Tikkurila's Interim Report for January-June 2013 -

Tikkurila Oyj Stock Exchange Release July 25, 2013 at 9:00 a.m. (CET+1) April-June 2013 highlights * Revenue was on the comparison period's level at EUR 208.3 million (4- 6/2012: EUR 209.1 million). * Operating profit (EBIT) excluding non-recurring items was EUR 33.4 (34.7) million, i.e. 16.0 (16.6) percent of revenue. * Operating profit (EBIT) was EUR 33.3 (33.2) million, i.e. 16.0 (15.9) percent of revenue. * EPS was EUR 0.54 (0.52). January-June 2013 highlights * Revenue decreased by 3.1 percent to EUR 346.7 million (1-6/2012: EUR 357.7 million). * Operating profit (EBIT) excluding non-recurring items was EUR 43.5 (44.8) million, i.e. 12.6 (12.5) percent of revenue. * Operating profit (EBIT) was EUR 43.6 (39.0) million, i.e. 12.6 (10.9) percent of revenue. * EPS was EUR 0.69 (0.51). Tikkurila reiterates its guidance for 2013 * Tikkurila expects its revenue and EBIT in euro excluding non-recurring items for the financial year 2013 to remain on 2012 level. Key figures (EUR million) 4-6/2013 4-6/2012 Change % 1-6/2013 1-6/2012 Change % 1-12/2012 -------------------------------------------------------------------------------- Income statement Revenue 208.3 209.1 -0.4% 346.7 357.7 -3.1% 670.4 Operating profit (EBIT), excluding non- recurring items 33.4 34.7 -3.9% 43.5 44.8 -2.9% 73.7 Operating profit (EBIT) margin, excluding non- recurring items, % 16.0% 16.6%   12.6% 12.5%   11.0% Operating profit (EBIT) 33.3 33.2 0.5% 43.6 39.0 11.8% 66.3 Operating profit (EBIT) margin, % 16.0% 15.9%   12.6% 10.9%   9.9% Profit before taxes 31.1 31.0 0.2% 41.6 33.0 25.8% 59.3 Net profit 23.9 23.0 3.7% 30.5 22.6 35.0% 40.7 Other key indicators EPS, EUR 0.54 0.52 3.7% 0.69 0.51 35.0% 0.92 ROCE, %, rolling 22.9% 20.6%   22.9% 20.6%   21.0% Cash flow after capital expenditure 4.4 -0.8   -9.4 -23.6 60.4% 50.3 Net interest- bearing debt at period-end     125.6 155.4 -19.2% 80.8 Gearing, %       66.0% 87.4%   40.6% Equity ratio, %       36.9% 33.6%   45.9% Personnel at period-end     3,400 3,552 -4.3% 3,223 Comments by Erkki Järvinen, President and CEO: "Our performance was reasonably good during the second quarter considering the current market conditions. Revenue and profitability remained at the comparison period's good level. Despite favorable weather conditions, our sales volumes continued to decline as construction decreased and the weak economic situation kept consumers cautious. Nevertheless, the decline in our sales volumes was clearly less steep in our largest markets, Russia and Sweden, compared to the beginning of the year. In Russia, our sales volumes reflected not only the general cautiousness of consumers but also the implementation of a new ERP system and problems experienced in the availability of certain raw materials, which weakened our delivery reliability in the period under review. Increases in sales prices and changes in the sales mix maintained the Group's revenue at the comparison period level. Our profitability remained at the good level of the comparison period. We successfully increased our marketing investments particularly in Scandinavia, where the competitive environment has become tighter. In Russia, we increased our inventory levels in order to secure better delivery reliability. In addition, our expenses were increased by the salary inflation in Russia, in particular. Streamlining of our operations and the slightly lower level of raw material prices supported our profitability. Lower financial expenses and corporate income taxes contributed to the fairly favorable development of our net profit. Continuing uncertainty concerning the economic development and the weakening employment situation are likely to reflect in the purchasing behavior of consumers in our markets in the latter half of the year as well. We believe that the improved delivery reliability will improve our sales in Russia during the remainder of the year. We will maintain our earlier guidance; in other words, we estimate that our revenue and operating profit, excluding non-recurring items, will remain at last year's level." Outlook for 2013 Tikkurila reiterates its guidance for 2013. Economic development in Europe is expected to be weak in 2013. The overall uncertainty and increasing unemployment are expected to have a negative impact on consumers' willingness to purchase and on the demand for Tikkurila's products. The outlook of the economic development of Russia, which is one of the key markets of Tikkurila, has weakened in comparison to the publishing date of Tikkurila's Financial Statement Release. The average GDP growth of Russia, Sweden, Finland, and Poland, is estimated to be slightly over one percent in 2013. Raw material prices are estimated to remain stable or to decrease slightly. Tikkurila expects its revenue and EBIT in euro excluding non-recurring items for the financial year 2013 to remain on 2012 level. Disclosing procedures of financial reviews Tikkurila Oyj follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority, and discloses relevant information (i.e. information likely to have a material effect on the value of Tikkurila's share price) related to its Interim Report with this Stock Exchange Release. Tikkurila's Interim Report for January-June 2013 is attached to this release and is also available on company's website at www.tikkurilagroup.com. Press Conference Tikkurila will hold a press conference regarding its January-June 2013 Interim Report for the media and analysts today on July 25, 2013, at 12:00 p.m. (CET+1) in the Akseli Gallén-Kallela Cabinet at the Hotel Kämp (address Pohjoisesplanadi 29, 00100 Helsinki). The conference will be held in Finnish language. Attendees will be served lunch at the conference premises starting at 11:30 (CET+1). The Interim Report will be presented by Erkki Järvinen, President and CEO, and Jukka Havia, CFO. The stock exchange release and presentation materials will be available before the event at www.tikkurilagroup.com/investors. 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, Manager, Investor Relations Mobile +358 40 533 7932, minna.avellan@tikkurila.com For 150 years already, Tikkurila has provided consumers and professionals with user-friendly and sustainable solutions for surface protection and decoration. Tikkurila wants to be the leading paint company in the Nordic area as well as in Russia and other selected Eastern European countries. - Tikkurila inspires you to color your life. www.tikkurilagroup.com [HUG#1718511]