Tikkurila's Financial Statement Release for January−December 2018
Tikkurila Oyj
Stock Exchange Release
February 12, 2019 at 9:00 a.m. (CET+1)
Tikkurila's Financial Statement Release for January−December 2018
- Profitability and cash flow improved, savings of EUR 30 million offset increased raw material prices and adverse currency effects
Full-year 2018 highlights
- Revenue was EUR 561.5 million (2017: EUR 582.4 million), a decrease of 3.6%. Revenue increased by 3.1 percent when excluding currency effects and divestments.
- Adjusted operating profit was EUR 38.8 (28.8) million, i.e. 6.9 (4.9) percent of revenue.
- Operating profit (EBIT) was EUR 26.5 (19.3) million, i.e. 4.7 (3.3) percent of revenue.
- EPS was EUR 0.33 (0.24).
- Cash flow after capital expenditure was EUR 36.3 (4.4) million
October-December 2018 highlights
- Revenue was EUR 105.5 million (10-12/2017: EUR 102.2 million), an increase of 3.2%. Revenue grew by 9.3 percent when excluding currency effects and divestments.
- Adjusted operating profit was EUR -5.5 (-18.3) million, i.e. -5.2 (-17.9) percent of revenue. Tikkurila received an insurance compensation of which EUR 4.75 million was recognized in the fourth quarter.
- Operating profit (EBIT) was EUR -8.6 (-26.5) million, i.e. -8.2 (-25.9) percent of revenue.
- EPS was EUR -0.19 (-0.53).
Dividend proposal
- The Board proposes a dividend of EUR 0.33 (0.80) per share, which corresponds to 100 (331) percent of the Group’s 2018 earnings per share. It is proposed that the dividend will be paid in two equal tranches.
Guidance for 2019
- Tikkurila’s revenue is expected to remain at the same level as in 2018 and the adjusted operating profit will continue to improve.
| Key figures | ||||||
| (EUR million) | 10-12/2018 | 10-12/2017 | Change,% | 1–12/2018 | 1–12/2017 | Change,% |
| Income statement | ||||||
| Revenue | 105.5 | 102.2 | 3.2% | 561.5 | 582.4 | -3.6% |
| Adjusted operating profit | -5.5 | -18.3 | 69.9% | 38.8 | 28.8 | 34.9% |
| Adjusted operating profit margin, % | -5.2% | -17.9% | 6.9% | 4.9% | ||
| Operating profit (EBIT) | -8.6 | -26.5 | 67.5% | 26.5 | 19.3 | 37.4% |
| Operating profit margin, (EBIT,%) | -8.2% | -25.9 % | 4.7 % | 3.3% | ||
| Profit before taxes | -9.9 | -27.2 | 63.5% | 21.0 | 16.6 | 26.6% |
| Net profit for the period | -8.4 | -23.4 | 64.2% | 14.6 | 10.7 | 36.9% |
| Other key indicators | ||||||
| EPS, EUR | -0.19 | -0.53 | 64.2% | 0.33 | 0.24 | 36.9% |
| ROCE, %, rolling | 9.3% | 6.3% | 9.3% | 6.3% | ||
| Cash flow after capital expenditure | 26.2 | 11.0 | 137.2% | 36.3 | 4.4 | 720.2% |
| Net interest-bearing debt at period-end | 85.5 | 90.1 | -5.1% | |||
| Gearing, % | 57.0% | 50.2% | ||||
| Equity ratio, % | 37.6 % | 42.0 % | ||||
| Personnel at period-end | 2,717 | 3,037 | -10.5 % |
Elisa Markula, CEO:
“Revenue increased by 3.1 percent in 2018, excluding currency effects and divestments, after a quite strong fourth quarter (an increase of 9.3 percent excluding currency effects and divestments). However, the euro-denominated revenue decreased as much as 3.6 percent after being affected by currency fluctuation (a total impact of EUR -27.5 million) and divestments (EUR -11.8 million) in 2018. Sales volumes grew in all of the main markets, especially in Poland, but decreased slightly in Russia. Russian revenue in rubles increased due to the shift from the economy segment into the premium.
The fixed expense savings of EUR 30 million improved our profitability, which was better than in the previous year, even if not at a satisfactory level. Sales price increases did not fully mitigate raw material cost increases.
In order to further improve profitability, Tikkurila continued to execute its efficiency program. We closed down and divested small production sites, implemented personnel deductions, harmonized our product portfolio and initiated a project regarding sourcing efficiency, among other measures. These measures have been necessary in order to enhance our cost competitiveness. The fixed costs savings will be fully visible during 2019.
In 2019 we will continue to focus on improving internal efficiency, cost control and driving profitable growth. Our vision “Surfaces that make a difference” entails building outstanding customer experience and enhancing easy-to-use sustainable solutions. Tikkurila also builds new, digital service channels for a growing segment of paint professionals and also offers surfaces for selected industrial segments. On top of this, we will share our renewed growth strategy in the near future.”
Outlook for 2019
Economic growth is estimated to be modest during 2019 in Tikkurila’s key markets. Overall, consumer confidence in Tikkurila’s main markets is still expected to be at a good level. Volatility in the exchange rates is expected to continue.
In the paint and coatings markets, the share of professional and business-to-business customers will continue to steadily increase, which affects the sales mix, and in certain markets, the sales channels as well. Consolidation in the paint market, as well as in the suppliers’ and retailers’ side is expected to continue. However, the rapid raw material and packaging material cost inflation should stabilize.
Tikkurila will continue to systematically implement the efficiency program with strict cost control, active pricing and further actions to improve cost competitiveness. Tikkurila is planning to finalize its ongoing strategy process during the first half of 2019. Tikkurila is well positioned to provide its customers with high-quality goods and services in all subsegments where the company operates.
Guidance for 2019
Tikkurila’s revenue is expected to remain at the same level as in 2018 and the adjusted operating profit will continue to improve.
Board of Directors’ proposal for the distribution of profit
Tikkurila Oyj’s distributable equity totaled 140.3 million on December 31, 2018: reserve for invested unrestricted equity totaled EUR 40.0 million and retained earnings totaled EUR 100.3 million when including the 2018 net profit. The Board proposes to the Annual General Meeting that a dividend of EUR 0.33 per share will be distributed for the year ended on December 31, 2018, and that the rest be retained in the unrestricted equity. The proposed dividend totals about EUR 14.6 million, which corresponds to 100 percent of the Group’s net profit for 2018.
Due to the seasonality of the business, Tikkurila will pay the dividend in two tranches. The payment of the dividend for the financial year 2018 will take place as follows: the first tranche of EUR 0.165 per share will be paid to a shareholder which is recorded at the record date for the payment of dividend on April 15, 2019 at the Company’s shareholder register maintained by Euroclear Finland Oy. The proposed date of payment is April 24, 2019.
The second tranche EUR 0.165 per share will be paid in November 2019. The second tranche will be paid to a shareholder who is recorded at the record date for the payment of dividend at the Company’s shareholder register maintained by Euroclear Finland Oy. The Board of Directors will decide at the meeting scheduled for October 28, 2019 the record date and the payment date for the second tranche. According to the current rules of the Finnish book-entry system the record date would then be October 30, 2019 and the dividend payment date earliest November 6, 2019.
Press Conference and webcast
Tikkurila will hold a press conference regarding the Financial Statement Release for January-December 2018 for the media and analysts on Tuesday, February 12, 2019, starting at 12:00 noon Finnish time at Tapahtumatalo Bank’s cabinet 24-25 (address: Unioninkatu 20, Helsinki). The conference will be held in Finnish. Attendees will be served lunch at the conference premises starting at 11:30 a.m. The Financial Statement Release will be presented by Elisa Markula, CEO.
A live webcast, conducted in English, will be organized on February 12, 2019, at 3:00 p.m. The live webcast will be available at www.tikkurilagroup.com/investors. The participants can also join a telephone conference that will be arranged in conjunction with the live webcast. The telephone conference details are set out below:
+358 9 7479 0361 (Finnish callers)
+44 330 336 9105 (UK callers)
+1 323 794 2551 (USA callers)
Participant code: 9710721
An on-demand version of the webcast will be available at www.tikkurilagroup.com/investors later during the same day.
Financial Statement Release and related presentation material will be available before the press conference at www.tikkurilagroup.com/investors.
Tikkurila Oyj
Elisa Markula, CEO
For further information, please contact:
Elisa Markula, CEO
Mobile +358 50 596 0978, elisa.markula@tikkurila.com
Jukka Havia, CFO
Mobile +358 50 355 3757, jukka.havia@tikkurila.com
Tikkurila Investor Relations and Communications
ir.tikkurila@tikkurila.com
Sustainable Nordicness
Tikkurila is a leading Nordic paint company with expertise that spans decades. We develop premium products and services that provide our customers with quality that will stand the test of time and weather. We operate in around ten countries and our 2,700 dedicated professionals share the joy of building a vivid future through surfaces that make a difference. In 2018, our revenue totaled EUR 562 million. The company is listed on Nasdaq Helsinki. Nordic quality from start to finish since 1862.
