Managing Director’s review

Revenue

0

10

20

30

40

50

60

19801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005

Finland Exports

FinlandRevenue by Country 2005

•Revenue in Finland: EUR 27.9 million; development about 1%.

•47.6% of the Group’s revenue.

•Revenue from exports: EUR 30.7 million; development about 10%.

•52.4% of revenue.

Finland, Fireplaces

• The Finnish fireplace market grows by 3-5% annually.

• Tulikivi’s growth falls short of market development.

• Profitability is the key objective.

• Close to 2 million fireplaces in Finland.• Fireplace market: over 50,000, of which

55% represent fireplaces installed during renovation works.

• Soapstone 25%, Brick 40%, Tile 15%, Metal 15%, Other natural stone 5%.

• Tulikivi’s market share: about 17%.

• Brisk construction of single-family houses and renovation continues.

Natural Stones

• Sales EUR 6.4 million (6.3).• Operating profit EUR 0.2 million (0.2).• Growth of one third from interior

decoration stones, which now account for about 60% of revenue.

• Tulikivi is the market leader in interior decoration stones in Finland.

• Total market for interior decoration stones in Finland is over EUR 15 million, market growing by >15 per cent annually.

• Further outlays will be made on interior decoration stones and consumer customers in the future.

• In addition, deliveries of stones to construction sites.

• Contracting phased out.

FinlandGermany

Revenue by Country 2005

• Swung to growth of over 5%.

• Three-year negative trend ended

Germany

Tulikivi’s distribution channel changeover 2005

•Stage 1: single step; succeeded according to plan.•Stage 2: stepping up the dealer network substantially; started up successfully.•Dealers 25 40 >60•Order flow grew by 20 %

• Although the consumer segment is still subdued, the high price of energy supports fireplace sales.

• Distribution through hardware stores has become more important and the share accounted for by lower-cost products has increased.

• Manufacturers selling directly to speciality stores.

• Soapstone is a very popular fireplace material.

FinlandGermanySweden

Revenue by Country 2005

•No growth in fireplace sales.

•Distribution channel overhaul 2006.

•One of the largest customers for lining stones is the Swedish company Nibe.

FinlandGermanySwedenFrance

Revenue by Country 2005

•Development of fireplace sales over 150%, market development about 30%.

•Distribution is in good shape.

•The State’s tax subsidy – which started in 2005 – will continue in 2006.

FinlandGermanySwedenFranceBelgium

Revenue by Country 2005

•Development of fireplace sales about 20%.

•Belgium is a ”stove country”.

•Long-term work by the importer has generated continuous growth.

FinlandGermanySwedenFranceBelgiumDenmark

Revenue by Country 2005

•Lining stones are sold to Denmark.

•Four major customers.

FinlandGermanySwedenFranceBelgiumDenmarkUSA

Revenue by Country 2005

•Sales development about 10%.

•Includes USA & Canada.

•Steady and profitable growth with reliable partners.

•High average price of products.

FinlandGermanySwedenFranceBelgiumDenmarkUSA

Switzerland

Revenue by Country 2005

•Fireplaces with small sales development.

•Long-term importer (about 20 years), with which a distribution development project has been started up.

•Strong traditions in heat-retaining fireplaces.

FinlandGermanySwedenFranceBelgiumDenmarkUSA

SwitzerlandAustria

Revenue by Country 2005

•Sales development of one third.

•Long-term work by the importer.

•Strong traditions in heat-retaining fireplaces.

FinlandGermanySwedenFranceBelgiumDenmarkUSA

SwitzerlandAustriaRussia

Revenue by Country 2005

•Sales doubled in Russia and the CIS countries (Ukraine).