Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q1 2004 Earnings Presentation
27 slides from Kemira Oyj's earnings presentation, May 4, 2004
Slide 1: Kemira Result Q1 2004
Kemira Result Q1 2004 4 May 2004
Slide 2: Our Businesses
Our Businesses Pulp & Paper Kemwater Paints & Industrial Growhow GrowHow Chemicals Coatings Chemicals 2 738 M€ (2003) Pulp & Other Paper Asia Other Chemicals Finland Americas GrowHow Kemwater Eastern Europe Other Paints & Euro area Coatings Other Industrial Western Chemicals Europe 2 4 May, 2004
Slide 3: Highlights Q1 2004
Highlights Q1 2004 Focus on efficiency EPS € 0.24 (€ 0.16) + 45% ROCE 8.6 % (5.3%) + 62% Cash flow after capital expenditure - € 21 m (- € 71 m) Net sales € 717 m (€ 700 m) + 3% Portfolio focus Ecocat Oy and Metpela Oy sold Alternative solutions evaluated concerning ownership of Kemira Fine Chemical
Slide 4: Income Statement
Income Statement € million 1-3/2004 1-3/2003 2003 Net sales 717 700 2 738 Other income from operations 6 5 28 Cost of sales -625 -630 -2 448 Depreciation -44 -42 -170 Operating income 54 33 148 Financial income and expenses -10 -4 -21 Net income of associates -1 0 -6 Net financial income and expense
Slide 5: Balance Sheet
Balance Sheet € million 31.3.2004 31.12.2003 ASSETS Non-current assets Intangible assets 227 228 Tangible assets 1092 1091 Deferred tax assets 6 17 Shares and holdings 99 119 Other investments 86 79 Total non-current assets 1510 1534 Current assets Inventories 403 390 Receivables Interest-bearing re
Slide 6: Balance Sheet
Balance Sheet LIABILITIES AND SHAREHOLDERS´ EQUITY 31.3.2004 31.12.2003 Shareholders´ equity Share capital 217 217 Own shares -28 -28 Other shareholders´ equity 877 847 Total shareholders´ equity 1066 1036 Minority interests 32 32 Long-term liabilities Interest-bearing long-term liabilities 505 507
Slide 7: Kemira Group Q1 2004 operating income by business
Kemira Group Q1 2004 Q1 2003 Q1 2004 All strategic business 20 units increased operating income € million 10 Kemira applies IFRS from the beginning of 2004; in this presentation all 2003 and 2004 figures are based on IFRS and are not 0 fully comparable with Pulp&Paper Coatings Chemicals Kemwater Gro
Slide 8: Pulp & Paper Chemicals
Pulp & Paper Chemicals Sales 13% higher Mostly due to North Pigments & American acquisition Additives Profit improved Bleaching Chemicals Operating income 22% higher, 8% of sales Improvements in cost levels Low production in pulp and Specialty paper industry continued Chemicals Net sales Q1 2004: €
Slide 9: Pulp & Paper Chemicals
Pulp & Paper Chemicals Net sales Operating income & ROCE 500 50 12 % 40 10 400 8 € million 300 30 € million 6 200 20 4 100 10 2 0 0 0 00 01 02 03 04 00 01 02 03 04 Q1 Q2 Q3 Q4 Operating margin ROCE Figures are not fully comparable due to changes in business structure 9 4 May, 2004
Slide 10: Kemwater
Kemwater Sales up by 47% largely due to US acquisition, positive development also in Europe Operating income 23% higher, 8% of sales Raw material costs rapidly increasing Net sales Q1 2004: € 63 m (€ 43 m) 10 4 May, 2004
Slide 11: Kemwater
Kemwater Net sales Operating income & ROCE 250 Net sales 30 25 % 200 25 20 € million 150 20 15 € million 100 15 10 10 50 5 5 0 0 0 00 01 02 03 04 00 01 02 03 04 Q1 Q2 Q3 Q4 Operating margin ROCE Figures are not fully comparable due to changes in business structure 11 4 May, 2004
Slide 12: Paints & Coatings
Paints & Coatings Deco (~70% of sales) Sales at the same level as last year Strong growth in Russia continued based more on local production Profitability improved driven by efficiency increase Coatings (~30% of sales) Sales decreased 8% Market continued particularly weak in Great Britain Net sales
Slide 13: Paints & Coatings
Paints & Coatings Net sales Operating income & ROCE 500 40 % 400 10 30 300 20 6 € million € million 10 200 2 0 100 -2 -10 0 -20 -6 00 01 02 03 04 00 01 02 03 04 Q1 Q2 Q3 Q4 Operating margin ROCE 13 4 May, 2004
Slide 14: Industrial Chemicals
Industrial Chemicals Sales at previous year’s level Operating income 41% higher, Fine 10% of sales Chemicals TiO2 prices 10% lower in euros; demand started to pick up Demand for formic acid and calcium chloride seasonally low Chemidet Chemidet hurt by lower volumes due to timing of deliveries to Cal
Slide 15: Industrial Chemicals
Industrial Chemicals Net sales Operating income & ROCE 500 60 % Net sales 18 400 50 16 14 40 300 12 € million € million 30 10 200 8 20 6 100 10 4 2 0 0 0 00 01 02 03 04 00 01 02 03 04 Q1 Q2 Q3 Q4 Operating margin ROCE Figures are not fully comparable due to changes in business structure 15 4 May, 20
Slide 16: GrowHow
GrowHow Sales down by 6% to € 324 million (€ 343 m) Fertilizer sales volumes 9% lower mainly due to seasonal timing differences Operating income increased 233% with higher fertilizer prices, which more than offset higher gas costs In Continental Europe nitrogen prices over 10% higher and in UK close
Slide 17: GrowHow
GrowHow Net sales Operating income & ROCE *) *) excluding € 78 m impairment loss in 2002 1 200 % 1 000 50 7 800 5 € million 30 € million 600 3 400 10 200 1 0 -10 -1 00 01 02 03 04 00 01 02 03 04 Q1 Q2 Q3 Q4 Operating margin ROCE 17 4 May, 2004
Slide 18: Kemira Group
Kemira Group Net sales Operating income & ROCE*) *) excluding € 78 m impairment loss in 2002 2800 180 % 2400 160 10 2000 140 8 120 € million 1600 € million 100 6 1200 80 4 800 60 40 400 2 20 0 0 0 00 01 02 03 04 00 01 02 03 04 Q1 Q2 Q3 Q4 Operating margin ROCE 18 4 May, 2004
Slide 19: Net Debt and Gearing
Net Debt 800 100 80 600 Gearing % 60 € million 400 40 200 20 0 0 00 01 02 03 Q1 04 19 4 May, 2004
Slide 20: Cash Flow after Investments and Disposals
Cash Flow after Investments and Disposals 550 450 350 € million 250 150 50 -50 -150 00 01 02 03 04 Whole year Q1 20 4 May, 2004
Slide 21: Earnings / Share
Earnings / Share € 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0 00 01 02 03 04 Q1 Q2 Q3 Q4 21 4 May, 2004
Slide 22: Return on Capital Employed
Return on Capital Employed % 10 8 6 4 2 0 2000 2001 2002 2003 Q1 2004 22 4 May, 2004
Slide 23: Valuation & Ownership
Valuation & Ownership Market capitalisation & equity Ownership 30 April 2004 1400 Public Finnish 7.0 % 1200 institutions 26.7 % Kemira 1000 3.4 % € million 800 600 400 International institutions 200 6.7 % Finnish state 0 56.2 % 00 01 02 03 04 No major changes Market cap. Equity State’s minimum o
Slide 24: Outlook for the Year 2004
Outlook for the Year 2004 Pulp & Paper Chemicals Low business cycle in pulp & paper industry is forecast to continue; some encouraging messages coming from customer industry Geographical presence, product range and scope of services have been strengthened especially in North America Sales and operat
Slide 25: Outlook for the Year 2004
Outlook for the Year 2004 Paints & Coatings Demand for paints is expected to be good Strong growth will continue in Russia with emphasis on locally produced paints Net sales and operating income expected to improve; fixed-cost savings and synergy benefits will contribute Industrial Chemicals Trend f
Slide 26: Outlook for the Year 2004
Outlook for the Year 2004 GrowHow Grain stocks exceptionally low, supporting grain and fertilizer prices Restructuring and efficiency measures expected to improve cost structure Net sales and operating result expected to improve on previous year Kemira Group Net sales, operating income and net resul
Slide 27: Kemira – From Good to Great
Kemira’s targets - FAST We will focus our actions Focus We will raise our ambition level significantly Ambition We will speed up implementation Speed We will intensify teamwork Teamwork KEMIRA – FROM GOOD TO GREAT 27 4 May, 2004