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Tikkurila Oyj: Tikkurila's Interim Report for January-September 2011 - Growth continued and profitability improved clearly during the third quarter

October 27, 2011 - London

Tikkurila Oyj
Stock Exchange Release
October 27, 2011 at 9:00 a.m. (CET+1)
July-September 2011 highlights

  • Revenue for the third quarter increased by 10.5 percent in comparison to the corresponding period last year and was EUR 191.8 million (7-9/2010: EUR 173.5 million).
  • Operating profit (EBIT) excluding non-recurring items was EUR 31.0 (25.2) million, i.e. 16.2 (14.5) percent of revenue.
  • No non-recurring items in the review or comparison period.
  • EPS was EUR 0.50 (0.38).
  • Tikkurila reiterates its outlook for 2011.
  • Board of Directors decided upon a revised strategy on October 26, 2011.

January-September 2011 highlights

  • Revenue for January-September increased by 10.4 percent in comparison to the corresponding period last year and was EUR 524.6 million (1-9/2010: EUR 475.4 million).
  • Operating profit (EBIT) excluding non-recurring items was EUR 65.0 (61.1) million, i.e. 12.4 (12.9) percent of revenue.
  • EPS was EUR 0.92 (0.93).


Key Figures
(EUR million) 7-9/2011 7-9/2010 Change % 1-9/2011 1-9/2010 Change % 1-12/2010
Income statement
Revenue 191.8 173.5 10.5% 524.6 475.4 10.4% 588.6
Operating profit (EBIT),
excluding non-recurring items
31.0 25.2 22.8% 65.0 61.1 6.3% 59.7
Operating profit (EBIT) margin, excluding non-recurring items, % 16.2% 14.5% 12.4% 12.9% 10.1%
Operating profit (EBIT) 31.0 25.2 22.8% 65.0 61.8 5.1% 60.8
Operating profit (EBIT) margin, % 16.2% 14.5% 12.4% 13.0% 10.3%
Profit before taxes 28.7 22.0 30.4% 56.0 55.8 0.3% 52.0
Net profit 22.0 16.8 30.7% 40.5 41.0 -1.1% 36.5
Other key indicators
EPS*, EUR 0.50 0.38 31.6% 0.92 0.93 -1.1% 0.83
ROCE, % p.a. 20.6% 18.0% 20.6% 18.0% 19.2%
Cash flow after capital expenditure 38.5 62.5 -38.4% 12.5 37.5 -66.7% 51.4
Net interest-bearing debt at period-end 102.7 92.0 11.6% 78.6
Gearing, % 53.3% 47.9% 41.4%
Equity ratio, % 41.0% 40.0% 41.1%
Personnel at period-end 3,721 3,677 1.2% 3,468

* As calculated by using the amount of shares outstanding of 44,108,252.

Comments by Erkki Järvinen, President and CEO:

"The global economic outlook weakened rapidly in the third quarter of the year, and uncertainty in the financial markets increased. The weakening of consumer confidence that began in our mature markets in Finland and Sweden during the summer accelerated at the beginning of the autumn, which was reflected in the demand for Tikkurila's products.

Our revenue continued to grow especially as a result of the sales price increases. We have succeeded well in transferring the clearly increased raw material costs to our sales prices, although regional differences in the timing and the magnitude of the increases are fairly large. Price increases in key raw materials continued in the autumn, although the pressure slightly decreased in some raw material groups due to the grimmer economic outlook. Nevertheless, raw material costs are still expected to rise during the remainder of the year. In Finland, sales prices were further increased after the review period in October in order to cover the increased raw materials costs.

Despite the challenging economic situation, we achieved a good financial result in the second half of our summer season. Profitability in the third quarter of the year was improved, on one hand, by revenue growth and, on the other, by the streamlining and savings measures that started to have an impact towards the end of the period. The savings measures have progressed as planned and will be continued.

In October, the Board of Directors decided upon a revised Group strategy. Tikkurila's strategic target is to be the leading paint-related architectural solutions provider for consumers and professional customers in its geographic area. Growth is targeted especially organically by utilizing strong brands, by developing distribution solutions and to relevant extent by entering into service business. Efficiency will be enhanced in all operations. Critical reassessment will be carried out within existing product portfolio, in market segments and in those geographical locations where Tikkurila currently does not have a strong position.

The growth forecasts in our key markets have been lowered especially for the developed markets. The outlook for Russian GDP growth is also clearly lower than before. Nevertheless, Tikkurila still reiterates its 2011 guidance. However, it would appear that next year will be challenging due to the evident slowing down of economic growth, which requires us to implement measures that support our strategy."

Short-term outlook

The economic outlook and confidence indicators rapidly weakened during the autumn, predicting a slowdown in growth for many markets. The GDP growth in Tikkurila's main market areas in the last quarter of 2011 is expected to be slower than previously estimated. In addition, raw material costs, as well as salary and other expenses, are expected to continue to rise.

Tikkurila reiterates its revenue growth and EBIT margin guidance for the financial year 2011. In 2011, Tikkurila expects revenue growth to exceed the average GDP growth in Tikkurila's main market areas.Tikkurila expects EBIT margin as a percentage of revenue to stay at the same level as in 2010, although it would seem to be that the previously estimated gradual strengthening of growth in the economies in Tikkurila's operating area will not be achieved in many markets for the last months of 2011. These estimates are based on the assumption that foreign exchange rates would stay close to the end of 2010 level. The estimates are also based on Tikkurila's current business structure, when the impact of mergers, acquisitions or divestments carried out in 2011 is excluded. In order to enhance profitability and competitiveness, Tikkurila has decided to continue to increase its sales prices as well as to implement additional measures to increase efficiency and decrease expenses.

Disclosing procedures of financial reviews

Tikkurila Oyj follows the new disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority, and discloses relevant information (i.e. information likely to have a material effect on the value of Tikkurila's share price) related to its Interim Report with this Stock Exchange Release. Tikkurila's Interim Report for January-September 2011 is attached to this release and is also available on company's website at

Press conference and conference call

Tikkurila will hold a press conference regarding its January-September 2011 Interim Report for the media and analysts today on October 27, 2011, at 12:00 p.m. (CET+1) in the Akseli Gallén-Kallela Cabinet at the Hotel Kämp, (address Pohjoisesplanadi 29, 00100 Helsinki). The conference will be held in Finnish language. Attendees will be served lunch at the conference premises starting at 11:30 (CET+1). The Interim Report will be presented by Erkki Järvinen, President and CEO, and Jukka Havia, CFO.

A conference call in English will be held at 3:00 p.m. Finnish time. Participants will be asked for their full name and conference ID, which is 17099459. To participate in the conference call, please dial one of the following numbers 5-10 minutes before the conference:

From Finland (free call): 0800 112 363 or (local call): 0923 195 187
From Russia (free call): 8108 002 097 2044
From Sweden (free call): 0200 890 171 or (local call): 0850 336 434
From USA (free call): 1866 966 9439 or (local call): 1631 510 7498
From UK (free call): 0800 694 0257 or (local call): 0844 493 3800
UK Standard International (all countries): +44 (0) 1452 555 566

The stock exchange release and presentation materials will be available before the event at A recording of the conference call will be available at the same address after the conference.

Tikkurila Oyj
Erkki Järvinen, President and CEO

For further information, please contact:

Erkki Järvinen, President and CEO
Mobile +358 400 455 913,

Jukka Havia, CFO
Mobile +358 50 355 3757,

Susanna Aaltonen, Group Vice President, Communications & IR
Mobile +358 40 593 4221,

Tikkurila provides consumers, professionals and the industry with user-friendly and environmentally sustainable solutions for protection and decoration. Tikkurila is a strong regional player that aims to be the leading paint company in the Nordic area and Eastern Europe including Russia. - Tikkurila inspires you to color your life.

Tikkurila's Interim Report Q3/2011

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: Tikkurila Oyj via Thomson Reuters ONE



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