Tikkurila Oyj - Interim report (Q1 and Q3)

Tikkurila's Business Review for January-March 2017

Tikkurila Oyj
Stock Exchange Release
April 28, 2017 at 9:00 a.m. (CET+1)

Tikkurila's Business Review for January-March 2017

Tikkurila's revenue for the first quarter increased by 5.1 percent to EUR 137.1
million (1-3/2016: EUR 130.4 million). Adjusted operating profit totaled EUR
5.2 (12.5) million, i.e. 3.8 (9.6) percent of revenue.

"Demand for our products increased in January-March, particularly in the Nordic
countries and Russia. However, significant fixed expenses and other initial
challenges caused by the deployment of our new enterprise resource planning
(ERP) system, particularly in Scandinavia, weakened our operating profit for the
first quarter. In such a situation, we prioritize reliable deliveries and
customer service resources to keep customer satisfaction as high as possible.

In raw material markets, the situation remained difficult, but despite the tight
market situation we managed to secure the availability of our key raw materials,
such as titanium dioxide, during the first months of the year. However, raw
material and packaging material prices have increased and are expected to
increase even more in the months to come. As a result of this, we increased our
sales prices in Russia in February, and will be implementing price increases
also in other markets to compensate for the cost inflation. However, the impacts
of sales price increases will materialize with a certain delay, and pricing will
vary depending on the market and customer segment. We continue to improve
efficiency in order to ensure our cost competitiveness.

In 2016, our market share strengthened or remained stable in all key markets
with the exception of Russia where our market share decreased by approximately
one percentage point," says Erkki Järvinen, President and CEO.


Key figures

(EUR million)                                    1-3/2017 1-3/2016 Change %
---------------------------------------------------------------------------
Group data

Revenue                                             137.1    130.4     5.1%

Adjusted operating profit                             5.2     12.5   -58.2%

Adjusted operating profit margin, %                  3.8%     9.6%

EPS, EUR                                             0.13     0.23   -43.9%

Net Interest-bearing liabilities (at period-end)     89.2     75.5    18.2%

Total equity (at period-end)                        217.4    205.5     5.8%

Total assets (at period-end)                        486.1    452.6     7.4%

Segment data

SBU West revenue                                     99.0     99.6    -0.6%

SBU West adjusted operating profit                    7.1     14.3   -50.6%

SBU East revenue                                     38.1     30.8    23.5%

SBU East adjusted operating profit                   -1.0     -0.6   -56.6%

Revenue by country

Sweden                                               36.6     38.4    -4.8%

Russia                                               26.2     18.5    41.1%

Finland                                              28.4     28.3     0.4%

Poland                                               16.5     16.9    -2.1%



Financial development in January-March 2017

Higher sales volumes increased Tikkurila Group's revenue in the first quarter by
7 percent. Also the strengthening of the foreign exchange rates, particularly
the Russian ruble, increased revenue. Unfavorable development of the sales mix
and sales prices as well as divestments had a negative impact on revenue.

Profitability was weakened by the cost level, which was clearly higher than in
the comparison period, especially due to the introduction of the new ERP system.
These costs mainly occurred at the beginning of the year when the system was
being implemented step by step in several of our key markets.

Guidance for 2017 intact

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


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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