Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q3 2001 Earnings Presentation
27 slides from Kemira Oyj's earnings presentation, 2001
Slide 1: Highlights 1-3Q 2001
Highlights 1-3Q 2001 Sales € 1 853 million, underlying growth 8% Operating income € 127 million, down by 8% - pension contributions increased strongly EPS € 0.55 up by 12% (excl. discontinuing operations) Equity / share € 9.42 Industri Kapital and the Finnish State have preliminarily agree
Slide 2: Kemira Group 1-3Q 2001
Kemira Group 1-3Q 2001 80 Other 70 Paints & 2% Coatings 60 19 % 50 € million Chemicals 1-3Q 01 35% 40 1-3Q 00 30 20 Agro 10 Nitrogen 19 % 0 Agro Chemicals Coatings Paints & Agro Specialties 25 % Net sales 1-3Q 2001: € 1 853 m Operating income 1-3Q 2001: € 127 m 7/23/2008 www.kemira.com 2
Slide 3: Strong growth
Strong growth Capital expenditure € 235 m Acquisitions Other - paper chemicals operations of van Baerle, 2% Agro Switzerland Chemicals 17 % - ferrichloride business of Ageco, Italy 30% - Cargas Blancas calcium sulphate pigment business, Spain Organic growth - extension of the sodium percarbona
Slide 4: Chemicals
Chemicals Net sales Operating income 900 Net sales % 120 16 14 100 600 12 € million 80 10 € million 60 8 300 40 6 4 20 2 0 0 0 96 97 98 99 00 01 96 97 98 99 00 01 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 4
Slide 5: Pulp & Paper Chemicals
Pulp & Paper Chemicals Sales + 9 % over 2000 y-o-y Pulp & paper industry continued Sulphur Bleaching production cutbacks chemicals chemicals Finnish paper production -5% and chemical pulp production -7% in Q1-3 y-o-y Increased raw material prices squeezed margins, esp. in bleaching chemicals
Slide 6: Kemwater
Kemwater Sales growth 5% over 2000 y-o-y Vision of Strong improvement in Central and Southern Europe emistry Ferrichloride business of Ageco bought in Italy Increasing ownership in Chinese joint venture to 89% (60%) Further emphasis on R & D - water competence center in Oulu - recycling co
Slide 7: Industrial Chemicals
Industrial Chemicals Fine Chemicals Sales close to the same level as 2000 Chemidet TiO2 volumes +3% and prices CC-products decreasing Pigments Formic acid continues strong, calcium Formics chloride sales and profitability improved Extension of sodium percarbonate production started successfu
Slide 8: Paints and Coatings
Paints and Coatings Net sales Operating income % 400 50 20 40 16 300 30 12 € million € million 200 20 8 100 10 4 0 0 0 -10 -4 96 97 98 99 00 01 96 97 98 99 00 01 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 8
Slide 9: Paints and Coatings
Paints and Coatings Deco Integration of Tikkurila Paints and Alcro-Beckers continues at a good pace Sales up by 163% Sales growth strong in main markets Margins reduced due to goodwill depreciations, synergies will more than compensate Coatings Sales 6% over 2000 y-o-y Depreciation of Sw
Slide 10: Agro
Agro Net sales Operating income % 150 15 1 200 1 000 100 10 € million € million 800 50 5 600 400 0 0 200 0 -50 -5 96 97 98 99 00 01 96 97 98 99 00 01 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 10
Slide 11: Agro Specialties
Agro Specialties Reported sales growth strong y-o-y boosted by the increase in ownership of UAB Kemira Lifosa and strong performance of feed phosphates NPK prices continued firm, volumes down by 15% leading to production cutbacks Uusikaupunki plant in Finland to be modernized by EUR 10 million
Slide 12: Agro Nitrogen
Agro Nitrogen Sales clearly below 2000 y-o-y; prices continued firm, volumes down substantially Record wet spring affected sales leading to production cutbacks Natural gas prices higher than in the previous year Fixed costs markedly lower following the closure of the Rozenburg plant Effort
Slide 13: Kemira Group
Kemira Group Net sales Operating income % 2800 250 12 2400 200 10 2000 € million 8 1600 150 € million 6 1200 100 800 4 400 50 2 0 0 0 96 97 98 99 00 01 96 97 98 99 00 01 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 13
Slide 14: Gearing
Net debt 1 050 100 900 80 750 60 € million Gearing 600 450 40 300 20 150 0 0 96 97 98 99 00 3Q01 7/23/2008 www.kemira.com 14
Slide 15: Net financing expenses and average interest rate
Net financing expenses 80 8 70 7 Average interest rate 60 6 50 5 € million 40 4 30 3 20 2 10 1 0 0 96 97 98 99 00 01 Q1 Q2 Q3 Q4 Average interest rate 7/23/2008 www.kemira.com 15
Slide 16: Cash flow
Cash flow 550 450 350 € million 250 150 50 -50 -150 96 97 98 99 00 1-3Q01 Cash flow from operations Cash flow after investments and disposals 7/23/2008 www.kemira.com 16
Slide 17: Financial targets
Financial targets Profitable growth, capital efficiency and healthy balance sheet Rolling Target 2000 12 mths > 2001 Growth rate (%)1) 11 10 >10 EBIT margin (%)1) 8 7 >10 EPS growth (%) 217 93 >10 CFROI (%) 11 8 >10 Gearing 2) (%) 37 59 40-100 1) Continuing operations 2) Net debt / (equity
Slide 18: Valuation / ownership
Valuation / ownership Market capitalisation / equity Ownership 1 Nov 2001 1500 Finnish instit. Public 1200 27.0% 6.5% 900 Kemira € million 2.1 % Int. instit. 600 8.2% 300 Finnish 0 State 95 96 97 98 99 00 01 56.2% Equity / share € 9.42 State’s minimum 15% -95 option programme until Jan 2002 2
Slide 19: Outlook for the year (1)
Outlook for the year (1) Chemicals – Pulp & Paper Chemicals unit affected by weaker demand within pulp & paper industry – Kemwater is expected to continue strong performance – Industrial Chemicals’ outlook good for formic acid, calcium chloride and detergent chemicals – Market outlook for titanium
Slide 20: Outlook for the year (2)
Outlook for the year (2) Agro – Uncertainty because of high inventory levels – Production cutbacks will continue – Autumn fertilizer season started off at the same price level as last year – Due to low nutrient content of soil demand is expected to improve during the new season – Efficiency improv
Slide 21: Kemira and Dynea together?
Kemira and Dynea together? State of Finland and Industri Kapital have reached a preliminary agreement to combine Kemira, Dynea and Sydsvenska Kemi to form a new global specialty chemicals company Sydsvenska Kemi 7/23/2008 www.kemira.com 21
Slide 22: The new company
The new company Global chemicals company, domiciled in Finland Major business areas: resins, coatings, pulp and paper chemicals, water treatment chemicals The goal is to become the leading operator in selected segments in the chemical industry Net sales EUR 4.3 billion (pro forma 2000) Per
Slide 23: Benefits to be achieved
Benefits to be achieved Combination will release latent shareholder value in Kemira´s share Bigger size will give an advantage in planned future listing The new company will be able to focus more effectively on specialty chemicals and can ultimately improve on results The new company will be
Slide 24: Synergies
Synergies Little overlap between Kemira´s and Dynea´s operations Æ effective organization and operational model Main objective of the combination is to grow in size and operational power rather than cut costs Positive outcome of the combination will expand company size, improve market presence
Slide 25: New company's structure and management
New company´s structure and management Dynea is the parent company owning Kemira, Sydsvenska Kemi and Dynea International Suggested Managing Director of the new company: Tauno Pihlava Board of directors to consist of seven members (four members to be appointed by IK, two by the Finnish State,
Slide 26: Next steps
Next steps The completion of the agreement is subject to – due diligence –procedures – approval by the Finnish parliament – approval by regulatory , competition and other authorities – public tender offer to shareholders in Kemira completed – expected completion of agreement by end of 2001 7/23/20
Slide 27: Reflections to Kemira
Reflections to Kemira Intensified development in core business areas while planned development continues in other areas Changes in the group business portfolio subject to decisions by the new company board Combination process does not include plant closures New board will decide on the compa