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Tikkurila – Nordic quality from start to finish
Contents
• Tikkurila as a company
• Business environment
• Business Units
Tikkurila Oyj2
Tikkurila as a company
Tikkurila Oyj3
Tikkurila – Sustainable Nordicness
Tikkurila is a leading Nordic paint company
with expertise that spans decades. We
develop premium products and services that
provide our customers with quality that will
stand the test of time and weather.
We operate in around ten countries and our
3,000 dedicated professionals share the joy
of building a vivid future through surfaces
that make a difference.
In 2017, our revenue totaled EUR 582
million. The company is listed on Nasdaq
Helsinki.
Nordic quality from start to finish since 1862.
Revenue EUR 582 million
Adjusted operating profit EUR 29
million (4.9% of revenue)
More than 3,000 employees
Production in eight countries
Products available in over 40
countries
Leading market position in main
markets
Revenue by
segment
Operating profit*
by segmentPersonnel
by segment
* Adjusted, excl. Group items
65%
35%
SBU West SBU East
54%46%
SBU West SBU East
55%45%
SBU West SBU East
Tikkurila Oyj4
Our locations
Production units in 8 countriesSales units in 12 countriesTraining centers in 9 countries
Production, distribution center, sales
Distribution center, sales
Training center
FinlandSweden
Estonia
GermanyPoland
Kazakhstan
China
Russia
Denmark
Tikkurila Oyj5
Our end-customers
CONSUMERS 50%* PROFESSIONALS 35%* INDUSTRY 15%CONSUMERS 50%*
Tikkurila Oyj6 *Tikkurila estimate
*Tikkurila estimate
Our products and services
CONSUMERS 50%*
Comprehensive home
interior and exterior
surface treatment
products
OUR SERVICES
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
PROFESSIONALS 35%*
Comprehensive surface
treatment products for
masonry surfaces, wood
facades and concrete floors,
effect and decorative paints
Functional coatings
Floor coatings for
demanding environments
INDUSTRY 15%
Durable solutions to protect
steel structures, machinery
and equipment
Paints and lacquers for
wood industry
Functional coatings for
line application
Tikkurila Oyj7
Over 150 years of decoration and protection
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.
Tikkurila Oyj8
Tikkurila is the market leader in decorative paints
SWEDEN RUSSIA FINLAND POLAND
#1 #1 #1 #4Russia accounts for 25%
of Group revenue
Sweden accounts for 23%
of Group revenue
Finland accounts for 16%
of Group revenue
Poland accounts for 13%
of Group revenue
37%(37%)
63%
Tikkurila Others
>50%(>50%)
50%
Tikkurila Others
15%(16%)
84%
Tikkurila Others
14%(15%)
85%
Tikkurila Others
Source: SVEFF (Sweden, value), Chem-Courier (Russia, volume), Association of Finnish Paint Industry (Finland, value), IBP Research (Poland, volume), 2016
Tikkurila Oyj9
Tikkurila Group structure
OFFERING
RDI
Marketing & Brand
Management
Business & Portfolio
Development: Consumers,
Professionals
and Industry
OPERATIONS
Procurement
Manufacturing
Product care
Logistics
HSEQ
SALES
Consumers
Professionals
Industry
Group KAM
Sales support
TIKKURILA
Tikkurila Oyj10
SUSTAINABILITY PROMISESWe improve and protect
air quality.
VALUES We are trustworthy. We are innovative. We are professionals.
We drive our portfolio towards maximized
performance with minimum environmental impact.
We drive at better resource
efficiency.
We are an active partner
in our communities.
MISSION
Nordic quality from
start to finish.
STRATEGY
We offer competitive surface
treatment solutions, and are
committed to improving the
overall user experience and
efficiency of our customers.
FOCUS AREAS
Pleasant and professional
customer journeys.
Unified customer segment
specific portfolio.
More efficient use of
resources.
VISION
Surfaces that make
a difference.
MEGATRENDS
• Urbanization
• Climate change
• Growing middle class
• Digitalization Tikkurila strategy 2022
Tikkurila values
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.
Tikkurila Oyj12
Strong and well-established brands
Strategic international brands
Tactical regional or local brands
Strategic regional or local brands
Tikkurila Oyj13
Distribution channels
TIKKURILA
Wholesale* Retail**
Retail**
Tikkurila’s own paint shops in Scandinavia
Tikkurila Industrial Paint Service, direct sales
CONSUMERS
PROFESSIONALS
CONSUMERS
PROFESSIONALS
PROFESSIONALS
PROFESSIONALS
* Only in some markets
** Big boxes, specialized paint shopsTikkurila Oyj14
INDUSTRY
We help customers to succeed in surface protection
INSPIRATION IDEAS COLORS STORES
CONSUMER SERVICES DIGITAL CHANNELS TRAININGPROFESSIONAL
SERVICES
Tikkurila Oyj15
Succesful end-results
• 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 Oyj16
Unique 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.
Tikkurila Oyj17
The many advantages of tinting
Enhances
the service
level of
retailers
Deepens the
cooperation of
retailers and
paint producer
Ecological
and cost-
efficient way
of operating
Economical
way to
produce small
batches of
different
colors
Practically
unlimited
amount of
shades
Enables lower
inventory
levels
Emphasizes
the quality
of paint
Tikkurila Oyj18
Sustainability promises for 2018–2022
WE DRIVE OUR PORTFOLIO
TOWARDS MAXIMIZED
PERFORMANCE WITH MINIMUM
ENVIRONMENTAL IMPACT.
WE IMPROVE AND PROTECT
AIR QUALITY WITH
OUR PRODUCTS AND
PROFESSIONAL SERVICES.
WE DRIVE AT BETTER RESOURCE
EFFICIENCY WITH QUALITY,
SAFETY AND DURABILITY
ON TOP OF OUR MINDS.
WE ARE A RESPONSIBLE
AND ACTIVE PARTNER
IN OUR COMMUNITIES.
WE DRIVE OUR PORTFOLIO
TOWARDS MAXIMIZED
PERFORMANCE WITH MINIMUM
ENVIRONMENTAL IMPACT.
WE IMPROVE AND PROTECT
AIR QUALITY WITH
OUR PRODUCTS AND
PROFESSIONAL SERVICES.
WE DRIVE AT BETTER RESOURCE
EFFICIENCY WITH QUALITY,
SAFETY AND DURABILITY
ON TOP OF OUR MINDS.
WE ARE A RESPONSIBLE
AND ACTIVE PARTNER
IN OUR COMMUNITIES.
Tikkurila Oyj19
Durable and user-friendly products that are safe for people and the environment
High-quality raw
materials
High-quality raw materials
• Carefully selected raw
materials that have as low
health and environmental
impacts as possible.
• We aim to ensure that our
suppliers act responsibly
and ethically.
Quality and durability
• Product and user safety in
focus in our operations.
• Long service life of painted
surfaces and long
maintenance painting
intervals.
• Eco-labels indicate the
environmental impacts of
products and their proven
quality and safety
characteristics.
Water-borne and low
emission paints
• Almost odorless paint,
which ensures better
indoor air quality and
lower allergy risks.
• Ease of use and fast
drying times.
Tikkurila Oyj20
75% of paints
produced are
water-borne
(2017)
*products awarded international or national eco-label,
allergy or asthma label or M1 classification
300+ eco-labeled
products*
(2017)
Tikkurila Oyj21
High-quality raw materials
• When selecting raw materials, the health, safety and
environmental aspects are carefully considered.
• More than 90% of the raw materials and packaging
materials for Tikkurila 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.
Tikkurila Oyj22
Committed product development
• Key principles for product development are quality, durability and safety.
• R&D develops new products, creates new business opportunities, renews existing products, and studies use of alternative and renewable raw materials.
• R&D units located in Finland, Poland, Russia, Sweden, Estonia and Denmark.
• The desired properties of products are ensured in thorough field testing and extensive laboratory testing.
Tikkurila Oyj23
Certified supply chain
• Tikkurila has 11 production units in 8 countries.
• Approx. half of Tikkurila 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.
Tikkurila Oyj24
10 sites
ISO 9001
QUALITY
9 sites
ISO 14001
ENVIRONMENT
6 sites
OHSAS 18001
HEALTH
& SAFETY
Tikkurila Oyj25
Paint-making process
Tikkurila Oyj26
Business environment
Tikkurila Oyj27
Value of the global paints and coatings market; USD ~130 billion
12%
10%
9%
6%
6%
6%3%3%3%
43%
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 Oyj28
Megatrends that drive our business
Climate change affecting the whole globe:
Changing weather conditions and
temperatures, increasing air pollution and
indoor air problems, different health risks.
By 2050, more than 65% of world's
population lives in urban areas: Improved
economic well-being, social development,
increasing building construction, increased
energy consumption and emissions.
Share of middle class is growing: Increases
in economic income and consumption,
changing consumption patterns, increasing
demand for premium brands, health and well-
being related products and services.
Digitalization: Comprehensive way to connect
with customers and understand their needs in
detail through data, optimize operations and
develop new growth opportunities.
Tikkurila Oyj29
Paint consumption and demand structure
= High
= Medium
= Low
Factors impacting paint demandEstimated 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* Paint consumption source: Management estimates, IPPIC
Tikkurila Oyj30
Long-term financial development
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 2017
Revenue Revenue from acquisitions Divestments Adjusted operating profit margin
Development of sales and profitability 2000–2017
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
mil
lio
n
Ad
jus
ted
op
era
tin
g p
rofi
t %
530
648625
563
457441 439450445
345
589
644670
653618
584 572 582
Tikkurila Oyj31
Business units
Tikkurila Oyj32
Tikkurila Strategic Business Units (SBU)
Russia, Central Asian countries, 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
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
VantaaNykvarnOslo
CopenhagenStockholm
Tallinn
Riga
Vilnius
AnsbachDebica
Warsaw
SzczecinLunderskov
SBU West key facts
Operational area Sweden, Denmark, Norway, Finland, Poland, Germany, Estonia, Latvia, and Lithuania
Revenue 2017 EUR 379.8 (395.2) million, 65% of Group
Adjusted operating
profit 2017EUR 18.1 (45.3) million, 54% of Group*
Employees 1,605 (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
* Excluding Group items
Khabarovsk
Novosibirsk
Almaty
Ekaterinburg
Chelyabinsk
St. Petersburg
Mytishchi
Stary Oskol
KrasnodarBeijing
Shanghai
Samara
SBU East key facts
Operational areaRussia, Central Asian countries, and China. Furthermore, this SBU is
responsible for the exports to approximately 20 countries.
Revenue 2017 EUR 202.6 (176.8) million, 35% of Group
Adjusted operating
profit 2017EUR 15.2 (13.4) million, 46% of Group*
Employees 1,409 (at year-end)
Production sites
St. Petersburg, Russia (3)
Stary Oskol, Russia
Šabac, Serbia
Almaty, Kazakhstan
Development in SBU East
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
2017 Divestment of Serbia and Macedonia
* Excluding Group items