Tikkurila's Interim Report for January-March 2013 - Good profitability despite weak market development
Tikkurila Oyj
Stock Exchange Release
April 24, 2013 at 12:00 noon (CET+1)
January-March 2013 highlights
* Revenue for the first quarter decreased by 6.9 percent to EUR 138.4 million
(1-3/2012: EUR 148.6 million).
* Operating profit (EBIT) excluding non-recurring items was EUR 10.1 (10.1)
million, i.e. 7.3 (6.8) percent of revenue.
* Operating profit (EBIT) was EUR 10.2 (5.8) million, i.e. 7.4 (3.9) percent
of revenue.
* EPS was EUR 0.15 (-0.01).
Tikkurila reiterates its guidance for 2013
* Tikkurila expects its revenue and EBIT in euro excluding non-recurring items
for the financial year 2013 to remain on 2012 level.
Key figures
(EUR million) 1-3/2013 1-3/2012 Change % 1-12/2012
Income statement
Revenue 138.4 148.6 -6.9% 670.4
Operating profit (EBIT), excluding non- 10.1 10.1 0.6% 73.7
recurring items
Operating profit (EBIT) margin,
excluding non-recurring items, % 7.3% 6.8% 11.0%
Operating profit (EBIT) 10.2 5.8 77.3% 66.3
Operating profit (EBIT) margin, % 7.4% 3.9% 9.9%
Profit before taxes 10.5 2.0 59.3
Net profit 6.6 -0.5 40.7
Other key indicators
EPS, EUR 0.15 -0.01 0.92
ROCE, %, rolling 22.6% 19.0% 21.0%
Cash flow after capital expenditure -13.7 -22,8 39.8% 50.3
Net interest-bearing debt at period-end 94.0 121.0 -22.3% 80.8
Gearing, % 45.5% 76.4% 40.6%
Equity ratio, % 43.4% 32.1% 45.9%
Personnel at period-end 3,231 3,438 -6.0% 3,223
Comments by Erkki Järvinen, President and CEO:
"The economic situation in Europe continued to be extremely challenging at the
beginning of the year. The level of consumer confidence was low, and
construction declined. These combined with the exceptionally cold spring in all
of Tikkurila's key markets resulted in a decline in our sales volumes. For
exterior paints, the pre-season orders in use in the Nordic countries were lower
in Sweden than in the corresponding period last year. However, this is at least
partly due to a transition caused by the cold spring. In Russia, economic
development weakened and uncertainty increased at the beginning of the year,
which manifested as both lower sales volumes and increased popularity of lower
price and quality grade paints.
Despite the decline in revenue, our operating profit remained at the comparison
period's excellent level. Profitability was supported by continuous improvement,
streamlining measures completed last year and stabilization in the prices of raw
materials.
Our market share declined slightly in Russia and Sweden at the end of last year.
Lower price and lower quality products increased their relative share of the
total volume of the paint market in Russia. In Sweden, the decline was due to
aggressive sales and marketing investments by certain competitors. We increased
our own marketing efforts in these areas at the beginning of the year and will
continue them as needed in the coming months. The weak development of sales at
the beginning of the current year has burdened the entire industry, and
according to Tikkurila's understanding, there have been no significant changes
in market shares in comparison to the situation at year-end. Nevertheless, it
would seem that the weak market atmosphere is resulting in tighter price
competition in the industry.
The significance of the first quarter is fairly minor to us. Traditionally, the
approaching exterior painting season is decisive in terms of sales and result
for the entire year. Economic growth in both developed and emerging markets may
be modest in the current year. We will maintain our earlier guidance; in other
words, we estimate that our revenue and operating profit, excluding non-
recurring items, will remain at last year's level."
Outlook for 2013
Tikkurila reiterates its guidance for 2013.
Economic development in Europe is expected to be weak in 2013. The overall
uncertainty and increasing unemployment are expected to have a negative impact
on consumers' willingness to purchase and on the demand for Tikkurila's
products. The outlook of the economic development of Russia, which is one of the
key markets of Tikkurila, has weakened in comparison to the publishing date of
Tikkurila's Financial Statement Release. The average GDP growth of Russia,
Sweden, Finland, and Poland, is estimated to be slightly over one percent in
2013. Raw material prices are estimated to remain stable or to decrease
slightly.
Tikkurila expects its revenue and EBIT in euro excluding non-recurring items for
the financial year 2013 to remain on 2012 level.
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 2013 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 2013 Interim
Report for the media and analysts today on April 24, 2013, at 2:00 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. 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
