Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Kemira Oyj Ord — Q2 2024 Earnings Presentation
29 slides from Kemira Oyj's earnings presentation, Jul 17, 2024
Slide 1: Considerable volume growth and profitability improvement following continued end-market recovery
ANTTI SALMINEN, PRESIDENT & CEO PETRI CASTRÉN, CFO JULY 17, 2024 Considerable volume growth and profitability improvement following continued end-market recovery JANUARY – JUNE 2024
Slide 2: Highlights of Q2 2024
Highlights of Q2 2024 • End-market recovery continued. Kemira’s volumes increased considerably year-on-year and slightly on a sequential basis. • Continued strong margin performance in Industry & Water • Entry into the activated carbon market for micropollutants removal – first steps through an acqu
Slide 3: Record-high customer satisfaction and excellent employee engagement
Record-high customer satisfaction and excellent employee engagement NET PROMOTER SCORE EMPLOYEE ENGAGEMENT 59 80 (57 in 2023) (80 in 2023) JULY 17, 204 Q2 2024 RESULT PRESENTATION 3
Slide 4: Financial highlights of Q2 2024
Financial highlights of Q2 2024 Revenue EUR million Q2 Q2 H1 H1 • Considerable volume growth year-on-year, slight (except ratios) 2024 2023 Δ% 2024 2023 Δ% 2023 volume growth sequentially. Sales prices Revenue 733.4 840.1 -13% 1,496.7 1,746.1 -14% 3,383.7 declined year-on-year, particularly in energ
Slide 5: Pulp & Paper: End-market recovery continued, considerable volume growth
Pulp & Paper: End-market recovery continued, considerable volume growth Market environment in Q2 REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million • Market recovery continued in all geographic regions 537 556 505 488 and product groups 447 421 404 419 423 412 Organic growth Q2: -1%, H1 2024 -7
Slide 6: Industry & Water: Strong margin performance and volume growth
Industry & Water: Strong margin performance and volume growth Market environment in Q2 REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million • End-markets continued to recover, particularly in 435 412 419 425 industrial water treatment 374 402 390 340 322 291 288 296 321 321 • Both EU by UWWTD (Ur
Slide 7: We announced two investments as a part of the strategy to expand our water business
We announced two investments as a part of the strategy to expand our water business Entry into the micropollutants removal Capacity expansion in Spain market • Expansion of coagulant (ferric chloride) • Kemira took the first steps in July in capacity in Tarragona, Spain to cater for entering the act
Slide 8: Focus areas for 2024
Focus areas for 2024 OPERATIVE PRIORITIES • Maintain strong financial performance in Industry & Water • Capitalize on market recovery in Pulp & Paper STRATEGIC PRIORITIES • Explore organic and inorganic growth opportunities, particularly in water treatment • Continue the review of strategic initiati
Slide 9: Financials Q2 2024
PETRI CASTRÉN CFO Financials Q2 2024 JULY 17, 2024 Q2 2024 RESULT PRESENTATION 9
Slide 10: Strong margin performance in Industry & Water
Strong margin performance in Industry & Water Q2/2024 REVENUE AND ORGANIC GROWTH (Y-ON-Y) Organic revenue growth 1% in Q2 2024, -4% in EUR million H1 2024 840 • Growth in Industry & Water compensated for the slight decline -16% 704* 7% -6% 3% 733 in Pulp & Paper in Q2 2024 -0% • Considerable year-on
Slide 11: Rather neutral net impact from variable costs and sales prices
Rather neutral net impact from variable costs and sales prices 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 47 42 -3 -16 16 26 37 34 43 38 -2
Slide 12: Return on capital employed remained strong
Return on capital employed remained strong NET DEBT (EUR million) AND LEVERAGE RATIO* 850 • Balance sheet remains record-strong 771 535 • Gearing 21% (32% in Q4 2023) - well below the 368 financial target range of below 75% 2.0 1.3 0.8 • Net debt / operative EBITDA at a record-strong level 0.6 of 0.
Slide 13: Continued strong cash flow generation
Continued strong cash flow generation ALL KEY FIGURES IN EUR MILLION CASH FLOW FROM OPERATIONS • Strong cash flow during the quarter; net working capital 546 Q1 Q3 stable 97 Q2 Q4 401 133 • Supplementary pension fund Neliapila returned the 42 115 143 excess funds of around EUR 12 million during Q1 2
Slide 14: Outlook for 2024 (upgraded on June 10)
Outlook for 2024 (upgraded on June 10) OUTLOOK REVENUE ASSUMPTIONS BEHIND THE OUTLOOK (UPDATED ON JUNE 10) Kemira's revenue is expected to be between EUR 2,800 million and EUR 3,200 million in 2024 (reported • Kemira’s end-market demand (in volumes) is expected to grow in 2024 following expected gra
Slide 15: Capital Markets Day
CAPITAL MARKETS DAY Kemira will hold a Capital Markets Day on Thursday September 26, 2024 between 1–6 pm Finnish time. The CMD will be held physically in Helsinki, Finland. The event can also be followed via a live webcast. Register by September 5! APRIL 26, 2024 Q1 2024 RESULT PRESENTATION kemira.c
Slide 16: Chemistry with a purpose. Better every day.
4 e mM | cra Chemistry with a purpose. Better every day.
Slide 17: Appendix
Appendix JULY 17, 2024 Q2 2024 RESULT PRESENTATION 17
Slide 18: Kemira in brief
Kemira in brief LTM EXCL. OIL & GAS: REVENUE EUR 2,836.7 MILLION, OPERATIVE EBITDA EUR 592.8 MILLION, OPERATIVE EBITDA MARGIN 20.9%, 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 di
Slide 19: 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% tissue writing papers 10% 1,800 260 Bleaching 245 Po
Slide 20: 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 21: Very limited currency impact in H1 2024
Very limited currency impact in H1 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 22: Key figures (reported)
Key figures (reported) EUR million Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 2023 2022 Revenue 733.4 763.3 808.8 828.7 840.1 906.0 3,383.7 3,569.6 Operative EBITDA 140.5 162.5 162.7 160.3 151.0 192.6 666.7 571.6 margin 19.2 21.3% 20.1% 19.3% 18.0% 21.3% 19.7% 16.0% Operative EBIT 94.0 117.6 11
Slide 23: Key figures, Oil & Gas divestment adjusted
Key figures, Oil & Gas divestment adjusted EUR million Q2 Q1 Q4 Q3 Q2 Q1 2024 2024 2023 2023 2023 2023 2023 2022 Revenue 733.4 718.8 690.2 694.3 709.1 795.6 2,889.0 3,141.1 Operative EBITDA 140.5 159.2 149.3 143.8 133.3 169.4 595.9 518.3 margin 19.2% 22.2% 21.6% 20.7% 18.8% 21.3% 20.6% 16.5% Operati
Slide 24: Cash flow
Cash flow EUR million Q2 2024 Q2 2023 2023 2022 Net profit for the period 65.4 67.7 211.3 239.7 Total adjustments 71.0 74.7 429.4 348.1 Change in net working capital 5.6 25.0 14.9 -101.8 Finance expenses -3.9 -11.3 -18.8 -52.2 Income taxes paid -28.8 -13.2 -90.8 -33.5 Net cash generated from operati
Slide 25: Pulp & Paper
Pulp & Paper KEY FINANCIALS EUR million Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 2023 2022 Revenue 412.4 422.9 418.8 403.6 421.2 504.6 1,748.2 2,027.7 Operative EBITDA 67.9 88.2 87.5 68.9 65.2 109.4 330.9 348.0 margin 16.5 20.9 20.9% 17.1% 15.5% 21.7% 18.9% 17.2% Operative EBIT 37.1 59.8 58.6
Slide 26: Industry & Water
Industry & Water KEY FINANCIALS EUR million Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 2023 2022 Revenue 321.0 340.5 390.0 425.1 418.9 401.5 1,635.5 1,541.9 Revenue, O&G divestment adjusted 321.0 295.9 271.4 290.7 287.9 291.0 1,140.9 1 113,40 Operative EBITDA 72.6 74.3 75.2 91.5 85.8 83.3 335.8
Slide 27: 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% JULY 17, 2024 Q2 2024 RESULT PRESENTATION 27
Slide 28: Important information about financial figures
Important information about financial figures Kemira provides certain financial performance measures (alternative performance measures) that are not defined by IFRS. Kemira believes that alternative performance measures followed by capital markets and Kemira management, such as revenue growth in loc
Slide 29: Kemira
Kemifa