Tikkurila Oyj - Interim report (Q1 and Q3)

Tikkurila's Interim Report for January-March 2011 - Stronger market demand increased revenue

Tikkurila Oyj
Stock Exchange Release
May 6, 2011 at 9:00 a.m. (CET+1)

January-March 2011 highlights

  * Revenue for the first quarter increased by 12.6 percent in comparison to the
    corresponding period last year and was EUR 134.5 million (1-3/2010: EUR
    119.4 million).
  * Operating profit (EBIT) was EUR 6.5 (7.5) million, i.e. 4.9 (6.3) percent of
    revenue.
  * EPS was EUR 0.03 (0.08).
  * Tikkurila reiterates its outlook for the financial year 2011.


Key figures

(EUR million)                             1-3/2011 1-3/2010 Change % 1-12/2010

Income statement

Revenue                                      134.5    119.4    12.6%     588.6

Operating profit (EBIT), excluding non-        6.5      7.5   -12.9%      59.7
recurring items

Operating profit (EBIT) margin,
excluding non-recurring items, %              4.9%     6.3%              10.1%

Operating profit (EBIT)                        6.5      7.5   -12.9%      60.8

Operating profit (EBIT) margin, %             4.9%     6.3%              10.3%

Profit before taxes                            3.5      5.9   -41.5%      52.0

Net profit                                     1.5      3.6   -58.2%      36.5



Other key indicators

EPS*, EUR                                     0.03     0.08   -58.2%      0.83

ROCE, % p.a.                                 19.1%    16.6%              19.2%

Cash flow after capital expenditure          -27.7    -30.2     8.2%      51.4

Net interest-bearing debt at period-end      106.4    158.7   -32.9%      78.6

Gearing, %                                   65.8%   101.0%              41.4%

Equity ratio, %                              34.7%    34.5%              41.1%

Personnel at period-end                      3,555    3,695    -3.8%     3,468

* As calculated by using the amount of shares outstanding of 44,108,252.


Comments by Erkki Järvinen, President and CEO:"Growth in the economies of our operating areas continued in the first quarter
of the year, and the growth outlook for Russia, our largest individual market,
is even more positive than before. During the review period, our revenue grew
considerably in all of our business units, excluding SBU Finland, where the
delayed spring has postponed the advance orders for the summer. In Russia as
well, the long and cold winter postponed the start of the painting season. At
the beginning of the year, most growth was seen in demand by industrial and
professional customers.

Raw material prices increased sharply during the first months of the year. In
spite of this, we were mostly able to cover the rise in the raw material prices
by raising our prices. Availability was also occasionally challenging. It would
seem that the challenges related to raw materials are continuing and will
possibly increase in the next few months. In order to cover the higher raw
material cost level, we will continue to adjust our sales prices in the coming
months. We will focus on securing sufficient raw material supply by extending
our sourcing alternatives where possible, and also by adapting our raw material
base to the appropriate extent.

Our fixed cost level increased during the first months of the year, which had an
impact on profitability in the first quarter. In line with our plans, we
invested significantly more on sales and marketing at the beginning of the year
than in the comparison period. Our goal is to sharpen up our strategic brands
and to further strengthen our positions.

The importance of the first quarter in the entire year's result is relatively
low, since the most significant portion of the entire year's revenue and
operating profit is generated in the second and third quarters. The upcoming
outdoor painting season will have a decisive impact on the overall result of the
year.

After the review period in April, we agreed on the acquisition of the business
operations of Serbian Zorka Color. The transaction strengthens our position in
Central Eastern Europe in accordance with our growth strategy, and expands our
geographical presence into the Balkans, which is an interesting area."

Outlook for 2011

Tikkurila reiterates its outlook for the financial year 2011.

GDP growth is expected to continue in the key market areas of the Tikkurila
Group in 2011. Further raw material cost increases are predicted. The suppliers
for the paint industry will probably not be able to fully match the increasing
demand, due to some of the capacity shutdowns carried out during the recession.

In 2011, Tikkurila expects revenue growth to exceed the average GDP growth in
Tikkurila's main market areas. In spite of the rising raw material prices,
Tikkurila expects EBIT margin as a percentage of revenue to stay at the same
level as in 2010. These estimates are based on the assumption that foreign
exchange rates will stay close to the end of 2010 level and that the gradual
economic recovery of Tikkurila's key markets will continue. The estimates are
also based on Tikkurila's current business structure.

The contemplated acquisition of the business of Serbian Zorka Color, if and when
concluded, will not affect the 2011 financial guidance.

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-March 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-March 2011 Interim
Report for the media and analysts today on May 6, 2011, 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 (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. (CET+1). The participants
will be asked to provide their full name and a conference ID (60210419). To
participate in the conference call, please dial one of the following numbers
5-10 minutes before the conference:

From Finland (no charge): 0800 112 363
From Russia (no charge): 8108 002 097 2044
From Sweden (no charge): 0200 890 171
From the USA (no charge): 1866 966 9439
UK Standard International (from 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.tikkurila.com






[HUG#1513038]

Attachments:

Tikkurila s Interim Report Q1/2011.pdf