Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q3 2024 Earnings Presentation
91 slides from Kemira Oyj's earnings presentation, Oct 25, 2024
Slide 1: Kemira Investor Presentation
OCTOBER 25, 2024 Kemira Investor Presentation Chemistry with a purpose. Better every day. INVESTOR PRESENTATION
Slide 2: Content
INVESTOR PRESENTATION Content 1. Kemira in brief 2. Investment highlights 3. Kemira as a sustainable investment 4. Pulp & Paper 5. Industry & Water 6. Recent progress 7. Appendix OCTOBER 25, 2024 INVESTOR PRESENTATION 2
Slide 3: Kemira in brief
INVESTOR PRESENTATION Kemira in brief OCTOBER 25, 2024 INVESTOR PRESENTATION 3
Slide 4: Kemira in brief
Kemira in brief LTM EXCL. OIL & GAS: REVENUE EUR 2,870 MILLION, OPERATIVE EBITDA EUR 596 MILLION, OPERATIVE EBITDA MARGIN 20.8%, OPERATIVE ROCE 21.6% SEGMENT SPLIT GEOGRAPHIES PRODUCTS 10% 15% Other: 40% 60% APAC e.g. defoamers, 25% Bleaching Industry & Water Pulp & Paper 35% 1. China disper
Slide 5: Kemira in your everyday
Kemira in your everyday COAGULANTS POLYMERS SIZING AND BLEACHING STRENGTH 30% 15% 15% 25% Important specialty chemical in Main water treatment chemical, Important water treatment pulp & paper, used to improve Critical product in pulp & paper, used to coagulate impurities in chemical, used to separat
Slide 6: Global reach – local excellence
Global reach – local excellence 57 MANUFACTURING SITES KEMIRA HQ Helsinki, Finland R&D Regional HQ Espoo, Finland Atlanta, USA Regional HQ Shanghai, China R&D Atlanta, USA R&D Shanghai, China EMEA 55% ASIA PACIFIC 10% 2,500 AMERICAS 35% 900 UNITS IN AROUND 40 COUNTRIES 1,200 SALES IN OVER 100+ COUNT
Slide 7: Pulp & Paper – strong business with solid track record
Pulp & Paper – strong business with solid track record REVENUE AND OPERATIVE EBITDA REVENUE BY CUSTOMER REVENUE BY EUR million TYPE AND MARKET GROWTH PRODUCT CATEGORY 2,200 348 40% 45% 15% 1% Other 331 2,000 Pulp Board & Printing & 40% 1,800 260 tissue writing papers 10% Bleaching 245 Po
Slide 8: Industry & Water – strong market positions
Industry & Water – strong market positions REVENUE AND OPERATIVE EBITDA REVENUE BY APPLICATION REVENUE BY EUR million TYPE AND MARKET GROWTH PRODUCT CATEGORY 1,800 336 1,600 90% 10% 15% 60% 1,400 1,200 224 Water treatment Other Other Coagulants 192 175 181 products 1,000 Municipal Industrial
Slide 9: Superior transformation into a water-focused company
Superior transformation into a water- focused company 1950 1961 1972 1985-1992 1994 2008 2015 2023 Development of Name changed The “Kemira” Expansion Kemira is listed on Water chemistry Acquisition of Strategic review first chemicals for to Rikkihappo Oy name adopted continues in the Helsinki stock
Slide 10: The new Kemira: accelerating profitable growth
STRATEGY The new Kemira: accelerating profitable growth with increased focus on water – ambition to double water revenue OCTOBER 25, 2024 INVESTOR PRESENTATION 10
Slide 11: We are well-positioned for profitable growth
WE ARE WELL-POSITIONED FOR PROFITABLE GROWTH We are We have We will execute accelerating structurally faster through growth – driven stronger the new Kemira by water and margins organization sustainability OCTOBER 25, 2024 INVESTOR PRESENTATION 11
Slide 12: We have already started on a more ambitious growth strategy
We have already started on a more ambitious growth strategy • Acquisition of SimAnalytics, a digital start-up • Coagulant capacity expansion in the UK • Expanded renewables partnership with IFF H2 2024 Announcement 2022 2024 of a new organizational 2023 model and updated long-term financial targets
Slide 13: First steps towards the new Kemira launching in 2025
First steps towards the new Kemira launching in 2025… NEW ORGANIZATIONAL MODEL NEW LONG-TERM FINANCIAL THE NEW KEMIRA TARGETS ORGANIZATION WILL PROVIDE: 2025 onwards • speed & agility AVERAGE >4% • increased strategic focus ANNUAL • even higher customer- ORGANIC centricity GROWTH WATER SOLUTIONS MAI
Slide 14: Clear performance mandates for the new business units
…with clear performance mandates for the new business units BUSINESS UNIT WATER FIBER PACKAGING & SOLUTIONS ESSENTIALS HYGIENE SOLUTIONS % of total sales* ~45% ~20% ~35% Mandate in the Growth + Cash flow + Growth + Kemira portfolio cash flow selective growth transformation Growth profile Su
Slide 15: New business units have different financial profiles
New business units have different financial profiles BUSINESS WATER FIBER PACKAGING & UNIT SOLUTIONS ESSENTIALS HYGIENE SOLUTIONS % of total sales* ~45% ~20% ~35% Cyclicality Low Medium Medium Pricing structure Majority fixed pricing Majority formula-based Majority fixed pricing Capital intensity Lo
Slide 16: Investment highlights
INVESTOR PRESENTATION Investment highlights OCTOBER 25, 2024 INVESTOR PRESENTATION 16
Slide 17: Why invest in Kemira
Why invest in Kemira ATTRACTIVE BUSINESS MODEL STRONG FINANCIAL PROFILE Resilient business model combined with Record-strong balance sheet strong market positions • Net debt / operative EBITDA 0.8 • #1 or #2 positions in P&P and water treatment Excellent profitability improvement track record Sustai
Slide 18: Global megatrends largely favor Kemira
Global megatrends largely favor Kemira – sustainability becoming a key driver for the long term CHANGING GROWING DEMOGRAPHICS ENVIRONMENTAL AWARENESS Growing Changing More efficient use Focus on Tightening Climate change middle-class lifestyles with of scarce natural renewable and environmental miti
Slide 19: Healthy market growth for Kemira's relevant markets
Healthy market growth for Kemira’s relevant markets KEMIRA RELEVANT MARKET PULP & PAPER RELEVANT MARKET EUR billion EUR billion 1-2% 12.1 11.1 2-3% 30.5 25.4 APAC 2024 2030 Packaging & Printing & Pulp Tissue Writing EMEA INDUSTRY & WATER RELEVANT MARKET EUR billion 3-5% 18.4 14.3 Americas 2024 2030
Slide 20: We have delivered on multiple fronts
We have delivered on multiple fronts IMPROVED FINANCIALS REDUCED EMISSIONS SHAREHOLDER RETURNS EUR million % KT CO2e (INDEXED) 5 993 700 667 22 6 000 2,5 20.2 20 5 321 600 17.9 572 18 5 000 15.9 16.0 19.7 15.4 16 4 267 4 108 2,0 500 435 426 4 000 410 14 3 602 400 12 3 000 1,5 303 10 300 8 2 000 200
Slide 21: Increased ambition levels in sustainability-driven strategic priorities
We have increased ambition levels in our sustainability-driven strategic priorities EXPAND IN WATER BUILD LEADING RENEWABLE UNLOCK NEW GROWTH SOLUTIONS PORTFOLIO PLATFORMS Significantly grow our water Enable sustainability transformation Increase penetration into selected new business by expanding t
Slide 22: We will grow through organic and inorganic opportunities
We will grow through organic and inorganic opportunities – particularly in water ILLUSTRATIVE EXAMPLE INORGANIC GROWTH OPPORTUNITIES STRONG APPETITE FOR M&A; ORGANIC GROWTH OPPORTUNITIES DISCIPLINED IN VALUATIONS FINANCIAL TARGET Key focus areas FOR AVERAGE ~4 B€ Water ANNUAL ORGANIC ~2.9 B€ GROWTH
Slide 23: Four paths to reach the EUR 500 million renewable revenue target
We have four paths to reach the EUR 500 million renewable revenue target CURRENT Boost the sales of commercially PORTFOLIO available renewable products Convert current fossil-based products to renewable PRODUCT products by replacing raw materials CONVERSION and feedstocks New products based on NEW R
Slide 24: Driving shareholder value through accelerated profitable growth
Driving shareholder value through accelerated profitable growth NEW FINANCIAL TARGETS WE ARE ACCELERATING GROWTH AVERAGE – DRIVEN BY WATER AND SUSTAINABILITY ANNUAL ORGANIC GROWTH >4% WE HAVE STRUCTURALLY STRONGER MARGINS OPERATIVE EBITDA 18-21% WE WILL EXECUTE FASTER THROUGH THE NEW KEMIRA ORGANIZA
Slide 25: Kemira as a sustainable investment
INVESTOR PRESENTATION Kemira as a sustainable investment OCTOBER 25, 2024 INVESTOR PRESENTATION 25
Slide 26: Our commitment to sustainability supports customers
SUSTAINABILITY IS A DRIVER FOR GROWTH Our commitment Enabling our industry’s sustainability transformation Our sustainability commitment makes us a preferred to sustainability partner for customers and suppliers Clear and measurable targets; top performer in supports customers the chemicals industry
Slide 27: 59% of revenue from products that improve customer resource efficiency
59% of revenue generated from products that improve customer resource efficiency PULP & PAPER INDUSTRY & WATER Kemira’s products improve the manufacturing process Municipal and industrial and enable better resource-efficiency. water treatment: For example Chemical water treatment provides the most c
Slide 28: We use significant amounts of recycled raw materials
We use significant amounts of recycled raw materials Already 47% up to of current raw materials 70-80% from recycled & renewable of raw materials from sources recycled sources in coagulants OCTOBER 25, 2024 INVESTOR PRESENTATION 28
Slide 29: Significant number of renewable products in our portfolio
We already have a significant number of renewable products in our portfolio REVENUE SPLIT IN 2023* CURRENT RENEWABLE PORTFOLIO Renewable (> 50%) Partly biobased Sizing • The majority of our current renewable offering Renewable polymers Does not • Biomass-balanced polymers both for water contain foss
Slide 30: Strong commitment to sustainability
Strong commitment to sustainability Five sustainability KPIS SAFETY TRIF* 1.5 by the end of 2025 and 1.1 by the end of 2030 CLIMATE WATER PEOPLE Reach top 10% cross industry norm for Glint Inclusion index by the end of 2025 CIRCULARITY Reduce waste intensity** by 15% by the end of 2030 from a 2019 b
Slide 31: SBTi has validated Kemira's emission reduction targets
SETTING THE STANDARD WITH A FRONTRUNNER CLIMATE TARGET The SBTi has validated SCOPE 1&2 TARGET Kemira’s science-based SCOPE 3 TARGET ~52% reduction ~33% reduction greenhouse gas emission by the end of 2030, by the end of 2033, reduction targets base year 2018 base year 2021 Kemira is a true frontrun
Slide 32: Sustainability performance in 2023
Sustainability performance in 2023 1/2 SDG KEY FIGURE UNIT 2023 SAFETY TRIF* 1.5 by the end of 2025 and 1.1 by the end of 2030 2.5 *TRIF = total recordable injury frequency per million hours, Kemira + contractors PEOPLE Reach top 10% cross industry norm for Diversity & Inclusion by the end of 2025 I
Slide 33: Sustainability performance in Q3 2024
Sustainability performance in Q3 2024 2/2 SAFETY TRIF* in January-September 2024 was 3.4 (1-9/2023: 2.4) with the Q3-specific TRIF also 3.4. Actions taken since the start of the year are expected to improve safety performance. In Q3 Kemira continued its global safety training program with the aim of
Slide 34: Pulp & Paper
INVESTOR PRESENTATION Pulp & Paper Driving growth as market leader Pulp & Paper will be divided to two business units starting 2025: • Fiber Essentials • Packaging & Hygiene Solutions OCTOBER 25, 2024 INVESTOR PRESENTATION 34
Slide 35: Pulp & Paper
Pulp & Paper TECHNOLOGY AND MARKET LEADER RAW CUSTOMER INTERMEDIATES PRODUCTS APPLICATIONS CUSTOMERS MATERIALS INDUSTRIES Electricity Tall oil rosin Sodium chlorate Pulping Pulp All the major global Sodium chloride AKD Wax Hydrogen peroxide Bleaching Packaging paper (salt) and board and pulp produce
Slide 36: Fiber Essentials focuses on critical pulp chemicals
Fiber Essentials focuses on critical pulp chemicals, particularly in mature markets KEY STRENGTHS OF NEW BUSINESS UNIT 5% • Strong customer loyalty and high retention 15% 15% • Long customer contracts with pricing largely based on formulas 15% REVENUE GEOGRAPHIC • Strong commitment to quality and re
Slide 37: Sodium Chlorate is the largest business
Sodium Chlorate is the largest business; market growing particularly in South America REGIONAL MARKET CAPACITIES* MARKET GROWING SLIGHTLY KEMIRA HAS A GOOD POSITION EUR billion +1% 20% of the global capacity* 10% 1.7 CAGR 1.5 #1 Market leader NA: -1% in EMEA 20% 45% In the growing South #2 American
Slide 38: We benefit from our customers' sustainability transition
We benefit from our customers’ sustainability transition CHEMICALS ARE A SIGNIFICANT CONTRIBUTOR WE ARE WORKING TO EXPAND OUR TO OUR CUSTOMERS’ SCOPE 3 EMISSIONS RENEWABLE PRODUCT PORTFOLIO Introducing sustainable and carbon free electrochemical as one of the pioneering suppliers Increasing customer
Slide 39: Packaging & Hygiene Solutions well positioned in several applications
Packaging & Hygiene Solutions is well positioned in several applications KEY STRENGTHS OF THE NEW BUSINESS UNIT • Long-term customer relationships 10% demonstrated through consistent reliability 25% and extensive collaboration; high customer 10% satisfaction KEMIRA KEMIRA 40% REVENUE REVENUE • High
Slide 40: Packaging & Hygiene Solutions is #2 in an expanding global market
Packaging & Hygiene Solutions is #2 in an expanding global market LARGE ADDRESSABLE MARKET SOME MARKET GROWTH KEMIRA HAS A GOOD MARKET EXPECTED POSITION 5% EUR billion ~2% 7.6 15% 6.7 #2 ~16% GLOBAL MARKET EUR MARKET POSITION ~7 BILLION 5.0 SHARE 15% 4.3 65% 1.1 1.3 Packaging & Board Other 1.0 0.8 T
Slide 41: Our products significantly improve our customers' footprint
RENEWABLE PRODUCTS Our products Positive climate impact* while maintaining product functionality Fossil-based raw materials cut by significantly >50% vs. standard products improve our customers’ STRENGTH DIGITAL SOLUTIONS footprint Making packaging Optimizing overall lighter and stronger, process im
Slide 42: Attractive growth in new end-markets
Attractive growth in new end-markets MOLDED TEXTILE RENEWABLE DIGITAL FIBERS FIBERS CHEMISTRY SOLUTIONS SERVICES Molded fiber continues Demand for novel sustainable Transition away from fossil- The chemical market is momentum as the sustain- solutions in the textile value based materials provides tr
Slide 43: We have a strong position particularly in EMEA
We have a strong position particularly in EMEA PULP PACKAGING & TISSUE PRINTING & WRITING EMEA Market position #1/2 #1/2 #1/2 North America Market position #3/4 #3 #2/3 APAC Market position n.a. #1/2 #1/2 South America Market position #2 #2/3 #2/3 OCTOBER 25, 2024 INVESTOR PRESENTATION Source: Kemir
Slide 44: Competitively positioned in growing fiber-based applications
We are 100 YEARS OF BROADEST PULP & EXPERTISE IN FIBER PAPER CHEMICAL WATER CHEMISTRY PRODUCT PORTFOLIO competitively IN THE WORLD positioned in the growing fiber- based applications LONG ESTABLISHED BROAD CAPABILITIES CUSTOMER TO SERVE CUSTOMERS RELATIONSHIPS ACROSS THE GLOBE OCTOBER 25, 2024 INVES
Slide 45: Industry & Water
INVESTOR PRESENTATION Industry & Water Ambition to double revenue in water Industry & Water will be transformed to Water Solutions as of 2025. It will become Kemira’s largest business unit. OCTOBER 25, 2024 INVESTOR PRESENTATION 45
Slide 46: Our water business is in excellent shape
Our water business is in excellent shape STRONG FINANCIAL PERFORMANCE WE HAVE AN EFFICIENT OPERATING PLATFORM IN RECENT YEARS EUR million % • Strong value proposition to customers: application know-how, product quality and supply security 350 336 23.3% 24 23.2% • Strong and typically long customer r
Slide 47: Industry & Water
Industry & Water TECHNOLOGY AND MARKET LEADER IN WATER TREATMENT AS WELL AS IN NICHE APPLICATIONS IN OIL & GAS RAW INTERMEDIATES PRODUCTS APPLICATIONS SALES CHANNELS CUSTOMERS MATERIALS Acrylonitrile Acrylamide Polymers Raw water & waste Direct sales Municipalities (EPAM, DPAM) water treatment Acryl
Slide 48: Strong positions particularly in EMEA water treatment
We have strong positions particularly in EMEA water treatment MARKET POSITION MARKET OUTLOOK EMEA Water treatment1,2) #1 NORTH AMERICA Water treatment1) Top 3 APAC Water treatment2) Top 10 OCTOBER 25, 2024 INVESTOR PRESENTATION I&W main product lines 1) Coagulants 2) Polymers 48
Slide 49: Our solutions improve our customers' footprint
MORE PHOSPHORUS REMOVAL WITH LOWER CARBON CHEMICAL FOOTPRINT WITH PHOSPHORUS CHEMICAL TREATMENT REMOVAL Up to Min Our solutions 90% 30% play a significant Coagulation enables better removal of phosphorus from With pre-precipitation at wastewater treatment plants role in improving wastewater discharg
Slide 50: Trends in water treatment provide opportunities for sustainable growth
Trends in water treatment provide solid opportunities for sustainable growth RELEVANT WATER TREATMENT RELEVANT MARKET TREND PRODUCTS & SOLUTIONS AND EXPECTED GROWTH MARKET CAGR EUR billion Energy efficiency in water 8-9% treatment processes CAGR 4-5% 18.4 5-6% Micropollutants removal 14.3 Accelerate
Slide 51: Micropollutant removal is an attractive growth opportunity
Micropollutant removal is an increasingly attractive and synergistic growth opportunity MARKET DESCRIPTION KEMIRA AND MICROPOLLUTANT REMOVAL Activated Carbon (AC) the most commonly used technology • Acquisition of Norit’s reactivation in micropollutant removal; market moving increasingly operations
Slide 52: Biogas applications are of increasing interest
Biogas applications are of increasing interest MARKET DESCRIPTION KEMIRA AND BIOGAS APPLICATIONS Biogas market expected to grow significantly in coming years • Our products, particularly coagulants, can due to increased focus on energy independence and green transition significantly enhance biogas y
Slide 53: Industrial water services present growth potential
Industrial water services also present interesting growth potential MARKET DESCRIPTION KEMIRA AND INDUSTRIAL WATER SERVICES Industrial water services include several applications, such • Kemira’s current industrial water treatment revenue as boiler & cooling, raw water intake and wastewater around E
Slide 54: Regulation continues to support growth in water treatment
Regulation continues to support the growth in water treatment REGION REGULATION UNDER REVIEW COMMENTS & IMPLICATIONS EUROPE Urban Wastewater Treatment Directive (UWWT) • Driver for the enforcement of existing legislation in all countries especially for phosphorus removal; tighter limits gradually st
Slide 55: Latest news and financials
INVESTOR PRESENTATION Latest news and financials OCTOBER 25, 2024 INVESTOR PRESENTATION 55
Slide 56: Highlights of Q3 2024
Highlights of Q3 2024 • Solid financial performance during the quarter; organic growth +2% driven by Industry & Water • Robust market demand in water treatment; recovery in the Pulp & Paper market slowed during the quarter • Operative EBITDA margin at 20.3% with solid margin performance in both segm
Slide 57: SBTi has validated Kemira's emission reduction targets
SETTING THE STANDARD WITH A FRONTRUNNER CLIMATE TARGET The SBTi has validated SCOPE 1&2 TARGET Kemira’s science-based SCOPE 3 TARGET ~52% reduction ~33% reduction greenhouse gas emission by the end of 2030, by the end of 2033, reduction targets base year 2018 base year 2021 Kemira is a true frontrun
Slide 58: Financial highlights of Q3 2024
Financial highlights of Q3 2024 Revenue EUR million Q3 Q3 1-9 1-9 • Considerable volume growth year-on-year of (except ratios) 2024 2023 Δ% 2024 2023 Δ% 2023 over 5% with growth in both segments. Rather Revenue 727.6 828.7 -12% 2,224.3 2,574.8 -14% 3,383.7 stable sales volumes sequentially. • Sales
Slide 59: Pulp & Paper: Volume growth and margin improvement
Pulp & Paper: Volume growth and margin improvement REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million Market environment in Q3 537 556 505 447 488 421 404 419 423 412 399 • Gradual market recovery slowed during the quarter • Softer demand in the APAC region impacting global 17% 22% 29% 28% 12%
Slide 60: Industry & Water: Strong organic growth and margin performance
Industry & Water: Strong organic growth and continued strong margin performance REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million Market environment in Q3 435 412 401 419 425 374 390 • Robust demand in both municipal and industrial water 322 340 329 329 291 288 291 296 321 321 treatment Organi
Slide 61: Focus areas for 2024
Focus areas for 2024 OPERATIVE PRIORITIES • Maintain strong financial performance in Industry & Water • Retain agility in Pulp & Paper following slowed market recovery in Q3 2024 STRATEGIC PRIORITIES • Explore organic and inorganic growth opportunities, particularly in water treatment • Design of th
Slide 62: We are well-positioned for profitable growth
WE ARE WELL-POSITIONED FOR PROFITABLE GROWTH We are We have We will execute accelerating structurally faster through growth – driven stronger the new Kemira by water and margins organization sustainability OCTOBER 25, 2024 INVESTOR PRESENTATION 62
Slide 63: First steps towards the new Kemira launching in 2025
First steps towards the new Kemira launching in 2025 NEW ORGANIZATIONAL MODEL NEW LONG-TERM FINANCIAL THE NEW KEMIRA TARGETS ORGANIZATION WILL PROVIDE: 2025 onwards • speed & agility AVERAGE >4% • increased strategic focus ANNUAL • even higher customer- ORGANIC centricity GROWTH WATER SOLUTIONS MAIN
Slide 64: Increased ambition levels in sustainability-driven strategic priorities
We have increased ambition levels in our sustainability-driven strategic priorities EXPAND IN WATER BUILD LEADING RENEWABLE UNLOCK NEW GROWTH SOLUTIONS PORTFOLIO PLATFORMS Significantly grow our water Enable sustainability transformation Increase penetration into selected new business by expanding t
Slide 65: Financials Q3 2024
PETRI CASTRÉN CFO Financials Q3 2024 OCTOBER 25, 2024 INVESTOR PRESENTATION 65
Slide 66: Solid margin performance in both segments
Solid margin performance in both segments Q3/2024 REVENUE AND ORGANIC GROWTH (Y-ON-Y) Organic revenue growth 2% in Q3 2024, -2% in EUR million 1-9 2024 829 • Strong organic growth in Industry & Water compensated for * 728 -16% 695 6% -5% -1% 3% stable development in Pulp & Paper • Considerable year-
Slide 67: Net impact from variable costs and sales prices slightly negative
Net impact from variable costs and sales prices slightly negative SALES PRICES AND VARIABLE COSTS (CHANGE Y-O-Y) EUR million 300 269 250 256 200 197 188 129 174 150 152 138 141 99 122 100 68 64 97 59 11 4 8 32 28 70 36 75 50 -20 -10 -2 -2 24 28 25 16 28 15 62 16 66 9 5 -3 47 42 -12 -16 16 26 37 34 4
Slide 68: Strong balance sheet and operative ROCE
Strong balance sheet and operative ROCE NET DEBT (EUR million) AND LEVERAGE RATIO* 850 • Balance sheet remains record-strong 771 535 • Gearing 18% (34% in Q4 2023) 310 • Net debt / operative EBITDA at a record-strong level 2.0 1.3 0.8 of 0.5 0.5 • Average interest rate of net debt excluding leases D
Slide 69: Continued strong cash flow generation
Continued strong cash flow generation ALL KEY FIGURES IN EUR MILLION CASH FLOW FROM OPERATIONS Q1 Q3 • Solid cash flow during the quarter; net working capital 546 Q2 Q4 increased slightly 97 401 413 133 • Supplementary pension fund Neliapila returned the 42 115 143 97 319 excess funds of around EUR
Slide 70: Outlook for 2024 (unchanged)
Outlook for 2024 (unchanged) OUTLOOK REVENUE ASSUMPTIONS BEHIND THE OUTLOOK (UNCHANGED) Kemira's revenue is expected to be between EUR • Kemira’s end-market demand (in volumes) is expected to 2,800 million and EUR 3,200 million in 2024 (reported grow in 2024 following expected gradual demand recover
Slide 71: New long-term financial targets
New long-term financial targets reflect our profitable growth ambitions and stronger fundamentals AVERAGE ANNUAL OPERATIVE OPERATIVE RETURN ON ORGANIC GROWTH EBITDA CAPITAL EMPLOYED > 4% 18-21% > 16% OCTOBER 25, 2024 INVESTOR PRESENTATION 71
Slide 72: New business units have different financial profiles
New business units have different financial profiles BUSINESS WATER FIBER PACKAGING & UNIT SOLUTIONS ESSENTIALS HYGIENE SOLUTIONS % of total sales* ~45% ~20% ~35% Cyclicality Low Medium Medium Pricing structure Majority fixed pricing Majority formula-based Majority fixed pricing Capital intensity Lo
Slide 73: Factors to watch in 2025
Factors to watch in 2025 FACTORS EXPECTED TO IMPACT THE OPERATIVE EBITDA DEVELOPMENT IN 2025 SUPPORTING UNCERTAINTIES POSSIBLE NEGATIVE FACTORS • Solid end-market demand in • Global economic uncertainty water treatment and its impact on Pulp & • Fixed cost pressure Paper market following strong infl
Slide 74: Kemira's cost structure and top raw materials
Kemira’s cost structure and top raw materials DIRECT PURCHASES AND EXPOSURE TO OIL RELATED TOP 12 RAW MATERIALS LOGISTICS COSTS 2023 RAW MATERIALS BY SPEND (around 50% of total EUR 1.8 billion raw material spend) 66% 34% 1. Acrylonitrile (OD) 20% Not oil Oil & gas 2. Sodium hydroxide (caustic
Slide 75: Cost structure and top raw materials excluding O&G
Kemira’s cost structure and top raw materials excluding O&G DIRECT PURCHASES AND EXPOSURE TO OIL RELATED TOP 12 RAW MATERIALS LOGISTICS COSTS 2023 RAW MATERIALS BY SPEND (around 50% of total EUR 1.6 billion raw material spend) 75% 25% 1. Sodium hydroxide (caustic soda)* 21% Not oil Oil & gas 2
Slide 76: Kemira has a diversified financing base
Kemira has a diversified financing base 17% GROSS DEBT END OF JUNE 2024 EUR 753 MILLION, MATURITY PROFILE EXCLUDING LEASES Leases 129 million 450 41% 400 400 350 16% Loans from 300 banks and 250 financial Other 193 200 institutions 200 EUR 117 EUR 313 million million 150 120 100 100 50 16 0 2024 202
Slide 77: Majority of contracts with fixed annual pricing
Majority of contracts with fixed annual pricing Pulp & Paper – Contract types and pricing terms* • Length – Around 95% of contracts are 1-year or longer / only 5% are spot deals • Pricing – Around 65% fixed / 35% formula or spot pricing Industry & Water – Contract types and pricing terms* • Length –
Slide 78: Kemira aims to pay an attractive dividend
Kemira aims to pay an attractive dividend KEMIRA’S DIVIDEND POLICY Competitive and over-time increasing dividend No fixed payout ratio We have a solid dividend track record 0.68* Dividend per share Dividend yield 0.62 0.58 0.58 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.56 5.8% 5.4% 5.4% 4.5% 4.9
Slide 79: Appendix
INVESTOR PRESENTATION Appendix OCTOBER 25, 2024 INVESTOR PRESENTATION 79
Slide 80: Very limited currency impact in Q3 2024
Very limited currency impact in Q3 2024 KEMIRA REVENUE DISTRIBUTION IN 2023 (EXCL. O&G BUSINESS) • Main currency exposure comes via translation 7% Others impact 2% PLN 43% EUR • Transaction risk is limited as revenues and costs 2% BRL are typically in same currency due to local 2% SEK manu
Slide 81: Key figures (reported)
Key figures (reported) EUR million Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 2023 2022 Revenue 727.6 733.4 763.3 808.8 828.7 3,383.7 3,569.6 Operative EBITDA 147.4 140.5 162.5 162.7 160.3 666.7 571.6 margin 20.3% 19.2% 21.3% 20.1% 19.3% 19.7% 16.0% Operative EBIT 100.8 94.0 117.6 112.6 107.6 463.0 361
Slide 82: Key figures, Oil & Gas divestment adjusted
Key figures, Oil & Gas divestment adjusted EUR million Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 2023 2022 Revenue 727.6 733.4 718.8 690.2 694.3 2,889.0 3,141.1 Operative EBITDA 147.4 140.5 159.2 149.3 143.8 595.9 518.3 margin 20.3% 19.2% 22.2% 21.6% 20.7% 20.6% 16.5% Operative EBIT 100.8 94.0 114.4 1
Slide 83: Cash flow
Cash flow EUR million Q3 2024 Q3 2023 2023 2022 Net profit for the period 67.2 75.2 211.3 239.7 Total adjustments 78.9 78.3 429.4 348.1 Change in net working capital -17.6 37.9 14.9 -101.8 Finance expenses -3.7 -5.7 -18.8 -52.2 Income taxes paid -12.7 -12.6 -90.8 -33.5 Net cash generated from operat
Slide 84: Pulp & Paper key financials
Pulp & Paper KEY FINANCIALS EUR million Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 2023 2022 Revenue 399.0 412.4 422.9 418.8 403.6 1,748.2 2,027.7 Operative EBITDA 70.7 67.9 88.2 87.5 68.9 330.9 348.0 margin 17.7% 16.5% 20.9% 20.9% 17.1% 18.9% 17.2% Operative EBIT 41.1 37.1 59.8 58.6 39.8 193.4 225.7 m
Slide 85: Industry & Water key financials
Industry & Water KEY FINANCIALS EUR million Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 2023 2022 Revenue 328.6 321.0 340.5 390.0 425.1 1,635.5 1,541.9 Revenue, O&G divestment adjusted 328.6 321.0 295.9 271.4 290.7 1,140.9 1 113,40 Operative EBITDA 76.7 72.6 74.3 75.2 91.5 335.8 223.7 Margin 23.3% 22.6%
Slide 86: Revenue split by country (excl. Oil & Gas)
Revenue split by country (excl. Oil & Gas) FY 2023 Other APAC 6% China 4% Other EMEA 9% USA 25% Belgium 2% Netherlands 2% France 2% Spain 3% Italy 3% Canada 6% Poland 3% Brazil 2% UK 3% Other Americas 3% Germany 4% Sweden 7% Finland 15% OCTOBER 25, 2024 INVESTOR PRESENTATION 86
Slide 87: Largest shareholders and Board of Directors
Kemira – largest shareholders and Board of Directors SHAREHOLDERS ON SEPTEMBER 30, 2024 KEMIRA BOARD OF DIRECTORS MATTI TIMO % OF SHARES KÄHKÖNEN LAPPALAINEN 1. Oras Invest 22.6% Chair Member since Member since 2014 2. Varma Mutual Pension Insurance Company 3.7% 2021 3. Nordea Funds 2.9% ANNIKA MIKA
Slide 88: Kemira's Management Board 2024
Kemira’s Management Board 2024 ANTTI SALMINEN TUIJA POHJOLAINEN- LINUS HILDEBRANDT President & CEO HILTUNEN EVP, Strategy with Kemira since 2011 President with Kemira since 2023 Industry & Water with Kemira since 2008 PETRI CASTRÉN MATTHEW PIXTON EEVA SALONEN CFO CTO EVP, Human Resources with Kemira
Slide 89: Forward with the new leadership team as of 2025
FORWARD WITH THE NEW LEADERSHIP TEAM AS OF 2025 Antti Harri Linus Salminen Eronen Hildebrandt President & EVP, EVP, Strategy CEO Packaging & & Sustainability Hygiene Solutions Petri Antti Sampo Castrén Matula Lahtinen CFO EVP, Fiber EVP, Essentials Research & Innovation Tuija Eeva Peter Pohjolainen-
Slide 90: Important information about financial figures
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Slide 91: Chemistry with a purpose.
4 e mM | cra Chemistry with a purpose. Better every day.