Tikkurila Oyj
Stock Exchange Release
October 28, 2016 at 9:00 a.m. (CET+1)
Tikkurila's Business Review for January-September 2016
Tikkurila's revenue for the third quarter decreased by 5.9 percent to EUR 158.0 million (7-9/2015: EUR 168.0 million). Adjusted operating profit totaled EUR 23.7 (26.0) million, i.e. 15.0 (15.5) percent of revenue.
"The third quarter was disappointing after the strong second quarter. Sales volumes decreased in Russia and Finland during the third quarter. In Russia, the markets were weighed down by low purchasing power among consumers, while the wet summer reduced demand for paint in Finland. In addition, unfavorable changes in the exchange rates and divestments had a negative impact on revenue. Profitability was weakened throughout the Group by the decline in revenue and by higher sales and marketing investments in SBU West. In SBU East, profitability improved compared to the comparison period due to the more favorable development of the ruble.
Our goal is to increase our presence in the new building market and industrial coatings business. We will adjust costs to reflect the market conditions. However, we will continue our strong efforts in sales and marketing activities, and also boost product development," says Erkki Järvinen, President and CEO.
Revenue for January-September decreased by 2.7 percent to EUR 467.8 million (1-9/2015: EUR 480.7 million). Adjusted operating profit totaled EUR 64.6 (70.0) million, i.e. 13.8 (14.6) percent of revenue.
| Key figures | ||||||
| (EUR million) | 7-9/2016 | 7-9/2015 | Change % | 1-9/2016 | 1-9/2015 | Change % |
| Group data | ||||||
| Revenue | 158.0 | 168.0 | -5.9% | 467.8 | 480.7 | -2.7% |
| Adjusted operating profit | 23.7 | 26.0 | -9.1% | 64.6 | 70.0 | -7.7% |
| Adjusted operating profit margin, % | 15.0% | 15.5% | 13.8% | 14.6% | ||
| EPS, EUR | 0.43 | 0.37 | 16.3% | 1.19 | 1.19 | 0.3% |
| Net Interest-bearing liabilities (at period-end) | 64.1 | 46.8 | 37.0% | 64.1 | 46.8 | 37.0% |
| Total equity (at period-end) | 211.5 | 208.3 | 1.5% | 211.5 | 208.3 | 1.5% |
| Total assets (at period-end) | 451.0 | 452.5 | -0.3% | 451.0 | 452.5 | -0.3% |
| Segment data | ||||||
| SBU West revenue | 104.9 | 108.7 | -3.5% | 328.0 | 327.2 | 0.2% |
| SBU West adjusted operating profit | 18.5 | 21.8 | -15.2% | 55.0 | 59.0 | -6.8% |
| SBU East revenue | 53.2 | 59.3 | -10.3% | 139.8 | 153.5 | -8.9% |
| SBU East adjusted operating profit | 6.1 | 5.0 | 21.3% | 13.1 | 14.9 | -12.7% |
| Revenue by country | ||||||
| Sweden | 39.4 | 41.5 | -5.0% | 124.2 | 123.5 | 0.6% |
| Russia | 37.5 | 40.6 | -7.6% | 94.6 | 105.5 | -10.4% |
| Finland | 23.2 | 25.3 | -8.4% | 85.3 | 86.0 | -0.7% |
| Poland | 20.8 | 20.1 | 3.7% | 57.1 | 56.0 | 1.9% |
Financial development in July-September 2016
Tikkurila Group's revenue decreased in the third quarter of 2016 due to divestments, weak foreign exchange rates and lower sales volumes. Lower sales volumes decreased revenue by 2 percent. Sales price increases that were conducted in Russia at the beginning of the year had a positive effect on revenue.
Profitability was weakened by the decrease in revenue and higher sales and marketing expenses in the west.
A reduction in net financial expenses, due to realized and unrealized exchange rate differences, improved the result for the period. The most significant improvement was related to the ruble denominated items.
Financial development in January-September 2016
Tikkurila Group's revenue decreased in January-September 2016 due to weak foreign exchange rates and divestments. Higher sales volumes increased revenue by one percent. Sales price increases had a positive effect on revenue.
Profitability was weakened by the decrease in revenue, raw material costs that were higher in Russia due to the weak ruble, as well as sales and marketing expenses that were higher than in the comparison period.
Guidance for 2016 intact
Tikkurila expects its revenue for the financial year 2016, with exchange rates as of the publication date of the financial statement release, to be at the same level as in 2015. Adjusted operating profit is expected to stay at 2015 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 16 countries. Our high-quality products and extensive services ensure the best possible user experience in the market. Sustainable beauty since 1862.