Tikkurila. Annual General Meeting on March 31, 2011 Finlandia Hall. Erkki Järvinen, President and CEO

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1 Tikkurila Annual General Meeting on Finlandia Hall Erkki Järvinen, President and CEO

2 Disclaimer All forward-looking statements in this presentation are based on the management's current expectations and beliefs about future events, and actual results may differ from the expectations and beliefs such statements contain. 2

3 Contents Tikkurila in brief Group highlights in 21 Strategy and operating environment Outlook 3

4 Tikkurila in brief

5 Tikkurila in brief Tikkurila in a nutshell Market position in the decorative paint market Customers: Consumers, professionals and industry Market position: Leading market position in decorative paints in Finland, Sweden, Russia and the Baltic countries, one of the leading in Poland Market area: Northern Europe, Central Eastern Europe, Russia and other CIS countries, Ukraine Products and services: Decorative paints, industrial wood and metal coatings, customer training, comprehensive advisory service (e.g. Customer hotline), Designer and Contractor Pool etc. 5

6 Group highlights in 21

7 Revenue by segment (SBU) Total revenue for 21 EUR million Total revenue for 29 EUR 53.2 million 18% 19% 18% 33% 2% 32% East Scandinavia Finland CEE 31% 3% Decorative paints accounted for some 85% of revenue in 21 and 29 The figures on the graphs above have been independently rounded to one decimal, which should be taken into account when calculating total figures. 7

8 Development of revenue and EBIT by segment Revenue 29 vs. 21 EBIT* 29 vs. 21 EUR million EUR million % (6.8%) 17.2 (.3%) (15.2%) (16.4%) % (-4.6%) 13.6 (-3.8%) 21.3 (32.5%) 22.7 (27.7%) East Scandinavia Finland CEE East Scandinavia Finland CEE Group common * Excluding non-recurring items 8

9 Seasonality Revenue by quarter EBIT* by quarter EUR million EUR million Q1 Q2 Q3 Q4-15 Q1 Q2 Q3 Q * Excluding non-recurring items 9

10 Net interest-bearing liabilities and gearing at year-end Net interest-bearing liabilities Gearing EUR million %

11 Financial targets Tikkurila has set the following financial targets in 21 for medium term An annual organic revenue growth of > 5% Operating EBIT > 1% ROCE %: continuous improvement Gearing < 1% Dividend policy: Target is to pay at least 4 % of annual operative net income as dividends Historical performance Target Organic growth, % 1 7% 6% 9% 3% -2% 11% > 5% EBIT, % 2 1.3% 9.9% 1.3% 9.1% 9.5% 1.1% > 1% ROCE 2.2% 23.7% 24.5% 18.7% 15.7% 19.2% Continuous improvement Gearing 315.4% 22.3% 135.3% 28.5% 9.% 41.4% < 1 % 1) Organic growth calculated based on reported net revenue and reported acquisitions and divestments 2) Excluding non-recurring items 11

12 Tikkurila share price development 12

13 98% of decorative paints sold in Scandinavia by Tikkurila were water-borne Water-borne paints' share of Tikkurila's production The most eco-labeled products in Scandinavia %

14 More than 4 product launches Supi Sauna Products Tikkurila ProHouse Method 14

15 Strategy and operating environment

16 Value of the global paints and coatings market Decorative paints 44% ($ ~38 billion) 1% Metal Industrial Coatings Industrial paints 56% ($ ~49 billion) Transportation 8% Decorative paints 44% 8% Industrial Maintenance and Protective 7% Automotive Refinish 6% 3% 3% 4% 6% Powder Coatings Lähde: IPPIC 21 (figures for 29) Packaging Coatings Marine Coatings Coil Coatings 16 Wood Coatings

17 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 17

18 Strategic intent: The leading paint company in the Nordic countries and Eastern Europe, including Russia Profitable growth Customer focus Geographical focus Strong brands One unified Tikkurila 18

19 Strong and well-established brands Strategic brands Local brands "High end" (premium), "High end" (premium), "Medium", "Economy", Large majority of sales from strategic brands 19 19

20 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 2 (Revenue ~MEUR 13) Acquisition of Alcro- Beckers in 21 (Revenue ~MEUR 19) Acquisition of Kraski Teks in 26 (Revenue ~MEUR 8) Acquisition of Gamma and Ohtek in 27 (Revenue ~MEUR 11) Revenue Revenue from acquisitions Divestments EBIT margin (excl. non-recurring) 2

21 Tikkurila in Russia Key facts Locations Operational area Product offering and brands 21 revenue 21 EBIT 1 Employees SBU East: Russia, other CIS countries and Ukraine Decorative paints and coatings for metal and wood industries Tikkurila, Teks, Gamma, Finncolor EUR million, 33% of group Biggest market: Russia (89% of SBU East's revenue) EUR 22.7 million, 36% of group 2 1,58 (year-end 21) St. Petersburg Mytishchi Novosibirsk Minsk Chelyabinsk Stary Oskol Almaty Kiev Market shares in decorative paints in 29 3 Production sites St. Petersburg, Russia Stary Oskol, Russia Kiev, Ukraine Tikkurila 18% Empils 7% Production capacity ~143 million litres, 48% of group capacity Others 69% Lakra 6% Sales offices Russia, Ukraine, Belarus, Kazakhstan 1 Excluding non-recurring items 2 Excluding group items 3 Source: Chem-Courier 21 21

22 Outlook

23 Development of gross domestic product F Russia Sweden E 211F GDP growth % , E 211F GDP growth % Finland Poland E 211F GDP growth % GDP growth % E 211F Source: BOFIT, EC, Statistics Finland and Sweden, Etla, Bank of Finland 23

24 Outlook for 211 Revenue and profitability of Tikkurila Outlook for 211 EUR million % In 211, Tikkurila expects revenue growth to exceed the average GDP growth in Tikkurila's main market areas. In spite of the rising raw material prices, Tikkurila expects EBIT margin as a percentage of revenue to stay at the same level as in Revenue EBIT, % (excluding non-recurring items) 24

25 Displayed at the General Meeting

26 Tikkurila's Touching Installation On the way to NY Design Museum Touching at Helsinki Design Week Further information: Tikkurila Annual Report 21 26

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