Tikkurila Oyj - Interim report (Q1 and Q3)

Tikkurila's Interim Report for January-June 2013 - Profitability kept on a good level despite tepid demand

Tikkurila Oyj
Stock Exchange Release
July 25, 2013 at 9:00 a.m. (CET+1)

April-June 2013 highlights

  * Revenue was on the comparison period's level at EUR 208.3 million (4-
    6/2012: EUR 209.1 million).
  * Operating profit (EBIT) excluding non-recurring items was EUR 33.4 (34.7)
    million, i.e. 16.0 (16.6) percent of revenue.
  * Operating profit (EBIT) was EUR 33.3 (33.2) million, i.e. 16.0 (15.9)
    percent of revenue.
  * EPS was EUR 0.54 (0.52).

January-June 2013 highlights

  * Revenue decreased by 3.1 percent to EUR 346.7 million (1-6/2012: EUR 357.7
    million).
  * Operating profit (EBIT) excluding non-recurring items was EUR 43.5 (44.8)
    million, i.e. 12.6 (12.5) percent of revenue.
  * Operating profit (EBIT) was EUR 43.6 (39.0) million, i.e. 12.6 (10.9)
    percent of revenue.
  * EPS was EUR 0.69 (0.51).

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)    4-6/2013 4-6/2012 Change % 1-6/2013 1-6/2012 Change % 1-12/2012
--------------------------------------------------------------------------------
Income statement

Revenue             208.3    209.1    -0.4%    346.7    357.7    -3.1%     670.4

Operating profit
(EBIT),
excluding non-
recurring items      33.4     34.7    -3.9%     43.5     44.8    -2.9%      73.7

Operating profit
(EBIT) margin,
excluding non-
recurring items,
%                   16.0%    16.6%             12.6%    12.5%              11.0%

Operating profit
(EBIT)               33.3     33.2     0.5%     43.6     39.0    11.8%      66.3

Operating profit
(EBIT) margin, %    16.0%    15.9%             12.6%    10.9%               9.9%

Profit before
taxes                31.1     31.0     0.2%     41.6     33.0    25.8%      59.3

Net profit           23.9     23.0     3.7%     30.5     22.6    35.0%      40.7

Other key
indicators

EPS, EUR             0.54     0.52     3.7%     0.69     0.51    35.0%      0.92

ROCE, %, rolling    22.9%    20.6%             22.9%    20.6%              21.0%

Cash flow after
capital
expenditure           4.4     -0.8              -9.4    -23.6    60.4%      50.3

Net interest-
bearing debt at
period-end                                     125.6    155.4   -19.2%      80.8

Gearing, %                                     66.0%    87.4%              40.6%

Equity ratio, %                                36.9%    33.6%              45.9%

Personnel at
period-end                                     3,400    3,552    -4.3%     3,223



Comments by Erkki Järvinen, President and CEO:"Our performance was reasonably good during the second quarter considering the
current market conditions. Revenue and profitability remained at the comparison
period's good level.

Despite favorable weather conditions, our sales volumes continued to decline as
construction decreased and the weak economic situation kept consumers cautious.
Nevertheless, the decline in our sales volumes was clearly less steep in our
largest markets, Russia and Sweden, compared to the beginning of the year. In
Russia, our sales volumes reflected not only the general cautiousness of
consumers but also the implementation of a new ERP system and problems
experienced in the availability of certain raw materials, which weakened our
delivery reliability in the period under review. Increases in sales prices and
changes in the sales mix maintained the Group's revenue at the comparison period
level.

Our profitability remained at the good level of the comparison period. We
successfully increased our marketing investments particularly in Scandinavia,
where the competitive environment has become tighter. In Russia, we increased
our inventory levels in order to secure better delivery reliability. In
addition, our expenses were increased by the salary inflation in Russia, in
particular. Streamlining of our operations and the slightly lower level of raw
material prices supported our profitability. Lower financial expenses and
corporate income taxes contributed to the fairly favorable development of our
net profit.

Continuing uncertainty concerning the economic development and the weakening
employment situation are likely to reflect in the purchasing behavior of
consumers in our markets in the latter half of the year as well. We believe that
the improved delivery reliability will improve our sales in Russia during the
remainder of the 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-June 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-June 2013 Interim
Report for the media and analysts today on July 25, 2013, 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.

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






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Attachments:

Tikkurila Interim Report Q2/2013.pdf