Tikkurila Oyj — Shareholder Meeting (April 2018)
31 slides from Tikkurila Oyj's shareholder meeting presentation, Apr 12, 2018
Slide 1: Nordic quality from start to finish since 1862
Nordic quality from start to finish since 1862 President and CEO Elisa Markula and Interim President and CEO, CFO Jukka Havia Tikkurila Annual General Meeting on April 12, 2018
Slide 2: Disclaimer
Disclaimer In this presentation, all forward-looking statements in relation to the company or its business are based on the management judgment, and macroeconomic or general industry data are based on third-party sources, and actual results may differ from the expectations and beliefs such statement
Slide 3: Contents
Contents Jukka Havia: • Year 2017 in brief • Outlook for 2018 Elisa Markula: • Introduction of the new President and CEO • Strategy 3 Tikkurila Oyj
Slide 4: Year 2017 in brief
Year 2017 in brief 4 Tikkurila Oyj
Slide 5: Tikkurila – Sustainable Nordicness
Tikkurila – Sustainable Nordicness Revenue by Operating profit* Personnel segment by segment by segment Tikkurila is a leading Nordic paint company with expertise that spans decades. We develop premium products and services that 35% provide our customers with quality that will 46% 54% 47% 53% stand
Slide 6: Full-year highlights
Full-year highlights EUR million 1–12/2017 1–12/2016 Change % Revenue 582.4 572.0 1.8% • Revenue was at the comparison period’s level. Tikkurila was not able to meet the market demand Adjusted operating profit 28.8 54.0 -46.7% in full in the Nordic countries due to delivery Adjusted operating profit
Slide 7: Tikkurila was not able to meet the market demand in full in the Nordic countries
Tikkurila was not able to meet the market demand in full in the Nordic countries Sales volume development by quarter, % change from the comparison period 14 +13 12 SBU West SBU East 10 +9 8 +7 +7 +7 6 4 +2 2 0 0 -2 -1 -1 -1 -2 -2 -4 -3 -4 -4 -4 -6 2016 2017 7 Tikkurila Oyj
Slide 8: Deployment of the new ERP system
Deployment of the new ERP system Schedule for the deployment of the new ERP system • The direct costs of the introduction of the new 2016 2017 2018-2019 ERP system, including amortization, were EUR 10.4 million in 2017. • Some indirect costs were also incurred due to, for Finland example, the additi
Slide 9: Benefits of the new ERP system
Benefits of the new ERP system Enables to harmonize functions and Increases transparency and Harmonizes the systems and key processes in the new, centralized improves reporting, which enables processes organization and leading model more efficient and faster steering Provides capabilities to increas
Slide 10: Actions to boost profitability
Actions to boost profitability In 2017, Tikkurila initiated an extensive program to boost profitability. The program is aimed at generating at least EUR 30 million in savings. Improved cost competitiveness will support Tikkurila in seeking new growth opportunities. 2017 2018 Reorganization Structura
Slide 11: Transition was made to a centrally driven function-based organization model in May 2017
Transition was made to a centrally driven function-based organization model in May 2017 TIKKURILA OFFERING OPERATIONS SALES RDI Procurement Consumers Marketing & Brand Manufacturing Professionals Management Product care Industry Business & Portfolio Logistics Group KAM Development: Consumers, HSEQ S
Slide 12: Our locations
Our locations • Tikkurila has discontinued or decided to discontinue Sweden Finland production in the Balkan area, Russia Stary Oskol (Russia) and Estonia Germany in 2018 Denmark Poland Germany Kazakhstan • A new, efficient factory is planned to be built in Russia • Optimization of the production Ch
Slide 13: Last year was difficult for the paint industry
Last year was difficult for the paint industry Development of sales and profitability 2000–2017 Major acquisitions and divestments Acquisition of Zorka Color Sale of tinting business in Acquisition of Alcro- Acquisition of Kraski Teks in 2011 2000 Beckers in 2001 in 2006 (Revenue ~MEUR 16) (Revenue
Slide 14: Stable dividend
Stable dividend 1,2 • Dividend policy: Target is to pay at least 40 % of annual adjusted net 1 income as dividends 0,8 • Historical (2010-2016) dividends 0,6 have corresponded to approximately 70-90% of the 0,4 adjusted net income 0,2 0 2012 2013 2014 2015 2016 2017* Earnings per share, EUR Dividend
Slide 15: Outlook for 2018
Outlook for 2018
Slide 16: Economies of the key markets are growing
Economies of the key markets are growing GDP development of Tikkurila’s key markets, % 10 8 6 4 2 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E -2 -4 -6 -8 -10 Sweden Russia Finland Poland 16 Tikkurila Oyj
Slide 17: There is a steep rise in raw material prices
There is a steep rise in raw material prices Price development of titanium dioxide 2016-2018, market price • Prices for raw materials and packaging materials have per tonne (euros) increased significantly during the past two years. 3100 • Market price for titanium dioxide has increased by almost 50
Slide 18: Conclusions
Conclusions • Identified problems with the deployment of the ERP system have mostly been resolved • Service level is good • Program to boost profitability is proceeding • Focus will be on improving profitability and increasing sales from last year • Market outlook is fairly good for this year • Raw
Slide 19: Guidance for 2018
Guidance for 2018 Revenue and profitability of Tikkurila 2010−2017 Outlook and guidance for 2018 EUR million % The market outlook for the current year is relatively good, although uncertainty has increased in the Swedish housing market in recent months. Economic 800 11.0 11.1 12 growth is anticipate
Slide 20: New President and CEO
New President and CEO 20 Tikkurila Oyj
Slide 21: Tikkurila's new President and CEO as of April 12, 2018
Tikkurila's new President and CEO as of April 12, 2018 Elisa Markula appointed President and CEO of Tikkurila • Born: 1966 • Nationality: Finnish • Education: M.Sc. (Econ.) International Marketing, Turku School of Economics and Business Administration Work experience: • 2010− Senior Vice President,
Slide 22: Strategy
Strategy
Slide 23: Good prerequisites to return to profitable growth
Good prerequisites to return to profitable growth WELL-KNOWN STRONG MARKET SKILFUL EMPLOYEES INSPIRING VISION BRANDS POSITION AND HIGH CUSTOMER AND MISSION SATISFACTION According to external Tikkurila is the market The NPS Surfaces that make a surveys, Tikkurila leader in decorative (Net Promoter Sc
Slide 24: Strategy 2022
STRATEGY 2022 OUR VISION Surfaces that make a difference FOCUS AREAS WE ARE Improve segment- Harmonize portfolio for Utilize specific customer segment needs across resources more journeys and support markets efficiently VALUE WE CREATE Nordic quality from start to finish
Slide 25: We help our customers to succeed in surface protection and decoration
We help our customers to succeed in surface protection and decoration INSPIRATION IDEAS COLORS STORES PROFESSIONAL CONSUMER SERVICES DIGITAL CHANNELS TRAINING SERVICES 25 Tikkurila Oyj
Slide 26: Megatrends that drive our business
Megatrends that drive our business Climate change affecting the whole globe: Share of middle class is growing: Increases Changing weather conditions and in economic income and consumption, temperatures, increasing air pollution and changing consumption patterns, increasing indoor air problems, diffe
Slide 27: Surfaces that make a difference: Sustainability promises for 2018–2022
Surfaces that make a difference: Sustainability promises for 2018–2022 WE WE DRIVE DRIVE OUR OUR PORTFOLIO PORTFOLIO WE WE IMPROVE IMPROVEAND AND PROTECT PROTECT TOWARDS TOWARDS MAXIMIZED MAXIMIZED AIR AIR QUALITY QUALITY WITH WITH PERFORMANCE PERFORMANCE WITH WITH MINIMUM MINIMUM OUR OUR PRODUCTS P
Slide 28: 75% of paints produced are water-borne; 300+ eco-labeled products
75% 300+ of paints eco-labeled produced are products* water-borne (2017) (2017) *products awarded international or national eco-label, 28 Tikkurila Oyj allergy or asthma label or M1 classification
Slide 29: New Children's Hospital in Helsinki
New Children’s Hospital in Helsinki • Tikkurila has supported the New Children's Hospital project in Finland by donating the interior paints for the hospital. The completion of the Hospital will be celebrated in May 2018. • In hospitals, paints and coatings can be used to create surfaces that fulfil
Slide 30: The way forward: clarity, direction, focus
The way forward: clarity, direction, focus EFFICIENCY STRATEGY • Structure “Surfaces that make a difference” • Production footprint • Harmonization • Positioning in the market • Processes • Changes in the environment • Where and how to play • Innovations VALUES ”Nordic quality from start GROWTH VALU
Slide 31: Slide 31