Tulikivi Oyj - Interim report (Q1 and Q3)

Tulikivi Corporation´s interim report 1-9/2014

TULIKIVI CORPORATION                        INTERIM REPORT 1-9/2014

                                                                  24 October
2014, at 10.0 a.m. 



Tulikivi Corporation

Interim report 1 January - 30 September 2014: Demand down, profitability up

24 October 2014, 10.00 a.m.



- The Tulikivi Group's third-quarter net sales were EUR 9.8 million (Q3/2013:
EUR 12.1 million), the operating profit in the third quarter was EUR 0.2 (0.0)
million and the result before taxes was EUR 0.0 (-0.3) million. The operating
result before non-recurring expenses was EUR 0.5 (0.6) million. 

- The Group's net sales for the reporting period 1 January - 30 September 2014
were EUR 28.6 million (1 January - 30 September 2013: EUR 31.9 million), the
operating result was EUR -2.2 (-2.5) million and the result before taxes was
EUR -2.8 (-3.3) million. The reporting period operating result before
non-recurring expenses was EUR -1.0 (-1.9) million. 

- Net cash flow from operating activities was EUR -4.8 (0.2) million in the
reporting period. 

- Order books at the end of the period stood at EUR 4.2 (5.3) million.

- Future outlook:  As a consequence of the weak market conditions, Tulikivi
Corporation´s sales have not performed as well as expected. Net sales for  2014
are expected to total approximately EUR 40 million (EUR 43.7 million in 2013).
The company expects to post an operating loss of about one million euros (EUR
-4.3 million in 2013).  The level of demand for Tulikivi product is closely
linked to changes in consumer confidence and in the construction sector. The
performance improvement programme that started in 2013 includes production and
sales efficiency measures and cost-saving measures. The results of these
measures will begin to show during the period 2014-2016. 

Key financial ratios



                     1-9/   1-9/  Change,  1-12/  7-9/   7-9/
                     2014   2013        %   2013  2014   2013
Sales, MEUR          28.6   31.9    -10.3   43.7   9.8   12.1
Operating profit/    -2.2   -2.5     11.9   -4.3   0.2    0.0
loss, MEUR                                                   
Operating result     -1.0   -1.9     47.0   -1.4   0.5    0.6
before non-                                                  
recurring                                                    
expenses, MEUR                                               
Profit before tax,   -2.8   -3.3     14.7   -5.3   0.0   -0.3
MEUR                                                         
Total                -2.3   -2.5      9.0   -4.5   0.0   -0.2
comprehensive                                                
income for the                                               
period, MEUR                                                 
Earnings per        -0.04  -0.07           -0.11  0.00  -0.02
share, EURO                                                  
Net cash flow        -4.8    0.2             2.6  -1.3    1.7
from operating                                               
activities, MEUR                                             
Equity ratio, %      38.6   30.1            38.1             
Net indebtness      101.1  136.9            59.3             
ratio, %                                                     
Return on,           -6.8   -7.9            -9.8   0.6   -0.1
investments, %                                               



Comments by Heikki Vauhkonen, Managing Director:

In Finland, net sales declined in the third quarter due to weakened consumer
confidence and the low volume of low-rise housing construction starts and
renovation projects. Net sales in Central Europe were also down as a result of
the uncertain financial situation and weak fireplace sales in the spring.
However, despite the challenging market situation, net sales in Russia
increased. 

In early autumn, the completely renewed ceramic fireplace collection was
launched, and it was well received by both consumers and dealers. Net sales
also continued to grow for the company's other new products, such as saunas and
the new-generation Hiisi fireplace collection, in spite of the challenging
market. 

The progress made with the performance improvement programme in the third
quarter helped to improve the company's relative profitability on the previous
year's level. In addition to savings in fixed costs, the performance
improvement programme includes a reorganisation of production. The
centralisation of the soapstone fireplace production implemented earlier in the
spring achieved the profitability levels set as targets. The profitability
targets for the reorganisation of ceramic fireplaces will be met during the
last quarter. Thus the measures taken will improve profitability in the second
half of the year. 

The flow of orders from Finland in the third quarter was weaker than the
previous year as a result of further weakened consumer confidence. The flow of
orders from the export areas in the third quarter was at the same level as the
previous year. Tulikivi's order books at the end of the reporting period
amounted to EUR 4.2 (5.3) million. 

Owing to the weak market conditions, the impact of the sales efficiency
measures that form part of the performance improvement programme will be felt
more slowly than anticipated in 2015 and 2016. In 2015, further measures will
be taken to increase exports and improve profitability. 





TULIKIVI CORPORATION



Board of Directors



Distribution: NASDAQ OMX Helsinki

Key media

www.tulikivi.com



Additional information: Tulikivi Corporation, FIN-83900 Juuka, Finland, tel.
+358 207 636 000, www.tulikivi.com 

- Heikki Vauhkonen, Managing Director, tel. +358 207 636 555

Attachments:

Interim Report 1-92014.pdf