Kemira Group
Stock Exchange Release
October 29, 2008, at 9.00 am (CET+1)
* Revenue in January-September 2008: EUR 2,205.1 million
(January-September 2007: EUR 2,155.8 million)
* Operating profit excluding non-recurring items: EUR 120.9 million
(EUR 170.5 million)
* Balance sheet strengthened.
* Earnings per share: EUR 0.55 (EUR 0.91).
Operating Result in July-September Clearly Up from the Previous
Quarter
Kemira's President and CEO Harri Kerminen:"Kemira was able to clearly improve its operating results from the
second to the third quarter. In July-September, operating profit
excluding non-recurring items was EUR 56.5 million, whereas in
April-June it was EUR 37.2 million. Similarly, operating profit as a
percentage of revenue, excluding non-recurring items, rose from 5% to
7%. Price increases and performance enhancement measures are starting
to take effect, and that is now visible in our key figures. Sales
growth was also a very positive factor. Revenue was up by 7% and,
when excluding the titanium dioxide business which was transferred to
a joint venture set up in early September and the water soluble
fertilizer business divested in 2007, sales increased by 12% compared
to July-September 2007. Nevertheless, the price of raw materials and
energy was very high, which eroded our profitability from the same
period in 2007.
In June we announced our new strategy that focuses on water and fiber
related businesses, and in line with that strategy we will now
concentrate on reinforcing our balance sheet, generating positive
cash flow and improving profitability. In the second stage, we will
focus on strong growth by drawing on Kemira's existing competences
and resources. We are seeking growth particularly in the new
businesses of oil and mining, and industrial water treatment, and
geographically in Asia, South America and Russia."
Key Figures and Ratios
EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
Revenue 780.0 729.5 2,205.1 2,155.8 2,810.2
EBITDA 101.9 113.0 241.2 285.5 316.9
EBITDA, % 13.1 15.5 10.9 13.2 11.3
Operating profit, 56.5 65.8 120.9 170.5 174.6
excluding non-recurring
items
Operating profit 69.8 79.5 142.1 186.0 143.1
Operating profit, 7.2 9.0 5.5 7.9 6.2
excluding non-recurring
items, %
Operating profit, % 8.9 10.9 6.4 8.6 5.1
Financial income and -20.7 -11.8 -45.8 -36.6 -51.9
expenses
Profit before tax 48.8 68.3 96.3 151.3 93.3
Profit before tax, % 6.3 9.4 4.4 7.0 3.3
Net profit 35.4 52.9 70.3 113.5 67.5
EPS, EUR 0.28 0.43 0.55 0.91 0.53
Capital employed* 2,043.2 2,018.9 2,043.2 2,018.9 2,035.8
ROCE, %* 4.9 10.3 4.9 10.3 7.1
Free cash flow after
investments 131.4 45.2 65.7 -123.4 -149.1
Personnel at period-end 9,392 10,048 9,392 10,048 10,007
* 12-month rolling average
Financial Performance for July-September
Kemira Group's revenue for July-September 2008 rose by 7% and totaled
EUR 780.0 million (July-September 2007: EUR 729.5 million).
Acquisitions contributed around EUR 6 million to revenue growth while
divestments decreased revenue by about EUR 33 million. The currency
exchange effect had EUR 19 million negative impact on revenue.
Revenue, EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
Kemira Pulp&Paper 281.9 259.7 799.4 789.4 1,043.0
Kemira Water 202.3 175.0 569.4 506.1 686.4
Kemira Specialty 95.8 109.8 311.6 323.9 425.9
Kemira Coatings 193.7 182.3 544.6 506.8 625.2
Other, including 6.3 2.7 -19.9 29.6 29.7
eliminations
Total 780.0 729.5 2,205.1 2,155.8 2,810.2
Raw material and energy prices as well as transportation costs were
high, and Kemira was able to transfer part of the increase in
variable costs to sales prices. Kemira Group's operating profit for
the third quarter, excluding non-recurring items, was EUR 56.5
million (EUR 65.8 million). Operating profit as a percentage of
revenue, excluding non-recurring items, fell from 9% to 7%. Variable
costs, excluding the effect of acquisitions, divestments and change
in volumes, grew by EUR 61 million in July-September 2008 compared to
same period in 2007. The impact of high variable costs was strongest
on the water treatment chemicals and paper chemicals business. Sales
price increases and higher volumes increased operating profit by EUR
46 million and EUR 10 million respectively. The currency exchange
effect decreased operating profit by EUR 3 million.
Operating profit
(excluding 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
non-recurring items),
EUR million
Kemira Pulp&Paper 15.3 22.6 41.0 67.5 79.8
Kemira Water 9.0 14.7 21.3 39.8 46.7
Kemira Specialty 7.1 8.7 12.5 26.1 24.1
Kemira Coatings 30.4 27.7 71.8 67.8 64.3
Other, including -5.3 -7.9 -25.7 -30.7 -40.3
eliminations
Total 56.5 65.8 120.9 170.5 174.6
+-------------------------------------------------------------------+
| Operating | Kemira | Kemira | Kemira | Kemira | Kemira |
| profit, EUR | Group | Pulp&Paper | Water | Specialty | Coatings |
| million | | | | | |
| Bridge | | | | | |
| 7-9/2007 to | | | | | |
| 7-9/2008 | | | | | |
|-------------+--------+------------+--------+-----------+----------|
| Operating | 79.5 | 23.8 | 14.7 | 10.0 | 38.9 |
| profit, | | | | | |
| 7-9/2007 | | | | | |
|-------------+--------+------------+--------+-----------+----------|
| Price | 46 | 9 | 17 | 6 | 14 |
|-------------+--------+------------+--------+-----------+----------|
| Volume | 10 | 8 | 3 | -1 | 0 |
|-------------+--------+------------+--------+-----------+----------|
| Currency | -3 | -1 | 0 | -1 | -1 |
| exchange | | | | | |
|-------------+--------+------------+--------+-----------+----------|
| Variable | -61 | -21 | -24 | -7 | -9 |
| costs | | | | | |
|-------------+--------+------------+--------+-----------+----------|
| Other | -2 | -4 | -2 | 14 | -13 |
|-------------+--------+------------+--------+-----------+----------|
| Operating | 69.8 | 14.5 | 8.9 | 21.2 | 30.4 |
| profit, | | | | | |
| 7-9/2008 | | | | | |
+-------------------------------------------------------------------+
Operating profit for July-September came to EUR 69.8 million (EUR
79.5 million) and includes non-recurring items with a positive net
impact of EUR 13.3 million (EUR 13.7 million).
Profit before tax amounted to EUR 48.8 million (EUR 68.3 million) and
net profit totaled EUR 35.4 million (EUR 52.9 million). Earnings per
share were EUR 0.28 (EUR 0.43).
Financial Performance for January-September
Kemira Group's revenue for January-September 2008 totaled EUR 2,205.1
million (January-September 2007: EUR 2,155.8 million). Acquisitions
contributed around EUR 29 million to revenue growth while divestments
decreased revenue by about EUR 73 million. The currency exchange
effect had EUR 67 million negative impact on revenue. Excluding the
titanium dioxide business transferred to a joint venture in early
September 2008 and the water soluble fertilizer business divested in
2007, sales increased by 5% compared to January-September 2007.
Operating profit, excluding non-recurring items, for
January-September 2008 was EUR 120.9 million (EUR 170.5 million) The
decrease in operating profit was due to the significant increases in
raw material and energy related costs. Variable costs, excluding the
effect of acquisitions, divestments and change in volumes, grew by
EUR 131 million in January-September 2008 compared to same period in
2007. Sales price increases and higher volumes increased operating
profit by EUR 95 million and EUR 21 million respectively. The
currency exchange effect had EUR 9 million negative impact on
operating profit.
Operating profit for January-September came to EUR 142.1 million (EUR
186.0 million) and includes non-recurring items with a positive net
impact of EUR 21.2 million (EUR 15.5 million).
Profit before tax for the January-September period came to EUR 96.3
million (EUR 151.3 million) and net profit totaled EUR 70.3 million
(EUR 113.5 million). Earnings per share were EUR 0.55 (EUR 0.91).
Financial Position and Cash Flows
In January-September, the Group reported cash flows of EUR 77.1
million (EUR 113.9 million) from operating activities. Net cash flow
from investing activities was EUR -11.4 million (EUR -237.3 million)
of which acquisitions accounted for an outflow of EUR -140.4 million
(EUR -47.2 million). Free cash flow after investments was EUR 65.7
million (EUR -123.4 million). Cash flow effect from expansion and
improvement investments was EUR -87.2 million (EUR -132.9 million).
At the end of September, the Group's net debt stood at EUR 990.5
million (June 30, 2008: EUR 1,113.5 million). Kemira Oyj paid EUR
60.6 million in dividends in April. Setting up a joint venture with
Rockwood Holding Inc. in the titanium dioxide business at the end of
August improved the Group's cash flow by about EUR 96 million and
reduced the Group's net debt by EUR 120 million, including the amount
reborrowed from the pension fund that was transferred into the joint
venture.
At the period-end, interest-bearing liabilities stood at EUR 1,052.4
million. Fixed-rate loans accounted for 34.5% of total
interest-bearing net loans. The average interest rate on the Group's
interest-bearing liabilities was 5.5%. The duration of the Group's
interest-bearing loan portfolio on September 30 was 14 months
(December 31, 2007: 13 months).
The unused amount of the EUR 750 million revolving credit facility
that falls due in 2012 was EUR 492.3 million on September 30, and the
amount obtained from the commercial paper markets was EUR 225
million. At the beginning of October, EUR 140 million of the
revolving credit facility was drawn to pay off the commercial papers
maturing in the last months of the year. In its current structure,
the Group will not have any significant refinancing needs in the
foreseeable future as the current loan arrangements cover its
financing needs.
On September 30, the equity ratio stood at 40 % (June 30, 2008: 37%)
while gearing was 87% (June 30, 2008: 99%).
The Group's net financial expenses for January-September totaled EUR
45.8 million (EUR 36.6 million). This increase was mainly caused by
increased interest expenses and financial exchange rate losses
amounting to EUR 2.6 million in January-September (EUR +0.7 million).
The Group's currency risk with respect to the US dollar was
significantly reduced after the establishment of the joint venture in
the titanium dioxide business, which started operations on September
1, 2008. In the future, the annual euro against dollar currency risk
will feature a counter value of approximately EUR 10-20 million.
Capital Expenditure
Gross capital expenditure, excluding acquisitions, amounted to EUR
116.3 million (EUR 178.7 million) in the reporting period. Expansion
investments represented around 43% of capital expenditure excluding
acquisitions, and improvement investments around 32% and maintenance
investments around 25%.
Group depreciation came to EUR 99.1 million (EUR 99.5 million).
Cash flow from the sale of assets was EUR 245.3 million (EUR -11.4
million). Cash flow from acquisitions was EUR 140.4 million (EUR 47.2
million). The Group's net capital expenditure totaled EUR 11.4
million (EUR 237.3 million).
Research and Development
In January-September, reported research and development expenditure
totaled EUR 44.4 million (EUR 46.4 million), accounting for 2% (2%)
of revenue.
Kemira will open a new research and development center in Atlanta,
Georgia, USA. The center will be located at a technology enterprise
park in association with the Georgia Institute of Technology (Georgia
Tech) in Atlanta, and it will house all of Kemira's North American
R&D activities from the five currently operating R&D centers which
will be shut down. The new center will start up by summer 2009 and
employ 85 R&D professionals. The R&D center in Atlanta is part of
Kemira's R&D streamlining program, which is to be completed by summer
2009. The objective of the program is to consolidate the 17 existing
R&D sites into 5 global facilities. These centers will serve the
clientele in North America, Northern Europe, Continental Europe and
Asia. A fifth center will be established in Latin America next
year. The resulting R&D infrastructure will be strategically focused
on enhancing development and commercialization of innovative
technologies and products for Kemira's customers locally and
globally, meeting the needs of the pulp and paper, water treatment
and oil and mining industries.
In June, Kemira Oyj and the European Investment Bank (EIB) signed a
EUR 100 million 12-year research and development loan agreement. EUR
50 million of the loan was drawn down in June and the rest can be
drawn within 18 months after the signature. The European Investment
Bank has granted the loan to support the research, development and
innovation activities of the Kemira Group during the years 2008-2011.
Human Resources
The number of Group employees totaled 9,392 on September 30 (10,048).
Business Areas
Kemira Pulp&Paper
Kemira Pulp&Paper is the world's leading expert in pulp and paper
chemicals, its energy and cost-efficient solutions spanning the pulp
and paper industry's value chain from pulp to paper coating.
EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
Revenue 281.9 259.7 799.4 789.4 1,043.0
EBITDA 25.6 35.9 74.1 106.3 133.7
EBITDA, % 9.1 13.8 9.3 13.5 12.8
Operating profit, 15.3 22.6 41.0 67.5 79.8
excluding non-recurring
items
Operating profit 14.5 23.8 40.2 70.0 68.2
Operating profit, 5.4 8.7 5.1 8.6 7.6
excluding non-recurring
items, %
Operating profit, % 5.1 9.2 5.0 8.9 6.5
Capital employed* 821.4 837.9 821.4 837.9 833.6
ROCE, % 4.7 10.7 4.7 10.7 8.2
Capital expenditure,
excluding acquisitions 6.5 20.5 31.4 63.8 78.4
Free cash flow after
investments -0.3 11.3 31.0 -7.6 -24.3
Personnel at period-end 2.326 2,400 2.326 2,400 2,351
* 12-month rolling average
Kemira Pulp&Paper's revenue in July-September rose by 9% to EUR 281.9
million (EUR 259.7 million). Organic growth in local currencies was
13%. The currency exchange effect had EUR 8 million negative impact
on revenue. While pulp chemicals showed sustained high demand, the
competitive environment for paper chemicals was challenging.
Customers have closed paper mills in mature markets in Europe and
North America but at the same time are increasing production in
growing markets, such as China.
Operating profit, excluding non-recurring items, for July-September
was EUR 15.3 million (EUR 22.6 million). The decrease in operating
profit was due to the high prices of raw materials, freight costs and
energy, and the lower sales volumes of paper chemicals. Variable cost
increase in July-September 2008 was EUR 21 million compared to same
period in 2007. The raw material price hikes impacted particularly
strongly on the profitability of the paper chemicals business. Sales
price increases had EUR 9 million effect on operating profit. Higher
volumes in pulp chemicals increased operating profit by EUR 7
million.
In January-September, Kemira Pulp&Paper's revenue was EUR 799.4
million (EUR 789.4 million). Organic growth in local currencies was
6%. The currency exchange effect had EUR 31 million negative impact
on revenue.
Operating profit excluding non-recurring items in January-September
2008 was EUR 41.0 million (EUR 67.5 million). The decrease in
profitability was mainly due to higher raw material and
energy-related costs. Achieved sales price increases did not fully
compensate the effect of high raw material prices and energy-related
costs.
In April, Kemira signed a two-year sulfuric acid delivery agreement
with Talvivaara Projekti Oy. Metal recovery in the Talvivaara mine in
Sotkamo, Finland, will begin in the final quarter of 2008. The mine
produces nickel, zinc, copper and cobalt. Sulfuric acid is used in
the production process to regulate the acidity of the bacterial
solution that acts as a catalyst in the process for dissolving
metals.
On-site chlorine dioxide production, project engineered by Kemira,
was launched at Celulosa Argentina's pulp mill in Capitan Bermudez in
early July, coinciding with the mill's switchover to chlorine-based
bleaching. Kemira will supply the chemicals needed for the chlorine
dioxide production, and also hydrogen peroxide required for the
mill's bleaching process. Kemira will actively participate in the
development efforts related to the bleaching process.
In July, Kemira agreed to deliver pulp and bleaching chemicals to
Mondi's production facilities located in Syktyvkar, Russia, for
2008-2010.
In June, the European Commission imposed a fine of EUR 10.15 million
on Finnish Chemicals Oy for antitrust activity in the company's
sodium chlorate business during 1994-2000. Kemira Oyj acquired
Finnish Chemicals in 2005. The fine imposed by the Commission will
not affect Kemira's cash flow.
Kemira Water
Kemira Water is the world's leading expert in municipal and
industrial waste water as well as process and drinking water
treatment. Kemira Water offers services, products and equipment for
municipal and industrial water treatment.
EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
Revenue 202.3 175.0 569.4 506.1 686.4
EBITDA 17.1 21.8 46.8 60.6 78.8
EBITDA, % 8.5 12.5 8.2 12.0 11.5
Operating profit, 9.0 14.7 21.3 39.8 46.7
excluding non-recurring
items
Operating profit 8.9 14.7 23.6 39.8 43.6
Operating profit, 4.4 8.4 3.7 7.9 6.8
excluding non-recurring
items, %
Operating profit, % 4.4 8.4 4.1 7.9 6.4
Capital employed* 425.3 388.1 425.3 388.1 409.4
ROCE, % 6.5 13.2 6.5 13.2 10.9
Capital expenditure,
excluding acquisitions 7.1 10.7 24.4 29.4 51.0
Free cash flow after
investments -6.8 -9.0 -13.9 -36.1 -65.8
Personnel at period-end 2,258 2,179 2,258 2,179 2,319
* 12-month rolling average
Kemira Water's revenue in July-September 2008 rose by 16% to EUR
202.3 million (EUR 175.0 million). Sales were high in all areas and
organic growth in local currencies was 15%. Business growth could be
largely attributed to price increases enforced in response to the
significant increase in raw material prices. Delivery volumes were
also higher than in the corresponding period a year earlier. The
currency exchange effect had EUR 4 million negative impact on
revenue. Acquisitions contributed around EUR 6 million to revenue
growth.
Raw material prices and transportation costs were high and had an
impact on profitability, despite realized sales price increases.
Operating profit excluding non-recurring items was EUR 9.0 million
(EUR 14.7 million). Variable cost increase in July-September 2008
was EUR 24 million compared to same period in 2007. Sales price
increases and higher volumes increased operating profit by EUR 17
million and EUR 3 million respectively.
Kemira Water's revenue in January-September 2008 rose by 13% to EUR
569.4 million (EUR 506.1 million). Organic growth in local currencies
was 13%. The currency exchange effect decreased revenue by EUR 22
million. Acquisitions contributed approximately EUR 22 million to
revenue growth.
Due to the unfavorable developments in raw material prices and
freight costs, operating profit excluding non-recurring items
decreased to EUR 21.3 million (EUR 39.8 million) in January-September
2008.
In August, Kemira announced it was investigating ownership
alternatives for its subsidiary Galvatek. Galvatek specializes in
planning and supplying surface treatment plants, industrial water
treatment plants and maintenance services. Galvatek, with a staff of
33 and headquartered in Lahti in Finland, posted revenue of around
EUR 16 million in 2007 and runs two subsidiaries, one in Sweden and
one in Poland.
In September, Kemira announced its intentions to acquire a water
treatment chemicals company operating in the Shandong Province of
China. The acquisition will be carried out through a new fully owned
subsidiary of Kemira taking over the assets of an existing privately
owned company called Zibo Huaqing Water Purifying Products Company
Ltd. The existing client base of the acquired company is primarily
engaged in the industrial water treatment, and Kemira's plan is to
expand the business to the municipal sector. The main product is poly
aluminum chloride, PAC, in both liquid and solid format. In addition
to the main product the company also produces iron based coagulants.
It employs about 50 people.
Kemira Specialty
Kemira Specialty is the leading expert in specialty chemicals in
selected customer segments, serving customers in a wide array of
industries, such as the food and feed industries, through its
customer-driven solutions.
EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
Revenue 95.8 109.8 311.6 323.9 425.9
EBITDA 27.4 17.9 48.7 50.9 45.1
EBITDA, % 28.6 16.3 15.6 15.7 10.6
Operating profit, 7.1 8.7 12.5 26.1 24.1
excluding non-recurring
items
Operating profit 21.2 10.0 26.6 27.4 13.5
Operating profit, 7.4 7.9 4.0 8.1 5.7
excluding non-recurring
items, %
Operating profit, % 22.1 9.1 8.5 8.5 3.2
Capital employed* 410.0 439.6 410.0 439.6 435.3
ROCE, % 3.0 8.8 3.0 8.8 3.1
Capital expenditure,
excluding acquisitions 5.5 11.0 24.2 35.6 55.0
Free cash flow after
investments 89.2 12.7 78.4 -18.6 -26.3
Personnel at period-end 327 1,039 327 1,039 1,028
* 12-month rolling average
Kemira Specialty's July-September revenue decreased after the
titanium dioxide business was transferred to the joint venture that
launched operations in early September. Revenue totaled EUR 95.8
(EUR 109.8 million). The start-up of the joint venture had a negative
impact of EUR 19 million on revenue since titanium dioxide ceased to
form part of Kemira's revenue at the beginning of September. Revenue
from continuing business operations rose by 9%.
Operating profit, excluding non-recurring items, in the third quarter
was EUR 7.1 million (EUR 8.7 million). Starting up the joint venture
mentioned above and high raw material prices and energy costs
contributed to the decline in revenue from last year. The start-up of
the joint venture had EUR 1 million negative impact on operating
profit in July-September as the result of the JV has been reported
under the operating profit line since September 1. Variable cost
increase in July-September was EUR 7 million compared to same period
in 2007. Sales price increases had EUR 6 million effect on operating
profit. The demand for formic acid and its price level remained
healthy. Operating profit from continuing business operations
increased by 28%.
Revenue in January-September amounted to EUR 311.6 million (EUR 323.9
million). The currency exchange effect had EUR 10 million negative
impact on revenue. Revenue from continuing business operations rose
by 1%.
Operating profit, excluding non-recurring items, in January-September
was EUR 12.5 million (EUR 26.1 million). The currency exchange effect
had EUR 6 million negative impact on operating profit.
The joint venture between Kemira Oyj and Rockwood Holdings, Inc.
started operations in the beginning of September. The joint venture
combines Kemira's and Rockwood's titanium dioxide business and
Rockwood's functional additives business. The pro forma revenues of
the joint venture for 2007 are approximately EUR 560 million. The
joint venture is 61 per cent owned by Rockwood and 39 per cent owned
by Kemira. The new company, which operates under the name Sachtleben,
is the leading producer of specialty titanium dioxide pigments for
the synthetic fiber industry, specialty titanium dioxide pigments for
packaging inks and specialty titanium dioxide grades for the
cosmetics, pharmaceutical and food industries. Sachtleben is also the
world's largest producer of synthetic barium sulfate specialties and
holds a unique position in the field of zinc sulfide pigments. Among
the joint venture's competitive advantages are that both companies'
titanium dioxide production is based on a same production process,
and both have strong capabilities in the development of nanoparticles
for specialty applications. Formation of the joint venture is part of
the implementation of Kemira's new strategy.
The expansion of Kemira's formic acid plant in Oulu was completed and
the plant was brought on line in July. Kemira is the world's second
largest formic acid producer. This investment further strengthens
Kemira's market position and makes it better equipped to respond to
market needs.
Kemira Coatings
Kemira Coatings. i.e. Tikkurila, is the leading expert in painting
and coating solutions in Northern and Eastern Europe, providing
services and branded products to consumers, professionals and the
industry.
EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
Revenue 193.7 182.3 544.6 506.8 625.2
EBITDA 35.2 43.1 86.1 91.6 91.2
EBITDA, % 18.2 23.6 15.8 18.1 14.6
Operating profit, 30.4 27.7 71.8 67.8 64.3
excluding non-recurring
items
Operating profit 30.4 38.9 71.8 79.0 73.1
Operating profit, 15.7 15.2 13.2 13.4 10.3
excluding non-recurring
items, %
Operating profit, % 15.7 21.3 13.2 15.6 11.7
Capital employed* 324.2 306.5 324.2 306.5 311.0
ROCE, % 20.4 25.8 20.4 25.8 23.9
Capital expenditure,
excluding acquisitions 3.9 10.7 17.9 32.9 43.5
Free cash flow after
investments 57.9 57.5 40.2 28.8 20.7
Personnel at period-end 3,997 3,889 3,997 3,889 3,789
* 12-month rolling average
Kemira Coatings' revenue in the third quarter rose by 6% to EUR 193.7
million (EUR 182.3 million), this growth being mainly organic. Sales
development was favorable in most markets both in decorative paints
and industrial coatings. The slowdown in new construction and the
decrease in the sales of construction material in the Baltics
affected the growth of Kemira Coatings in that region. The currency
exchange effect had EUR 5 million negative impact on revenue. Organic
growth in local currencies was 9%.
Operating profit for July-September, excluding non-recurring items,
was EUR 30.4 million (EUR 27.7 million). Variable cost increase was
EUR 9 million compared to same period in 2007. Sales price increases
and product mix alterations had EUR 14 million effect on operating
profit.
In January-September 2008, revenue grew by 7% to EUR 544.6 (EUR 506.8
million) with the currency exchange effect decreasing revenue by EUR
4 million. Organic growth in local currencies was 8%.
Operating profit, excluding non-recurring items, in January-September
was EUR 71.8 million (EUR 67.8 million). Increases in the costs of
some raw materials and packaging materials had an effect on
profitability.
Following its strategy of growth, Kemira Coatings will strengthen its
position in the Southeast and East European paint market. In the
beginning of July, a trading company by the name of Tikkurila JUB
Romania established jointly with the Slovenian paint company JUB
launched operations. The company is responsible for the marketing,
sales and distribution of Kemira Coatings' and JUB's decorative
paints in Romania. In August, Kemira Coatings announced its
intentions to establish a sales company in Minsk to handle the
marketing, sales and distribution of Kemira Coatings' decorative
paints and industrial coatings in Belarus. Kemira Coatings has also
decided on a relocation and major expansion in production of
decorative paints in St Petersburg, Russia. The expansion will
significantly increase Kemira Coatings' production volumes of
waterborne paints and improve the cost efficiency of production in
Russia. Later this year, a logistics and service center will be
completed in Mytish near Moscow with the objective of considerably
improving Kemira Coatings' customer service in the rapidly growing
markets in this region. Both decorative paints and industrial paints
businesses will be located in the center. It will also offer
facilities for extensive customer training programs, which is an
integral part of Kemira Coatings' marketing.
Erkki Järvinen has been appointed President and CEO of Tikkurila Oy.
He is currently working as President and CEO of Rautakirja
Corporation, which belongs to Sanoma Oyj. Erkki Järvinen will take up
his position as President and CEO of Tikkurila during the first
quarter of 2009. Jarmo Mäenpää will work as managing director until
Erkki Järvinen begins work. Visa Pekkarinen, the current President of
Kemira Coatings, will retire at the end of October 2008.
Kemira Oyj Shares and Shareholders
During January-September, Kemira Oyj shares registered a high of EUR
14.77 and a low of EUR 7.12, the share price averaging EUR 9.14. On
September 30, the company's market capitalization, excluding treasury
shares, totaled EUR 1,005.9 million.
On September 30, 2008, the company's share capital totaled EUR 221.8
million and the number of registered shares was 125,045,000. Kemira
holds 3,854,465 treasury shares, accounting for 3.1% of outstanding
company shares and voting rights.
Strategy Update
In June Kemira announced its new strategy, which states that Kemira
will concentrate on water and fiber related businesses. In the first
phase, the company will focus on reinforcing the balance sheet,
generating positive cash flow and improving profitability. In the
second phase, Kemira will seek strong growth.
Kemira's new organization reflecting the strategy is as follows:
- Kemira's business is divided into three customer-oriented segments
with P/L responsibility. Water technology is the common denominator
for all the segments. The Paper segment will focus on serving
customer segments in the pulp and paper industry, while the Water
segment will concentrate on the customer segments in municipal and
industrial water treatment. The Oil and Mining segment will further
develop businesses in the expanding application areas of the oil, gas
and mining industries.
- Kemira is divided into four geographical areas: North America,
Latin America, Asia Pacific (APAC) and Europe (EMEA). These areas are
responsible for developing a common cost-effective infrastructure for
the different business functions. In addition, the geographical
organizations of Latin America and Asia Pacific are responsible for
strategy implementation and market development.
- The functions will be organized globally, and they will provide
services for all Kemira businesses.
The new organization is effective as of October 1, 2008. The
objective is to secure profitability improvement and growth by
focusing on business development in the most profitable customer
segments and applications, based on Kemira's existing competences and
resources. Kemira will begin financial reporting according to the new
structure from the beginning of 2009.
When Kemira announced its strategy, it also unveiled plans to
separate its Coatings business, i.e. Tikkurila, from Kemira and list
it on the NASDAQ OMX Helsinki Ltd. The listing is planned to take
place in the first half of 2009, depending on the market conditions.
With the listing, Kemira pursues an increase in overall shareholder
value and focuses Kemira's business around water.
Kemira also intends to reorganize the Kemira Specialty business area.
A joint venture with Rockwood Holdings Inc. started operations at the
beginning of September, combining Kemira's and Rockwood's titanium
dioxide business and Rockwood's functional additives business. Kemira
will continue to develop the ChemSolutions business as a separate
entity, ensuring its profitability and maximum cash flow.
Together with the announcement of the new strategy Kemira announced a
cost savings program with annual savings target of over EUR 50
million, excluding Kemira Coatings. Measures are being deployed as
planned, and the savings are expected to realize in the course of
2009-2010. Measures to achieve Group-wide savings include changing
the group structure, organization, and operating models. The planned
savings program may also lead to a reduction of approximately 1,000
persons worldwide from Kemira's payroll, including potential sale of
businesses. Streamlining of the global functions may lead, for
example, to the consolidation of production sites, R&D facilities and
the warehouse network. Kemira's co-determination negotiations held in
five business locations in Finland were concluded on October 8, 2008.
The organizational change and savings program will result in a net
reduction of 298 persons in Finland.
Management Boards of Kemira as of October 1, 2008
The Strategic Management Board of Kemira Oyj is responsible for the
strategy implementation. As of October 1, 2008, the Strategic
Management Board comprises of: Harri Kerminen (President and CEO),
Esa Tirkkonen (deputy CEO), Petri Helsky (Paper), Pekka Ojanpää
(Water), Randy Owens (Oil and Mining), Håkan Kylander (EMEA), Hannu
Melarti (North America), Hilton Casas (Latin America), Ronald Kwan
(Asia Pacific), Jyrki Mäki-Kala (CFO, IT), Petri Boman (Supply Chain
Management), Johan Grön (R&D, Technology), Jukka Hakkila (Legal, Risk
Management, Internal Audit), Päivi Jokinen (Marketing), Timo Leppä
(Communications) and Eeva Salonen (Human Resources).
The Operative Management Board of Kemira Oyj is responsible for
operative steering of the businesses and it consists of Harri
Kerminen, Esa Tirkkonen, Jyrki Mäki-Kala, Petri Helsky, Pekka Ojanpää
and Randy Owens.
Outlook
Kemira Group's growth in continuing operations is expected to be
moderate and primarily fuelled by organic growth in the last months
of the year. Continued improvements in operational efficiency are the
key to improving profitability. During the year, the high raw
material prices and energy-related costs and the weak US dollar have
put a strain on Kemira's financial performance. In 2008, Kemira's
operating profit and earnings per share, excluding non-recurring
items, are expected to remain below last year's level.
The annual cost savings target of the published worldwide cost-saving
program is over EUR 50 million. Due to cost-savings and structural
changes, non-recurring expenses and other non-recurring items will be
recognized in the October-December result. The operating profit of
the final quarter, excluding non-recurring items, is expected to grow
from the previous year.
In Kemira Pulp&Paper, operational rearrangements carried out in the
customer industries in North America and Europe, as well as the high
raw material prices, may have an adverse impact on Kemira's pulp and
paper chemicals business. Kemira Water is expected to show good
organic growth, but business outlook is overshadowed by high raw
material prices. In the Kemira Specialty business area, demand for
organic acids and sodium percarbonate is expected to be good. Kemira
Coatings expects moderate demand in most market areas during the
remainder of the year. The first signals of a slowdown in new
construction and the housing trade are being seen in the main market
areas, which may have an impact on demand.
Economic growth is lagging and the overall economic situation is
challenging for future estimates.
Helsinki, October 29, 2008
Board of Directors
All forward-looking statements in this review are based on the
management's current expectations and beliefs about future events,
and actual results may differ materially from the expectations and
beliefs such statements contain.
For further information, please contact:
Kemira Oyj
Timo Leppä, Executive Vice President, Group Communications
Tel. +358 10 86 21700
Kemira Oyj
Päivi Antola, Investor Relations Manager
Tel. +358 10 86 21140
Kemira will hold a press conference on its January-September 2008
results for the media and analysts at its head office (Porkkalankatu
3) today, starting at 10:30 a.m.
Presentation material will be available on Kemira's website at
www.kemira.com
Kemira Oyj will publish a financial statements bulletin for 2008 on
Wednesday, February 25, 2009 at 9:00 a.m.
KEMIRA GROUP
The figures are unaudited.
All figures in this financial report have been rounded and
consequently the
sum of individual figures can deviate from the presented sum figure.
This Interim Consolidated Financial Statements has been prepared in
compliance with IAS 34.
Changes to the accounting policies as of January 1, 2008:
- IFRIC 11 interpretation of IFRS 2 Group and Treasury Share
Transactions
- IFRIC 12 (Service Concession Arrangements) interpretation related
to service arrangements between public and private sectors
- IFRIC 14 (IAS 19 - The Limit on a defined Benefit Asset, Minimum
Funding Requirement and their Interaction) interpretation related to
minimun funding requirements of defined benefit arrangements
The Group assesses that the adoption of the revised standards will
not have any material effect on its future financial statements.
INCOME STATEMENT 7-9/ 7-9/ 1-9/ 1-9/
EUR million 2008 2007 2008 2007 2007
Revenue 780,0 729,5 2 205,1 2 155,8 2 810,2
Other operating
income 18,6 6,5 39,9 19,2 45,9
Expenses -696,7 -623,0 -2 003,8 -1 889,5 -2 539,2
Depreciation and
impairments -32,1 -33,5 -99,1 -99,5 -173,8
Operating profit 69,8 79,5 142,1 186,0 143,1
Financial income and
expenses, net -20,7 -11,8 -45,8 -36,6 -51,9
Share of profit or loss of
associates -0,3 0,6 0,0 1,9 2,1
Profit before tax 48,8 68,3 96,3 151,3 93,3
Income tax -13,4 -15,4 -26,0 -37,8 -25,8
Net profit for the period 35,4 52,9 70,3 113,5 67,5
Attributable to:
Equity holders of the parent 34,4 51,8 66,8 110,5 63,7
Minority interest 1,0 1,1 3,5 3,0 3,8
Net profit for the period 35,4 52,9 70,3 113,5 67,5
BALANCE SHEET
EUR million
30.9. 31.12.
ASSETS 2008 2007
Non-current assets
Goodwill 629,2 626,6
Other intangible assets 114,3 112,3
Property, plant and equipment 829,5 984,3
Holdings in associates 141,9 5,5
Available-for-sale investments 182,3 102,2
Deferred tax assets 13,0 5,2
Defined benefit pension receivables 34,9 34,6
Other investments 14,3 6,4
Total non-current assets 1 959,4 1 877,1
Current assets
Inventories 308,3 311,2
Receivables
Interest-bearing receivables 6,6 3,2
Interest-free receivables 540,8 548,1
Total receivables 547,4 551,3
Money market investments -
cash equivalents 27,4 21,4
Cash and cash equivalents 34,5 31,2
Total current assets 917,6 915,1
Non-current assets held for sale 2,7 35,7
Total assets 2 879,7 2 827,9
EQUITY AND LIABILITIES 30.9. 31.12.
2008 2007
Equity attributable to equity
holders of the parent 1 126,9 1 072,0
Minority interest 15,1 15,3
Total equity 1 142,0 1 087,3
Non-current liabilities
Interest-bearing non-current liabilities 756,9 431,1
Deferred tax liabilities 111,1 105,5
Pension liabilities 71,7 74,2
Provisions 42,0 18,8
Total non-current liabilities 981,7 629,6
Current liabilities
Interest-bearing current liabilities 295,6 625,0
Interest-free current liabilities 459,0 473,6
Provisions 1,4 6,2
Total current liabilities 756,0 1 104,8
Liabilities directly associated with non-current
assets classified as held for sale - 6,2
Total liabilities 1 737,7 1 740,6
Total equity and liabilities 2 879,7 2 827,9
Available-for-sale financial assets include also shares entitling to
electricity from a nuclear power plant currently under construction
in Finland. In previous financial statements these shares have been
accounted at acquisition value. In May 2008, the market price of
these nuclear power plant shares was determined by an external third
party share trading transaction. Due to this, the Group has booked a
revaluation of the shares, EUR 80 million, with an equity effect of
EUR 59.2 million.
Non-current assets held for sale include Russian factory site.
CONSOLIDATED CASH FLOW STATEMENT
EUR million 1-9/ 1-9/
2008 2007 2007
Cash flows from operating activities
Adjusted operating profit 207,4 262,3 281,1
Interests -47,6 -27,3 -36,3
Dividend income 0,1 2,1 2,0
Income taxes paid -18,2 -24,3 -35,6
Total funds from operations 141,7 212,8 211,2
Change in net working capital -64,6 -98,9 -39,1
Total cash flows from operating activities 77,1 113,9 172,1
Cash flows from investing activities
Capital expenditure for acquisitions -140,4 -47,2 -66,6
Other capital expenditure -116,3 -178,7 -254,4
Proceeds from sale of assets 245,3 -11,4 -0,2
Net cash used in investing activities -11,4 -237,3 -321,2
Cash flow after investing activities 65,7 -123,4 -149,1
Cash flows from financing activities
Change in non-current loans
(increase +, decrease -) 203,1 60,0 53,7
Change in non-current loan receivables
(decrease +, increase -) -8,6 -0,7 2,5
Short-term financing, net
(increase +, decrease -) -174,4 105,8 117,8
Dividends paid -64,2 -60,4 -60,8
Other -12,3 2,7 12,3
Net cash used in financing activities -56,4 107,4 125,5
Net change in cash and cash equivalents 9,3 -16,0 -23,6
Cash and cash equivalents at end of period 61,9 60,2 52,6
Cash and cash equivalents at
beginning of period 52,6 76,2 76,2
Net change in cash and cash equivalents 9,3 -16,0 -23,6
CONSOLIDATED CASH FLOW STATEMENT 7-9/ 7-9/
EUR million 2008 2007
Cash flows from operating activities
Adjusted operating profit 83,1 96,2
Interests -14,8 -12,2
Dividend income 0,1 2,0
Income taxes paid 0,4 -4,8
Total funds from operations 68,8 81,2
Change in net working capital -6,3 9,6
Total cash flows from operating activities 62,5 90,8
Cash flows from investing activities
Capital expenditure for acquisitions -136,5 -2,6
Other capital expenditure -28,8 -57,6
Proceeds from sale of assets 234,2 14,6
Net cash used in investing activities 68,9 -45,6
Cash flow after investing activities 131,4 45,2
Cash flows from financing activities
Change in non-current loans
(increase +, decrease -) 68,0 66,7
Change in non-current loan receivables
(decrease +, increase -) -6,5 -1,4
Short-term financing, net
(increase +, decrease -) -164,9 -110,7
Dividends paid -0,3 -0,5
Other -20,0 -1,3
Net cash used in financing activities -123,7 -47,2
Net change in cash and cash equivalents 7,7 -2,0
Cash and cash equivalents at end of period 61,9 60,2
Cash and cash equivalents at
beginning of period 54,2 62,2
Net change in cash and cash equivalents 7,7 -2,0
STATEMENT OF CHANGES IN EQUITY
EUR million
Capital
paid-in Fair value
in
Share excess of and other Exchange
capital par value reserves differences
Shareholders' equity at
January 1, 2007 221,6 257,9 62,7 -30,8
Net profit for the period - - - -
Dividends paid - - - -
Treasury shares issued
to key employees - - - -
Share-based compensation - - - -
Options subscribed
for shares 0,2 - - -
Exchange differences - - 0,1 -4,8
Hedge of net investments
in foreign entities - - - 3,2
Cash flow hedging: amount
entered in shareholders'
equity - - -1,5 -
Acquired minority interest - - - -
Transfer between restricted
and
non-restricted equity - - 0,1 -
Other changes - - - -0,1
Shareholders' equity at
September 30, 2007 221,8 257,9 61,4 -32,5
Shareholders' equity at
January 1, 2008 221,8 257,9 68,2 -41,1
Net profit for the period - - - -
Dividends paid - - - -
Available-for-sale
assets - change in
fair value - - 59,2 -
Share-based compensation - - - -
Exchange differences - - -0,2 -13,0
Hedge of net investments
in foreign entities - - - 2,3
Cash flow hedging: amount
entered in shareholders'
equity - - -0,7 -
Transfer between restricted
and
non-restricted equity - - 0,9 -
Other changes - - - -
Shareholders' equity at
September 30, 2008 221,8 257,9 127,4 -51,8
Treasury Retained Minority
shares earnings interests Total
Shareholders' equity at
January 1, 2007 -26,8 585,3 12,6 1 082,5
Net profit for the period - 110,5 3,0 113,5
Dividends paid - -58,2 -2,2 -60,4
Treasury shares issued
to key employees 0,9 -0,9 - 0,0
Share-based compensation - 1,3 - 1,3
Options subscribed
for shares - - - 0,2
Exchange differences - - 0,2 -4,5
Hedge of net investments
in foreign entities - - - 3,2
Cash flow hedging: amount
entered in shareholders'
equity - - - -1,5
Acquired minority interest - - 0,4 0,4
Transfer between restricted
and
non-restricted equity - -0,1 - 0,0
Other changes - - - -0,1
Shareholders' equity at
September 30, 2007 -25,9 637,9 14,0 1 134,6
Shareholders' equity at
January 1, 2008 -25,9 591,1 15,3 1 087,3
Net profit for the period - 66,8 3,5 70,3
Dividends paid - -60,6 -3,6 -64,2
Available-for-sale
assets - change in
fair value - - - 59,2
Share-based compensation - 0,6 - 0,6
Exchange differences - - 0,3 -12,9
Hedge of net investments
in foreign entities - - - 2,3
Cash flow hedging: amount
entered in shareholders'
equity - - - -0,7
Transfer between restricted
and
non-restricted equity - -0,9 - 0,0
Other changes - 0,5 -0,4 0,1
Shareholders' equity at
September 30, 2008 -25,9 597,5 15,1 1 142,0
Kemira had in its possession 3,854,465 of its treasury shares at
September 30, 2008. The number of treasury shares was the same as at
the end of the year 2007. Their average acquisition share price was
EUR 6.73 and the treasury shares represented 3.1% of the share
capital and of the aggregate number of votes conferred by all the
shares. The equivalent book value of the treasury shares is EUR 6.8
million.
KEY FIGURES 1-9/ 1-9/
2008 2007 2007
Earnings per share, basic and
diluted, EUR 0,55 0,91 0,53
Earnings per share excluding write-downs,
basic and diluted, EUR 0,55 0,91 0,87
Cash flow from operations
per share, EUR 0,64 0,94 1,42
Capital expenditure, EUR million 256,7 225,9 321,0
Capital expenditure / revenue, % 11,6 10,5 11,4
Average number of shares (1000),
basic * 121,191 121,155 121,164
Average number of shares (1000),
diluted * 121,191 121,194 121,194
Number of shares at the end
of the period (1000), basic * 121,191 121,193 121,191
Number of shares at the end of the
period (1000), diluted * 121,191 121,193 121,191
Equity per share, attributable to
equity holders of the parent, EUR 9,30 9,25 8,85
Equity ratio, % 39,7 38,9 38,6
Gearing, % 86,7 88,0 92,3
Interest-bearing net liabilities, EUR
million 990,5 998,9 1 003,4
Personnel (average) 10 145 10 008 10 008
7-9/ 7-9/
KEY FIGURES 2008 2007
Earnings per share, basic and
diluted, EUR 0,28 0,43
Earnings per share excluding write-downs,
basic and diluted, EUR 0,28 0,43
Cash flow from operations
per share, EUR 0,52 0,75
Capital expenditure, EUR million 165,3 60,2
Capital expenditure / revenue, % 21,2 8,3
Average number of shares (1000),
basic * 121,191 121,193
Average number of shares (1000),
diluted * 121,191 121,193
Number of shares at the end
of the period (1000), basic * 121,191 121,193
Number of shares at the end of the
period (1000), diluted * 121,191 121,193
* Number of shares outstanding, excluding the
number of shares bought back.
REVENUE BY BUSINESS AREA 7-9/ 7-9/ 1-9/ 1-9/
EUR million 2008 2007 2008 2007 2007
Kemira Pulp&Paper 281,9 259,7 799,4 789,4 1 043,0
Kemira Water 202,3 175,0 569,4 506,1 686,4
Kemira Specialty 95,8 109,8 311,6 323,9 425,9
Kemira Coatings 193,7 182,3 544,6 506,8 625,2
Other and Intra-Group
sales 6,3 2,7 -19,9 29,6 29,7
Total 780,0 729,5 2 205,1 2 155,8 2 810,2
OPERATING PROFIT BY 7-9/ 7-9/ 1-9/ 1-9/
BUSINESS AREA 2008 2007 2008 2007 2007
EUR million
Kemira Pulp&Paper 14,5 23,8 40,2 70,0 68,2
Kemira Water 8,9 14,7 23,6 39,8 43,6
Kemira Specialty 21,2 10,0 26,6 27,4 13,5
Kemira Coatings 30,4 38,9 71,8 79,0 73,1
Other and eliminations -5,2 -7,9 -20,1 -30,2 -55,3
Total 69,8 79,5 142,1 186,0 143,1
CHANGES IN PROPERTY, PLANT AND EQUIPMENT 1-9/ 1-9/
EUR million 2008 2007 2007
Carrying amount at beginning of year 984,3 987,1 987,1
Acquisitions of subsidiaries - 5,0 14,3
Increases 97,0 155,2 215,7
Decreases -5,3 -4,1 -2,5
Disposal of subsidiaries -168,4 - -7,8
Depreciation and impairments -83,6 -84,0 -133,2
Exchange rate differences and
other changes 5,5 -45,1 -89,3
Net carrying amount at end of period 829,5 1 014,1 984,3
CHANGES IN INTANGIBLE ASSETS 1-9/ 1-9/
EUR million 2008 2007 2007
Carrying amount at beginning of year 738,9 689,9 689,9
Acquisitions of subsidiaries 3,1 19,0 32,2
Increases 19,4 22,4 30,4
Decreases -0,1 -0,3 -0,3
Disposal of subsidiaries -8,1 - -0,1
Depreciation and impairments -15,5 -15,5 -40,6
Exchange rate differences and
other changes 5,8 28,6 27,4
Net carrying amount at end of period 743,5 744,1 738,9
CONTINGENT LIABILITIES 30.9. 31.12.
EUR million 2008 2007
Mortgages 43,4 62,1
Assets pledged
On behalf of own commitments 5,8 6,0
Guarantees
On behalf of own commitments 8,4 8,3
On behalf of associates 1,3 1,4
On behalf of others 0,6 2,8
Operating leasing liabilities
Maturity within one year 22,2 22,4
Maturity after one year 116,8 129,0
Other obligations
On behalf of own commitments 4,2 0,4
On behalf of associates 2,1 2,3
Major off-balance sheet investment commitments
Major amounts of contractual commitments for the acquisition of
property, plant and equipment on September 30, 2008 were EUR 4
million for the investment of Kemira Coatings in Russia.
Litigation
The Group has extensive international operations and is involved in a
number of legal proceedings incidental to these operations.
Kemira Oyj, Kemira Chemicals, Inc. and Kemira Chemicals Canada, Inc.
have received claims or were named in class action lawsuits filed by
direct and indirect purchasers of hydrogen peroxide and persalts in
US state courts and in Canada. In these civil actions it is alleged
that the US plaintiffs suffered damages resulting from a cartel among
hydrogen peroxide suppliers. To avoid further litigation costs Kemira
Oyj and Kemira Chemicals Canada Inc. have made a settlement agreement
in the US direct purchaser class action in an US federal court and
settled with some others. As regards the other claims and suits, the
proceedings continue.
The European Union Commisson ordered in June 2008 Finnish Chemicals
Oy to pay EUR 10.15 million fine for competition law infringements by
sodium chlorate producers during 1994-2000.
RELATED PARTY
Related party transactions have not changed materially after annual
closing 2007.
DERIVATIVE INSTRUMENTS
EUR million
30.9.2008 31.12.2007
Nominal Fair Nominal Fair
value value value value
Currency instruments
Forward contracts 342,9 -2,8 942,9 -1,4
of which hedges of
net investment
in a foreign operation - - - -
Currency options
Bought 0,0 0,0 65,5 0,1
Sold 8,1 -0,3 57,8 0,2
Currency swaps 147,3 3,5 147,2 6,5
Interest rate instruments
Interest rate swaps 295,9 1,7 174,0 2,3
of which cash flow hedge 278,9 1,3 164,0 2,0
Interest rate options
Bought 10,0 0,1 10,0 -
Sold - - - -
Bond futures 10,0 -0,2 10,0 0,2
of which open 10,0 -0,2 10,0 0,2
Other instuments Fair value Fair value
Electricity forward
contracts, GWh 763,2 8,6 833,6 10,0
of which cash flow
hedge, GWh 763,2 8,6 833,6 10,0
The fair values of the instruments which are publicly traded are
based on market valuation on the date of reporting. Other instruments
have been valuated based on net present values of future cash
flows.
Valuation models have been used to estimate the fair values of
options.
Nominal values of the financial instruments do not necessarily
correspond to the actual cash flows between the counterparties and do
not therefore give a fair view of the risk position of the Group.
QUARTERLY INFORMATION 2008 2008 2008
EUR million Q3 Q2 Q1
Revenue
Kemira Pulp&Paper 281,9 253,6 263,9
Kemira Water 202,3 187,6 179,5
Kemira Specialty 95,8 108,8 107,0
Kemira Coatings 193,7 205,7 145,2
Other and intra-Group sales 6,3 -14,2 -12,0
Total 780,0 741,5 683,6
Operating profit
Kemira Pulp&Paper 14,5 10,1 15,6
Kemira Water 8,9 5,5 9,2
Kemira Specialty 21,2 1,6 3,8
Kemira Coatings 30,4 29,7 11,7
Other including eliminations -5,2 -7,6 -7,3
Total 69,8 39,3 33,0
Operating profit, excluding non-recurring items
Kemira Pulp&Paper 15,3 10,1 15,6
Kemira Water 9,0 5,5 6,8
Kemira Specialty 7,1 1,6 3,8
Kemira Coatings 30,4 29,7 11,7
Other including eliminations -5,3 -9,7 -10,7
Total 56,5 37,2 27,2
QUARTERLY INFORMATION 2007 2007 2007 2007
EUR million Q4 Q3 Q2 Q1
Revenue
Kemira Pulp&Paper 253,6 259,7 267,0 262,7
Kemira Water 180,3 175,0 173,2 157,9
Kemira Specialty 102,0 109,8 110,6 103,5
Kemira Coatings 118,4 182,3 188,7 135,8
Other and intra-Group sales 0,1 2,7 13,5 13,4
Total 654,4 729,5 753,0 673,3
Operating profit
Kemira Pulp&Paper -1,8 23,8 23,3 22,9
Kemira Water 3,8 14,7 13,1 12,0
Kemira Specialty -13,9 10,0 7,1 10,3
Kemira Coatings -5,9 38,9 27,3 12,8
Other including eliminations -25,1 -7,9 -13,2 -9,1
Total -42,9 79,5 57,6 48,9
Operating profit, excluding non-recurring items
Kemira Pulp&Paper 12,3 22,6 23,3 21,6
Kemira Water 6,9 14,7 13,1 12,0
Kemira Specialty -2,0 8,7 7,1 10,3
Kemira Coatings -3,5 27,7 27,3 12,8
Other including eliminations -9,6 -7,9 -14,2 -8,6
Total 4,1 65,8 56,6 48,1
DEFINITIONS OF KEY FIGURES
Earnings per share (EPS): Equity ratio, %:
Net profit attributable to Total equity x 100 /
equity holders Total assets - prepayments
of the parent / received
Average number of shares
Cash flow from operations: Gearing, %:
Cash flow from operations, Interest-bearing net
after change in liabilities x 100 /
net working capital Total equity
and before investing
activities
Cash flow from operations Interest-bearing net liabilities:
per share: Interest-baring liabilities -
Cash flow from operations / money market investments -
Average number of shares cash and cash equivalents
Equity per share: Return on capital employed
Equity attributable to equity (ROCE), %:
holders of the parent at Operating profit + share
end of quarter / of profit or loss of associates x 100
/
Number of shares at (Net working capital +
end of quarter property, plant and equipment
available for use + intangible
assets + investments in
associates) *
* Average
