Tikkurila Oyj - Interim report (Q1 and Q3)

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

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
www.tikkurilagroup.com/fi.

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 www.tikkurilagroup.com/investors. 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,erkki.jarvinen@tikkurila.com

Jukka Havia, CFO
Mobile +358 50 355 3757,jukka.havia@tikkurila.com

Susanna Aaltonen, Group Vice President, Communications & IR
Mobile +358 40 593 4221,susanna.aaltonen@tikkurila.com


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.

www.tikkurilagroup.com


[HUG#1558288]

Attachments:

Tikkurila s Interim Report Q3/2011.pdf