- The Tulikivi Group’s fourth-quarter net sales were EUR 16.6 million (EUR 15.6 million, 10-12/2009), the operating profit was EUR 0.8 (0.3) million and the result before taxes was EUR 0.7 (0.2) million.
- In 2010, the net sales of the Tulikivi Group amounted to EUR 55.9 million (EUR 53.1 million in 2009), the operating result was EUR -0.3 (-2.4) million and the result before taxes EUR -1.0 (-3.3) million. Earnings per share amounted to EUR -0.02 (-0.06).
- Year-end order books were at EUR 6.3 (4.8) million.
- Cash flow from operating activities before investments was EUR 2.9 (3.7) million.
- Future outlook: With growing sales and improved cost efficiency, the consolidated net sales are expected to be up from the previous year and the operating result is expected to improve significantly in 2011.
- The Board will propose to the Annual General Meeting that a dividend of EUR 0.0250 per share on Series A shares and EUR 0.0233 per share on Series K shares will be paid.
New procedure for publishing releases
From now on Tulikivi Corporation will publish its financial statement releases and interim reports as stock exchange releases with contain the information included in the releases and reports that is likely to have a material impact on the value of the share. The full-length financial statement release which contains a descriptive section and tables section will be attached to the stock exchange release. It will be available on the company´s website at www.tulikivi.com. The new procedure is based on the amendment to the Financial Supervisory Authority´s standard 5.2b.
Key financial ratios
Managing Director Heikki Vauhkonen
“In 2010 Tulikivi operated in a divided business environment. While demand increased in Finland and the surrounding areas, the situation was more challenging in the traditional export market in Central Europe. During the year, demand for products with a lower profit margin was higher than expected. The results for the last three quarters were in the black but not sufficient enough to turn the loss of the first quarter into profit.
However, Tulikivi strengthened its foothold in the domestic fireplace market. Distribution efficiency has been increased, and the new Green products have been well received. Owing to an increase in new construction and a rise in the consumer energy price, the outlook on demand is good for the new year. Moreover, several new Tulikivi Service Points have been established, and a distribution agreement on fireplace products was made with the S Group. New points of sales will be an excellent addition to Tulikivi’s existing distribution network.
Demand in Central Europe was clearly lower than expected in 2010. Consumer uncertainty reduced the number of investment decisions. Despite the positive development in sales in the surrounding areas, total fireplace exports remained below the level of 2009. The outlook on export demand for 2011 is better than a year ago, thanks to consumers’ improved investment appetite and an increase in housing construction. We have been able to expand our distribution network, and the new design fireplaces have been well received in the market. The export of ceramic fireplaces is anticipated to grow in the Baltic countries and Russia.
The demand for lining stone products rose significantly last year. This was supported by the good situation in the fireplace markets in Sweden and Norway and the increase in the popularity of soapstone-lined fireplaces in the Central European markets and the improved market position of Tulikivi as a supplier of lining stone products. The outlook on demand for the next few months is also good.
The result for natural stone products was decreased by weak demand for building stones and deliveries being postponed until 2011.
In the autumn, the sauna business focused on the development of new products. Sales of the first new Tulikivi sauna heaters will be launched during the first quarter of 2011.
The measures of the centralisation and profitability programme that was started in 2009 were completed during 2010. Similar measures to boost cost efficiency will also be explored in future. The goal of the ERP project started at the turn of the year is to streamline and intensify Tulikivi’s business processes in order to achieve substantial savings while increasing net sales. A new system provided by IFS Oy is well-suited for a networked business model and will replace the two systems currently used.
As a whole, the outlook on demand in all business areas is more positive than before. The increase in net sales will further enhance Tulikivi's profitability.”
Net sales and result
The 2010 net sales of the Tulikivi Group totalled EUR 55.9 million (EUR 53.1 million in 2009). The net sales of the Fireplaces Segment amounted to EUR 50.8 (47.8) million, and those of the Natural Stone Segment were EUR 5.1 (5.3) million.
Net sales in Finland totalled EUR 29.2 (25.9) million or 52.3 (48.9) per cent. Exports accounted for EUR 26.7 (27.2.) million of the net sales. The principal export countries were France, Sweden and Germany. The export of lining stones increased, but Fireplace exports did not perform as anticipated.
The consolidated operating result was EUR -0.3 (-2.4) million. The Fireplaces Segment’s operating profit was EUR 2.2 (-0.2) million, while the operating result for the Natural Stone Products Segment was a loss of EUR -0.5 (-0.3) million, and the expenses under “Other items´” were EUR -2.0 (-1.9) million. The profit target of Fireplaces Segment was not reached as demand focused on products with a lower profit margin. During the fourth-quarter non-recurring expenses of EUR 0.1 million had a negative effect on profit resulting from the dismantling of the production machinery at Kuhmo. The programme of profitability and centralisation measures launched in 2009 was completed during the first half of 2010. Most of the targets set for the programme, such as relative cost savings, were achieved. The result for natural stone products was decreased by weak demand for building stones and deliveries being postponed until 2011.
The consolidated result before taxes was EUR -1.0 (-3.3) million and comprehensive income was EUR -0.7 (-2.4) million. The consolidated return on investment was -0.1 (-4.3) per cent. Earnings per share amounted to EUR -0.02 (-0.06).
Tulikivi Group´s fourth-quarter net sales were EUR 16,6 million (EUR 15,6 million in 10-12/2009), the operating profit was EUR 0,8 (0,3) million and the profit before taxes EUR 0,7 (0,2) million.
Financing and investments
Cash flow from operating activities before investments was EUR 2.9 (3.7) million. Working capital increased by EUR 0.9 million in the period and came to EUR 7.2 (6.3) million. Interest-bearing debt was EUR 25.3 (24.7) million and net financial expenses were EUR 0.7 (0.9) million.
The Group´s investments in production, quarrying and development came to total of EUR 3.4 (2.1) million. Major investments made during the year comprised the conversion and replacement investments made in fireplace production, development projects and the opening of new quarries and quarrying sites.
The Group employed an average of 404 (417) people during the financial year and 497 (484) at the end of the year. Of these employees, 426 (406) were employed by the Fireplaces Segment, 48 (52) by the Natural Stone Products Segment and 23 (26) in activities not allocated to a segment. In all, 96.4 per cent of the employment relationships were permanent and 3.6 per cent were temporary. Salaries and bonuses during the review period totalled EUR 15.7 (15.9) million.
The Group’s near-term risks are unexpected negative fluctuations in certain market areas. The renewal of the enterprise resource planning system is being launched. A schedule and cost risk is often associated with such projects.
In Finland, the demand outlook for fireplace products are good as a result of increasing new construction and rising consumer energy prices. In exports, the revival in new construction and increasing consumer confidence will increase the demand for fireplaces during the financial year. The demand for lining stone products will remain good.
New and innovative solutions in sauna and fireplace products and expanding distribution network will all increase net sales.
With growing sales and improved cost efficiency, the consolidated net sales are expected to be up from the previous year and the operating result is expected to improve significantly in 2011.
Order books at the end of the year amounted to EUR 6.3 (4.8) million.
The Board’s proposal for the distribution of profits
The parent company’s distributable equity amounts to EUR 10 116 thousand made up of EUR 7334 thousand in the reserve for invested unrestricted equity and EUR 2 782 thousand of equity distributable as dividends. The results for the year made up EUR -1010 thousand of the distributable equity. The Board will propose to the Annual General Meeting that the distributable equity be used as follows:
- Dividend distribution
EUR 0.0250/share for Series A shares
EUR 0.0233/share for Series K shares
in total approximately EUR 909 thousand.
- EUR 9207 thousand will be retained in equity.
It is the Board's opinion that the proposed distribution of profits will not endanger the company's solvency.
Board of Directors
Matti Virtaala Chairman of the Board
Distribution: NASDAQ OMX Helsinki Ltd
Additional information: Tulikivi Corporation, 83900 Juuka, tel.
+358-207-636 000, www.tulikivi.com
- Chairman of the Board of Directors Matti Virtaala
- Managing Director Heikki Vauhkonen
Enclosure: Tulikivi Corportion´s Financial Statement Release Jan-Dec 2010