Tikkurila Oyj - Financial Statement Release

Tikkurila's Financial Statement Release for January-December 2016 - Encouraging signs of recovery on the market

Tikkurila Oyj
Stock Exchange Release
February 9, 2017 at 9:00 a.m. (CET+1)

Tikkurila's Financial Statement Release for January-December 2016
- Encouraging signs of recovery on the market

Full-year 2016 highlights
- Revenue decreased by 2.1 percent to EUR 572.0 million (2015: EUR 584.1
million).
- Adjusted operating profit was EUR 54.0 (58.9) million, i.e. 9.4 (10.1) percent
of revenue.
- Operating profit (EBIT) was EUR 53.1 (61.7) million, i.e. 9.3 (10.6) percent
of revenue.
- EPS was EUR 1.01 (0.94).
- Cash flow after capital expenditure was EUR 22.7 (32.6) million.

October-December 2016 highlights
- Revenue increased by 0.7 percent to EUR 104.2 million (10-12/2015: EUR 103.4
million).
- Adjusted operating result was EUR -10.6 (-11.1) million, i.e. -10.1 (-10.7)
percent of revenue.
- Operating result (EBIT) was EUR -10.7 (-10.3) million, i.e. -10.3 (-9.9)
percent of revenue.
- EPS was EUR -0.18 (-0.25).

Dividend proposal
- The Board proposes a dividend of EUR 0.80 (0.80) per share, which corresponds
to about 79 (85) percent of the Group's 2016 earnings per share.

Revenue and operating profit estimates for 2017
- Tikkurila expects its revenue and adjusted operating profit for the financial
year 2017 to increase from the 2016 level.

Key figures

(EUR million)        10-12/2016 10-12/2015 Change % 1-12/2016 1-12/2015 Change %
--------------------------------------------------------------------------------
Income statement

Revenue                   104.2      103.4     0.7%     572.0     584.1    -2.1%

Adjusted operating
result                    -10.6      -11.1     4.5%      54.0      58.9    -8.3%

Adjusted operating
result margin, %         -10.1%     -10.7%               9.4%     10.1%

Operating result
(EBIT)                    -10.7      -10.3    -4.2%      53.1      61.7   -13.9%

Operating result
(EBIT) margin, %         -10.3%      -9.9%               9.3%     10.6%

Result before taxes        -8.8      -13.7    35.5%      57.4      52.8     8.7%

Net result for the
period                     -8.2      -11.0    25.6%      44.5      41.5     7.2%

Other key indicators

EPS, EUR                  -0.18      -0.25    25.6%      1.01      0.94     7.2%

ROCE, %, rolling          18.5%      22.2%              18.5%     22.2%

Cash flow after
capital expenditure         9.3       -1.6               22.7      32.6   -30.4%

Net interest-bearing
debt at period-end                                       58.7      46.2    27.0%

Gearing, %                                              28.1%     23.7%

Equity ratio, %                                         50.9%     51.1%

Personnel at period-
end                                                     3,033     3,100    -2.2%



Comments by Erkki Järvinen, President and CEO:

"The revenue and operating result of the year's last quarter were close to the
level of the comparison period.  Sales volumes developed well in Western
markets, but the unfavorable development in exchange rates and higher cost level
negatively impacted revenue and profitability.

Euro-denominated revenue for the entire year decreased by 2 percent, but grew in
local currencies. The exchange rate development and divestments exerted a
negative impact on revenue, totaling approximately EUR 28 million. Sales volumes
grew in all key markets with the exception of Russia, where the decline in
volume nevertheless clearly leveled out. China's strong growth in business
operations continued, and the sales network was again raised by over 100 sales
outlets.

Relative profitability for the entire year deteriorated from 10.1 percent to
9.4 percent. This deterioration arose primarily as a result of our investments
towards stimulating demand in the Western paint market and improving the
customer experience, as well as in strengthening sales and marketing resources
under harsh competitive circumstances.

The most difficult phase in Russia would appear to be over. We await a slightly
easier situation for the current year, but we do not see signs of rapid
improvement. Increase in local production and raw materials sourcing have
proceeded as planned. The changes made have favorably impacted demand and
profitability, and as a result we have been able to maintain our clear
leadership in the market.

Our goal is to grow our business further in the coming years. Growth is being
actively sought in various geographical areas and product groups. In addition,
better service on the professional side is high on our priority list. In order
to support our growth target, we have on the one hand adjusted the structure of
the company and streamlined our operational modes in recent years and, on the
other hand, increased resources supporting growth. We will continue to make our
operations more efficient also during the current year.

The price and availability related uncertainties linked with raw materials and
titanium dioxide in particular, have increased significantly during the past few
days. We will do our utmost to mitigate this significant risk by activating our
sourcing and product development.

We estimate positive volume development as well as revenue and adjusted
operating profit to grow this year."

Outlook for 2017

Among Tikkurila's key markets in Sweden and Poland, the fairly strong economic
growth is expected to continue in 2017. The economies of Finland and Russia are
also anticipated to grow slightly. Demand for paint is predicted to moderately
increase in Tikkurila's operational area during the current year. The importance
of the professional segment is growing, which affects the sales structure of the
Tikkurila Group.

Raw material prices are expected to rise, but Tikkurila will aim to compensate
for this impact by intensifying its raw material procurement, increasing local
purchasing in Russia, and by increasing its sales prices. Furthermore, there are
risks related to the availability of titanium dioxide.

Guidance for 2017

Tikkurila expects its revenue and adjusted operating profit for the financial
year 2017 to increase from the 2016 level.

Board of Directors' proposal for the distribution of profit

Tikkurila Oyj's distributable equity totaled EUR 161.5 million on December
31, 2016: reserve for invested unrestricted equity totaled EUR 40.0 million and
retained earnings totaled EUR 121.5 million. The Board proposes to the Annual
General Meeting that a dividend of EUR 0.80 per share will be distributed for
the year ended on December 31, 2016, and that the rest be retained in the
unrestricted equity. The proposed dividend totals about EUR 35.3 million, which
corresponds to approximately 79 percent of the Group's net profit for 2016. It
is proposed that the record date for the payment of the dividend will be April
6, 2017, and that the dividend will be paid on April 13, 2017.

Press Conference and webcast

Tikkurila will hold a press conference regarding the Financial Statement Release
for 2016 for the media and analysts today on February 9, 2017, at 12:00 p.m.
(CET+1) in the Paavo Nurmi 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 a.m. (CET+1).
The Financial Statement Release will be presented by Erkki Järvinen, and Jukka
Havia, CFO.

A live webcast, conducted in English, will be organized on February 9, 2017, at
3:00 p.m. The live webcast will be available at www.tikkurilagroup.com. 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 0404 (Finnish callers)
+44 330 336 9411 (UK callers)
+1 719 457 2086 (US callers)
Participant code: 7761517

An on-demand version of the webcast will be available at
www.tikkurilagroup.com/investors later during the same day.

The Financial Statement 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, Director, Investor Relations and Brand Concept Development
Mobile +358 40 533 7932, minna.avellan@tikkurila.com


Tikkurila is the leading paints and coatings professional in the Nordic region
and Russia. With our roots in Finland, we now operate in 14 countries. Our high-
quality products and extensive services ensure the best possible user experience
in the market. Sustainable beauty since 1862.

www.tikkurilagroup.com








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Attachments:

20170209_Tikkurila_financial_statement_release_2016.pdf