Strong 2020 not a one-off. Tikkurila’s 2020 has been strong with 9M adjusted EBIT up 34% y/y to its highest level since 2014. The company has benefited from strong demand for DIY paint products. There was also some boost from temporary cost savings, but mainly in Q2, with Q3 costs already at a more normal level. We expect 2021 EBIT to remain almost flat and our estimate is 8% above Infront consensus. We believe that 1) good DIY demand will continue in 2021 due to continued stay-at-home trends and subdued spending in other categories; and 2) a large part of the EBIT margin improvement in 2020 has been driven by internal actions (such as 11% lower headcount versus two years ago) and is structural.
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