Kemira Oyj
Stock Exchange Release
October 23, 2015 at 8.30 am (CET+1)
This is a summary of the January - September 2015 Interim report. The complete January - September 2015 Interim report with tables is attached to this release and available at www.kemira.com/investors.
Third quarter:
- Revenue increased 15% to EUR 625.1 million (541.5), driven mainly by inorganic growth in Pulp & Paper.
- Operative EBITDA increased 12% to EUR 78.2 million (69.9) with a margin of 12.5% (12.9%).
January-September:
- Revenue increased 12% to EUR 1,772.9 million (1,589.6). Revenues in local currencies, excluding acquisitions and divestments remained largerly unchanged.
- Operative EBITDA increased 17% to EUR 219.3 million (187.6) with an improved margin of 12.4% (11.8%).
- Operative earnings per share increased 15% to EUR 0.54 (0.47).
- Kemira maintains its outlook for 2015.
Kemira's President and CEO Jari Rosendal:
"Our third quarter was solid with continued double-digit revenue and operative EBITDA growth. Growth was particularly strong in the Pulp & Paper segment. In the Municipal & Industrial segment, operative EBITDA margin improved from 13.2% to 15.5%. In the Oil & Mining segment, market conditions continued to be challenging, especially in North American shale oil operations and impacted the demand for our products.
The integration of the acquired AkzoNobel's paper chemicals business is proceeding well. Our customers benefit from our strengthened product portfolio, application knowhow in pulp and paper chemistries as well as our backward integration into key products and raw materials, such as polymers and sizing chemicals. Revenue and cost synergies have started to materialize according to plan.
In September, we made a small acquisition in North America. The acquisition of certain assets of Soto Industries LLC strengthens our process chemicals portfolio, improving our ability to serve customers in the pulp and paper industry. At the same time, we have focused on continuous efficiency improvement and optimization of our manufacturing footprint. As part of this, we started to plan a closure of a manufacturing site in Soave, Italy.
So far this year, we have benefitted of lower raw material costs, especially when it comes to our polymer product lines. Favorable currency exchange rate fluctuations have also had a positive impact. Global availability of certain sizing related raw materials has started to improve and increased the utilization of our site in Nanjing during the quarter.
Looking forward towards the end of the year, we expect continued solid performance from Pulp & Paper and Municipal & Industrial. In Oil & Mining, oil price volatility impacts the predictability of the business. Progress in new application areas like chemical enhanced oil recovery and oil sands is encouraging."
KEY FIGURES AND RATIOS
| EUR million | Jul-Sep 2015 | Jul-Sep 2014 | Jan-Sep 2015 | Jan-Sep 2014 | Jan-Dec 2014 |
| Revenue | 625.1 | 541.5 | 1,772.9 | 1,589.6 | 2,136.7 |
| Operative EBITDA | 78.2 | 69.9 | 219.3 | 187.6 | 252.9 |
| Operative EBITDA, % | 12.5 | 12.9 | 12.4 | 11.8 | 11.8 |
| EBITDA | 74.8 | 67.2 | 206.1 | 179.8 | 252.9 |
| EBITDA, % | 12.0 | 12.4 | 11.6 | 11.3 | 11.8 |
| Operative EBIT | 46.1 | 45.5 | 130.0 | 118.8 | 158.3 |
| Operative EBIT, % | 7.4 | 8.4 | 7.3 | 7.5 | 7.4 |
| EBIT | 42.7 | 42.9 | 114.8 | 107.2 | 152.6 |
| EBIT, % | 6.8 | 7.9 | 6.5 | 6.7 | 7.1 |
| Share of profit or loss of associates | 0.0 | 0.0 | 0.3 | 0.0 | 0.2 |
| Financing income and expenses | -8.2 | -6.6 | -25.0 | -20.4 | -30.7 |
| Profit before tax | 34.5 | 36.3 | 90.1 | 86.8 | 122.1 |
| Net profit | 27.1 | 27.0 | 72.8 | 71.9 | 95.8 |
| Earnings per share, EUR | 0.17 | 0.16 | 0.45 | 0.44 | 0.59 |
| Operative earnings per share, EUR | 0.22 | 0.18 | 0.54 | 0.47 | 0.63 |
| Capital employed* | 1,601.6 | 1,433.4 | 1,601.6 | 1,433.4 | 1,427.7 |
| Operative ROCE* | 10.6 | 10.7 | 10.6 | 10.7 | 11.1 |
| ROCE* | 10.0 | 4.8 | 10.0 | 4.8 | 10.7 |
| Capital expenditure | 55.5 | 30.6 | 241.8 | 90.2 | 145.1 |
| Cash flow after investing activities | 27.6 | 6.8 | -103.6 | 97.6 | 75.2 |
| Equity ratio, % at period-end | 46 | 51 | 46 | 51 | 51 |
| Gearing, % at period-end | 59 | 41 | 59 | 41 | 42 |
| Personnel at period-end | 4,692 | 4,244 | 4,692 | 4,244 | 4,248 |
*12-month rolling average (ROCE, % based on the EBIT)
Definitions of key figures are available at www.kemira.com > Investors > Financial information. Comparative 2014 figures are provided in parentheses for some financial results, where appropriate. Operative EBITDA, operative EBIT, operative earnings per share and operative ROCE do not include non-recurring items.
KEMIRA'S FINANCIAL TARGETS 2017 AND OUTLOOK for 2015 (UNCHANGED)
Kemira will continue to focus on improving its profitability and operative cash flow. The company will also continue to invest in order to secure future growth to serve selected water intensive industries.
The company's financial targets for 2017 are:
- Revenue EUR 2.7 billion
- Operative EBITDA-% of revenue 15%
- Gearing level <60%.
Kemira expects its capital expenditure-to-sales ratio, excluding acquisitions to increase in the next few years from the 2014 level of 6.3%. In addition, Kemira expects its medium-term operative tax rate to be in the range of 22%-25%. This rate excludes non-recurring items.
The basis for growth is the expanding market for chemicals and Kemira's expertise that helps customers in water intensive industries to increase their water, energy and raw material efficiency. 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 enabler of organic growth for Kemira, providing differentiation capabilities in its relevant markets. Kemira will invest in innovation, technical expertise, and competencies in its selected focus areas.
Outlook for 2015
Outlook for 2015: In 2015, Kemira will focus on profitable growth both organically and inorganically. Kemira's revenue and operative EBITDA in 2015 are expected to increase compared to 2014.
Helsinki, October 22, 2015
Kemira Oyj
Board of Directors
FINANCIAL CALENDAR 2015 and 2016
Financial Statements Bulletin 2015 February 11, 2016
Interim Report January-March 2016 April 26, 2016
Interim Report January-June 2016 July 21, 2016
Interim Report January-September 2016 October 25, 2016
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 Jari Rosendal and CFO Petri Castrén will present the results. The press conference will be held in English and will be webcasted at www.kemira.com/investors. The presentation material will be available around 10.00 am and the webcast after the event at the above mentioned company web site.
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 10495
SE: +46 8 566 42702
UK: +44 20 31940552
US: +1 855 7161597
No PIN code requested.
For more information, please contact
Kemira Oyj
Tero Huovinen, SVP, Communications and Corporate Responsibility
+358 10 862 1980
Kemira is a global chemicals company serving customers in water-intensive industries. We provide expertise, application know-how 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 2014, Kemira had annual revenue of EUR 2.1 billion and around 4,250 employees. Kemira shares are listed on the NASDAQ OMX Helsinki Ltd.
www.kemira.com
