Tikkurila CMD Towards podium position

Tikkurila in Poland
Towards podium position
Remigiusz Skapski, Commercial Director, Tikkurila Poland
Tikkurila Capital Markets Day in Poland on June 14 and 15, 2016
Tikkurila in Poland
2015 revenue
Personnel
Production sites
EUR 68 million
12% of Group revenue
429 employees at year end (2015)
Debica
Production capacity ~20% of Group total
Brands
1982
1998
1998
1999
2001
History
2012
2015
June 2016
Paint export to Poland started
Joint venture established with a local partner
Tikkurila acquires Baltcolor in Szczecin
Alcro-Beckers increases ownership to 95% in Debica
Tikkurila Oy acquires Alcro-Beckers
Szczecin factory closed
Debica production site and Jedynka brand obtained through the AlcroBeckers acquisition
Industrial coatings operations were merged into Tikkurila Polska S.A.
Restructuring of the logistic network
2
Tikkurila's site in Debica, Poland
June 2016
•
Water-borne and solvent-borne
products for consumers,
professionals and the industry
•
Resin production for both internal
and external use
•
Modern RDI center
3
Strong development of the Polish economy is expected to
continue in the coming years despite the political situation
GDP development, change %
Consumer confidence
8
0
7
-2
6
-4
5
4
-6
3
-8
2
1
-10
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015F
-12
Source: Several sources, trading economics
June 2016
4
Slight headwind from the exchange rate
PLN vs. EUR exchange rate
• Polish zloty (PLN) has
weakened against the euro
during the past year
• Slight strengthening during the
past month
June 2016
5
Polish paint market is median in terms of consumption and
quality but the market is trading up
Paint market in Poland
Population
Decorative paint market
Paint consumption
Paint market growth
Price level
Current demand
structure
Competition
June 2016
38.4 million
EUR 560 million
10 liters per capita (deco + industry)
Volume +6% (2015 vs. 2010)
Value +15% (2015 vs. 2010)
Average liter price 2.1 €/l (2015)
Economy and medium segments dominating, premium segment
expected to grow fastest
Private labels are growing in Big Boxes, current market share >5%
Almost all major players from east and west present
Four biggest paint producers account for almost 80% of the total
decorative paint market
6
Key decorative paint players in Poland
Dyrup
80% of the market
Polifarb Wrocław
1997
Polifarb CieszynWrocław
2005
Sigma Kalon
2008
PPG
2012
PPG
Polifarb Cieszyn
Pilawa
ICI
Nobiles
Włocławek
1996
Polifarb Dębica
(1939)
Alcro Beckers
Polska
(1991)
Baltcolor
Chemal
(1984)
June 2016
Akzo Nobel
Polska
2008
2000
1998
Akzo Nobel
Alcro Beckers
Polska Sp. z o.o.
Tikkurila
Baltcolor
TBD S.A.
(from 2008 Tikkurila
Polska S.A.)
Tikkurila Coatings
Sp. z o.o.
2012
Tikkurila Polska
S.A.
1998
Śnieżka S.A.
7
Polish decorative paint market is crowded
According to Tikkurila's estimation, there are more than 70 decorative paint brands on Polish market. Some of them
are provided on the chart below:
PPG
AKZO/ ICI
ŚNIEŻKA
TIKKURILA
Others
White & ready
shades
Dekoral
Sigma
Drewnochron
Domalux
Dekoral Professional
Bondex*
Cieszynka
Malfarb
Dyrup*
Dulux
Nobiles
Sadolin
Hammerite
Nobiles Pro
Sikkens
Śnieżka
Magnat
Vidaron
Senseo
Foveo
Beston Professional
Tikkurila
Beckers
Jedynka
Polifarb Dębica
Caparol
Alpina
Bolix
Fox Deco
Altax
Private Labels: Luxens
Colours
Primacol
Unicel
Tinting
segment
Dekoral
Sigma
Malfarb
Dyrup*
Dulux
Sikkens
Śnieżka
Magnat
Tikkurila
Beckers
Jedynka
Benjamin Moore
Flugger
Kabe
Caparol
Alpina
Teknos
Para
Jeger
Bolix
*merge with Dyrup in 2012
Source: Public information
June 2016
8
Segmentation of the Polish decorative paint market by paint
type
Tinting
18 %
•
•
Readyshades
82 %
Ready-shades constitute a majority of the category (including white paints)
Tinting accounts only for small part of the market and is concentrated on
premium/super-premium
%
Scandinavia
Russia
Finland
Poland
Estonia
TINTING
35
50
70
18
70
READY SHADES
5
20
10
44
WHITE PAINTS
60
30
10*
38
Comments
WP - incl. offwhite shades
Latvia
Lithuania
Export
75
40
25
15
7
50
70
15
18
10
5
* (+10%
colourless)
Source: PMR research report and internal data
June 2016
9
Segmentation of the Polish decorative paint market by
application surface
Category split in value
Category split in volume
18%
24%
32%
Paints for walls, ceilings
and facades
Paints for walls, ceilings and
facades
Wood varnish
Wood varnish
7%
Metal varnish
Metal varnish
14%
Enamels
14%
61%
Enamels
30%
•
Paints for walls (interior and exterior) and ceilings is the biggest segment, particularly in volume terms. The share of
white paints and economy/medium brands is high
Source: IBP research 2015
June 2016
10
Complexity of decorative paint distribution
Producers’
stores
65%
Wholesalers
Final users
(Consumers)
Distributors
Retailers/
POS
Producers
35%
Big Boxes/
Supermarkets
Final users
(Professionals)
E-commerce
June 2016
11
Focus areas for Tikkurila’s commercial activities
•
Point of sales management
• Optimizing the amount of point of sales
• Securing the availability of products and
marketing materials in the shops, stimulating
shoppers with attractive product displays
•
Professional painters and influencers
• Further increasing the brand awareness and
recommendation
• Deeper integration and cooperation
•
Focus on premium brands
• Quality promotion
• Sustainability approach
June 2016
12
Positioning and distribution patterns of Tikkurila brands
Size of the bubble reflectcs the brand’s share of
Tikkurila sales
Premium
(~30% of market value*)
Medium
(~45% of market value*)
Economy
(~25% of market value*)
*Tikkurila's estimation
June 2016
100%
Traditional distribution
13
100%
Big boxes
13
Tikkurila's presence is increasing rapidly
Brand
Type of in-store solution
Tikkurila Colour Studio – Shop Concept
Tikkurila Tinting Studio – Tinting zone Concept for DIY
Tikkurila
Tikkurila Tinting Set – Tinting zone Concept
# of retail points
71 (10 in 2016)
21
125 (47 in 2016)
Tikkurila Duett – Wallpaper Display
90
Tikkurila Valtti Expert – Display
38
Beckers Designer Colour – Display
582 (120 in 2016)
Beckers
Beckers Designer Kitchen & Bathroom - Display
Jedynka ready-shades interior – Display
115 (40 in 2016)
135
Jedynka
Jedynka ready-shades exterior wood & universal products – Display
322 (145)
According to Tikkurila's estimation, there are some 3,500 shops selling decorative paints in the Polish
market. Tikkurila’s products are available in approximately 2,000 shops
June 2016
14
Tikkurila color studio shop concepts
June 2016
15
Digital channels have a significant role in marketing
June 2016
16
Favorable development with the awareness of our premium
brands
Brand awareness among consumers
•
Focus has been on promoting the premium
brands of Tikkurila
•
All Tikkurila brands in Poland are among the
most mentioned paint brands (spontaneously
mentioned brands)
•
In consumer brand mappings, both Beckers
and Tikkurila are categorized in the highest
possible quality segment
90
80
70
60
50
40
30
20
10
0
Jedynka
Beckers
2013
2014
Tikkurila
2015
Source: OMNIBUD, IPSOS 2013/2014/2015, prompted awareness
June 2016
17
Tikkurila
Śnieżka
Dulux
2012
Beckers
2013
Dekoral
Caparol
2014
2015
Flugger
9,0%
13,8%
14,0%
20,8%
23,8%
24,3%
27,8%
31,3%
Brand awareness among architects and designers
Benjamin Moore
Source: OMNIBUD, BCMM Research company 2015
June 2016
18
Tikkurila
Beckers
Flugger
IX 2012
IX 2013
Dulux
IX 2014
Benjamin Moore
9,0%
10,5%
11,3%
12,5%
19,5%
29,8%
Brand recommendation among architects and designers
Caparol
IX 2015
Source: OMNIBUD, BCMM Research company 2015
June 2016
19
Dekoral
Dulux
Śnieżka
Beckers
Tikkurila
2012
Kabe
2013
Caparol
2014
Flugger
Jedynka
Magnat
1,8%
5,5%
6,0%
9,8%
13,0%
13,3%
23,3%
24,3%
32,3%
35,5%
49,8%
Brand awareness among professional painters
Don't
know/none
2015
Source: OMNIBUD, firma BCMM VII 2015
June 2016
20
Dekoral
Tikkurila
Beckers
Dulux
Flugger
2012
2013
Caparol
2014
Śnieżka
Magnat
Kabe
9,8%
7,8%
8,0%
9,5%
11,8%
12,8%
18,0%
18,5%
23,0%
26,3%
Brand recommendation among professional painters
Don't
know/none
2015
Source: OMNIBUD, BCMM Research company 2015, spontaneous
June 2016
21
Market share development
Polish decorative paint market, %
30
27,6
25,5
24,2
25
20,7
20,2
20
18,6
17,4
16,3
17,1
15
12,4
10
5
0
PPG Deco
Sniezka
Akzo Nobel
2009
Since 2012, PPG includes Dyrup
June 2016
2010
2011
2012
Tikkurila
2013
Others
2014
Source: IBP Research 2015
22
Conclusions
•
GDP has been growing steadily for a long time, even during the
financial crisis
Tikkurila revenue development in Poland,
EUR million
70
•
Purchasing power has increased and people are getting more
aware of quality issues; favorable sales mix development for
Tikkurila
65
60
•
•
•
Competition is fierce in the Polish paint market; Tikkurila has been
one of the winners
55
50
No radical changes to strategy; focus will be on decorative paints
but industrial coatings provide also some growth opportunities
Internal efficiency measures, such as deployment of new
production technology and restructuring of the logistic network,
have had a favorable impact on profitability
June 2016
45
40
2009
2010
2011
2012
2013
2014
2015
23