Upload
phungphuc
View
213
Download
0
Embed Size (px)
Citation preview
Update on Tikkurila's
Russian operations Tikkurila Analyst Day on August 15, 2013
Simo Laitala, Managing Director, Russia and
Central Asia
Tikkurila in Russia
August 15, 2013 2
Current demand
structure
Economy and medium segments
dominating, premium segment expected
to grow fastest
Facts about SBU East
Paint
consumption
~5-7 liters per capita*
*Excl. non-recurring items
Source: Chem-Courier 2012 (paint consumption)
Russia, other CIS countries, Ukraine
Operational area
Production sites Russia (3) and Ukraine (1)
Personnel
EUR 242.8 million, 36% of Group
Russia ~90% of SBU East revenue
2012 revenue
EUR 32.5 million, 44% of Group
2012 EBIT*
Retail Tikkurila's products are sold in more than
5,000 retail outlets
1,517 (on average in 2012)
Good coverage of operations
Khabarovsk
Saint Petersburg
Moscow Kopeisk
Yekaterinburg
Novosibirsk Irkutsk
Stariy Oskol
Krasnodar
Samara
August 15, 2013
Production, logistic center, sales
Logististic center and sales
Sales office
3
• Tikkurila sales function has regional structure with more than 200 employees
• Tikkurila has established long term partnerships with local customers
• Tikkurila's office and warehouse network has been expanded in 2012
Russian paint market is fragmented and there
have been no major changes recently
August 15, 2013 4
*Source: Chem-Courier 2012 (volume)
Market share development in Russia in 2010–2012 Russian decorative paint market shares in 2012
17%
6%
5%
4%
3%
3% 3%
3% 3%
53%
Tikkurila
Empils
Lakra
VGT
Dekart
Akzo Nobel
Akva
Meffert
ABC Farben
Others
17%
6% 5% 4% 3% 2%
63%
0%
10%
20%
30%
40%
50%
60%
70%
Tikkurila Empils Lakra VGT AkzoNobel
Caparol Other
2010 2011 2012
Low price segment is still dominating the
Russian paint market
• TOP 10 paint producers account for
almost 50% of the market, the rest is
shared by more than 250 small local
companies
• In terms of volume, economy and low price
segments account for the biggest part of
the market
• Water-borne paints are gaining market
share in medium and premium segments
due to the arising ecological trends in
consumer behavior
• Share of alkyd paints is decreasing in both
monetary and volume terms
5 August 15, 2013
Macro environment deteriorates
• GDP grew by 1.6% in Q1 2013 and
1.2% in Q2/2013
• FY GDP growth is estimated to be
modest (1-2%)
• Winter Olympics in 2014 and FIFA
World Cup in 2018 are expected to
support the GDP growth and
consumption
6
Source: Rosstat, several sources
August 15, 2013
Russian construction output has reached the
pre-crisis level
August 15, 2013 7
0
20
40
60
80
100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Residential Non-residential
Construction output in Russia Total floor space, million square meters
Source: Rosstat
Paint market development in Russia
• Chem-Courier expects reduction in paint market volume and slight growth in value
• Other researchers are more optimistic and forecast the market to increase by 4-9%
August 15, 2013 8
618 616 614 583
1,312
1,579
1,398 1,426
0
200
400
600
800
1000
1200
1400
1600
1800
0
100
200
300
400
500
600
700
2010 2011 2012 2013F
Volume
Value
-5%
+2%
Source: Chem Courier
Million liters EUR million
Price segment #1:
Tikkurila
#2:
Empils
#3:
Lakra Sintez
#4:
Akzo Nobel
Others:
Caparol
Premium
Medium
Economy
Low
Brand positioning of the main producers:
August 15, 2013 10
Indirect customers
Direct disributors/customers
Customer segments
Tikkurila SBU East
Consumers
DIY big boxes
Consumers
Color studios
Regional wholesalers
- Traditional retail outlets
- Professional painters
- Construction industry
Professionals
Temaspeed dealers Industry
Distribution channels in SBU East
11 August 15, 2013
• High share and number of distributors
• Chains are increasing slowly
• Both international and local big boxes
• Located only in the central parts of Russia, i.e. in big cities
• Low coverage of regions
• Tikkurila is present in all channels and has a long history of cooperation with the
customers
Tikkurila aims at diversifying its distribution
in Russia
• Tikkurila's products are sold
through more than 5,000 retail
outlets
• Big boxes are increasing their
market share slowly
• Majority of Tikkurila sales go
through distributors but their
relative share is decreasing
• Tikkurila aims at balanced
development of different
distribution channels
August 15, 2013 12
Big boxes' share of Tikkurila sales in Russia
0%
5%
10%
15%
20%
25%
2010 2011 2012
International
Big Boxes
National chains
& Household
Regional chains
& Department
store chains
Examples of key accounts in Russia
August 15, 2013 13
More active role in distribution to support
growth
• For consumers and
designers
• Brand offering: Tikkurila
• First shop opened in St.
Petersburg in May 2013
August 15, 2013 14
Color Studio Profe Shop Inspiration Gallery
• In cooperation with a parquet
producer (Karelia Upofloor) in
Russia
• Idea: Total interior design
service, including follow-up
services and installation work
• First showroom opened in
Krasnodar in March 2013
• For small-scale construction
professionals
• Brand offering: Tikkurila,
Finncolor, Teks and
Tikkurila Coatings
• First shop opened in St.
Petersburg in May 2013
Tikkurila's new paint shop concepts
Russian paint market
Sustainability Water-borne paints gaining market share
Ecological production
Competition Additional production capacity to the market
Services Need for sales consultancy
Price sensitivity Tendency to buy low-cost products
Several no-name producers
High brand awareness At the same time: low awareness of brands
and how to apply paints
Characteristics Trends
Substitutes Wall papers are still very popular
Production optimization Investigating new applications and enhancing
product performance and quality
Growing demand from the construction industry
August 15, 2013 15
Water-borne paints have clearly increased
market share in Russia
August 15, 2013 16
Source: Rosstat, Chem-Courier, Tikkurila
Market Tikkurila
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Water-borne Solvent-borne
70%
30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012
Water-borne Solvent-borne
Findings of a consumer survey in Russia
81%
18% 1%
Makes the finaldecision at thestore
Makes thedecision inadvance
Not able toanswer
Quality
Color palette
Price
Decision is made at the store Factors impacting choice
53% 11% 10% 10% 9% 5%
Big boxes Big retail (Starik Hotabych, etc.)Construction market Special painting shopShopping center of construction materials Household shop
Most popular place of purchase: Big boxes (e.g. Leroy Merlin, OBI, Castorama)
Source: GFK, 2012
August 15, 2013 17
Russian consumers' main sources for paint
information
Advice from relatives or friends
Advice from professionals
Advice from the shop keeper
Own experience
August 15, 2013 18
Source: GFK, 2012
Adjacent markets offer interesting
opportunities
Kazakhstan Population: 17.7 million
Urban population: 59%
GDP per capita: $13,900 (country comparison: 96)
GDP growth rate: 5% in 2012
Paint market size: 60.0 million liters
Paint consumption per capita: 4 liters
Tikkurila presence: Representative office, warehouse
August 15, 2013 19
Ukraine Population: 44.6 million
Urban population: 69%
GDP per capita: $7,600 (country comparison: 136)
GDP growth rate: 0.2% in 2012
Paint market size: 165.0 million liters
Paint consumption per capita: 3.7 liters
Tikkurila presence: Production unit in Kiev, raw
material sourcing, representative office, warehouse
Belarus Population: 9.6 million
Urban population: 75%
GDP per capita: $16,000 (country comparison: 82)
GDP growth rate: 4.3% in 2012
Paint market size: 43.2 million liters
Paint consumption per capita: 4.5 liters
Tikkurila presence: Representative office,
warehouse
Source: CIA The World Factbook, Tikkurila estimates
Growth potential on the Kazakhstan paint
market
August 15, 2013 20
• Market size some 60 million liters
• Two main producers (local companies) hold 40-45% of the market
• Upcoming events include EXPO2017, Winter Universiade 2017, new G4 city
Market
• Tikkurila brand mainly sold through special paint shops
• TEKS brand sold through retail network and directly to construction and industrial companies
Distribution
• Tikkurila operates with Tikkurila and Teks brands
• Our market share is around 10% Our presence
Source: Management estimate
Key growth drivers, Russia
August 15, 2013 21
Changes in sales organization
New approach in marketing
New shop concepts
Broad service offering
GDP growth
Trading up Market forces
Own operations
Near-term focus in Russia to support growth
• Upgrading product mix towards
higher quality and environmentally
sound paints
• Boosting particularly point of sale
marketing efforts
• Increasing the sales of paint-
related services (design services,
painting work etc.)
• Increasing the amount and
geographical scope of our Color
studios and Profe shops
August 15, 2013 22