Tikkurila inspires you to color your life!

Transcription

1 Tikkurila inspires you to color your life!

2 Contents Tikkurila as a company Business environment Key figures and financial targets Business Units Tikkurila company presentation 2

3 Tikkurila as a company Tikkurila company presentation 3

4 Tikkurila 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

5 Tikkurila in brief Our end-customers #1 Market position in key markets* in decorative paints Consumers Professionals Industry 50% Balanced geographical presence between mature and emerging markets Our goal is to provide the best user experience Production in 9 countries Operations in 14 countries Presence in 40 countries 3,100 employees *Russia, Sweden, Finland, the Baltic countries Tikkurila company presentation Tikkurila is #4 in Poland 5

6 Our locations Sweden Finland Estonia Denmark Poland Germany Kazakhstan Russia Serbia China Production units in 9 countries Sales units in 14 countries Production, distribution center, sales Distribution center, sales Training center Tikkurila company presentation 6

7 Our end-customers 50%* 35%* 15% Consumers (DIY) Professional painters Industry *Tikkurila estimate Tikkurila company presentation 7

8 Our products and services Consumers (DIY) Professional painters and designers Industry Services Comprehensive home interior and exterior surface treatment products Wallpapers Comprehensive surface treatment products for masonry surfaces, wood facades and concrete floors, effect and decorative paints Functional coatings Durable products and solutions to protect steel structures, machinery and equipment Paints and lacquers for wood industry Ideas, work instructions and methods online Personal painting advice and technical support over the phone, online, on site and on production lines Floor coatings for demanding environments Color cards, color design and tinting service Functional coatings for line application Training events On-site visits, inspections and analysis services Contacts with other professionals in the industry

9 150 years of decoration and protection 1920s The manufacture of paints and lacquers began in Tikkurila in Extensive marketing and customer training began in the 1920s. 1960s Entering the Scandinavian market through Sweden. A clear leading position was obtained through the acquisition of Alcro- Beckers in Tinting technology was introduced. 2010s Tikkurila listed on the stock exchange. Entering the Balkan area through the acquisition of Serbian Zorka Color. Tikkurila turned 150 yrs An oil press was founded on the banks of the Keravanjoki River in Tikkurila. 1950s Tikkurila introduced its first water-borne product, the Joker paint. Tikkurila's coloring service was led by designer Yki Nummi. Tikkurila company presentation 1970s Entering the Eastern trade. Tikkurila was known as "Firma Miranol" in Soviet Union. The acquisition of Kraski Teks in 2006 made Tikkurila the leading decorative paint company in Russia. 1980s To the Eastern European market and the Baltics through Poland. 9

10 Tikkurila 2015 Our largest markets are Sweden, Russia, Finland, Poland and the Baltic countries. We have production in nine countries, and we are the leading decorative paint company in all our main markets. On the whole, our products are available in 40 countries. In 2015, Tikkurila s revenue totaled EUR 584 million, and it had 3,100 employees. Revenue EUR 584 million EBIT* EUR 59 million Personnel 3, % 21 % 1% 46% 53% 68 % 79 % West East West East West East Group *Excl. non-recurring items Tikkurila company presentation 10

11 Tikkurila market shares in decorative paints in key markets in 2014 RUSSIA SWEDEN FINLAND POLAND 16% (17%) 63% 37% (37%) 50% >50% (>50%) 16% (15%) 84% 85% Tikkurila Others Tikkurila Others Tikkurila Others Tikkurila Others #1 #1 #1 #4 Russia accounts for 28% of Group revenue Sweden accounts for 23% of Group revenue Finland accounts for 16% of Group revenue Poland accounts for 10% of Group revenue Source: Chem-Courier (Russia, volume), SVEFF (Sweden, value), Association of Finnish Paint Industry (Finland, value), IBP Research (Poland, volume) Tikkurila company presentation 11

12 Tikkurila Group structure SBU WEST Sweden Norway Denmark Finland Poland Germany Baltic countries SBU EAST Russia Central Asia Balkan China Exports Business Portfolio & Brand Management Supply Chain Management & HSEQ RDI Support Functions Tikkurila's reporting units: West and East. Tikkurila company presentation 12

13 Tikkurila's strategy Tikkurila offers user-friendly and sustainable solutions for surface protection and decoration. Focusing Customers Geographic area Brands Profitability Resilience Realignment Agility Growth Organic Well-targeted acquisitions The leading provider of paint-related architectural solutions for consumers and professionals in the Nordic area as well as in Russia and other selected Eastern European countries Restructuring and improving profitability 2013 Growth Tikkurila company presentation 13

14 Tikkurila values We are trustworthy We create and offer quality brands, services, and products that people can trust are safe, reliable, and environmentally sustainable. We are innovative We drive change in the market and offer novel solutions for our customers' needs. We are professionals We add value to our customers, owners, and the community every day. Tikkurila company presentation 14

15 Strong and well-established brands Strategic international brands Strategic regional or local brands Tactical regional or local brands Tikkurila company presentation 15

16 Distribution channels Wholesale* Retail** Retail** TIKKURILA Tikkurila's own paint shops Tikkurila Industrial Paint Service Direct sales * Only in some markets ** Big boxes, specialized paint shops Consumers Professionals Tikkurila company presentation 16

17 Deep partnerships with retailers are of crucial importance Creating added value to consumers Strongest brands Marketing support Active product and service development Training for retailers' personnel Developing the category together with the retailers Tikkurila company presentation 17

18 We help our customers to succeed in surface protection and decoration Inspiration Ideas Colors Stores Helpline Internet Training Designer Pool Contractor Pool Professional services Tikkurila company presentation 18

19 Successful end-results We develop environmentally sustainable and user-friendly solutions. We train our stakeholders in the durable painting and use of our products. We invest in developing solutions that make selecting, buying and selling of paints easier. We inspire people to paint. We enhance the quality of painting, environmentally sustainable use of products, product and user safety, as well as the knowledge of surface treatment. Tikkurila company presentation 19

20 Advice services close to the customer Technical consultation, advice on selecting colors and paints as well as tips and work instructions. Providing customers with easy ways for communicating, giving feedback and making enquiries. Tikkurila s customer hotline offers assistance, advice and ideas for painting. Tikkurila company presentation 20

21 Extensive training Tikkurila trains its customers, retailers, and other professionals and students in its training centers and in stores. Tikkurila organizes seminars, lectures, and training regarding paints, painting, and tinting. Training centers located in 11 countries. Recently, training centers have been opened in Serbia, Macedonia and Lithuania. Tikkurila company presentation 21

22 The many advantages of tinting Enhances the service level of retailers Enables lower inventory levels Deepens the cooperation of retailers and paint producer Ecological and cost-efficient way of operating Practically unlimited amount of shades Emphasizes the quality of paint Economical way to produce small batches of different colors Tikkurila company presentation 22

23 Colors Tikkurila is one of the forerunners in the production of paints for tinting and in the development and marketing of colors. Tikkurila's color cards are based on the tinting system and made with color card paints. Thus the color card sample will be as close to the color of the final painted surface as is technically possible. Color cards are provided for both indoor and outdoor painting. Tikkurila company presentation 23

24 Product development Key principles for product development are quality, durability and safety. R&D develops products for various purposes and with various functionalities, studies use of alternative and renewable raw materials, and improve properties of existing paints and coatings. Largest R&D units located in Finland, Sweden, Russia and Poland. The desired properties of products are ensured in thorough field testing and extensive laboratory testing. Tikkurila company presentation 24

25 Raw materials When selecting raw materials, we carefully consider the different health, safety and environmental aspects. Paint typically consists of binders, pigments, fillers, thinner and additives. More than 90 percent of the raw materials and packaging materials for Tikkurila s units in the EU are bought from the EU region. In Russia, more than 60 percent of all raw materials and packaging materials are bought from local suppliers. Chemical legislation sets restrictions on paint import to the EU region from the third countries. Raw material prices affected mainly by oil prices, supply capacity, and currencies. Tikkurila company presentation 25

26 Sustainable solutions Quality Long service life and long maintenance painting intervals Easy to use User safety Environmentally sustainable: raw material choices, water-borne, low emissions Eco-labels Tikkurila company presentation 26

27 Majority of products water-borne High-quality and safe products which burden the environment as little as possible are a key element in our strategy. Water-borne paints are a better choice for both the health and the environment. The environmental impact of water-borne paint is smaller than that of solvent-borne paint, especially in the application stage, since mainly water evaporates from water-borne paint. The benefits of water-borne paints include ease of use, odorlessness and fast drying times. 73.5% Share of water-borne products in production in

28 Eco-labels guide customers' purchase decision Eco-labels and various classifications awarded to paints indicate the environmental impacts of products as well as their proven safety characteristics. Eco-labels guide consumers in their purchasing decisions, as well as to make consumption habits more environmentally sound. Tikkurila Group s different paint brands have been awarded several official and local eco-labels and product-specific classifications. ~300 Amount of eco-labeled products* * products awarded international or national eco-label, allergy or asthma label or M1 classification 28

29 Business environment Tikkurila company presentation 29

30 Value of the global paints and coatings market; USD ~130 billion Decorative paints 43% Industrial coatings 57% Transportation 12% 10% Metal Industrial Coatings Decorative paints 43% 9% Industrial Maintenance and Protective 6% 3% 3% 3% 6% 6% Wood Coatings Source: IPPIC 2015 Powder Coatings Packaging Coatings Automotive Refinish Coil Coatings Marine Coatings Industrial segments where Tikkurila is present Tikkurila company presentation 30

31 Trends affecting Tikkurila's business operations URBANIZATION AGING OF THE POPULATION RISE OF THE MIDDLE CLASS EXHAUSTING NATURAL RESOURCES CHANGES IN CONSUMPTION BEHAVIOR CLIMATE CHANGE Tikkurila company presentation 31

32 Paint consumption and demand structure Factors impacting paint demand Estimated paint consumption per capita* Living standards Local habits and painting methods Construction styles and available materials Trends in interior decoration, colors etc. Level of activity in new construction, renovation and industry Functional paints Markets in Western Europe mature, growth opportunities in areas with increasing income per household Tikkurila has an established presence in areas with expected growth in consumption per capita and increasing demand for premium products = High = Medium = Low * Paint consumption source: Management estimates, IPPIC Tikkurila company presentation 32

33 Key figures and financial targets Tikkurila company presentation 33

34 Revenue, EUR million EBIT % (excl. non-recurring) Long term financial development Development of sales and profitability Major acquisitions and divestments Sale of tinting business in 2000 (Revenue ~MEUR 130) Acquisition of Alcro- Beckers in 2001 (Revenue ~MEUR 190) Acquisition of Kraski Teks in 2006 (Revenue ~MEUR 80) Acquisition of Zorka Color in 2011 (Revenue ~MEUR 16) Revenue Revenue from acquisitions Divestments EBIT margin (excl. non-recurring) 0 Tikkurila company presentation 34

35 Financial targets for 2018 Historical performance Revenue Revenue of EUR 1 billion Operating EBIT >12% Operative return on capital employed (ROCE) >20% Gearing <70% Dividend policy: Target is to pay at least 40% of annual operative net income as dividends EBIT, % % 9.1% 9.5% 10.1% 9.7% 11.0% 11.1% 10.4% 10.1% ROCE 24.5% 18.7% 15.7% 19.2% 19.4% 21.0% 23.5% 22.9% 22.2% Gearing 135.3% 208.5% 90.0% 41.4% 51.9% 40.6% 23.4% 24.6% 23.7% Dividend paid; share of operative net income, % 84% (EUR 0.70 per share) 88% (EUR 0.73 per share) 72% (EUR 0.76 per share) 69% (EUR 0.80 per share) 73% (EUR 0.80 per share) 90% 2 (EUR 0.80 per share) 1) Excluding non-recurring items 2) Board of Directors' proposal Tikkurila company presentation 35

36 Key figures 2015 EUR million 1 12/ /2014 Change % Revenue % EBIT excluding non-recurring items % EBIT excluding non-recurring items, % 10.1% 10.4% EBIT % EBIT, % 10.6% 10.3% EPS, EUR % ROCE, %, rolling 22.2% 22.9% Cash flow after capital expenditure % Net interest-bearing debt at period-end % Gearing, % 23.7% 24.6% Equity ratio, % 51.1% 49.5% Personnel at period-end 3,100 3, % Tikkurila company presentation 36

37 Tikkurila's ownership at the end of December 2015 Number of shareholders ~20,500 Foreign ownership in Tikkurila has increased strongly Largest shareholders: Oras Invest Oy (18.1%), Varma (5.7%), and Ilmarinen (5.6%) and Tikkurila's ownership structure on December 31, % 20% 7% Private companies Financial and insurance institutions Public sector organizations Households 13% Non-profit organizations 2% 12% Foreigners and Nominee registered Tikkurila company presentation 37

38 Business Units Tikkurila company presentation 38

39 Tikkurila Strategic Business Units (SBU) Operational area SBU West Sweden, Denmark, Norway, Finland, Poland, Germany, Estonia, Latvia, and Lithuania SBU East Russia, Central Asian countries, Serbia, Macedonia, and China. Furthermore, this SBU is responsible for the exports to approximately 20 countries. Production sites Nykvarn, Sweden Vantaa, Finland Debica, Poland Ansbach, Germany Tallinn, Estonia Lunderskov, Denmark St. Petersburg, Russia Stary Oskol, Russia Almaty, Kazakhstan Sabac, Serbia Current demand structure Premium and medium price and quality segment products Economy price and quality segment products Expected demand structure Competitors Premium and medium price and quality segment products Akzo Nobel, PPG, Flügger, Jotun, Sherwin-Williams, Teknos, Nor-Maali, Sniezka Premium price and quality segment products expected to rise Akzo Nobel, Lakra-Sintez, Empils, ABC-Farben, Meffert, Caparol Distribution channels Deco: DIY retailers, independent retailers, Alcro professional stores, wholesalers Industry: direct sales, Tikkurila Industrial Paint Service Deco: DIY retailers, independent retailers, wholesalers Industry: direct sales, Tikkurila Industrial Paint Service Tikkurila company presentation 39

40 SBU West key facts SBU West locations Operational area Sweden, Denmark, Norway, Finland, Poland, Germany, Estonia, Latvia, and Lithuania 2015 revenue EUR million, 68% of Group EBIT ) EUR 50.5 million, 79% of Group 2) Employees Production sites Development in West 1,630 (at year-end) Nykvarn, Sweden; Vantaa, Finland; Debica, Poland; Ansbach, Germany; Tallinn, Estonia; Lunderskov, Denmark 1862 Tikkurila founded in Finland 1865 Beckers founded in Sweden 1906 Alcro founded in Sweden 1930 Customer training started in Finland 1958 Color card development and color advisory service started in Finland 1970 Monicolor tinting system launched in Finland 1992 Paint production started in Estonia 1995 Sales company established in Lithuania 2000 Maalilinja customer helpline launched in Finland 2001 Acquisition of Alcro-Beckers in Sweden 2001 Production plants in Germany and Poland 2003 Customer training center Paletti opened in Finland 2007 New production plant in Nykvarn Sweden 2009 Avatint tinting system launched 2012 Divestment of subsidiaries in Hungary, Czech Republic, Slovakia, and Romania 2014 Acquisitions of ISO Paint Nordic and KEFA Drytech Oslo Nykvarn Copenhagen Stockholm Lunderskov Ansbach Lodz Vantaa Warsaw Debica Tallinn Riga Vilnius 1 Excluding non-recurring items 2 Excluding group items Tikkurila company presentation 40

41 Operational area SBU East key facts Russia, Central Asian countries, Serbia, Macedonia, and China. Furthermore, this SBU is responsible for the exports to approximately 20 countries revenue EUR million, 32% of Group EBIT ) EUR 13.4 million, 21% of Group 2) Employees Production sites 1,441 (at year-end) St. Petersburg, Russia (3) Stary Oskol, Russia Šabac, Serbia Almaty, Kazakhstan Development in SBU East 1970s Export to Russia and the former Soviet Union started 1994 Sales company in Russia 1995 First western paint factory opened in St. Petersburg 1998 Sales company OOO Tikkurila Coatings established 2004 Acquisition of Kolorit in Ukraine 2006 Acquisition of Kraski Teks 2006 Sales company established in Kazakhstan 2007 Sales company established in China 2008 Sales company established in Belarus 2009 Completion of logistic centre in Mytishchi, Moscow region and new water-borne production lines to Obukhovo site in St. Petersburg 2011 Divestment of the powder coatings business 2011 Acquisition of the business of Serbian Zorka Color 2012 Expansion of sales and ware house network in Russia 2015 New factory opened in Almaty, Kazakhstan focusing on water-borne products 2016 Divestment of subsidiaries in Ukraine and Belarus St. Petersburg Ekaterinburg Mytishchi Samara Novosibirsk Chelyabinsk Stary Oskol Šabac Almaty Krasnodar Skopje Beijing Khabarovsk 1 Excluding non-recurring items 2 Excluding group items Shanghai Tikkurila company presentation 41

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