Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q2 2009 Earnings Presentation
24 slides from Kemira Oyj's earnings presentation, Jul 30, 2009
Slide 1: Marked Increase in Operating Profit in Q2
Marked Increase in Operating Profit in Q2 Harri Kerminen, President & CEO July 30, 2009
Slide 2: Contents
Contents Kemira in Brief Kemira Group – Q2 Highlights Segments – Q2 Highlights 2
Slide 3: Kemira in Brief
Kemira in Brief Kemira
Slide 4: Freshwater Offers Potential
Freshwater Offers Potential The world uses fresh water 70% for irrigation 22% for industry 8% for domestic use (World Water Assessment Programme, WWAP) Freshwater consumption has more than doubled since the World War II and is expected to rise another 25% by 2030, mainly due to world popul
Slide 5: Kemira Focuses on Water
Kemira Focuses on Water Full utilization of shared competencies Water quality management Common product range Uniform Kemira Common objectives Common way of working The objective is to list Tikkurila on the stock market when the market situation so allows Tikkurila’s goal is to be th
Slide 6: Kemira excluding Tikkurila: ~75% is Water Related
Kemira excluding Tikkurila: ~75% is Water Related Revenue excluding Tikkurila in 2008 ~2 billion € 75% water related businesses 6
Slide 7: Kemira Group – Q2 Highlights
Kemira Group – Q2 Highlights 7
Slide 8: Operative EBIT from Continuing Businesses Increased by 52%
Operative EBIT from Continuing Businesses Increased by 52% Revenue from continuing businesses* fell only by 5% in Q2/2009 compared to Q2/2008 Lower volumes in Paper and Tikkurila Excluding Tikkurila, revenue increased by 2% Operative EBIT from continuing businesses increased by 52%, or 18.4
Slide 9: Key Figures Q2
Key Figures Q2 Q2/2008 Q2/2008 (M€) Q2/2009 2008 Continuing Reported Revenue 650.9 686.4 741.5 2,832.7 Operative EBIT 53.8 35.4 37.2 132.6 Operative EBIT, % 8.3 5.2 5.0 4.7 Operative EPS (EUR) 0.25 0.12 0.29 EPS (EUR) 0.23 0.15 -0.02 Equity ratio, % 35 37 34 Gearing, % 104 99 107 CapEx excl. acquisi
Slide 10: EBIT excl. Non-Recurring Items, % of Revenue Q2/2009 vs. Q2/2008
EBIT excl. Non-Recurring Items, % of Revenue Q2/2009 vs. Q2/2008 16 Q2/09 Q2/08 14 12 Q2/09 10 8 Q2/09 6 Q2/09 Q2/08 4 Q2/08 Q2/08 2 0 Paper Water Oil & Mining Tikkurila 10
Slide 11: Revenue Q2/2009 vs. Q1/2009
Revenue Q2/2009 vs. Q1/2009 250 Q1/09Q2/09 200 Q2/09 Q2/09 Q1/09 150 Q1/09 100 Q1/09Q2/09 50 0 Paper Water Oil & Mining Tikkurila* *Seasonal effect 11
Slide 12: Key Figures H1
Key Figures H1 H1/2008 H1/2008 (M€) H1/2009 Continuing Reported Revenue 1,259.6 1,315.7 1,425.1 Operative EBIT 81.9 61.3 64.4 Operative EBIT, % 6.5 4.7 4.5 Operative EPS (EUR) 0.30 0.21 EPS (EUR) 0.28 0.27 Equity ratio, % 35 37 Gearing, % 104 99 CapEx excl. acquisitions 36.1 87.5 Free cash flow afte
Slide 13: Cash Flows
Cash Flows M€ H1/2009 H1/2008 2008 Funds from operations 98.9 72.9 118.9 Change in net working capital -11.2 -58.3 -28.7 Cash flows from operations 87.7 14.6 90.2 CapEx excl. acquisitions -36.1 -87.5 -161.0 Acquisitions -3.7 -3.9 -180.8 Sale of assets 1.6 11.1 254.3 Free cash flow 49.5 -65.7 2.7 13
Slide 14: Balance Sheet
Balance Sheet 30 Jun 09 31 Dec 08 Net debt (M€) 1,033.7 1,049.1 Equity (M€) 991.4 976.0 Capital employed (M€)* 2,031.4 2,062.8 Net Working Capital (M€) 371.2 358.6 Equity ratio, % 35 34 Gearing, % 104 107 *12-month rolling average Net debt decreased thanks to positive cash flows. 14
Slide 15: No Refinancing Needs in the Near Future
No Refinancing Needs in the Near Future Kemira has diversified loan portfolio from different sources. The unused amount of the Revolving Credit Facility (RCF) was 313 M€ on June 30 Due to improved liquidity position, the unused amount of the RCF will increase by 40 M€ up to 353 M€ by the end o
Slide 16: Segments – Q2 Highlights
Segments — Q2 Highlights Kemifra
Slide 17: Paper
Paper Revenue decreased by 8% Customer demand continued to be weak Sales was on the level of Q1/2009 Operative EBIT 8.0 M€ (7.6) Sales price increases and fixed cost savings compensated lower sales volumes Variable cost increase, impact -3 M€ JV established in China in January has star
Slide 18: Water
Water Excellent result in Q2 Revenue increased by 11% Demand in municipal water treatment remained good Weakening demand in some industrial customer segments Acquisition of Nheel Química, impact on revenue 7 M€ Operative EBIT 18.2 M€ (4.7) Sales price increases, for the most part in H2
Slide 19: Oil & Mining
Oil & Mining Revenue declined by 17% In the oil and gas industry, high oil stocks and weak demand undermined prices. Upstream operations were at the lowest level in more than a year In the mining industry, volumes and prices remained low due to the recession’s impact Operative EBIT 3.2 M€ (2
Slide 20: Tikkurila
Tikkurila Very good result despite lower volumes and currencies Revenue declined by 21% Slowdown in new construction and in building material sales Currency exchange effect -25 M€ Operative EBIT 24.5 M€ (29.7), EBIT-% rose to 15.1% (14.4%) Fixed cost savings on track Currency exchange
Slide 21: Other (Specialty Chemicals and Group Expenses)
Other (Specialty Chemicals and Group Expenses) Specialty chemicals Specialty product lines based on a niche strategy Organic salts and acids for the food, feed, and pharmaceutical industries Demand was good, with good price level and profitability M€ Q2/09 Q2/08 H1/09 H1/08 2008* Revenue 71.7
Slide 22: Kemira Group’s Outlook
Kemira Group’s Outlook Kemira's revenue in 2009 is expected to fall compared to 2008 due to reduced demand in customer industries, especially in Tikkurila and in pulp and paper chemicals. Operating profit in continuing business operations, excluding non- recurring items, is expected to increase
Slide 23: Focus
Focus Implementation of the water strategy Developing the company based on its Cash flow ↑ strengths Integration of the company EBIT % ↑ ↓ Gearing <100% with cash flow management Costs <80% by listing Tikkurila and exiting TiO2 JV Creating new Gearing ↓ Research and product developme
Slide 24: Kemifra
Kemifra