Tikkurila Oyj — Shareholder Meeting (April 2019)
40 slides from Tikkurila Oyj's shareholder meeting presentation, Apr 11, 2019
Slide 1: Surfaces that make a difference
Surfaces that make a difference CEO ELISA MARKULA TIKKURILA ANNUAL GENERAL MEETING ON APRIL 11, 2019 In this presentation, all forward-looking statements in relation to the company or its business are based on the management judgement, and macroeconomic or general industry data on third-party source
Slide 2: Contents
Contents • Tikkurila today • Business performance in 2018 • Efficiency program and cost savings • Sustainability in Tikkurila • Outlook for 2019
Slide 3: Tikkurila today
Tikkurila today Tikkurila is a leading Nordic paint company with expertise that spans over decades. We develop premium products and services that provide our customers with quality that will stand the test of time and weather. Revenue EUR Leading market Focus on 561.5 Sustainability position in its
Slide 4: Tikkurila's market position is strong in its main markets
Tikkurila’s market position is strong in its main markets in decorative paints Russia Sweden Finland Poland 18 % 18 % 37 % 48 % 52 % <50% >50% 63 % 82 % 82% Tikkurila Others Muut Tikkurila Others Muut Tikkurila Others Muut Tikkurila Others Muut 1 1 1 3 Russia accounts for 25% of Sweden accounts for
Slide 5: Tikkurila's customer segments
Tikkurila’s customer segments Share of industrial customers rising Consumers 47 %* Professionals 35 %* Industry 18 % *Tikkurila estimate 5
Slide 6: Business performance in 2018
Business performance in 2018 Footer
Slide 7: 2018 in brief
2018 in brief • Euro-denominated revenue was EUR 561.5 million, • Adjusted operating profit increased significantly to decreased by 3.6%, and grew by 3.1% when excluding EUR 38.8 million (28.8), up 34.8%. currency effects and divestments (EUR -38.8 million). • Earnings per share EUR 0.33 Revenue Adj
Slide 8: Highlights in 2018
Highlights in 2018 Sales volumes Sales prices • Sales volumes increased in all of the main markets, especially in Poland. Fixed expenses • Sales price increases were not enough savings of EUR 30m to compensate for effects of the continued raw material inflation. Cash flow and • Fixed expenses saving
Slide 9: Key figures in 2018
Key figures in 2018 EUR million 2018 2017 Change % • Profitability improved, strict fixed Revenue 561.5 582.4 -3.6% expenses savings of EUR 30 million Adjusted operating result 38.8 28.8 34.9% offset increased raw material prices and Adjusted operating result, 6.9% 4.9% adverse currency effects. % O
Slide 10: Tikkurila's business units SBU West and SBU East
Tikkurila’s business units SBU West and SBU East Finland Sweden Russia Estonia Denmark Poland Kazakstan China SBU West SBU East Products available in more than 40 countries
Slide 11: SBU West's operating profit improved
SBU West’s operating profit improved • SBU West's euro-denominated revenue increased by 0.4% from the comparison period while increased by +3.0% excluding currency effects. • Higher sales volumes (+3%) eliminated the impact of exchange rate fluctuation • Despite sales price increases the indirect co
Slide 12: SBU East burdened by exchange rate fluctuation and divestments
SBU East burdened by exchange rate fluctuation and divestments • SBU East's euro-denominated revenue decreased by 11% from the comparison period, however, excluding currency effects and divestments the revenue increased by 3.2%. • Sales mix developed favorably due to the shift to premium products fr
Slide 13: Tikkurila's efficiency program of EUR 30 million
Tikkurila’s efficiency program of EUR 30 million 4/11/2019
Slide 14: Tikkurila's efficiency program of EUR 30 million
Tikkurila’s efficiency program of EUR 30 million Fixed expenses savings of EUR 30 million achieved in 2018, fully 1. Fixed expenses visible in 2019. Closing or divesting of operations in Balkan, small production facility in 2. Optimizing the Russia, and relocation of production in Denmark. Closing o
Slide 15: Tikkurila's efficiency program of EUR 30 million
Tikkurila’s efficiency program of EUR 30 million 1. Fixed expenses 2. Optimizing the production network Improved cost Kustannuskilpailu- 3. Harmonizing the portfolio competitiveness kyvyn paraneminen 4. Streamlining sourcing 5. Net working capital
Slide 16: 1. Fixed expenses savings of EUR 30 million
1. Fixed expenses savings of EUR 30 million (compared to 2017), proportion of revenue decreased Fixed expenses of Tikkurila and savings from the efficiency program EUR million % of revenue Approximately EUR 30 million fixed expenses savings achieved 37% 38 % 38% 240 in 2018*. Savings will be fully 3
Slide 17: Tikkurila's efficiency program of EUR 30 million
Tikkurila’s efficiency program of EUR 30 million 1. Fixed expenses 2. Optimizing the production network Improved cost Kustannuskilpailu- 3. Harmonizing the portfolio competitiveness kyvyn paraneminen 4. Streamlining sourcing 5. Net working capital
Slide 18: 2. Optimization of production and logistics sites
2. Optimization of production and logistics sites Finland Sweden Russia Estonia Denmark Poland • In 2018, operations were closed Saksa down in Balkan, Germany, small Kazakstan production sites in Denmark and Russia China • Investment in Russia is still in the planning phase. • Production sites in 6
Slide 19: Tikkurila's efficiency program of EUR 30 million
Tikkurila’s efficiency program of EUR 30 million 1. Fixed expenses 2. Optimizing the production network Improved cost Kustannuskilpailu- 3. Harmonizing the portfolio competitiveness kyvyn paraneminen 4. Streamlining sourcing 5. Net working capital
Slide 20: 3. Harmonizing product portfolio
3. Harmonizing product portfolio Optimization of manufacturing formulas, raw materials and SKUs is underway at Tikkurila, the goal is to reduce the number of product titles by half by 2020. The goal is to reduce the number of product Focus on premium brands titles by half by 2020 - 50% GOAL 2016 201
Slide 21: Tikkurila's efficiency program of EUR 30 million
Tikkurila’s efficiency program of EUR 30 million 1. Fixed expenses 2. Optimizing the production network Improved cost Kustannuskilpailu- 3. Harmonizing the portfolio competitiveness kyvyn paraneminen 4. Streamlining sourcing 5. Net working capital
Slide 22: 4. Streamlining of sourcing and raw material prices in 2018
4. Streamlining of sourcing and development of raw material prices in 2018 • The cost of raw materials and packaging materials corresponds to approximately Price development of oil (Brent), EUR/tn Price development of titanium dioxide, half of Tikkurila’s revenue. 2017-2018 EUR/tn 2017-2018 • The ta
Slide 23: Tikkurila's efficiency program of EUR 30 million
Tikkurila’s efficiency program of EUR 30 million 1. Fixed expenses 2. Optimizing the production network Improved cost Kustannuskilpailu- 3. Harmonizing the portfolio competitiveness kyvyn paraneminen 4. Streamlining sourcing 5. Net working capital
Slide 24: 5. Efficiency on net working capital improved cash flow
5. Efficiency on net working capital improved cash flow Net working capital decreased Cash flow after investments, by 10% mainly due to the lower EUR million inventory levels and was EUR 81 million 40 on 31 Dec 2018. 35 30 Several actions improving net 25 working capital are ongoing. 20 36.6 15 10 2
Slide 25: How to ensure future growth?
How to ensure future growth? 25
Slide 26: Tikkurila is entering "Into the New"
Tikkurila is entering “Into the New” – targeting growth and efficiency FOCUS AREAS: STRATEGY 1. EFFICIENCY • Improved cost competitiveness • Changes in operating environment • Market positioning • Strategic choices 2. PROFITABLE GROWTH Renewed • Exceeding market growth strategy to be published in Q2
Slide 27: Tikkurila's focus areas in 2019
Tikkurila’s focus areas in 2019 1. EFFICIENCY • Tikkurila’s efficiency program of EUR 30 million continues • Strict cost control in fixed costs • Portfolio harmonization • Efficiency in sourcing and transfering raw material costs further to sales prices • Efficiency in net working capital, diminishi
Slide 28: We create Nordic, sustainable quality surfaces that have a difference
We create Nordic, sustainable quality surfaces that have a difference
Slide 29: We create Nordic, sustainable quality surfaces that have a difference
We create Nordic, sustainable quality surfaces that have a difference 77 % 300+ of produced Ecolabeled paints products* were water-borne (2018) (2018) *Products that have international or local ecolabels, allergy or asthma society labels or M1 classification.
Slide 30: Environmental friendly Vivacolor in the Baltic countries
Environmental friendly Vivacolor in the Baltic countries
Slide 31: Tikkurila's first bio-based product introduced in Sweden: Alcro A1
Tikkurila's first bio-based product introduced in Sweden: lower carbon footprint and packaged in recycled plastic can – Alcro A1
Slide 32: Tikkurila Finngard Clean for demanding conditions
Tikkurila Finngard Clean for demanding conditions
Slide 33: Creating products for demanding construction projects
Creating products for demanding construction projects
Slide 34: Modernization of Helsinki Olympic stadium with Tikkurila products
Modernization of Helsinki Olympic stadium in 2016-2019 with Tikkurila’s professional and industrial products • exterior wooden cladding (Ultra Pro Plus 30 + Ultra Classic) • wooden lathwork of the stadion canopy (Pinja Priming Oil + Pinja Wood Stain) • concrete floors (Temafloor PU Flex + Fontefloor
Slide 35: Quality that tests time and weather conditions
Quality that tests time and weather conditions Indoor ski hall in Norway Norway indoor ski hall EPPUR 200/2 Temacoat Primer + Temathane PC 50
Slide 36: Products used in demanding industrial applications such as bridges
Products are used in demanding industrial applications such as bridge constructions, where superior resistance is needed Jännevirta bridge in Finland, built in 2018.
Slide 37: Products and expertise for special buildings
Products and expertise for special buildings Russia, Irkutsk Tikkurila Novasil and Panssarimaali
Slide 38: Outlook
Outlook
Slide 39: Outlook for 2019
Outlook for 2019 Revenue and profitability of Tikkurila 2010−2018 Outlook and guidance for 2019 EUR million Outlook for 2019 % • Economic growth is estimated to be modest during 2019 in Tikkurila’s key markets. Overall, consumer confidence in Tikkurila’s main markets is still expected to be at a goo
Slide 40: Thank you!
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