Tikkurila inspires you
to color your life!
Contents
• Tikkurila as a company
• Business environment
• Key figures and financial targets
• Business Units
March 16, 2017 Tikkurila company presentation 2
Tikkurila as a company
March 16, 2017 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.
69%
31%
West East
Revenue EUR 572 million
Adjusted operating profit EUR 54 million
(9.4% of revenue)
More than 3,000 employees
Production in nine countries
Products available in over 40 countries
Leading market position in main markets
Revenue by segment Operating profit* by segment
54%45%
1%
West East Group
Personnel by segment
* Adjusted, excl. Group items
4
77%
23%
SBU West SBU East
March 16,
2017
Tikkurila company
presentation
Production units in 9 countries
Sales units in 14 countries
Training centers in 11 countries
Our locations
March 16, 2017 Tikkurila company presentation
Production, distribution center, sales
Distribution center, sales
Training center
FinlandSweden
Estonia
Germany
Serbia
Poland
Kazakhstan
China
Russia
Denmark
5
Our end-customers
March 16, 2017
Consumers (DIY) IndustryProfessional painters
50%* 15%
*Tikkurila estimate
35%*
Tikkurila company presentation 6
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
7
150 years of decoration and protection
March 16, 2017 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.
8
SWEDEN RUSSIA FINLAND POLAND
Tikkurila market shares in decorative paints in key
markets in 2015
#1
37%(37%)
63%
Tikkurila Others
>50%(>50%)
50%
Tikkurila Others
15%(16%)
84%
Tikkurila Others
#1 #1 #4Sweden accounts for 26% of Group revenue Russia accounts for 22% of Group revenue Finland accounts for 17% of Group revenue Poland accounts for 12% of Group revenue
Source: SVEFF (Sweden, value), Chem-Courier (Russia, volume), Association of Finnish Paint Industry (Finland, value), IBP Research (Poland, volume)
15%(16%)
85%
Tikkurila Others
March 16, 2017 9Tikkurila company presentation
Tikkurila Group structure
March 16, 2017
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 10
Tikkurila strategy
March 16, 2017 Tikkurila company presentation 11
Tikkurila values
March 16, 2017 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.
12
Strong and well-established brands
Strategic international
brands
Tactical regional or local
brands
Strategic regional or local
brands
March 16, 2017 13Tikkurila company presentation
Distribution channels
March 16, 2017 Tikkurila company presentation 14
We help our customers to succeed in surface protection
and decoration
March 16, 2017
Inspiration Ideas Colors Stores
Helpline TrainingInternetDesigner PoolContractor Pool
Professional services
Tikkurila company presentation 15
March 16, 2017
• We enhance the quality of painting, environmentally sustainable use
of products, product and user safety, as well as the knowledge of
surface treatment.
• We train our customers, retailers, and other professionals and
students in our training centers and in stores regarding paints,
painting, and tinting.
• We invest in developing solutions that make selecting, buying and
selling of paints easier.
• We offer our customer technical consultation, advice on selecting
colors and paints as well as tips and work instructions in all channels.
Tikkurila company presentation 16
Successful end-results
Colors
• Tikkurila is one of the forerunners in the production of paints
for tinting and in the development and marketing of colors.
• 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.
• Tikkurila provides color cards for both indoor and outdoor
painting.
March 16, 2017 Tikkurila company presentation 17
March 16, 2017 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
18
Sustainable solutions
• Tikkurila develops durable and user-friendly products that are safe for both
people and the environment.
• Quality: Long service life of painted surfaces and long maintenance painting
intervals
• Products that are safe for both people and the environment: raw material
choices, product and user safety
• Water-borne and low emission paints: ease of use, odorlessness and fast
drying times.
• Eco-labels indicate the environmental impacts of products and their proven
safety characteristics as well as make consumption habits more
environmentally sound. March 16, 2017 19Tikkurila company presentation
73.8% of paints produced are
water-borne (2016)
More than 300 eco-labeled products (2016)*
*products awarded international or national eco-
label, allergy or asthma label or M1 classification
Sustainability principles
March 16, 2017 20
• Long service life of surfaces
• High product and user safety
• Water-borne and low-emission products
• Eco-labels and allergy labels
• Sustainable packaging solutions
• Training and advice services
• Good partner with retail and customers
• Supplier management and raw material traceability
• Resource-efficient and certified supply chain
• Ethical business operations
• Active in the local communities
USER
EXPERIENCE
QUALITY,
SAFETY &
DURABILITY
Tikkurila company presentation
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% 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% 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.
March 16, 2017 Tikkurila company presentation 21
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.
March 16, 2017 Tikkurila company presentation 22
Supply chain
10 9 6SITES SITES SITES
ISO 9001 ISO 14001 OHSAS 18001
QUALITY ENVIRONMENT HEALTH & SAFETY
• Tikkurila has 12 production units in 9 countries.
• Approx. half of Tikkurila’s personnel work in the supply chain.
• Production manufactures and packages the products in an economical, safe, and eco-efficient
manner. We constantly work to develop our production processes and the resource efficiency of
our production sites.
• Majority of Tikkurila’s production sites have independently audited and certified quality,
environmental, and safety management systems.
March 16, 2017 Tikkurila company presentation 23
Paint-making process
March 16, 2017 Tikkurila company presentation 24
Business environment
March 16, 2017 Tikkurila company presentation 25
12%
10%
9%
6%
6%
6%3%3%3%
43%
Value of the global paints and coatings market;
USD ~130 billion
March 16, 2017
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 26
March 16, 2017 Tikkurila company presentation 27
• Functional products that improve energy
efficiency of buildings and address
construction problems.
• Low-emission and high-quality products
that are safe for both health and the
environment.
• Understanding and analyzing the
customer needs.
• Mapping the business opportunities
brought by digitalization.
• Resource efficiency and opportunities of
circular economy in own operations.
• Increasing the use of renewable raw
materials.
Trends affecting Tikkurila's business operations
URBANIZATION
CHANGES IN
CONSUMPTION
BEHAVIOR
RISE OF THE
MIDDLE CLASS
EXHAUSTING
NATURAL
RESOURCES
CLIMATE CHANGE
DIGITALIZATION
Paint consumption and demand structure
March 16, 2017
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 28
Key figures and financial
targets
March 16, 2017 Tikkurila company presentation 29
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 2016
Revenue Revenue from acquisitions Divestments Adjusted operating profit margin
Long term financial development Development of sales and profitability 2000–2016
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
Ad
juste
d o
pe
ratin
g p
rofit %
530
648625
563
457441 439450445
345
589
March 16, 2017 30
644670
653618
584 572
Tikkurila company presentation
Long-term financial targets
2009 2010 2011 2012 2013 2014 2015 2016
Revenue 530 589 644 670 653 618 584 572
Adjusted operating
profit, %9.5% 10.1% 9.7% 11.0% 11.1% 10.4% 10.1% 9.4%
ROCE 15.7% 19.2% 19.4% 21.0% 23.5% 22.9% 22.2% 18.5%
Gearing 90.0% 41.4% 51.9% 40.6% 23.4% 24.6% 23.7% 28.1%
Dividend paid; share
of adjusted 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%
(EUR
0.80 per
share)
78%1
(EUR
0.80 per
share)
March 16, 2017
Historical performance
• Revenue of EUR 1 billion
• Adjusted operating profit >12%
• Operative return on capital employed
(ROCE) >20%
• Gearing <70%
• Dividend policy: Target is to pay at
least 40% of annual adjusted net
income as dividends
1) Board of Directors' proposal
Tikkurila company presentation 31
Tikkurila's ownership at the end of December 2016
Tikkurila's ownership structure on December 30, 2016• Number of shareholders ~20,000
• Foreign ownership in Tikkurila has
increased
• Largest shareholders:
Oras Invest Oy (18.1%), Varma
(5.7%), and Ilmarinen (5.6%)
20%
9%
13%
12%2%
45%
Private companies
Financial and insuranceinstitutions
Public sector organizations
Households
Non-profit organizations
Foreigners and Nomineeregistered
March 16, 2017 32Tikkurila company presentation
Business Units
March 16, 2017 Tikkurila company presentation 33
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
March 16, 2017 34Tikkurila company presentation
SBU West key facts
Operational area Sweden, Denmark, Norway, Finland, Poland, Germany, Estonia, Latvia, and Lithuania
Revenue 2016 EUR 395.2 million, 69% of Group
Adjusted operating
profit 2016EUR 45.3 million, 77% of Group*
Employees 1,649 (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
* Excluding Group items
Lunderskov
March 16, 2017 35Tikkurila company presentation
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.
Revenue 2016 EUR 176.8 million, 31% of Group
Adjusted operating
profit 2016EUR 13.4 million, 23% of Group*
Employees 1,353 (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
* Excluding Group itemsSamara
March 16, 2017 36Tikkurila company presentation