Tulikivi Corporation’s share capital increase of EUR 122,133.10, which was carried out as a directed share issue, has been registered in the Trade Register today. The 718,430 new Series A shares will become subject to trading on the Helsinki Stock Exchange’s Main List, together with the old Series A shares, on July 3, 2006.
After the issue, the share capital of Tulikivi Corporation amounts to EUR 6,314,474.90 and the total number of shares to 37,143,970. Of these, 27,603,970 are Series A shares and 9,540,000 Series K shares.
Tulikivi Corporation
Juha Sivonen Managing Director
Distribution: Helsinki Stock Exchange, central media
Additional information: Tulikivi Corporation, 83900 Juuka, tel. +358-207 636 000, www.tulikivi.com - Chairman of the Board of Directors Matti Virtaala - Managing Director Juha Sivonen
Tulikivi Corporation’s Board of Directors has, on the basis of the authorization given by the Annual General Meeting, decided to increase the company’s share capital with a directed share issue for the payment of a EUR 2.1 million share consideration to Ilkka Paatero as part of the share purchase agreement for Kermansavi Oy’s shares signed on April 3, 2006.
In accordance with the purchase conditions mentioned above, 718,430 Tulikivi Corporation Series A shares were subscribed for in the directed share issue. The share capital increase, which is carried out as a rights issue, of is EUR 122,133.10 and the share premium fund increase of is EUR 1,982,866.90 will be carried out as a rights issue. As a result of the issueincrease, the share capital of the company will increase to EUR 6,314,474.90 and the total number of shares to 37,143,970. The newly issued shares will represent just under 2 per cent of the company’s total shares.
The new shares are expected to be registered in the Trade Register on June 30, 2006 and to become subject to trade on the stock exchange together with the old Series A shares on July 3, 2006. The Financial Inspection Supervision Authority has granted Tulikivi Corporation an exemption from the obligation to publish a listing document prospectus when applying for public trading for the new shares issued.
TULIKIVI CORPORATION
Distribution: Helsinki Stock Exchange Central Media
Additional information: Tulikivi Corporation, 83900 Juuka, tel. +358-207-636 000, www.tulikivi.com - Chairman of the Board of Directors Matti Virtaala - Managing Director Juha Sivonen
Petri Huhti, B.Sc. (Eng.), 35, has been appointed Director, Ceramics Business at Tulikivi Corporation as of June 5, 2006. Huhti is based at Kermansavi Oy in Heinävesi, and will also become a member of the Tulikivi Corporation Management Team.
Huhti transferred to Tulikivi Corporation from his position as Plant Manager at Perlos Corporation’s Kontiolahti plant. He has previously worked for companies such as Elcoteq and Amerplast.
Distribution: Helsinki Stock Exchange Principal media
For additional information, contact: Tulikivi Corporation, 83900 Juuka, tel. +358 207 636 000, www.tulikivi.com - Managing Director Juha Sivonen
– The Tulikivi Group’s sales rose by 24.5 per cent during the first quarter and amounted to EUR 16.3 (13.1) million. – Exports grew by 60 per cent. – The Group’s profit before taxes was EUR 1.7 (0.3) million. – The Group’s flow of orders has remained good. The order book amounted to EUR 9.7 (6.6) million at period’s end.
Sales and result The Group’s sales came in at EUR 16.3 million (EUR 13.1 million in the January-March period of 2005). Sales growth is organic. The Fireplaces Business racked up sales of EUR 14.6 (11.4) million and the Natural Stone Products Business (the former Architectural Stone Business) had sales of EUR 1.7 (1.7) million.
The share of sales accounted for by exports was EUR 9.7 (6.0) million, or 59.4 (45.9) per cent. The largest export countries were Germany and Sweden. Sales in Finland amounted to EUR 6.6 (7.1) million.
The Group’s operating profit was EUR 1.7 (0.3) million. The Fireplaces Business posted operating profit of EUR 2.3 (0.9) million and the Natural Stone Products Business EUR 0.1 (0.1) milllion, with unallocated expenses amounting to EUR 0.7 (0.7) million. The Group’s profit before taxes was EUR 1.7 (0.3) million.
Financing activities and investments
The Group’s financing position is favourable. Cash flow from operating activities before investments was EUR -0.4 (-3.0) million. The working capital of the Group increased by 2.8 (3.9) million during the period.
The equity ratio was 64.1 per cent (51.6 per cent on March 31, 2005 after reduction of dividend). The ratio of interest-bearing net liabilities to equity (gearing) was 5.5 (33.3) per cent. The current ratio was 1.6 (1.5). Equity per share was EUR 2.94 (2.33).
The Group invested EUR 1.8 (1.3) million in production and quarries. A factory investment valued at about EUR 5 million was started up in Juuka during the review period. The factory is slated for completion in autumn 2006. It will manufacture the next generation of Tulikivi products. This collection was unveiled at the Verona fireplace trade fair in March.
In January 2006 Tulikivi was granted a license for the prospecting and industrial utilization of stone reserves in the Republic of Karelia in Russia. Research will start during the summer.
Quotation and trading of the Series A share Share turnover during the review period amounted to 648 596, with the value of turnover being EUR 6.9 million. The highest trading price of the share was EUR 12.50 and the lowest EUR 8.16. The closing rate for the report period was EUR 12.00.
Major events after the end of the report period On April 3, 2006, Tulikivi Corporation acquired all the shares in Kermansavi Oy, whose main business is the manufacture of tiled stoves. The transaction bolsters Tulikivi’s market leadership in heat-retaining fireplaces and rounds out Tulikivi’s product range. In 2005, Kermansavi Oy had sales of about EUR 16 million and its profit before taxes was EUR 1.5 million. The selling price was EUR 13.1 million.
Tulikivi Corporation’s Annual General Meeting, held on 6 April 2006, resolved that a dividend of EUR 0.280 be paid on Series A shares and EUR 0.273 on Series K shares. The former Board members were re-elected. The Annual General Meeting accepted the proposal of the Board of Directors to quadruple the number of shares without raising the share capital, effective as from April 21, 2006. The Annual General Meeting also approved the Board’s proposals to authorize the
Board of Directors to acquire and dispose of the company’s own shares as well as to raise the share capital.
Outlook for the future Tulikivi’s sales are still rising in both its main and new markets. The company is making further outlays on the development of distribution channels and marketing. Uncertainties regarding the distribution of energy and its rising price increase the demand for fireplaces. The trend in the Group’s sales and earnings is positive at the annual level. It is estimated that the acquisition of Kermansavi Oy will have a slightly positive effect on the Group’s result for 2006.
At the end of the review period, the order book was EUR 9.7 million, of which the Fireplaces Business accounted for EUR 9.3 (5.9) million and the Natural Stone Business for EUR 0.4 (0.7) million.
The Interim Report has been drafted in line with IFRS measurement and recognition principles.
CONSOLIDATED INCOME STATEMENT MEUR 01-03/ 01-03/ Change, 01-12/ 2006 2005 % 2005
Sales 16.3 13.1 24.1 58.6 Other operating income 0.1 0.1 0.3 Increase/decrease in inventories in finished goods and in work in progress -0.1 -0.4 -1.0 Production for own use 0.2 0.1 1.2
Raw materials and consumables 2.5 2.1 9.7 External services 1.7 1.5 6.6 Personnel expenses 5.9 4.8 21.0 Depreciation 1.0 1.0 4.0 Other operating expenses 3.7 3.2 11.5
Operating profit 1.7 0.3 466.7 6.3 Percentage of sales 10.6 2.3 10.7 Finance costs -net 0.0 0.0 -0.1 Share of the profit of Associated company -0.1
Profit before tax 1.7 0.3 572.8 6.1 Percentage of sales 10.5 1.9 10.3 Direct taxes 0.4 0.2 1.7
Profit for the period 1.3 0.1 1145.1 4.4
Earnings per share attributable to the equity holders of the parent company, EUR 0.14 0.01 0.48 basic and diluted
CONSOLIDATED BALANCE SHEET MEUR 03/2006 03/2005 12/2005 ASSETS Non-current assets Property, plant and equipment Land 0.9 1.0 0.9 Buildings 6.7 6.4 6.2 Machinery and equipment 9.0 8.3 8.4 Other tangible assets 0.7 0.8 0.8 Intangible assets Goodwill 0.6 0.6 0.6 Other intangible assets 4.2 3.1 4.1 Investment properties 0.2 0.2 0.2 Available-for-sale investments 0.1 0.1 0.1 Receivables 0.2
Deferred tax assets 0.5 0.6 0.5 Total non-current assets 22.9 21.1 22.0
Current assets Inventories 7.3 7.2 7.0 Trade receivables 8.6 9.2 6.5 Current income tax receivables 0.1 0.5 0.0 Other receivables 1.4 1.7 0.8 Prepaid expenses 0.2 0.2 Financial assets at fair value through profit and loss Cash and cash equivalents 1.4 1.2 4.1 Total non-current assets 18.8 20.0 18.6 Total assets 41.7 41.1 40.6
EQUITY AND LIABILITIES Equity Share capital 6.2 6.2 6.2 Share premium 5.4 5.4 5.4 Retained earnings 15.2 9.6 13.9 Total equity 26.8 21.2 25.5 Non-current liabilities Deferred income tax liabilities 0.8 0.8 0.8 Retirement benefit obligations 0.0 Provisions 0.3 0.2 0.3 Interest-bearing debt 1.8 5.3 1.8 Other debt 0.4 0.4 0.4 Total non-current liabilities 3.3 6.7 3.3 Current liabilities Trade and other payables 10.5 10.3 10.2 Current income tax liabilities 0.1 0.1 Short-term interest-bearing debt 1.1 2.9 1.5 Total current liabilities 11.7 13.2 11.8 Total liabilities 15.0 19.9 15.1 Total equity and liabilities 41.8 41.1 40.6
CONSOLIDATED CASH FLOW STATEMENT 01-03/ 01-03/ 01-12/ MEUR 2006 2005 2005
Cash flows from operating activities Profit for the period 1.3 0.1 4.4 Adjustments: Non-cash transactions 1.0 1.0 4.0 Interest expenses and income and taxes 0.4 0.2 1.8 Change in working capital -2.8 -3.9 1.8 Interest paid and received and taxes paid -0.3 -0.4 -1.5 Net cash flow from operating activities -0.4 -3.0 10.5
Cash flows from investing activities Acquistion of associated companies and loans granted to them -0.1 Investment in property, plant and equipment and intangible assets -1.9 -1.4 -5.1 Grants received for investments and sales of property, plant and equipment 0.1 0.1 0.3 Sale of financial asets at fair value through profit and loss 0.8 0.8 Net cash flow from investing activities -1.8 -0.5 -4.1
Cash flows from financing activities Loans received 1.8 Repayment of loans -0.5 -2.3 -5.3 Dividends paid -2.1
Net cash flow from financing activities -0.5 -0.5 -7.4
Change in cash and cash equivalents -2.7 -4.0 -1.0
Cash and cash equivalents beginning of period 4.1 5.1 5.1
Cash and cash equivalents at end of period 1.4 1.1 4.1
KEY FINANCIAL RATIOS AND SHARE RATIOS 03/2006 03/2005 12/2005 Outstanding orders (31 March), MEUR 9.7 6.6 9.2 Gross investment, MEUR 2.2 1.3 5.1 Gross investment, % of sales 13.4 10.2 8.7 Average number of staff 544 492 514
Earnings per share, EUR 0.14 0.01 0.48 Equity per share, EUR 2.94 2.33 2.80 Equity ratio, % 64.1 51.6 63.0 Gearing, % 5.5 33.3 -3.1 Current ratio 1.6 1.5 1.6 Number of shares average 9106385 9106385 9106385 Number of shares 31 March 9106385 9106385 9106385
STATEMENT OF CHANGES IN EQUITY MEUR Share Share Trans-Dividend Re- Total capital premium lation distri- tained fund diff. bution ear- nings Equity 1 January 2006 6.2 5.4 13.9 25.5 Translation differences 0.0 0.0 Profit for the period 1.3 1.3 Equity 31 March 2006 6.2 5.4 0.0 15.2 26.8
Share Share Trans-Dividend Re- Total capital premium lation distri- tained fund diff. bution ear- nings Equity 1 January 2005 6.2 5.4 0.0 11.6 23.2 Translation differences 0.0 0.0 Profit for the period 0.1 0.1 Dividends -2.1 -2.1 Equity 31 March 2005 6.2 5.4 0.0 -2.1 11.7 21.2
BUSINESS SEGMENTS Q1/ Q1/ 1-12 MEUR 2006 2005 2005 Sales 16.3 13.1 58.6 Fireplaces business 14.6 11.4 52.2 Natural stone products business 1.7 1.7 6.4
Operating profit 1.7 0.3 6.3 Fireplaces business 2.3 0.9 8.8 Natural stone products business 0.1 0.1 0.2 Unallocated group expenses -0.7 -0.7 -2.7
BUSINESS SEGMENTS QUARTERLY Q1/ Q4/ Q3/ Q2/ Q1/ 2006 2005 2005 2005 2005
Sales 16.3 17.6 13.4 14.6 13.1 Fireplaces business 14.6 15.9 12.1 12.8 11.4 Natural stone products business 1.7 1.7 1.3 1.8 1.7
Operating profit 1.7 2.7 1.7 1.5 0.3 Fireplaces business 2.3 3.2 2.5 2.1 0.9 Natural stone products business 0.1 0.1 -0.1 0.1 0.1 Unallocated group expenses -0.7 -0.6 -0.7 -0.7 -0.7
COLLATERAL AND SECURITIES GIVEN AND OTHER COMMITMENTS MEUR 3/2006 3/2005 12/ 2005 Loans from credit institutions and other non-current liabilities, secured by mortgages and pledges 2.6 7.4 2.9 Mortgages and pledges given 10.8 10.8 10.8 Other mortgages and pledges given by the company on its own behalf 1.7 1.7 1.7
Environmental guarantees In accordance with the mining and environmental legislation, Tulikivi Corporation has environmental commitments, which have to be met when closing a quarry. The amount of the commitments cannot be reasonably estimated, but it is not expected to be material.
Derivatives The impact of off-balance sheet derivatives is immaterial.
LARGEST SHAREHOLDERS ON 31 MARCH 2006
Name of shareholder Number of Proportion of shares total vote Vauhkonen Reijo 1 039 673 24.4 % Vauhkonen Heikki 749 938 23.8 % Elo Eliisa 739 255 5.9 % Virtaala Matti 604 723 12.0 % Mutual Pension Insurance Company Ilmarinen 475 595 1.5 % Mutanen Susanna 449 375 7.3 % Investment Fund Phoebus 210 000 0.7 % Vauhkonen Mikko 200 175 3.6 % Nuutinen Tarja 168 635 3.5 % Fondita Nordic Small Cap Placfond 163 100 0.5 % Other shareholders 4 305 916 16.8 %
The interim report has not been audited.
The companies included in the Group are the parent company Tulikivi Corporation and subsidiaries Kivia Oy, AWL-Marmori Oy, Tulikivi U.S. Inc. and OOO Tulikivi Russia. Group companies include also Tulikivi Vertriebs GmbH and The New Alberene Stone Company, Inc., which are dormant. Parent company has a fixed place of business in Germany, Tulikivi Oyj Niederlassung Deutchland. The Group has a associated company Stone Pole Oy. Kermansavi Oy is a part of the Tulikivi Group starting from April 3, 2006.
Board of directors Matti Virtaala, Chairman of the Board
The decision by the annual general meeting of Tulikivi Corporation held on April 6, 2006 was to increase the number of shares to quadruple (split) without increasing the share capital. This will be done in proportion to shareholders’ ownership. The nominal value of both share series will be changed from EUR 0.68 to EUR 0.17 so that one old share will be split into four new shares. After the split, the number of K shares will be 9 540 000 and the number of A shares 26 885 540.
The change in the number of shares and related changes in paragraphs 3 and 4 of the company by-laws entered into the trade register today, April 20, 2006 and the new shares will be subject to public trading at Helsinki Stock Exchange beginning from April 21, 2006.
Juuka, 20 April 2006
TULIKIVI CORPORATION Board
Distribution: Helsinki Stock Exchange and principal media
For further information: Tulikivi Corporation, 83900 Juuka, tel. 0207 636 000, www.tulikivi.com Chairman of the Board Matti Virtaala Managing Director Juha Sivonen
The Annual General Meeting resolved that a dividend of EUR 0.280 be paid on Series A shares and 0.273 on Series K shares for financial year 2005. The current board members were re-elected. The Annual General Meeting accepted the proposal of the Board of Directors to quadruple the number of shares without raising the share capital as well as the proposals to authorise the Board of Directors to acquire the company’s own shares and to dispose of the company’s own shares as well as to raise the share capital.
The Annual General Meeting of the Tulikivi Corporation held on April 6, 2006 approved the parent company and consolidated financial statements for the financial year 2005 as presented by the Board of Directors and discharged the members of the Board of Directors and the Managing Director from liability.
Dividend The Annual General Meeting resolved, in accordance with the Board’s proposal, to pay a dividend of: – EUR 0.280 on Series A shares – EUR 0.273 on Series K shares The record date for the dividend payment will be April 11, 2006. The dividend will be paid out on April 20, 2006.
Grants The Annual General Meeting resolved to grant EUR 100 000 of the Group’s distributable equity to charitable, non-profit, organisations and foundations.
Remuneration of Board members and auditor’s fees The annual remuneration of a Board member is EUR 11 815. In accordance with the resolution of the Annual General Meeting, each Board member will receive 40 per cent of the annual remuneration in the form of Tulikivi Corporation Series A shares. The Tulikivi shares in question will be acquired for the Board members through share purchases on Helsinki Exchanges by December 31, 2006. In addition, the Chairman of the Board of Directors will be paid a EUR 5 630 monthly fee, the Vice Chairman a EUR 2 745 monthly fee and the director serving as secretary to the Board of Directors a EUR 565 monthly fee. The fees for the auditor are paid according to the relevant invoice.
Board members and Chairman of the Board The number of Board members was set at seven. The current Board was re-elected and consists of the following members: Bishop Ambrosius, Mr. Juhani Erma, Mr. Eero Makkonen, Mr. Aimo Paukkonen, Mr. Reijo Vauhkonen, Mr. Heikki Vauhkonen and Mr. Matti Virtaala. The initial meeting of the Board was held immediately after the Annual General Meeting. Mr. Matti Virtaala was elected Chairman of the Board, and Mr. Heikki Vauhkonen was elected Vice Chairman.
Auditor The firm of independent public accountants PriceWaterhouseCoopers Oy was elected the auditor of Tulikivi Corporation, with Hannele Selesvuo, Authorized Public Accountant, acting as the chief auditor.
The increase in the number of shares The Annual General Meeting accepted the proposal of the Board of Directors to quadruple the number of shares. The number of shares will be increased in proportion to the holdings of shareholders without raising the share capital so that one old share will be divided into four new shares i.e. each share with with a nominal value of EUR 0.68 each into four shares with a nominal value of EUR 0.17 each, after which the number of Series K shares will be 9 540 000 and the number of Series A shares 26 885 540. It is planned that the increase in the number of shares enters into force after the dividens are paid out, at the earliest on April 21, 2006.
Change in Articles of Association The Annual General Meeting resolved a change in Articles 3 and 4 of the Articles of Association as proposed by the Board of Directors as follows:
Article 3 Minimum and maximum share capital The company’s minimum share capital is 2 550 000 euros and the maximum share capital is 10 200 000 euros, within which limits the share capital can be raised or lowered without amending the Articles of Association.
The shares are divided into Series K shares, which are referred to as common shares, and Series A shares, which are referred to as preference shares, such that the minimum number of Series K shares is 9 540 000 and the maximum number is 21 840 000, and the minimum number of Series A shares is 9 790 000 and the maximum number is 38 160 000.
The Series K and Series A shares differ from each other as follows: 1) Each Series K share confers 10 votes at a General Meeting and each Series A share one vote. 2) Of the profits to be distributed, the dividend that is paid on the nominal value of Series A shares shall be at least 1 percentage point greater than that paid on Series K shares. The General Meeting of shareholders can resolve to issue only Series K or Series A shares in a rights issue.
Article 4 Nominal value of shares The nominal value of the shares is EUR 0.17.
Authorisation to acquire the company’s own shares The Annual General Meeting granted the Board authorization to acquire the company’s own shares as proposed by the Board. The company’s own shares are acquired to develop the company’s capital structure and to be used as consideration in business and company acquisitions and other structural arrangements, the manner and scope of which will be determined at the discretion of the Board of Directors. The Board of Directors can also initiate the invalidation of shares by decreasing the share capital. No more than a total of 678 138 Series A shares of the company (a maximum of 2 668 552 new Series A shares after the split) shall be acquired and no more than a total of 238 500 Series K shares of the company (a maximum of 954 000 new Series K shares after the split) shall be acquired.
Authorisation to dispose of the company’s own shares The Annual General Meeting granted the Board authorization to dispose the company’s own shares as proposed by the Board. No more than a total of 678 138 series A shares of the company (a maximum of 2 668 552 new Series A shares after the split) shall be acquired and no more than a total of 238 500 Series K shares of the company (a maximum of 954 000 new Series K shares after the split) shall be disposed of.
Authorization of the Board of Directors to decide on the increasing of the share capital The Annual General Meeting authorised the Board of Directors to decide on the increase the share capital so that the share capital can be increased by a maximum of EUR 1 238 468 on the basis of the rights issue and convertible bonds by offering a maximum of 1 821 277 new Series A shares for subscription (a maximum of 7 825 108 split new Series A shares) at the price determined by the Board of Directors and under the other terms set by the Board. The authorisation includes the right to waive the pre-emptive subscription right of shareholders provided there is weighty financial reason for the company to do so.
TULIKIVI OYJ
Matti Virtaala Chairman of the Board
Additional Information: Tulikivi Corporation, 83900 Juuka, Tel. +358 207 636 000, www.tulikivi.com Matti Virtaala, Chairman of the Board Juha Sivonen, Managing Director Distribution: Helsinki Stock Exchanges and Principal Media
*Tulikivi Corporation significantly increases its market share in fireplaces by acquiring all the shares in Kermansavi Oy. *The transaction substantially rounds out Tulikivi’s product range and enlarges its clientele. *The acquisition generates synergy benefits, supplements distribution channels in Finland and opens up export markets for new products.
Tulikivi, well known as a manufacturer of soapstone fireplaces, is bolstering its position as the market leader in heat-retaining fireplaces by acquiring Kermansavi Oy, whose main business is the manufacture of tiled stoves. Kermansavi’s share of the Finnish market for branded fireplaces is ten per cent. Tulikivi’s domestic market share will thus rise to over 30 per cent. The data is based on Rakennustutkimus RTS Oy’s fireplace market report for 2005.
The acquisition of Kermansavi Oy is in line with Tulikivi’s growth strategy. Tulikivi aims to achieve annual organic growth of over five per cent and to enlarge its business to new customer groups through acquisitions.
The acquisition significantly rounds out Tulikivi’s product range and increases its potential clientele. It also yields major synergy benefits for the Group and establishes a new distribution channel for Tulikivi in Finland. Tulikivi’s current distribution channels in export markets in turn make it possible to start up sales of ceramic products abroad.
The acquiree, Kermansavi Oy, is a family company established in 1976 and owned by Ilkka Paatero and his children. Kermansavi Oy’s business operations comprise the design, manufacture and sale of tiled stoves as well as domestic and decorative stoneware, along with the installation of stoves. The company’s production facilities are located in Heinävesi.
In 2005, Kermansavi Oy had revenue of about EUR 16 million, of which tiled stoves accounted for about 70 per cent. The share of revenue generated by stoves is rising vigorously and will amount to close to 80 per cent this year. Kermansavi Oy’s profit before taxes was EUR 1.5 million and its net profit EUR 1.1 million. The balance sheet total was EUR 8.6 million at the turn of the year. Kermansavi Oy has about EUR 2.6 million in interest-bearing liabilities. At present, Kermansavi Oy has about 130 employees. They will transfer into the Tulikivi Group’s employ under their current terms of employment. The Tulikivi Group’s total payroll will thus increase to approximately 650 people.
“The acquisition of Kermansavi is a major step in the implementation of Tulikivi’s growth strategy. Together with the new generation of Tulikivi fireplaces, the acquisition significantly bolsters our position as the global market and technology leader in heat-retaining fireplaces,” says Tulikivi Corporation’s Managing Director Juha Sivonen.
“Kermansavi’s future is in fireplaces and it has a strong brand. I believe that, with Tulikivi’s help, our products will find their way into export markets, too. As a company from Eastern Finland, Tulikivi is a good home for Kermansavi,” says Ilkka Paatero, who sold Kermansavi Oy.
A EUR 13 million transaction
The selling price was EUR 13.1 million, of which EUR 11 million was paid in cash and the remainder will be paid by transferring about 179,000 (before the split) Series A shares in Tulikivi Corporation after a share issue decision is made. In the transaction, the former owners of Kermansavi will receive a total holding of less than 2 % in Tulikivi.
The deal will have a slightly positive effect on the consolidated result and key figures in 2006. As from 2007, the effect on earnings will be significantly positive. The solvency of the Tulikivi Group will remain good.
The right of ownership and possession to Kermansavi Oy’s shares was transferred to Tulikivi Corporation upon the signing of the agreement on 3 April 2006.
For additional information, contact: Tulikivi Corporation, 83900 Juuka, tel. +358 207 636 000, www.tulikivi.com – Chairman of the Board Matti Virtaala and Managing Director Juha Sivonen Distribution: – Helsinki Stock Exchange, – Principal media
Tulikivi Corporation and its subsidiaries form the Tulikivi Group, the world’s largest and most technologically advanced processor of soapstone and the world’s largest manufacturer of industrially produced heat-retaining fireplaces. Before the acquisition, the Group had revenue of about EUR 60 million. The Group owns six production plants and employs more than 500 people.
Tulikivi Corporation's annual report for 2005 was published today as a printed product and will be mailed to shareholders. The annual report is also available as a PDF file on the company's website at www.tulikivi.com. The annual report can also be ordered from the company: tel 0207 636 254, e-mail tulikivi@tulikivi.fi, street address: Tulikivi Corporation / Financial reports, 83900 Juuka.
Distribution: - Helsinki Stock Exchange
*Tulikivi will introduce to the market a new generation of fireplaces created by design professionals. *The combustion technology and efficiency of the new products are top of their class, resulting in cleaner burning of wood. * The products will be manufactured at the new plant that is due for completion in Juuka in September 2006 and that will utilize small and left-over blocks.
Tulikivi has completed a development project that has lasted almost two years, as a result of which the company will introduce a new generation of fireplaces to the market in order to expand its current model series. The prototypes for the new products were unveiled at the Verona fireplace trade fair in Italy. The new products will become available for sale in Finland in September 2006.
In January 2006, Tulikivi's Board of Directors took a decision to invest five million euros in the construction of a new production plant in Juuka in order to boost production capacity. The production plant which is due for completion in September 2006 will manufacture the new product line. For raw materials, the new plant will mostly utilize low-cost small and left-over blocks accumulated during the company's 25-year history.
Cutting edge design and combustion technology
The new Tulikivi fireplaces were designed on the basis of the results of an extensive market survey carried out in Tulikivi^s main markets. Top design professionals, such as Industrial Designer Hannu Kähönen and his agency Creadesign Oy, were involved in the process. The objective was to create a new range of fireplaces featuring the best combustion technology and efficiency in its class. Tulikivi also sought to minimize emissions, despite the fact that its current products already comply with the strictest emissions standards in the world (those of Austria). New models are easy to maintain
The clear-cut fireplaces have large doors with straight lines that sit beautifully with the new stone size. New doors include a square-shaped door and a tall vertical door as well as a large horizontal door which is a novelty in heat-retaining fireplaces. Soot doors have been placed out of sight, which accentuates the harmonious look of the fireplaces. The new double-shell construction of the fireplaces guarantees a prolonged heat-release time, making the new models particularly well-suited for low- energy houses, since they store heat for a long time and release it slowly.
Benches and shelves with a modular design as well as other accessories can be added to the new models. Customers can personalize the composition of their fireplace, and accessories can be varied, replaced or added later. For additional information, contact: - Tulikivi Corporation, FI-83900 Juuka, tel. +358 207 636 000, www.tulikivi.com - Chairman of the Board of Directors Matti Virtaala or Managing Director Juha Sivonen
Distribution: - Helsinki Stock Exchange, - Central media
Tulikivi Corporation and its subsidiaries form the Tulikivi Group, the world's largest and most technologically advanced processor of soapstone and the world^s largest manufacturer of industrially produced heat-retaining fireplaces. The Group is one of the five largest stone processors in Europe. Tulikivi's business areas are the Fireplace and the Natural Stone Products businesses. The Group's revenue amounts to approximately EUR 60 million and it owns six production plants and employs more than 500 people.
The shareholders of Tulikivi Corporation are invited to the Annual General Meeting to be held on 6 April 2006 at 12 a.m. at the Kivikylä Auditorium in Nunnanlahti, Juuka.
The following matters will be on the agenda of the meeting:
1) Matters specified as being the business of the Annual General Meeting in Article 10 of the Articles of Association.
2) Proposal of the Board of Directors to the Annual General Meeting to quadruple the number of shares in proportion to the holdings of the shareholders without raising the share capital
The Board of Directors proposes that the number of shares be increased under the following terms: 1) The number of shares in the company will be quadrupled in proportion to the holdings of shareholders without raising the share capital. At present, the company’s share capital is EUR 6,192,341.80, which is divided into 2,385,000 Series K shares and 6,721,385 Series A shares with nominal value of EUR 0.68 per share. Due to the increase in the number of shares, each share with a nominal value of EUR 0.68 will be converted into four (4) shares with a nominal value of EUR 0.17 each, after which the number of Series K shares will be 9,540,000 and the number of Series A shares 26,885,540. b) The increase in the number of shares will be carried out in the book-entry system and does not require shareholders to take action. c) It is planned that the increase in the number of shares enters into force at the earliest on 21 April 2006, i.e. after the record date. d) The new shares entitle their holders to a full dividend for the financial year that began on 1 January 2006, and to the other shareholder rights once the increase in the number of shares has been recorded in the Trade Register. e) Other matters related to the increase in the number of shares and the necessary practical measures will be decided on by the company’s Board of Directors. The higher number of shares will improve the liquidity of the shares, and enhance the functionality of the stock market. The increase in the number of shares has no effect on the shareholding structure of the company, shareholder rights or the relations between share series.
3) Proposal of the Board of Directors to amend Articles 3 and 4 of the Articles of Association
Due to the decision to increase the number of shares, the Board of Directors proposes to the Annual General Meeting that in the Articles of Association
Article 3 be amended as follows: Article 3 Minimum and maximum share capital The company’s minimum share capital is 2,550,000 euros and the maximum share capital is 10,200,000 euros, within which limits the share capital can be raised or lowered without amending the Articles of Association.
The shares are divided into Series K shares, which are referred to as common shares, and Series A shares, which are referred to as preference shares, such that the minimum number of Series K shares is 9,540,000 and the maximum number is 21,840,000, and the minimum number of Series A shares is 9,790,000 and the maximum number is 38,160,000.
The Series K and Series A shares differ from each other as follows:
1) Each Series K share confers 10 votes at a General Meeting and each Series A share one vote.
2) Of the profits to be distributed, the dividend that is paid on the nominal value of Series A shares shall be at least 1 percentage point greater than that paid on Series K shares.
A General Meeting of shareholders can resolve to issue only Series K or Series A shares in a rights issue.
and that Article 4 be amended as follows:
4) Proposal of the Board of Directors to authorise the Board of Directors to decide on the acquisition of the company’s own shares
The Board of Directors is authorised to decide on the acquisition of the company’s own shares with the following terms:
a) The company’s own shares are acquired to develop the company’s capital structure and to be used as consideration in business and company acquisitions and other structural arrangements, the manner and scope of which will be determined at the discretion of the
Board of Directors. The Board of Directors can also initiate the invalidation of shares by decreasing the share capital.
b) No more than a total of 672,138 Series A shares of the company (a maximum of 2,668,552 new Series A shares after the split) shall be acquired and no more than a total of 238,500 Series K shares of the company (a maximum of 954,000 new Series K shares after the split) shall be acquired.
c) The shares shall be acquired as follows:
The company’s Series A shares may be acquired in disproportion to shareholders’ holdings and are to be acquired through public trading on the Helsinki Stock Exchange as decided upon by the Board of Directors, with the price of the shares being their market rate at the time of purchase, and in accordance with the rules and regulations of the Helsinki Stock Exchange.
The company’s Series K shares are to be acquired in proportion to the shareholders’ holdings by making a purchase offer to shareholders owning Series K shares. The value of the offer is determined by calculating the weighted average value of the Series A shares for a period of two weeks of public trading on the Helsinki Stock Exchange prior to the signing of the purchase offer. In the event that the number of Series K shares stated in the decision reached by the general meeting cannot be acquired in this manner, the Board may acquire the remainder of the shares from those owners of Series K shares who are willing to sell more than their relative proportion of the number of shares to be acquired. In the event that the number of shares offered exceeds the number of shares to be acquired, the Board will consider the ownership of the vendors and number of shares offered and decide how the acquisition is to be divided among those offering their shares for sale.
As the maximum number of shares to be acquired is 10 per cent of the total number of shares in the company and the number of votes conferred by the shares in the company, the acquisition of shares has no considerable effect on the distribution of the share ownership or voting power in the company. Related entities, as defined in the Finnish Companies Act, are estimated to own in total approximately 54.4 per cent of the share capital and approximately 85.2 per cent of the votes conferred by the shares in the company prior to the acquisition of the company’s own shares. As a major part of the shares in the company are planned to be acquired through public trading arranged by the Helsinki Stock Exchange without knowledge of the identity of the transferors of shares, it is not possible to determine the related entities’ share of the share capital and of the votes after the acquisition.
d) The acquisition of shares is to be carried out using distributable earnings. The acquisition therefore reduces the total non-restricted distributable equity.
e) The authorisation for share acquisitions is valid until the Annual General Meeting in 2007, however for not more than one full year after the decision reached by the Annual General Meeting.
f) Other matters pertaining to the acquisition of shares are at the discretion of the Board of Directors.
5) Proposal of the Board of Directors to authorise the Board of Directors to decide on the disposal of the company’s own shares
The Board of Directors is authorised to decide on the disposal of the company’s own shares on the following terms:
a) The authorised total number of shares is not to exceed 672,138 (a maximum of 2,688,552 after the split) Series A shares and 238,500 (a maximum of 954,000 after the split) Series K shares acquired by the company.
b) The Board of Directors is authorised to decide to whom and in what order the shares will be transferred. The Board of Directors has total discretion over the disposal of the shares in disproportion to the shareholders’ pre-emptive rights to the company’s shares.
c) The shares are to be disposed of as consideration in business and company acquisitions or used in other structural arrangements, the manner and scope of which will be determined by the Board of Directors. In addition, the Board of Directors suggests that the Annual General Meeting authorise the Board of Directors to make decisions on the sale of the company’s own Series A shares through public trading on the Helsinki Stock Exchange to secure funds for future business or company acquisitions or investments.
d) The Board of Directors shall determine the transfer price of the shares and the principles used to establish that transfer price. Shares may be transferred in exchange for non-monetary consideration.
e) The authorisation to dispose of shares is valid until the Annual General Meeting in 2007, however for not more than one full year beginning from the decision reached by the Annual General Meeting.
f) Other matters pertaining to the disposal of shares are at the discretion of the company’s Board of Directors.
6) Proposal of the Board of Directors to authorise the Board of Directors to decide on raising the share capital
The Board of Directors proposes that the Annual General Meeting authorise the Board of Directors to increase the share capital in one or more instalments by means of a rights issue and/or through the issuance of convertible bonds such that the share capital can be raised by a maximum of EUR 1,238,468 on the basis of the rights issue and convertible bonds by offering a maximum of 1,821,277 new Series A shares for subscription (a maximum of 7,825,108 split new Series A shares) at the price determined by the Board of Directors and under the other terms set by the Board.
The Board of Directors proposes that the authorisation include the right to waive the pre-emptive subscription right of shareholders provided there is a weighty financial reason for the company to do so. The authorisation can be used to develop the capital structure, expand the shareholder base, as consideration in acquisitions, or when the company acquires business assets, to implement incentive schemes and for other equivalent purposes. The rights issue may also be made against a contribution in kind or by using off-setting rights. The authorisation is valid until the next Annual General Meeting, however for no more than one full year after the decision reached by the Annual General Meeting.
7) Proposal on payment of dividends
The Board of Directors proposes to the Annual General Meeting that a dividend be paid of EUR 0.280 per share for Series A shares and EUR 0.273 per share for Series K shares. The dividend decided upon by the Annual General Meeting is to be paid to shareholders registered by the record date in the shareholder register kept by Finnish Central Securities Depository Ltd. The Board of Directors has agreed that the record date for payment of the dividend shall be 11 April 2006. The Board of Directors proposes to the Annual General Meeting that the dividend be paid after the record period on 20 April 2006.
8) Proposal on the composition of the Board of Directors and the auditor
The appointment committee proposes to the Annual General Meeting that the following people be elected as Board members for the next term of office: Bishop Ambrosius, Juhani Erma, Eero Makkonen, Aimo Paukkonen, Heikki Vauhkonen, Reijo Vauhkonen and Matti Virtaala.
The Board of Directors proposes to the Annual General Meeting that Authorised Public Accountants PricewaterhouseCoopers Oy be elected as the company’s auditor, with Hannele Selesvuo, APA, as chief auditor.
Documents (and appendices to these documents) pertaining to the financial statements for 2005, the Board of Directors’ proposal to quadruple the number of shares and the amendment of the articles of association as well as the Board of Directors’ proposals for authorising the Board of Directors to acquire and dispose of the company’s own shares and to increase the company’s share capital are available for inspection by shareholders at the company headquarters at Kuhnustantie 10, 83900 Juuka, as from 27 February 2006. Copies will be mailed to shareholders on request. The Annual Report will be mailed to shareholders the week of 20 March.
The right to participate in the general shareholders’ meeting is given to shareholders who are registered in the shareholder register kept by Finnish Central Securities Depository Ltd (Suomen Arvopaperikeskus Oy) on 27 March 2006.
A shareholder wishing to participate in the Annual General Meeting is obligated to notify the company thereof by 27 March 2006. The notification must be made either by phone to Ms Kaisa Toivanen, tel. +358 (0)207 636 251, by e-mail to kaisa.toivanen@tulikivi.fi, or by post to the address Tulikivi Corporation/Annual General Meeting, FIN-83900 Juuka, Finland. Any powers of attorney must be submitted together with the preliminary enrolment for the meeting.
Juuka, 17 February 2006
Tulikivi Corporation Board of Directors
DISTRIBUTION: Helsinki Stock Exchange and Principal Media
Additional information: Tulikivi Corporation, FIN-83900 Juuka, Finland, tel. 358-(0)207 636 000, www.tulikivi.com – Chairman of the Board of Directors Matti Virtaala – Managing Director Juha Sivonen