Tikkurila's Interim Report for January-March 2012 - Revenue increased, EBIT excluding non-recurring items clearly higher
Tikkurila Oyj
Stock Exchange Release
April 26, 2012 at 9:00 a.m. (CET+1)
January-March 2012 highlights
* Revenue for the first quarter increased by 10.7 percent to EUR 148.9 million
(1-3/2011: EUR 134.5 million).
* Operating profit (EBIT) excluding non-recurring items was EUR 10.1 (6.5)
million, i.e. 6.8 (4.9) percent of revenue.
* Operating profit (EBIT) was EUR 5.8 (6.5) million, i.e. 3.9 (4.9) percent of
revenue.
* EPS was EUR -0.01 (0.03).
Tikkurila reiterates its outlook for 2012
* In 2012, Tikkurila expects the revenue growth to exceed the average GDP
growth in Tikkurila's main market areas. As far as the profitability is
concerned, Tikkurila expects EBIT in euro to stay at the same level as in
2011.
Key figures
(EUR million) 1-3/2012 1-3/2011 Change % 1-12/2011
Income statement
Revenue 148.9 134.5 10.7% 643.7
Operating profit (EBIT), excluding non- 10.1 6.5 54.5% 62.7
recurring items
Operating profit (EBIT) margin,
excluding non-recurring items, % 6.8% 4.9% 9.7%
Operating profit (EBIT) 5.8 6.5 -11.6% 61.2
Operating profit (EBIT) margin, % 3.9% 4.9% 9.5%
Profit before taxes 2.0 3.5 -41.4% 50.7
Net profit -0.5 1.5 -130.9% 35.5
Other key indicators
EPS, EUR -0.01 0.03 -130.9% 0.80
ROCE, %, rolling 19.0% 19.1% 19.4%
Cash flow after capital expenditure -22,8 -27.7 17.6% 13.3
Net interest-bearing debt at period-end 120.9 106.4 13.6% 99.4
Gearing, % 73.2% 65.8% 51.9%
Equity ratio, % 33.6% 34.7% 44.1%
Personnel at period-end 3,441 3,555 -3.2% 3,551
Comments by Erkki Järvinen, President and CEO:
"Although the debt crisis in the euro region remains unresolved, some positive
signs could be seen in the market at the beginning of the year. Consumer
confidence increased in our key markets in Sweden and Finland. In Russia,
consumer confidence did not experience a similar downturn as in the emerging
markets last year, and stayed at a reasonably good level at the beginning of the
year.
Gradual recovery could also be seen in the paint market, and our revenue was
clearly on the increase. The price increases implemented last year to compensate
for the raw material cost inflation continued to be the most significant factor
behind revenue growth. In our key markets, development continued to be favorable
in Russia, in particular, and the volume development in Scandinavia also showed
signs of recovery mainly due to the favorable start of the pre-deliveries for
the summer season. In Finland and Central Eastern Europe, revenue growth relied
on price increases.
Our operating profit strengthened clearly compared to the comparison period,
supported by price increases and positive volume development. Raw material price
increases slowed down at the beginning of the year but the level of our variable
costs was clearly higher than in the comparison period. The implementation of
the strategy, updated at the end of last year, and the streamlining program with
the aim to create a more flexible cost structure proceeded according to plan. As
expected, the streamlining program incurred non-recurring expenses that burdened
our operating profit at the beginning of the year. Measures in accordance with
the strategy will be continued during the current year, but they are estimated
not to result in significant expenses.
The importance of the first quarter is relatively minor for us since the most
significant portion of the entire year's sales and result is generated in the
exterior painting season that is about to begin. Although the development at the
beginning of the year was encouraging, the macroeconomic development is still
characterized by great uncertainty. We will continue to monitor all expenses
closely in order to maintain our margins."
Outlook for 2012
Tikkurila reiterates its outlook for 2012.
In 2012, the GDP is expected to remain close to the 2011 levels or the GDP
growth is expected to be low in the key market areas of Tikkurila. Further raw
material cost increases are predicted, even though it is assumed that the raw
material and packaging material cost inflation will be clearly lower than in
2011.
In 2012, Tikkurila expects the revenue growth to exceed the average GDP growth
in Tikkurila's main market areas. As far as the profitability is concerned,
Tikkurila expects EBIT in euro to stay at the same level as in 2011.
The estimates presented above are based on internal assessment reflecting
management's most recent forecasts for full-year 2012 financial performance.
These estimates are based on the assumption that foreign exchange rates would
stay at the same level as the actual exchange rates on December 31, 2011. The
estimates are also based on Tikkurila's current distribution network and
business structure. The main market areas referred above include Russia, Sweden,
Finland and Poland. Moreover, as announced during the fourth quarter of 2011, a
group-wide efficiency program aiming at increasing competitiveness was launched
in 2011 and it will be continued in 2012, and therefore the impact of the non-
recurring expenses linked to the implementation of the efficiency program or of
any potential major restructuring actions, regardless of their timing, are not
taken into account in the guidance.
Disclosing procedures of financial reviews
Tikkurila Oyj follows the 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-March 2012 is attached to this
release and is also available on company's website at www.tikkurilagroup.com.
Press Conference
Tikkurila will hold a press conference regarding its January-March 2012 Interim
Report for the media and analysts today on April 26, 2012, 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.
The stock exchange release and presentation materials will be available before
the event at www.tikkurilagroup.com/investors.
Tikkurila Oyj
Erkki Järvinen, President and CEO
For further information, please contact:
Erkki Järvinen, President and CEO
Mobile +358 400 455 913, erkki.jarvinen@tikkurila.com
Jukka Havia, CFO
Mobile +358 50 355 3757, jukka.havia@tikkurila.com
Minna Avellan, Manager, Investor Relations
Mobile +358 40 533 7932, minna.avellan@tikkurila.com
For 150 years already, Tikkurila has provided consumers and professionals with
user-friendly and sustainable solutions for surface protection and decoration.
Tikkurila wants to be the leading paint company in the Nordic area as well as in
Russia and other selected Eastern European countries. - Tikkurila inspires you
to color your life.
www.tikkurilagroup.com