Business Review Q1
January-March highlights
- Revenue increased by 9.3 percent compared to 2020, amounting to
EUR 145.4 million (1-3/2020: 133.0). Comparable revenue increased by 12.9 percent, excluding currency effects. -
Adjusted operating result increased by 105.8 percent to
EUR 17.6 (8.5) million and amounted to 12.1 (6.4) percent of revenue. -
Operating result (EBIT) increased by 88.5 percent to
EUR 16.1 (8.5) million and was 11.1 (6.4) percent of revenue. -
Earnings per share (EPS) increased by 258.6 percent to
EUR 0.31 (0.09). -
Regarding the voluntary recommended cash tender offer for all the shares in
Tikkurila Oyj byPPG Industries, Inc. , PPG announced onApril 14 that it has extended the tender offer period to continue untilMay 11, 2021 .
The demand for decorative paints continued on a healthy level, and despite the Covid-restrictions imposed in some countries such as in the Baltic countries,
The paint industry has recently experienced constraints in raw material supply causing availability issues and cost inflation globally. The impact of raw material disruption is expected to be visible from Q2 onwards.
Key figures for the Group
EUR million | 1-3/2021 | 1-3/2020 | Change % | 1-12/2020 |
Revenue | 145.4 | 133.0 | +9.3% | 582.0 |
Excl. currencies and closures | +17.2 | +12.9% | ||
Operating result | 16.1 | 8.5 | +88.5% | 61.1 |
Operating result margin, % | 11.1% | 6.4% | +4.6%-p* | 10.5% |
Adjusted operating result | 17.6 | 8.5 | +105.8% | 63.8 |
Adjusted operating result margin, % | 12.1% | 6.4% | +5.7%-p | 11.0% |
Net result for the period | 13.5 | 3.8 | +258.6% | 43.1 |
Earnings per share (EPS), EUR | 0.31 | 0.09 | +258.6% | 0.98 |
Interest-bearing net liabilities (at period-end) | 48.8 | 95.6 | -49.0% | 12.1 |
Cash and cash equivalents | 37.9 | 70.5 | -46.2% | 92.0 |
Total equity (at period-end) | 195.4 | 166.3 | +17.5% | 181.4 |
Total assets (at period-end) | 454.0 | 486.5 | -6.7% | 441.6 |
Gearing, % | 25.0% | 57.5% | 6.7% | |
ROCE, %, rolling | 27.6% | 15.8% | 24.0% | |
Cash flow after capital expenditure | -32.2 | -17.4 | -85.2% | 92.0 |
*percentage points
Main drivers (Q1)
The demand for decorative paints remained high during the first quarter. The sales of premium quality products,
In industry paints the total revenue slightly declined, but performance varied between countries and segments. The revenue declined in metal industry paints but increased in wood industry. Especially
Currencies had a clear negative impact on the revenue during the quarter. The weakening of the Russian Ruble impacted negatively on the revenue in SBU East, whereas in local currency the revenue growth was strong. In SBU West, the weakening Polish Zloty had a negative impact on the revenue, which however, was compensated by the strengthening Swedish Krona.
Operating result improved significantly driven by the healthy demand for decorative paints and positive development on all core markets. The turn-around efficiency improvements also boosted the financial result. Items affecting comparability during Q1 were related to the on-going PPG's tender offer.
Segment data
EUR million | 1-3/2021 | 1-3/2020 | Change % | 1-12/2020 |
SBU West revenue | 107.1 | 96.9 | +10.5% | 398.0 |
Excl. FX and closures | +9.3 | +9.6% | ||
SBU West operating result (EBIT) | 15.2 | 10.4 | +47.8% | 49.0 |
SBU West adjusted operating result | 15.4 | 10.4 | +47.8% | 49.2 |
SBU East revenue | 38.3 | 36.0 | +6.3% | 184.1 |
Excl. FX and closures | +7.9 | +21.9% | ||
SBU East operating result (EBIT) | 3.5 | -0.9 | +475.4% | 20.4 |
SBU East adjusted operating result | 3.6 | -0.9 | +483.5% | 21.8 |
Group Common operating result | -2.6 | -0.9 | -176.3% | -8.3 |
Effects of various factors on revenue
Group | SBU West | SBU East | ||||
EUR million | % | EUR million | % | EUR million | % | |
Revenue in Q1/2020 | 133.0 | 96.9 | 36.0 | |||
Volume | 13.0 | 9.8% | 7.1 | 7.3% | 5.9 | 16.5% |
Price/mix | 4.2 | 3.1% | 2.2 | 2.3% | 2.0 | 5.5% |
Currencies | -4.7 | -3.6% | 0.9 | 0.9% | -5.6 | -15.5% |
Divestments | - | - | - | |||
Revenue in Q1/2021 | 145.4 | +9.3% | 107.1 | +10.5% | 38.2 | +6.3% |
Revenue by region
EUR million | 1-3/2021 | 1-3/2020 | Change % | 1-12/2020 |
26.0 | 27.7 | -6.0% | 133.6 | |
36.6 | 31.0 | +18.1% | 131.3 | |
29.1 | 27.6 | +5.5% | 97.9 | |
24.2 | 21.4 | +12.9% | 92.6 | |
Other countries* | 29.4 | 25.2 | +16.6% | 126.6 |
*
Main drivers (Q1)
In
In
In
In
The revenue increase in Other countries was driven by
Income statement
EUR million | 1-3/2021 | 1-3/2020 | Change % | 1-12/2020 |
Revenue | 145.4 | 133.0 | 9.3% | 582.0 |
Other operating income | 0.6 | 0.8 | -25.8% | 2.7 |
Expenses | -124.0 | -119.4 | 3.9% | -499.1 |
Depreciation, amortization and impairment losses | -5.9 | -5.8 | 1.2% | -24.4 |
Operating result | 16.1 | 8.5 | +88.5% | 61.1 |
Total financial income and expenses | 0.4 | -3.8 | +109.9% | -6.6 |
Share of profit or loss of equity-accounted investees | 0.1 | 0.1 | +63.7% | 0.4 |
Result before taxes | 16.6 | 4.8 | +242.7% | 54.9 |
Income taxes | -3.0 | -1.1 | +185.9% | -11.8 |
Net result for the period | 13.5 | 3.8 | +258.6% | 43.1 |
Reconciliation of adjusted operating result to EBIT
EBIT by segment | 1-3/2021 | 1-3/2020 | 1-12/2020 |
EUR million | |||
SBU West | 15.2 | 10.4 | 49.0 |
SBU East | 3.5 | -0.9 | 20.4 |
-2.6 | -0.9 | -8.3 | |
Eliminations | - | - | - |
Total | 16.1 | 8.5 | 61.1 |
Items affecting comparable EBIT by segment | 1-3/2021 | 1-3/2020 | 1-12/2020 |
EUR million | |||
SBU West | -0.2 | - | -0.2 |
SBU East | -0.1 | - | -1.4 |
-1.2 | - | -1.1 | |
Eliminations | - | - | - |
Total | -1.5 | - | -2.7 |
Adjusted operating result by segment | 1-3/2021 | 1-3/2020 | 1-12/2020 |
EUR million | |||
SBU West | 15.4 | 10.4 | 49.2 |
SBU East | 3.6 | -0.9 | 21.8 |
-1.4 | -0.9 | -7.2 | |
Eliminations | - | - | - |
Total | 17.6 | 8.5 | 63.8 |
Items affecting comparable EBIT | |||
Group total | 1-3/2021 | 1-3/2020 | 1-12/2020 |
EUR million | |||
Divestments, changes in Group structure | - | - | 0.0 |
Costs related to public tender offer | -0.5 | - | -0.9 |
Personnel related *) | -1.0 | - | -0.5 |
Impairment losses | - | - | -1.3 |
Total | -1.5 | - | -2.7 |
SBU West | 1-3/2021 | 1-3/2020 | 1-12/2020 |
EUR million | |||
Divestments, changes in Group structure | - | - | 0.0 |
Personnel related *) | -0.2 | - | -0.0 |
Impairment losses | - | - | -0.2 |
Total | -0.2 | - | -0.2 |
SBU East | 1-3/2021 | 1-3/2020 | 1-12/2020 |
EUR million | |||
Divestments, changes in Group structure | - | - | 0.0 |
Personnel related *) | -0.1 | - | -0.2 |
Impairment losses | - | - | -1.1 |
Total | -0.1 | - | -1.4 |
1-3/2021 | 1-3/2020 | 1-12/2020 | |
EUR million | |||
Costs related to public tender offer | -0.5 | - | -0.9 |
Personnel related *) | -0.6 | - | -0.2 |
Total | -1.2 | - | -1.1 |
*) Related to the public tender offer in Q1/2021
Market review and impact of Covid-19
Similar to 2020, Covid-19 has continued to support demand for decorative paints as consumers increasingly focus on home improvement activities. In industrial paints, the pandemic has led to a weaker demand on some of our operating markets, whereas effects vary between different segments of the paint industry.
For
Raw material constraints
Due to simultaneous downstream raw material supply challenges and heavy global demand for decorative paints, the paint industry has experienced constraints in supply causing availability issues and price pressures globally. The impact is expected to be mainly visible in Q2 onwards. However, we target pricing changes to offset the accelerating raw material cost inflation from the second half of 2021 onwards.
Development of
The development of the use of land area owned by
Tender Offer by
The tender offer by
As previously announced, the
Other than the receipt of necessary regulatory approvals, the tender offer is subject to customary conditions to completion set out in the tender offer document, including the valid acceptance of the tender offer with respect to shares representing, together with shares otherwise held by PPG and any of its subsidiaries, more than 66.7% of the shares and voting rights in
Share-based incentive plans and one-time costs related to the Tender Offer
The costs related to the implementation of the Tender Offer will have an effect on
Guidance for 2021
Revenue is expected to remain at previous year's level excluding currency effect and adjusted operating result to remain on, or slightly below previous year's level when excluding costs in connection with implementing the public tender offer. (2020:
Annual General Meeting
As announced earlier, Board of Directors will summon the Annual General meeting 2021 at a later date.
Conference call
Regarding the Business Review Q1, no conference call will be arranged this time.
Contact information:
ir.tikkurila@tikkurila.com
+358 50 596 0978
elisa.markula@tikkurila.com
Markus Melkko, CFO
+358 40 531 1135
markus.melkko@tikkurila.com
Sustainable Nordicness
www.tikkurilagroup.com
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