14.04.2010Managing

Director

Heikki Vauhkonen

Tulikivi Corporation’s

financial

statements

2009Future

outlook 2010

Tulikivi in 2015

Turnover

53.1

66.5

-20.1

Operating

profit

-2.4

3.2

-173,5

% of turnover

-4.5

4.9

Profit

before

taxes

-3.3

2.1

-260,8

% of turnover

-6.2

3.1

Profit

for the year

-2.4

1.4

-265,1

01-12/2009 01-12/2008

Change, %

Summary

of consolidated

income

statement

EUR million

Earnings

per share, EUR

-0.06

0.04

Equity

per share, EUR

0.64

0.73

Solvency

ratio, %

39.4

41.2

Current ratio 1.9

2.0

Order

book, (31.12), EUR million

4.8

4.9

Gross

investments, EUR million

2.1

2.9

Gross

investments/turnover, %

4.0

4.4

Average

personnel

417

526

12/2009

12/2008

Number

of shares

average

37023708

37128494

Number

of shares

31.12

37019770

37069970

Key figures

12/2009

12/2008

AssetsTotal

non-current

assets

34.3

37.2

Total

current assets

26.1

28.9

Total

assets

60.4

66.1

Liabilities

and shareholders’ equity

Capital stock

6.3

6.3

Other

shareholders´ capital

17.4

20.9

Total

non-current

liabilities

22.9

24.6

Total

current liabilities

13.7

14.3

Total

liabilities

and shareholders’ equity

60.4

66.1

EUR million

Consolidated

balance

sheet

2009

2008Cash

flow

from

operating

activities

Profit

for the financial

year

-2.4 1.4

Net

cash

flow

from

operating

activities

3.7 7.6

Net

cash

used

in investing

activities

-1.8

-3.1

Net

cash

flow

from

financing

activities-3.0 3.4

Cash

and cash

equivalents

at end

offinancial

year

10.6

11.7

EUR million

Consolidated

cash

flow

statement

Turnover by country 2009Finland

France

Germany

Belgium

Sweden

Russia

Austria

USA

Switzerland

Italy

Others

Denmark

Other

countries:

Estonia, Ukraine, Norway, Lithuania, The Netherlands, Romania, Spain, Bulgaria, Slovenia

Finland

• Markets

are

estimated

to have

declined

by

some 20 per cent

annually, in terms

of units

sold

• Tulikivi and Kermansavi maintained

their

market share

• Consumers’ interest

in fireplaces

picked

up

during the summer

• Fireplaces

must

have

the CE mark

as of 1.1.2011 (one-year

transition

period)

• More

international actors

have

entered

the Finnish

fireplace

market

in recent

years

• Increased

competition• New product

groups

available

for

consumers

Finland

• The development

of Tulikivi’s

own

distribution

channel

has

been

continued according

to plan

• Currently

40 Tulikivi Showrooms

and 60 Tulikivi Service Points

• High-quality, professional

service

is our

distribution

channel’s key competitive

edge

• The Tulikivi academy in co-operation

with

the North Karjala Educational Federation of Municipalities

(Pohjois-Karjalan Koulutuskuntayhtymä)

• Some

20 Tulikivi Showroom

entrepreneurs

and salespersonswill

take

part

in a pilot

group

tailored

for Tulikivi

• Tulikivi Tailor

program

online

since

September

Exports

• Due

to the financial

crisis, demand

collapsed

in the Baltic

countries and Russia

• Exceptionally

large

differences

in the performance

of fireplace market

areas

last

year

• In France, fireplace

demand

has

been

increased

by

an energy efficiency

subsidy

granted

by

the government: consumers

may

be

compensated

for up

to 40% of the value

of a purchased

product

in taxation

• In France, importers

have

invested

in new exhibitions

Exports• In Germany, Belgium, Austria, and Switzerland, demand

has

been

steady, although

in the autumn

it

was

weaker

• Small-scale

wood

combustion

is an important

tool in battle

against

climate

change

also

in the USA,

where

purchasers

of fireplaces

can

receive

a USD 1500 tax

rebate

for the purchase

• In Germany, the authorities

have

issued increasingly

tight

emissions

regulations

for

fireplaces

to reduce

particle

emissions

Lining

stones

• Demand

for lining

stones

contracted

along

with

the markets

in general

• In 2009, additional

resources

focused

on sales and cost

calculation – our

competitiveness

has

improved

• Customer

base

expanded

from

the stove’s

lining

stones

also

to other

components

• Focusing

lining

stone

production

at Suomussalmi has

improved efficiency

of operations, thus

improving

our

price

competitiveness

Natural

stone

products

• Market conditions

have

been

challenging throughout

the year

• Focus

still

strongly

on developing

interior decoration

stones

sales and overall

service

• Major kitchen

chains

as customers

• Satisfactory

amount

of individual

sites, hardly

any

larger

apartment

blocks

or

hotels

• Mosaic products

currently

being

developed

• Using

natural

stones

in fireplaces

Production

• 2009 especially

challenging

for fireplace

production• Production

volume

declined

substantially

• Adjustment

measures

and projects

to develop

operations were

also

carried

out at the same

time

• An 8% annual

increase

in productivity

was

achieved, which

was reflected

in profitability, especially

in the autumn

• In the autumn, the sales margin

rose

to a higher

level

than

that of the previous

year

• Lining

stone

production

focused

at Suomussalmi• Revised

production

bonus supports

productivity

performance

Production

• New working

hour

models

introduced• Frequency

of occupational

accidents

has

decreased

substantially

• Sick

leave

absences

have

decreased

substantially

from

previous years’ level

• Insurance

class

of pension

contributions

has

dropped

by

several classes

• Personnel

committed

to development

work

with

revamped

initiative activity

Production

• Test

quarrying

commenced

at the Vaaralampi mining

patent

in Juuka after

extensive

preparations

• Quality

of raw

material

in line

with

our expectations

• Use

of small

stone

in production

has

been further

enhanced

• Reduces

need

for new quarry investments

• Investment

needs

moderate

in the future

Future

outlook

• In Finland private

house

building

and fireplace

demand

picked

up last

autumn• Positive

development

is expected

to continue

• The trough

in demand

in Russia

and the Baltic

countries

is behind us

• In Central

Europe, stove

lining

stone

sales have

increased significantly, but

securing

a market

for fireplaces

continues

to be

a

challenge

Future

outlook

• New products

will

increase

the company’s

turnoverin the second

half

of the year

• We

will

continue

adjustment

measures, withlayoffs

where

necessary

• As a result

of recovering

sales and improved

cost- effectiveness, full-year

net

sales are

expected

to increase

from

the previous

year, and the result

is expected

to turn

positive during

the financial

year

Tulikivi in 2015

• Tulikivi Group specialises

in fireplaces

and heating

equipment

that

produce

radiant

heat, and in household

natural

stone products

• Our

customers

value

the environmental- friendliness

and aesthetic

beauty of our

products, the comfort

they

generate

and the benefits

of wood

heating

• Tulikivi is a versatile

company

that

values its

customers, entrepreneurship

and fair

play

Operating

environment

• Bioenergy

use

is increasing

for ecological

and financial

reasons

• Energy

independence

is valued

• Products’ aesthetic

beauty and practicality

appeals

to consumers

• Well-being

and housing

comfort

are

core

values

for consumers

• A lot

of time

is spent

at home: people

want

to ensure

that

their

homes are

well-equipped

and comfortable

• Fireplace

regulation

is tightening

in the EU, number

of producers

declining

Product

groups

• Grouped

in a customer-oriented

way

• Grouping

provides

new marketing

and product

development

opportunities

• Significantly

inreases

the number

of potential

customers

• Part

of Tulikivi’s

product

strategy

renewed, with

Hannu Kähönen (Creadesign

Oy) as

design manager

• Three

groups:

• Tulikivi Heating

& Environment

• Tulikivi Interior

& Design

• Tulikivi Cooking

Tulikivi Heating

& Environment

• Builders

and renovators

in rural

areas

and population

centres

as customers

• Also

for leisure

dwellings

• Customers

interested

in

environmental-friendliness, energy

efficiency, cost-efficiency, comfortable

heat

• Heat-retaining

Tulikivi and Kermansavi

fireplaces

and bakeovens

• On sale

in all

market

areas

• We

will

increase

the proportion of

various

natural

stone

surfaces

in the

range

Tulikivi Heating

& Environment

• Making

use

of one’s

own

wood

which costs

nothing

is important

for

consumers

• 3-10 cubic

metres

of wood

are

burnt per year

• Tulikivi Green products: water

heating, pellet burning

and stove

control

system

• International launch

at Progetto Fuoco

fair, Verona

• Products

available

as of April

2010

Cleaner

combustion

with

pellets

Fireplace’s emissions and efficiency, measured

in accordance with EN 15250

Pahta /Cm = 1575 kg

Limit value (AUT)

Efficiency [%] 90,4 > 78 %

CO [mg/MJ] 705 < 1100

NOx [mg/MJ] 69 < 150

OGC [mg/MJ] 21 < 80

•High-quality

pellets

burn cleanly

– ash

accounts

for approximately0.5% of the fuel’s weight.• Heat

value

of the pellets

is approximately

15% higher

than

that

of dry

firewood.• High-quality

pellets

are

a fuel

of uniform

quality.

Tulikivi-GreenP10

Pellets: 15 dm3

≈

9.5 kg ≈

45 kWh

Corresponds

to birch: 45 kWh ≈

11 kg

• The ceramic

combustion

chamber

ensures

a sufficiently

high

combustion

temperature

• In the initial

stage

of combustion, the combustion

air is directed

on top of the pellet bed

as secondary

air

• In the final stage of combustion, the primary air pushes through the pellet bed → efficient

and complete

burning

of all

pellets

is ensured

• No moving

parts

Tulikivi-GreenP10

= primary

air

= secondary

air

Simple

and ingenious

pellet system

for Tulikivi fireplaces

Tulikivi-GreenC10

Intelligent

fireplace

1 adjust

the combustion

air volume

to the correct

level

of the stage

of the fire2 instruct

the user

during

the use

of the fireplace

3 indicate

the heat-retention

status of the fireplace

4 operate 24/7

Tulikivi fireplaces

may

be

fitted

with

a control

system

which

will

→ Cleaner

combustion

and easier

use

Tulikivi-GreenW10

At the heart

of the system

is a Tulikivi fireplace

equipped

with

a heat

exchanger

The rest

of the heat

radiates

into the room.

The fire

is lit

normally.

The heat

is first

collected

in the inner

core

of the fireplace

Some

of the heat

is transferred

to the circulation

water

via a heat

exchanger

between

the inner

core

and the outer

shell.

1

4

2

3

Tulikivi-GreenW10

System

for heating

and hot

water

With

a Tulikivi-GreenW10

heating

system, much

of the heat

can

be

produced

ecologically

using

bioenergy. Perfect

for construction

of low-energy

housing.

Tulikivi Interior

& Design

• For customers

living

in towns

or

the suburbs

who

are

building

or

renovating

their

home

• Customers

interested

in aesthetic

design,

durability, comfortable

heat

and the

environment

• Interior

decoration

fireplaces

under

theTulikivi

and Kermansavi brands, with

natural

stone

and ceramics

as surface

materials

• Sales: all

market

areas

• International launch:

Progetto

Fuoco

fair, Verona

• September

2010 entire

range

launched: 8-

10 fireplaces

Tulikivi Interior

& Design

Designer: Hannu Kähönen, Creadesign

Oy

Tulikivi Interior

& Design

Designer: Hannu Kähönen, Creadesign

Oy

Tulikivi Interior

& Design

• For customers

living

in towns

or

the suburbs

who

are

building

or

renovating their

home

• Customers

interested

in aesthetic

design, durability

and the environment

• Tulikivi interior

decoration stones

• Sales: Finland

Tulikivi Cooking

• For customers

living

in towns

or the countryside who

love

cooking

and/or

are

owners

of fireplaces

• Customers

interested

in cooking, practicality

and durability

• Tulikivi and Kermansavi bakeovens and stoves, Kermansavi utility

ceramics

• Main market

area

is Finland

Procedures

• Focus

is on finished

consumer

products

• Also

provide

consumers

with

tailor- made

solutions

• Lining

stones

through

B-to-B

deals: customers

are

important

European

heating-appliance

manufacturers

• Building

stones

through

B-to-B

deals: sales in Finland and Scandinavia

• Significant

share

of tabletops

through B-to-B

deals:

sold

in Finland

Key measures

• To systematically

focus

on customer

needs

and development

of the operating

environment

• To launch

new product

groups

through

own

product development

work

and acquisitions

• To extend

our

operations

to new market

areas

and new customer

groups

• To make

product

management easier

by

modulation

of products and by

updating

the IT system

• To primarily

provide

electronic

services

to dealers

and customers

• To network

with

the leading

companies

in the sector

• To improve

profitability

through

a continuous

development

and learning

approach

Financial

targets

for 2015

• Return

on investment

over

20%

• Organic

growth

for the coming

years

of over

10%

• Possible

acquisitions

to support

company

strategy

• Profitability

target: profit

before

taxes

will

be

10% of net

sales

Strategy

targets

• New strategy

broadens

customer

potential:

• More

possibilities

for growth

in main export

areas

• Retain

Finland’s market share

• Reduce

dependence

on an individual

market

area

or customer

group

• More

stable

growth

• Fluctuations

in net

sales reduced

• More

targeted

product

development

and marketing

• Increase

customer

focus

• Concentrate

on the needs

of a specific

customer group

Strategy

targets

• Utilise

strengths:

• Distribution

channels

• Brands

• Design expertise

• Stone and ceramics

expertise

• Combustion

technology

• Increase

speed

of development

operations

Tulikivi Oyj83900 JUUKAPuh. 0207 636 000www.tulikivi.com

THANK YOU!