Kemira Oyj
Stock Exchange Release
April 23, 2014 at 8.30 am (CET+1)
This is a summary of the January-March 2014 Interim report. The complete January - March 2014 Interim report with tables is attached to this release and available at www.kemira.com/investors.
- Reported revenue decreased 6% to EUR 529.9 million (560.9), due to divestments and unfavorable currency exchange rates. Organic revenue growth reached 2%.
- Operative EBIT decreased 14% to EUR 36.3 million (42.2) with a margin of 6.9% (7.5%), mainly due to decreased result in ChemSolutions.
- Operative EBIT, excluding the impacts of food and pharmaceuticals business (divested on March 1, 2013) and formic acid business (divested on March 6, 2014), increased 12% to EUR 37.0 million (33.0) with a margin of 7.3% (6.5%). The corresponding operative EBITDA improved to EUR 58.3 million (53.0) with a margin of 11.4% (10.4%).
- The reported earnings per share increased to EUR 0.28 (0.01), mainly due to a capital gain related to the divestment of formic acid business. Comparable period was impacted by a write-down related to the divestment of shares in the Joint Venture Sachtleben.
- Kemira maintains its outlook for 2014.
Kemira's President and CEO Wolfgang Büchele:
"Kemira's reported revenue declined due to the divestments announced in the fourth quarter of 2013 and due to continued unfavorable currency development. As a result of the divestments, Kemira continued to shift towards businesses with a higher growth profile.
The financial performance of our core segments was solid with organic revenue growth of 4% and operative EBIT improvement of 12%. Stable profitable growth continued in Paper and organic growth accelerated in Oil & Mining. Municipal & Industrial reported a fifth consecutive quarter with improved operative EBIT margin (year-on-year comparison).
Group's operative EBIT was impacted by a very weak de-icing season, resulting in a reduced operative EBIT of ChemSolutions' formic acid business. The divestment of formic acid business was completed during the quarter, marking the last major step of our transformation into a company that focuses on water quality and quantity management. Going forward, Kemira's business portfolio will be based on three core segments; Paper, Oil & Mining and Municipal & Industrial.
Kemira is currently the only global chemical company committed to the water intensive pulp and paper industries. During the quarter, we further strengthened our position by announcing the acquisition of BASF's AKD emulsion business. The transaction will support our leading market position in sizing chemicals and enable an improved offering to our Paper customers on the continental European market. In addition, we are investing in the expansion of our sizing and strength chemicals production at our Telêmaco Borba plant in Paraná, Brazil.
As an important milestone of our continuous efficiency measures, we inaugurated in March our Business Service Center in Gdansk, an excellent example of the process optimization and cross-functional collaboration.
Looking ahead, we are confident that we will reach the set organic revenue growth and operative EBIT targets for 2014. This is supported by a streamlined strategic portfolio and a clear focus on growth in Paper and Oil & Mining, as well as on cash optimization in Municipal & Industrial."
KEY FIGURES AND RATIOS
| EUR million | Jan-Mar 2014 | Jan-Mar 2013 | 2013 |
| Revenue | 529.9 | 560.9 | 2,229.1 |
| Operative EBITDA | 57.5 | 63.5 | 251.9 |
| Operative EBITDA, % | 10.9 | 11.3 | 11.3 |
| EBITDA | 77.7 | 61.1 | 141.9 |
| EBITDA, % | 14.7 | 10.9 | 6.4 |
| Operative EBIT | 36.3 | 42.2 | 164.2 |
| Operative EBIT, % | 6.9 | 7.5 | 7.4 |
| EBIT | 54.3 | 39.2 | 42.6 |
| EBIT, % | 10.2 | 7.0 | 1.9 |
| Share of profit or loss of associates | 0.0 | -1.2 | -1.1 |
| Financing income and expenses | -5.3 | -24.7 | -39.0 |
| Profit before tax | 49.0 | 13.3 | 2.5 |
| Net profit | 43.1 | 2.8 | -25.9 |
| Earnings per share, EUR | 0.28 | 0.01 | -0.21 |
| Operative earnings per share, EUR | 0.15 | 0.17 | 0.70 |
| Capital employed* | 1,322.2 | 1,595.6 | 1,366.5 |
| Operative ROCE* | 12.0 | 9.9 | 11.9 |
| ROCE* | 4.4 | 2.2 | 3.0 |
| Capital expenditure | 25.6 | 29.0 | 197.5 |
| Cash flow after investing activities | 130.3 | 189.9 | 195.7 |
| Equity ratio, % at period-end | 50 | 50 | 51 |
| Gearing, % at period-end | 30 | 30 | 41 |
| Personnel at period-end | 4,267 | 4,662 | 4,453 |
*12-month rolling average (ROCE, % based on the reported EBIT)
Definitions of key figures are available at www.kemira.com > Investors > Financial information. Comparative 2013 figures are provided in parentheses for some financial results, where appropriate. Operative EBITDA, operative EBIT, operative earnings per share and operative ROCE are excluding non-recurring items.
KEMIRA'S FINANCIAL TARGETS FOR 2016 and outlook 2014 (UNCHANGED)
Kemira will continue to focus on improving its profitability and reinforcing positive cash flow. The company will also continue to invest in order to secure future growth in the water quality and quantity management business.
The company's financial targets for 2016 are:
- revenue EUR 2.6-2.7 billion
- EBITDA-% of revenue 15%
- gearing level < 60%.
In addition, Kemira expects its medium-term operating tax rate to be in the range of 22%-24%. The operating tax rate excludes non-recurring items and the impact of the income from associated companies.
The basis for growth is the expanding market for chemicals related to water quality and quantity management and Kemira's strong expertise in this field. The need to increase operational efficiency in our customer industries creates opportunities for Kemira to develop new products and services for both current and new customers. Research and Development is a critical organic growth enabler for Kemira and it provides differentiation capabilities in the water quality and quantity management markets. Kemira will invest in innovation, technical expertise, and competencies in the targeted focus areas.
Outlook
In 2014, Kemira expects its revenue in local currencies and excluding acquisitions and divestments to be slightly higher than in 2013 and its operative EBIT to be higher than in 2013.
The guidance for 2014 is defined as follows:
| Kemira guidance | Definition |
| Slightly higher/lower | from 0% to 5% or from 0% to -5% |
| Higher/lower | from 5% to 15% or from -5% to -15% |
| Significantly higher/lower | more than 15% or less than -15% |
Helsinki, April 23, 2014
Kemira Oyj
Board of Directors
FINANCIAL CALENDAR 2014
Interim report January-June 2014 July 22, 2014
Interim report January-September 2014 October 22, 2014
Kemira Capital Markets Day will be held in London on September 9, 2014.
Press and analyst conference and conference call
Kemira will arrange a press conference for analysts and the media starting at 10.30 am (8.30 am UK time) at Kemira House, Porkkalankatu 3, Helsinki. In the conference, Kemira's President and CEO Wolfgang Büchele and the CFO Petri Castrén will present the results. The press conference will be held in English and will be webcasted at www.kemira.com/investors. Webcast will be available at www.kemira.com/investors also after the event. Presentation material will be available on Kemira's website at www.kemira.com/investors under Investors in English and at www.kemira.com/fi/sijoittajat in Finnish at about 10.00 am.
Conference call in connection to the press and analyst conference
You can also listen to the conference live over the phone and attend the Q&A session via a conference call. In order to participate in the call, please dial ten minutes before the conference begins:
FI: +358 9 817 10468
SE: +46 85 1999 362
UK: +44 20 7660 2079
US: +1 855 2692606
No PIN code requested.
For more information, please contact
Kemira Oyj
Tero Huovinen, VP, Investor Relations
+358 10 862 1980
Kemira is a global chemicals company serving customers in water-intensive industries. We provide expertise and chemicals that improve our customers' water, energy and raw material efficiency. Our focus is on pulp & paper, oil & gas, mining and water treatment. In 2013, Kemira had annual revenue of EUR 2.2 billion and around 4,500 employees. Kemira shares are listed on the NASDAQ OMX Helsinki Ltd. www.kemira.com
