Tikkurila inspires you
to color your life!
Contents
• Tikkurila as a company
• Business environment
• Key figures and financial targets
• Business Units
June 27, 2016 Tikkurila company presentation 2
Tikkurila as a company
June 27, 2016 Tikkurila company presentation 3
TikkurilaTikkurila is the leading paints and coatings professional in the Nordic
region and Russia. With our roots in Finland, we now operate in 14
countries. Our high-quality products and extensive services ensure
the best possible user experience in the market.
Sustainable beauty since 1862.
4
Tikkurila in brief
June 27, 2016
3,100 employees
#1Market position in key
markets* in decorative
paints
50%Balanced geographical
presence between mature
and emerging markets
Our end-customers
Our goal is to provide the
best user experience
Consumers IndustryProfessionals
Production in 9 countries
Operations in 14 countries
Presence in 40 countries
*Russia, Sweden, Finland, the Baltic countries
Tikkurila is #4 in PolandTikkurila company presentation 5
Production units in 9 countries
Sales units in 14 countries
Our locations
June 27, 2016 Tikkurila company presentation
Production, distribution center, sales
Distribution center, sales
Training center
FinlandSweden
Estonia
Germany
Serbia
Poland
Kazakhstan
China
Russia
Denmark
6
Our end-customers
June 27, 2016
Consumers (DIY) IndustryProfessional painters
50%* 15%
*Tikkurila estimate
35%*
Tikkurila company presentation 7
Ideas, work instructions and
methods online
Personal painting advice and
technical support over the phone,
online, on site and on production
lines
Color cards, color design and
tinting service
Training events
On-site visits, inspections and
analysis services
Contacts with other professionals
in the industry
Comprehensive home interior
and exterior surface
treatment products
Wallpapers
Comprehensive surface
treatment products for
masonry surfaces, wood
facades and concrete floors,
effect and decorative paints
Functional coatings
Durable products and
solutions to protect steel
structures, machinery and
equipment
Paints and lacquers for
wood industry
Floor coatings for
demanding environments
Functional coatings for line
application
ServicesConsumers (DIY)
Professional painters
and designersIndustry
Our products and services
150 years of decoration and protection
June 27, 2016 Tikkurila company presentation
1862 1950 1960 1970 1980 1990 2010
1862
An oil press was
founded on the
banks of the
Keravanjoki River
in Tikkurila.
1920s
The manufacture of
paints and lacquers
began in Tikkurila in
1919. Extensive
marketing and
customer training
began in the 1920s.
1950s
Tikkurila introduced its
first water-borne
product, the Joker
paint. Tikkurila's
coloring service was led
by designer Yki Nummi.
1960s
Entering the Scandinavian
market through Sweden.
A clear leading position was
obtained through
the acquisition of Alcro-
Beckers in 2001.
Tinting technology was
introduced.
1970s
Entering the Eastern
trade. Tikkurila was
known as "Firma
Miranol" in Soviet
Union. The
acquisition of Kraski
Teks in 2006 made
Tikkurila the leading
decorative paint
company in Russia.
1980s
To the Eastern
European market
and the Baltics
through Poland.
2010s
Tikkurila listed on
the stock exchange.
Entering the Balkan
area through the
acquisition of
Serbian Zorka Color.
Tikkurila turned
150 yrs.
9
Revenue EUR 584 million EBIT* EUR 59 million Personnel 3,100
Tikkurila 2015
June 27, 2016 Tikkurila company presentation
Our largest markets are Sweden, Russia, Finland, Poland and the Baltic countries. We have production in nine countries, and we are
the leading decorative paint company in all our main markets. On the whole, our products are available in 40 countries. In 2015,
Tikkurila’s revenue totaled EUR 584 million, and it had 3,100 employees.
68 %
32 %
West East
79 %
21 %
West East
*Excl. non-recurring items
53%46%
1%
West East Group
10
RUSSIA SWEDEN FINLAND POLAND
Tikkurila market shares in decorative paints
in key markets in 2014
#1
June 27, 2016
37%(37%)
63%
Tikkurila Others
>50%(>50%)
50%
Tikkurila Others
16%(15%)
85%
Tikkurila Others
#1 #1 #4Russia accounts for 28% of Group revenue Sweden accounts for 23% of Group revenue Finland accounts for 16% of Group revenue Poland accounts for 10% of Group revenue
Source: Chem-Courier (Russia, volume), SVEFF (Sweden, value), Association of Finnish Paint Industry (Finland, value), IBP Research (Poland, volume)
16%(17%)
84%
Tikkurila Others
Tikkurila company presentation 11
Tikkurila Group structure
June 27, 2016
Support Functions
Supply Chain Management
& HSEQ
RDI
Business Portfolio & Brand
Management
SBU EASTRussia
Central Asia
Balkan
China
Exports
SBU WESTSweden
Norway
Denmark
Finland
Poland
Germany
Baltic countries
Tikkurila's reporting units: West and East.
Tikkurila company presentation 12
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.
Tikkurila's strategy
FocusingCustomers
Geographic area
Brands
ProfitabilityResilience
Realignment
Agility
GrowthOrganic
Well-targeted acquisitions
June 27, 2016
Tikkurila offers user-friendly and
sustainable solutions for surface
protection and decoration.
2011–2012 Restructuring and improving profitability │2013– Growth
Tikkurila company presentation 13
Tikkurila values
June 27, 2016 Tikkurila company presentation
We are trustworthy
We create and offer quality brands, services, and products that people can
trust are safe, reliable, and environmentally sustainable.
We are innovative
We drive change in the market and offer novel solutions for our customers'
needs.
We are professionals
We add value to our customers, owners, and the community – every day.
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Strong and well-established brands
Strategic international
brands
June 27, 2016
Tactical regional or local
brands
Strategic regional or local
brands
Tikkurila company presentation 15
Distribution channels
Tikkurila's own paint shops
Tikkurila Industrial Paint Service
Direct sales
Retail**Wholesale*
TIKKURILA
Consumers Professionals* Only in some markets
** Big boxes, specialized paint shops
Retail**
June 27, 2016 Tikkurila company presentation 16
Deep partnerships with retailers are of crucial
importance
• Creating added value to consumers
• Strongest brands
• Marketing support
• Active product and service development
• Training for retailers' personnel
• Developing the category together with the retailers
June 27, 2016 Tikkurila company presentation 17
We help our customers to succeed in surface protection
and decoration
June 27, 2016
Inspiration Ideas Colors Stores
Helpline TrainingInternetDesigner PoolContractor Pool
Professional services
Tikkurila company presentation 18
June 27, 2016
• We develop environmentally sustainable and user-friendly solutions.
• We train our stakeholders in the durable painting and use of our
products.
• We invest in developing solutions that make selecting, buying and
selling of paints easier.
• We inspire people to paint.
• We enhance the quality of painting, environmentally sustainable use
of products, product and user safety, as well as the knowledge of
surface treatment.
Tikkurila company presentation
Successful end-results
19
Advice services close to the customer
• Technical consultation, advice on selecting colors and paints as well
as tips and work instructions.
• Providing customers with easy ways for communicating, giving
feedback and making enquiries.
• Tikkurila’s customer hotline offers assistance, advice and ideas for
painting.
June 27, 2016 Tikkurila company presentation 20
Extensive training
• Tikkurila trains its customers, retailers, and other professionals and
students in its training centers and in stores.
• Tikkurila organizes seminars, lectures, and training regarding paints,
painting, and tinting.
• Training centers located in 11 countries.
• Recently, training centers have been opened in Serbia, Macedonia
and Lithuania.
June 27, 2016 Tikkurila company presentation 21
June 27, 2016 Tikkurila company presentation
Ecological
and cost-efficient
way of operating
Economical way
to produce small
batches of
different colors
Enhances
the service level
of retailers
Emphasizes
the quality
of paint
Deepens
the cooperation of
retailers and
paint producer
The many advantages of tinting
Enables
lower
inventory
levels
Practically
unlimited
amount of
shades
22
Colors
• Tikkurila is one of the forerunners in the
production of paints for tinting and in the
development and marketing of colors.
• Tikkurila's color cards are based on the tinting
system and made with color card paints. Thus the
color card sample will be as close to the color of
the final painted surface as is technically possible.
• Color cards are provided for both indoor and
outdoor painting.
June 27, 2016 Tikkurila company presentation 23
Product development
• Key principles for product development are quality, durability and safety.
• R&D develops products for various purposes and with various
functionalities, studies use of alternative and renewable raw materials,
and improve properties of existing paints and coatings.
• Largest R&D units located in Finland, Sweden, Russia and Poland.
• The desired properties of products are ensured
in thorough field testing and extensive laboratory testing.
June 27, 2016 Tikkurila company presentation 24
Raw materials
• When selecting raw materials, we carefully consider the different health,
safety and environmental aspects.
• Paint typically consists of binders, pigments, fillers, thinner and additives.
• More than 90 percent of the raw materials and packaging materials for
Tikkurila’s units in the EU are bought from the EU region. In Russia, more
than 60 percent of all raw materials and packaging materials are bought
from local suppliers.
• Chemical legislation sets restrictions on paint import to the EU region from
the third countries.
• Raw material prices affected mainly by oil prices, supply capacity, and
currencies.
June 27, 2016 Tikkurila company presentation 25
Sustainable solutions
• Quality
• Long service life and long maintenance painting intervals
• Easy to use
• User safety
• Environmentally sustainable: raw material choices,
water-borne, low emissions
• Eco-labels
June 27, 2016 Tikkurila company presentation 26
Majority of products water-borne
• High-quality and safe products which burden the environment as little
as possible are a key element in our strategy.
• Water-borne paints are a better choice for both the health and the
environment.
• The environmental impact of water-borne paint is smaller than that of
solvent-borne paint, especially in the application stage, since mainly
water evaporates from water-borne paint.
• The benefits of water-borne paints include ease of use, odorlessness
and fast drying times.73.5%
Share of water-borne products
in production in 2015
June 27, 2016 27
Eco-labels guide customers' purchase
decision
• Eco-labels and various classifications awarded to paints indicate the
environmental impacts of products as well as their proven safety
characteristics.
• Eco-labels guide consumers in their purchasing decisions, as well as to make
consumption habits more environmentally sound.
• Tikkurila Group’s different paint brands have been awarded several official and
local eco-labels and product-specific classifications.
* products awarded international or national eco-label,
allergy or asthma label or M1 classification
June 27, 2016 28
~300Amount of eco-labeled products*
Business environment
June 27, 2016 Tikkurila company presentation 29
12%
10%
9%
6%
6%
6%3%3%3%
43%
Value of the global paints and coatings market;
USD ~130 billion
June 27, 2016
Decorative paints 43% Industrial coatings 57%
Source: IPPIC 2015
Decorative paints
Metal Industrial
Coatings
Transportation
Industrial Maintenance
and Protective
Automotive Refinish
Powder Coatings
Wood Coatings
Marine CoatingsCoil Coatings
Packaging Coatings
Industrial segments where
Tikkurila is present
Tikkurila company presentation 30
Trends affecting Tikkurila's business operations
June 27, 2016 Tikkurila company presentation
URBANIZATION AGING OF THE POPULATION
CHANGES IN CONSUMPTION
BEHAVIOR
RISE OF THE MIDDLE CLASSEXHAUSTING NATURAL
RESOURCES
CLIMATE CHANGE
31
Paint consumption and demand structure
June 27, 2016
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
Tikkurila company presentation 32
Key figures and financial
targets
June 27, 2016 Tikkurila company presentation 33
0
2
4
6
8
10
12
0
100
200
300
400
500
600
700
800
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Revenue Revenue from acquisitions Divestments EBIT margin (excl. non-recurring)
Long term financial development Development of sales and profitability 2000–2014
Acquisition of Alcro-
Beckers in 2001
(Revenue ~MEUR 190)
Sale of tinting business in
2000
(Revenue ~MEUR 130)
Acquisition of Kraski Teks
in 2006
(Revenue ~MEUR 80)
Acquisition of Zorka Color
in 2011
(Revenue ~MEUR 16)
Major acquisitions and divestments
Reve
nu
e, E
UR
mill
ion
EB
IT %
(e
xcl. n
on
-re
cu
rrin
g)
530
648625
563
457441 439450445
345
589
June 27, 2016
644670
653618
584
Tikkurila company presentation 34
Financial targets for 2018
2007 2008 2009 2010 2011 2012 2013 2014 2015
Revenue 625 648 530 589 644 670 653 618 584
EBIT, %1 10.3% 9.1% 9.5% 10.1% 9.7% 11.0% 11.1% 10.4% 10.1%
ROCE 24.5% 18.7% 15.7% 19.2% 19.4% 21.0% 23.5% 22.9% 22.2%
Gearing 135.3% 208.5% 90.0% 41.4% 51.9% 40.6% 23.4% 24.6% 23.7%
Dividend paid;
share of operative
net income, %
84%
(EUR
0.70 per
share)
88%
(EUR
0.73 per
share)
72%
(EUR
0.76 per
share)
69%
(EUR
0.80 per
share)
73%
(EUR
0.80 per
share)
90%2
(EUR
0.80 per
share)
June 27, 2016
Historical performance
• Revenue of EUR 1 billion
• Operating EBIT >12%
• Operative return on capital employed
(ROCE) >20%
• Gearing <70%
• Dividend policy: Target is to pay at
least 40% of annual operative net
income as dividends
1) Excluding non-recurring items
2) Board of Directors' proposal
Tikkurila company presentation 35
Key figures 2015
June 27, 2016 Tikkurila company presentation
EUR million 1−12/2015 1−12/2014 Change %
Revenue 584.1 618.4 -5.5%
EBIT excluding non-recurring items 58.9 64.2 -8.2%
EBIT excluding non-recurring items, % 10.1% 10.4%
EBIT 61.7 63.7 -3.2%
EBIT, % 10.6% 10.3%
EPS, EUR 0.94 1.10 -14.1%
ROCE, %, rolling 22.2% 22.9%
Cash flow after capital expenditure 32.6 49.9 -34.5%
Net interest-bearing debt at period-end 46.2 47.4 -2.4%
Gearing, % 23.7% 24.6%
Equity ratio, % 51.1% 49.5%
Personnel at period-end 3,100 3,142 -1.3%
36
Tikkurila's ownership at the end of December 2015
June 27, 2016
Tikkurila's ownership structure on December 31,
2015
• Number of shareholders ~20,500
• Foreign ownership in Tikkurila has
increased strongly
• Largest shareholders:
Oras Invest Oy (18.1%), Varma
(5.7%), and Ilmarinen (5.6%) and
20%
7%
13%
12%2%
47%
Private companies
Financial and insuranceinstitutions
Public sector organizations
Households
Non-profit organizations
Foreigners and Nomineeregistered
Tikkurila company presentation 37
Business Units
June 27, 2016 Tikkurila company presentation 38
Tikkurila Strategic Business Units (SBU)
Russia, Central Asian countries, Serbia, Macedonia, and
China. Furthermore, this SBU is responsible for the exports to
approximately 20 countries.
SBU EastSBU West
Sweden, Denmark, Norway, Finland, Poland, Germany,
Estonia, Latvia, and LithuaniaOperational area
Production sites
Current demand
structure
Expected demand structure
Competitors
Distribution channels
St. Petersburg, Russia
Stary Oskol, Russia
Almaty, Kazakhstan
Sabac, Serbia
Nykvarn, Sweden Lunderskov, Denmark
Vantaa, Finland
Debica, Poland
Ansbach, Germany
Tallinn, Estonia
Economy price and quality segment productsPremium and medium price and quality segment products
Premium price and quality segment products expected to
risePremium and medium price and quality segment products
Akzo Nobel, Lakra-Sintez, Empils, ABC-Farben, Meffert,
CaparolAkzo Nobel, PPG, Flügger, Jotun, Sherwin-Williams,
Teknos, Nor-Maali, Sniezka
Deco: DIY retailers, independent retailers, wholesalers
Industry: direct sales, Tikkurila Industrial Paint Service
Deco: DIY retailers, independent retailers, Alcro professional
stores, wholesalers
Industry: direct sales, Tikkurila Industrial Paint Service
June 27, 2016 Tikkurila company presentation 39
SBU West key facts
Operational area Sweden, Denmark, Norway, Finland, Poland, Germany, Estonia, Latvia, and Lithuania
2015 revenue EUR 395.3 million, 68% of Group
EBIT 20151) EUR 50.5 million, 79% of Group2)
Employees 1,630 (at year-end)
Production sitesNykvarn, Sweden; Vantaa, Finland; Debica, Poland; Ansbach, Germany; Tallinn, Estonia;
Lunderskov, Denmark
Development in West
1862 Tikkurila founded in Finland
1865 Beckers founded in Sweden
1906 Alcro founded in Sweden
1930 Customer training started in Finland
1958 Color card development and color advisory service started in Finland
1970 Monicolor tinting system launched in Finland
1992 Paint production started in Estonia
1995 Sales company established in Lithuania
2000 Maalilinja customer helpline launched in Finland
2001 Acquisition of Alcro-Beckers in Sweden
2001 Production plants in Germany and Poland
2003 Customer training center Paletti opened in Finland
2007 New production plant in Nykvarn Sweden
2009 Avatint tinting system launched
2012 Divestment of subsidiaries in Hungary, Czech Republic, Slovakia, and Romania
2014 Acquisitions of ISO Paint Nordic and KEFA Drytech
SBU West locations
VantaaNykvarnOslo
CopenhagenStockholm
Tallinn
Riga
Vilnius
AnsbachDebica
WarsawLodz
1 Excluding non-recurring items
2 Excluding group items
June 27, 2016
Lunderskov
Tikkurila company presentation 40
SBU East key facts
Operational areaRussia, Central Asian countries, Serbia, Macedonia, and China. Furthermore,
this SBU is responsible for the exports to approximately 20 countries.
2015 revenue EUR 188.9 million, 32% of Group
EBIT 20151) EUR 13.4 million, 21% of Group2)
Employees 1,441 (at year-end)
Production sites
St. Petersburg, Russia (3)
Stary Oskol, Russia
Šabac, Serbia
Almaty, Kazakhstan
Development in SBU East
Šabac
Khabarovsk
Novosibirsk
Almaty
Ekaterinburg
Chelyabinsk
St. Petersburg
Mytishchi
Stary Oskol
Krasnodar
SkopjeBeijing
Shanghai
1970s Export to Russia and the former Soviet Union started
1994 Sales company in Russia
1995 First western paint factory opened in St. Petersburg
1998 Sales company OOO Tikkurila Coatings
established
2004 Acquisition of Kolorit in Ukraine
2006 Acquisition of Kraski Teks
2006 Sales company established in Kazakhstan
2007 Sales company established in China
2008 Sales company established in Belarus
2009 Completion of logistic centre in Mytishchi, Moscow region and new
water-borne production lines to Obukhovo site in St. Petersburg
2011 Divestment of the powder coatings business
2011 Acquisition of the business of Serbian Zorka Color
2012 Expansion of sales and ware house network in Russia
2015 New factory opened in Almaty, Kazakhstan focusing on water-borne
products
2016 Divestment of subsidiaries in Ukraine and Belarus
June 27, 2016
1 Excluding non-recurring items
2 Excluding group items
Tikkurila company presentation
Samara
41