TIKKURILA INSPIRES YOU TO COLOR YOUR LIFE. TM. Tikkurila's Interim Report for January September 2013 Record-high third quarter profitability 1 (30)

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1 Interim Report Q3 January September 2013

2 1 Tikkurila Oyj Interim Report November 7, 2013 at 9:00 a.m. (CET+1) Tikkurila's Interim Report for January September 2013 Record-high third quarter profitability July September 2013 highlights - Revenue decreased by one percent to EUR million (7 9/2012: EUR million). - Operating profit (EBIT) excluding non-recurring items was EUR 33.3 (32.1) million, i.e (16.8) percent of revenue. - Operating profit (EBIT) was EUR 33.1 (31.4) million, i.e (16.4) percent of revenue. - EPS was EUR 0.55 (0.51). January September 2013 highlights - Revenue decreased by 2.3 percent to EUR million (1 9/2012: EUR million). - Operating profit (EBIT) excluding non-recurring items was EUR 76.8 (76.9) million, i.e (14.0) percent of revenue. - Operating profit (EBIT) was EUR 76.7 (70.4) million, i.e (12.8) percent of revenue. - EPS was EUR 1.25 (1.02). Outlook for Tikkurila reiterates its outlook for 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) 7 9/ /2012 Change % 1 9/ /2012 Change % 1 12/2012 Income statement Revenue % % Operating profit (EBIT), excluding non-recurring items % % 73.7 Operating profit (EBIT) margin, excluding non-recurring items, % 17.6% 16.8% 14.3% 14.0% 11.0% Operating profit (EBIT) % % 66.3 Operating profit (EBIT) margin, % 17.4% 16.4% 14.3% 12.8% 9.9% Profit before taxes % % 59.3 Net profit % % 40.7 Other key indicators EPS, EUR % % 0.92 ROCE, %, rolling 23.7% 20.9% 21.0% Cash flow after capital expenditure % % 50.3 Net interest-bearing debt at period-end % 80.8 Gearing, % 28.0% 43.6% 40.6% Equity ratio, % 46.4% 42.0% 45.9% Personnel at period-end 3,253 3, % 3,223

3 2 Comments by Erkki Järvinen, President and CEO: Our revenue remained nearly at the comparison period level in the third quarter of the year, although the clear decline of the ruble reduced SBU East's euro-denominated revenue. The situation in retail and construction continued to be difficult in our operating area. Demand was weak and our sales volumes declined in all our largest markets, with the exception of Russia. Our sales mix developed favorably, but total demand in the paint market showed signs of slowing down in all our main markets. Marketing measures supported our good development. In addition, the sales price increase implemented in Russia at the beginning of October had a positive impact on September order volumes. Our profitability was at a record-high level in the third quarter. Operating profit and relative profitability improved considerably in Finland and in the Central Eastern Europe segment, where the business operations developed well in Poland and the Baltic area, in particular. The improved profitability was due to the continuous improvement efforts and the expense level which was lower than in the comparison period. SBU East's profitability was weakened by marketing investments and the weakening of the ruble. We 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.

4 3 Press Conference today at 12:00 noon Tikkurila will hold a press conference regarding its January September 2013 Interim Report for the media and analysts today on November 7, 2013, at 12:00 noon (CET+1) in the Akseli Gallén-Kallela Cabinet at the Hotel Kämp (address Pohjoisesplanadi 29, Helsinki). The conference will be held in Finnish language. Attendees will be served lunch at the conference premises starting at 11:30 a.m. (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 Tikkurila will publish its Financial Statement Release for 2013 on Monday, February 10, 2014 at around 9:00 a.m. (CET+1). Tikkurila Oyj Erkki Järvinen, President and CEO For further information, please contact: Erkki Järvinen, President and CEO Mobile , erkki.jarvinen@tikkurila.com Jukka Havia, CFO Mobile , jukka.havia@tikkurila.com Minna Avellan, Manager, Investor Relations Mobile , 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.

5 4 Tikkurila Oyj Interim Report January 1 September 30, 2013 This Interim Report has been prepared in accordance with the IAS 34 standard and other valid regulations. The information disclosed is unaudited. The same accounting policies have been applied in this Interim Report as in the annual Financial Statement for 2012, with the exception of the new or revised or amended standards and interpretations which have been applied from the beginning of 2013 and which are described in the Summary Financial Statements and Notes section of this report. Some of the standards and interpretations are applied retrospectively and therefore comparison information is changed accordingly. The figures presented in the Interim Report are independently rounded. Fluctuations in exchange rates in this Interim Report refer to the translation effect of the exchange rates. In this Report 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. If there are any discrepancies between the language versions of the Interim Report, the Finnish version shall prevail. Tikkurila s business operations are organized in four reporting segments, or Strategic Business Units (SBU). Tikkurila s reporting segments are SBU East, SBU Scandinavia, SBU Finland, and SBU Central Eastern Europe. SBU East consists of Russia, Ukraine, Central Asian countries and Belarus. SBU Scandinavia covers Sweden, Denmark, and Norway. SBU Finland covers Tikkurila s business operations in Finland. SBU Central Eastern Europe includes Estonia, Latvia, Lithuania, Poland, China, Germany, Serbia and Macedonia. Furthermore, this SBU is responsible for the exports to approximately 20 countries that are not included in the operating areas of the other SBUs. Market Review Market development continued to be weak in the third quarter. The most positive macroeconomic signals came from Sweden where consumer confidence and construction showed signs of recovery. In Russia, economic growth for the entire year is estimated to be modest, compared to expectations. Growth is estimated to be no more than 1.5 per cent, driven primarily by private consumption. Consumers' purchasing power in Russia has been supported particularly by the low unemployment level in growth centers and the rapid increase in salaries. Construction volumes were lower than in the previous year. In Finland, the state of the economy and consumer confidence continued to be at a relatively low level, and there are no signs of any quick improvement. New construction and the number of new building permits continued to decline, whereas demand in repair and renovation was at a reasonable level. Demand for construction supplies is estimated to decrease by approximately five per cent in the current year. In Poland, the situation continued to be challenging, although the outlook improved slightly. Consumer confidence strengthened slightly in the fall, and it is estimated that the economy will take a slight upward turn, boosted by the recovery of export and private consumption. Construction continued to be at a weak level, and no signs of significant improvement can be seen in the near future. Competitors continued their aggressive campaigns in the fall. Among the key currencies, the Russian ruble weakened clearly and the Swedish krona weakened slightly compared to the comparison period. The exchange rate of the Polish zloty was at the comparison period level. The prices of raw materials were at a slightly lower level than in the comparison period. The prices of several raw materials started to increase slightly in the third quarter.

6 5 Financial Performance in July September 2013 Revenue and operating result by reporting segment in July September are presented in the table below. July September (EUR million) Revenue Operating result (EBIT) excluding non-recurring items 7 9/ / / /2012 SBU East SBU Scandinavia SBU Finland SBU Central Eastern Europe Group common and eliminations Consolidated Group Tikkurila Group's revenue in July September 2013 was at the comparison period level. Favorable development of the sales mix and increases in sales prices increased revenue by 7 percent. Sales volumes declined in all key markets with the exception of Russia. Negative volume development reduced revenue by 4 percent. Unfavorable exchange rate development decreased revenue by 4 percent. Operating profit (EBIT) excluding non-recurring items totaled EUR 33.3 (32.1) million, which accounts for 17.6 (16.8) percent of revenue. Profitability development was favorable despite clearly higher marketing investments. Favorable sales mix development, streamlining of operations and the development of raw material prices supported our profitability. Operating profit (EBIT) totaled EUR 33.1 (31.4) million, equaling 17.4 (16.4) percent of revenue. The net financial expenses in July September 2013 were EUR 1.6 (1.1) million. Profit before taxes was EUR 31.6 (30.4) million. Taxes totaled EUR 7.1 (7.8) million, equaling an effective tax rate of 22.5 (25.6) percent. Earnings per share were EUR 0.55 (0.51) in the review period.

7 6 Financial Performance in January September 2013 Revenue and operating result by reporting segment in January September are presented in the table below. January September (EUR million) Revenue Operating result (EBIT) excluding non-recurring items 1 9/ / / /2012 SBU East SBU Scandinavia SBU Finland SBU Central Eastern Europe Group common and eliminations Consolidated Group Tikkurila Group's revenue in January September 2013 decreased by 2 percent. Lower sales volumes declined revenue by 6 percent. Changes in the sales mix and increases in sales prices increased revenue by 5 percent. Unfavorable exchange rate development decreased revenue by one percent. Operating profit (EBIT) excluding non-recurring items totaled EUR 76.8 (76.9) million, which accounts for 14.3 (14.0) percent of revenue. Relative profitability improved despite reduction in revenue and higher marketing investments. Favorable sales mix development, streamlining of operations and the development of raw material prices supported our profitability. Operating profit (EBIT) totaled EUR 76.7 (70.4) million, equaling 14.3 (12.8) percent of revenue. The nonrecurring items of the comparison period were mainly related to the implementation of the Group s streamlining program. The net financial expenses in January September 2013 were EUR 3.7 (7.1) million. Profit before taxes was EUR 73.1 (63.5) million. Taxes totaled EUR 18.2 (18.3) million, equaling an effective tax rate of 24.9 (28.8) percent. Earnings per share were EUR 1.25 (1.02) in the review period.

8 7 Financial Performance by Reporting Segments SBU East EUR million 7 9/ /2012 Change 1 9/ /2012 Change 1 12/2012 % % Revenue % % Operating profit (EBIT), excluding non-recurring items % % 32.5 Operating profit (EBIT) margin, excluding nonrecurring items, % 14.9% 19.1% 12.1% 15.1% 13.4% Operating profit (EBIT) % % 29.9 Operating profit (EBIT) margin, % 14.9% 18.3% 12.1% 14.0% 12.3% Capital expenditure excluding acquisitions % % 5.6 Financial Performance in July September 2013 SBU East s third quarter revenue decreased by 2 percent. Exchange rate changes decreased revenue by 8 percent. Increases in sales prices and changes in the sales mix increased revenue by 5 percent. The favorable development of the sales mix is taking place against the backdrop of growth in the relative share of the Tikkurila brand in sales. Higher sales volumes increased revenue by one percent. The good development of sales was in part affected by the price increases Tikkurila implemented at the beginning of October which increased the September sales volumes. Operating profit, excluding non-recurring items, decreased by 23 percent. Profitability was reduced particularly by the increase in cost level caused by higher marketing expenses and salary inflation as well as by the weakening of the ruble. Financial Performance in January September 2013 SBU East s revenue in January September decreased by 4 percent. Lower sales volumes declined revenue by 5 percent and the weakening of the ruble decreased it by 4 percent. Increases in sales prices and changes in the sales mix increased revenue by 5 percent. Operating profit, excluding non-recurring items, decreased by 23 percent. Profitability was reduced by the decline in revenue, by the increase in fixed costs caused by higher marketing expenses and salary inflation as well as by the weakening of the ruble.

9 8 SBU Scandinavia EUR million 7 9/ /2012 Change 1 9/ /2012 Change 1 12/2012 % % Revenue % % Operating profit (EBIT), excluding non-recurring items % % 24.3 Operating profit (EBIT) margin, excluding nonrecurring items, % 22.9% 21.3% 17.8% 15.9% 12.5% Operating profit (EBIT) % % 23.6 Operating profit (EBIT) margin, % 22.4% 21.3% 17.4% 15.6% 12.2% Capital expenditure excluding acquisitions % % 3.4 Financial Performance in July September 2013 SBU Scandinavia's third quarter revenue decreased by 2 percent. Lower sales volumes decreased revenue by 5 percent and exchange rate fluctuations decreased it by 3 percent. Increases in sales prices and changes in the sales mix increased revenue by 6 percent. Operating profit, excluding non-recurring items, increased by 5 percent and relative profitability improved. Decrease in the raw material prices reduced the level of variable costs. Financial Performance in January September 2013 SBU Scandinavia's revenue in January September decreased by one percent. Lower sales volumes decreased revenue by 6 percent. Increases in sales prices and changes in the sales mix increased revenue by 4 percent and exchange rate fluctuations increased it by one percent. Operating profit, excluding non-recurring items, increased by 11 percent and relative profitability improved. Profitability was primarily improved by the lower level of variable expenses and increased operational efficiency. Fixed cost level was higher than in the comparison period mainly due to higher marketing investments.

10 9 SBU Finland EUR million 7 9/ /2012 Change 1 9/ /2012 Change 1 12/2012 % % Revenue % % Operating profit (EBIT), excluding non-recurring items % % 12.6 Operating profit (EBIT) margin, excluding nonrecurring items, % 20.6% 13.2% 18.2% 17.0% 11.7% Operating profit (EBIT) % % 10.6 Operating profit (EBIT) margin, % 20.6% 12.9% 18.7% 14.9% 9.8% Capital expenditure excluding acquisitions % % 5.3 Financial Performance in July September 2013 SBU Finland s third quarter revenue was at the comparison period level. Increases in sales prices and changes in the sales mix increased revenue by 6 percent. Lower sales volumes decreased revenue by 5 percent. Operating profit, excluding non-recurring items, increased by 57 percent and relative profitability improved clearly. Profitability was mainly improved by the cost level which was lower than in the comparison period. Financial Performance in January September 2013 SBU Finland s revenue in January September decreased by 2 percent. Lower sales volumes decreased revenue by 5 percent. Increases in sales prices and changes in the sales mix increased revenue by 2 percent. Operating profit, excluding non-recurring items, increased by 4 percent and relative profitability improved despite the decline in revenue. Profitability improved due to lower cost level, in particular.

11 10 SBU Central Eastern Europe (CEE) EUR million 7 9/ /2012 Change 1 9/ /2012 Change 1 12/2012 % % Revenue % % Operating profit (EBIT), excluding non-recurring items % % 7.3 Operating profit (EBIT) margin, excluding nonrecurring items, % 15.3% 10.0% 11.9% 8.2% 5.8% Operating profit (EBIT) % % 5.4 Operating profit (EBIT) 15.3% 9.8% 11.9% 6.4% 4.3% margin, % Capital expenditure excluding acquisitions % % 3.9 Financial Performance in July September 2013 SBU Central Eastern Europe s third quarter revenue increased by 2 percent. Increases in sales prices and changes in the sales mix increased revenue by 12 percent. Lower sales volumes decreased revenue by 9 percent. Exchange rate fluctuations decreased revenue by one percent. Operating profit, excluding non-recurring items, increased by 57 percent and relative profitability improved clearly. The improved operating profit was due to the increased revenue, streamlining measures and lower cost level. Business development was good in the region's largest markets Poland and the Baltic countries. Financial Performance in January September 2013 SBU Central Eastern Europe s revenue in January September decreased by one percent. Lower sales volumes decreased revenue by 8 percent. Increases in sales prices and changes in the sales mix increased revenue by 8 percent. Operating profit, excluding non-recurring items, increased by 45 percent and relative profitability improved clearly. Improved profitability was mainly due to the impacts of streamlining measures and cost savings.

12 11 Cash Flow, Financing Activities, and Financial Risk Management Tikkurila s financial position and liquidity remained at a good level during the review period. Cash flow from operations in January September totaled EUR 65.4 (52.9) million. Net working capital totaled EUR (107.0) million at the end of the review period. The net cash flow from the investing activities was EUR -9.9 (-12.4) million, when taking into account the acquisitions and divestments. Cash flow after capital expenditure totaled EUR 55.5 (40.5) million during the review period. The increase in cash flow was based on lower investments than those of the comparison period, as well as on the timing of the income tax payments. Interest-bearing debt amounted to EUR 87.9 (106.3) million at the end of the review period, and net debt was EUR 60.1 (89.2) million. At the end of the review period, cash and cash equivalents amounted to EUR 27.8 (17.0) million, and short-term interest-bearing debt totaled EUR 27.6.(45.6) million, including the company s issued commercial papers for a total nominal amount of EUR 25.0 (37.0) million. Moreover, the Group had long-term interest-bearing debt totaling EUR 60.4 (60.7) million. At the end of September, the Group had a total of EUR (146.8) million of unused committed credit facilities or credit limits. In September, the company utilized the option to extend the loan period related to the revolving credit facility of a total of EUR 120 million, signed in the fall of 2011, and agreed on a one-year extension to the loan period. The due date according to the original agreement was in September The change agreement signed with banks moved the due date of the EUR 120 million revolving credit facility to September The Group s net financial expenses were EUR 3.7 (7.1) million, and interest expenses and other financing expenses totaled EUR 1.7 (4.3) million. The net financial expenses were clearly lower than in the comparison period due to lower market interest rates, the change in the structure of short-term debt with commercial papers having a larger role, and also due to the lower average balance of interest-bearing debt. The average capital-weighted interest rate of interest-bearing debt was 1.5 (2.2) percent. The net profit was negatively affected by a total of EUR 2.1 (2.9) million based on the impact of realized and unrealized exchange rate differences recognized. Changes in exchange rates also had an impact on the equity on Group's balance sheet via translation differences, especially due to the depreciation of the Russian ruble. At the end of September, the equity ratio was 46.4 (42.0) percent, and gearing was 28.0 (43.6) percent. At the end of the review period, the nominal value of open foreign exchange rate forward agreements was EUR 40.1 (58.5) million and the corresponding market value was EUR 0.3 (-1.3) million. On September 30, 2013, the average nominal hedge ratio, based on those non-euro currencies that have cost-efficient hedging instruments and that are not tied to euro, was about 50 percent. Capital Expenditure In January September 2013, the gross capital expenditure excluding acquisitions amounted to EUR 9.4 (13.1) million. No major single investments were carried out during the review period. Capital expenditures in the period under review were related to, among others, the filling automation in Russia, replacement of labeling machines in Sweden, and the construction of new warehouse for packaging materials in Poland. The Group s depreciation, amortization and impairment losses amounted to EUR 15.5 (17.4) million in January September. The Group performs impairment tests in accordance with the IAS 36 standard.

13 12 Research and Development In January September 2013, Tikkurila s research and development expenses totaled EUR 7.9 (8.1) million, corresponding to 1.5 (1.5) percent of revenue. Human Resources At the end of September 2013, the Tikkurila Group employed 3,253 (3,355) people. The average number of employees in January September was 3,290 (3,469). Tikkurila Group s number of employees at the end of each quarter is presented below split by SBU, starting from the first quarter of Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 SBU East 1,522 1,534 1,500 1,437 1,420 1,447 1,434 SBU Scandinavia SBU Finland SBU CEE Group functions Total 3,438 3,552 3,355 3,223 3,231 3,400 3,253 Shares and Shareholders At the end of September 2013, Tikkurila s share capital was EUR 35.0 million, and the total number of registered shares was 44,108,252. At the end of September 2013, Tikkurila held no treasury shares. According to Euroclear Finland Oy s register, Tikkurila had a total of some 21,400 shareholders on September 30, A list of the largest shareholders registered in the book-entry account system is regularly updated and is available on Tikkurila s website at At the end of September, the closing price of Tikkurila s share was EUR In January September, the volume-weighted average share price was EUR 16.60, the highest price EUR 19.88, and the lowest EUR At the end of September, the market value of Tikkurila Oyj s shares was EUR million. During January September, a total of 10.1 million Tikkurila shares, corresponding to approximately 22.9 percent of the number of registered shares, were traded on NASDAQ OMX Helsinki Ltd. The value of the traded volume was EUR million. Events after reporting period Tikkurila's Scandinavian business segment carried out an acquisition in Sweden after the end of the period under review. In the acquisition, Tikkurila Sverige AB purchased the entire share capital of Färgservice i Malmö AB. The intention of the acquisition is to improve the distribution of Tikkurila's paint products to professional customers in Southern Sweden. The revenue of the acquired company in the 2012 financial period was approximately 17.4 million Swedish krona, or approximately EUR 2.0 million. The acquisition

14 13 does not have a significant impact on the Group's result, balance sheet or financial position. The acquired company will be consolidated with the Tikkurila Group starting from the last quarter of Tikkurila Oyj received a notification, based on the Securities Markets Act, from Threadneedle Investments on October 4, According to the notification, the holding of Ameriprise Financial Inc's holding companies (Columbia Wanger Asset Management LLC, Columbia Management Investment Advisers LLC and Threadneedle Asset Management Holdings Limited) in shares of Tikkurila Oyj exceeded the 1/20 (5%) threshold due to trades executed on October 3, The holding of the above mentioned companies in Tikkurila Oyj amounted to a total of 2,215,512 shares, which corresponds to 5.02 percent of the total amount of shares and votes in Tikkurila Oyj. Short-term Risks and Uncertainties Tikkurila s business involves a number of strategic, operational, financial and hazard risks. Tikkurila strives to recognize, assess and react to risks as proactively as possible, and restrict their possible adverse effects. Tikkurila s Financial Statement Release for the 2012 financial year describes the key short-term risk areas, where no significant changes have taken place compared to the situation stated in the release. The key risk areas are related to the overall macroeconomic situation, the competitive situation and possible changes in the value chain and product distribution. Tikkurila's risk management principles are available on Tikkurila's website at Additional information is available for example in the corporate governance statement and Board of Directors review in relation to risks applicable and relevant to Tikkurila's business in both short term and long term. Moreover, financial risks are described in the Notes to the 2012 Financial Statements. Outlook for 2013 Tikkurila reiterates its guidance for Economic development in Europe is expected to be weak in 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 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.

15 14 Summary Financial Statements and Notes This interim financial report is prepared in accordance with IAS 34 Interim Financial Reporting standard. The same accounting policies have been applied in this interim financial report as in the annual financial statements for 2012, with the exception of the following new or revised or amended standards and interpretations which have been applied from the beginning of Some of them are applied retrospectively and therefore comparison information is changed accordingly. The effect of restatements on the Group's cumulative financial information of each four quarters 2012, full year information 2012 as well as restated consolidated statement of financial position as of Jan 1, 2012 was disclosed in Note 1 in first quarter interim report. This interim financial report is unaudited. As a result of rounding differences, the figures presented in the tables may not add up to the total. The following new or revised or amended standards and interpretations have been applied from January 1, 2013: - Amendments to IAS 1 Presentation of Items of Other Comprehensive Income - IFRS 13 Fair Value Measurement - IFRS 10 Consolidated Financial Statements - IAS 27 (revised 2011) Separate Financial Statements - IAS 28 (revised 2011) Associates and Joint Ventures - IFRS 11 Joint Arrangements - IAS 19 (revised 2011) Employee Benefits - IFRS 12 Disclosures of Interest in Other Entities - Amendments to IFRS 7 Financial Instruments: Disclosures - Offsetting Financial Assets and Financial liabilities - Annual Improvements to IFRSs , May 2012 Above mentioned revised IAS 19 and new standard IFRS 11 Joint Arrangements have had a significant effect on Tikkurila Group's figures. According the revised IAS 19 the actuarial gains and losses on defined benefit pension plans are to be recognized immediately in other comprehensive income and the possibility of corridor method approach was eliminated. The finance cost is calculated on net funding basis according the revised IAS 19. Tikkurila Group applied according the earlier accounting principles the corridor method. The actuarial gains or losses were recognized in profit or loss over the average remaining working lives of the participating employees to the extent that they exceeded the higher of the following: 10% of the pension obligation or 10% of the fair value of plan assets. Tikkurila Group had at year-end 2012 unrecognized actuarial losses on defined benefit pensions and therefore revised IAS 19 had a negative effect on the Group's equity. As revised IAS 19 was applied retrospectively, the Group has adjusted the numbers presented in annual report 2012 accordingly. As a result the equity attributable to owners of the parent decreased EUR 4.2 million, net of tax and defined benefit pension liability increased EUR 5.0 million. In this context, the Group reviewed more closely other long-term employee benefits and as following to this, the liability related to long-service benefits, EUR 3.9 million was recognized. This decreased equity attributable to owners of the parent EUR 2.9 million, net of tax. The Group has used the proportionate consolidation for its joint venture, Alcro Parti AB in which the Group's ownership is 50%. According the new standard IFRS 11 the joint ventures are required to be accounted for using the equity method. This change in accounting principles decreased Revenue 2012 EUR 1.4 million and EBIT EUR 0.3 million. The change however has no impact on net profit for the year Due the change the Group's total assets decreased EUR 0.3 million and the change had an impact on Group's consolidated

16 15 cash flows, which earlier included the cash flows of the joint venture according the Group's ownership percent. Effect of restatements due IFRS 11, revised IAS 19 and other long-service benefit were disclosed in Note 1 the first quarter interim report. Amendments to IAS 1 had an impact on presentation of other comprehensive income: items recognized in other comprehensive income (OCI) are classified as items that may subsequently be reclassified in profit or loss and as items that will not be reclassified in profit or loss. At the same time with new standard IFRS 13, amendments were done in IAS 34 and due these amendments the fair value hierarchy information is disclosed in interim report. In addition the IFRS 12 standard will have effect on notes to be disclosed in forthcoming annual financial statements.

17 16 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 7-9/2013 Restated 7-9/ /2013 Restated 1-9/2012 Restated 1-12/2012 Revenue 189, , , , ,439 Other operating income ,449 1,421 3,266 Expenses -151, , , , ,237 Depreciation, amortization and impairment losses -5,067-5,690-15,478-17,426-25,140 Operating profit 33,080 31,398 76,650 70,356 66,328 Total financial income and expenses -1,595-1,052-3,671-7,124-7,380 Share of profit or loss of associates and joint ventures Profit before taxes 31,554 30,413 73,118 63,460 59,264 Income taxes -7,108-7,772-18,202-18,256-18,599 Net result for the period 24,446 22,641 54,916 45,204 40,665 Other comprehensive income Items that will not be reclassified to profit or loss Remeasurements on defined benefit plans Income taxes relating to items that will not be reclassified to profit or loss Total items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss Available-for-sale financial assets Foreign currency translation differences for foreign operations ,906-6,280 7,040 6,082 Income taxes relating to items that may be reclassified subsequently to profit or loss Total items that may be reclassified subsequently to profit or loss ,084-6,076 7,115 6,251 Total comprehensive income for the period 23,908 26,725 48,840 52,319 46,613 Net result attributable to: Owners of the parent 24,446 22,641 54,916 45,204 40,665 Non-controlling interest Net result for the period 24,446 22,641 54,916 45,204 40,665 Total comprehensive income attributable to: Owners of the parent 23,908 26,725 48,840 52,319 46,613 Non-controlling interest Total comprehensive income for the period 23,908 26,725 48,840 52,319 46,613

18 17 Earnings per share of the net profit attributable to owners of the parent Basic earnings per share (EUR) Diluted earnings per share (EUR)

19 18 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Restated Sep 30, 2012 Restated Dec 31, 2012 Restated Jan 1, 2012 ASSETS Sep 30, 2013 Non-current assets Goodwill 66,508 68,589 66,971 68,696 Other intangible assets 23,222 28,373 26,922 30,155 Property, plant and equipment 107, , , ,570 Investment in associates and joint ventures 1,981 1,793 1,859 1,646 Available-for-sale financial assets 3,515 3,207 3,281 3,028 Non-current receivables 6,377 12,170 9,870 6,846 Deferred tax assets 10,461 9,661 8,772 7,264 Total non-current assets 219, , , ,205 Current assets Inventories 82,710 91,899 84,766 94,690 Interest-bearing receivables Non-interest-bearing receivables 131, , ,051 95,870 Cash and cash equivalents 27,840 17,049 15,739 10,301 Non-current assets held for sale ,894 Total current assets 242, , , ,818 Total assets 461, , , ,023 EQUITY AND LIABILITIES Sep 30, 2013 Restated Sep 30, 2012 Restated Dec 31, 2012 Restated Jan 1, 2012 Share capital 35,000 35,000 35,000 35,000 Other reserves Fair value reserve 1,946 1,758 1,815 1,636 Reserve for invested unrestricted equity 40,000 40,000 40,000 40,000 Translation differences -14,225-7,097-8,018-16,281 Retained earnings 151, , , ,992 Equity attributable to owners of the parent 214, , , ,706 Non-controlling interest Total equity 214, , , ,706 Non-current liabilities Interest-bearing non-current liabilities 60,354 60,665 60,628 60,345 Other non-current liabilities 1,732 1,431 1,160 2,382 Defined benefit pension and other long-term employee benefit liabilities 26,741 26,733 26,432 25,153 Provisions Deferred tax liabilities 10,028 11,437 11,607 10,980 Total non-current liabilities 99, , ,751 99,394 Current liabilities Interest-bearing current liabilities 27,562 45,615 35,925 49,504 Non-interest-bearing current liabilities 120, ,073 97, ,579 Provisions Liabilities classified as held for sale Total current liabilities 147, , , ,923 Total equity and liabilities 461, , , ,023

20 19 CONSOLIDATED FINANCIAL STATEMENT OF CASH FLOWS 7-9/2013 Restated 7-9/ /2013 Restated 1-9/2012 Restated 1-12/2012 CASH FLOW FROM OPERATING ACTIVITIES Net result for the period 24,446 22,641 54,916 45,204 40,665 Adjustments for: Non-cash transactions 6,471 8,243 19,327 24,347 31,120 Interest and other financial expenses 1,833 1,226 4,656 7,794 8,775 Interest income and other financial income ,394 Income taxes 7,109 7,771 18,202 18,256 18,600 Funds from operations before change in net working capital 39,618 39,703 96,115 94,929 97,766 Change in net working capital 37,460 35,129-10,903-14, Interest and other financial expenses paid -1,818-1,659-4,321-5,802-6,636 Interest and other financial income received Income taxes paid -7,087-6,555-16,038-22,660-26,370 Total cash flow from operations 68,369 66,811 65,399 52,883 65,777 CASH FLOW FROM INVESTING ACTIVITIES Other capital expenditure -3,683-3,218-11,477-13,191-16,827 Proceeds from sale of assets , Non-current loan receivables decrease (+), increase (-) Dividends received Net cash used in investing activities -3,484-2,721-9,878-12,414-15,520 Cash flow before financing 64,885 64,090 55,521 40,469 50,257 CASH FLOW FROM FINANCING ACTIVITIES Non-current borrowings, increase (+), decrease (-) Current financing, increase (+), decrease (-) -57,377-63,034-8,402-5,235-13,989 Dividends paid ,522-32,199-32,199 Other 423 1,613-1,185 2,297 1,420 Net cash used in financing activities -56,954-61,421-43,109-35,137-44,768 Net change in cash and cash equivalents 7,931 2,669 12,412 5,332 5,489 Cash and cash equivalents at the beginning of period 19,779 12,924 15,739 10,301 10,301 Effect of exchange rate fluctuations on cash held Cash and cash equivalents transferred in assets held for sale Cash and cash equivalents at the end of period 27,840 15,851 27,840 15,851 15,739 Net change in cash and cash equivalents 7,931 2,669 12,412 5,332 5,489

21 20 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share capital Equity attributable to the owners of the parent Other reserves Fair value reserve Reserve for invested unrestricted equity Translation differences Retained earnings Noncontrolling interest Total equity Equity before restatements at Jan 1, , ,636 40,000-16, , , ,500 Effect of restatements to equity ,794-6, ,794 Equity at Jan 1, , ,636 40,000-16, , , ,706 Total comprehensive income for the period ,184 43,013 52,319-52,319 Share-based compensation Adjustment arising from hyperinflation Dividends paid ,199-32, ,199 Equity at Sep 30, , ,758 40,000-7, , , ,575 Equity at Jan 1, , ,815 40,000-8, , , ,909 Total comprehensive income for the period ,207 54,916 48,840-48,840 Reclassification Share-based compensation Adjustment arising from hyperinflation Dividends paid ,522-33, ,522 Equity at Sep 30, , ,946 40,000-14, , , ,245 Total

22 21 OPERATING SEGMENTS Tikkurila's business activities are organized in four reporting segments based on its strategy to be 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. The differences in these operating environments and overall management of each area have been taken into account while establishing these reporting segments. Segments' revenue arises from the sales of various paints and related products that are sold to retailers, industrial customers and for professional use. Insignificant revenue is received from the sales of auxiliary services related to paints. Tikkurila common section includes the items related to the Group headquarters. The evaluation of profitability and decision making concerning resource allocation are based on segmental operating profit. Segment assets are items of the statement of financial position that the segment employs in its business activities or which can reasonably be allocated to a segment. Segments' revenue is presented based on the location of the customers, whereas reportable segment assets are presented according to the location of the assets. Inter-segment pricing is based on market prices. External revenue accumulates from a large number of customers. Revenue by segment 7-9/ / / / /2012 SBU East 74,286 75, , , ,840 SBU Scandinavia 50,971 52, , , ,154 SBU Finland 26,477 26,444 89,927 92, ,906 SBU Central Eastern Europe 37,858 37, , , ,539 Total 189, , , , ,439 EBIT by segment 7-9/ / / / /2012 SBU East 11,071 13,836 23,057 27,817 29,897 SBU Scandinavia 11,422 11,120 27,122 24,489 23,646 SBU Finland 5,465 3,404 16,836 13,700 10,595 SBU Central Eastern Europe 5,786 3,649 11,962 6,452 5,355 Tikkurila common ,327-2,102-3,164 Eliminations Total 33,080 31,398 76,650 70,356 66,328 Non-allocated items: Total financial income and expenses -1,595-1,052-3,671-7,124-7,380 Share of profit or loss of associates and joint ventures Profit before taxes 31,554 30,413 73,118 63,460 59,264 Assets by segment Sep 30, 2013 Sep 30, 2012 Dec 31, 2012 SBU East 141, , ,062 SBU Scandinavia 166, , ,860 SBU Finland 79,121 83,850 74,674 SBU Central Eastern Europe 91, ,742 82,231 Assets, non-allocated to segments 45,873 51,360 47,054 Eliminations -62,903-66,912-59,532 Total assets 461, , ,348

23 22 Non-recurring items by segment SBU East SBU Scandinavia SBU Finland SBU Central Eastern Europe Tikkurila common Total 1-9/2013 Personnel related Divestments and restructuring of Group organization Gain on sale of availablefor-sale financial assets Total SBU East SBU Scandinavia SBU Finland SBU Central Eastern Europe Tikkurila common Total 1-9/2012 Personnel related , ,783 Divestments and restructuring of Group organization , ,222 Impairment losses -1, ,565 Total -2, ,011-1, ,570 SBU East SBU Scandinavia SBU Finland SBU Central Eastern Europe Tikkurila common Total 1-12/2012 Personnel related , ,919 Divestments and restructuring of Group organization , ,246 Impairment losses -2, , ,038 Change in fair value of contingent consideration ,853-1,853 Total -2, ,011-1, ,350

24 23 CHANGES IN PROPERTY, PLANT AND EQUIPMENT 1-9/ / /2012 Carrying amount at the beginning of period 112, , ,570 Additions 8,215 10,819 14,640 Disposal of subsidiaries and businesses Disposals Depreciation, amortization and impairment losses -11,935-13,037-17,446 Exchange rate differences and other changes -1,918 3,191 3,580 Carrying amount at the end of period 107, , ,785 Tikkurila Group had contractual commitments for purchase of property, plant and equipment EUR 1.8 (1.7) million at the end of September CHANGES IN INTANGIBLE ASSETS 1-9/ / /2012 Carrying amount at the beginning of period 93,892 98,850 98,850 Additions 1,141 2,288 3,475 Disposal of subsidiaries and businesses Disposals Depreciation, amortization and impairment losses -3,543-4,389-7,694 Exchange rate differences and other changes -1, Carrying amount at the end of period 89,730 96,962 93,892 Tikkurila Group had contractual commitments for intangible assets EUR 0.0 (0.6) million at the end of September INVENTORIES Write-down of inventory for a total amount of EUR 1.7 (2.8) million was recognized until end of September 2013.

25 24 RELATED PARTY TRANSACTIONS Parties are considered as each other s related parties if one party is able to control or has significant influence over financial and operating decision making of another party. Tikkurila Group has related party relationships with the parent company of the Group (Tikkurila Oyj), subsidiaries, associates and joint ventures. Related parties include members of Board of Directors and the Group s Board of Management, CEO as well as their family members. Related party transactions are presented below 1-9/ / /2012 Joint ventures Sales 3,924 3,618 4,702 Receivables Liabilities Associates Sales 13,027 18,562 20,724 Purchases ,261 Receivables 3,446 6,970 3,151 Liabilities Share-based Commitment and Incentive Plan In order to commit and motivate key personnel, the Board of Directors of Tikkurila Oyj decided on a new share-based plan in 2012, and it also selected ten key persons, each of which has a right to participate in this plan. In order to participate, each person has to buy Tikkurila Oyj's shares from the market. The maximum amount of shares under this plan has been individually defined for each participant. Based on the commitment and incentive plan, and stemming from both the performance period as well as the performance period , during the third quarter a total of EUR 0.3 (during the third quarter 2012: 0.2) million was recognized as personnel expenses in the Group income statement according to IFRS 2 standard. From the beginning of the review period, expenses totaling around EUR 0.7 (0.3) million have been booked. Correspondingly, the estimated total value of the plan for the performance period of totaled approximately EUR 2.5 million, and the total value for the performance period about EUR 0.2 million, at the end of the review period. The total value will be expensed over a three-year period until when the potential payments will take place if the terms and conditions of the plan are met. Half of the payments will be in shares, and a half will be settled in cash. Share price changes as well as the terms and conditions of the plan will determine the value and corresponding liability in relation to the cash-settled portion.

26 25 COMMITMENTS AND CONTINGENT LIABILITIES Sep 30, 2013 Sep 30, 2012 Dec 31, 2012 Mortgages given as collateral for liabilities in the statement of financial position Other loans Mortgages given Total loans Total mortgages given Contingent liabilities Guarantees On behalf of own commitments On behalf of others 2,958 2,762 2,436 Other obligations of own behalf Lease obligations 34,115 44,744 41,152 Total contingent liabilities 37,517 47,739 43,818 DERIVATIVE INSTRUMENTS Sep 30, 2013 Sep 30, 2012 Dec 31, 2012 Nominal value Fair value Nominal value Fair value Nominal value Fair value Currency derivatives Currency forwards 40, ,453-1,330 47, EVENTS AFTER THE END OF REPORTING PERIOD Tikkurila's Scandinavian business segment carried out an acquisition in Sweden after the end of the period under review. In the acquisition, Tikkurila Sverige AB purchased the entire share capital of Färgservice i Malmö AB. The intention of the acquisition is to improve the distribution of Tikkurila's paint products to professional customers. The revenue of the acquired company in the 2012 financial period was approximately 17.4 million Swedish krona, or approximately EUR 2.0 million. The acquisition does not have a significant impact on the Group's result, consolidated statement of financial position, result or financial position. The acquired company will be consolidated with the Tikkurila Group starting from the last quarter of Purchase price allocation according IFRS 3 standard will be disclosed in Financial Statement release, published on February 10, 2014.

27 26 CARRYING AMOUNTS AND FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES BY CATEGORIES Financial assets and liabilities at fair value through profit or loss Loans and other receivables Availablefor-sale financial assets Other financial liabilities Carrying amounts Sep 30, 2013 Fair values Non-current financial assets Available-for-sale financial assets - - 3,515-3,515 3,515 Non-current receivables - 6, ,171 6,171 Current financial assets Interest-bearing receivables Derivatives Cash equivalents - 27, ,840 27,840 Trade and other noninterest-bearing receivables - 122, , ,066 Total ,318 3, , ,322 Non-current financial liabilities Non-current interest-bearing liabilities ,354 60,354 60,536 Contingent consideration Current financial liabilities Current interest-bearing liabilities ,562 27,562 27,562 Derivatives Trade payables ,175 53,175 53,175 Total , , ,464

28 27 FAIR VALUE HIERARCHY Sep 30, 2013 Level 1 Level 2 Level 3 Total Recurring fair value measurements Available-for-sale financial assets - 2, ,515 Derivatives (in assets) Recurring fair value measurements Derivatives (in liabilities) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs). Reconciliation of Level 3 fair value measured financial assets Available-for-sale financial assets Carrying amount at Jan Translation differences in other comprehensive income -7 Acquisitions 84 Carrying amount at end of review period 853 In review period no gains or losses of available-for-sale financial assets in fair value hierarchy level 3 were recognized. Available-for-sale financial assets in level 3 include unquoted shares that are measured at amortized cost. These shares are of business supportive nature and personnel s recreational activities related long-term investments that Tikkurila is not intending to sell. These shares have no quoted market price in an active market and their fair values cannot be measured reliably by using any valuation techniques. Therefore, according assessment of Tikkurila's management, the cost of shares is the best available estimate for fair value.