of contact through
-
out the workplace lifecycle, from specifying needs
to maintenance and optimisation of the workplace.
Martela is a family company founded in 1945
and its shares are quoted on the OMX Nordic Ex
-
change Helsinki. Our main market areas are Fin-
land, Sweden and Norway, and our solutions are
also sold globally through our network of dealers.
Our production facilities are located in Finland and
Poland.
In 2020, the Martela Group’s revenue was
EUR 88.4 million and it employed an average of
451 employees.
Martela
in brief
3Martela 2020
CEO’s review
MARTELA ANNUAL REPORT 2020
Operational environment Financial Statements Governance
In 2020, Martela’s revenue declined, and prof-
it performance was weak. Operations remained
loss-making. The main reason for the prot per
-
formance was the change in the general econom-
ic situation and in customer behaviour caused by
the coronavirus pandemic. Many companies were
forced to put their ofce space related acquisi
-
tions on hold as a result of the prolonged period
of remote working and nancial distress.
We completed our cost-efciency programme
that was announced in 2019 and achieved savings
of about EUR 4 million. The programme’s results
started to be visible during the second quarter of
2020. When the pandemic spread to the Nordic
countries in the spring, we took rapid measures
to streamline our cost structure by, among other
things, temporarily laying off employees.
Despite the coronavirus crisis, our delivery reli
-
ability remained excellent, and we focused on pro-
viding an excellent customer experience. Our net
promoter score (NPS), which describes customer
satisfaction, improved.
The transformation of working life, which was
already in progress, accelerated suddenly as a re
-
sult of the pandemic. Martela fulls the require-
ments created by this transformation with exible
and responsible solutions for the future.
88.4
-4.0
451
Revenue
(EUR million)
Operating profit
(EUR million)
Personnel
(on average)
2018 2019 2020
50
40
30
20
10
0
Equity ratio (%)
39.2
28.8
22.7
Revenue by country
(EUR million)
Finland 72.4
Norway 3.8
Sweden 9.2
Other 3.1
88.4
Total
Martela 2020
4
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
Highlights of the year
WORKPLACE AS A SERVICE PROVED
ITSELF IN THE PANDEMIC
Changes are constantly and rapidly taking place in
organisations’ situations and their number of em
-
ployees, management culture and ways of work-
ing. The coronavirus pandemic accelerated these
changes and the amount of remote working in
-
creased. Workplaces must adapt to these changes.
Martela’s Workplace as a Service helps companies
adapt to change, avoid unnecessary investments
and develop their workplace in a user-centric and
responsible way. The model proved its benets
during the pandemic. The exible model adapts to
changing requirements and enables workplace op
-
timisation. The service model can be used, for ex-
ample, to lease home workstations for employees,
to optimise the needed ofce space and to develop
a hybrid working environment.
CONTROLLED RETURN TO THE OFFICE
WITH SMART SOLUTIONS
Our digital workplace solutions help create safe
and functional workplaces and optimise the use of
premises, for example when we return to the ofce
after this period of remote working. The solutions
allow the users of the premises and the organisa
-
tion’s management to base their decision-making on
data instead of gut feeling. Smart solutions make
it possible to manage an ofce’s capacity, monitor
use in real time, and analyse whether the safety
measures and changes have been successful. Em
-
ployees can be directed to a suitable workstation,
observing social distancing requirements, and data
on usage can be shared with property services to
allow enhanced cleaning, for example, to be target
-
ed correctly.
ALVA OY’S NEW WORKPLACE SUPPORTS
NEW WAYS OF WORKING
Alva-yhtiöt’s new ofce space was designed to
serve new ways of working and the wellbeing of
personnel. The ofce’s furniture and interior were
all acquired through Martela’s exible service mod
-
el, which also includes smart solutions that meas-
ure ofce utilisation rate and the optimisation and
circular economy model in the monthly fee. Imple
-
mentation was delayed due to the pandemic, but
the main goal of the project, exibility, became
even more important.
“We had a strong desire to focus on cozy sur
-
roundings, in addition to a functional workplace.
As we gain more data on user experience, we can
modify the premises and the furniture,” says Tiina
Mikkola, Vice President of Business Development
at Alva.
MARTELA CELEBRATED ITS 75-YEAR
JOURNEY WITH RENEWAL
To celebrate its anniversary, Martela renewed itself
in many ways. During the spring, the entire person
-
nel was involved in dening the values that best
describe Martela’s core and operations: Together,
Boldly, Listening and Caring. Martela’s brand image
was also refreshed. The Happy Mondays since 1945
theme describes Martela’s mission to promote bet
-
ter work and wellbeing.
5
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
The past year has not been easy for anyone, but
there is light at the end of the tunnel. The coro
-
navirus pandemic that spread to Europe in March
drove workers from their ofces to their homes to
work remotely and was particularly tough on the
private sector. As the economy stalled, many compa
-
nies put their ofce renewal projects on ice. Project
sales were relatively good, but the more fast-paced
sales for customers’ small-scale needs slowed
down. Sales of our exible Workplace as a Service
solution grew quickly as organisations experienced
more uncertainty in their nancial situations. The
public sector reacted more slowly than the private,
but price pressure has been great in both sectors.
Empty offices showed
us the value of flexible
solutions
The pandemic catalysed the transformation of working
life, and now is the time for Martela’s workplace solutions
to prove their benefits. The coronavirus pandemic
showed that customer satisfaction is our strength.
As total demand fell, Martela’s revenue declined
and the result remained negative. We completed
the EUR 4 million cost-efciency programme that
was announced in 2019, and results started to
show during the second quarter.
Pandemic accelerated change
The coronavirus pandemic helped to accelerate
the transformation of working life that was already
in progress. For a long time, it has been possible to
work remotely and this has been normal in many
companies, but the pandemic forced the remaining
organisations and employees to adopt new ways
of working very quickly.
6
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
We believe that the state of emergency caused
by the pandemic will permanently change workplac
-
es and the ways people work. The transition to a
hybrid work model, which combines remote work
-
ing and ofce working, will accelerate and organisa-
tions will need to re-evaluate their workplaces and
their lifecycle. New solutions are needed to ensure
smooth working and to keep ofce space costs
under control in the midst of the transformation.
Therefore, the transformation of work will increase
demand for exible workplace services.
Our Workplace as a Service (WaaS) solution
meets this demand and sales of the model grew
during the year. In the Workplace as a Service
model, a customer’s workspaces are able to adapt
to even rapid changes in requirements and situa
-
tions. In addition, customers avoid the risk associ-
ated with the ownership of the furniture and the
capital tied up in furniture is freed up. The solu
-
tion offered by Martela is economically smart and
responsible.
In addition to ofces, our lifecycle model meets
the needs of learning environments. The operating
culture at education institutions is already chang
-
ing radically and teaching and learning methods
are becoming increasingly varied. The pandemic
accelerated the increase of the role of distance
learning and teaching.
New needs require new products
We responded to the increase in demand for mo-
bile meeting rooms and added a new member to the
Pod product family. PodBooth Meeting, which was
launched in February, is a soundproofed space for
meetings and work for 1–6 people. The product fam
-
ily now includes furniture for work requiring concen-
tration, for relaxation and for spontaneous meetings.
After the pandemic began, we started offering
our customers furniture packages that facilitate
their employees’ remote working and improve the
ergonomics of home ofces in the form of a rental
service. Sales of home workstations began to rise
considerably after the summer.
Our survey-based Martela Remote Work In
-
sights 2020 report increased our understanding
of remote work: Many people like the fact that
they can concentrate at home and that they can
spend the time usually spent on commuting to
work on something more enjoyable, but there are
deciencies in furniture and ergonomics of their
home ofces. Face-to-face interaction and spon
-
taneous, informal meetings are, however, need-
ed in certain jobs and to maintain a feeling of
belonging in a working community. Though the
amount of remote work we do is expected to in
-
crease, it will not completely replace work carried
out at the ofce.
Sustainability is growing in
importance
The constantly growing demand for sustainability
and the rise of the circular economy are also sig
-
nicant trends. Products must be durable, and, for
example, a certain proportion of recycled materials
may be one of the criteria that needs to be met in
an organisation’s acquisitions.
Sustainability and responsibility are Martela’s
strengths, as sustainable choices generally also
have economic benets. Our Lifecycle model guar
-
antees sustainability in all stages of the lifecycle
of our working and learning environments. For ex
-
ample, from the perspective of energy consump-
tion, it is essential that ofce spaces are the right
size and suitable: the environmental impacts of an
unused space are completely unnecessary.
Our furniture is manufactured to stand the test
of time and use. We recycle furniture that is no
longer required and nd new owners for them and
reuse the materials of furniture that can no longer
be repaired. We sell cleaned and serviced furniture
in our Martela Outlet chain.
Martela Outlet’s sales grew during 2020 as peo
-
ple furnished their home ofces. Both consumer
and corporate customers have noticed that used
furniture is a very good option – especially when
it is genuinely as good as new.
Customer satisfaction at its
highest level
In the midst of the pandemic, Martela’s net pro-
moter score (NPS) rose from 48 to 49, which is
the highest level it has ever been. Martela’s com
-
petent and committed employees deserve all the
thanks for this as they are dedicated to ensur
-
ing customer satisfaction. Our delivery reliability
remained high throughout the coronavirus crisis,
which is an indication of our excellent supply chain
management.
Martela’s brand image also strengthens custom
-
er satisfaction. The brand was updated to mark
Martela’s 75th anniversary. We also claried the
values that guide our work with the help of the
entire personnel.
Ahead of our time for 75 years
The 75-year-old Martela has always been ahead
of its time. The company’s long history is an indi
-
cation of its pioneering spirit, which is precisely
what we need to keep forging ahead. Martela is a
pioneer and expert in workplace lifecycle manage
-
ment, and our Workplace as a Service model rein-
forces our position as a provider of expert services
and continuous comprehensive solutions.
We see signicant growth potential in the area
of workplaces and Martela must seize this poten
-
tial in order to make its core operations protable.
In the aftermath of the coronavirus pandemic, we
will have the opportunity to offer our customers
even better solutions than before. The past year
has shown that even in situations requiring exi
-
bility, we can still improve customer satisfaction.
We will continue our work to promote a good
working life.
Artti Aurasmaa,
CEO
7
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
Pandemic accelerated the
transformation of working life
The coronavirus pandemic accelerated the transformation of working life, as office workers started
working remotely. We got used to remote work, but it doesn’t replace face-to-face meetings.
The transformation of the way we work, which has
been in progress for a long time, accelerated rap
-
idly in the spring of 2020 as the coronavirus pan-
demic drove workers from ofces to their homes
to work remotely.
The development of technology and digitalisa
-
tion have made it possible for people to work at
any time and any place and have increased the
share of knowledge work. However, in many com
-
panies, ofce space is still the largest cost item af-
ter personnel expenses. The need to reduce costs
and a growing awareness of climate change have
created pressure to reduce energy consumption.
These trends have encouraged companies to in
-
tensify their use of space and have prompted the
transformation of ofce spaces from conventional
individual ofces to open-plan ofces and now to
activity-based ofces.
Remote work has long been an option in many
organisations, but employees have continued to
come to the ofce to work and have meetings. Of
-
ces are primarily designed for a more old-fash-
ioned type of work, even when they have been
turned into open-plan ofces due to cost pres
-
sures and the organisation’s low hierarchy. The
pandemic emptied ofces for a long period and
raised questions as to whether the type of ofces
we have now really are the best to meet our needs.
The decision to transition to remote work in
spring 2020 was based on reasons of public health
security, but the nancial difculties caused by the
pandemic are likely to increase demand for more
cost-effective and exible ofce space solutions.
Ofce spaces must adapt to the rapid change in
requirements.
Face-to-face meetings still important
For a long time, we have already been working re-
motely on those days when we need to concentrate
without distractions, but the possibilities of mobile
work became increasingly evident during the coro
-
navirus pandemic. We were even able to take care
of many of our tasks better at home than the ofce.
However, we will still need to have face-to-face
meetings. In order for creative problem solving and
collaboration to be successful, people need to be
physically present. Working together, genuine in
-
teraction and spontaneous intercommunication
form the glue that keeps an organisation togeth
-
er. As remote working will never be able to replace
meetings or working together at the same location,
more and more working communities will transfer
to a hybrid work model.
In other words, ofce spaces will need to con
-
tinue to offer work communities opportunities to
meet together and spaces for work requiring con
-
centration. The premises may be smaller than be-
fore, but they must also be more attractive so that
people will want to come to the workplace.
Sustainability is a requirement
The pandemic is also likely to accelerate the trans-
formation of learning environments. Though tradi-
tional classroom solutions are no longer favoured
in new educational institutions, remote schooling
was a completely new experience for many last
spring. Learning environments are typically de
-
signed to last decades, so they have been slow to
develop. The benets of distance teaching were
also observed at educational institutions. In the fu
-
ture, we will be able to supplement contact teach-
ing with distance teaching to a certain extent.
Organisations and consumers are increasingly
interested in the responsibility and sustainabili
-
ty of their purchases. The transition to a circular
economy has started. Lifecycle thinking is already
a consideration in the acquisitions of pioneering
organisations, but price is still a major aspect.
As a result of the pandemic, there are now
many home ofce decorators who are interested
in furniture that facilitates working and improves
ergonomics. Many employers want to support their
employees in their remote work by providing an er
-
gonomic remote workstation.
8
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
Value for organisation
Increase in productivity and
ability to innovate
Improved employee
experience and wellbeing
Working environment
is always up-to-date and
optimised
Renewal of operational and
management culture
Specication of
needed change
Optimisation
Implementation User-centred
planning
Cost-effective and responsible
method of acquisition –
Waste Nothing.
Martela
Lifecycle®
Service models adapt to change
WORKPLACE AS A SERVICE
The post-pandemic world of work will be built
on hybrid work. People will have the freedom to
choose where and when to work, together with
others or alone. Thanks to the Workplace as a
Service model, your employees will always have
the best possible workplace at their disposal. In
-
stead of individual pieces of furniture, the organi-
sation will have a comprehensive solution for the
entire lifecycle of the ofce, which constantly
takes care of the premises, the furniture – and
the people. An essential aspect of the service is
the continuous optimisation of the workplace in
accordance with the changing needs of the us
-
ers. The service model enables the organisation
to only pay for what it genuinely needs, which
means that the problems related to owning fur
-
niture do not exist. In addition to the company’s
ofce space, the service is also suitable for the
development of employees’ home ofces and ex
-
ible co-working facilities.
LEARNING ENVIRONMENT AS A SERVICE
The operating culture at educational institutions
is changing radically and teaching and learning
methods are increasingly varied. New practices and
methods also require a new type of learning en
-
vironment. Developed through service design and
together with customers, Martela’s Learning envi
-
ronment as a Service responds to this challenge.
The new service model means that schools and
educational institutes no longer need to own a sin
-
gle piece of furniture, as the whole package can be
acquired as a service instead. The greatest benet
of the Learning environment as a Service model is
that it creates a framework for redesigning learning
environments in a user-centric way and introduc
-
es the circular economy to schools in a practical
manner. Furniture that is in good condition but no
longer needed due to the service model is repaired
and sold through the Martela Outlet stores or the
webshop or utilised in energy generation or as sec
-
ondary raw material.
Value for organisation
Increase in productivity and
ability to innovate
Improved employee
experience and wellbeing
Working environment
is always up-to-date and
optimised
Renewal of operational and
management culture
Specication of
needed change
Optimisation
Implementation User-centred
planning
Cost-effective and responsible
method of acquisition –
Waste Nothing.
Martela
Lifecycle®
Value for organisation
Increase in productivity and
ability to innovate
Improved employee
experience and wellbeing
Working environment
is always up-to-date and
optimised
Renewal of operational and
management culture
Specication of
needed change
Optimisation
Implementation User-centred
planning
Cost-effective and responsible
method of acquisition –
Waste Nothing.
Martela
Lifecycle®
Value for organisation
Increase in productivity and
ability to innovate
Improved employee
experience and wellbeing
Working environment
is always up-to-date and
optimised
Renewal of operational and
management culture
Specication of
needed change
Optimisation
Implementation User-centred
planning
Cost-effective and responsible
method of acquisition –
Waste Nothing.
Martela
Lifecycle®
9
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
Board of Directors’ Report and
Financial Statements
Board of Directors’ Report 11
Consolidated nancial statements IFRS 18
Accounting principles for the consolidated nancial statements 21
Parent company nancial statements FAS 46
Accounting principles for the parent company nancial statements 49
Auditor’s report 57
Corporate governance statement 2020 60
Board of Directors 65
Group Management Team 67
Information for shareholders 69
10
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
Board of directors’ report
Key gures
The Group’s revenue for the nancial year was EUR 88.4 million (106.2). The operating result for the year
was EUR -4.0 million (-2.0). Earnings per share were EUR -1.16 (-0.61). Cash ow from operating activities
totalled EUR 5.7 (6.3) million. The equity-to-assets ratio was 22.7 % (28.8) and gearing was 37.9 % (31.5).
The return on investment for the year was -13.4 % (-6.4).
Description of the business
Martela is one of the Nordic leaders in the workplace industry. Martela designs and implements best
workplace and learning environments. Martela supplies user-centric solutions into today’s workplaces
– mobile work and activity-based ofces. Martela also offers the widest selection of services support
-
ing changes in interior planning as well as supporting maintenance. Our total offering comprises of the
change of the whole workplace from its specication and planning to implementation and maintenance.
Martela’s offering and product development
In line with its Lifecycle strategy Martela creates high-quality services for workplaces and learning en-
vironments along the full lifecycle. Our offering includes workplace and learning environment specica-
tion and planning, implementation and furnishing as well as continuous measurement and optimisation.
To add to the traditional way of purchasing Martela has introduced two new service models, Workplace
as a Service and Learning Environment as a Service. The monthly service fees can include everything
from one to all of the lifecycle phases.
During 2020 Martela has expanded the Pod product family by introducing the meeting space called
PodBooth meeting. Martela also launched a new cabinet solution called Capa.
EUR -2.0 (-2.2) million has been entered in the Group prot and loss statement as research and de
-
velopment expenses.
Market situation
The coronavirus pandemic has had a negative impact on the whole market environment of Martela, both
in Scandinavia and in other countries. This has impacted especially the commercial sector. The negative
impact has been smaller on the Finnish Public sector compared to the commercial sector, but the com
-
petition has toughened and prices have decreased also in the Public sector. At the moment it is chal-
lenging to say what the short- and midterm impacts to general market conditions will be and how long
the uncertainty in the markets will continue.
Group structure
Kiinteistöyhtiö Ylähanka Oy, a subsidiary of Martela Oyj, was merged into the parent company during the
rst quarter of 2020.
Revenue and operating result
The January–December 2020 revenue was EUR 88.4 million (106.2) a decrease of 16.8 % from previous
year. Compared to the previous year, revenue decreased in Sweden 14.0% and in Norway 51.6%. Revenue
from Finland decreased 13.0% and in Other countries 32.5%.
The Group’s operating result for the January-December was EUR -4.0 million (-2.0).
The January–December result before taxes was EUR -4.8 million (-2.7). The January–December result
was EUR -4.8 million (-2.5).
11
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
Financial position
The cash ow from operating activities in January–December was EUR 5.7 million (6.3).
At the end of the period, interest-bearing liabilities stood at EUR 15.4 million including EUR 6.0 mil
-
lion lease liabilities according to IFRS 16. At the end of comparison period the interest bearing liabilities
stood at EUR 14.6 million. Net liabilities were EUR 4.3 million (5.0). At the end of the period, short-term
limits of EUR 4.0 million were in use (5.0) and available limits stood at EUR 0.7 million (2.0).
The gearing ratio at the end of the period was 37.9% (31.5) and the equity ratio was 22.7% (28.8). The
key ratios were negatively impacted by the lease liabilities according to IFRS 16 EUR 6.0 million (5.3).
Financial income and expenses were EUR -0.8 million (-0.7).
Financing arrangements include covenant clauses in which the ratio between the Group’s net liabili
-
ties and EBITDA and the Group’s equity ratio are examined. The key gures calculated at the end of the
review period didn’t in all nancial arrangements fulll the covenant clauses. Financing arrangements
where covenant clauses were not fullled equaled approximatley 10% of all nancing arrangements.
The balance sheet total stood at EUR 51.7 million (55.9) at the end of the period.
150
100
50
0
2016 2017 2018 2019 2020
REVENUE (EUR MILLION)
129.1
109.5
103.1
106.2
88.4
7
6
5
4
3
2
1
0
-1
-2
-3
-4
2016 2017 2018 2019 2020
OPERATING PROFIT (EUR MILLION)
6.2
0.3
-2.1
-2.0
-4.0
7
6
5
4
3
2
1
0
2016 2017 2018 2019 2020
CAPITAL EXPENDITURE AND
DEPRECIATIONS (EUR MILLION)
Capital expenditure Depreciations
2016 20182017 2019 2020
EARNINGS/SHARE AND DIVIDENDS
2.0
1.5
1.0
0.5
0
-0.5
-1.0
-1.5
Earnings/share
Dividends paid (EUR million)
Capital expenditure
The Group’s gross capital expenditure for January–December came to EUR 1.2 million (2.3).
The group management team
Kristiina Hoppu, VP Human Recources, has been appointed a member of the Martela Group’s Manage-
ment Team since August 1, 2020. MartelaGroup’s Board of Directors has appointed Artti Aurasmaa as
the company’s new CEO since October 19, 2020. Aurasmaa has solid experience in enabling the growth
of the service business in a variety of operating environments. For this moment onwards Group Manage
-
ment Team has consisted of CEO Artti Aurasmaa, CFO Kalle Lehtonen, VP Sales and Marketing Johan
Westerlund, VP Human Recources Kristiina Hoppu and VP Customer Supply Management Ville Taipale.
12
MARTELA ANNUAL REPORT 2020
Martela 2020
CEO’s review
Operational environment Financial Statements Governance
Personnel
The Group employed an average of 451 people (494), which represents a decrease of 43 persons or 8.7%.
Personnel on average employed in Finland was 375 (423), in Sweden 24 (22), in Norway 15 (10) and in
group other countries 37 (39).
The number of employees in the Group was 435 (464) at the end of the review period. Personnel costs
in January–December totalled EUR 23.1 million (26.7).
Non-nancial information
MANAGEMENT OF CORPORATE RESPONSIBILITY
Responsibility forms an integral part of Martela’s strategy and operations. The VP, Customer Supply Man-
agement is responsible for the corporate responsibility as well as quality, environmental and occupational
health and safety management system of the Group. Sustainability Steering Group supervises corporate
responsibility with members from the Management Group and the Sustainability Manager as the secretary.
More detailed information on the Group’s corporate responsibility principles, goals and achievements
can be found in a separate Sustainability Report published annually. The 2020 Sustainability Report will
be published after the annual report.
Since 2011, Martela’s corporate responsibility has been guided by the Martela Corporate Code of Con
-
duct approved by the Board of Directors. The principles contain references to international corporate re-
sponsibility commitments. The company has engaged itself in the UN Global Compact challenge, which
aims at promoting human rights, rights in working life, environmental protection and the eradication of
corruption and bribery.
As Martela operates in an international market, it also takes into account any international treaties,
commitments and recommendations that concern its work. The most important ones are:
• The UN Universal Declaration of Human Rights
• OECD Guidelines for Multinational Enterprises
• The ILO Declaration on Fundamental Principles and Rights at Work and other ILO conventions relat
-
ed to its activities
Since 2011, the practical activities of the company have been guided by the corporate responsibility pol
-
icies approved by the Management Group concerning matters related to personnel, the environment and
purchasing management. The principles and policies published on Martela’s website www.martela.com/
about-us/sustainability/corporate-responsibility are reviewed and, when necessary, updated annually un
-
der the coordination of the Sustainability Steering Group. The principles and policies cover social and em-
ployee matters and matters related to respecting human rights and eradication of corruption and bribery.
DESCRIPTION OF THE BUSINESS OPERATING MODEL
The Martela Lifecycle model takes into account the entire lifecycle of the workplace. Martela supports
the sustainability of its client companies by offering sustainable workplace solutions throughout their
entire lifecycle and by ensuring responsible recycling of any furniture that is no longer needed.
The Group units have had, since the 1990s, the ISO 9001 quality and ISO 14001 environmental man
-
agement system certications, granted by an independent party, as proof of continuous improvement of
its operations, meeting customer expectations and taking environmental matters into account. During
2014, the systems were unied into a certied, multi-site quality and environmental system covering the
entire Group’s operations. During 2020, a multi-site occupational health and safety system certication
in accordance with the ISO 45001 standard was also achieved.
40
30
20
10
0
-10
100
75
50
25
0
-25
2016
%
20182017 2019 2020
GEARING
Interest-bearing net debt
Gearing (%)
Equity
eur. million
80
60
40
20
0
2016 2017 2018 2019 2020
100
75
50
25
0
EQUITY RATIO
Balance sheet total
Equity ratio (%)
Equity
%eur. million
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In the manufacturing process, there is an emphasis on a strong supplier chain. Martela’s own manu-
facturing is focused on nal assembly and remanufacturing production at its logistics centre in Numme-
la, Finland, which also houses most of the company’s R&D and purchasing. The assembly of upholstery
components takes place at Martela’s own plant in Poland. The manufacture of table top and storage
components takes place mainly at Kidex Oy, Martela’s subsidiary located in Kitee, Finland.
The Martela headquarters in Pitäjänmäki, Helsinki, houses sales and support functions in addition
to the Group administration. Martela has several sales ofces in Finland, Sweden and Norway. In other
countries, the sale of Martela’s products takes place mostly through a dealer network.
The purchasing of products and services from service providers accounts for more than 70% of Mar
-
tela Group’s turnover, while Martela itself concentrates on nal assembly and service business. Martela
had about 150 suppliers of materials and components for standard products.
Almost a quarter of the Group’s turnover goes on salaries and social security payments. Martela values
local manufacturing and employment. As the share of its service business is growing, the company will
keep creating more new jobs close to its markets. The distribution of nancial value will be discussed in
further detail in the forthcoming Sustainability Report.
ENVIRONMENTAL MATTERS
Martela’s Environmental Policy, approved by the Group Management Team, aims to decrease the compa-
ny’s environmental impacts and promote recycling. The policy gives instructions on taking environmental
matters into account in the development of its offering, through which the company will also have an
indirect impact on the environmental effects of its customers.
The essential environmental aspects in Martela’s operations are presented in the materiality assess
-
ment found in the Sustainability Report. Martela has the best opportunities to inuence the reduction
of greenhouse gas emissions and energy use in its market area through its customers’ premises. Martela
is constantly working to help its customers create facilities that support knowledge work and improve
space efciency.
By far the most signicant climate impact of Martela arises from the use of materials related to the
products delivered to customers. During 2019, Martela’s calculated greenhouse gas emissions totalled
almost 14 million kg. Of the greenhouse gas emissions, 89% were due to material use (scope 3), 4% to
indirect energy use (scope 2) and 6% to the distribution of nished products to customers (scope 1).
The total amount of indirect energy used for heating, lighting and ventilation in Martela’s sites was
slightly more than 36,000 GJ (10 GWh) in 2019. 87% of the total energy consumption was renewable.
Martela procured almost 10 million kilos of materials, of which 60% were wood-based materials and 30%
metal-based materials. Through the recycling business, Martela collected more than three and a half
million kilos of mostly recoverable material from customers. In its own operations, Martela generated al
-
most two million kilos of waste, almost all of which is utilised as energy or recycled material, with haz-
ardous waste accounting for only one-tenth of one per cent. Hazardous waste is generated mainly from
the maintenance of properties and equipment.
There are no signicant environmental risks in Martela’s own operations, but global changes in, for
example, energy sources, pricing, availability of materials and changes in the way of working may affect
Martela’s operations in the future.
Environmental goals, their realisation and more detailed environmental metrics are published annually
in the Sustainability Report.
SOCIAL MATTERS AND HUMAN RESOURCES
The People Policy includes the principles of responsible human resources management, claries and
unies the management of human resources and promotes maintenance and development of the corpo
-
rate and employer image.
According to the materiality assessment in the Sustainability Report, improvement of occupational well
-
PERSONNEL BY AREAS, ON AVERAGE 2019
Finland 423 Other 39Scandinavia 32
TOTAL
494
PERSONNEL BY AREAS, ON AVERAGE 2020
Finland 375 Other 37Scandinavia 39
TOTAL
451
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MARTELA ANNUAL REPORT 2020
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CEO’s review
Operational environment Financial Statements Governance
being is the most important social and human resources area in Martela’s operations. The Martela Lifecy-
cle model is utilised for improving occupational well-being of knowledge workers, which is about half of
Martela’s personnel. Occupational well-being included in the Sustainability Programme is monitored with
the help of People Spirit employee satisfaction survey, for example. Due to the exceptional changes in cir
-
cumstances caused by the pandemic, the People Spirit survey was not conducted during 2020.
A survey concerning the impact of the exceptional circumstances caused by the pandemic on man
-
agement, work ow and the well-being of the work community was conducted among people managers
in the early autumn. The positive results showed that Martela has succeeded in supporting both people
managers and personnel in the changed working conditions. In addition, a work environment survey was
conducted for all personnel. The obtained results are used to improve the functionality of both ofce and
remote working.
During 2020, strong investments were made in the occupational health and safety management sys
-
tem, and at the end of the year Martela was awarded the ISO45001 certicate. In the Martela Group, the
greatest occupational safety risks are related to the personnel of the removal services, who work in vary
-
ing customer locations under changing circumstances. After Martela was granted a training center status
by Tracom in 2019, occupational safety card training has been carried out internally.
The company’s Sustainability Report contains a comprehensive description of the social and human
resource issues.
.
RESPECTING HUMAN RIGHTS
Matters related to respecting human rights are discussed in, for example, the company’s People Policy
and Sustainability Policy for Supply Chain. The main principle is to offer equal opportunities to all of
employees and to treat each employee equally. In the requirements for the suppliers, the focus is on ob
-
serving national legislation and ILO conventions, depending on which of them is found more demanding
from the viewpoint of employee rights. No breaches of respecting human rights have been observed in
Martela’s operations or supply chain.
Martela’s products are manufactured on the basis of customer orders, which means that the supply
chains are short and that the acquisitions mainly take place from the neighbouring areas and from else
-
where in Europe. In Europe, where there is a long tradition of follow-up of working conditions and leg-
islation, the risks related to respecting human rights are smaller. The social risks of Martela’s suppliers
have been thoroughly investigated and are always reviewed when selecting new suppliers and in con
-
junction with supplier audits.
Martela’s material supplier base is subject to an annual country-specic, social responsibility risk anal
-
ysis. Based on the risk analysis, the necessary supplier specic assessment of compliance is planned,
for example, by own or third-party evaluation. During 2020 the pandemic prevented nearly all of supplier
visits by Martela and only one third-party assessment was made. The ndings of the assessment were
mainly related to occupational safety and management of chemicals, although the supplier is ISO 14001
and ISO 45001 certied. Due to the pandemic, assessment of suppliers had to be limited to question
-
naires and written supplier commitments related to Möbelfakta labelling.
The 2020 sustainability training was implemented in the autumn and was attended by 80% of the
personnel. The training was used to study how comprehensively the employees perceive that the prin
-
ciples in Martela’s code of conduct are present in team meetings and how well they are aware of the
operating models for dealing with inappropriate behaviour. About half of the staff remembered that the
absolute ban on corruption and bribery had been discussed in team meetings. Nearly 70% remembered
that the ban on inappropriate behaviour had been discussed. Employees were also asked for their com
-
mitment to the principles of code of conduct and to achieving accident-free and smooth working. 96%
of employees committed to the principles of responsible business practice, and almost everyone com
-
mitted to striving for accident-free and smooth working. Reviewing and discussing the principles is an
important part of everyday work enabling one to be committed to them.
PREVENTION OF CORRUPTION AND BRIBERY
Matters related to prevention of corruption and bribery are discussed in, for example, the Corporate Code
of Conduct and Sustainability Policy for Supply Chain. Martela does not accept bribery in any form in its
business in any of its market areas. Giving or receiving bribes is not permitted under any circumstances.
All transactions are recorded through the nancial management/bookkeeping of each subsidiary.
Martela’s and all its subsidiaries bookkeeping and transactions are subject to an annual statutory audit.
The bookkeeping is transparent to the CFO of the Group.
Share
Martela has two share series, A and K, with each K share entitling its holder to 20 votes at a General
Meeting and each A share entitling its holder to one vote. Private holders of K shares have shareholder
agreement that restricts the sale of K shares to any party outside the existing holders of K shares. There
is a total of 604,800 K shares and a total of 3,550,800 A series, together 4,155,600 shares.
In January–December, a total of 1,786,397 (822,862) of the company’s series A shares were traded on
the NASDAQ OMX Helsinki exchange, corresponding to 50.3% (23.2) of the total number of series A shares.
The value of trading turnover was EUR 4.3 million (2.6), and the share price was EUR 3.09 at the end
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MARTELA ANNUAL REPORT 2020
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CEO’s review
Operational environment Financial Statements Governance
of the period (3.36). During January–December the share price was EUR 3.58 at its highest and EUR
1.78 at its lowest. At the end of December, equity per share was EUR 2.71 (3.80).
There were no disclosure notications in 2020. More information on the Martela Corporation shares
and shareholders can be found under note 27 of the Notes to the nancial statements.
TREASURY SHARES
Martela did not purchase any of its own shares in January–December. Martela owns a total of 13 082
Martela A shares and its holding of treasury shares amounted to 0.3% of all shares and 0.1% of all votes.
Out of the shares 12,036 were purchased at an average price of EUR 10.65 and 1,046 were transferred
from Martela Corporation’s joint account to the treasury shares by the decision made by the Annual Gen
-
eral Meeting on March 13, 2018.
SHARE-BASED INCENTIVE PROGRAMME
In the effective share-based incentive programme there are two earning periods, which are 2017–2018
and 2019–2020. The Board of Directors will decide the earning criteria and the goals for each criterion
of the programme at the beginning of each earning period.
The target group for the 2017–2018 and 2019–2020 earning periods is the Group’s Management Team.
The potential reward of the programme from the earning period 2017–2018 is based on the Group´s Earn
-
ings before Interest and Taxes (EBIT) and from the earning period 2019–2020 based on the Group’s rev-
enue and Earnings before Interest and Taxes (EBIT). No incentives will be paid for the earning period
2017–2018. The cash portion is aimed to cover taxes and other costs related to the reward. Management
of the share-based incentive scheme has been outsourced to an external service provider.
2020 Annual General Meeting
Martela Corporation’s Annual General Meeting was held on Thursday, March 12, 2020. The Meeting ap-
proved the Financial Statements, discharged the members of the Board of Directors and CEO from li-
ability for the year of 2019 and adopted Remuneration Policy for the Company’s governing bodies. The
Board of Directors proposal that no dividend will be distributed was approved.
The Annual General Meeting conrmed that the Board of Directors will consist of seven members and
Ms. Minna Andersson, Mr. Jan Mattsson, Mr. Eero Martela, Mr. Heikki Martela, Ms. Katarina Mellström and
Ms. Anni Vepsäläinen be re-elected as members of the Board of Directors and Mr. Johan Mild elected as
a new member of the Board of Directors.
Authorised Public Accountant Ernst & Young Oy was elected as the company’s auditor.
The Annual General Meeting authorised the Board in accordance with the proposal of the Board of
Directors to decide on the repurchase of own shares, issuance of own shares and/or to dispose of the
own shares held by the Company.
The Board of Directors elected by Martela Corporation’s Annual General Meeting had its organisation
-
al meeting after the Annual General Meeting and re-elected from among its members Heikki Martela as
the Chairman and Katarina Mellström as the new Vice Chairman of the Board.
Administration
Martela Corporation is a Finnish limited liability company that is governed in its decision-making and
management by Finnish legislation, especially the Finnish Limited Liability Companies Act, by other reg
-
ulations concerning public listed companies, and by its Articles of Association. The company complies
with the NASDAQ OMX Guidelines for Insiders and the Corporate Governance Code 2020 for Finnish
listed companies published by the Securities Market Association. More information on Martela’s govern
-
ance can be found on the company’s website.
Martela Responsibility Report includes extensively the non-nancial information (NFI) required by the
accounting law reforms. The Responsibility Report of 2020 will be published after the Annual Report.
Risks and uncertainties
The principal risk regarding prot performance relates to the general economic uncertainty and the con-
sequent effects on the overall demand in Martela’s operating environment. Due to the project-based na-
ture of the sector, forecasting short-term developments is challenging. In accordance with Martela’s risk
management model, the risks are classied and guarded against in different ways.
Production of Martela’s products is based on orders placed by customers, supply chain is short and
purchases are mainly from neighbouring area and from other parts of Europe. Extensive warehousing
is not needed. The product assembly is automated and based on component subcontracting and on as
-
sembly carried out by Martela.
Risks of damage are covered with appropriate insurance and this provides comprehensive coverage
for property, business interruption, supplier interruption loss and loss liability risks. The services of an
external partner are used in insurance as well as in legal matters.
Finance risks are discussed in note 22 of the notes to the nancial statements.
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SHORT-TERM RISKS
The principal risk regarding prot performance relates to the general economic uncertainty and the con-
sequent effects on the overall demand in Martela’s operating environment. The coronavirus pandemic and
the uncertainty caused by it have had a negative impact on the market situation. Due to the project-based
nature of the sector, forecasting short-term development is challenging in normal circumstances. This
has been further been emphasised by the general uncertainty caused by the pandemic.
Events after the end of the nancial year
Head of Innovation to Market –organisation and management team member VP, Mikko Mäkelä, is head-
ing for new challenges outside Martela and leaves the company at the end of January. Artti Aurasmaa,
CEO, will take as interim position to lead the Innovation to Market business in addition to his duties as
the CEO. The change has been announced in the stock exchange release on January 14, 2021.
Martela Plans restructuring measures to improve operational efciency and starts co-operation ne
-
gotiations. This has been announced in the stock exchange release on January 27, 2021.
No other signicant events requiring reporting have taken place since the January–December period,
and operations have continued according to plan.
Outlook for 2021
The Martela Group anticipates that its revenue and operating result in 2021 will improve compared to
the previous year. Due to normal seasonal variations, the Group’s operating result accumulates during
the second half of the year.
Proposal of the board of directors for distribution of prot
The Board of Directors will propose to the AGM that no dividend will be distributed for 2021.
Annual general meeting
The Annual General Meeting is planned to be held on Thursday 18 March 2021. The notice of the Annual
General Meeting will be published in a separate release.
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MARTELA ANNUAL REPORT 2020
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Operational environment Financial Statements Governance
Consolidated comprehensive income statement
(EUR 1,000) Note 1.1.–31.12.2020 1.1.–31.12.2019
Revenue 1 88,385 106,207
Other operating income 2 540 356
Changes of inventories of nished goods and work in progress 1,689 116
Raw material and consumables used* -54,606 -63,977
Production for own use 90 172
Employee benets expenses 3 -23,072 -26,651
Other operating expenses* 4 -10,498 -13,304
Depreciation and impairment 5 -6,523 -4,949
Operating prot (-loss) -3,996 -2,031
Financial income 7 123 103
Financial expenses 7 -940 -772
Prot (-loss) before taxes -4,813 -2,701
Income taxes 8 7 159
Prot (-loss) for the nancial year -4,806 -2,541
Other comprehensive income:
Items that will not later be recognised through prot or loss
Items resulting from remeasurement of the net debt related to dened benet plans 28 -37
Taxes from items that will not later be recognised through prot or loss 4 6
Items that may later be recognised through prot or loss
Other changes -38
Translation differences -22 -98
Other comprehensive income for the period 10 -167
Total comprehensive income -4,796 -2,708
Allocation of prot (-loss) for the nancial year
Equity holders of the parent -4,806 -2,541
Allocation of total comprehensive income
Equity holders of the parent -4,796 -2,708
Earnings per share of the prot attributable to the equity holders of the parent
Basic earnings/share, EUR 9 -1,16 -0,61
Diluted earnings/share, EUR 9 -1,16 -0,61
Consolidated balance sheet
(EUR 1,000) Note 31.12.2020 31.12.2019
ASSETS
Non-current assets
Intangible assets 10 5,792 7,605
Tangible assets 11 10,387 9,582
Available-for-sale nancial assets 7 7
Deferred tax assets 13 314 287
Non-current assets, total 16,499 17,481
Current assets
Inventories 14 9,473 8,587
Trade receivables and other receivables 12, 15 14,562 20,179
Cash and cash equivalents 11,172 9,621
Current assets, total 35,207 38,387
ASSETS, TOTAL 51,706 55,868
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Operational environment Financial Statements Governance
(EUR 1,000) Note 31.12.2020 31.12.2019
EQUITY AND LIABILITIES
Equity attributable to holders of the parent 16
Share capital 7,000 7,000
Share premium account 1,116 1,116
Other reserves -9 -9
Treasury shares* -128 -128
Translation differences -1,060 -1,038
Retained earnings 4,292 9,138
Equity, total 11,212 16,080
Non-current liabilities
Deferred tax liabilities 13 198 283
Pension obligations 19 492 472
Financial liabilities 12, 18 6,277 5,924
Provisions 20 282 282
Non-current liabilities, total 7,249 6,961
Current liabilities
Financial liabilities 12, 18 8,656 8,188
Advances received 21 2,281 3,728
Trade payables 12, 21 8,885 9,839
Accrued liabilities and prepaid income 12, 21 8,289 8,176
Other current liabilities 12, 21 5,063 2,826
Provisions 20 70 70
Non-interest-bearing current liabilities, total 33,245 32,827
LIABILITIES, TOTAL 40,494 39,788
EQUITY AND LIABILITIES, TOTAL 51,706 55,868
* The shares acquired for and assigned to share-based incentive scheme are shown in accounting terms as
treasury shares. See notes 17.
Consolidated cash ow statement
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Cash ows from operating activities
Cash ow from sales 94,370 107,633
Cash ow from other operating income 393 325
Payments on operating costs -88,199 -101,324
Net cash from operating activities before nancial items and taxes 6,564 6,634
Interest paid -545 -360
Interest received 18 5
Other nancial items -252 -208
Dividends received 8 0
Taxes paid -74 203
Net cash from operating activities (A) 5,718 6,274
Cash ows from investing activities
Capital expenditure on tangible and intangible assets -1,219 -3,040
Proceeds from sale of tangible and intangible assets 59 5
Net cash used in investing activities (B) -1,159 -3,034
Cash ows form nancing activities
Proceeds from short-term loans 5,000 0
Repayments of short-term loans -9,333 -1,152
Repayments of lease liabilities -3,027 -2,631
Proceeds of long-term loans 4,400 0
Dividends paid and other prot distribution 0 -414
Net cash used in nancing activities (C) -2,960 -4,197
Change in cash and cash equivalents (A+B+C), increase +, decrease - 1,599 -957
Cash and cash equivalents at the beginning of year 9,621 10,594
Translation differences -47 -16
Cash and cash equivalents at the end of year 11,172 9,621
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MARTELA ANNUAL REPORT 2020
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Operational environment Financial Statements Governance
Statement of changes in equity
Equity attributable to equity holders of the parent (EUR 1,000) Share capital
Share premium
account Other reserves Treasury shares Translation diff. Retained earnings Equity total
Equity 1.1.2019 7,000 1,116 -9 -128 -940 11,751 18,790
Correction of errors in previous periods 340 340
Other comprehensive income
Prot (-loss) for the nancial year -2,541 -2,541
Other items of comprehensive income adjusted by tax effects
Translation differences -98 -98
Items resulting from remeasurement of the net debt related to dened benet plans (incl.
Deferred taxes) -31 -31
Other change -38 -38
Total comprehensive income -98 -2,610 -2,708
Share-based incentives 72 72
Business transactions with owners 0
Dividends 0 -414 -414
Equity 31.12.2019 7,000 1,116 -9 -128 -1,038 9,138 16,080
Equity 1.1.2020 7,000 1,116 -9 -128 -1,038 9,138 16,080
Correction of errors in previous periods
Other comprehensive income , ,
Prot (-loss) for the nancial year -4,806 -4,806
Other items of comprehensive income adjusted by tax effects
Translation differences -22 -22
Items resulting from remeasurement of the net debt related to dened benet plans (incl.
Deferred taxes)
Other change 0
Total comprehensive income -22 -4,774 -4,796
Share-based incentives -72 -72
Business transactions with owners
Dividends 0 0
Equity 31.12.2020 7,000 1,116 -9 -128 -1,060 4,292 11,212
More information in Notes 16 Equity and 17 share-based payments.
20
MARTELA ANNUAL REPORT 2020
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Operational environment Financial Statements Governance
Accounting Principles for the Consolidated
Financial Statements
Martela Group
Martela Corporation supplies ergonomic and innovative furniture solutions and provides interior plan-
ning services.
The Group’s parent company is Martela Oyj, a Finnish public limited company domiciled in Helsinki,
street address Takkatie 1, FI-00370 Helsinki. The company’s A-shares are listed on Nasdaq Helsinki.
Copies of the Group’s nancial statements are available at Takkatie 1, FI-00370 Helsinki, and on the
Internet at Martela’s home pages www.martela.com.
These nancial statements were authorised for issue by the Board of Directors of Martela Oyj on Feb
-
ruary 4, 2021. The Finnish Limited Liability Companies Act permits the shareholders to approve or reject
the nancial statements in the general meeting that is held after publishing the nancial statements.
As well, the general meeting has a possibility to amend the nancial statements.
BASIS OF PREPARATION
Martela’s consolidated nancial statements are prepared in accordance with the International Financial
Reporting Standards (IFRS) as on December 31, 2020. As referred to in the Finnish Accounting Act and
in ordinances issued pursuant to the provisions of this Act, the International Financial Reporting Stand
-
ards 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 nancial statements
also conform with additional requirements of the Finnish accounting and company legislation.
The consolidated nancial statements are presented in thousands of euros and have been prepared
on the historical cost basis except as disclosed in the accounting policies. All presented gures have
been rounded, which is why the sum of individual gures might deviate from the presented sum. The
key nancial indicators have been calculated using exact gures. Martela’s consolidated nancial state
-
ments cover the full calendar year, and this represents the nancial period for the parent company and
the Group companies.
USE OF ESTIMATES
The preparation of the nancial statements in conformity with IFRS requires Group management to
make certain estimates and to use judgement when applying accounting policies. The section “Account
-
ing policies requiring management’s judgement and key sources of estimation uncertainty” refers to the
judgements made by management and those nancial statement items on which judgements have a sig
-
nicant effect.
Principles of consolidation
The consolidated nancial statements include the parent company, Martela Oyj, and all the subsidiaries
in which the parent company controls, directly or indirectly, more than 50% of the voting power of the
shares, or otherwise has control. Martela is considered to be in control of a subsidiary when it is ex
-
posed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to
affect those returns through its power over the subsidiary. Subsidiaries are included in the consolidated
nancial statements by using the acquisition method. The intra-group transactions, unrealised margins
on intra-group deliveries, intra-group receivables and liabilities and prot distribution are eliminated.
Items denominated in foreign currency
Transactions in foreign currencies are translated at the exchange rate prevailing on the date of the trans-
action – in practice, for transactions taking place within any given month, a rate is used that approxi-
mates the rate of the transaction date. At the end of the reporting period, the monetary assets and lia-
bilities 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 pur
-
chases and sales. Exchange rate gains and losses in nancing are treated as adjustments to nancial
income and expenses.
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MARTELA ANNUAL REPORT 2020
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The statements of comprehensive income and cash ows of foreign subsidiaries for the period are
translated into euros at the average rates for the nancial 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 prot or
loss and comprehensive income for the period at different exchange rates in the statement of compre
-
hensive 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 intra-group
non-current loans which in substance are equity and form a part of the net investment in the operation
in question. When a subsidiary is disposed of, all or in part, the accumulated translation differences are
reclassied to prot and loss as part of the gain or loss on disposal.
Government grants
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 intan
-
gible 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. The public grants received during the nancial year 2020 consist of
grants granted by Business Finland to Group companies.
Revenue recognition principles
Furniture is mainly delivered as installed at customer. The control of the furniture is transferred to the
customer when the deliverables form the contract are fullled, i.e. the furniture is delivered and installed
at customer and the customer has approved the delivery. The signicant risks and rewards of ownership
of the furniture is also transferred to the buyer through the approval of the delivery. Revenue from sold
goods is recognised as the control of the goods is transferred to the buyer according to the agreement.
The normal warranty for standard Martela produced products in normal use is ve years and for other
standard products two years.
Consultative services consist of workshops and interviews for specication of the demands placed
on the work environment and interior planning services. The deliverable is fullled and the control is
transferred to the customer as the product of the service is delivered to the customer. Revenue from
consultative services is recognised as the deliverable is fullled.
In removals services the value of the service is received by the customer as Martela provides the
service. In such cases the revenue is recognised over time. The removal services provided by Martela
are mainly short in duration. In case a removal services project lasts for several months is the revenue
recognised based on either invoicing of the achieved project milestones or based on actual work hours
registered for the project.
The transaction prices for the sold goods and services are dened for each deliverable on the sales
orders and no variable considerations are in use. Martela does not have capitalised costs for obtaining
or of fullling customer contracts. Sales receivables are typically due latest within two months from in
-
voicing. The customer contracts do not include signicant nancing components provided by Martela.
Revenue consists of income from customer contracts according to IFRS 15 and income from custom
-
er contracts that are classied as leases based on the contract contents, and are treated in accordance
to IFRS 16.
Leases in which substantially all the risks and rewards incidental to ownership of an asset remain
with the lessor are classied as operative lease contracts and recognised as revenue in the statement of
comprehensive income on a straight-line basis over the lease term. In nance leases, the risks and bene
-
ts of ownership have been substantially transferred to the lessee. The gain on the sale of the contract
is recognised in the same way as for the sale of an asset.
Employee benets
PENSION LIABILITIES
The Group has arranged dened contribution plans and dened benet plans for retirement. A dened
contribution plan is a pension plan under which the Group pays xed contributions into a separate enti
-
ty. The Group has no legal or constructive obligations to pay further contributions if the fund does not
hold sufcient assets to pay all employees the benets relating to employee service in the current and
prior periods. A dened benet plan is a pension plan that is not a dened contribution plan. Contribu
-
tions made to dened contribution plans are recognised in prot or loss as an expense as incurred.
The obligations of dened benet 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 qualied actuaries. In calculating the pres
-
ent 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 signicant extent with
the maturity of the computed pension liability.
Pension expenses (service cost in the period) and the net interest for the net debt related to the de
-
ned benet pension plan are recognised through prot or loss. Pension expenses are included in em-
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ployee benet expenses. Items resulting from the remeasurement of the net debt (or net asset) related
to the dened benet plan are recorded in items of other comprehensive income in the nancial period
during which they emerge. These include actuarial gains and losses and returns on assets included in
the plan, among other items. Past service costs are recognised in expenses through prot or loss on
the earlier of the following dates: the date when the plan is amended or reduced, or the date when the
entity recognises the reorganisation expenses related to this or the benets related to the termination
of the employment relationship.
SHARE-BASED PAYMENTS
In the Group’s share-based incentive system, with vesting periods 2017–2018 and 2019–2020, payments
are made in a combination of shares and cash. Share rewards are measured at fair value at the grant
date and recognised as expenses over the vesting period. The vesting conditions are taken into account
in the number of shares which are expected to vest by the end of the validity period. Measurements are
adjusted at the end of each reporting period and the settlement is recognised under equity. The expense
determined at the time of granting the share-based incentives is based on the Group’s estimate of the
number of shares which are expected to vest by the end of the vesting period. The assumed vesting
takes account of the maximum incentive, the assumed achievement of non-market-based earnings tar
-
gets and the reduction of persons participating the plan. The Group updates the estimate of the nal
number of shares at the end of each reporting period. Their impact on prot or loss is presented in the
statement of comprehensive income under employment benets expenses.
OPERATING PROFIT
Operating prot is the Group’s prot from operations before nancial items and income taxes. Exchange
rate differences arisen in the translation of trade receivables and payables denominated in foreign cur
-
rencies are included in operating prot.
INCOME TAXES
The taxes recognised in the consolidated statement of comprehensive income include current tax based
on the taxable income of the Group companies for the nancial year, taxes for previous years and the
change in deferred taxes. For transactions and other events recognised in prot or loss, any related tax
effects are also recognised in prot or loss. For transactions and other events recognised outside prot
or loss (either in other comprehensive income or directly in equity), any related tax effects are also rec
-
ognised 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 nancial statements. A deferred tax asset is rec
-
ognised only to the extent that it is probable that taxable prot will be available against which it can be
used. Deferred tax liabilities are recognised to the full extent in the balance sheet. Deferred taxes are
measured by using the tax rates enacted or substantively enacted by the end of the reporting period.
Intangible assets
GOODWILL
Goodwill resulting from business combinations represents the excess of the consideration transferred
over the fair value of the net identiable assets acquired.
Goodwill is tested annually or more frequently if there are indications that the value might be impaired.
Testing is performed at least at the end of each nancial year. For this purpose goodwill is allocated to
cash generating units. An impairment loss is recognised whenever the carrying amount of cash-generat
-
ing unit exceeds the recoverable amount. Impairment losses are recognised in the comprehensive income
statement. An impairment loss in respect of goodwill is never reversed.
RESEARCH AND DEVELOPMENT
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 fullled these projects
are capitalised. Research expenditure is recognised as an expense when incurred. R&D-related equipment
is capitalised in machinery and equipment. There has been no development costs that met the capitali
-
sation criteria during the nancial year.
OTHER INTANGIBLE ASSETS
An intangible asset is initially capitalised in the balance sheet at cost if the cost can be measured relia-
bly and it is probable that the expected future economic benets that are attributable to the asset will
ow 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 amortisa
-
tion and any impairment.
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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.
Tangible assets
Land, buildings, machinery and equipment constitute the majority of tangible assets. They are measured
in the balance sheet at historical cost, less accumulated depreciation and any impairment.
When a part of an item of property, plant and equipment (accounted for as a separate asset) is re
-
newed, the expenditure related to the new item is capitalised and the possibly remaining balance sheet
value removed from the balance sheet. Other expenditure arising later is capitalised only when future
economic benets will ow 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 tan
-
gible asset once classied 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 nancial year-end
and, if necessary, are adjusted to reect changes in the expected future economic benets.
Gains and losses from the sale or disposal of tangible assets are recognised in prot and loss and
presented under other operating income or other operating expenses.
IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS
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 im
-
pairment loss is recognised if the balance sheet value of an asset or a cash-generating unit exceeds the
recoverable amount of it. Impairment losses are recognised in the statement of comprehensive income.
If there are indications that impairment losses no longer exist or that they have diminished, the recov
-
erable 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
Martela’s lease contracts consist mainly of ofce spaces, cars and IT-equipment. The lease contracts
of cars and IT-equipment are time limited whereas the contracts for ofce spaces are mainly open end
-
ed. The lease contracts do not include variable lease payments and Martela does not have any sale and
leaseback transactions.
Lease agreements, for which the lease period is beyond 12 months, are according to IFRS 16 recognised
on the balance sheet as a right-of-use assets and lease liabilities. The right-of-use assets decreased with
the accumulated depreciations are recognised as tangible assets. The right-of-use assets are depreci
-
ated over the lease period or an estimated period if longer. Estimated rental periods, are used for lease
agreements of indenite duration. The estimated rental periods are 2 years for rented ofces and sales
facilities and 1 year for warehouses. Martela applies the exemptions to IFRS 16 and does not apply IFRS
16 to short-term leases for which the lease term ends within 12 months and leases of low-value assets,
which are not ofces or warehouses in use by Martela.
Short term lease contracts and leases of low-value assets, are disclosed as other rental agreements
from which the payments are recognised as equal instalments over the rental period in the consolidated
statement of comprehensive income.
The lease liabilities have been discounted at the borrowing rate. The weighted average discount rate
is 2,6%
Martela has one lease agreement concerning a real estate in which Martela acts as a lessor. This con
-
tact is disclosed as other rental agreements and the rental income is recognized as equal instalments
over the rental period in the consolidated statement of comprehensive income.
Inventories
Inventories are measured at the lower of cost and net realisable value. The value of inventories is de-
termined by using weighted average purchase prices and it includes all direct expenditure incurred by
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acquiring the inventories and also a part of the production overhead costs. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale.
Inventory value includes adjustments caused by obsolescence.
Financial assets
Group’s nancial assets are classied into the following groups: nancial assets at fair value through
prot or loss, nancial assets at fair value through other comprehensive income and nancial assets
measured at amortised costs. The classication depends on the purpose of acquiring the nancial as
-
sets, and they are classied at the time of initial acquisition. All purchases and sales of nancial assets
are recognised and derecognised on the trade date. The Group derecognises nancial assets when it
has lost its right to receive the cash ows or when it has transferred substantially all the risks and re
-
wards to an external party.
Financial assets measured at amortised costs include assets that are held in a business model whose
object is achieved by holding the assets and collecting contractual cash ows until the due date. The
cash ow from the assets consists of solely payments of principal and interest on the principal amount
outstanding. They are originally recognised at fair value and subsequently measured at amortised cost.
The group recognises a deduction in the nancial assets recognised at amortised cost based on expect
-
ed credit losses. These assets are included in either current or non-current nancial assets (they are
included in the latter if they mature over 12 months later). The category includes loan, trade and other
receivables that are not derivatives.
Cash and cash equivalents comprise cash in hand, in banks and in demand bank deposits, as well as
other current, very liquid investments. Items qualifying as cash and cash equivalents have original ma
-
turities of three months or less from the date of acquisition.
IMPAIRMENT OF FINANCIAL ASSETS
At the end of each reporting period, the Group assesses whether objective evidence exists of the im-
pairment of an individual nancial asset or a group of nancial assets. Impairment will be recognised
through prot or loss.
A simplied model according to IFRS 9 is used in assessing the expected credit losses on trade re
-
ceivables: credit losses are recognised to an amount that represents the expected credit losses for the
full lifetime. The expected credit losses are assessed based on historical information on credit losses
and on the information on the future nancial circumstances available on the review date.
FINANCIAL LIABILITIES
The Group classies its nancial liabilities as nancial liabilities measured at amortised cost (mainly in-
cludes borrowings from nancial institutions, IFRS 16 lease liabilities and trade payables) .
Financial liabilities are initially recognised at fair value and are subsequently measured either at am
-
ortised cost or at fair value, based on the classication made. Financial liabilities are included in current
and non-current liabilities and they can be interest-bearing or non-interest-bearing. Bank overdrafts are
included in current interest-bearing liabilities. Financial liabilities are regarded as current, unless the Group
has an absolute right to postpone the repayment of the debt until a minimum of 12 months after the end
of the reporting period. Financial liabilities (in full or in part) are not eliminated from the balance sheet
until the debt has ceased to exist – in other words, when the obligation specied in the agreement has
been fullled or rescinded or ceases to be valid.
Share capital
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 deduc
-
tions from equity. If Martela Oyj buys back its own equity instruments, their cost is deducted from equity.
DIVIDENDS
Dividends proposed by the Board of Directors are not recorded in the nancial statements but the relat-
ed liability is only recognised when approved by a general meeting of shareholders.
Provisions
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 outow of economic benets 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.
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Accounting policies requiring management’s judgement and key sources
of estimation uncertainty
In preparing the nancial statements it is necessary to make forward-looking estimates and assump-
tions which may not, in fact, turn out to be true. In addition, it is necessary to use judgement in apply-
ing accounting policies to the nancial statements. The foremost estimates concern the utilisation of
deferred tax assets against future taxable income and the assumptions used in the impairment test
-
ing. Other estimates requiring management’s judgement mainly concerns the amount of non-marketable
inventories, impairment of trade receivables, the amount of guarantee provisions and the denition of
the lease period in lease contracts of indenite duration under IFRS 16. Estimates and assumptions are
based on management’s current best knowledge at the end of the reporting period, reecting historical
experience and other reasonable assumptions.
Impairment testing
The carrying amounts of non-current assets are assessed at the end of each reporting period to observe
whether there are any indications that the balance sheet value of an asset or a cash-generating unit ex
-
ceeds the recoverable amount of it.
If such indications exist, the recoverable amount of the asset will be estimated at the higher of its
fair value less costs to sell and its value in use. Value in use is calculated based on discounted forecast
cash ows. An impairment loss is recognised if the balance sheet value of an asset or a cash-gener
-
ating unit exceeds the recoverable amount of it. Impairment losses are recognised in the statement of
comprehensive income.
If there are indications that impairment losses no longer exist or that they have diminished, the recov
-
erable amount is estimated. An impairment loss previously recognised in the statement of comprehensive
income is reversed if the estimates used in measuring the recoverable income have changed. However,
an impairment loss cannot be reversed to an extent more than what the carrying amount of the asset
or cash-generating unit would be without recognition of an impairment loss.
Goodwill is tested for impairment annually regardless of whether there is any indication of impair
-
ment. An impairment loss in respect of goodwill is never reversed. (Note 10)
The recoverable amounts of cash generating units have been determined using calculations based
on value in use. In the calculations, forecast cash ows are based on nancial plans approved by man
-
agement, covering a period of ve years. The central assumptions concern development of growth and
protability. The cash ows beyond the ve-year period are estimated based on 1,5% growth.
The usability of inventory items in the valid sales product portfolio is investigated in the valuation of
inventories. If the sales portfolio does not include products where an inventory item is used, the value
of such an item is written down.
Deferred tax receivables
The prerequisites for recognition of deferred tax receivables are assessed at the end of each reporting
period. Assumptions made by the managers of the Group companies on taxable income in future nan
-
cial periods have been taken into account when evaluating the amount of deferred tax assets. Various
internal and external factors can have a positive or negative effect on deferred tax assets. These include
restructuring in the Group, amendments to tax laws (such as changes to tax rates or a change to the
period of utilisation of conrmed deductible tax losses) and changes to the interpretations of tax regu
-
lations. Deferred tax assets recognised in an earlier reporting period are recognised in expenses in the
consolidated statement of comprehensive income if the unit in question is not expected to accumulate
sufcient taxable income to be able to utilise the temporary differences, such as conrmed tax losses,
on which the deferred tax assets are based.
Deferred tax assets are not recorded for taxation losses in subsidiaries.
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1. Segment reporting
As a result of harmonising and combining processes, the organisation, reporting and systems, as of 2017 the company reports
consolidated gures as a single segment and in addition reports revenue by country. Revenue will be reported by the location of a
customer in following countries: Finland, Sweden, Norway and Other countries.
Liikevaihto (EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Revenue by area
Finland 72,350 83,170
Sweden 9,172 10,663
Norway 3,770 7, 792
Other areas 3,093 4,582
Total 88,385 106,207
Income from the sale of goods 74,209 91,494
Income from the sale of services 14,176 14,713
Total 88,385 106,207
Assets
Information about geographical regions
Non-current assets (EUR 1,000)
Intangible assets
31.12.2020
Tangible assets
31.12.2020
Finland 5,788 10,153
Sweden 0 101
Other regions 4 132
Total 5,792 10,387
Non-current assets (EUR 1,000)
Intangible assets
31.12.2019
Tangible assets
31.12.2019
Finland 7,592 9,328
Sweden 0 88
Other regions 13 165
Total 7,605 9,582
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Assets and liabilities from contracts with customers
Trade receivables 12,656 16,847
Accrued income based on customer contracts 646 1,358
Prepayments based on customer contracts 2,281 3,728
Revenue includes EUR 579 thousand (196) income from sold furniture that based on the customer agreement is classied as ren-
tal income.
2. Other operating income
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Gains on sale of tangible assets 62 5
Rental income 257 261
Public subsidies 16 3
Other income from operations 205 88
Total 540 356
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3. Employee benets expenses 4. Other operating expenses
5. Depreciation and impairment
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Salaries and wages -18,936 -21,674
Pension expenses, dened contribution plans -2,933 -3,539
Pension expenses, dened benet plans -221 -171
Part paid as share-based incentives 72 -72
Other salary-related expenses -1,053 -1,196
Personnel expenses in the income statement -23,072 -26,651
Other fringe benets -371 -364
Total -23,442 -27,015
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Freight -527 -1,376
Travel -448 -1,021
Administration -1,582 -2,010
IT -2,833 -2,617
Marketing -1,198 -1,264
Vehicles -214 -254
Real estate -1,065 -1,441
Other -2,631 -3,319
Total -526 -13,304
Auditors' fees
Auditing -73 -86
Other services -7 -79
Total -80 -165
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Depreciation
Intangible assets -2,196 -900
Tangible assets
Buildings and structures -484 -540
Machinery and equipment -695 -790
Depreciation, total -3,375 -2,230
Depreciation of right-of-use assets according to IFRS 16
Buildings and structures -2,171 -2,110
Machinery and equipment -977 -609
Depreciation, total -3,148 -2,719
Personnel 2020 2019
Personnel on average, workers 227 258
Personnel on average, ofcials 223 235
Personnel on average, total 451 494
Personnel at year end 435 464
Personnel on average in Finland 375 423
Personnel on average in Sweden 24 21
Personnel on average in Norway 15 10
Personnel on average in Poland 38 39
Total 451 494
A total of EUR - 729 thousand for 2020 and EUR - 750 thousand from 2019 were recognised in the result from the incentives and
salary-related expenses associated with the incentive scheme. Salaries and fees and share-based payments are presented in more
detail under Note 24 Related-party transactions.
More information about share-based incentive programme is in note 17.
Auditors’ fees are included in administration expenses.
Other operating expenses are reported by type of expense.
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6. Research and development expenses
The income statement includes research and development expenses of EUR -1,971 thousand (EUR -2,211 thousand in 2019).
Reconciliation between the income statement’s tax expense and the income tax expense calculated using the Martela Group’s do-
mestic corporation tax rate 20.0%.
The company has no diluting instruments 31.12.2020 or 31.12.2019.
7. Financial income and expenses
8. Income taxes
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Financial income
Interest income on loans and other receivables 18 5
Foreign exchange gain on loans and other receivables 95 96
Ohter nancial income 10 2
Total 123 103
Financial expenses
Interest expenses from nancial liabilities measured at amortised cost -403 -285
Foreign exchange losses on loans and other receivables -224 -176
Interest expenses of lease liabilities according to IFRS 16 -162 -165
Other nancial expenses -152 -146
Total -940 -772
Financial income and expenses, total -818 -670
Total exchange rate differences affecting prot and loss are as follows:
Exchange rate differences, sales (included in revenue) -33 -43
Exchange rate differences, purchases (included in adj.of purchases) -72 -68
Exchange rate differences, nancial items -128 -80
Exchange rate differences, total -234 -191
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Prot before taxes -4,813 -2,701
Taxes calculated using the domestic corporation tax rate -963 -540
Different tax rates of subsidiaries abroad -46 -31
Taxes for previous years -77 3
Recognition of unused tax losses not booked earlier -116 -116
Tax-exempt income 0 -3
Non-deductible expenses 44 36
Unbooked deferred tax assets on losses in taxation 1908 731
Other items -758 -239
Income taxes for the year in the p/l (+ = expense, - = prot) -7 -159
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Income taxes, nancial year -25 -20
Taxes for previous years -77 3
Change in deferred tax liabilities and assets 110 176
Total 7 159
9. Earnings per share
The basic earnings per share is calculated dividing the prot attributable to equity holders of the parent by the weighted average
number of shares outstanding during the year.
(EUR 1,000) 1.1.–31.12.2020 1.1.–31.12.2019
Prot attributable to equity holders of the parent -4,806 -2,541
Weighted average number of shares (1000) 4,143 4,143
Basic earnings per share (EUR/share) -1,16 -0,61
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10. Intangible assets
(EUR 1,000)
1.1.-31.12.2020
Intangible assets Goodwill Work in progress Total
1.1.-31.12.2019
Intangible assets Goodwill Work in progress Total
Acquisition cost 1.1. 13,267 883 2,038 16,188 13,135 883 478 14,496
Increases 2,092 936 3,028 164 2,159 2,323
Decreases 0 -2,656 -2,656 -31 -600 -631
Acquisition cost 31.12. 15,360 883 317 16,560 13,267 883 2,038 16,188
Accumulated depreciation 1.1. -8,582 0 0 -8,582 -7,721 0 0 -7,721
Accumulated depreciation, decreases 0 0 31 0 0 31
Depreciation for the year 1.1.-31.12. -1299 -1,299 -892 0 0 -892
Impairment -888 -888
Exchange rate differences 0 0 0
Accumulated depreciation 31.12. -10,769 0 0 -10,769 -8,582 0 0 -8,582
Carrying amount 1.1. 4,685 883 2,038 7,605 5,414 883 478 6,776
Carrying amount 31.12. 4,591 883 317 5,792 4,685 883 2,038 7,605
Goodwill
The Group’s Goodwill EUR 883 thousand (EUR 883 thousand in 2019) relates to the Grundell acquisition Martela made December
31, 2011. The expected future cash ows will be generated through more extensive service solutions encompassing
also products and the already implemented prot improving actions. The revenue growth is also supported by the renewed
strategy of Martela that increases the emphasis on service within the Group.
Impairment testing
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 carrying unit. The recoverable amount of the goodwill is determined based on the value in use calculations. The value
in use is calculated based on the discounted forecast cash ows. The cash ow forecasts rely on the plans approved by the
management concerning protability and the growth rate of revenue. The plans cover a ve-year period taking into account
the recent development of the business.
In impairment testing the average growth is estimated to be 2.0% and EBIT 3.0%. The use of testing model requires making es-
timates and assumptions concerning market growth and general interest rate level. The used pre-tax discount rate is 9.4% (11.6%)
which equals the weighted average cost of capital.
The cash ows after the ve-year period have been forecasted by estimating the future growth rate of revenue to be 1.5%.
Based on the impairment test there is no need to recognise an impairment loss.
Sensitivity analysis of impairment testing
The carrying value of the cash generating unit is EUR 4.3 million higher than the book value according to the performed impair-
menttest. The rise in discount rate by 24 %-units or the actual operating prot (EBIT) level on the terminal year to be 3 %-units lo-
wer than estimated would cause that the recoverable amount of the cash generating units would be the same as the book value.”
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11. Tangible assets
1.1.2020–31.12.2020 (EUR 1,000) Land areas Buildings Buildings IFRS 16
Machinery and
equipment
Machinery and
equipment IFRS 16 Other tangible assets Work in progress Total
Acquisition cost 1.1. 66 24,462 7,500 33,329 5,614 34 119 71,124
Increases 50 2194 1509 1606 34 5,392
Decreases -157 -45 -4582 -4,784
Exchange rate differences -2 -2
Acquisition cost 31.12. 66 24,513 9,537 34,793 2,637 34 152 71,732
Accumulated depreciation 1.1. 4 -22,702 -3,162 -30,907 -4,776 0 0 -61,543
Accumulated depreciation, decreases 0 130 23 4383 0 0 4,536
Depreciation for the year 1.1.–31.12. 0 -487 -2,171 -1,018 -662 0 0 -4,339
Exchange rate differences 0 0 0
Accumulated depreciation 31.12. 4 -23,189 -5,203 -31,902 -1,054 0 0 -61,346
Carrying amount 1.1. 70 1,760 4,337 2,422 839 34 119 9,582
Carrying amount 31.12. 70 1,323 4,334 2,891 1,582 34 152 10,387
1.1.2019–31.12.2019 (EUR 1,000) Land areas Buildings Buildings IFRS 16
Machinery and
equipment
Machinery and
equipment IFRS 16 Other tangible assets Work in progress Total
Acquisition cost 1.1. 66 24,410 6,666 32,170 5,253 34 0 68,599
Increases 80 1462 1295 416 119 3,371
Decreases -15 -606 -136 -51 -809
Exchange rate differences -12 -22 -2 -37
Acquisition cost 31.12. 66 24,462 7,500 33,329 5,614 34 119 71,124
Accumulated depreciation 1.1. 3 -22,171 -1,059 -29,933 -4,166 0 0 -57,327
Accumulated depreciation, decreases 0 14 143 0 0 157
Depreciation for the year 1.1.–31.12. 0 -545 -2110 -1117 -609 0 0 -4,383
Exchange rate differences 1 7 0 0 8
Accumulated depreciation 31.12. 4 -22,702 -3,162 -30,907 -4,776 0 0 -61,545
Carrying amount 1.1. 69 2,239 5,329 2,237 1,070 34 0 10,981
Carrying amount 31.12. 70 1, 760 4,337 2,422 839 34 119 9,582
The implementation of IFRS 16 increased the 2019 opening balance book value by EUR 786 thousand for machinery and equipment and EUR 5 329 thousand for buildings.
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12. Book values of nancial assets and liabilities by group
(EUR 1,000)
Financial assets measured
at amortised costs
Financial liabilities
measured at amortised cost
Book values of
balance
sheet items Fair value
Hierarchy
level Note
2020 BALANCE SHEET ITEMS
Non-current nancial assets
Other nancial assets 7 7 2
Current nancial assets
Trade and other receivables 12,656 12,656 12,656 2 15
Book value by group 12,656 12,663 12,663
Non-current nancial liabilities
Interest-bearing liabilities 6,277 6,277 6,277 2 18
Current nancial liabilities
Interest-bearing liabilities 8,656 8,656 8,656 2 18
Trade payables and other liabilities 14,118 14,118 14,118 2 21
Book value by group 29,052 29,052 29,052
(EUR 1,000)
Financial assets measured
at amortised costs
Financial liabilities
measured at amortised cost
Book values of
balance
sheet items Fair value
Hierarchy
level Note
2019 BALANCE SHEET ITEMS
Non-current nancial assets 0
Other nancial assets 52 52 2
Current nancial assets
Trade and other receivables 16,847 16,847 16,847 2 15
Book value by group 16,847 16,899 16,899
Non-current nancial liabilities
Interest-bearing liabilities 5,924 5,924 5,924 2 18
Current nancial liabilities
Interest-bearing liabilities 8,188 8,188 8,188 2 18
Trade payables and other liabilities 12,789 12,789 12,789 2 21
Book value by group 26,901 26,901 26,901
Other nancial assets include investments in unlisted equities. They have been measured at ac-
quisition cost as fair value cannot be assessed reliably. The book values of trade receivables and
receivables other than those based on derivatives are estimated to essentially correspond to
their fair values due to the short maturity of the receivables. The book values of
debts are estimated to correspond to their fair values. Interest rate level has no material effect.
The book values of trade and other non-interest-bearing liabilities are also estimated to corres-
pond to their fair values. Discounting has no material effect. Fair values of each nancial asset
and liability group are presented in more detail under the note indicated in the table above.
Assets and liabilities recognised at fair value in the nancial statements are categorised into
three levels in the fair value hierarchy based on the inputs used in the valuation technique to de-
termine their fair value. The three levels are:
Level 1. Quoted prices(unadjusted) in active markets for identical assets or liabilities.
Level 2. Inputs other than quoted prices included within Level 1 that are observable for the as-
set or liability either directly or indirectly e.g. discounted cash ows or valuation models.
Level 3. Inputs for the asset or liability that are not based on observable market data and the
fair value determination is widely based on management’s judgement and the use of that in
commonly approved valuation models.
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13. Deferred tax assets and liabilities
Changes in deferred taxes during 2020 (EUR 1,000) 1.1.2020
Recognised in the
income statement
Recognised in the other
comprehensive income
Exchange rate
differences 31.12.2020
Deferred tax assets
Pension obligations 64 0 4 0 68
Other temporary differences* 153 23 0 70 245
Total 217 23 4 70 314
Deferred tax liabilities
On buildings measured at the fair value of the transition date 264 -66 0 0 198
Other temporary differences 19 -20 0 0 0
Total 283 -86 0 0 198
Deferred tax assets and liabilities, total -67 108 4 70 115
Changes in deferred taxes during 2019 (EUR 1 000) 1.1.2019
Recognised in the
income statement
Recognised in the other
comprehensive income
Exchange rate
differences 31.12.2019
Deferred tax assets
Pension obligations 58 0 6 0 64
Other temporary differences 76 77 0 0 153
Total 134 77 6 0 217
Deferred tax liabilities
On buildings measured at the fair value of the transition date 330 -66 0 0 264
Other temporary differences 53 -33 0 0 19
Total 383 -99 0 0 283
Deferred tax assets and liabilities, total -249 176 6 0 -66
*The implementation of IFRS 16 caused and increase of EUR 12 thousand in the opening balance.
Deferred tax assets have not been recognised on unused tax losses that probably cannot be utilised in the future against taxable
income. The amount of such losses is EUR 24.6 million (17.7 in 2019) including current year results.
Of these losses EUR 4.9 million expires from 2028 and the remainder, according to current knowledge, have no expiration date
The losses originate mainly from foreign subsidiaries.
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14. Inventories
15. Current trade receivables and other receivables
(EUR 1,000) 31.12.2020 31.12.2019
Raw materials and consumables 7, 75 7 6,738
Work in progress 1,063 1,081
Finished goods 654 768
Total 9,473 8,587
Age distribution of trade receivables (EUR 1,000) 2020
Incl. credit
loss provision 2019
Incl. credit
loss provision
Undue 10,318 55 14,051 59
0–6 months overdue 2,064 33 2,399 310
6–12 months overdue 144 12 211 181
12–24 months overdue 22 12 111 82
Over 24 months overdue 107 638 75 608
Total 12,656 751 16,847 1,240
(EUR 1,000) 31.12.2020 31.12.2019
Trade receivables 12,656 16,847
Accrued income and prepaid expenses of
Personnel expenses 150 151
Advances 1,755 3,182
Accrued income and prepaid expenses total 1,905 3,332
Total 14,562 20,179
Region (EUR 1,000) 2020 2019
Finland 9,883 10,890
Scandinavia 1,627 4,744
Other European countries 806 746
Other regions 340 467
Total 12,656 16,847
The value of inventories has been written down by -229 thousand (-263 thousand 2019) due to obsolescence.
In the valuation of inventories the fair value of an item as well as its usage in current product portfolio offered is monitored.
Should the current product portfolio no longer carry the product to which the item is used the item is written down. If the pro-
duct is still on sale but there has been decision to nish its selling, it will be written down to equal half of its value.
A provision is made to the trade receivables according to following, unless it is highly likely to receive payment for the receivable:
undue receivables 0.5%, 0–6 months overdue 2%, 6–12 months overdue 10%, 12-24 months overdue 50% and over 24 months over-
due 100%.
The credit loss provision includes also the total receivables of a reseller of Martela that went bankrupt.
The sales invoices are interest-fre and the most general payment term is 7 days.
The maximum trade receivable credit risk amount on the balance sheet date 31 December by country or region:
The age distribution of Group trade receivables on the balance sheet date 31 December is presented in the following table:
Credit risks from trade receivables are not concentrated.
In 2020 credit losses of EUR -79 thousand (EUR -398 thousand in 2019) has been recognised as expenses and are presented in
other operating expenses.
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16. Equity
Share capital
The paid share capital entered in the Trade register is 7,000,000 eur. According to the Articles of Association the maximum share
capital is EUR 14,000,000 and the minimum capital EUR 3,500,000. the counter value of a share is 1.68. The K-shares carry 20 vo-
tes at the annual general meeting and the A-shares 1 vote each. Both share series have the same dividend rights.
Number of shares
Changes in share capital (EUR 1,000) A- shares K-shares Share capital Share premium account Treasury shares
Treasury shares,
share-based incentive-system Total
1.1.2019 3,537,718 604,800 7,000 1,116 -128 0 7,9 8 8
Acq.of shares for share-based incentive system*
Shares given* 0
Shares returned
Share issue
31.12.2019 3,537,718 604,800 7,000 1,116 -128 0 7,9 88
Acq.of shares for share-based incentive system*
Shares given* 0 0
Shares returned
Share issue
31.12.2020 3,537,718 604,800 7,000 1,116 -128 0 7,9 8 8
Martela Oyj owns 13,082 A-shares purchased at an average price of 10.65. The number of treasury shares is equivalent to 0.31% of
all shares and 0.08% of all votes.
* Acquisition of shares for the share-based incentive scheme and the management of the scheme have been outsourced to an ex-
ternal service provider.
A retrospective adjustment of EUR 352 thousand guarantee provision plus the deferred tax effect of EUR 70 thousand have
been made to equity. More information can be found in the note 20. Moreover a retrospective correction of the inventory of EUR
621 has also been made to equity.
Translation differences in equity comprises translation differences of nancial statements of foreign subsidiaries when translat-
ed into euros and of investments in foreign units. Other reserves consists of reserve funds.
The share premium account is a fund established in accordance with the previous Finnish Companies Act. According to the
present Liability Companies Act (effective from September 1, 2006) it is included in restricted shareholders’ equity and can no
longer be accumulated. The share premium account can be reduced in accordance with the regulations on the reduction of share
capital, and it can be used as a fund increase to increase share capital. The acquisition cost of treasury shares is deducted from
shareholders’ equity (including the related transaction costs).
The parent company’s distributable equity was 18 350 thousand on December 31, 2020.
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17. Share-based payments
Share-based incentive programme 2017-2018 and 2019-2020
In the effective share-based incentive programme there are two earning periods, which are 2017–2018 and 2019–2020. The Bo-
ard of Directors will decide the earning criteria and the goals for each criterion of the programme at the beginning of each ear-
ning period. The target group for the 2017–2018 and 2019-2020 earning periods is the Group’s Management Team. The potential
reward of the programme from the earning period 2017–2018 is based on the Group´s Earnings before Interest and Taxes (EBIT)
and from the earning period 2019-2020 based on the Group’s revenue and Earnings before Interest and Taxes (EBIT). No incenti-
ves will be paid for the earning period 2017–2018.
Program Share-based incentive programme 2017-2018 and 2019-2020
Type Share
Instrument Earning period 2017-2018 Earning period 2019-2020
Issuing date 15.12.2016 13.12.2018
Maximum amount, pcs 80,000 100,000
Dividend adjustment No No
Grant date 7.4.2017 13.12.2018
Beginning of earning period 1.1.2017 1.1.2019
End of earning period 31.12.2018 31.12.2020
End of restriction period 15.4.2019 30.4.2021
Vesting conditions EBIT Revenue and EBIT
Maximum contractual life, yrs 3,3 3,3
Remaining contractual life, yrs 0,0 0,0
Number of persons at the end of reporting year 0 5
Payment method Cash & Equity Cash & Equity
Changes during the period 2020 Earning period 2017–2018 Earning period 2019–2020 Total
1.1.2020
Outstanding at the beginning of
the reporting period, pcs
0 91,000 91,000
Changes during the period
Granted 0 0
Forfeited 0 0
Shares given 0 0
Outstanding at the end of the period 0 91,000 91,000
Effects from the share based incentive programme on the nancial year 2020, (EUR 1,000)
Expenses for the nancial year, share-based payments, equity settled -72
Liabilities arising from share-based payments on 31.12.2020 0
IFRS 2 requires an entity to measure the award at its fair value and recognised over the vesting period. The award is recognised
in equity in its full extent. The fair value of the share-based scheme when granted was the value of a company’s share.
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18. Financial liabilities
(EUR 1,000) 31.12.2020 31.12.2019
Non-current
Bank loans 2,900 3,086
Lease liabilities, IFRS 16 3,377 2,838
Total 6,277 5,924
Current
Bank loans 6,000 5,748
Lease liabilities, IFRS 16 2,656 2440
Total 8,656 8,188
Lease liabilities are payable as follows:
31.12.2020
Lease liabilities, IFRS 16
31.12.2019
Finance lease liabilities, IAS 17
Lease liabilities - total amount of minimum lease payments
No later than one year 2,782 2543
Later than one year and no later than ve years 3,439 3043
Later than ve years 0
Total 6,221 5,586
Lease liabilities - present value of minimum lease payments
No later than one year 2,656 2,440
Later than one year and no later than ve years 3,339 2,838
Later than ve years 41 0
Total 6,036 5,278
Unearned nance expense 184 308
Amounts recognised in prot or loss (EUR 1 000) 31.12.2020 31.12.2019
Interest on lease liabilities -236 -156
Expenses related to short-term leases -830 -1 069
Non cash changes
Changes in net debt 2020 1.1.2020
Cash
ows
Transfer
between groups
IFRS 16
increase
IFRS 16
repayments 31.12.2020
Long-term liabilities total 5,797 4,400 -4,459 2,851 -2,311 6,277
Short-term liabilities total 8,315 -4,333 4,459 3,169 -2,953 8,656
Total liabilities from the nancing
activities 14,112 67 0 6,020 -5,265 14,933
Non cash changes
Changes in net debt 2019 1.1.2019
Cash
ows
Transfer
between groups
IFRS 16
increase
IFRS 16
repayments 31.12.2019
Long-term liabilities total 3,956 0 -870 2,711 5,797
Short-term liabilities total 6,319 -1,152 870 5,131 -2,853 8,315
Total liabilities from the nancing
activities 10,275 -1,152 0 7,8 42 14,112
The Group’s bank loans have either variable or xed interest rates. The Group’s average interest rate is 4.2% (3.9% 2019). The cur-
rent portions of debt are presented more in detail under Note 22 Management of nancial risks.
A covenant linked to net debt to EBITDA-ratio and the Group’s equity ratio was attached to the Group’s bank loans. The net debt
to EBITDA-ratio can be at maximum 3.7 according to one of the contracts and according to the other contract the net debt to
EBITDA without the effect of IFRS 16 can be a maximum of 4.0 and the equity ratio can be 25% at minimum. When calculating
these gures, the net debt is the net debt of the review date and the EBITDA is the sum of the four preceding quarter EBITDA.
The effect of IFRS 16 implementation has been reduced in the calculations. If Martela breaches this covenant, the loans will fall
due immediately unless Martela manages to recover the ratio during the following quarter or the lender gives a waiver. The to-
tal value of loans submitted to these covenants were EUR 8.9 million on 31.12.2020 and Martela didn’t meet one of the contracts
(Calculated gures: net debt/EBITDA without the effect of IFRS 16 5.8 and equity ratio 25.8) The amount of the broken covenant
loan is EUR 1 million and will be repaid in accordance with the original payment schedule in April 2021.
Mortgages and guarantees given by credit institutions and, to a minor degree, pledged shares in housing corporations owned by
the company are used as collateral for bank and pension loans.
More information in Note 23 Pledges granted and contingent liabilities.
The average interest of nancial leases was 3.7% in 2020 and 3.1% in 2019.
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19. Pension obligations
Martela’s dened benet plans concern its operations in Finland. The arrangements are made through insurance companies. The
plans are partly funded.
On the balance sheet, the commitment to those insured is presented as a pension liability, and the part of this liability that falls
under the responsibility of insurance company is presented as an asset. As the funds belong to the insurance companies, they
cannot be itemised in Martela’s consolidated nancial statements.
Changes in dened benet liability Present value of the dened benet liability Fair value of the funds included in the plan Net debt of the dened benet liability
(EUR 1,000) 2020 2019 2020 2019 2020 2019
1.1. 3,059 2,961 -2,737 -2,669 322 292
Recognised in prot or loss
Service cost in the period 148 141 148 141
Past service cost 0 0 0 0 , ,
Interest expense or income 34 53 -31 -49 3 4
Settlements 0 -400 0 400
181 -206 -31 351 150 145
Recognised in other comprehensive income
Items resulting from remeasurement:
Gains (-) or losses (+) resulting from changes in demographical assumptions 0 0 0 0
Actuarial gain (-) and losses (+) resulting from changes in nancial assumptions 279 373 279 373
Experience based prots (-) or losses (+) -6 -55 -6 -55
Return on the funds included in the plan, excluding items in interest expenses or income (+/-) -301 -281 -301 -281
273 318 -301 -281 -27 38
Other items
Employer's payments (+) 0 -14 -102 -138 -102 -152
0 -14 -102 -138 -102 -152
31.12. 3,513 3,059 -3,172 -2,737 342 322
Dened benet liability Fair value of the funds included in the plan
Effect of a change in the assumption employed The assumption is growing The assumption is growing
Discount rate (0.5% change) -8.8% -8.3%
Increase in salaries (0.5% change) N/A N/A
Morality rate (a change of 5% points) -1.3% -1.2%
In insurance arrangements, the amount of funds is calculated using the same discount rate used for the determination of pensi-
on liabilities. This means that a change in discount rate does not pose a signicant risk. In addition, an increase in life expectancy
does not pose a signicant risk for Martela, as insurance companies will bear most of the impact of this.
The pensions are xed to 2017 salary levels and accounted for accordingly.
The Group anticipates that it will pay a total of EUR 158 thousand to dened benet pension plans in the nancial period of 2021.
Sensitivity analysis
The following table illustrates the effects of changes in the most signicant actuarial assumptions on the funds related to the dened benet pension liability and plans.
The weighted average of the duration of the plans is 18,4 years.
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20. Provisions 22. Management of nancial risks
21. Current liabilities
(EUR 1,000) 31.12.2020 31.12.2019
Long-term provisions 282 282
Short-term provisions 70 70
Total 352 352
(EUR 1,000) 31.12.2020 31.12.2019
8,656 8,188
Advances received 2,281 3,728
Trade payables 8,885 9,839
Total 19,822 21,755
Accrued liabilities and prepaid income of
Personnel expenses 5,432 4,874
Interests 170 124
Royalties 155 183
Residual expenses 2,530 2,984
Other 2 10
Total 8,289 8,176
Other current liabilities 5,063 2,826
Other 5,063 2,826
Provisions* 70 70
Current liabilities 33,245 32,827
The normal warranty for standard Martela produced products is ve years. The warranty provision has been calculated as an
estimate of the 5-year warranties for Martela products and the sale of Martela products.
*For more information see note 20.
Financial risks are unexpected exceptions relating to exchange rates, liquidity, customer liquidity, investments and interest rates.
The objective of nancial risk management is to ensure that the company has sufcient nancing on a cost-efcient basis and to
reduce the adverse effects of nancial market uctuations on the Group’s result and net assets. The general principles of risk ma-
nagement are approved by Board of Directors and the practical implementation of nancial risk management is on the responsibi-
lity of the parent company’s nancial administration.
Market risks
Market risks comprise the following three risks: Currency risk, interest rate risk and price risk. The associated uctuations in
exchange rates, market interest rates and market prices may lead to changes in the fair value of nancial instruments and in the
future cash ows and hence they impact the result and balance sheet of the Gruop.
Currency risks
The Group has operations in Finland, Sweden, Norway and Poland and it is therefore exposed to currency that arise in intra-group
transactions, exports and imports, the nancing of foreign subsidiaries and equity that is denominated in foreign currencies.
Translation risks result from incoming cash ows denominated in foreign currencies. Translation risk arise when the value of the
capital invested in the parent company’s foreign subsidiaries, annual prots and loans change as a result of exchange rate uc-
tuations.
Transaction risks
Martela’s major trading currencies are EUR, SEK, NOK and PLN. The SEK, NOK and PLN currency positions are reviewed mainly
on a half-yearly basis. The Group’s policy is to hedge the net positions remaining after reconciliation if seen necessary.
The Group has not hedged against transaction risks during the nancial periods of 2019 and 2020.
The following table presents currency risks per instrument and currency.
Transaction risks per instrument and currency 31.12.2020
(EUR 1,000) EUR SEK NOK
Trade receivables 0 1,144 1333
Trade payables 3 0 69
Total 3 1,144 1,402
(EUR 1,000) EUR SEK NOK
Trade receivables 0 1,918 2002
Trade payables 44 390 38
Total 44 2,308 2,040
Transaction risks per instrument and currency 31.12.2019
The impact of other currencies is minor.
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Analysis of sensitivity to transaction risk
The following table presents the average impact of 10 per cent change in exchange rates on 31 December on the company’s nan-
cial result before taxes and capital for 2020 (2019). The estimates are based on the assumption that no other variables change.
Price risk
Available-for-sale shares included in nancial assets are not deemed subject to resale price risk.
Credit risk
Credit risk arises from the possibility that a counterparty will not meet its contractual payment obligations. Hence the serious-
ness of the risk is determined on the basis of the counterparty’s creditworthiness. The objective of credit risk management is to
minimise the losses that would arise should the counterparty not meet its obligations.
The turnover and maturity structure of Group’s companies trade receivables are reported monthly and are monitored by the pa-
rent company’s nancial management.
The principles of credit risk management are conrmed by Martela’s Board of Directors. Risk management is based on the aut-
horisations given to the organisation.
Credit risks related to the company’s trade and other receivables are minimised by using short terms of payment, effective col-
lection measures and accounting for the counterparty’s creditworthiness. Supply agreements are used when the customer com-
pany is unknown and the available credit information is insufcient. In this context a supply agreement is an agreement which se-
cures andy receivables arising from an order by withholding the right of ownership with Martela Oyj until the customer has paid
the sale price in full.
Supply agreements are only used in sales in Finland. A customer may also be required to make prepayment before sold products
are delivered if it is considered necessary in light of the potential credit risk associated with the customer. Counterparties may
also be granted to credit limits. The creditworthiness of customers is monitored regularly on the basis of payment history and
credit rating.
Collateral may be required from certain customers based on their creditworthiness and in the case of exports, for example, Mar-
tela may use conrmed irrevocable Letters of Credit.
The book value of nancial assets corresponds to the maximum amount of the credit risk.
The maximum nancial asset credit risk amount on the balance sheet date 31 December is presented in the following table:
Analysis of sensitivity to interest rate risks
Impact of 1 per cent increase in interest rate on nancial result before taxes and capital on the balance sheet date 31 December.
Decrease in interest rate would have an opposite impact of equal size.
Interest rate risks
The Group’s interest rate risks relate mainly to the Group’s loan portfolio. The duration of loans varies between 1–5 years. The Group can
raise either xed-interest or variable-interest loans and can use interest rate swaps.
The following table presents the distribution of the Group’s nancial instruments into xed interest rate and variable interest
rate on the balance sheet date.
Analysis of sensitivity to transaction risk (EUR 1,000) Impact on result
31.12.2020
EUR +/- 0
SEK +/- 144
NOK +/- 140
31.12.2019
EUR +/- 4
SEK +/- 231
NOK +/- 204
Analysis of sensitivity to interest rate risks (EUR 1,000) Impact on result
31.12.2020
Financial liabilities
Variable rate nancial instruments -89
31.12.2019
Financial liabilities
Variable rate nancial instruments -88
Financial instruments (EUR 1,000) 31.12.2020 31.12.2019
Fixed rate
Financial liabilities 6,033 5,278
Variable rate
Financial liabilities 8,900 8,833
Total 14,933 14,111
Maximum nancial asset credit risk (EUR 1,000) 31.12.2020 31.12.2019
Financial assets measured at fair value through prot or loss 7 52
Trade receivables and other receivables 14,562 16,847
Cash and cash equivalents 11,172 9,621
Total 25,741 26,520
See note 15 for additional information on trade receivables and the related credit loss provisions.
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Operational environment Financial Statements Governance
Liquidity risks
The Group strives to assess and monitor the amount of funding required by business operations so that there are sufcient liquid
assets for operating expenses and repayment of maturing loans. In addition, the Group continually maintains sufcient liquidi-
ty by means of effective cash management solutions such as cash reserves and overdrafts. The renancing risk is managed by
Management of capital structure
It is the Group’s objective to ensure an effective capital structure that will secure its operating capacity in the capital markets
in all circumstances irrespective of volatility. The Group’s Board of Directors assess the capital structure on a regular basis, The
Group uses the equity ratio to monitor its capital structure.
The equity ratio formula is presented in the following table:
balancing the maturity schedules of loans and bank overdrafts according to forecast cash ows and by using several banks in -
nancial operations. A covenant is linked to the bank’s loans in by the group. For more information on the bank loans and the cove-
nants see note 18.
Cash and cash equivalent at the year end 2020 were EUR 11 172 thousand and unused credit limits EUR 883 thousand.
Cash and cash equivalent at the year end 2019 were EUR 9,621 thousand and unused credit limits EUR 1,950 thousand.
Contractual cash ows mature as follows (EUR 1,000) 2021 2022 2023 2024 2025 Later Total Balance sheet value
Bank loans 6,000 1,000 1,900 8,900 8,900
Finance leases 2,449 2,346 739 333 150 41 6,059 6,059
Trade payables 8,885 0 0 0 0 0 8,885 8,885
Loan interest and guarantee fees 324 106 38 0 0 468
Total 17,334 3,452 2,677 333 150 41 24,312
Contractual cash ows mature as follows (EUR 1,000) 2020 2021 2022 2023 2024 Later Total Balance sheet value
Bank loans 5,748 3,086 8,833 8,833
Pension loans 0 0 0 0 0 0 0 0
Financial leases 2,440 1,659 1,080 99 0 0 5,278 5,278
Trade payables 9,839 0 0 0 0 0 9,839 9,839
Bank overdrafts, used 0 0 0 0 0 0 0 0
Loan interest and guarantee fees 135 31 0 0 0 166
Total 18,162 4,776 1,080 99 0 0 24,117
Equity ratio 31.12.2020 31.12.2019
Shareholders' equity 11,212 16,080
Balance sheet total - advance payments 49,425 55,868
Equity to assets ratio % 22,7 28,8
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23. Pledges granted and contingent liabilities
24. Related party transactions
(EUR 1,000) 31.12.2020 31.12.2019
Debts secured by mortgages
Bank and pension loans 8,900 8,833
Property mortgages 7,565 7,565
Corporate mortgages 14,358 14,240
Total mortgages 21,923 21,805
Other pledges
Guarantees as security for rents 379 321
(EUR 1,000) 2020 2019
Management employee benets
Salaries and other short-term employee benets -1,211 -1,038
Total -1,211 -1,038
Salaries and fees
Board members -173 -173
CEO* -392 -261
Management team members (excl. CEO) -646 -604
-1,211 -1,038
Fees paid to Board members: 2020 2019
Andersson Minna -20.4 -20.4
Komi Kirsi* -5.5
Leskinen Eero -5.5 -22
Martela Eero -22 -22
Martela Heikki -42.4 -42.4
Mattson Jan** -22 -16.5
Mellström Katarina *** -22 -22
Mild Johan*** -16.5
Vepsäläinen Anni -22 -22
Total -172.8 -172.8
Group structure Domicile
Holding (%)
31.12.2020
Of votes (%)
31.12.2020
Sales
company
Production
company
Parent company
Martela Oyj Finland x x
Subsidiaries
Kidex Oy Finland 100 100 x x
Grundell Muuttopalvelut Finland 100 100 x
Martela AB, Nässjö Sweden 100 100 x
Aski Avvecklingsbolag AB, Malmö Sweden 100 100
Martela AS, Oslo Norway 100 100 x
Martela Sp.z o.o., Varsova Poland 100 100 x x
Tehokaluste Oy Finland 100 100 x
Martela Group’s related party transactions comprise the CEO, members of the Board and the Group’s management team, as well
as their family members. Martela Group’s related parties also include a shareholder who holds at least 20% of the company’s total
number of votes.
Members of the Board hold a total of 6.6% of the share capital and 14.0% of the votes.
Persons in the management own a total of 5,000 Martela Corporation shares as at 31st December, 2020.
*In connection with the dismissal of Martela’s President and CEO, a total of EUR 66 thousand was paid in 2020, including social
security costs.
* in Board until Q1 2019 ** new member, in Board from Q2 2019
*** new member, in Board from Q2 2020
Fees based on board membership are not paid to members employed by the company.
Management employee benets
The Group has determined key persons in management to be:
Members of the Board of Directors
CEO
Group’s Management Team
The table below presents the employee benets received by key persons in management. Voluntary pension plans, which include
both dened contribution plans and dened benet plans, are recognised as post-employment benets.
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Salaries, fees and pension commitment to CEO 2020 2019
Salaries and fees -320 -261
Statutory earnings-related pension payment (TyEL) on salaries -71 -66
Salaries include also share-based incentives.
The period of notice is 6 months with respect to both the present CEO and the company, and in the event of dismissal by the
company, the CEO is entitled, besides of the notice period, to a lump-sum compensation equalling hies salary for 6 months.
CEO and the Group management team has long term share-based incentive programme, in which is possible to receive Martela
A-shares when the set targets are met. The earning periods are 2017–2018 individually and cumulative and 2019–2020. Fees ba-
sed on the programme are paid as a combination of cash and shares.
No share-based incentives are paid based on any of the earning periods.
More information in Note 17 Share-based payments.
25. Key nancial indicators for the Group
Martela Group 2016–2020 2020 2019 2018 2017 2016
Revenue MEUR 88.4 106.2 103.1 109.5 129.1
Change in revenue % -16.8 3.0 -5.9 -15.2 -2.8
Export and operations outside Finland MEUR 16.3 23.1 17.0 22.3 33.1
In relation to revenue % 18.5 21.7 16.5 20.4 25.6
Exports from Finland MEUR 16.1 22.7 16.3 18.4 16.5
Gross capital expenditure MEUR 1.2 2.3 1.7 2.2 2.9
In relation to revenue % 1.4 2.1 1.6 2.1 2.2
Depreciation MEUR 6.5 4.9 2.6 2.6 2.9
Research and development MEUR 2.0 2.2 1.9 2.0 1.9
In relation to revenue % 2.2 2.1 1.8 1.8 1.5
Personnel on average 451 494 510 508 550
Change in personnel % -8.7 -3.1 0.4 -7.3 -11.6
Personnel at the end of year 435 464 501 507 506
of which in Finland 362 385 425 435 435
Protability
Operating prot MEUR -4.0 -2.0 -2.1 0.3 6.2
In relation to revenue % -4.5 -1.9 -2.0 0.2 4.8
Prot before taxes MEUR -4.8 -2.7 -2.5 0.0 5.6
In relation to revenue % -5.4 -2.5 -2.4 0.0 4.4
Prot for the year * MEUR -4.8 -2.5 -2.4 -0.6 3.3
In relation to revenue % -5.4 -2.4 -2.3 -0.6 2.6
Revenue / employee teur 196 215 202 216 235
Return on equity % -35.7 -14.7 -11.4 -2.7 13.9
Return on investment % -13.4 -6.4 -4.9 1.6 18.2
Finance and nancial position
Balance sheet total MEUR 51.7 55.9 50.0 56.4 56.2
Equity MEUR 11.2 16.1 18.8 22.6 25.2
Interest-bearing net liabilities MEUR 4.3 5.0 0.1 6.6 -4.8
In relation to revenue % 4.9 4.7 0.1 6.0 -3.7
Equity ratio % 22.7 28.8 39.2 40.8 45.3
Gearing % 3 7.9 31.5 0.7 28.9 -18.9
Net cash ow from operations MEUR 5.7 6.3 7. 4 -7.6 11.7
Dividends paid MEUR 0.0 0.4 1.3 1.5 1.0
*) Change in deferred tax liability included in prot for the year
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26. Key share-related gures
Martela Group 2016-2020 2020 2019 2018 2017 2016
Earnings per share EUR -1.16 -0.61 -0.57 -0.15 0.81
Earnings per share (diluted) EUR -1.16 -0.61 -0.57 -0.15 0.81
Share par value EUR 1.68 1.68 1.68 1.68 1.68
Dividend *) EUR 0.0* 0 0.10 0.32 0.37
Dividend/earnings per share % 0.0 0.0 -17.5 -208.4 45.8
Effective dividend yield % 0.00 0.00 3.38 4.30 2.90
Equity per share EUR 2.71 3.80 4.54 5.47 6.13
Price of A-share 31.12. EUR 3.09 3.36 2.96 7.47 12.84
Share issue-adjusted number of shares tpcs 4,155.60 4,155.60 4,155.60 4,155.60 4,155.60
Average share-issue adjusted number of shares tpcs 4,155.60 4,155.60 4,155.60 4,155.60 4,155.60
Price/earnings ratio -2.66 -5.48 -5.18 -48.64 15.90
Market value of shares ** MEUR 12.80 13.92 12.26 30.95 52.75
* Proposal by the Board of Directors
** Price of A-shares used as value of K shares
Formulas to key gures
Earnings / share =
Prot attributable to equity holders of the parent
Average share issue-adjusted number of shares
Price /earnings multiple (P/E) =
Share issue-adjusted share price at year end
Earnings / share
Equity / share, EUR =
Equity attributable to the equity holders of the parent
Share issue-adjusted number of share at year end
Dividend / share, EUR =
Dividend for the nancial year
Share issue-adjusted number of share at year end
Dividend / earnings, % =
Dividend / share x 100
Earnings / share
Market value of shares, EUR = Total number of shares at year end x share price on the balance sheet date
Return on equity, % =
Prot/loss for the nancial year x 100
Equity (average during the year)
Return on investment, % =
(Pre-tax prot/loss + interest expenses + other nancial items) x 100
Balance sheet total – Non-interest-bearing liabilities (average during the year)
Equity ratio, % =
Equity x 100
Balance sheet total – advances received
Gearing, % =
Interest-bearing-liab. – cash, cash equiv.and liq. asset securities x 100
Equity
Personnel on average = Month-end average number of personnel in active employment
Interest-bearing net debt = Interest-bearing debt – cash and other liquid nancial assets
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27. Shares and shareholders
Distribution of shares 31.12.2020 Number, pcs 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
Breakdown of share ownership by
number of shares held 31.12.2020.
Shares, pcs
Number of
sharehol-
ders
% of total
sharehol-
ders Number of shares %
Number of
votes % of Votes
1 - 500 2,460 78.7 343,558 8.3 351,158 2.2
501 - 1,000 313 10.0 242,669 5.8 246,469 1.6
1,001 - 5,000 262 8.4 601,710 14.5 841,870 5.4
Over 5,000 91 2.9 2,950,744 71.0 13,868,923 88.6
Total 3,126 100.0 4,138,681 99.6 15,308,420 97.8
of which nominee-registered 8 72,112 1.7 72,112 0.5
In the waiting list and
collective account
4 16,919 0.4 338,380 2.2
Total 4,155,600 100.0 15,646,800 100.0
Breakdown of shareholding by
sector 31.12.2020
Number of
share-
holders
% of total
share-
holders Number of shares %
Number of
votes % of Votes
Private companies 119 3.8 1,167,376 28.1 6,715,376 42.9
Financial and insurance institutions 10 0.3 108,948 2.6 163,902 1.0
Public corporations 1 0.0 335,400 8.1 335,400 2.1
Non-prot entities 5 0.2 3,161 0.1 3,161 0.0
Households 2,981 95.4 2,441,310 58.7 8,063,049 51.5
Foreign investors 10 0.3 10,374 0.2 27,532 0.2
Total 3,126 100.0 4,066,569 9 7. 9 15,308,420 97.8
of which nominee-registered 6 72,112 1.7 73,821
In the waiting list and
collective account
4 16,919 0.4 338,380 2.2
Total 4,155,600 100.0 15,646,800 100.0
The largest shareholders by number of
shares 31.12.2020
K series
shares
A series sha-
res
Total number
of shares %
Number of
votes % of total votes
Marfort Oy 292,000 232,574 524,574 12.6 6,072,574 38.8
Keskinäinen Eläkevakuutusyhtiö Ilmarinen 0 335,400 335,400 8.1 335,400 2.1
Martela Heikki Juhani 52,122 130,942 183,064 4.4 1,173,382 7. 5
Palsanen Leena Maire Sinikka 4,486 131,148 135,634 3.3 220,868 1.4
Palsanen Jaakko Antero 1,600 132,140 133,740 3.2 164,140 1.0
Etelä-Pohjanmaan Turve Oy 0 133,000 133,000 3.2 133,000 0.9
Kelhu Markku Juhani 0 110,000 110,000 2.6 110,000 0.7
Ac Invest Oy 0 103,777 103,777 2.5 103,777 0.7
Meissa-Capital Oy 0 86,487 86,487 2.1 86,487 0.6
Sijoitusrahasto Nordea Nordic Small Cap 0 76,286 76,286 1.8 76,286 0.5
Lindholm Tuija Elli Annikki 43,122 28,221 71,343 1.7 890,661 5.7
Martela Pekka Kalevi 69,274 8 69,282 1.7 1,385,488 8.9
Andersson Minna Sinikka 49,200 0 49,200 1.2 984,000 6.3
Martela Mari Kaarina 20,219 9,596 29,815 0.7 413,976 2.6
Martela Ille Ilari 13,218 8,368 21,586 0.5 272,728 1.7
Martela Jarmo Matti Tapani 8,919 0 8,919 0.2 178,380 1.1
Other shareholders 50,640 2,032,853 2,083,493 50.1 3,045,653 19.5
Total 604,800 3,550,800 4,155,600 100 15,646,800 100
Share capital
The number of registered Martela Oyj shares on 31.12.2020 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 annual 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 Nasdaq Helsinki.
The list includes all shareholders holding over 1% of the shares or votes.
The Board of Directors hold 6.6% of shares and 14.0% of votes.
Martela Oyj owns 13,082 pcs A shares. Out of the shares 12,036 were purchased at an average price of EUR 10.65 and 1,046
were transferred from Martela Corporation’s joint account to the treasury shares reserve based on the decision by AGM on March
13, 2018. The number of treasury shares is equivalent to 0.31% of all shares and 0.08% of all votes.
The Annual General Meeting has in 2020 re-authorised the Board of Directors to decide, for the following year, on share issue,
on acquiring and/or disposing of the company’s shares in deviation from the pre-emptive rights of shareholders.
The AGM approved the Board of Directors’ proposals, detailed in the meeting notice, to authorise the Board to acquire and/or
dispose of Martela shares. The authorisation is for a maximum 415,560 of the company’s A series shares.
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Parent Company Income Statement
(EUR 1,000) Note 1.1-31.12.2020 1.1-31.12.2019
Revenue 1 85,342 102,234
Change in inventories of nished goods and work in progress 521 -195
Production for own use 90 172
Other operating income 2 1,203 1,237
Materials and services 3 -64,006 -76,371
Personnel expenses 4 -13,329 -16,073
Other operating expenses 5 -9,376 -11,281
Depreciation and impairment 6 -3,520 -2,216
Operating prot (-loss) -3,076 -2,493
Financial income and expenses 7 -3,483 -1,953
Prot (-loss) before appropriations and taxes -6,559 -4,446
Group contributions 8 500 1,300
Depreciation difference and Group contributions 500 1,300
Income taxes 9 0 2
Prot (-loss) for the nancial year -6,059 -3,144
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Assets (EUR 1,000) Note 31.12.2020 31.12.2019
NON-CURRENT ASSETS
Intangible assets 10
Intangible rights 1,781 185
Goodwill 6,440 7,360
Other long-term expenditure 2,847 4,547
Advance payments 317 2,038
11,386 14,131
Tangible assets 11
Land and water areas 80 80
Buildings and structures 1,866 1,895
Machinery and equipment 920 878
Other tangible assets 23 23
2,889 2,876
Investments 12
Share is subsidiaries 7,489 7,498
Receivables from subsidiaries 4,973 5,425
Other shares and participations 7 7
12,469 12,930
CURRENT ASSETS
Inventories
Materials and supplies 6,484 5,441
Work in progress 988 1,019
Finished goods 1,040 1,109
Advances paid to suppliers 10 429
8,522 7,9 98
Non-current receivables 13
Trade receivables 13,567 17,515
Loan receivables 3,220 5,059
Accrued income and prepaid expenses 1,636 2,759
18,424 25,333
Cash and cash equivalents 10,393 8,918
64,083 72,185
Equity and liabilities (EUR 1,000) Note 31.12.2020 31.12.2019
SHAREHOLDERS' EQUITY
Shareholders' equity 14
Share capital 7,000 7,000
Share premium account 1,116 1,116
Reserve fund 11 11
Retained earnings 24,409 27,552
Prot for the year -6,059 -3,144
Total 26,477 32,535
Compulsory reservations
Other compulsory reservations 352 352
LIABILITIES
Non-current 15
Loans from nancial institutions 2,900 3,086
Accrued liabilities and prepaid income 150 150
3,050 3,236
Current 16
Loans from nancial institutions 6,000 5,743
6,000 5,743
Advances received 461 2,533
Trade payables 13,908 13,581
Accrued liabilities and prepaid income 9,037 12,025
Other current liabilities 4,798 2,180
28,203 30,318
Liabilities, total 37, 254 39,297
64,083 72,185
Parent Company Balance Sheet
Other compulsory reservations are corrected in the comparison year 2019.
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(EUR 1,000) 1.1.-31.12.2020 1.1.-31.12.2019
CASH FLOWS FROM OPERATING ACTIVITIES
Cash ows from sales 85,287 106,331
Cash ow from other operating income 1,210 1,237
Payments on operating costs -83,558 -102,847
Net cash from operating activities before nancial items and taxes 2,939 4,721
Interests paid and other nancial payments -402 -346
Dividends received 0 0
Taxes paid 0 184
Net cash from operating activities (A) 2,537 4,558
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditure on tangible and intangible assets -1,011 -1,949
Proceeds from sale of tangible and intangible assets 0 0
Loans granted -123 -1,319
Net Cash used in investing activities (B) -1,134 -3,267
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from current loans 5,000
Repayments of current loans -9,329 -1,143
Proceeds from non-current loans 4,400 0
Dividends and other prot distribution -414
Net cash used in nancing activities (C) 71 -1,557
CHANGE IN CASH AND CASH EQUIVALENTS (A+B+C) (+ increase, - decrease) 1,474 -266
Cash and cash equivalent at the beginning of nancial year
*
8,918 9,185
Cash and cash equivalent at the end of nancial year
*
10,393 8,918
Parent Company’s Cash Flow Statement
* Includes cash and bank receivables
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Accounting Policies for the
Parent Company Financial Statements
Martela Oyj’s Financial Statements have been prepared in accordance with Finnish Accounting Standards
(FAS). Items in the nancial statements have been recognised at cost. No assets have been recorded to
appreciated values, unless separately mentioned.
Items denominated in foreign currency:
Transactions denominated in foreign currencies are recognised at the rate of exchange on the date of their
occurrence. Receivables and liabilities in the balance sheet are translated at the average rate on the bal
-
ance 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 bal
-
ance sheet nancial items, such as loans, are recognised in exchange rate differences of nance.
Shareholders loans denominated in foreign currency to subsidiaries are considered as investments. Cur
-
rency exchange rate differences are hence not recognised in parent company nancial statements. Exchange
rate differences related to shareholder loans are recognised in the Consolidated nancial statements.
Intangible assets:
Intangible assets are reported in the balance sheet at cost and depreciated according to the plan (by
straight line method). Intangible assets are depreciated according to their estimated useful life in 3–10
years. Goodwill is depreciated by straight-line method in 10 years.
Tangible assets:
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 cal
-
culated on a straight line basis according to the estimated useful life. The change in accumulated depre-
ciation difference is presented as a separate item in the parent company’s prot and loss statement and
the accumulated depreciation difference as a separate item in the balance sheet.
Depreciation periods for tangible assets:
Buildings and structures 20–30 years
Machinery and equipment 4–8 years
Other tangible assets 3–5 years
Impairment testing of long-term assets
Goodwill and investments in subsidiaries are tested for impairment annually regardless if there are any
indications that the amount might be impaired. The recoverable cash amount from the subsidiaries is
based on value in use calculations in the testing. The forecasted cash ows are based on 5-year nancial
plans approved by management. The central assumptions of the plans comprise of subsidiary growth-
and protability assumptions. The cash ows beyond the ve-year period are estimated based on 1,5%
growth.
Inventories:
Inventories are recognised at weighted average purchase prices. The value of inventories is reduced with
respect to nonmarketable items. The cost of goods includes also a share of the overhead costs of pro
-
duction.
Income tax:
The company income taxes are recognised on accrual basis and are calculated according to local tax
legislation with adjustments from previous nancial years. In the nancial statements the company does
not recognise deferred tax receivables or deferred tax liabilities.
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Revenue and recognition policies:
Revenue is recognised on accrual basis. Direct taxes, discounts and exchange rate differences are de-
ducted from sales income in calculating revenue.
Research and development:
Research and development expenses are recognised normally in prot or loss in the year they arise. Re-
search and development-related equipment is capitalised in machinery and equipment.
Other operating income and expenses:
Proceeds from sale of assets, public subsidies and other income (e.g. rent income) are recognised in
”Other operating income”. Losses from disposal of assets and other costs are recognised in ”Other op
-
erating expenses”.
Operating leases:
All leasing payments are reported as rent expenses.
Share-based payments:
In the effective share-based incentive programme there are two earning periods, which are 2017–2018 and
2019–2020, and payment are made as a combination of shares and cash. No incentives will be paid for
the earning periods.
Treasury shares:
The treasury shares held by the parent company are reported as a deduction from equity.
Other compulsory reservations
The normal warranty for standard Martela produced products is ve years. The warranty provision (EUR
352 thousand) has been calculated as an estimate of the ve-year warranties for Martela products and
the sale of Martela products.
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% of revenue 2020 2019
Finland 81 76
Scandinavia 16 19
Other 3 5
Total 100 100
(EUR 1,000) 2020 2019
Salaries, CEO -320 -262
Pension expenses -71 0
Salaries of Board and directors -173 -173
Salaries of Board and directors and managing director, total -564 -435
Other salaries -10,565 -12,776
Pension expenses -1,921 -2,443
Other salary-related expenses -279 -418
Personnel expenses in the income statement -13,329 -16,073
Fringe benets -211 -232
Total -13,540 -16,305
Personnel
Personnel on average, workers 58 82
Personnel on average, ofcials 170 186
Personnel on average, total 227 268
Personnel at the year end 227 238
(EUR 1,000) 2020 2019
Rental income 251 245
Government grants 70 0
Other operating income 40 22
Other operating income, Group 842 970
Total 1,203 1,237
(EUR 1,000) 2020 2019
Purchasing during the nancial year -49,153 -57,570
Change in inventories of materials and suppliers 1,043 -341
External services -15,375 -18,655
Materials and supplies, total -63,486 -76,566
(EUR 1,000) 2020 2019
Auditor's fees
Auditing -73 -58
Other services -2 -79
Auditor's fees, total -75 -137
1. Breakdown of revenue by market area 4. Personnel expenses and number of personnel
2. Other operating income
3. Materials and services
5. Other operating expenses
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(EUR 1,000) 2020 2019
Financial income and expenses
Interest income from short-term investments 26 3
Interest income from short-term investments from Group companies 52 55
Foreign exchange gains 0 5
Interest expenses -478 -293
Losses on foreign exchange -19 -105
Other nancial expenses -60 -83
Impairment -3,005 -1,535
Total -3,483 -1,953
1.1.2020 - 31.12.2020
(EUR 1,000) Intangible rights Goodwill
Other long-term
expenses
Work in
progress
Intangible
assets total
Acquisition cost 1.1. 3,312 9,200 12,416 2,038 26,966
Increases 2,092 0 50 936 3,079
Decreases 0 0 0 -2,656 -2,656
Acquisition cost 31.12. 5,404 9,200 12,466 318 27,388
Accumulated depreciation 1.1. -3,128 -1,840 -7,868 0 -12,837
Depreciation for the year 1.1.–31.12. -497 -920 -1,750 0 -3,167
Accumulated depreciation 31.12. -3,625 -2,760 -9,618 0 -16,004
Carrying amount 1.1. 185 7,360 4,547 2,038 14,130
Carrying amount 31.12. 1,781 6,440 2,847 317 11,386
1.1.2019 - 31.12.2019
(EUR 1,000) Intangible rights Goodwill
Other long-term
expenses
Work in
progress
Intangible
assets total
Acquisition cost 1.1. 3,215 9,200 12,339 478 25,232
Increases 97 0 77 2,159 2,336
Acquisition cost 31.12. 3,312 9,200 12,416 2,038 26,969
Accumulated depreciation 1.1. -3,108 -920 -6,907 0 -10,936
Depreciation for the year 1.1.–31.12. -20 -920 -962 0 -1,901
Accumulated depreciation 31.12. -3,128 -1,840 -7,868 0 -12,837
Carrying amount 1.1. 107 8,280 5,430 478 14,295
Carrying amount 31.12. 185 7,360 4,547 2,038 14,131
(EUR 1,000) 2020 2019
Appropriations
Group contributions, received 500 1,300
Group contributions, given - /received + 500 1,300
Group contributions total 500 1,300
Appropriations, total 500 1,300
(EUR 1,000) 2020 2019
Income taxes from operations 0 0
Taxes from previous years 0 2
Total 0 2
7. Financial income and expenses
10. Intangible assets
8. Depreciations and Group contributions
9. Income Taxes
Impairments include a write-down of subordinated loans to Martela AS based on impairment tests.
Deferred tax liabilities and assets have not been included into income statement nor balance sheet.
There was no deferred tax asset related to periodisation differences nor losses in 2019 and 2020.
(EUR 1,000) 2020 2019
Depreciation according to plan
Intangible assets -3,173 -1,907
Tangible assets
Buildings and structures -29 -34
Machinery and equipment -318 -275
Depreciation according to plan, total -3,520 -2,216
Impairments 0 0
Depreciations and impairments, total -3,520 -2,216
6. Depreciation and write-down
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1.1.2020 - 31.12.2020
(EUR 1,000) Land areas Buildings
Machinery and
equipment
Other tangible
assets
Work in
progress Total
Acquisition cost 1.1. 80 10,623 12,445 23 0 23,171
Increases 0 0 367 0 0 367
Acquisition cost 31.12. 80 10,623 12,812 23 0 23,538
Accumulated depreciation 1.1. 0 -8,728 -11,567 0 0 -20,295
Depreciation for the year 1.1.–31.12. 0 -29 -324 0 0 -353
Accumulated depreciation 31.12. 0 -8,757 -11,891 0 0 -20,648
Carrying amount 1.1. 80 1,895 878 23 0 2,876
Carrying amount 31.12. 80 1,866 920 23 0 2,889
1.1.2019 - 31.12.2019
(EUR 1,000) Land areas Buildings
Machinery and
equipment
Other tangible
assets
Work in
progress Total
Acquisition cost 1.1. 80 10,623 11,999 23 0 22,725
Increases 0 0 446 0 0 446
Acquisition cost 31.12. 80 10,623 12,445 23 0 23,170
Accumulated depreciation 1.1. 0 -8,694 -11,286 0 0 -19,980
Depreciation for the year 1.1.–31.12. 0 -34 -281 0 0 -315
Accumulated depreciation 31.12. 0 -8,728 -11,567 0 0 -20,295
Carrying amount 1.1. 80 1,929 713 23 0 2,745
Carrying amount 31.12. 80 1,895 878 23 0 2,876
11. Tangible assets
Revaluations included in buildings 2020 total EUR 1 850 thousand (1 850).
Carrying amount of production machinery and equipment in 2020 was EUR 55 thousand (90 in 2019).
Kiinteistö Oy Ylähanka merged with its parent company Martela Oyj on February 6, 2020.
1.1.2020 - 31.12.2020
(EUR 1,000)
Subsidiary
shares
Shares in associated
undertakings
Other shares and
participations
Shareholder
loan receivables Total
Balance sheet value at beginning of year 7,498 0 7 5,425 12,929
Increases 0 0 0 2552 2,552
Decreases / Impairment -9 0 0 -3,004 -3,013
Balance sheet value at end of year 7,489 0 7 4,973 12,470
1.1.2019 - 31.12.2019
(EUR 1,000)
Subsidiary
shares
Shares in associated
undertakings
Other shares and
participations
Shareholder
loan receivables Total
Balance sheet value at beginning of year 7,498 0 9 6,960 14,466
Increases 0 0 0 0 0
Decreases / Impairment 0 0 -1 -1,535 -1,536
Balance sheet value at end of year 7,498 0 7 5,425 12,930
Subsidiary shares:
Parent company’s
holding, %
Of total
votes, %
Number of
shares
Par value
1,000
Book value
EUR 1,000
Kidex Oy Finland 100 100 200 EUR 2,208 2,208
Muuttopalvelu Grundell Oy Finland 100 100 100 EUR 8 4,440
Kiinteistö Oy Ylähanka Finland 100 100 510 EUR 0 0
Martela AB, Bodafors Sweden 100 100 50,000 SEK 5,000 550
Aski avvecklingsbolag AB, Malmö Sweden 100 100 12,500 SEK 1,250 132
Martela AS, Oslo Norway 100 100 200 NOK 200 24
Martela Sp.z o.o., Varsova Poland 100 100 3,483 PLN 3,483 135
Tehokaluste Oy Finland 100 100 1 EUR 0 0
Total 7,490
Other shares and participations 7
12. Investments
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(EUR 1,000) 2020 2019
Current receivables
Receivables from Group companies
Trade receivables 1,875 1,502
Loan receivables 3,220 5,059
Accrued income and prepaid expenses 0 0
Receivables from others
Trade receivables 11,692 16,013
Accrued income and prepaid expenses 1,636 2,759
Current receivables, total 18,424 25,333
Accrued income and prepaid expenses, main items; 2020 2019
Related to personnel expenses 150 164
Related to payments in advance 400 463
Other accrued income or prepaid expenses 38 774
Periodization of revenue 1,047 1,358
Accrued income and prepaid expenses total 1,636 2,759
13. Receivables
Distribution of shares 31.12.2020
Number of
shares 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 13,082
Number of shares outstanding 4,142,518
Shareholders’ equity 2020 2019
Restricted equity
Share capital 1.1.and 31.12. 7,000 7,000
Share premium account 1.1. and 31.12. 1,116 1,116
Unrestricted equity
Reserve fund 1.1. and 31.12. 11 11
Retained earnings 1.1. 24,409 27,698
Entries in retained earnings 0 269
Dividends 0 -414
Prot (-loss) for the year -6,059 -3,144
Retained earnings 31.12. 18,349 24,409
Shareholders' equity total 26,477 32,535
14. Changes in shareholders’ equity
The distributable equity of the parent company is EUR 18,349 thousand in 2020.
A correction of an inventory difference of previous periods of EUR 621 thousand and a guarantee provision of
EUR 352 have been recorded in retained earnings.
Treasury shares held by Martela Oyj are reported as a deduction from retained earnings.
Martela Oyj owns 13,082 A shares (13,082 in 2019). Out of the shares 12,036 were purchased at an average price of EUR 10.65
and 1,046 were transferred from Martela Corporation’s joint account to the treasury shares reserve based on the decision by AGM
on March 13, 2018.
The acquisition cost of shares for the incentive scheme has been treated in the IFRS consolidated nancial statement as an
item comparable to treasury shares.
Market value of treasury shares on 31.12.2020 was EUR 3.09 per share (3.36), a total of EUR 40.4 thousand (43.9 thousand in
2019)
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(EUR 1,000) 2020 2019
Loans from nancial institutions 2,900 3,086
Accrued expenses 150 150
Total 3,050 3,236
(EUR 1,000) 2020 2019
Current liabilities
Liabilities to Group companies
Trade payables to Group companies 6,812 5,480
Accrued liabilities to Group companies 5,106 7, 72 7
Total 11,918 13,208
Other current liabilities
Loans from nancial institutions 6,000 5,743
Advances received 461 2,533
Trade payables 7,096 8,101
Other current liabilities 4,798 2,180
Accrued liabilities 3,931 4,297
Total 22,285 22,854
Current liabilities, total 34,203 36,061
Essential items of accrued liabilities 2020 2019
Personnel expenses 2,303 2,261
Interest and nancing accruals 170 124
Royalties 127 159
Residual expenses 1,331 1,753
Accrued liabilities, total 3,931 4,297
Repayments 2021 2022 2023 2024
Loans from nancial institutions 1,000 1,000 900 0
Total 1,000 1,000 900 0
Changes and repayments of non-current liabilities 2020 2019
Loans from nancial institutions
Loans 1.1. 3,086 3,429
Additions 1,400 0
Repayments -1,586 -343
Loans 31.12. 2,900 3,086
Accrued liabilities
Related to the personnel expenses 150 150
15. Non-current liabilities 16. Current liabilities
Current liabilities are specied in Notes because items are combined in Balance sheet.
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(EUR 1,000) 2020 2019
Debts secured by mortgages
Bank loans 8,900 8,829
Property mortgages 7,565 7,565
Corporate mortgages 11,368 11,368
Shares pledged 18,933 18,933
Other pledges
Guarantees as security for rents 395 321
Guarantees given on behalf of Group companies 1,598 1,834
Total 1,992 2,155
Other liabilities
Residual value liabilities related to the service business 813 301
Total 813 301
Leasing commitments
Falling due within 12 months 796 365
Falling due after 12 months 1,098 214
Total 1,894 579
Rent commitments 3,013 3,447
17. Pledges granted and contingent liabilities
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Auditor’s report
(TRANSLATION OF THE FINNISH ORIGINAL)
To the Annual General Meeting of Martela Oyj
Report on the Audit of the Financial Statements
Opinion
We have audited the nancial statements of Martela Oyj (business identity code 0114891-2) for the year
ended 31 December, 2020. The nancial statements comprise the consolidated balance sheet, statement
of comprehensive income, statement of changes in equity, statement of cash ows and notes, including
a summary of signicant accounting policies, as well as the parent company’s balance sheet, income
statement, statement of cash ows and notes.
In our opinion
• the consolidated nancial statements give a true and fair view of the group’s nancial position as
well as its nancial performance and its cash ows in accordance with International Financial Re
-
porting Standards (IFRS) as adopted by the EU.
• the nancial statements give a true and fair view of the parent company’s nancial performance
and nancial position in accordance with the laws and regulations governing the preparation of
-
nancial statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under
good auditing practice are further described in the Auditor’s Responsibilities for the Audit of Financial
Statements section of our report.
We are independent of the parent company and of the group companies in accordance with the eth
-
ical requirements that are applicable in Finland and are relevant to our audit, and we have fullled our
other ethical responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent
company and group companies are in compliance with laws and regulations applicable in Finland regard
-
ing these services, and we have not provided any prohibited non-audit services referred to in Article 5(1)
of regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in note
4. to the consolidated nancial statements.
We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most signicance in our
audit of the nancial statements of the current period. These matters were addressed in the context of
our audit of the nancial statements as a whole, and in forming our opinion thereon, and we do not pro
-
vide a separate opinion on these matters.
We have fullled the responsibilities described in the Auditor’s responsibilities for the audit of the
nancial statements section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the nancial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
nancial statements.
We have also addressed the risk of management override of internal controls. This includes consider
-
ation of whether there was evidence of management bias that represented a risk of material misstate-
ment due to fraud.
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Key Audit Matter How our audit addressed the Key Audit Matter
REVENUE RECOGNITION
We refer to the Group’s accounting policies and the note 1
Revenue recognition is considered as a key audit matter
because revenues are a key performance measure which
could create an incentive for revenue to be recognized
prematurely. Revenue recognition was determined to be a key
audit matter and a signicant risk of material misstatement
referred to in EU Regulation No 537/2014, point (c) of Article
10(2).
Our audit procedures to address the risk of material
misstatement in respect of revenue recognition included
among others:
• We assessed the appropriateness of the group’s
accounting policies over revenue recognition compared to
IFRS standards.
• We assessed the group’s processes and controls over
timing of revenue recognition.
• We tested the correct timing of revenue recognition by
using analytical procedures and transaction level testing.
Our procedures included data analytics, obtaining
external conrmations and transaction level testing
before and after the balance sheet date as well as
inspection of credit notes prepared after the balance
sheet date.
• We considered the appropriateness of the group’s
disclosures in respect of revenues.
VALUATION OF SUBSIDIARY SHARES AND RECEIVABLE
AND GOODWILL IN PARENT COMPANY’S BALANCE SHEET
We refer to parent company’s accounting policies and notes
7, 10 and 12
As of balance sheet date December 31, 2020 the subsidiary
shares and receivable amounted to 12,5 M€ and goodwill to
6,4 M€. Together these compose 29 % of parent company’s
total assets and 71 % of parent company’s equity.
The management of the parent company prepares annually
impairment calculation for balance sheet value of the in-
vestments and goodwill based on their value in use. These
calculations include signicant management judgements, like
forecasted revenue growth, EBITDA and discount rate used
in discounting cash ows. Based on the calculation an im-
pairment loss of 3,0 M€ was recognized on the loan receivab-
le of Martela AS.
This matter was also determined to be a signicant risk
of material misstatement referred to in EU Regulation No
537/2014, point (c) of Article 10(2).
Our audit procedures to address the risk of material
misstatement in respect of valuation of subsidiary shares
and receivable and goodwill included among others:
• We assessed the basis and appropriateness of the
forecasts used in the impairment calculations, like
revenue growth, EBITDA and discount rate.
• We tested the mathematical accuracy of the calculations.
• We involved our valuation specialists to assist us in
evaluating the methodologies and assumptions in
relation to market and industry information.
Responsibilities of the Board of Directors and the Managing Director for
the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation of consolidated
nancial statements that give a true and fair view in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and of nancial statements that give a true and fair view in
accordance with the laws and regulations governing the preparation of nancial statements in Finland
and comply with statutory requirements. The Board of Directors and the Managing Director are also re
-
sponsible for such internal control as they determine is necessary to enable the preparation of nancial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the nancial statements, the Board of Directors and the Managing Director are responsi
-
ble for assessing the parent company’s and the group’s ability to continue as going concern, disclosing,
as applicable, matters relating to going concern and using the going concern basis of accounting. The
nancial statements are prepared using the going concern basis of accounting unless there is an inten
-
tion to liquidate the parent company or the group or cease operations, or there is no realistic alternative
but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance on whether the nancial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that in
-
cludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with good auditing practice will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in aggregate, they could reasonably be expected to inuence the economic decisions of users taken on
the basis of the nancial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the nancial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evi
-
dence that is sufcient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
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• Obtain an understanding of internal control relevant to the audit in order to design audit proce-
dures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the parent company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting es
-
timates and related disclosures made by management.
• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the
going concern basis of accounting and based on the audit evidence obtained, whether a materi
-
al uncertainty exists related to events or conditions that may cast signicant doubt on the parent
company’s or the group’s ability to continue as a going concern. If we conclude that a material un
-
certainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclu
-
sions are based on the audit evidence obtained up to the date of our auditor’s report. However, fu-
ture events or conditions may cause the parent company or the group to cease to continue as a go-
ing concern.
• Evaluate the overall presentation, structure and content of the nancial statements, including the
disclosures, and whether the nancial statements represent the underlying transactions and events
so that the nancial statements give a true and fair view.
• Obtain sufcient appropriate audit evidence regarding the nancial information of the entities or
business activities within the group to express an opinion on the consolidated nancial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and signicant audit ndings, including any signicant deciencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with rel
-
evant ethical requirements regarding independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable, relat
-
ed safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most signicance in the audit of the nancial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regula
-
tion precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benets of such communication.
Other Reporting Requirements
INFORMATION ON OUR AUDIT ENGAGEMENT
We were rst appointed as auditors by the Annual General Meeting on March 12, 2020.
OTHER INFORMATION
The Board of Directors and the Managing Director are responsible for the other information. The other
information comprises the report of the Board of Directors and the information included in the Annual
Report but does not include the nancial statements and our auditor’s report thereon. We have obtained
the report of the Board of Directors prior to the date of this auditor’s report, and the Annual Report is
expected to be made available to us after that date.
Our opinion on the nancial statements does not cover the other information.
In connection with our audit of the nancial statements, our responsibility is to read the other infor
-
mation identied above and, in doing so, consider whether the other information is materially inconsist-
ent with the nancial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. With respect to report of the Board of Directors, our responsibility also includes
considering whether the report of the Board of Directors has been prepared in accordance with the ap
-
plicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the informa
-
tion in the nancial statements and the report of the Board of Directors has been prepared in accord-
ance with the applicable laws and regulations.
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Helsinki 5.2.2021
Ernst & Young Oy
Authorized Public Accountant Firm
Osmo Valovirta
Authorized Public Accountant
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Corporate governance statement 2020
Corporate Governance
Martela Corporation is a Finnish limited liability company that is governed in its decision-making and
management by Finnish legislation, especially the Finnish Limited Liability Companies Act, by other reg
-
ulations 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 2020 published by the Securities Market Association. Martela complies with all of
the Code’s guidelines.
Organisation
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.
In 2020 The Group was organised in units as:
• Sales and Marketing (SM), which is responsible for customer relationships, sales, workplace servic
-
es and marketing.
• The Innovation to Market (ITM), which is responsible for the company’s brand and the development
and management of the product portfolio.
• The Customer Supply Management (CSM), which is responsible for after-sales activities, including
sourcing, production, removal services, product development, quality assurance, the research labo
-
ratory, planning of material ows and logistics as well as environmental management. The plants
have been concentrated at three locations: Nummela (nal product assembly) and Kitee (manu
-
facturing of melamine and laminate composites), both in Finland, and Warsaw (upholstery compo-
nents), Poland.
• People & Communication, which is responsible for human resources, communications and responsi
-
bility management.
• The Group’s Finance, IT and IR, which is responsible for the Group’s nancial planning and report
-
ing, investor relations as well as IT and legal matters.
Annual general meeting
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 nancial year. The nancial 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 nancial statements, use of the prot shown on the balance sheet, discharging the mem
-
bers of the Board of Directors and the CEO from liability, the fees of the Board members and auditors and
the number of members on the Board. The General Meeting also elects the Directors of the Board and the
auditor. Other matters on the agenda of the General Meeting are mentioned in the notice of meeting.
Shares
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 re
-
ferred 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 2020 was EUR 7 million.
Board of directors
The Board of Directors, elected by the Annual General Meeting each year, is responsible for the manage-
ment and proper arrangement of the operations of the company in compliance with the Limited Liability
Companies Act and the Articles of Association.
Preparations concerning the composition of the Board of Directors are carried out by the principal
shareholders, who propose Board candidates to the Annual General Meeting based on their preparato
-
ry work. In accordance with the Articles of Association, the Board of Directors consists of no less than
ve and no more than nine members. There may be no more than two deputy members. The Board of
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Directors elects from among its members a Chairman and Vice Chairman to serve until the end of the
next Annual General Meeting.
According to the principles of the Board diversity, the members of the Board of Directors must have
sufcient and complementary experience and expertise in Martela’s most important business sectors
and markets.
The Board must have both sexes and a diverse age distribution. Board members should have suf
-
ciently diverse professional and educational background, strategy development and implementation skills,
economic expertise, experience in managing companies at various stages of development, innovation,
decision-making and questioning skills, and sufcient time for working in the board. The achievement
and development of diversity in reaching the goals is assessed in the Board Self-Evaluation Discussion
The Board has conrmed a Charter dening 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 addition to the duties mentioned in the Limited Liability Companies Act and the Articles of Associa
-
tion, the Board of Directors is responsible for:
• deciding on the Group strategy
• deciding on the Group structure
• approving nancial statements, interim nancial statements and interim reports
• approving the Group’s operating plans, budgets, major investments and donations
• deciding on business expansion and reduction, acquisitions and divestments
• deciding on the Risk management policy and principles of the internal control
• deciding on dividend policy and make a proposal to the Annual General Meeting on the amount of
dividend to be paid
• deciding on the Treasury policy
• approving and dismissing the CEO and to decide on his salary
• authorising the Remuneration Committee to decide on the appointments and remuneration of the
members of the Group Management Team and the general principles of the Group’s performance
bonus scheme
• deciding on Management’s share-based incentive schemes
• regularly approving and revising corporate governance principles and internal policies
• annually approving the company’s internal control and risk management principles and addressing
the most signicant risks and uncertainties associated with the company’s operations
• appointing board committees and deciding on their reporting
• accepting stock exchange releases related to the Board’s decisions
• conrming the principles of the Board diversity
• the other statutory provisions of the Limited Liability Companies Act, the Corporate Governance
Code or elsewhere
Following persons are members of the Board:
• Heikki Martela, b. 1956, KTM, Board member, direct ownership 130,942 A shares and 52,122 K shares
and indirectly 232,574 A shares ja 292,000 K shares
• Minna Andersson, b. 1973, MEng, Head of Sales and Marketing Canter Oy, ownership 49,200 K shares
• Eero Martela, b. 1984, DI, General Manager Columbia Road Oy, ownership 6,710 A shares and 400 K
shares
• Jan Mattson, b. 1966, M Sc. Architecture, CEO Tengbom Ab
• Katarina Mellström, b. 1962, KTM, IMM Consulting Ab owner
• Johan Mild, b. 1974, KTM, CEO Remeo Oy
• Anni Vepsäläinen, b. 1963, DI, CEO Suomen Messut Osuuskunta, ownership 2,000 A shares
The Board convened sixteen times during the nancial year. Members of the Board attended the meet
-
ings following way:
Present Absent
Heikki Martela 16 0
Eero Martela 16 0
Johan Mild (from March 12) 15 0
Eero Leskinen (until March 12) 1 0
Minna Andersson 15 1
Anni Vepsäläinen 14 2
Jan Mattsson 16 0
Katarina Mellström 16 0
The Board reviews its own activities annually, either by self-assessment or assessment made by an ex-
ternal 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 Eero Martela, Heik
-
ki Martela, Jan Mattsson, Katarina Mellström, Johan Mild and Anni Vepsäläinen are independent of the
company. Of the company’s largest shareholders Jan Mattsson, Katarina Mellström, Johan Mild and Anni
Vepsäläinen are independent members of the Board.
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Present Absent
Heikki Martela 4 0
Katarina Mellström 4 0
Jan Mattsson 4 0
Present Absent
Johan Mild 4 0
Eero Leskinen 1 0
Eero Martela 5 0
Anni Vepsäläinen 3 2
According to the Charter, the key duties of the Audit Committee include:
• monitoring the nancial reporting and interim report processes,
• supervising the nancial reporting process,
• monitoring the company’s nancial condition,
• monitoring the adequacy and effectiveness of the company’s internal control and risk management
systems,
• processing the description of the internal control and risk management systems related to the
-
nancial reporting process included in the Corporate Governance Statement,
• monitoring the statutory audit of the nancial statements and the consolidated nancial statements,
• observing, together with the auditors and the management of the company, the ndings of the au
-
diting carried out and the possible difculties in carrying out the audit,
• assessing the independence of the auditor or the audit rm, and in particular the provision of ancil
-
lary services to the company,
• evaluating the fees charged on auditing and ancillary services and their criteria,
• preparing a proposal for a decision on the election of the auditor,
• assessing the compliance process with laws and regulations and respect for ethical principles in
the organisation,
• conducting reports on the company’s most signicant legal and regulatory procedures
The Board’s Audit Committee comprises Eero Martela, Johan Mild and Anni Vepsäläinen.
The committee convened ve times during the nancial year. Members of committee attended the
meetings following way:
The secretary of the Board of Directors is a lawyer from the same company from where other legal ser
-
vices is provided to the Group. The Chairman of the Board is in direct contact with the CFO as necessary
and regularly with the Company’s auditor.
CEO
The Board appoints Martela Corporation’s CEO and decides on the terms and conditions of his service
relationship, which are dened in a written CEO’s service contract. The CEO is responsible for the oper
-
ational management and supervision of the parent company and the Group according to the guidelines
set by the Board.
• CEO Artti Aurasmaa, b. 1975, M Econ, does not own Martela shares
The Board has formed from among its members a Human Resource and Rewarding Committee and
an Audit Committee, which both have written Charters.
According to the Charter, the key duties of the Human Resource and Rewarding Committee include:
• deciding, with authorisation from the Board, on the remuneration issues and annual performance
bonuses of the CEO and the Group Management Team as well as general principles for the Group’s
performance bonus scheme for the entire personnel
• preparing for the Board the structure, criteria and target levels of the long-term incentive plans for
key personnel processing the appointments of the CEO and Group Management Team members,
deputy arrangements and successor issues.
The Compensation Committee also handles remuneration statements in connection with the nancial
statements
The Board’s Human Resource and Rewarding Committee comprises Heikki Martela, Jan Mattsson
and Katarina Mellström.
The committee convened four times during the nancial year. Members of committee attended the
meetings following way:
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Group management team
The Board of Directors and the CEO appoints the members of the Group Management Team. The CEO
of Martela Corporation acts as the Chairman of the Group Management Team. The directors responsible
for the units and processes are also represented in the Group Management Team. The Group Manage
-
ment Team drafts and reviews strategies, budgets and investment proposals and monitors the nancial
situation of the Group and its business areas and processes and the attainment of operational targets
and plans. The Group Management Team meets once a month.
Following persons are members of the Group Management team:
• Kristiina Hoppu, b.1966, M Laws, People & Communication
• Kalle Lehtonen, b. 1974, M Econ., Group Finance and IR, indirect ownership 5,000 A shares
• Ville Taipale, b. 1971, M S. Technology, Customer Supply Management
• Johan Westerlund, b. 1975, M Econ., Sales and Marketing
Financial reporting in the group
Martela Corporation’s Board of Directors is provided with monthly reports on the nancial performance
and forecasts of the Group. The reports and forecasts are also presented by the CEO at Board meetings,
where they are reviewed.
The Group Management Team meets about once a month to evaluate the nancial performance, out
-
look and risks of the Group.
Auditing
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-or
-
dinates the auditing of the Group’s subsidiaries together with the Group’s CEO and CFO. The auditors
of Martela Corporation and the Group are the authorised public accountants Ernst & Young, with Osmo
Valovirta, Authorised Public Accountant, as the principally responsible auditor. All the auditors of the
Group’s companies are in the Ernst & Young chain.
In year 2020 audit fees were EUR 73 thousand and other advisory services EUR 7 thousand.
Internal control
The reliability of nancial reporting is one of the principal objectives of Martela Corporation’s internal
control. The CEO is responsible for the operational management and supervision of the Group according
to the guidelines set by the Board.
Martela’s strategy is updated and its targets dened 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
areas, functions and supervisors are derived from Group-level targets. For each business area, specic
nancial and non-nancial targets are set in accordance with the business plan, and their attainment is
monitored regularly through comprehensive reporting to executive management, for example.
The CFO has overall responsibility for nancial reporting in the Group. Reporting to executive man
-
agement is carried out separately and independently of business operations. Controllers and nancial
managers (controller function) are responsible for Group, company and other nancial reporting. At Mar
-
tela, nancial reporting is carried out in compliance with guidelines, laws and regulations in a consist-
ent manner throughout the Group. The reliability of nancial reporting depends on the appropriateness
and reliability of nancial and reporting processes and on the control measures taken to ensure these.
In 2020, the internal control focused on sales, quote to cash processes and management of inventories.
The CFO is responsible for the maintenance and development of reporting processes and dening
and implementing control measures. Control measures include guidelines, matching, management reviews
and reporting on deviations. The CFO monitors compliance with dened processes and controls. He also
monitors the reliability of nancial reporting.
The Board of Directors approves Martela’s strategy and annual operating plans. It also approves the
principles and rules of risk management, and monitors on a regular basis the effectiveness and sufcien
-
cy of the internal control and risk management. Furthermore, the Board is responsible for the internal
control of the nancial reporting process.
Auditors and other external controllers assess the control measures in terms of the reliability of
-
nancial reporting.
Risk management and internal audit
Martela’s Board of Directors has conrmed 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 regu
-
lar monitoring carried out by the Board and the management teams as described above. Risks are also
evaluated when planning and making decisions on signicant projects and investments. Risk manage
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ment is integrated with the strategy process as a separate stage of analysis. There is no separate risk
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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.
Taking into consideration the nature and scope of Martela’s business, the company has not consid
-
ered it appropriate to form a separate internal audit function. The internal control is carried out in the
form of controls in business processes, and the company will either make its own or, if necessary, con
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duct separate internal audit reports with external experts.
Risks
In accordance with Martela’s risk management model, risks are classied and prepared for in different
ways. The manufacture of Martela’s products is largely based on the company performing the nal assem
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bly and using subcontractors for components. Production control is based on orders placed by custom-
ers, 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 interrup
-
tion, 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.
The responsibility perspectives regarding the supply chain are discussed as part of the annual re
-
sponsibility report.
Finance risks are discussed in the notes to the nancial statements.
Management remuneration, benets and incentive plans
Information on the effect of management remuneration and the share-based incentive plan on the result
for the year can be found in the notes of the nancial statements and on the company’s website.
Insider administration
Martela complies with the Guidelines for Insiders issued by Nasdaq Helsinki Ltd. In addition, Martela’s
Board of Directors has conrmed specic insider guidelines for the company to complement Nasdaq
Helsinki Ltd’s Guidelines for Insiders.
The company has dened as permanent insider people who work at Martela Group and who have ac
-
cess to all inside information concerning Martela due to their position or task. The information in the
permanent insider list is not public. In addition to the permanent insider list, non-public project-specic
insider lists shall be established, if necessary, as dened in Nasdaq Helsinki Ltd’s Guidelines for Insiders.
Permanent insiders are not entered into the project-specic insider lists.
The persons discharging managerial responsibilities, other permanent insiders and persons partici
-
pating in preparing of nancial reports of the company must not trade in Martela’s nancial instruments
prior to the publication of an interim report and nancial statement release of the company. The length
of the closed period is 30 days at Martela.
Martela discloses inside information that directly concerns Martela or its nancial instrument as
soon as possible, unless the conditions for delay of disclosure of inside information are met. Martela
has dened an internal process in order to evaluate and disclose the inside information and to monitor
and evaluate the duration and the conditions for the delay. Martela continuously monitors the situation
to ensure that the conditions for the delay are met and the company has the ability to publicly disclose
the information immediately in the case of a data leakage.
In accordance with MAR, Martela has an obligation to disclose transactions with Martela’s nancial
instruments conducted by persons discharging managerial responsibilities at the company and persons
closely associated with them.
The obligation to disclose transactions applies to the following persons
discharging managerial responsibilities at Martela:
• Members of Martela’s Board of Directors and CEO, and
• Members of Martela Group’s Management Team.
Transactions between companies in the Martela Group conducted by persons discharging managerial
responsibilities at Martela and persons closely associated with them are monitored. In 2020 there were
no material related party transactions.
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Board of Directors
Eero Martela
BOARD MEMBER
Born in 1984, M.Sc. (Tech.)
Member of the Board of Martela Oyj since 2015.
Other key duties:
General Manager, Finland, Columbia Road Oy
Owns 6,710 Martela Oyj A shares and 400 K
shares.
Minna Andersson
BOARD MEMBER
Born in 1973, MEng, MKT (Marketing Degree)
Member of the Board of Martela Oyj since 2017.
Marketing and Responsibility Director of Martela
Oyj, 2011–2017
Other key duties:
Head of Sales and Marketing, Canter Oy
Member of the Board, Canter Oy and Marfort Oy
Owns 49,200 Martela Oyj K shares.
Heikki Martela
CHAIRMAN OF THE BOARD
Born in 1956, M.Sc. (Econ.), MBA
Member of the Board of Martela Oyj since 1986,
Chairman of the Board of Martela Oyj 2000–
2002 and again starting 2015.
Managing Director of Martela Oyj 2002–2015.
Other key duties:
Chairman of the Board, Marfort Oy
Member of the Board, Lappset Group Oy, Net
-
control Oy, and Filosoan Akatemia Oy
Owns 130,942 Martela Oyj A shares and
52,122 K shares.
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Anni Vepsäläinen
BOARD MEMBER
Born in 1963, M.Sc. (Tech.)
Member of the Board since 2016.
Other key duties:
Member of the Board, Cinia Oy
Managing Director, Finnish Fair Corporation
Chairman of the Board, Helsinki Region Chamber
of Commerce
Member of the Board, Finnish Chamber of Commerce
Owns 2,000 Martela Oyj A shares
Johan Mild
BOARD MEMBER
Born in 1974, M.Sc. (Accounting)
Member of the Board of Martela Oyj since 2020.
Other key duties:
CEO, Remeo Oy
Member of the Board, Ympäristöteollisuus ja
-palvelut YTP ry
Jan Mattsson
BOARD MEMBER
Born in 1966, M.Sc. (Architecture), KHT Royal In-
stitute of Technology
Member of the Board of Martela Oyj since 2019.
Other key duties:
CEO and partner, Tengbomgruppen AB
Chairman of the Board, Tovatt Architects & plan
-
ners AB
Member of the Board, Svenska Innovationsföre
-
tagen
Katarina Mellström
BOARD MEMBER
Born in 1962, M.Sc. (Econ.)
Member of the Board of Martela Oyj since 2018.
Other key duties:
Owner, IMM Consulting AB
Member of the Board, Vectura AB
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Management team
Kalle Lehtonen
CHIEF FINANCIAL OFFICER (CFO)
Born in 1974, M.Sc (Econ.)
Area of responsibility: Group Finance, Investor Relations, Legal Affairs,
HR and IT.
CFO and member of the management team since 2018.
Other Key Duties:
Tantalus Rare Earths AG, CFO, 2013–2018
Ruukki Group Oyj, CFO, 2012–2013
Ruukki Group Oyj, Wood Processing Division, CFO, 2009–2012
Aldata Solution Oyj, Group Controller, 2003–2008
ABB Oy, managerial positions in nancial administration, 1998–2003
Owns 5,000 Martela Oyj A shares.
Kristiina Hoppu
CHIEF PEOPLE OFFICER
Born in 1966, Master of Laws
Area of responsibility: Group HR
Joint the company in 2019, member of the man
-
agement team since 2020.
Other Key Duties:
CGI Suomi Oy, Leadership roles in human re
-
sources, 2010–2018
Pohjolan Voima Oy, VP, Human Resources and Le
-
gal Affairs, 2007–2008
Tecnotree Oyj, Leadership roles in legal and hu
-
man resources, 1998–2007
Artti Aurasmaa
CHIEF EXECUTIVE OFFICER (CEO)
Born in 1975, M.Sc. (Economy)
Area of responsibility: Martela Corporation CEO
and member of the management team since
2020.
Other Key Duties:
Ropo Capital Oy, CEO, 2016–2020
Stella Care Oy, CEO, 2014–2016
3StepIT Oy, CEO, 2005–2014
Current Board Memberships:
Ropo Capital Oy, member of the Board, 2020–
Bookers Group Oy, Chairman of the Board,
2020–
Vincit Oyj, Chairman of the Board, 2019–
Yleinen työttömyyskassa YTK, member of the
Board, 2015–
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Johan Westerlund
VP, SALES & MARKETING
Born in 1975, M.Sc. (Econ.)
Area of responsibility: Group Customers, Marketing and Sales in
Finland, Sweden, Norway and International Dealer Network.
Vice President and member of the management team since 2017.
Other Key Duties:
Ricchetti Group S.p.a, Managing Director Nordics, 2015–2017
Pukkila Oy, CEO, 2012–2015
Newtop Oy, CFO, 2010–2012
BearingPoint Oy, Management consultant, 2003–2010
Kraft Foods, Economy and Business Controller positions, 2000-
2003
Ville Taipale
VP, CUSTOMER SUPPLY MANAGEMENT
VP, Customer Supply Management
Born in 1971, DI
Area of responsibility: Group Sourcing, Product Development, Quality
Control, Sustainability, Production, Logistics and Removal Service.
Vice President and member of the management team since 2018.
Other Key Duties:
Patria Land Systems Oy, Vice President, Sourcing and Logistics
2015–2018
Componenta Oyj, Vice President, Sourcing and Procurement 2010–
2015
Fiskars Oyj, Director, Sourcing Unit, 2007–2010
Nokia Oyj, Supply chain management and development positions,
1998–2007
VTT, Researcher, 1997–1998
Mikko Mäkelä
VP, INNOVATION TO MARKET
Born in 1973, M.Sc. (Tech.)
Area of responsibility: Development of
Group’s Product and Service Offering,
Workspace Professional Service and In
-
terior Design.
Vice President and member of manage
-
ment team since 2017.
Key work experience:
Wärtsilä Oyj, Director, Strategy and
Business Development, 2015–2017
F-Secure Oyj, Leadership in product
management and strategy, 2009–2015
Nokia Oyj, Leadership and other tasks
of product management and strategy,
2002–2009
McKinsey & Co, Management consultant,
2000–2002
Andersen Consulting (Accenture), Man
-
agement consultant, 1998–2000
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Information for shareholders
Annual General Meeting
The Annual General Meeting of Martela Oyj will be held on Thursday 18 March 2021 at 1 p.m. at Itämer-
entori 2, 00180 Helsinki. The names of shareholders wishing to attend the meeting should be entered in
the shareholder register at Euroclear Finland Ltd no later than 8 March 2021 and the shareholder should
register by email to agm@innovatics., by post to Innovatics Oy, Yhtiökokous / Martela Oyj, Ratame
-
starinkatu 13 A, 00520 Helsinki, or on the internet site of the Corporation www.martela.com/about-us/
about-martela/investors no later than March 12, 2021 at 4 p.m.
Payment of dividends
The Board of Directors proposes to the Annual General Meeting that no dividend would be paid for the
nancial year 1 January 2020–31 December 2020.
Publication of nancial information
Martela Corporation’s nancial information in 2021 will be published as follows:
• January–March (Q1) Financial Review on Friday May 5, 2021
• January–June (H1) Half-Year Report on Friday August 13, 2021
• January–September (Q3) Financial Review on Friday November 5, 2021
Financial reports are available in Finnish and English on the company’s website (www.martela.com/
and www.martela.com). Annual reports are available on the company’s website in pdf format. After pub
-
lished, stock exchange releases are available on the company’s website, where you can nd all stock ex-
change releases in chronological order.
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FINLAND
Martela Oyj
Takkatie 1, PL 44
FI-00371 Helsinki
tel. +358 10 345 50
www.martela.com/
Kidex Oy
Savikontie 25
FI-82500 Kitee
tel. +358 10 345 7211
www.kidex.
Muuttopalvelu Grundell Oy
Tikkurilantie 146
FI-01530 Vantaa
tel. +358 10 480 4200
www.martela.com/services/
implementation-of-interiors/removal-services
SWEDEN
Martela AB
Storgatan 49A
57132 Nässjö
tel. +46 380 37 19 00
www.martela.com/sv
NORWAY
Martela AS
Drammensveien 130
N-0277 Oslo
tel. +47 23 28 38 50
www.martela.com/no
POLAND
Martela Sp. z o.o.
ul Geodetów 156
05-500 Józefosław
www.martela.com
Contact