To aid comparability, the comparison figures for 2002 are presented in this report net of the EUR 78 million of write-downs made by GrowHow.
All the Kemira Group's businesses except GrowHow were able to improve their operating income in 2003 despite the continued slow economic growth in Europe.
Consolidated net sales were up 5% on 2002, rising to EUR 2,738 million (2,612 million). Operating income was EUR 144 million (118 million), representing 5% of net sales (4%). Consolidated operating income in October-December was EUR 22 million (13 million). The weakness of the exchange rates (especially the US dollar) against the euro during the year lowered net sales nearly by EUR 80 million and operating income by about EUR 20 million. Contributions to the Finnish pension funds declined by EUR 26 million thanks to good investment income and a decrease in the pension liability.
Income before taxes and minority interests rose to EUR 118 million from EUR 94 million in 2002. Income after taxes was EUR 74 million (72 million). Total earnings per share were EUR 0.62 (0.61). About 82% of the Group's net sales came from outside Finland.
Return on equity was 7% (5%). The cash flow return on capital invested was 11% (15%).
Cash flow after capital expenditures and income from the disposal of assets was EUR 19 million (67 million). Per-share cash flow from operations was EUR 1.85 (2.45). Equity per share was EUR 9.04 (8.94) and gearing was 69% (72%).
The Board of Directors is proposing that the dividend to be paid for 2003 be raised to EUR 0.33 per share (0.30), or a total dividend payout of EUR 39 million. The proposed dividend is 53% of the company's net income, exceeding slightly both the total dividend payout in 2002 and the level defined in the dividend policy.
GROUP STRATEGY
Kemira is continuing to strengthen its position in its chosen growth areas. It is seeking growth that will give it a leading position worldwide within pulp and paper chemicals as well as water treatment chemicals, leveraging its expertise based on deep knowledge. Within paints, growth will be sought in the Baltic Rim area and in eastern Europe, including Russia. For industrial chemicals, progress will be based mainly on organic growth, cost position leadership and the creation of added value via the speciality businesses. Within plant nutrients and animal nutrition, added value will be created by means of tailored solutions in accordance with the Food Chain Partner concept and business development will be based on the unit's own cash flow.Kemira Group.
The Kemira Group's net sales are estimated to increase and operating income to improve on the figure reported for 2003.
Kemira will go over to IAS/IFRS reporting from the beginning of 2004. The IFRS opening balances and comparison figures for 2003 will be published as a separate bulletin. The biggest changes relate to the reporting of personnel benefits (mainly pension funds) as well as the valuation of certain shares.
Helsinki, 10 February 2004
Board of Directors
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