Annual report
11.2.2010
- The 2009 net sales of the Tulikivi Group amounted to EUR 53.1 million (EUR 66.5 million in 2008). - The 2009 result before taxes was a loss, at EUR -3.3 (+2.1) million. Earnings per share were EUR -0.06 (+0.04). - Net sales for the final quarter of 2009 were EUR 15.6 (18.3) million, and profit before taxes was EUR 0.2 (0.9) million. - Year-end order books were at EUR 4.8 (4.9) million. - Cash flow from operating activities before investments was EUR 3.7 (7.6) million. - With the Group’s recovering sales and improved cost efficiency, net sales in 2010 are expected to be up from the previous year, and the result is expected to turn positive during 2010.
Managing Director Heikki Vauhkonen “2009 began in very challenging circumstances following the collapse of sales both in Finland and in neighbouring markets due to the global economic crisis that emerged in the second half of the previous year. The adjustment measures under the profitability and centralisation programme launched in January proceeded as planned and have brought considerable cost savings.
Since the summer, demand in Finland has picked up as a result of the recovery in private house building, whereas demand in Central Europe has been weaker than in the early part of the year as a consequence of the slow start to the fireplace season and because of the economic recession.
In the latter part of the year we continued to focus on bringing new product groups to market. In the first half of 2010 we shall be launching the Tulikivi Green product range designed for energy- efficient and environmentally friendly living. These products mark a further improvement to the energy efficiency of our fireplaces and a reduction in their emissions.
In conjunction with developing the environmental friendliness of our products we also estimated the carbon footprint of our operations, being the first fireplace manufacturer in the world to do so. This was conducted in accordance with the British PAS 2050 standard and the results indicate that the carbon footprint from the manufacture of a Tulikivi fireplace will typically be neutralised during the first or second year of its use.
In the early part of 2010 we will launch our first new interior design fireplaces on the market.
The cold winter weather that began in late 2009 has boosted the demand for fireplaces in the early months of 2010, which will be reflected in the first six months’ sales, especially in the Finnish market. Sales of lining stone are also expected to grow favourably. A positive factor in fireplace sales in Central European markets is that French government support for fireplace purchasing will remain high during 2010.
The demand for natural stone products has been comparatively low and will not recover as quickly as the demand for fireplaces.”
Segment reporting Since the beginning of 2009, the Group’s operating segments have been the Fireplaces Segment and the Natural Stone Products Segment. The Fireplaces Segment includes soapstone and ceramic fireplaces sold under the Tulikivi and Kermansavi brands, their accessories, utility ceramics and fireplace lining stones. The Natural Stone Products Segment includes interior design stone products for households and stone deliveries to construction sites. Expenses not allocated to a segment are recognised under ‘Other items’, which also include financial costs and taxes. Expenses not allocated to a segment include expenses of the Group administration and expenses pertaining to data, financial and personnel administration.
Net sales and result The 2009 net sales of the Tulikivi Group totalled EUR 53.1 million (EUR 66.5 million in 2008). The net sales of the Fireplaces Segment amounted to EUR 47.8 (58.5) million, and those of the Natural Stone Segment were EUR 5.3 (8.0) million.
Exports accounted for EUR 27.2 (31.6) million, or 51.1 (47.6) per cent, of total sales. Net sales in Finland totalled EUR 25.9 (34.9) million. The largest markets for the Group’s exports were France and Germany.
The consolidated operating result was EUR -2.4 (+3.2) million. The Fireplaces Segment’s operating profit totalled EUR 1.0 (6.1) million, while the operating result for the Natural Stone Products Segment was a loss, at EUR -0.2 (+0.3) million. The expenses under ‘Other items’, i.e. expenses not allocated to the segments, were EUR -3.2 (-3.2) million. The Fireplaces Segment’s result was adversely affected by the total of almost EUR 1.0 million in expenses resulting from the restructuring of operations following the drop in net sales, and the write-down of EUR 0.2 million for the Kermansavi brand utility ceramics unit. The weakened result for the Natural Stone Products Segment was due to the drop in net sales. The consolidated result before taxes was EUR -3.3 (+2.1) million, and the net result was EUR -2.4 (+1.4) million. The consolidated return on investment was -4.3 (+6.8) per cent. Earnings per share amounted to EUR -0.06 (+0.04).
The profitability and centralisation programme was put into effect within the Group during 2009. In March, the codetermination negotiations were concluded, leading to 79 redundancies and 41 layoffs until further notice. For the most part, these layoffs are still continuing. The restructuring provision mentioned above, of which EUR 0.7 million has been used, was recognised for these measures. In addition to the restructuring provision, the restructuring will also result in approximately EUR 0.2 million in further non-recurring expenses, which will be recorded in future periods.
Consolidated net sales in the fourth quarter were EUR 15.6 (18.3) million, and the fourth-quarter profit before taxes was EUR 0.2 (0.9) million.
Monitoring achievement of the strategic goals The strategic goals set for the Tulikivi Group in 2009 were: an annual organic growth of 5 per cent in the long term; a return on investment of over 20 per cent; and an improvement in relative profitability of two percentage points per year. Sales growth, return on investment and the improvement in profitability all fell short of these goals, mainly due to the decline in demand.
Financing and investments Cash flow from operating activities before investments was EUR 3.7 (7.6) million. The current ratio was 1.9 (2.0). The equity ratio was 39.4 (41.2) per cent. The ratio of interest-bearing net debt to equity, or gearing, was 59.4 (55.1) per cent. The equity per share amounted to EUR 0.64 (0.73). Financial income for the period was EUR 0.2 million and financial expenses EUR 1.1 million. At the end of the financial year, the Group’s cash and other liquid assets came to EUR 10.6 (11.7) million, and the total of undrawn credit facilities and unused credit limits amounted to EUR 6 million.
The Group’s investments in production, quarrying and development came to a total of EUR 2.1 (2.9) million. Major investments made during the year comprised the conversion and replacement investments made in fireplace production and the opening of new quarries and quarrying sites.
Research and development expenses totalled EUR 1.6 (1.8) million, representing about 3.1 (2.7) per cent of net sales. A total of EUR 0.4 (0.4) million of this figure was capitalized. The development work during the year included continued combustion tests and product conceptualisation. In addition, a lifecycle assessment of Tulikivi fireplaces was undertaken and an estimation made of the carbon footprint associated with manufacture of the fireplaces. The results of these were available in January 2010. The product lifecycle covers many decades and the carbon emissions from the product’s manufacture are neutralised in as little as 1-2 years, depending on the model in question and how heavily it is used.
Personnel The Group employed an average of 417 (526) people during the financial year and the amount of the personnel was 484 (587) at the end of the year. Of these employees, 406 (504) were employed by the Fireplaces Segment, 52 (55) by the Natural Stone Products Segment and 26 (28) in activities not allocated to the segments. In all, 99.2 per cent of the employment relationships were permanent and 0.8 per cent were temporary. Salaries and bonuses during the review period totalled EUR 15.9 (17.8) million.
The Tulikivi Group has an incentive plan that includes a share- based incentive plan for key personnel and an incentive pay scheme for all personnel. The share-based incentive plan includes three earning periods: the calendar years 2008, 2009 and 2010. Under the plan, the bonus would be based on any improvement in Group’s result after financial items and on any improvement in cash flow from operating activities. The bonus could amount to a maximum of 175 000 Tulikivi Corporation Series A shares and a cash payment corresponding to the value of the shares. A maximum total of about 360 000 Series A shares and a cash payment corresponding to the value of the shares can be paid as rewards on the basis of the entire share-based incentive plan. No incentive plan bonus was accumulated on the 2009 earnings period.
The incentive pay scheme is based on the Group’s earnings and productivity and on attainment of personal targets. The cost impact of the incentive pay scheme was EUR 0.1 million in the financial year.
Occupational safety has improved well. The number of accidents per 1 000 000 working hours was 25 (26).
Resolutions of the Annual General Meeting Dividends Tulikivi Corporation’s Annual General Meeting, held on 31 March 2009, resolved to pay a dividend of EUR 0.0280 on Series A shares and EUR 0.0263 on Series K shares. The dividend was paid out on 14 April 2009.
Board of Directors, Managing Director and auditor Tulikivi Corporation’s Annual General Meeting elected the following persons to the Board of Directors of the parent company and domestic business subsidiaries: Bishop Ambrosius, Juhani Erma, Eero Makkonen, Markku Rönkkö, Maarit Toivanen-Koivisto, Heikki Vauhkonen and Matti Virtaala. The Board of Directors elected Matti Virtaala as Chairman. The auditor was KPMG Oy Ab, Authorized Public Accountants, Helsinki.
Authorisation to repurchase the company’s own shares The Annual General Meeting authorised the Board to acquire the company’s own shares as proposed by the Board.
Authorisation to decide on share issues and on the transfer of Tulikivi Corporation shares held by the company, and on the right to issue special rights giving entitlement to shares as defined in chapter 10, section 1 of the Limited Liability Companies Act.
The Annual General Meeting authorised the Board of Directors to decide on issuing new shares and on the transfer of Tulikivi Corporation shares held by the company as proposed by the Board. The authorisation also includes the right to issue special rights, as defined in chapter 10, section 1 of the Limited Liability Companies Act, which give entitlement to subscribe shares against payment or by setting off the receivable.
Treasury shares At the beginning of the year Tulikivi Corporation held a total of 74 000, and at the end of the year 124 200, of its own Series A shares. During the year a further total of 60 000 Series A shares were purchased at a total acquisition price of EUR 43 875, and 9 800 Series A shares were assigned to key personnel in accordance with the share-based incentive plan. During the year the average purchase price was EUR 0.73 per share. The purchase price was the share price at the time of purchase, which varied between EUR 0.68 and EUR 0.83 per share during the purchase periods. The book value of the assigned shares was EUR 13 212 and the value for recipients was EUR 9 979, i.e. EUR 1.02 per share on average. The during the year repurchased shares account for 0.2 per cent of all shares and 0.05 per cent of the votes carried by the shares. The number of shares in the company’s possession at the end of the year was 124 200 Series A shares, which corresponds to 0.3 per cent of the company’s share capital and 0.1 per cent of all voting rights.
The repurchase of the company’s own shares and their partial assignment had no material impact on the division of shareholdings and voting rights in the company.
The shares are repurchased for use as consideration in corporate acquisitions or other structural arrangements or to implement the share-based incentive plan, to pay a share-based incentive or otherwise to be transferred or cancelled.
Major business risks In the Tulikivi Group, risk analysis and risk management form part of the regular strategic planning process performed each year and part of line operations. Strategic planning includes analysing the opportunities and risks that are associated with strategy choices and which are taken into account in decision-making. Separate risk analyses are drawn up for major individual projects, and the necessary risk management measures are decided upon. When compiling action plans, the risks that threaten the fulfilment of objectives are assessed and suitable measures for managing the risks are determined. The action plans and budgets are adjusted to suit the risk level. In day-to-day operations, continuous risk management is employed to ensure undisturbed operations.
The necessary remedies and development measures are determined immediately for any risks that emerge. In the assessment of risks, their probability and impact are taken into account. Euro- denominated risk limits are used in evaluating the impacts. The purpose of risk management is to ensure that the Tulikivi Group’s business risks are identified and managed as effectively as possible so that the Group’s strategic and financial objectives can be attained.
In accordance with the division of responsibilities of the Group’s risk management, the Board of Directors of Tulikivi Corporation and the Boards of the business subsidiaries are responsible for the companies’ and the Group’s risk management policy and oversee its implementation. The Managing Director, assisted by the Management Team, is responsible for establishing risk management procedures. The Managing Director is responsible for ensuring that risk management is organised appropriately. The business units are responsible for the management of their business risks.
The Group’s risks comprise strategic and operational risks, damage, casualty and loss risks and financial risks.
Strategic risks are related to the nature of business operations and concern, but are not limited to, changes in the Group’s operating environment, market situation and market position, raw material reserves, legislative changes, business operations as a whole, the reputation of the company, its brands and raw materials, and major investments.
Operational risks are related to products, distribution channels, personnel, operations and processes. Damage, casualty and loss risks include fires, serious breakdowns of machinery and other damage to assets that may also lead to interruption of business. Damage risks also include occupational safety and protection risks, environmental risks and accident risks. Financial risks to which the Group is exposed are foreign currency risk, interest rate risk, credit risk and liquidity risk.
During the financial year, one risk that materialised in Finland and in neighbouring regions was a substantial deterioration in the demand, to which we reacted by implementing a profitability and centralisation programme. However, this did not yet have an effect in the first part of the year, and instead increased non-recurring expenses. Outside the euro zone, strong exchange rate fluctuations caused demand to fall more than predicted in the risk assessment.
The Group’s near-term risks are increased uncertainty among consumers and the effect of this on consumers’ building and fireplace projects.
Environmental obligations Tulikivi’s environmental strategy is geared towards making systematic progress in environmental matters in specified areas. All of Tulikivi Corporation’s operational quarries have the environmental permits they require. Permit renewals are also in progress. The Group’s operations comply with the environmental permits, the requirements of the authorities and the environmental protection requirements.
The company is responsible for the environmental impacts of its operations. Under the Mining Act and environmental legislation, the Tulikivi Group has landscaping obligations that must be met when operating its quarries and after the quarries and plants are eventually shut down. No hazardous or poisonous substances are left in the environment as a result of the Group’s operations.
The Group is neither party to judicial or administrative procedures concerning environmental issues nor is it aware of any environmental risks that would have a significant effect on its financial position.
Events following the end of the financial year
At the end of the financial year, order books were at EUR 4.8 (4.9) million. Order books for the Tulikivi Group have since grown, and stood at EUR 6.1 million on 11 February 2010.
The Tulikivi Group has drawn up and, since the start of the year, put into effect a revised strategy, which covers the key operational and financial goals for the period to 2015, and a new division of product groups. The product group division does not affect the current segment reporting. According to the strategic goals, the company’s organic growth target is an annual growth of over 10 per cent in the next few years, the target for profit before taxes is to reach the level of 10 per cent of net sales over the next five years, and the target for return on capital is more than 20 per cent. Corporate acquisitions in support of the strategy are also possible.
Future outlook Private house building, and along with it the demand for fireplaces, increased in Finland last autumn and this positive trend is expected to continue. The trough in demand in Russia and the Baltic countries is also behind us. In Central Europe sales of lining stones have increased significantly, but securing a market for fireplaces continues to be a challenge. New products will increase the company’s net sales during the second half of the year. Adjustment measures will be continued in the Group, with layoffs where necessary.
With the company’s recovering sales and improved cost efficiency, the full-year net sales are expected to be up from the previous year and the result is expected to turn positive during the year.
The Board’s proposal for the distribution of profits The parent company’s distributable equity following the financial year’s result of EUR -2.7 million amounts to EUR 4.7 million.
Dividend distribution EUR 0.0250/share for Series A shares EUR 0.0233/share for Series K shares in total approximately EUR 0.9 million and EUR 3.8 million will be left to equity. In the Board’s view, the proposed distribution of profits will not jeopardise the company’s solvency.
Corporate Governance Statement Tulikivi Corporation will issue its Corporate Governance Statement for 2009 separately from the Report of the Board. The Corporate Governance Statement has been prepared in accordance with Recommendation 51 of Corporate Governance Code and chapter 2, section 6 of the Securities Markets Act. Information on Corporate Governance can be found on Tulikivi’s website, at www.tulikivi.com/Investors/Corporate Governance and Management.
FINANCIAL STATEMENTS Jan-Dec 2009, SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME EUR million Jan-DecJan-Dec Change Q4 Q4Change 2009 2008 % 2009 2008 %
Sales 53.1 66.5 -20.1 15.6 18.3 -14.7 Other operating income 0.6 0.7 0.1 0.1 Increase/decrease in inventories in finished goods and in work in progress -1.0 -0.6 0.1 0.3 Production for own use 0.3 0.8 0.1 0.3 Raw materials and consumables 10.2 12.5 3.1 3.4 External services 7.6 10.0 2.3 2.6 Personnel expenses 20.0 23.1 5.3 6.5 Depreciation and amortisation 5.5 5.7 1.4 1.6 Other operating expenses 12.1 12.9 3.5 3.6
Operating profit/loss -2.4 3.2 -173.5 0.3 1.3 -73.8
Percentage of sales -4.5 4.9 2.2 7.1 Finance income 0.2 0.2 0.0 0.1 Finance expense -1.1 -1.4 -0.2 -0.6 Share of the profit of associated company 0.0 0.0 0.0 0.0
Profit before tax -3.3 2.1 -260.8 0.2 0.9 -74.6 Percentage of sales -6.2 3.1 1.4 4.6 Income tax expenses 1.0 -0.6 0.2 -0.3
Profit/loss for the year -2.4 1.4 -265.1 0.5 0.6 -19.0
Other comprehensive income Interest rate swaps 0.0 0.0 0.0 - 0.1 Translation differences 0.0 0.0 0.0 0.0
Total comprehensive income for the year -2.4 1.4 -271.0 0.5 0.5 -5.4
Earnings per share attributable to the equity holders of the parent company, EUR basic and diluted -0.06 0.04 0.01 0.02
CONSOLIDATED BALANCE SHEET EUR million 12/09 12/08 ASSETS Non-current assets Property, plant and equipment Land 1.0 1.0 Buildings 7.4 8.0 Machinery and equipment 8.1 10.3 Other tangible assets 1.1 1.2 Intangible assets Goodwill 4.2 4.3 Other intangible assets 10.6 11.2 Investment properties 0.2 0.2 Available-for-sale investments 0.1 0.1 Receivables Deferred tax assets 1.6 0.9 Total non-current assets 34.3 37.2
Current assets Inventories 10.2 11.5 Trade receivables 4.1 5.3 Current income tax receivables 0.3 Other receivables 0.9 0.4 Cash and other liquid assets 10.6 11.7 Total current assets 26.1 28.9 Total assets 60.4 66.1
EQUITY AND LIABILITIES Equity Share capital 6.3 6.3 Share premium fund 7.4 7.4 Treasury shares -0.1 -0.1 Translation difference -0.1 0.0 Revaluation reserve -0.1 -0.1 Retained earnings 10.4 13.7 Total equity 23.8 27.2 Non-current liabilities Deferred income tax liabilities 1.9 2.1 Provisions 1.0 0.9 Financial liabilities 19.9 21.6 Other debt 0.1 Total non-current liabilities 22.9 24.6 Current liabilities Trade and other payables 8.7 9.1 Current income tax liabilities 0.0 0.1 Current provisions 0.2 Current financial liabilities 4.8 5.1 Total current liabilities 13.7 14.3 Total liabilities 36.6 38.9 Total equity and liabilities 60.4 66.1
CONSOLIDATED CASH FLOW STATEMENT EUR million Jan-Dec Jan-Dec 2009 2008 Cash flows from operating activities Profit for the period -2.4 1.4 Adjustments: Non-cash transactions 5.5 5.8 Interest expenses and interest income and income taxes 0.0 1.8 Change in working capital 1.8 0.2 Interest paid and received and taxes paid -1.2 -1.6 Net cash flow from operating activities 3.7 7.6 Cash flows from investing activities Investment in property, plant and equipment and intangible assets -2.0 -3.3 Grants received for investments and sales of property, plant and equipment 0.2 0.2 Net cash flow from investing activities -1.8 -3.1
Cash flows from financing activities Loans taken 5.1 10.0 Repayment of loans -7.0 -4.9 Dividends paid and treasury shares -1.1 -1.7 Net cash flow from financing activities -3.0 3.4
Change in cash and cash equivalents -1.1 7.9
Cash and cash equivalents at beginning of period 11.7 3.8
Cash and cash equivalents at end of period 10.6 11.7
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY EUR million Share Share Trans- Revalu- Trea- Re- Total capital premium lation ation sury tained fund diff. reserve shares earnings
Equity January 1, 2009 6.3 7.4 0.0 -0.1 -0.1 13.8 27.2 Dividends paid and treasury shares -1.0 -1.0 Total comprehensive income for the period -0.1 -2.4 -2.5 Equity Dec.31, 2009 6.3 7.4 -0.1 -0.1 -0.1 10.4 23.8
Equity January 1, 2008 6.3 7.4 -0.1 14.0 27.6 Dividends paid and treasury shares -0.1 -1.6 -1.7 The comprehensive income for the period 0.1 -0.1 1.4 1.4 Equity Dec.31, 2008 6.3 7.4 0.0 -0.1 -0.1 13.8 27.2
SEGMENT REPORTING Jan-Dec Jan-Dec EUR million 2009 2008 Sales 53.1 66.5 Fireplaces 47.8 58.5 Natural Stone Products 5.3 8.0 Other items - -
Operating profit -2.4 3.2 Fireplaces 1.0 6.1 Natural Stone Products -0.2 0.3 Other items -3.2 -3.2
BUSINESS SEGMENTS QUARTERLY EUR million Q4/ Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ 2009 2009 2009 2009 2008 2008 2008 2008
Sales 15.6 13.5 13.0 11.0 18.3 16.6 17.0 14.6 Fireplaces 14.4 12.4 11.4 9.6 16.4 14.9 14.6 12.6 Natural stone products 1.2 1.1 1.6 1.4 1.9 1.7 2.4 2.0 Other items - - - - - - - -
Operating profit/loss 0.3 0.7 -0.7 -2.7 1.3 1.3 0.9 -0.3 Fireplaces 1.3 1.5 0.1 -1.9 2.1 1.9 1.7 0.4 Natural stone products -0.2 0.0 0.1 -0.1 -0.1 0.1 0.1 0.2 Other items -0.8 -0.8 -0.9 -0.7 -0.7 -0.7 -0.9 -0.9
ASSETS AND LIABILITIES BY SEGMENT ON DECEMBER 31, 2009 Fire- Natural Other Total places stone items products Assets by segment 43.6 3.9 12.9 60.4 Liabilities by segment 8.3 0.6 27.7 36.6 Investments 1.9 0.0 0.2 2.1 Depreciation and amortisation expenses 4.9 0.3 0.3 5.5
KEY FINANCIAL RATIOS AND SHARE RATIOS Jan-Dec/09 Jan-Dec/08 Q4/09 Q4/ 08 07
Earnings per share, EUR -0.06 0.04 0.01 0.02 Equity per share, EUR 0.64 0.73 0.64 0.73 Return on equity, % -9.3 5.2 7.7 8.3 Return on investments, % -4.3 6.8 3.2 8.8 Equity ratio, % 39.4 41.2 Net indebtness ratio, % 59.4 55.1 Current ratio 1.9 2.0 Gross investments, EUR million2.1 2.9 Gross investments, % of sales 4.0 4.4 Research and development costs, EUR million 1.6 1.8 %/sales 3.1 2.7 Outstanding orders (31.Dec.), EUR million 4.8 4.9 Average number of staff 417 526
Rate development of shares, EUR Lowest share price, EUR 0.67 0.60 Highest share price, EUR 1.30 1.88 Average share price, EUR 0.96 1.28 Closing price, EUR 1.06 0.67
Market capitalization at the end of period, 1000 EUR 39241,0 24836,9 (Supposing that the market price of the K-share is the same as that of the A-share) Number of shares traded, (1000 pcs) 3959 2455 % of total amount of A-shares14.4 8.9 Number of shares average 37023708 37128494 37143970 37091946 Number of shares 31 December 37019770 37069970 37019770 37069970
NOTES TO THE CONSOLIDATED FINANCIALS STATEMENTS
This financial statement release has been prepared in accordance with the IAS 34 Interim Financial Reporting standard.
In preparing of this interim report, Tulikivi has applied same accounting policies as in the 2008 financial statements, with the exception of the following new/amended standards that the group has adopted as from January 1, 2009:
In preparing of this interim report, Tulikivi has applied same accounting policies as in the 2008 financial statements, with the exception of the following new/amended standards that the group has adopted as from January 1, 2009: - IFRS 8, Operating Segments - IAS 1 Presentation of Financial Statements (revised)
and the following new/amended standards and interpretations the adoption of which has not have any material impact on the figures for the period: - Amendment to IFRS 2 Share-based Payment - IAS 23 Borrowing Costs (revised) -Amendments to IFRS 7 Financial Instruments: Discloseres – improving Disclosures about Financial Instruments - Amendments to IFRIC 9 and IAS 39: Embedded Derivatives - Amendment to IAS 28 Investments in Associates (and consequential amendments to IAS 32 Financial Instruments: Presentation and IFRS 7 Financial Instruments: Disclosures) - Amendment to IAS 36 Impairment of Assets - Amendment to IAS 38 Intangible Assets - Amendment to IAS 19 Employee Benefits - Amendment to IAS 39 Financial Instruments: Recognition and Measurement - IFRIC 16 Hedges of a Net Investment in a Foreign Operation - IFRIC 13 Customer Loyalty Programmes - Amendment to IAS 16 Property, Plant and Equipment - Amendment to IAS 29 Financial Reporting in Hyperinflationary Economies - Amendment to IAS 31 Interests in Joint Ventures - Amendment to IAS 40 Investment Property - Amendment to IAS 20 Accounting for Government Grants and Disclosures for Government Assistance - IFRIC 15 Agreements for the Construction of a Real Estate
The key performance ratios and share ratios are calculated using the same methods as for the consolidated financial statements for 2008. The formulas can be found in the 2008 annual report, page 67.
Use of estimates When preparing the financial statements certain assumptions and estimates regarding future have to be made. The outcomes might differ from these assumptions and estimates. In addition judgements have to be made in the application of accounting principles. The estimates affect the amounts of assets and liabilities at the balance sheet date, reporting of contingent liabilities and income and expenses for the reporting period. Estimates are used i.a. when determining realisability of certain assets, useful lives of property, plant and equipment and intangible assets, income taxes, provisions and impairment of goodwill.
Income taxes EUR million Jan-Dec/09 Jan-Dec/08 Taxes for the current and previous reporting periods 0.1 -0.7 Deferred taxes 0.9 0.1 Total 1.0 -0.6
Collaterals given EUR million 12/2009 12/2008 Mortages granted and collaterals pledged 29.1 25.5 Derivatives Interest rate swaps Nominal value 7.3 13.0 Fair value -0.3 -0.2 Foreign exchange forward contracts Nominal value 0.1 Fair value 0.0 The fair value of derivatives is the gain or loss for closing the contract based on market rates at the balance sheet date.
Provisions EUR million Environ- Warranty Restruc- mental provisions turing provisions provision Provisions, Jan. 1, 2009 0.4 0.5 Increase in provisions 0.1 0.1 1.0 Effect of discounting 0.1 Used provisions 0.2 0.7 Provisions, Dec. 31, 2009 0.6 0.4 0.3
- The environmental and warranty provisions are non-current provisions. The environmental provision before discounting amounts to EUR 0.9 (0.8) million. The discount factor used in determining the present value is 4 (5) per cent. The restructuring provision comes under current provisions.
Under the Mining Act and environmental legislation, the Tulikivi Group has landscaping obligations which must be met during operations and when the quarries are shut down in the future. The environmental provision takes into account the costs of environmental monitoring after the closure of a quarry and the costs of landscaping obligations in so far as it has been possible to determine these reliably. The lining work carried out in stacking areas is based on a long-term quarrying plan, according to which surface material from new quarries is to be used in lining work. No provision is recognised for the lining work because this particular landscaping work is not expected to increase the costs of normal quarrying activity.
Changes in tangible assets are classified as follows: 12/09 12/08 Acquisition costs 1.1 1.4 Proceeds from sales -0.1 -0.4 Total 1.0 1.0
Impairment of property, plant and equipment, intangible assets and other assets A total of EUR 221 000 (250 000) in goodwill/trademark impairment was recognised for the financial year.
Share capital Share capital by share series
Number of % of % of Share, shares shares voting EUR of rights share capital K shares (10 votes) 9 540 000 25.7 77.6 1 621 800 A shares (1 vote) 27 603 970 74.3 22.4 4 692 675 Total Dec.31, 2009 37 143 970 100.0 100.0 6 314 475
There have been no changes in Tulikivi Corporation´s share capital during the period. According to the articles of association the dividend paid for Series A shares shall be 0.0017 EUR higher than the dividend paid on Series K shares. Each Series K shares confers 10 votes at a general meeting, while each Series A shares confers one vote. The Series A share is listed on the NASDAQ OMX Helsinki Ltd. 5.5 per cent of all shares were nominee registered or in foreign ownership. No flagging notifications were made to the company during the review period.
Board authorizations The Board of Directors has an authorization to acquire the company’s own shares. A maximum of 2 760 397 Series A shares in the company and 954 000 Series K shares in the company can be bought back. The authorization is valid until the Annual General Meeting 2010.
The Board of Directors has an authorization to decide on share issues and the conveyance of the company’s own shares in the possession of the company and the granting of special rights that give entitlement to shares as set forth in Chapter 10, Article 1 of the Companies Act. The Annual General Meeting authorized the Board of Directors to decide on issuing new shares and the conveyance of own shares in the company’s possession. New shares can be issued or own shares held by the company conveyed amounting to a maximum of 5 520 794 Series A shares and 1 908 000 Series K shares.
The authorization also includes the right to issue special rights, as defined in Chapter 10, Article 1 of the Companies Act, entitling the right holder to subscribe for shares against payment or by setting off the receivable. The authorization is valid until the Annual General Meeting 2010.
At the end of the period, the company hold 124 200 of its own A- series shares, corresponding to 0.3 per cent of share capital and 0.1 per cent of total voting rights.
Related party transactions The following transactions with related parties took place: EUR 1000 12/09 12/08 Sales of goods and services to associated companies 7 13 Purchases of goods and services from associated companies 148 173 Sales to related parties 30
Leases from related parties 109 115 Sales of goods and services to related parties 30
Transactions with other related parties Tulikivi Corporation is a founder member of the Finnish Stone Research Foundation. In 2009 the company has donated EUR 30 thousand (in 2008 EUR 100 thousand) for the Foundation. The company has leased offices and storages from the property owned by the Foundation and North Karelia Educational Federation of Municipalities. The rent paid for these facilities was EUR 131 thousand (128 thousand)in the period. The rent corresponds with the market rents. The rent corresponds with the market rents. The company has sold services amounting to EUR 41 thousand (52 )to the foundation and has leased land, amounting to EUR thousand 2 (2).
Largest shareholders on December 31, 2009 Name of shareholder Shares Proportion of total vote
Vauhkonen Reijo 4 186 827 24.2 % Vauhkonen Heikki 3 006 137 24.1 % Elo Eliisa 2 957 020 5.9 % Virtaala Matti 2 421 300 12.6 % Mutual Pension Insurance Ilmarinen 1 902 380 1.5 % Mutanen Susanna 1 643 800 7.2 % Vauhkonen Mikko 786 310 3.5 % Paatero Ilkka 718 430 0.6 % Nuutinen Tarja 674 540 3.5 % Investment Fond Phoebus 585 690 0.5 % Other shareholders 18 261 536 16.4 %
The figures contained in the financial statement release have not yet been audited.
The financial statements and Board of Directors´report will be published on the company´s website (www.tulikivi.com/Investors/Releases) during the week beginning March 15.
The companies included in the Group are the parent company Tulikivi Corporation, Kivia Oy, AWL-Marmori Oy, Tulikivi U.S. Inc. and OOO Tulikivi. Group companies include also The New Alberene Stone Company, Inc., which is dormant. The Group company Uuni Vertriebs GmbH was liquidated during the year. The parent company has a fixed place of business in Germany, Tulikivi Oyj Niederlassung Deutschland. The Group has interests in associated companies Stone Pole Oy and Leppävirran Matkailukeskus Oy.
TULIKIVI CORPORATION
Board of Directors Matti Virtaala Chairman of the Board
Distribution: NASDAQ OMX Helsinki Ltd Central Media www.tulikivi.com
Additional information: Tulikivi Corporation, 83900 Juuka, tel. +358-207-636 000, www.tulikivi.com - Chairman of the Board of Directors Matti Virtaala - Managing Director Heikki Vauhkonen- The 2009 net sales of the Tulikivi Group amounted to EUR 53.1 million (EUR 66.5 million in 2008). - The 2009 result before taxes was a loss, at EUR -3.3 (+2.1) million. Earnings per share were EUR -0.06 (+0.04). - Net sales for the final quarter of 2009 were EUR 15.6 (18.3) million, and profit before taxes was EUR 0.2 (0.9) million. - Year-end order books were at EUR 4.8 (4.9) million. - Cash flow from operating activities before investments was EUR 3.7 (7.6) million. - With the Group’s recovering sales and improved cost efficiency, net sales in 2010 are expected to be up from the previous year, and the result is expected to turn positive during 2010.
Additional information: Tulikivi Corporation, 83900 Juuka, tel. +358-207-636 000, www.tulikivi.com - Chairman of the Board of Directors Matti Virtaala - Managing Director Heikki Vauhkonen