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Half year financial report
January-June 2021
TIKKURILA OYJ P.O.Box 53, Heidehofintie 2, FI-01301 Vantaa, Finland, +358 20 191 2000, VAT FI01970674, Business Identity Code 0197067-4, Registered Office Vantaa www.tikkurilagroup.com
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Tikkurila's half year financial report for January−June 2021
Tikkurila's revenue grew, profitability remained at a good level
Tikkurila Oyj
Half year financial report
July 23, 2021 at 9.30 a.m. (EEST)
April−June 2021 highlights
- Revenue increased by 7.4 percent to EUR 184.5 (171.8) million. Comparable revenue increased by 9.1 percent, excluding currency effects.
- Operating result (EBIT) decreased by 52.4 percent to EUR 15.8 (33.1) million and was 8.5 (19.3) percent of revenue. Operating profit was affected by costs related to PPG's tender offer, a total of EUR 11.4 million in the second quarter of 2021.
- Adjusted operating result decreased by 21.5 percent to EUR 27.2 (34.7) million and was 14.8 (20.2) percent of revenue.
- EPS decreased by 55.0 percent to EUR 0.28 (0.61).
- The voluntary recommended cash tender offer for all the shares in Tikkurila Oyj by PPG Industries, Inc. was completed on June 10, 2021. As of June 30, 2021, PPG Finland Oy, an indirectly wholly owned subsidiary of PPG Industries, Inc., owns 97.3 percent of all shares and votes in Tikkurila Oyj. The right and obligation of PPG Finland Oy to redeem minority shares have been registered with the Finnish Trade Register on June 14, 2021.
January−June 2021 highlights
- Revenue increased by 8.3 percent to EUR 329.9 (304.8) million. Comparable revenue increased by 10.7 percent, excluding currency effects.
- Operating result (EBIT) decreased by 23.5 percent to EUR 31.9 (41.7) million and was 9.7 (13.7) percent of revenue. Operating profit was affected by costs related to PPG's tender offer, a total of EUR 12.9 million in the first half of the year.
- Adjusted operating result increased by 3.7 percent to EUR 44.8 (43.2) million and was 13.6 (14.2) percent of revenue.
- EPS amounted to EUR 0.58 (0.70).
Guidance for 2021
Due to the tender offer for all the shares in Tikkurila Oyj completed by PPG Industries, Inc. on June 10, 2021, Tikkurila will not give guidance for 2021. Consequently, the previous guidance given in the Q1 Business Review on April 28, 2021 is not in force.
TIKKURILA OYJ P.O.Box 53, Heidehofintie 2, FI-01301 Vantaa, Finland, +358 20 191 2000, VAT FI01970674, Business Identity Code 0197067-4, Registered Office Vantaa www.tikkurilagroup.com
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Markus Melkko, Interim CEO & CFO:
During the second quarter Tikkurila's financial performance remained solid, and strong demand for our quality brands continued. Revenue increased by 7% and revenue without currency effect increased by 9%. The adjusted operating result decreased by -21% compared to the record high Q2/2020. The adjusted operating margin during the second quarter of 2021 was close to 15 percent.
During the first half of the year, the global paint industry has experienced an
unprecedented raw material disruption, which has further escalated during the second quarter. The raw material and packaging inflation impacted our cost basis, and the simultaneous raw material supply issues impacted our ability to serve our customers.
In the first half of the year 2021, revenue increased by 8% (11% excluding currency effects) and adjusted operating result increased by 4% compared to the first half of 2020. Due to PPG's tender offer transaction operating result includes EUR 12.9 million costs, which are treated as items affecting comparability. These costs were advisory costs and costs related to employee incentives.
Tikkurila experienced good revenue growth in decorative paints in both interior and exterior paints. Revenue grew in all key geographies, except in Finland, where the second quarter revenue was slightly below the comparison period. Industrial paint revenue grew in both metal and wood paints against the comparison period.
Despite the varying Covid-19 restrictions in Tikkurila's operating countries, we have remained fully operational also during the second quarter.
We expect that raw material inflation and some supply constraints will continue during the second half of 2021. We will maintain focus on serving our customers to the best of our capabilities under the supply constraints, while maintaining our profitability with smart margin management and targeted pricing changes to offset inflation.
On June 10, 2021, PPG Industries, Inc. completed its voluntary cash tender offer. As of June 30, 2021, PPG Industries, Inc., through its wholly owned subsidiaries, owned 97.3% of Tikkurila Oyj shares and votes. PPG has commenced redemption proceedings, as defined under Finnish Companies Act, to redeem the minority shares.
TIKKURILA OYJ P.O.Box 53, Heidehofintie 2, FI-01301 Vantaa, Finland, +358 20 191 2000, VAT FI01970674, Business Identity Code 0197067-4, Registered Office Vantaa www.tikkurilagroup.com
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Key figures for the Group
EUR million | 4-6/2021 | 4-6/2020 | Change % 1-6/2021 | 1-6/2020 | Change % 1-12/2020 | ||||||
Revenue | 184.5 | 171.8 | +7.4% | 329.9 | 304.8 | +8.3% | 582.0 | ||||
Comparable | 15.6 | +9.1% | 32.7 | +10.7% | |||||||
revenue growth1) | |||||||||||
Operating result | 15.8 | 33.1 | -52.4% | 31.9 | 41.7 | -23.5% | 61.1 | ||||
(EBIT) | |||||||||||
Operating result | 8.5% | 19.3% | -10.7%- | 9.7% | 13.7% | -4.0%-p* | 10.5% | ||||
(EBIT) margin, % | p* | ||||||||||
Adjusted operating | 27.2 | 34.7 | -21.5% | 44.8 | 43.2 | +3.7% | 63.8 | ||||
result | |||||||||||
Adjusted operating | 14.8% | 20.2% | -5.4%-p* | 13.6% | 14.2% | -0.6%-p* | 11.0% | ||||
result margin, % | |||||||||||
Result before taxes | 15.5 | 34.3 | -54.8% | 32.1 | 39.1 | -18.1% | 54.9 | ||||
Net result for the | 12.2 | 27.0 | -55.0% | 25.7 | 30.8 | -16.6% | 43.1 | ||||
period | |||||||||||
Earnings per share | 0.28 | 0.61 | -55.0% | 0.58 | 0.70 | -16.6% | 0.98 | ||||
(EPS), EUR | |||||||||||
Interest-bearing net | 58.4 | 96.9 | -39.7% | 12.1 | |||||||
liabilities (at period- | |||||||||||
end) | |||||||||||
Total equity (at | 204.8 | 173.8 | +17.9% | 181.4 | |||||||
period-end) | |||||||||||
Total assets (at | 523.2 | 561.8 | -6.9% | 441.6 | |||||||
period-end) | |||||||||||
Equity ratio, % | 39.2% | 30.9% | 41.1% | ||||||||
Gearing, % | 28.5% | 55.8% | 6.7% | ||||||||
ROCE, %, rolling | 21.0% | 20.5% | 24.0% | ||||||||
Cash flow after | -7.9 | 11.4 | -169.4% | -40.1 | -5.9 | -575.0% | 92.0 | ||||
capital expenditure | |||||||||||
- Comparable revenue excluding currency effects. * Percentage points.
TIKKURILA OYJ P.O.Box 53, Heidehofintie 2, FI-01301 Vantaa, Finland, +358 20 191 2000, VAT FI01970674, Business Identity Code 0197067-4, Registered Office Vantaa www.tikkurilagroup.com
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Tikkurila Oyj Half year financial report January 1 - June 30, 2021
This report has been prepared in accordance with the IAS 34 standard and other valid regulations. The information disclosed is unaudited except for full year figures for 2020. The figures presented in the report are independently rounded. Figures in brackets refer to the corresponding period in the previous year, unless otherwise stated.
Fluctuations in exchange rates in this 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 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 report, the Finnish version shall prevail.
Tikkurila's reporting segments are SBU West and SBU East. SBU West consists of Sweden, Denmark, Norway, Finland, Poland, Estonia, Latvia, and Lithuania. SBU East consists of Russia, Central Asia, and China. Furthermore, SBU East is responsible for exports to more than 30 other countries. From 2019, after closing the activities of Tikkurila's German subsidiary, Germany has belonged to export and is presented in SBU East, but items related to the German subsidiary are still reported in SBU West.
TIKKURILA OYJ P.O.Box 53, Heidehofintie 2, FI-01301 Vantaa, Finland, +358 20 191 2000, VAT FI01970674, Business Identity Code 0197067-4, Registered Office Vantaa www.tikkurilagroup.com
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Tikkurila Oyj published this content on 23 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 July 2021 07:37:03 UTC.