(Stock Exchange Release)
- Revenue in January-March 2008: EUR 683.6 million (Q1/2007: EUR
673.3 million)
- Operating profit excluding non-recurring items: EUR 27.2 million
(EUR 48.1)
- Operating profit: EUR 33.0 million (EUR 48.9 million)
- Earnings per share: EUR 0.12 (EUR 0.22)
- Full-year operating profit and earnings per share, non-recurring
items excluded, are expected to show an increase from their 2007
levels.
Kemira's President and CEO Harri Kerminen:
"We saw challenging times in Q1, with substantially higher than
expected raw materials and energy-related costs and the continued
weakening of the US dollar, eroding our profitability versus Q1
2007. There was, however, an improvement over Q4 2007, indicating a
positive trend forward. Most businesses have shown reasonably good
sales growth in local currencies. General price increases have been
announced and wherever possible, contract pricing has been
renegotiated to compensate for these higher costs. Measures to
reorganize and to improve operational efficiencies are also under
way. Based on current market understanding and excluding
non-recurring items, we expect full-year profits and earnings per
share to show an increase over prior year."
"The strategy review and organizational restructuring work announced
in February in connection with the disclosure of financial statements
is ongoing and according to plan. The strategy work is based on
customer segments and a new business structure reflecting the revised
strategy for Kemira Pulp&Paper and Kemira Water will be in place at
the end of the year."
Key Figures and Ratios
EUR million 1-3/2008 1-3/2007 Change % 1-12/2007
Revenue 683.6 673.3 2 2,810.2
EBITDA 67.6 82.6 -18 316.9
EBITDA, % 9.9 12.3 11.3
Operating profit, excluding 27.2 48.1 -43 174.6
non-recurring items
Operating profit 33.0 48.9 -33 143.1
Operating profit, excluding 4.0 7.1 6.2
non-recurring items, %
Operating profit, % 4.8 7.3 5.1
Financial income and expenses -11.2 -12.2 -51.9
Profit before tax 21.9 37.3 -41 93.3
Profit before tax, % 3.2 5.5 3.3
Net profit 16.0 27.3 -41 67.5
EPS, EUR 0.12 0.22 -45 0.53
Capital employed* 2,043.5 1,924.6 2,035.8
ROCE, %* 6.3 10.2 7.1
Cash flow after investments,
excluding acquisitions -9.0 -117.6 -82.5
Personnel at period-end 10,138 9,405 10,007
* 12-month rolling average
As announced in the financial statements bulletin earlier this year,
Kemira switched certain customer segments between Kemira Pulp&Paper
and Kemira Water at the beginning of 2008, in order to improve
customer service and clarify its sales organization and sales
responsibilities. Changes will only affect the business-area specific
segment information for Kemira Pulp&Paper and Kemira Water.
Business-area comparatives for 2007 have been adjusted to match the
new breakdown. As a result of this change, Kemira Water's revenue for
2007 decreased by about EUR 44 million and operating profit by EUR
1.4 million while Kemira Pulp&Paper's revenue grew by EUR 25 million
and operating profit by EUR 1.4 million, and revenue eliminations
between business areas decreased by some EUR 19 million.
Financial Performance
Kemira Group's revenue for January-March 2008 totaled EUR 683.6
million (Q1/2007: EUR 673.3 million). Demand was healthy in most
areas and organic growth in local currencies was 3%. Acquisitions
contributed around EUR 16 million to revenue growth, while
divestments depressed revenue by EUR 6 million. The currency effect
had a 3%, or EUR 20 million negative impact on revenue.
Revenue, EUR 1-3/2008 1-3/2007 1-12/2007
million
Kemira Pulp&Paper 263.9 262.7 1 043.0
Kemira Water 179.5 157.9 686.4
Kemira Specialty 107.0 103.5 425.9
Kemira Coatings 145.2 135.8 625.2
Other, including eliminations -12.0 13.4 29.7
Total 683.6 673.3 2 810.2
The first quarter was challenging due to the continued increases in
already high raw material and energy prices, and the continued
weakening of the US dollar. The raw material prices increased more
than estimated earlier.. Kemira Group's operating profit, excluding
non-recurring items, for January-March decreased by 43% to EUR 27.2
million (EUR 48.1 million). As a result, operating profit as a
percentage of revenue, excluding non-recurring items, fell from 7.1%
to 4.0%. However the profitability improved compared to the last
quarter in 2007. High raw material and energy prices eroded
profitability in all business areas, but paper chemicals and the
polymers required for water treatment were most severely affected.
Furthermore, Kemira Specialty's performance was hampered by low sales
prices in euro of titanium dioxide. The currency effect had a EUR 3
million negative impact on revenue compared with Q1 a year earlier.
Operating profit (excl. non-recurring 1-3/2008 1-3/2007 1-12/2007
items), EUR million
Kemira Pulp&Paper 15.6 21.6 79.8
Kemira Water 6.8 12.0 46.7
Kemira Specialty 3.8 10.3 24.1
Kemira Coatings 11.7 12.8 64.3
Other, including eliminations -10.7 -8.6 -40.3
Total 27.2 48.1 174.6
Operating profit for January-March came to EUR 33.0 million (48.9)
and includes non-recurring items with a positive net impact of
EUR 5.8 million (EUR 0.8 million).
Profit before tax for the period amounted to EUR 21.9 million (37.3)
and net profit totaled EUR 16.0 million (27.3). Earnings per share
were EUR 0.12 (EUR 0.22).
Financial Position and Cash Flows
In January-March, the Group reported cash flows of EUR 20.2 million
(-30.0) from operating activities. Net cash flow from investing
activities was EUR -29.2 million (-110.8). There were no acquisitions
in the first quarter. In the first quarter of 2007 the acquisitions
accounted for an outflow of EUR 23.2 million. Kemira showed a
negative free cash flow of EUR -9.0 million (-140.8).
At the end of March, the Group's net liabilities stood at EUR 1,015.9
million (December 31, 2007: EUR 1,003.4 million).
At the period-end, interest-bearing liabilities stood at EUR 1 072.2
million. Fixed-rate loans accounted for roughly 26% of total
interest-bearing net loans. The Group's net financial expenses
totaled 5.3%. The duration of the Group's interest-bearing loan
portfolio on March 31 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 622.4 million on March 31.
On March 31, the equity ratio stood at 36 % (December 31, 2007: 39%),
while gearing was 99% due to equity effect of dividends (December 31,
2007: 92%).
The Group's net financial expenses for January-March totaled EUR 11.2
million (12.2).
The Group's most important exchange rate risk arises from the USD
denominated exports from the euro area. Approximately 70% of the
exchange rate risk, annually equivalent to EUR 56 million, due to
exposure to the US dollar, was hedged during the quarter. In
addition, the company is exposed to a USD risk when USD denominated
items are converted into euro in the financial statements.
Capital Expenditure
Gross capital expenditure, excluding acquisitions, amounted to EUR
38.6 million (55.1) in January-March. Maintenance investments
represented around 15% of capital expenditure, excluding
acquisitions.
Group depreciation came to EUR 34.6 million (33.7 million).
Cash flow from the sale of assets was EUR 9.4 million (-32.5). The
Group's net capital expenditure totaled EUR 29.2 million (110.8).
Research and Development
In January-March, reported research and development expenditure
totaled EUR 15.5 million (EUR 16.0 million), accounting for 2.3% of
revenue (2.4%).
Kemira's Asian Technology Center in Shanghai was inaugurated on April
15, 2008. In addition to Asia, Kemira's network of the R&D centers
includes Europe and North America. Once completed, the planned
technology center in Latin America will bolster Kemira's strategy of
enhancing its business in the growing markets. With the technology
centers up and running, customers will receive full R&D services on
all continents. Kemira engages in development work with customers and
other cooperation partners, e.g. in process technology and
automation. In addition, close contacts with universities and
research institutions are valuable. Kemira is intensifying its
cooperation with China's leading universities, the first among these
being South China University of Technology in Guangzhou and Nanjing
Forestry University.
Human Resources
The number of Group employees totaled 10,138 on March 31 (9,045).
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 1-3/2008 1-3/2007 Change % 1-12/2007
Revenue 263.9 262.7 0 1 043.0
EBITDA 27.5 35.5 -23 133.7
EBITDA, % 10.4 13.5 12.8
Operating profit, excluding 15.6 21.6 -28 79.8
non-recurring items
Operating profit 15.6 22.9 -32 68.2
Operating profit, excluding 5.9 8.2 7.6
non-recurring items, %
Operating profit, % 5.9 8.7 6.5
Capital employed* 832.0 838.9 833.6
ROCE, % 7.3 10.3 8.2
Capital expenditure, excluding
acquisitions 11.3 22.3 78.4
Cash flow after investments,
excluding acquisitions 29.1 -7.7 -24.3
Personnel at period-end 2,378 2,286 2,351
* 12-month rolling average
In the first quarter, Kemira Pulp&Paper's revenue remained on the
previous year's level. Organic growth in local currencies was 5% but
the currency effect and divested businesses brought reported growth
practically to zero. The currency effect had a 3% negative effect on
revenue. While pulp chemicals showed good demand, the competitive
environment for paper chemicals was challenging and sales figures
fell short of last year due to customer paper mill closures,
particularly in Europe and North America.
As a result of higher raw material and energy prices as well as the
increase in transport costs, operating profit for the period
excluding non-recurring items was down by 28% from the previous year
to EUR 15.6 million (21.6). These raw material price hikes reflected
particularly strongly on the profitability of the paper chemicals
business. However, operating profit, excluding non-recurring items,
was higher than in the final quarter last year.
The start-up of Kemira's chemical plant, built next to Botnia's pulp
mill in Uruguay, has gone well. Its deliveries to the pulp mill are
proceeding according to plans. Furthermore, the Kemira plant has also
initiated chemical deliveries to other South American customers.
In January, Kemira announced its intentions to start a new company in
Indonesia, which is a growth area for the pulp and paper production.
PT Kemira Indonesia launched operations in January, offering pulp and
paper chemicals solutions and products to customers in South East
Asia.
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 1-3/2008 1-3/2007 Change % 1-12/2007
Revenue 179.5 157.9 14 686.4
EBITDA 16.8 18.8 -11 78.8
EBITDA, % 9.4 11.9 11.5
Operating profit, excluding 6.8 12.0 -43 46.7
non-recurring items
Operating profit 9.2 12.0 -23 43.6
Operating profit, excluding 3.8 7.6 6.8
non-recurring items, %
Operating profit, % 5.1 7.6 6.4
Capital employed* 413.1 296.0 409.4
ROCE, % 10.0 14.3 10.9
Capital expenditure, excluding
acquisitions 9.1 7.7 51.0
Cash flow after investments,
excluding acquisitions 3.0 -10.5 -11.6
Personnel at period-end 2,317 1,972 2,319
* 12-month rolling average
Kemira Water's revenue in the first quarter improved by 14% to EUR
179.5 million (157.9). Sales were good in all areas and organic
growth in local currencies was 13%. The currency effect had a 5%
negative impact on revenue. Acquisitions contributed around EUR 9
million to revenue growth.
The dramatically increased raw material prices taxed Kemira Water's
profitability in the first quarter. Operating profit excluding
non-recurring items remained on the same level as in Q4 last year,
EUR 6.8 million (12.0). The increase in raw material costs weighed
particularly heavily on the profitability of water treatment
polymers. Profitability of water treatment coagulants remained
despite the increase in costs.
The operating profit of EUR 9.2 million for the first quarter
includes EUR 2.4 million worth of non-recurring income.
At the beginning of January Kemira announced that a Finnish pulp
manufacturer Savon Sellu Oy had selected Kemira Water as its partner
responsible for managing and developing Savon Sellu's waste water and
sludge treatment.
In early April, Kemira announced its intention of increasing its
water treatment chemicals production capacity in central China.
Kemira's 80%-owned Kemira Water Solutions (Chongqing) Co. Ltd will
invest in a new production line for the manufacture of polyaluminum
chloride. The plant extension is scheduled to be taken into use in
the first quarter of 2009. Kemira Water Solutions (Chongqing) mainly
serves the water treatment needs of the Chongqing autonomous area in
terms of both drinking water and industrial wastewater. The new
investment will allow the expansion of the customer base both in the
Chongqing area and in the neighboring Sichuan province. In addition,
the company aims to invest in municipal wastewater treatment in the
future. Kemira is committed to strengthening its water treatment
chemicals business in Asia.
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 paint, cosmetics, printing ink, food and feed
industries, through its customer-driven solutions.
EUR million 1-3/2008 1-3/2007 Change % 1-12/2007
Revenue 107.0 103.5 3 425.9
EBITDA 11.9 18.1 -34 45.1
EBITDA, % 11.1 17.5 10.6
Operating profit, excluding 3.8 10.3 -63 24.1
non-recurring items
Operating profit 3.8 10.3 -63 13.5
Operating profit, excluding 3.6 9.9 5.7
non-recurring items, %
Operating profit, % 3.6 9.9 3.2
Capital employed* 432.4 446.4 435.3
ROCE, % 1.6 10.0 3.1
Capital expenditure, excluding
acquisitions 6.7 9.5 55.0
Cash flow after investments,
excluding acquisitions 2.8 -7.6 -19.7
Personnel at period-end 989 1 004 1 028
* 12-month rolling average
Kemira Specialty's revenue in the first quarter picked up by 3% to
EUR 107.0 million (103.5). Revenue growth was held back by the
ongoing weakening of the US dollar and the market environment for
titanium dioxide, which continues to be very challenging. Organic
growth in local currencies was 3%. In addition the acquisition of
Tri-K in 2007 contributed to revenue growth. The currency effect had
a 3% negative impact on revenue.
Operating profit in the first quarter amounted to EUR 3.8 million
(10.3). The decline from the previous year could be attributed to the
weaker US dollar, sustained low sales prices in euro of titanium
dioxide, and increases in raw material and energy prices. However,
operating profit excluding non-recurring items increased from the
final quarter of 2007. The weakening of the US dollar has continued
to improve the competitive position of US titanium dioxide producers
in Europe, which is making it increasingly difficult to raise sales
prices in Europe. The demand for, and price level of, formic acid
remained at a good level.
An announcement was made in early January on the awarding of a new
environmental permit to Kemira Pigments Oy's Pori titanium dioxide
plant. Until now, part of the iron sulfate formed at the plant as a
by-product in the production of titanium dioxide has been pilled on
the site and part has been sold for use as water purification
chemicals or in the production of such chemicals. In the future,
sales volume will be increased and customer base will be expanded
from water treatment to other segments, such as the cement industry.
Kemira Oyj has concluded the evaluation of strategic alternatives for
its business unit Chemidet. The business unit will continue to run as
a part of the Kemira Specialty business area and will focus on
maximization of profitability and cash flow.
Kemira Coatings
Kemira Coatings 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 1-3/2008 1-3/2007 Change % 1-12/2007
Revenue 145.2 135.8 7 625.2
EBITDA 16.4 17.1 -4 91.2
EBITDA, % 11.3 12.6 14.6
Operating profit, excluding 11.7 12.8 -9 64.3
non-recurring items
Operating profit 11.7 12.8 -9 73.1
Operating profit, excluding 8.1 9.4 10.3
non-recurring items, %
Operating profit, % 8.1 9.4 11.7
Capital employed* 317.5 311.5 311.0
ROCE, % 22.9 24.6 23.9
Capital expenditure, excluding
acquisitions 9.8 43.5
Cash flow after investments,
excluding acquisitions -39.7 26.0
Personnel at period-end 3 944 3 543 3 789
* 12-month rolling average
Kemira Coating's revenue in the first quarter rose by 7% to EUR 145.2
million (135.8) with organic growth at 5%. In addition, acquisitions
completed in 2007 contributed to revenue growth. The timing of Easter
in March and the cold and rainy weather in Northern Europe during the
same month had a negative effect on sales growth compared with Q1 a
year earlier.
Operating profit in the first quarter amounted to EUR 11.7 million
(12.8). Increases in the costs of some raw materials and packaging
materials affected profitability.
Following its strategy, Kemira Coatings continue investments in
development of infrastructure in order to secure further growth in
the CIS countries. The logistics and customer service center that is
being built in Moscow will be ready in the second half of the year.
Furthermore, Kemira Coatings has decided to build a paint plant near
Kiev, Ukraine. The plant premises in Ukraine will also house a
logistics centre, offices and a painting school. The new paint plant
near Stockholm started operation in the beginning of this year.
Kemira Oyj Shares and Shareholders
During January-March, Kemira Oyj shares registered a high of EUR
14.77 and a low of EUR 8.28, the share price averaging EUR 9.67. On
March 31, the company's market capitalization, excluding treasury
shares, totaled EUR 1,175.5 million.
On March 31, 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.
AGM Decisions
In accordance with a resolution made at the Kemira Oyj Annual General
Meeting, a dividend of EUR 0.50 per share was paid for the financial
year 2007. Dividends were paid out on April 2, 2008.
The Annual General Meeting elected seven Board members. As proposed
by the Nomination Committee, the current members Elizabeth Armstrong,
Juha Laaksonen, Ove Mattsson, Pekka Paasikivi and Kaija Pehu-Lehtonen
were re-elected, and Jukka Viinanen and Jarmo Väisänen were elected
as new members. Pekka Paasikivi was elected to continue as the
Board's chairman and Jukka Viinanen was elected as vice-chairman.
KPMG Oy Ab was elected the company's auditor, with Pekka Pajamo,
Authorized Public Accountant, acting as chief auditor.
The AGM decided that Article 4 of the current Articles of Association
should be amended such that references to the Finnish titles"pääjohtaja" (English translation in the current Articles of
Association "Chief Executive Officer") and "varapääjohtaja" (English
translation in the current Articles of Association "Deputy Chief
Executive Officer") are deleted.
The Annual General Meeting authorized the Board of Directors to
decide upon the repurchase of a maximum of 2,397,515 treasury shares
("share repurchase authorization"). Shares will be repurchased using
unrestricted equity either through a direct offer with equal terms to
all shareholders, at a price determined by the Board of Directors, or
otherwise than in proportion to the existing shareholdings of the
company's shareholders in public trading on the OMX Nordic Exchange
Helsinki Oy ("the stock exchange") at the market price quoted at the
time of the repurchase. Shares shall be acquired and paid for in
accordance with the rules of the stock exchange and the Finnish
Central Securities Depository Ltd. Shares may be repurchased for use
in implementing or financing mergers and acquisitions, developing the
company's capital structure, improving the liquidity of the company's
shares, or implementing the company's share-based incentive plan. In
order to realize the aforementioned purposes the shares acquired may
be retained, transferred further, or canceled by the company. The
Board of Directors will decide upon other terms related to the share
repurchase. The share repurchase authorization will remain valid
until the end of the next Annual General Meeting.
The Annual General Meeting authorized the Board of Directors to
decide on the issue of a maximum of 12,500,000 new shares and
transfer a maximum of 6,252,250 own shares held by the company
("share issue authorization"). The new shares may be issued and the
treasury shares held by the company may be transferred either against
payment or, as part of the implementation of the company's
share-based incentive plan, without payment. The new shares may be
issued and the treasury shares held by the company may be transferred
to the company's shareholders in proportion to their current
shareholdings in the company, or, by way of derogation from the
shareholders' preferential rights, through a directed share issue, if
the company has a weighty financial reason for doing so, such as
financing or implementing mergers and acquisitions, developing its
capital structure, improving the liquidity of the company's shares
or, if this is justified, for the purpose of implementing the
company's share-based incentive plan. The directed share issue may be
carried out without payment only in connection with the
implementation of the company's share-based incentive plan.
Furthermore, the subscription price for the new shares must be
recognized under the unrestricted equity capital fund and the
consideration payable for treasury shares shall be recognized under
the unrestricted equity capital fund. The Board of Directors will
decide on other terms related to share issues. The share issue
authorization will remain valid until the end of the next Annual
General Meeting.
Board Committees
At its meeting, the Board of Directors of Kemira Oyj elected members
from among the Board for the Audit Committee and the Compensation
Committee.
The Board's Audit Committee members are Juha Laaksonen, Jarmo
Väisänen and Kaija Pehu-Lehtonen. The Audit Committee is chaired by
Juha Laaksonen.
The Board's Compensation Committee members are Pekka Paasikivi, Jukka
Viinanen and Ove Mattsson. The Committee is chaired by Pekka
Paasikivi.
Outlook
Based on current market understanding and excluding non-recurring
items, we expect full-year profits and earnings per share to show an
increase over prior year. Kemira Group's growth is expected to be
moderate and primarily fueled by organic growth in 2008. Continued
actions on price and on-going improvements in operational efficiency
are key. However, the volatility in the global economy and especially
if there are further energy-related and raw material cost increases
or a continued weakening of the US dollar will create challenges to
Kemira.
It is estimated that demand for pulp chemicals in Kemira Pulp&Paper's
customer industries will remain high, while the operational
rearrangements carried out in the customer industries in North
America and Europe will have an adverse impact on the demand for
paper chemicals. Growth in this business area is expected mainly from
the developing markets, such as Uruguay, where the chemical plant
constructed at the site of a pulp mill will be in operation for its
initial year. Kemira Water is expected to show good organic growth.
The forecast for Kemira Water's polymer business is overshadowed
particularly by the increase in raw material prices. In the Kemira
Specialty business area, demand for titanium dioxide, organic acids
and sodium percarbonate is expected to be high. No increase is
expected in average sales prices in euro for titanium dioxide in the
first half despite some price increases implemented in the US dollar
markets. Kemira Coatings expects sustained healthy demand in most
market areas, with the strongest growth anticipated in Russia and
other CIS countries.
Helsinki, April 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.
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 1-3/ 1-3/
EUR million 2008 2007 2007
Revenue 683.6 673.3 2,810.2
Other operating
income 13.7 6.8 45.9
Expenses -629.7 -597.5 -2,539.2
Depreciation and
impairments -34.6 -33.7 -173.8
Operating profit 33.0 48.9 143.1
Financial income and
expenses, net -11.2 -12.2 -51.9
Share of profit or loss of
associates 0.1 0.6 2.1
Profit before tax 21.9 37.3 93.3
Income tax -5.9 -10.0 -25.8
Net profit for the period 16.0 27.3 67.5
Attributable to:
Equity holders of the
parent 14.8 26.4 63.7
Minority interest 1.2 0.9 3.8
Net profit for the period 16.0 27.3 67.5
BALANCE SHEET
EUR million
31.3. 31.12.
ASSETS 2008 2007
Non-current assets
Goodwill 620.1 626.6
Other intangible assets 114.3 112.3
Property, plant and
equipment 981.2 984.3
Holdings in associates 5.5 5.5
Available-for-sale
investments 102.3 102.2
Deferred tax assets 9.0 5.2
Defined benefit pension receivables 34.6 34.6
Other investments 5.7 6.4
Total non-current assets 1,872.7 1,877.1
Current assets
Inventories 315.2 311.2
Receivables
Interest-bearing
receivables 5.3 3.2
Interest-free
receivables 592.3 548.1
Total receivables 597.6 551.3
Money market investments -
cash equivalents 23.2 21.4
Cash and cash equivalents 33.1 31.2
Total current assets 969.1 915.1
Non-current assets held for sale - 35.7
Total assets 2,841.8 2,827.9
EQUITY AND LIABILITIES 31.3. 31.12.
2008 2007
Equity attributable to
equity
holders of the parent 1,011.9 1,072.0
Minority interest 16.2 15.3
Total equity 1,028.1 1,087.3
Non-current liabilities
Interest-bearing non-current
liabilities 581.8 431.1
Deferred tax liabilities 103.3 105.5
Pension liabilities 74.1 74.2
Provisions 19.1 18.8
Total non-current
liabilities 778.3 629.6
Current liabilities
Interest-bearing current
liabilities 490.4 625.0
Interest-free current liabilities 539.7 473.6
Provisions 5.3 6.2
Total current liabilities 1,035.4 1,104.8
Liabilities directly associated
with non-current
assets classified as held for sale - 6.2
Total liabilities 1,813.7 1,740.6
Total equity and
liabilities 2,841.8 2,827.9
CONSOLIDATED CASH FLOW STATEMENT
EUR million 1-3/ 1-3/
2008 2007 2007
Cash flows from operating
activities
Adjusted operating
profit 62.5 81.6 281.1
Interests -11.2 -5.6 -36.3
Dividend income - - 2.0
Other financing items - - -
Income taxes paid -4.2 -7.8 -35.6
Total funds from
operations 47.1 68.2 211.2
Change in net working
capital -26.9 -98.2 -39.1
Total cash flows from operating
activities 20.2 -30.0 172.1
Cash flows from investing
activities
Capital expenditure for
acquisitions - -23.2 -66.6
Other capital
expenditure -38.6 -55.1 -254.4
Proceeds from sale of
assets 9.4 -32.5 -0.2
Net cash used in investing
activities -29.2 -110.8 -321.2
Cash flow after investing
activities -9.0 -140.8 -149.1
Cash flows from financing
activities
Change in non-current
loans
(increase +, decrease -) -9.2 118.9 53.7
Change in non-current loan receivables
(decrease +, increase -) 0.5 1.4 2.5
Short-term financing,
net
(increase +, decrease -) 29.0 - 117.8
Dividends paid - - -60.8
Other -7.6 0.8 12.3
Net cash used in financing
activities 12.7 121.1 125.5
Net change in cash and cash
equivalents 3.7 -19.7 -23.6
Cash and cash equivalents at end
of period 56.3 56.5 52.6
Cash and cash
equivalents at
beginning of period 52.6 76.2 76.2
Net change in cash and cash
equivalents 3.7 -19.7 -23.6
STATEMENT OF CHANGES IN EQUITY
EUR million
Capital
paid-in
in
Share excess of Fair Exchange
value
capital par value reserve 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 0.1 - - -
Exchange differences - - - -4.0
Hedge of net investments
in foreign entities - - - 2.8
Cash flow hedging: amount
entered in shareholders'
equity - - -4.3 -
Acquired minority interest - - - -
Transfer between restricted and
non-restricted equity - - - -
Other changes - - 0.1 -
Shareholders' equity at
March 31, 2007 221.7 257.9 58.5 -32.0
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 - - - -
Treasury shares issued
to key employees - - - -
Share-based compensation - - - -
Options subscribed
for shares - - - -
Exchange differences - - -0.1 -11.3
Hedge of net investments
in foreign entities - - - 1.9
Cash flow hedging: amount
entered in shareholders'
equity - - -5.3 -
Acquired minority interest - - - -
Transfer between
restricted and
non-restricted equity - - 0.3 -
Other changes - - - 0.1
Shareholders' equity at
March 31, 2008 221.8 257.9 63.1 -50.4
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 - 26.4 0.9 27.3
Dividends paid - - - 0.0
Treasury shares issued
to key employees 0.9 -0.9 - 0.0
Share-based compensation - 0.4 - 0.4
Options subscribed
for shares - - - 0.1
Exchange differences - - - -4.0
Hedge of net investments
in foreign entities - - - 2.8
Cash flow hedging: amount
entered in shareholders'
equity - - - -4.3
Acquired minority interest - - - 0.0
Transfer between restricted and
non-restricted equity - - - 0.0
Other changes - 0.2 - 0.3
Shareholders' equity at
March 31, 2007 -25.9 611.4 13.5 1,105.1
Shareholders' equity at
January 1, 2008 -25.9 591.1 15.3 1,087.3
Net profit for the period - 14.8 1.2 16.0
Dividends paid * - -60.6 - -60.6
Available-for-sale
assets - change in
fair value - - - 0.0
Treasury shares issued
to key employees - - - 0.0
Share-based compensation - 0.3 - 0.3
Options subscribed
for shares - - - 0.0
Exchange differences - - - -11.4
Hedge of net investments
in foreign entities - - - 1.9
Cash flow hedging: amount
entered in shareholders'
equity - - - -5.3
Acquired minority interest - - - 0.0
Transfer between
restricted and
non-restricted equity - -0.3 - 0.0
Other changes - 0.1 -0.3 -0.1
Shareholders' equity at
March 31, 2008 -25.9 545.4 16.2 1,028.1
Kemira had in its possession 3,854,465 of its treasury shares at
March 31, 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.
* Dividends were paid out
on April 2, 2008.
KEY FIGURES 1-3/ 1-3/
2008 2007 2007
Earnings per share, basic
and
diluted, EUR 0.12 0.22 0.53
Earnings per share excluding write-downs,
basic and diluted, EUR 0.12 0.22 0.87
Cash flow from operations
per share, EUR 0.17 -0.25 1.42
Capital expenditure, EUR
million 38.6 78.3 321.0
Capital expenditure /
revenue, % 5.7 11.6 11.4
Average number of shares (1000),
basic * 121,191 121,091 121,164
Average number of shares (1000),
diluted * 121,191 121,197 121,194
Number of shares at the
end
of the period (1000),
basic * 121,191 121,152 121,191
Number of shares at the end of the
period (1000), diluted * 121,191 121,191 121,191
Equity per share, attributable to
equity holders of the parent, EUR 8.35 9.01 8.85
Equity ratio, % 36.2 39.2 38.6
Gearing, % 98.8 87.3 92.3
Interest-bearing net
liabilities, EUR million 1,015.9 964.5 1,003.4
Personnel (average) 10,100 9,431 10,008
* Number of shares outstanding,
excluding the
number of shares bought
back.
REVENUE BY BUSINESS AREA 1-3/ 1-3/
EUR million 2008 2007 2007
Kemira Pulp&Paper 263.9 262.7 1,043.0
Kemira Water 179.5 157.9 686.4
Kemira Specialty 107.0 103.5 425.9
Kemira Coatings 145.2 135.8 625.2
Other and Intra-Group
sales -12.0 13.4 29.7
Total 683.6 673.3 2,810.2
OPERATING PROFIT BY 1-3/ 1-3/
BUSINESS AREA 2008 2007 2007
EUR million
Kemira Pulp&Paper 15.6 22.9 68.2
Kemira Water 9.2 12.0 43.6
Kemira Specialty 3.8 10.3 13.5
Kemira Coatings 11.7 12.8 73.1
Other and eliminations -7.3 -9.1 -55.3
Total 33.0 48.9 143.1
CHANGES IN PROPERTY, PLANT AND
EQUIPMENT 1-3/ 1-3/
EUR million 2008 2007 2007
Carrying amount at beginning of
year 984.3 987.1 987.1
Acquisitions of
subsidiaries - 17.0 14.3
Increases 28.7 1.8 215.7
Decreases -1.0 -2.7 -2.5
Disposal of subsidiaries -0.5 - -7.8
Depreciation and
impairments -28.7 -28.4 -133.2
Exchange rate differences
and
other changes -1.6 -1.0 -89.3
Net carrying amount at end of
period 981.2 973.8 984.3
CHANGES IN INTANGIBLE
ASSETS 1-3/ 1-3/
EUR million 2008 2007 2007
Carrying amount at beginning of
year 738.9 689.8 689.9
Acquisitions of
subsidiaries - 6.2 32.2
Increases 9.9 53.3 30.4
Decreases - -0.6 -0.3
Disposal of subsidiaries - - -0.1
Depreciation and
impairments -5.9 -4.3 -40.6
Exchange rate differences
and
other changes -8.5 -1.3 27.4
Net carrying amount at end of
period 734.4 743.1 738.9
CONTINGENT LIABILITIES 31.3. 31.12.
EUR million 2008 2007
Mortgages 62.1 62.1
Assets pledged
On behalf of own
commitments 6.0 6.0
Guarantees
On behalf of own
commitments 8.4 8.3
On behalf of associates 1.4 1.4
On behalf of others 0.6 2.8
Operating leasing
liabilities
Maturity within one year 22.4 22.4
Maturity after one year 125.4 129.0
Other obligations
On behalf of own
commitments 0.4 0.4
On behalf of associates 2.2 2.3
Major off-balance sheet investment
commitments
Major amounts of contractual commitments for the acquisition of
property, plant and equipment on March 31, 2008 were EUR 16 million
for the investment of Kemira Coatings in Russia and EUR 3 million
for the environmental investment in Pori.
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
federal and 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 Inc. have made a settlement
agreement, pending court approval, in the US direct
purchaser class action and settled with some others. As
regards the other claims and suits, the proceedings
continue.
Finnish Chemicals Oy has received in August 2007 from
the European Union Comission a statement of objections
in respect to competition law infringements by sodium
chlorate producers during 1994-2000 to which statement
of objections Finnish Chemicals Oy has given its reply.
RELATED PARTY
Related party transactions have not changed materially
after annual closing 2007.
DERIVATIVE INSTRUMENTS
EUR million
31.3.2008 31.12.2007
Nominal Fair Nominal Fair
value value value value
Currency instruments
Forward contracts 442.8 4.7 942.9 -1.4
of which hedges of
net investment
in a foreign operation - - - -
Currency options
Bought 111.5 - 65.5 0.1
Sold 90.3 1.4 57.8 0.2
Currency swaps 153.9 11.2 147.2 6.5
Interest rate instruments
Interest rate swaps 249.4 -0.9 174.0 2.3
of which cash flow hedge 239.4 -1.2 164.0 2.0
Interest rate options
Bought 10.0 - 10.0 -
Sold - - - -
Bond futures 10.0 0.1 10.0 0.2
of which open 10.0 - 10.0 0.2
Other instuments Fair Fair value
value
Electricity forward
contracts, GWh 747.4 4.8 833.6 10.0
of which cash flow
hedge, GWh 747.4 4.8 833.6 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 2007 2007 2007 2007
EUR million Q1 Q4 Q3 Q2 Q1
Revenue
Kemira Pulp&Paper 263.9 253.6 259.7 267.0 262.7
Kemira Water 179.5 180.3 175.0 173.2 157.9
Kemira Specialty 107.0 102.0 109.8 110.6 103.5
Kemira Coatings 145.2 118.4 182.3 188.7 135.8
Other and intra-Group
sales -12.0 0.1 2.7 13.5 13.4
Total 683.6 654.4 729.5 753.0 673.3
Operating profit
Kemira Pulp&Paper 15.6 -1.8 23.8 23.3 22.9
Kemira Water 9.2 3.8 14.7 13.1 12.0
Kemira Specialty 3.8 -13.9 10.0 7.1 10.3
Kemira Coatings 11.7 -5.9 38.9 27.3 12.8
Other including
eliminations -7.3 -25.1 -7.9 -13.2 -9.1
Total 33.0 -42.9 79.5 57.6 48.9
Operating profit, excluding non-recurring
items
Kemira Pulp&Paper 15.6 12.3 22.6 23.3 21.6
Kemira Water 6.8 6.9 14.7 13.1 12.0
Kemira Specialty 3.8 -2.0 8.7 7.1 10.3
Kemira Coatings 11.7 -3.5 27.7 27.3 12.8
Other including
eliminations -10.7 -9.6 -7.9 -14.2 -8.6
Total 27.2 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 cash and cash
/ equivalents -
Average number of shares money market investments
Equity per share: Return on capital employed
Equity attributable to (ROCE), %:
equity
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
For further information, please contact:
Kemira Oyj
Timo Leppä, Executive Vice President, Group Communications
Tel. +358 10 862 1700
Kemira Oyj
Andreas Langhoff, Investor Relations Manager
Tel. +358 10 862 1140
Kemira will hold a press conference on its January-March 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
http://www.kemira.com/Group/Suomeksi/Sijoittajat/Esitykset/Tulosesitykset/.
