Tulikivi Corporation lowers its outlook for turnover and operating result for the year 2013, so that the turnover will be lower than in the year 2012. The operating result is expected to be in line with the year 2012.
In an uncertain market situation Tulikivi’s sales have not developed as estimated. Therefore, the company revises its outlook for the whole year’s turnover development. Despite the cost savings, a lower estimate on turnover leads to an outlook with lower operating result as well.
The new turnover and operating result outlook for 2013
The demand for Tulikivi products is dependent on consumer confidence. New products will allow us to increase our market share; however, the turnover is expected to be lower than in 2012. The company estimates that the operating result will be in the same level as in 2012.
The previous turnover and operating result outlook for 2013
The demand for Tulikivi products is dependent on consumer confidence. New products will allow us to increase our market share; however, no significant growth is anticipated for turnover in 2013. Operating profit is expected to improve with improved operating efficiency.
TULIKIVI CORPORATION Board of Directors
Heikki Vauhkonen Chairman of the Board Distribution: NASDAQ OMX Helsinki Ltd Central Media www.tulikivi.com
Additional information: Tulikivi Corporation, 83900 Juuka, tel. +358 403 063 100, www.tulikivi.com
– Chairman of the Board of Directors Heikki Vauhkonen, +358 207 636 555 – Managing Director Jouni Pitko, +358 403 063 222
Interim report, 1 January – 31 March 2013
– The Tulikivi Group’s net sales were EUR 9.2 million (EUR 10.7 million in Q1/2012). – The Group’s operating result was EUR -1.7 (-1.4) million. Earnings per share amounted to EUR -0.04 (-0.03). – Cash flow from operating activities before investments was EUR -2.5 (-3.5) million. – Order books were at EUR 6.0 million on 31 March 2013 (EUR 7.8 million on 31 March 2012). – Future outlook: The demand for Tulikivi products is dependent on consumer confidence. New products will allow us to increase our market share; however, no significant growth is anticipated for net sales in 2013. Operating profit is expected to improve with improved operating efficiency. Summary of the interim report 1-3/2013. The full interim report is attached to this release.
Key financial ratios
Comments by Jouni Pitko, Managing Director:
Net sales in the Fireplaces Business grew in Russia but in Central Europe they were somewhat lower than a year earlier. Due to weak domestic demand in the winter, net sales in the first quarter declined from the comparison period in the Fireplaces and the Interior Stone Businesses.
Order books improved on the situation at the beginning of the year. The fireplace sales campaign in Central Europe was held at a different time, and this resulted in a decline in order books on the previous year.
Measures to improve profitability were continued at the beginning of the year by reorganising sales operations in Finland and adjusting production capacity. Measures to cut costs will be continued and sales operations will further intensified. Production processes will be developed to improve efficiency. In exports, growth will be sought by renewing and expanding the distribution network. Tulikivi Corporation’s strategy will be simplified to better correspond to the changed markets in Finland and abroad. Changes to our strategy will be announced in the third quarter.
Interim Report
Net sales and result
The Group’s net sales were EUR 9.2 million (Jan–March/2012: EUR 10.7 million). The net sales of the Fireplaces Business were EUR 8.3 (9.6) million and of the Natural Stone Business EUR 0.9 (1.1) million.
Net sales in Finland accounted for EUR 4.5 (5.6) million, i.e. 49.3 (52.3) per cent, of total net sales. Exports amounted to EUR 4.7 (5.1) million in net sales. The principal export countries were France, Belgium Germany, Russia and Sweden.
The consolidated operating result was EUR -1.7 (-1.4) million. The operating result for the review period was adversely affected by the restructuring provision of EUR 0.1 million recognised for adjustment measures. In the segment reporting, the operating result for the Fireplaces Business was EUR -1.6 (-1.2) million, and for the Interior Stone Business EUR -0.1 (-0.2) million.
The consolidated result before taxes was EUR -2.0 (-1.6) million, and the net result EUR -1.5 (-1.2) million. Earnings per share amounted to EUR -0.04 (-0.03).
Financing and investments
Cash flow from operating activities before investments was EUR -2.5 (-3.5) million. Working capital increased by EUR 1.5 million in the period and came to EUR 11.4 million (31 March 2012: EUR 9.7 million). The growth in working capital was a result of an increase in inventories at the Suomussalmi plant and the concentration of trade receivables in Finland to customers, with longer payment terms. Interest-bearing debt was EUR 25.6 (26.4) million. Financial income was EUR 0.0 (0.0) million and financial expenses EUR 0.3 (0.2) million. The equity ratio was 32.0 (31.8) per cent. The ratio of interest-bearing net debt to equity, or gearing, was 142.2 (126.7) per cent. The current ratio was 1.6 (1.7). Equity per share was EUR 0.45 (0.47).
At the end of the reporting period, the Group’s cash and other liquid assets were EUR 2.0 (4.1) million. The total of undrawn credit facilities and unused credit limits amounted to EUR 0.5 (1.6) million.
The Group’s interest-bearing debt includes covenants which are tied to the Group’s equity. The covenant conditions were met at the close of the reporting period. In addition, the Group has a covenant, concerning the second and fourth quarter, on the relation of net debt to EBITDA.
The Group’s investments in production, quarrying and development were EUR 0.6 (0.8) million. Research and development costs were EUR 0.4 (0.5) million, i.e. 4.4 (4.7) per cent of net sales. EUR 0.1 (0.2) million of this figure, after deduction of subsidies, was capitalised in the balance sheet. Product development focused on the efficient production and commercialisation of the new modular Aalto and Kide hybrid fireplaces which are members of the Hiisi product family.
Near-term risks and uncertainties
A substantial decline in euro zone consumer confidence is the Group’s most significant risk. If access to consumer credit weakens, it will reduce new construction and renovation, which could have an impact on the demand for fireplaces.
In the EU, construction legislation is currently being revised. New country-specific energy efficiency provisions that meet the EU’s energy efficiency policies will come into force within 2013 and could influence the competition between different forms of heating and thus the demand for fireplaces in different markets.
Maintaining the Group’s current financial position will require improvements in profitability. Weaker profitability will force Tulikivi to reinforce its financial position or reorganise its financing. A more comprehensive explanation of the Tulikivi Group’s risks can be found under note 38: Major risks and their management, in the Consolidated Financial Statements in the Annual Report for 2012.
Events following the end of the period
Resolutions of the Annual General Meeting
Dividends
Tulikivi Corporation’s Annual General Meeting, held on 16 April 2013, resolved not to distribute a dividend on the 2012 financial year.
Decision-making bodies
The following persons were elected to the Board of Directors of the parent company and domestic business subsidiaries: Nella Ginman-Tjeder, Olli Pohjanvirta, Markku Rönkkö, Pasi Saarinen, Harri Suutari and Heikki Vauhkonen. The Board elected from among its members Heikki Vauhkonen as its full-time Chairman. KPMG Oy Ab, Authorized Public Accountants, was appointed as auditor.
Jouni Pitko was appointed Managing Director on 16 April 2013. In addition to the Managing Director, the Management Group includes Michel Mercier, Export Director, Ismo Mäkeläinen, Head of Production and Purchasing, Martti Purtola, Business Director, saunas, Juha Sivonen, Sales Director, Finland, Jouko Toivanen, Business Director, lining and interior stones, Anu Vauhkonen, Corporate Communications Director, and Risto Vidgren, Financial Director.
Amending the Articles of Association
The General Meeting approved the Board’s proposals for amending the Articles of Association. A new article 3 a, following article 3, was added to the Articles of Association on converting series K shares into series A shares if so requested by a holder of the series K share and on condition that the number of shareholders owning series K shares is less than 150. In addition, an amendment was made to article 8 of the Articles of Association to the effect that the notice of meeting will be published as a stock exchange release and on the company’s website.
Authorisation to repurchase the company’s own shares
The Annual General Meeting authorised the Board of Directors to acquire shares of the company as proposed by the Board. The shares are repurchased for improving the company’s capital structure and for use as consideration in corporate acquisitions or other structural arrangements in accordance with and to the extent of the Board’s decision. Furthermore, shares may be repurchased for the purpose of implementing the share-based incentive system, to pay a share-based incentives or otherwise to be transferred or cancelled. A maximum of 2,760,397 of series consideration, however, that the amount of treasury shares may not exceed 10 per cent of the total number of the company’s shares. The authorisation is valid until the 2014 Annual General Meeting, but not longer than 18 months as of the decision of the Annual General Meeting.
The 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 in accordance with the proposal of the Board. New shares can be issued or the company’s own shares held by the company transferred as follows: a maximum of 5,520,794 Series A shares and 1,908,000 Series K shares.
The authorisation includes the right to decide on a directed rights issue, deviating from the shareholders’ right of pre-emption, provided that there is compelling financial reason for the company. The authorisation also includes the right to decide on a bonus issue to the company itself, where the number of issued shares is no more than one tenth of the total number of the company’s shares.
The authorisation also includes, as proposed by the Board, 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. The authorisation includes the right to pay the company’s share rewards. The Board is authorised to decide on other matters concerning share issues. The authorisation is valid until the 2014 Annual General Meeting.
Other events following the end of the financial year
Result of the codetermination negotiations of 11 March 2013
The outcome of the negotiations was that 6 people will be made redundant in domestic sales, customer service and production, and 21 people will be laid off until further notice. In addition, the company may, until 30 June 2014, implement fixed-term layoffs according to the situation regarding demand.
New Managing Director
Jouni Pitko was appointed Managing Director of Tulikivi Corporation on 16 April 2013.
Future outlook
The demand for Tulikivi products is dependent on consumer confidence. New products will allow us to increase our market share; however, no significant growth is anticipated for net sales in 2013. Operating profit is expected to improve with improved operating efficiency. Order books at the end of the reporting period amounted to EUR 6.0 million (31 March 2012: EUR 7.8 million).
Additional information: Tulikivi Corporation, 83900 Juuka, tel. +358 403 063 100, www.tulikivi.com – Chairman of the Board of Directors Heikki Vauhkonen, +358 207 636 555 – Managing Director Jouni Pitko, +358 403 063 222
ATTACHEMENT: Interim Report 1-3/2013
The Annual General Meeting of the Tulikivi Corporation held on April 16, 2013 approved the financial statement for the financial year 2012 and discharged the members of the Board of Directors and the Managing Director from liability. It was resolved that the dividend will not be paid. The Annual General Meeting accepted the proposals of the Board of Directors, to authorise the Board of Directors to acquire the company’s own shares, to decide upon an issue of shares, to dispose of the company’s own shares and to issue special rights related to the shares. In addition the Annual General Meeting accepted Board´s proposal for amendments of the Articles of Association.
1. Dividend The Annual General Meeting resolved, in accordance with the Board’s proposal that the dividend will not be paid.
2. Remuneration of Board members and auditor’s fees The annual remuneration of a Board member is EUR 18,000. 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. In addition, the full-time Chairman of the Board of Directors will be paid a EUR 14, 500 monthly salary or the part-time Chairman of the Board of Directors will be paid a EUR 4,500 monthly salary. The Board member serving as secretary to the Board of Directors will be paid a EUR 1,400 monthly salary. The members of the Nomination Board and the members of the Audit Committee of the Board will receive a EUR 330 remuneration per each meeting. The fees for the auditor are paid according to the relevant invoice.
3. Board members The number of Board members was set at six. Mrs. Nella Ginman-Tjeder, Mr. Olli Pohjanvirta, Mr. Markku Rönkkö, Mr. Pasi Saarinen, Mr. Harri Suutari and Mr. Heikki Vauhkonen were elected as the members of the Board of Directors.
4. The Nomination Board and its composition The Annual General Meeting accepted the proposal of shareholders representing more than 75 % of the voting rights in the company for the members of the Nomination Board. Mr. Heikki Vauhkonen, Mr. Reijo Vauhkonen and Mr. Matti Virtaala were elected as the members of the Nomination Board.
5. Auditor The firm of independent public accountants KPMG Oy Ab was elected the auditor of Tulikivi Corporation, with Mr. Ari Eskelinen, Authorized Public Accountant, acting as the chief auditor.
6. Authorisation to acquire the company’s own shares The Annual General Meeting granted the Board authorisation 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. In addition the shares can be acquired for the use in share-based incentive arrangement, for payment of share-based remuneration or otherwise to be transferred or cancelled. No more than a total of 2 760 397 Series A shares of the company shall be acquired and no more than a total of 954 000 Series K shares of the company shall be acquired, taking into account that the company may not hold more than 10 per cent of all shares. The authorisation is in force until the Annual General Meeting to be held in 2014 but, however, not for a longer period than 18 months as of the resolution by the General Meeting.
7. The authorisation of the Board of Directors to decide on an issue of shares and the company´s own shares in possession of the company and the right to issue special rights which give entitlement to shares as defined in Chapter 10 Article 1 of the Companies´ Act The Annual General Meeting authorised the Board of Directors to decide on the issue of new shares or the company´s own shares in possession of the company as proposed by the Board. The new shares and the company´s own shares in possession of the company can be issued in the following amounts: A total of no more than 5 520 794 A series and no more than 1 908 000 K series shares. The authorisation also includes the right to carry out share capital increase deviating from the shareholders´ pre-emptive subscription right provided there is a weighty financial reason from the company´s point of view for the deviation. The authorisation includes the right to issue cost-free shares to the company, provided that the number of shares issued to the company would not exceed one tenth of all shares of the company. The authorisation also includes the right to issue special rights, as defined in Chapter 10 Article 1 of the Companies´ Act, which entitle to subscribe for shares against payment or by setting off the receivable. The authorisation also includes the right to pay remuneration in the form of shares. The Board of Directors is entitled to decide on other issues related to the share issues. The authorisation to repurchase shares is in force until the Annual General Meeting to be held in 2014.
8 .The amendment of the Articles of Association The General Meeting approved the Board’s proposals for amending the Articles of Association. A new article 3 a, following article 3, was added to the Articles of Association. The new article is about converting series K shares into series A shares if so requested by the holder of the series K share and provided that the number of shareholders owning series K shares is less than 150.
In addition, an amendment was made to article 8 of the Articles of Association to the effect that the notice of meeting is to be published as a stock exchange release and on the company’s website.
9. Organisation of the Board At its organisational meeting following the Annual General Meeting the Board elected Heikki Vauhkonen as its full-time Chairman and Markku Rönkkö as its secretary. Markku Rönkkö was elected as chairman of the Audit Committee and Pasi Saarinen and Nella Ginman-Tjeder as its members.
TULIKIVI CORPORATION
Heikki Vauhkonen Chairman of the Board
Additional Information: Tulikivi Corporation, 83900 Juuka, tel. +358 403 033 100 Heikki Vauhkonen, Chairman of the Board, tel. +358 207 636 555 Jouni Pitko, Managing Director, tel. +358 403 063 222 Distribution: NASDAQ OMX Helsinki Ltd, key media www.tulikivi.com
Attachment: Press release: Nella Ginman-Tjeder and Harri Suutari join Tulikivi Corporation´s Board of Directors
The new members of Tulikivi Corporation’s Board of Directors elected at the Annual General Meeting held on 16 April 2013 are Nella Ginman-Tjeder, M.Sc. (Econ. & Bus. Admin.), and Harri Suutari, B.Sc. (Eng.).
Nella Ginman-Tjeder (born 1959) is the Managing Director of Ifolor Oy. She has previously held the positions of Vice President and Country Manager at American Express in Finland, Director Marketing Communications at Finpro and Sales and Marketing Director at the Sanoma Group. Nella Ginman-Tjeder has a strong background in marketing, PR and brand building. She is a member of the Board of Indmeas Oy and the Board of Arcada foundation.
Harri Suutari (born 1959) has previously served as the Managing Director of PKC Group Plc, Ponsse Plc and Kajaani Automatiikka Oy. Suutari is Chairman of the Board of Componenta Corporation and the Board of Alma Media Corporation and a member of the Board of PKC Group Plc and the Board of Oy M-Filter Ab.
Further information for the media: Heikki Vauhkonen, Chairman of the Board, Tulikivi Corporation, tel 0207 636 555
The shareholders of Tulikivi Corporation are invited to the Annual General Meeting to be held on April 16, 2013 at 13.00 at the Kivikylä auditorium in Nunnanlahti, Juuka. The reception of persons who have registered for the meeting will commence at 12.30 p.m.
A. Matters on the agenda of the general meeting
The following matters will be dealt with by the Annual General Meeting:
1. Opening of the meeting
2. Calling the meeting to order
3. Election of persons to scrutinize the minutes and to supervise the counting of votes
4. Recording the legality of the meeting
5. Recording the attendance at the meeting and adoption of the list of votes
6. Presentation of the annual accounts, the report of the Board of Directors and the auditor’s report for the year 2012 – Review by the CEO
7. Adoption of the annual accounts
8. Resolution on the use of the profit shown on the balance sheet The Board of Directors proposes to the Annual General Meeting that the dividend will not be paid.
9. Resolution on the discharge of the members of the Board of Directors and the CEO from liability
10. Resolution on the remuneration of the members of the Board of Directors – The Nomination Committee proposes that the annual remuneration of Board members is EUR 18,000, of which 60 per cent will be paid in cash and 40 per cent in the form of Series A shares in Tulikivi Corporation. The shares will be purchased on the stock exchange on or before December 31, 2013 for a total consideration per each Board member of no more than 7,200 euros. The purchase of shares will take place on the basis of the General Meeting’s resolution and instructions. If it is not possible to effect the purchase of the shares on or before the above date, the remuneration will be paid in cash. Unless the Board of Directors grants express permission in advance, members of the Board are not allowed to transfer any shares received in this manner until their Board membership has ended. In addition, the full-time Chairman of the Board will be paid a 14,500 euros monthly salary. A part-time Chairman of the Board will be paid a monthly salary of 4,500 euros for this work. The Board member serving as secretary to the Board of Directors a 1,400 euros monthly salary. Board members who perform non-Board assignments for the company shall be paid a fee on the basis of time rates and invoices approved by the Board of Directors. Travel costs will be reimbursed in accordance with the company’s travelling compensation regulations. The members of Audit committee of the Board and the members of the Nomination Board will receive a 330 euros remuneration per each meeting.
11. Resolution on the number of members of the Board of Directors – It is proposed to the Annual General Meeting that six members will be elected to the Board of Directors.
12. Election of members of the Board of Directors – The Nomination Board proposes to the Annual General Meeting that the following persons will be elected members of the Board of Directors: Mrs. Nella Ginman, Mr. Olli Pohjanvirta, Mr. Markku Rönkkö, Mr. Pasi Saarinen, Mr. Harri Suutari and Mr. Heikki Vauhkonen.
13. Decision concerning Nomination Board -Shareholders representing more than 75% of the voting rights in the company have announced their intention to put forward Heikki Vauhkonen, Reijo Vauhkonen and Matti Virtaala for election as members of the Nomination Board. The Nomination Board would submit to the following Annual General Meeting a proposal concerning the members to be appointed to the Board of Directors.
14. Resolution on the remuneration of the auditor – The Board of Directors proposes to the Annual General Meeting that the fees of the auditor are paid according to approved invoices.
15. Election of auditor – The Board of Directors proposes to the Annual General Meeting that the firm of authorized public accountants KPMG Oy Ab will be elected auditor, with Mr. Ari Eskelinen, Authorized Public Accountant, acting as the chief auditor.
16. Board of Directors’ proposal for amending the Articles of Association – The Board of Directors proposes to the Annual General Meeting that a resolution be passed by the meeting to amend the Articles of Association by adding a new article 3a after article 3, to read as follows:
3a § Conversion clause Provided that the number of shareholders owning series K shares is less than 150, each series K share may be converted to a series A share if so requested by the shareholder. A written request addressed to the company’s Board of Directors concerning conversion must state the number of shares to be converted and the book entry account in which the book entry securities corresponding to the shares are registered. The company may ask that for the duration of the conversion procedure an entry be made in the shareholder’s book entry account restricting the owner’s disposal right. Within three months of receiving the request, the company’s Board of Directors or a party designated by it must deal with the conversion requests presented and must report them for registration in the Trade Register. A request to convert shares can be cancelled up to the point when notification of the conversion is made in the Trade Register. Following a cancellation, the company will ask for the removal of any entry made in the shareholder’s book entry account restricting the disposal right. The conversion of series K to series A shares occurs upon completion of the Trade Register entry. Registration of the conversion is notified to the party that submitted the conversion request and to the book entry registrar. The company’s Board of Directors will, if necessary, give more detailed instructions on carrying out the conversion.
– The Board of Directors proposes to the Annual General Meeting that a resolution be passed by the meeting to amend article 8 of the Articles of Association, to read as follows: 8 § Notice of meeting The notice of meeting shall be delivered by the Board of Directors by publishing the notice as a stock exchange release and on the company’s website no earlier than three months and no later than three weeks before the General Meeting, and in any event no later than nine days before the General Meeting record date referred to in section 2(2), chapter 4 of the Limited Liability Companies Act. For shareholders to be able to participate in a General Meeting, they must submit notification of this intention to the place mentioned in the notice of meeting no later than ten days prior to the meeting.
17. Authorizing the Board of Directors to decide on the repurchase of the company’s own shares – The Board of Directors proposes to the Annual General Meeting that the Annual General Meeting would resolve to authorise the Board of Directors to decide on the repurchase of the company’s own shares under the following terms: a) The company’s shares are to be acquired in order to develop the company’s capital structure and to be used as consideration in acquisitions or other structural arrangements in a manner and with a scope determined by the Board of Directors. In addition, the shares may be acquired for the use in share-based incentive arrangements, for payment of share-based remuneration or otherwise to be transferred or cancelled. b) A maximum number of 2 760 397 of the A-series shares and 954 000 of the K-series shares of the company may be repurchased, taking into account that the company may not hold more than 10 per cent of all shares. c) Shares will be acquired in the following manner: (i) The company’s A-series shares will be acquired through public trading at the NASDAQ OMX Helsinki Oy as decided by the Board of Directors and by deviating from the proportion in which the company’s shareholders own shares in the company, at the price set at the NASDAQ OMX Helsinki Oy and in accordance with its rules; (ii) The company’s K-series shares will be acquired in proportion to shares owned by the shareholders by making an offer to the owners of the K-series shares with the following terms: the price paid for the K-series shares corresponds to the weighted average price paid in the executed transactions in the public trading of the A-series shares at the NASDAQ OMX Helsinki Oy during the two week´s period preceding the signing date of the offer. In case the company has not managed to acquire the number of K-series shares set out in the resolution by the General Meeting, the Board of Directors may acquire the remaining number from those owners of K-series shares willing to sell more than their proportional share of the shares to be acquired. In case more shares are offered for sale than the number to be purchased, the Board of Directors will decide, having regard to the ownership share of the sellers and the number of shares offered for sale, how the number of shares to be purchased is to be allocated among the shareholders offering shares for repurchase. d) The repurchase of the shares will be carried out with funds available for distribution of profits and the acquisition will reduce the equity available for distribution e) The authorisation to repurchase shares is in force until the Annual General Meeting to be held in 2014, however, not for a longer period than 18 months as of the resolution by the General Meeting. f) All other issues related to the repurchase of shares are decided by the Board of Directors of the Company. 18. Authorizing the Board of Directors to decide on the issuance of shares and the company’s own shares in possession of the company and the right to issue special rights which give entitlement to shares as defined in Chapter 10 Section 1 of the Companies Act.
The Board of Directors proposes to the Annual General Meeting that the Annual General Meeting would resolve to authorise the Board of Directors to decide on the issue of new shares or the company’s own shares in the possession of the company. The new shares and the company’s own shares in possession of the company may be issued against payment or free of charge to all shareholders in accordance with their proportional ownership of the company’s shares or through a directed issue by deviating from the shareholders’ pre-emptive subscription right provided there is a weighty financial reason from the company’s point of view for the deviation. A directed share issue may only be free of charge if there is a particularly weighty financial reason for it from the point of view of the company and all its shareholders.
In addition, the authorisation would include a right to issue cost-free shares to the company, provided that the number of shares issued to the company would not exceed one tenth (1/10) of all shares of the company. When calculating this number, the number of shares held by the company as well as those held by its subsidiaries must be taken into account as set out in Chapter 15, Section 11, and subsection 1 of the Companies Act.
The authorisation would also include the right to issue special rights, as defined in Chapter 10, Section 1 of the Companies Act, which entitle to subscribe for new shares or shares in the possession of the company against payment. The payment may be made in cash or by setting off the subscriber’s receivable against the company as payment for the share subscription.
The Board of Directors may use the authorization for the purpose of making fee/salary payments in the form of shares.
The Board of Directors is entitled to decide on other issues related to the share issuances.
No more than 5 520 794 A-series shares in the aggregate and no more than 1908 000 K-series shares in the aggregate (i.e. no more than a 7 428 794 shares in the aggregate) may be issued (including shares issued on the basis of special rights) on the basis of this authorisation, regardless of whether such shares are new or in the company’s possession.
The authorisation to issue shares is in force until the Annual General Meeting to be held in 2014 however, until 30 June 2014 at the latest.
19. Closing of the meeting
B. Documents of the general meeting
The proposals of the Board of Directors and its Committees relating to the agenda of the General Meeting as well as this notice are available on Tulikivi Corporation’s website at www.tulikivi.com/investors/general meetings/general meeting 2013. The annual report of Tulikivi Corporation, including the company’s annual accounts, the report of the Board of Directors and the auditor’s report as well as the Corporate Governance Statement, is available on the above-mentioned website no later than March 20, 2013. The proposals of the Board of Directors and the annual accounts are also available at the meeting. Copies of these documents and of this notice will be sent to shareholders upon request. The minutes of the meeting will be available on the above-mentioned website as from April 30, 2013.
C. Instructions for the participants in the general meeting
1. The right to participate and registration Each shareholder, who is registered on April 4, 2013 in the shareholders’ register of the company held by Euroclear Finland Ltd., has the right to participate in the general meeting. A shareholder, whose shares are registered on his/her personal, Finnish book-entry account, is registered in the shareholders’ register of the company. A shareholder, who wants to participate in the general meeting, shall register for the meeting no later than April 6, 2013 giving a prior notice of participation, which shall be received by the company no later than on the above-mentioned date. Such notice can be given: a) by e-mail to the address kaisa.toivanen@tulikivi.fi b) by phone + 358 207 636 251 or + 358 207 636 322 (from Monday to Friday at 8.00 a.m. – 4.00 p.m. Saturday 6th of April at 8.00 a.m. – 4.00 p.m. only +358 207 636 322); c) by telefax, +358 206 050 701 or d) by regular mail to Tulikivi Corporation/ Annual General Meeting, FI-83900 Juuka In connection with the registration, a shareholder shall notify his/her name, personal identification number, address, telephone number and the name of a possible assistant or a proxy and his/her personal identification number.
The personal data given to Tulikivi Corporation is used only in connection with the general meeting and with the processing of related registrations.
2. Holders of nominee registered shares A holder of nominee registered shares has the right to participate in the general meeting by virtue of such shares, based on which he/she on the record date of the general meeting, i.e. on April 4 2013, would be entitled to be registered in the shareholders’ register of the company held by Euroclear Finland Ltd. The right to participate in the general meeting requires, in addition, that the shareholder on the basis of such shares has been registered into the temporary shareholders’ register held by Euroclear Finland Ltd. at the latest by April 11 2013, at 10 am. As regards nominee registered shares this constitutes due registration for the general meeting.
A holder of nominee registered shares is advised to request in good time necessary instructions regarding the registration in the shareholders’ register of the company, the issuing of proxy documents and registration for the general meeting from his/her custodian bank. The account management organisation of the custodian bank will register a holder of nominee registered shares, who wants to participate in the general meeting, to be temporarily entered into the shareholders’ register of the company at the latest by the time stated above. Further information is also available on www.tulikivi.com/investors/general meetings/general meeting 2013.
3. Proxy representative and powers of attorney A shareholder may participate in the general meeting and exercise his/her rights at the meeting by way of proxy representation. A proxy representative shall produce a dated proxy document or otherwise in a reliable manner demonstrate his/her right to represent the shareholder at the general meeting. When a shareholder participates in the general meeting by means of several proxy representatives representing the shareholder with shares at different securities accounts, the shares by which each proxy representative represents the shareholder shall be identified in connection with the registration for the general meeting.
Possible proxy documents should be delivered in originals to Tulikivi Corporation/ general meeting, FI-83900 Juuka on or before the last date for registration.
4. Other instructions and information Pursuant to Chapter 5, Section 25 of the Companies Act, a shareholder who is present at the general meeting has the right to request information with respect to the matters to be considered at the meeting.
On the date of this summons to the Annual General Meeting, on March 14, 2013, the total number of shares in Tulikivi Corporation is 37 143 970 of which the number of A-series shares is 27 603 970 and the number of K-series shares is 9 540 000. Of such shares, a total of 124 200 A-series shares are held by the company. A-series shares have 27 603 970 votes altogether and K-series shares have 95 400 000 votes. On the basis of the above, a maximum of 122 879 770 votes can be cast at the general meeting.
In Juuka March 14, 2013
TULIKIVI CORPORATION BOARD OF DIRECTORS
TULIKIVI CORPORATION STOCK EXCHANGE RELEASE FI-83900 JUUKA 11 March 2013 at 15.30 Codetermination negotiations concluded at Tulikivi Corporation On 15 January 2013, Tulikivi Corporation announced that it was planning to reorganise its operations and adjust its production capacity in order to improve profitability.
At the same time, Tulikivi started codetermination negotiations involving the entire Group and all personnel groups with the aim of improving the company’s profitability and the efficiency of its operations.
The company negotiated about possible redundancies affecting up to 10 people, layoffs until further notice for up to 40 people, and fixed-term layoffs of up to 90 days for the remaining staff. The codetermination negotiations were concluded on 11 March 2013.
The outcome of the negotiations was that 6 employees will be made redundant in domestic sales, customer service and production, and 21 workers will be laid off until further notice. In addition, the company may, until 30 June 2014, implement fixed-term layoffs according to the demand situation.
Managing Director Heikki Vauhkonen: “Since demand is not expected to increase significantly in the near future, profitability has to be improved through reorganisation and by adjusting capacity.”
Heikki Vauhkonen Managing Director
Distribution: NASDAQ OMX Helsinki Key media www.tulikivi.com
Additional information: Tulikivi Corporation, FIN-83900 Juuka, www.tulikivi.com
Heikki Vauhkonen, Managing Director, tel. +358 (0)207 636 555
Mr. Jouni Pitko (b. 1959) has been appointed Managing Director of Tulikivi Corporation with effect from 16 April 2013. He comes to Tulikivi Corporation from the position of Vice President, Electromechanical Lock Cases at Abloy Oy, and he has a wide range of experience in successfully managing business activities. He holds a Bachelor of Science degree in Mechanics.
Mr. Pitko has international experience in managerial positions in the United Kingdom and in France. He has also managed export operations at Abloy Oy.
“In Jouni Pitko, Tulikivi will gain a Managing Director with international experience and considerable competence. In the past few years, Tulikivi’s operations have seen a considerable amount of reshaping, as unprofitable businesses have been discontinued and core business processes harmonised. This is a great starting point from which the new Managing Director can take the company forward,” says Matti Virtaala, Chairman of the Board of Directors.
Board of Directors
Distribution: NASDAQ OMX Helsinki Ltd Central Media www.tulikivi.com
Additional information: Tulikivi Corporation, 83900 Juuka, tel. +358 403 063 100, www.tulikivi.com – Chairman of the Board of Directors Matti Virtaala – Managing Director Heikki Vauhkonen
Press quality picture: http://www.tulikivi.com/kuvat/henkilokuvat/jouni_pitko_cmyk.jpg
– The Tulikivi Group’s fourth-quarter net sales totalled EUR 14.2 million (EUR 15.5 million Q4/2011), the operating result was EUR 0.5 million (-1.0) and the profit before taxes was EUR 0.3 million (-1.2). The result was adversely affected by the restructuring provision of EUR 1.0 million for adjustment measures. – Net sales in 2012 totalled EUR 51.2 million (EUR 58.8 million in 2011), the operating result was EUR 0.1 million (-2.4) and the result before taxes was EUR -0.8 million (-3.1). The comparable figures for 2011 were adversely affected by non-recurring expenses of EUR 1.6 million caused by the centralisation and adjustment measures. Earnings per share amounted to EUR -0.02 (-0.07). – Year-end order books were at EUR 4.6 (5.7) million. – Cash flow from operating activities before investments was EUR 0.1 (1.4) million. – The Group’s equity ratio at the end of the year was 35.2 per cent (33.3). – The Board will propose to the Annual General Meeting that no dividend be paid. – Future outlook: The sales of Tulikivi products will depend on the development of demand. No significant growth on the previous year is anticipated for net sales in 2013. As a result of improvements to operating efficiency, operating profit is expected to improve and the result before taxes to be profitable.
Summary of the financial statement release 01-12/2012. The full financial statement release is attached to this release.
Managing Director Heikki Vauhkonen The financial situation was very challenging at the start of 2012. The European financial crisis, which intensified in October 2011, weakened consumer confidence and decreased fireplace demand in the main markets. The strongest impact was on domestic net sales fireplace business that decreased by approximately 15 per cent despite the positive development in market share. At the start of the year, fireplace demand already remained below the previous year’s level. In September 2012, domestic consumer demand decreased further. Performance in fireplace exports was more stable, and net sales grew by around 2 per cent. The most positive development took place in the United States, Russia, Germany and the new East European export countries. As a whole, there was satisfactory performance in exports to Central Europe despite the dire financial situation. Demand for lining stone products was low in early 2012, due to the cautious behaviour of heater manufacturers as regards their stocks. Net sales of lining stone products decreased by 18 per cent. Net sales of sauna products are not yet significant regarding the whole figure. The net sales and result of interior stone products were as expected.
In spite of the decrease in net sales, the operating result of the Tulikivi Group became profitable in 2012. This was the result of the three million euro savings project that was implemented successfully. The savings boosted production efficiency and decreased fixed costs, as was the target.
Net sales and result The Tulikivi Group’s fourth-quarter net sales totalled EUR 14.2 million (EUR 15.5 million in Q4/2011), the operating profit was EUR 0.5 (-1.0) million and the profit before taxes was EUR 0.3 (-1.2) million. The comparable figures for 2011 were adversely affected by the restructuring provision of EUR 1.0 million for adjustment measures.
Group net sales in 2012 totalled EUR 51.2 million (EUR 58.8 million in 2011). The net sales of the Fireplaces Segment amounted to EUR 47.1 (53.5) million and the net sales of the Interior Stone Segment were EUR 4.1 (5.3) million. The 2011 figures included net sales of discontinued operations, which amounted to EUR 1.6 million in the Fireplaces Business and EUR 1.4 million in the Interior Stone Business.
Net sales in Finland totalled EUR 24.9 (31.6) million, or 48.5 (53.7) per cent of the total net sales. Exports accounted for more than a half of the net sales total, i.e. EUR 26.3 (27.2) million. The principal export countries were Sweden, France, Germany, Belgium and Russia. In exports, net sales of fireplaces and lining stone products were as expected. The consolidated operating result was EUR 0.1 (-2.4) million. The Fireplaces Segment’s operating profit was EUR 1.8 (0.2) million and the operating result for the Interior Stone Segment was a loss of EUR -0.1 (-0.6) million, while Other Items’ expenses were EUR -2.0 (-2.0) million. Other Items include expenses of the Group administration and expenses pertaining to financial administration. The operating result for 2011 was adversely affected by non-recurring expenses of EUR 1.6 million net caused by the centralisation and adjustment measures. Of these expenses, EUR 1.4 million is allocated to the Fireplaces Segment and EUR 0.2 million net to the Interior Stone Segment. The consolidated result before taxes was EUR -0.8 (-3.1) million and comprehensive income was EUR -0.6 (-2.4) million. The consolidated return on investment was 0.3 (-4.9) per cent. Earnings per share amounted to EUR -0.02 (-0.07).
Financing and investments Cash flow from operating activities before investments was EUR 0.1 (1.4) million. Working capital increased by EUR 3.0 million during the financial year and came to EUR 9.9 million. This was the result of the decrease in accrued expenses, the cancellation of the restructuring provision and the increase in boulder stocks. Interest-bearing debt was EUR 23.9 (24.9) million, and net financial expenses were EUR 0.8 (0.7) million. The current ratio was 1.7 (1.5). The equity ratio was 35.233.3) per cent. The ratio of interest-bearing net debt to equity, or gearing, was 112.9 (96.5) per cent. The equity per share amounted to EUR 0.49 (0.51).
Tulikivi completed negotiations to change the loan instalment schedule for the next three years. This includes covenants which are tied to the increase of the Group’s profitability.
At the end of the financial year, the Group’s cash and other liquid assets came to EUR 3.3 (6.8) million, and the total of undrawn credit facilities and unused credit limits amounted to EUR 4.0 (4.1) million. The Group’s debt financing, totalling EUR 18.4 (14.5) million, includes covenants which are tied to the Group’s equity. Furthermore, a covenant condition tied to the ratio between the interest-bearing debt and EBITDA is applied on a share of EUR 8.4 (0.0) million of debt financing. All covenant conditions were met on the balance sheet date, and the Group’s financing resources are sufficient for the implementation of business plans.
The Group´s investments in production, quarrying and development came to total of EUR 2.7 (4.9) million. The new ERP system was introduced at the beginning of 2012. The new system will harmonise Tulikivi’s internal processes in the various production plants and businesses. It will also make the management of the partner network and the entire delivery chain more efficient. Other major investments included replacement investments in the production plants and quarry investments.
Research and development expenses totalled EUR 1.6 (2.1) million, and their relative share of net sales was 3.1 (3.8) per cent. A total of EUR 0.6 (0.6) million of this figure, after deduction of subsidies, was capitalised.
Significant investments were made in the commercialisation, launch and product approvals of the modular Hiisi collection. The modular design of the products allows the growth of component-specific volumes in order to boost production and acquisitions. This will accelerate and intensify product development in future.
Tulikivi Figure and Tulikivi Color coating materials were launched at the same time as the Hiisi collection. They will enable the use of new designs and colours in soapstone fireplaces.
The Tulikivi Nuoska sauna heater received a Fennia Prize design award and the Hiisi collection received an award for its design at the Habitare Fair. The Tulikivi Harmaja fireplace received a Vesta Award for its technical features at the HBPA Expo in the USA.
Personnel The Group employed an average of 351 (427) people during the financial year. The average was calculated according to the period of employment, taking account of the impact of layoffs. The number of personnel at the end of the year was 377 (436) people. Of these employees, 341(395) were employed by the Fireplaces Segment, 21 (25) by the Interior Stones Segment and 15 (16) in activities not allocated to a segment. The number of personnel decreased during the year by 54 people as a result of the centralisation measures and attrition.
In all, 97.6 per cent of the employment relationships were permanent and 2.4 per cent were temporary. Salaries and bonuses during the year totalled EUR 13.9 (17.4) million.
Dividends Tulikivi Corporation’s Annual General Meeting, held on 12 April 2012, resolved not to pay a dividend on the 2011 financial year.
Decision-making bodies The following persons were elected to the Board of Directors of the parent company and domestic business subsidiaries: Olli Pohjanvirta, Markku Rönkkö, Pasi Saarinen, Maarit Toivanen-Koivisto, Heikki Vauhkonen and Matti Virtaala. The Board of Directors elected from among its members Matti Virtaala as Chairman. KPMG Oy Ab, Authorized Public Accountants, was elected as the auditor.
Major business risks In 2012, the relative profitability of Tulikivi operations was significantly improved. Efficient operations will be further intensified with the renewed enterprise resource planning system that enables faster and more reliable reporting.
Any major downturn that might be caused by the euro area crisis could decrease the demand for the company’s products and the company’s profitability and equity. The company’s balance sheet assets include goodwill, intangible assets and deferred tax assets, the value of which is based on the management’s estimates. If these estimates fail to materialise, it is possible that impairment losses would have to be recognised in connection with the impairment testing processes. Meeting the covenant conditions on the Group’s bank loans will require the improvement of the company’s profitability in future.
Events following the end of the financial year On 21 January 2013, the company began codetermination negotiations covering all of the Group’s personnel. The current estimate is that any reorganisation of work would mean up to 10 people being made redundant in the Group’s Finnish operations, in sales, customer service and production, and up to 40 production staff being laid off until further notice. In addition to this, temporary layoffs of a maximum of 90 days are being negotiated. Tulikivi’s negotiations concerning implementation of the layoffs will take account of the demand situation during 2013.
Future outlook The demand for Tulikivi products depends on the development of consumer confidence. New products will enable the growth of market share, but no significant growth is anticipated for net sales in 2013. As a result of improvements to operating efficiency, operating profit is expected to improve and the result before taxes to be profitable. Order books at the end of the year amounted to EUR 4.6 (5.7) million.
Board of Directors’ proposal on use of distributable equity There is no distributable equity. The reserve for invested unrestricted equity has a total of EUR 5,835 thousand of returnable funds.
The Board will propose to the Annual General Meeting that no dividend be paid.
Corporate Governance Statement Tulikivi Corporation will issue its Corporate Governance Statement for 2012 separately from the Annual Report. The Corporate Governance Statement has been prepared in accordance with Recommendation 54 of the Finnish 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 http://www.tulikivi.com/en/tulikivi/Corporate_governance_and_management.
Matti Virtaala Chairman of the Board
Financial Statement Release Jan-Dec 2012 (pdf)
Tulikivi Coporation´s Corporate Governance Statement for 2012 is enclosed and it can be viewed on the company´s website, at www.tulikivi.com->Investors->Corporate Governance and Management.
For additional information, contact: – Tulikivi Corporation, FI-83900 Juuka, Finland, tel. +358 403 063 100, www.tulikivi.com – Managing Director Heikki Vauhkonen Attachment: Corporate Governance Statement 2012
Distribution: NASDAQ OMX Helsinki Ltd, Central Media