Tikkurila Capital Markets Day

Russian Operations

Simo Laitala, Head of Russia and Central Asia

DisclaimerIn this presentation, all forward-looking statements in relation to the company or its business are based on the

management estimates, and actual results may differ from the expectations and beliefs such statements contain.

Macroeconomic or general industry data are based on third-party sources. Tikkurila related figures in this presentation are

based on internal accounting data. The information disclosed is unaudited except for some whole year 2011 figures. In

addition, the market information presented is based on Tikkurila management estimates unless an external source is

mentioned. All management estimates are suggestive.

June 13, 2012 2

2010 New production line in

St. Petersburg for

water-borne products

Tikkurila's key milestones in Russia

June 13, 2012 3

1862 1970 1980 1990 2000 2010

1862 Tikkurila

established

in Finland

1980s Export to the Soviet

Union started with

industrial coatings for

automotive industry

1990s Tikkurila is the first

western paint

company to start

promoting tinting

technology in Russia

1995 Opening of the first

western paint factory in

St. Petersburg

2006 Acquisition of Kraski

Teks in Russia

2007 Acquisition of Gamma

and Ohtek in Russia

2009 Logistic center in

Mytischi, Moscow

2011 Divestment of Powder

Coatings business

1970s

Entering the Eastern trade.

Tikkurila was known as

"Firma Miranol" in Soviet

Union. The acquisition of

Kraski Teks in 2006 made

Tikkurila the leading

decorative paint company in

Russia.

Russia

~5 liters per capita

= high

= middle

= low

Paint consumption per capita

* Source: paint consumption, IPPIC

Paint consumption is still on a relatively low

level in Russia

Europe

8–15 liters per capita

Russian population

142.9 million people

June 13, 2012 4

But the paint market is growing

June 13, 2012 5

2.22.6

3.0 3.0

3.4

4.0

4.4 4.3

3.6

4.3 4.3

0

1

2

3

4

5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Liters

Source: Rosstat, Chem-Courier (decorative paints)

283300

358

411

457

571

622 615

515

618 619

-20

-15

-10

-5

0

5

10

15

20

25

30

0

100

200

300

400

500

600

700

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Market size Growth

Decorative paint market in Russia

Market size (million liters)1

1) Chem-Courier, Management estimates

6

Liters (million) Growth %

June 13, 2012

Russian macro environment

• Euro crises has had a limited effect

on Russia

• Strong growth figures in e.g.

construction output and retails sales

in late 2011 and early 2012

• Consumer confidence has been

improving

• Inflation is at record low level

• Oil price is still relatively high

• Russian GDP growth is estimated

to be some 4% over the medium-

term

• Inauguration of the new President

and formation of the government

• WTO membership

June 13, 2012 7

5.2

-7.9

4.0 4.3 3.5

-10

-5

0

5

10

2008 2009 2010 2011E 2012F

Russian consumer confidence index

-40

-30

-20

-10

0

10

Russian GDP development, %

Opportunities exist in Russia…

June 13, 2012 8

RUSSIA IS THE WEALTHIEST BRIC COUNTRY (GDP/CAPITA)

ALL SOURCES INDICATE GROWTH ON MEDIUM AND LONG TERM

RUSSIANS REMAIN BRAND CONSCIOUS

GROWING MIDDLE CLASS MAKES RUSSIA AN ATTRACTIVE MARKET

RUSSIA IS ONE OF THE LARGEST RETAIL MARKETS

…but there are also risks

June 13, 2012 9

RUSSIAN ECONOMY IS DEPENDENT ON THE OIL PRICE DEVELOPMENT

LACK OF RUSSIAN INDUSTRY AND EXPORT PRODUCTS

CHANGES IN LEGISLATION REQUIRE CONSTANT MONITORING

FIGHT FOR TALENTS

Tikkurila in Russia

June 13, 2012 10

Current demand

structure

Economy and medium segments

dominating, premium segment expected

to grow fastest

Tikkurila paint brands in RussiaFacts about SBU East

Paint

consumption

~5–7 liters per capita

PREMIUM ECONOMY

Market leader in Russia in 2011*

19%

6%

5%

70%

Tikkurila

Empils

Lakra

Others

*Source: Chem-Courier 2011 (decorative paints, volume)

Russia, other CIS countries, UkraineOperational area

Production sites Russia (4) and Ukraine (1)

1,577 (average in 2011)Personnel

EUR 220.0 million, 34% of Group

Russia 88% of SBU East revenue2011 revenue

EUR 25.3 million, 39% of Group2011 EBIT

RetailTikkurila's products are sold in more than

5,000 retail outlets

Track record in SBU East

June 13, 2012 11

204

227

167

195

220

0

2

4

6

8

10

12

14

0

50

100

150

200

250

2007 2008 2009 2010 2011

Revenue East EBIT margin

-30

-20

-10

0

10

20

2008 2009 2010 2011

Russian GDP growth, % East revenue growth, %

Development of Russian GDP and SBU East revenue*SBU East revenue and EBIT margin 2007–2011

Source: Rosstat (GDP)

*Euro-denominated revenue growth

EUR million % %

June 13, 2012 12

Population split in Russia

Central FD

Northwestern FD

Southern FD

Volga FD

Urals FD

Siberian FD

Far Eastern FD

North Caucasian

6.3 million

19.3 million

13.6 million

29.9 million

12.1 million

38.4 million

13.9 million

9.4 million

31.5 million people

111.4 million people

June 13, 2012 13

Central FD

Northwestern FD

Southern FD

Volga FD

Urals FD

Siberian FD

Far Eastern FD

North Caucasian

Novosibirsk

Saint Petersburg

Moscow

Stariy Oskol

Kopeisk

Tikkurila has regional focus

KhabarovskIrkutsk

Krasnodar

SamaraEkaterinburg

• Sales function has regional structure with more than 200 employees

• Tikkurila has established long term partnerships with local customers

• Tikkurila's office and warehouse network has been expanded in 2012

Tikkurila's focus will be on the golden cities

• Tikkurila will focus on the 14 "golden

cities" of Russia (population exceeds

1 million) and greater-Moscow area

• In these areas the distribution network

will be further expanded

June 13, 2012 14

Source: Global insights, Rosstat, E&Y

Population of Russia's largest cities

10.6

4.6

1.4

1.3

1.3

1.1

1.1

1.1

1.1

1.1

1.1

1.1

1

1

0 2 4 6 8 10 12

Moscow

St. Petersburg

Novosibirsk

Yekaterinburg

Nozhny Novgorod

Kazan

Samara

Omsk

Chelyabinsk

Rostov-on-Don

Ufa

Perm

Krasnoyarsk

Volgograd

Distribution channels in SBU East

Indirect customers

Direct disributors/customers

Customer segments

Tikkurila SBU East

Consumers

DIY big boxes

Consumers

Color studios

Regionalwholesalers

- Traditional retail outlets- Professional painters- Construction industry

Professionals

Temaspeeddealers Industry

15June 13, 2012

Big boxes account for approximately 20% of Tikkurila sales in Russia

Tikkurila is represented in all segments

16

Medium

Premium

2-6 EUR

TikkurilaSegment

Trends

Value

Shelf Price

Low /

Economic

< 1,0 EUR

Akzo Nobel

+ ICI

Russkiye

kraski

Caparol Empils Lakra Predpriyatie

VGT

KhimikFarben –

Dekart

Holding

Prestizh

Eskaro Meffert

> 6 EUR

1-2 EUR

16June 13, 2012

Water-borne paints have clearly increased

market share in Russia

June 13, 2012 17

16%25%

31%36% 40% 42%

47% 47%54% 56% 54% 57%

84%75%

69%64% 60% 58%

53%

53%46%

44%46% 43%

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SB

WB

Source: Rosstat, Chem-Courier

Tikkurila promotes water-borne paints systematically in Russia

Tikkurila is in a good position to grow further

in Russia

June 13, 2012 18

Success in Russia: Tikkurila's strengths in Russia

MARKET KNOWLEDGE

EXPERIENCE

LEADING POSITIONS

CLEAR MARKET LEADER POSITION IN

DECORATIVE PAINTS

TOP-CLASS BRAND AWARENESS

GOOD COVERAGE OF OPERATIONS

AND DISTRIBUTION

Q&A