Tikkurila Half year financial report for January−June 2019: Profitability improvement continued
Half year financial report
August 8, 2019 at 9:00 a.m. (CET+1)
Tikkurila Half year financial report for January−June 2019
Profitability improvement continued
Adjusted operating profit increased by 25% in H1
This is a summary of Tikkurila's Half year financial report 2019. The full report is attached to this stock exchange release and is available on Tikkurila's website.
April−June 2019 highlights
Revenue for the second quarter decreased by 2.3 percent to EUR 169.7 (173.7) million. Excluding currency effects and divestments revenue decreased by 1.5 percent.
Adjusted operating profit increased by 7.8 percent to EUR 23.2 (21.5) million and was 13.7 (12.4) percent of revenue.
Operating profit (EBIT) was EUR 21.2 (21.2) million, and 12.5 (12.2) percent of revenue.
EPS was EUR 0.37 (0.35).
January−June 2019 highlights
Revenue decreased by 1.7 percent to EUR 298.8 (303.8) million. Excluding currency effects and divestments revenue increased by 1.1 percent.
Adjusted operating profit increased by 24.9 percent to EUR 31.4 (25.1) million and was 10.5 (8.3) percent of revenue.
Operating profit (EBIT) increased to EUR 29.1 (21.1) million and was 9.7 (7.0) percent of revenue.
EPS was EUR 0.53 (0.30).
Elisa Markula CEO:
During the second quarter, the successful implementation of price increases, improved sales mix and cost savings continued to increase Tikkurila’s profitability. Adjusted operating profit increased during the whole first half of the year. Our cash flow from operations also continues to improve, driven by favorable development in profitability and a lower level of net working capital.
Tikkurila is focusing on premium brands, and prioritizing value over volume. The softening economic environment is currently not offering much tailwind, but in local currencies our revenue increased during the first half of the year, despite decreasing volumes. Revenue increased in SBU East, while it decreased in SBU West, with clear country-specific differences.
In Russia and Poland, growth is fueled by the increasing demand for premium products, which is positively reflected in our sales mix. In more mature markets, such as Sweden and Finland, we are seeing softer development in general market demand. In all countries, we have further increased sales prices, but this has not yet fully compensated for the recent significant raw material inflation. Combined, the price increases and positive development in our sales mix partly offset decreased volumes.
As announced in our Capital Markets Day on June 5, Tikkurila has a concrete action plan to improve performance in all key areas. In addition to further optimizing our offering and production, we have now started to increase efficiency in sales as well as in direct and indirect sourcing. We also remain focused on fixed costs.
Tikkurila is moving in the right direction. Our target is to achieve an adjusted operating profit margin above 12 percent. That said, it’s important to understand that we are still in the early days of our margin recovery and growth initiatives.
|(EUR million)||4–6/2019||4–6/2018||Change %||1–6/2019||1–6/2018||Change %||1–12/2018|
|Adjusted operating profit||23.2||21.5||7.8%||31.4||25.1||24.9%||38.8|
|Adjusted operating profit margin, %||13.7%||12.4%||10.5%||8.3%||6.9%|
|Operating profit (EBIT)||21.2||21.2||0.2%||29.1||21.1||37.6%||26.5|
|Operating profit (EBIT) margin, %||12.5%||12.2%||9.7%||7.0%||4.7%|
|Profit before taxes||20.9||19.5||7.1%||30.6||18.2||68.4%||21.0|
|Net profit for the period||16.1||15.4||4.9%||23.5||13.3||77.4%||14.6|
|Other key indicators|
|ROCE, %, rolling||12.2%||5.0%||12.2%||5.0%||9.3%|
|Cash flow after capital expenditure||-12.0||-6.5||-85.8%||-30.1||-52.1||42.3%||36.3|
|Net interest-bearing debt at period-end||151.8||157.3||-3.5%||85.5|
|Equity ratio, %||30.4%||28.1%||37.6%|
|Personnel at period-end||2,846||3,030||-6.1%||2,717|
Events after the reporting period
No material changes regarding the company’s business or financial position have materialized after the end of the quarter.
Guidance for 2019 remains unchanged
Tikkurila’s revenue is expected to remain at the same level as in 2018 and the adjusted operating profit will continue to improve.
Press conference and webcast
CEO Elisa Markula and CFO Markus Melkko will present Tikkurila’s Half year financial report for January−June 2019 in Finnish for the media and analysts at Tapahtumatalo Bank’s cabinet 24-25 (Unioninkatu 20, Helsinki) today August 8, 2019 at 12:00 (CET +1). Lunch will be available from 11:30 a.m.
A webcast for investors and analysts will be held in English on the same day at 3:00 p.m. To participate, please click on the link:
You can also participate in the telephone conference by calling one of the following numbers:
+358 (0)9 7479 0360 (Finland)
+44 (0)330 336 9104 (UK)
+1 323-794-2095 (US)
+46 (0)8 5033 6573 (Sweden)
+43 (0)1 9289 265 (Austria)
+33 (0)1 76 77 22 73 (France)
Participant code: 231415
An on-demand version of the webcast will be available on our webpage later the same day. The report and related presentation material will be available before the press conference at http://www.tikkurilagroup.com/investors.
Vantaa, August 8, 2019
BOARD OF DIRECTORS
For further information, please contact:
Elisa Markula, CEO
+358 50 596 0978 email@example.com
Tikkurila is a leading Nordic paint company with expertise that spans decades. We develop premium products and services that provide our customers with quality that will stand the test of time and weather. We operate in around ten countries and our 2,700 dedicated professionals share the joy of building a vivid future through surfaces that make a difference. In 2018, our revenue totaled EUR 562 million. The company is listed on Nasdaq Helsinki. Nordic quality from start to finish since 1862.