VANTAA, Finland - Tikkurila has reported that its revenue for the first quarter increased by 12.6 percent in comparison to the corresponding period last year and was EUR 134.5 million, compared to EUR 119.4 million in 2010. Operating profit (EBIT) was EUR 6.5 million, 4.9 percent of revenue, compared to EUR 7.5 million in 2010, 6.3 percent of revenue.
Erkki Järvinen, President and CEO of Tikkurila, commented, "Growth in the economies of our operating areas continued in the first quarter of the year, and the growth outlook for Russia, our largest individual market, is even more positive than before. During the review period, our revenue grew considerably in all of our business units, excluding SBU Finland where the delayed spring has postponed the advance orders for the summer. In Russia as well, the long and cold winter postponed the start of the painting season. At the beginning of the year, most growth was seen in demand by industrial and professional customers.
“Raw material prices increased sharply during the first months of the year. In spite of this, we were mostly able to cover the rise in the raw material prices by raising our prices. Availability was also occasionally challenging. It would seem that the challenges related to raw materials are continuing and will possibly increase in the next few months. In order to cover the higher raw material cost level, we will continue to adjust our sales prices in the coming months. We will focus on securing sufficient raw material supply by extending our sourcing alternatives where possible, and also by adapting our raw material base to the appropriate extent.
“Our fixed cost level increased during the first months of the year, which had an impact on profitability in the first quarter. In line with our plans, we invested significantly more on sales and marketing at the beginning of the year than in the comparison period. Our goal is to sharpen up our strategic brands and to further strengthen our positions.
“The importance of the first quarter in the entire year's result is relatively low, since the most significant portion of the entire year's revenue and operating profit is generated in the second and third quarters. The upcoming outdoor painting season will have a decisive impact on the overall result of the year.”
In 2011, Tikkurila expects revenue growth to exceed the average GDP growth in Tikkurila's main market areas. In spite of the rising raw material prices, Tikkurila expects EBIT margin as a percentage of revenue to stay at the same level as in 2010.