Tikkurila Oyj - Financial Statement Release

Tikkurila's Financial Statement Release for January-December 2014 - Volumes remained stable but the collapse of the ruble deepened the last quarter loss

Tikkurila Oyj
Stock Exchange Release
February 10, 2015 at 9:00 a.m. (CET+1)

Tikkurila's Financial Statement Release for January-December 2014
- Volumes remained stable but the collapse of the ruble deepened the last
quarter loss

Full-year 2014 highlights

  * Revenue decreased by 5.3 percent to EUR 618.4 million (2013: EUR 653.0
    million).
  * Operating profit (EBIT) excluding non-recurring items was EUR 64.2 (72.6)
    million, i.e. 10.4 (11.1) percent of revenue.
  * Operating profit (EBIT) was EUR 63.7 (71.5) million, i.e. 10.3 (10.9)
    percent of revenue.
  * EPS was EUR 1.10 (1.14). Diluted EPS was EUR 1.09 (1.13).
  * The Board proposes a dividend of EUR 0.80 (0.80) per share, which
    corresponds to about 73 (70) percent of the Group's 2014 earnings per share.
  * Cash flow after capital expenditure was EUR 49.9 (66.9) million.

October-December 2014 highlights

  * Revenue decreased by 10.5 percent to EUR 104.4 million (10-12/2013: EUR
    116.7 million).
  * Operating result (EBIT) excluding non-recurring items was EUR -13.2 (-4.2)
    million, i.e. -12.6 (-3.6) percent of revenue.
  * Operating result (EBIT) was EUR -13.9 (-5.2) million, i.e. -13.3 (-4.4)
    percent of revenue.
  * EPS was EUR -0.19 (-0.11).

Revenue and EBIT estimates for 2015

  * Tikkurila expects its revenue and EBIT excluding non-recurring items for the
    financial year 2015 to be below the 2014 level.

Key figures

(EUR million)        10-12/2014 10-12/2013 Change % 1-12/2014 1-12/2013 Change %
--------------------------------------------------------------------------------
Income statement

Revenue                   104.4      116.7   -10.5%     618.4     653.0    -5.3%

Operating profit
(EBIT), excluding
non-recurring items       -13.2       -4.2  -211.3%      64.2      72.6   -11.6%

Operating profit
(EBIT) margin,
excluding non-
recurring items, %       -12.6%      -3.6%              10.4%     11.1%

Operating profit
(EBIT)                    -13.9       -5.2  -167.5%      63.7      71.5   -10.9%

Operating profit
(EBIT) margin, %         -13.3%      -4.4%              10.3%     10.9%

Profit before taxes        -9.7       -6.1   -58.9%      63.3      67.0    -5.6%

Net profit for the
period                     -8.2       -4.8   -69.6%      48.3      50.1    -3.6%

Other key indicators

EPS, EUR                  -0.19      -0.11   -69.9%      1.10      1.14    -3.5%

ROCE, %, rolling          22.9%      23.5%              22.9%     23.5%

Cash flow after
capital expenditure         7.6       11.4   -33.1%      49.9      66.9   -25.5%

Net interest-bearing
debt at period-end                                       47.4      48.6    -2.6%

Gearing, %                                              24.6%     23.4%

Equity ratio, %                                         49.5%     50.1%

Personnel at period-
end                                                     3,142     3,133     0.3%




Comments by Erkki Järvinen, President and CEO:"The market situation in Russia weakened over the year and became difficult in
the last quarter due to the sharp decline in oil prices and the collapse of the
ruble. From October to December, our revenue in the SBU East region declined by
25 percent mainly due to the weak currencies. There was only a slight reduction
in sales volumes in Russia in the last quarter, because retailers built up their
inventories at the end of the year in anticipation of price hikes. Our business
development was more stable in our other markets even if the weakening Swedish
krona had a negative impact on our euro-denominated revenue. The Group's annual
revenue declined by 5 percent, as the weak currencies directly reduced our
reported revenue by more than EUR 50 million year on year.

The decline in revenue and the significant exchange rate fluctuations had a
negative impact on profitability. Furthermore, the sales and marketing
investments, which were higher than in the comparison period, increased our
fixed costs. The clearly unprofitable last quarter weakened the entire year's
operating profit. Our operative EBIT margin was down to 10.4 percent from 11.1
percent in the previous year. Our good net income and cash flow, the latter of
which continued to be strong despite acquisitions, kept our dividend
distribution capability stable.

Predicting market development in the current year is challenging, but, at least
in the short term, there are no signs of stabilization in the geopolitical
situation in Ukraine, cancellation of economic sanctions, increase in oil
prices, or strengthening of the ruble. We estimate that the uncertain economic
situation and the consumers' reduced purchasing power will decrease paint demand
in Russia and increase the relative demand for lower price and quality grade
products over the current year. In the EU region, we expect demand to remain
close to last year's level. Sales price increases will be moderate in all areas
except for Russia, where we increased the prices of decorative paints in
January. Despite the careful cost management, we will continue to seek growth in
our operations. Tikkurila is a financially sound company, and our aim is to
further strengthen our position in Russia as well as our other areas of
operation, notwithstanding the difficult market situation."

Outlook for 2015

The geopolitical tensions, low oil prices and the weak ruble will make a
difficult operating environment for 2015. The Russian economy is anticipated to
weaken considerably, and the EU region is expected to see a slow recovery. The
demand for paint is anticipated to reduce in Russia, with a relative increase
expected in the market share of the lower price and quality grade products.
Demand in the EU region is expected to remain close to last year's level.
Tikkurila will increase sales prices mainly in Russia to partly, not fully,
compensate for the effects of the weak ruble. As in the previous years,
Tikkurila will continue investing in sales and marketing in order to strengthen
its market position. The level of costs is being continuously monitored.

Guidance for 2015

Tikkurila expects its revenue and EBIT excluding non-recurring items for the
financial year 2015 to be below the 2014 level.

Board of Directors' proposal for the distribution of profit

Tikkurila Oyj's distributable equity totaled EUR 151.9 million on December
31, 2014: reserve for invested unrestricted equity totaled EUR 40.0 million and
retained earnings totaled EUR 111.9 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, 2014, and that the rest be retained in the
unrestricted equity. The proposed dividend totals about EUR 35.2 million, which
corresponds to approximately 73 percent of the Group's net profit for 2014. It
is proposed that the record date for the payment of the dividend will be March
27, 2015, and that the dividend will be paid on April 9, 2015.

Press Conference and webcast

Tikkurila will hold a press conference regarding the Financial Statement Release
for 2014 for the media and analysts today on February 10, 2015, 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 Financial Statement Release will be presented by Erkki
Järvinen, and Jukka Havia, CFO.

A live webcast, conducted in English, will be organized on February 10, 2015, 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 2313 9201 (Finnish callers)
+44 20 7162 0077 (UK callers)
+1 334 323 6201 (US callers)
Participant code: 950790

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, Manager, Investor Relations
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 16 countries. Our high-
quality products and extensive services ensure the best possible user experience
in the market. Sustainable beauty since 1862.

www.tikkurilagroup.com


[HUG#1892948]

Attachments:

Tikkurila Financial Statement Release 2014.pdf