Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — FY2000 Earnings Presentation
41 slides from Kemira Oyj's earnings presentation, Feb 5, 2001
Slide 1: Highlights 2000
Highlights 2000 Sales € 2,486m, underlying growth 11 % Operating income € 175m, up by 58 % Income after financing items € 144m, up by 146 % EPS € 0.73, up by 217 % (excl. non-recurring items) Year of major structural overhaul Strong cash flow platform for growth Proposed dividend 0.30
Slide 2: Sales and operating income
Sales and operating income 80 70 60 Tikkurila Other 2 % 13 % 50 40 Chemicals Pigments 30 % 30 € million 12% 20 2000 10 1999 0 o rila ts micals a Ag r en -10 Tikku Pigm Kemir a Ch e -20 Kemir -30 Agro -40 43% Net sales 2000: € 2,486m Operating income 2000: 7/23/2008 € 175m www.kemira.com 2
Slide 3: Strategic transformation is progressing ...
Strategic transformation is progressing ... Enhance shareholder value: – Savannah and Rotterdam divestment completed, capital gain ca. € 149m – Tinting system deal closed, capital gain € 96m – Safety divestment completed, capital gain € 12m – Nitrogen fertilisers divestment efforts continue, Rozenbu
Slide 4: Emphasis is changing ...
Emphasis is changing ... Growth is starting: Capital expenditure € 218m Pigments Other 2 % Acquisitions: 12 % – Alcro-Beckers and Mason Coatings Chemicals – Krems Paper chemicals 46 % – 15 % stake in American water Agro 30 % treatment company Kemiron Paint plant started operations in Moscow ar
Slide 5: Major structural overhaul
Major structural overhaul Net sales 1999: € 2,526m Net sales - pro forma Tikkurila 14 % Tikkurila Chemicals 26 % Chemicals Pigments Agro Agro 19 % 38 % 7/23/2008 www.kemira.com 5
Slide 6: EPS growth > 10 %
EPS growth > 10 % Business Price Cost volume Pulp and Paper + 6 → 20 % synergy Kemwater + 3 Æ 20 % synergy recycled rawmaterials Paints + 3 Æ 20 % synergy Industrial Chemicals +2Æ6% capacity increases Kemira Agro +0Æ5% capacity utilization Specialties Group > 10 % 7/23/2008 www.kemira.com 6
Slide 7: Improving the quality of life
Improving the quality of life Vision – We are the preferred partner to our customers, offering complete solutions Values – Respect for individuals – Innovation – Working together – Result-orientation 7/23/2008 www.kemira.com 7
Slide 8: Capital strategy
Capital strategy “Push” Focus “Pull” Focus BRAND CAPITAL HUMAN CAPITAL WORKING CAPITAL PHYSICAL CAPITAL (Outsourcing Network) 7/23/2008 5.2.2001 88 www.kemira.com www.kem ira .com
Slide 9: Kemira Chemicals
Kemira Chemicals Net sales 90 Operating income 16 % 80 14 750 70 12 60 10 500 € million € million 50 8 40 6 250 30 20 4 10 2 0 0 0 96 97 98 99 00 96 97 98 99 '00 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 9
Slide 10: Kemira Chemicals
Kemira Chemicals Net sales by SBU Fine Chemicals 4% Industrial Chemicals Pulp and Industrial Pulp and Paper Chemicals Paper 31 % 45 % Kemwater Kemwater 20 % Net sales 2000: € 767m Net sales - pro forma 7/23/2008 www.kemira.com 10
Slide 11: Pulp & Paper Chemicals
Pulp & Paper Chemicals Sales + 14 % over 99 y-o-y Sulphur Record operating rates at customers chemicals Bleaching Margin pressure due to increases in costs Acquisition of Krems Paper Chemicals – net sales about € 35m and price € 34m Specialty Industry consolidation stepping up Paper Stro
Slide 12: Kemwater
Kemwater Sales growth + 7 % over 99 y-o-y Acquisition of 15 % of Kemiron in the US Vision of Stake in the Chinese Kemwater (Yixing) green increased from 49 % to 60% chemistry Acquisitions of aluminium sulphate plant in Czech Republic and coagulant plant in Spain Project going on in St. Pet
Slide 13: Industrial Chemicals
Industrial Chemicals Industrial Chemicals Net sales - pro forma Fine Sales 2 % below 99 y-o-y Chemicals Markets stabilized for phosphoric acid Chemidet and calcium chloride CC-products Pigments Sale of lossmaking sodium tripolyphosphate business, Formics one-time cost € 10m Sodium percarbona
Slide 14: Tikkurila
Tikkurila Net sales Operating income 400 50 16 % 14 40 300 12 € million 30 € million 10 200 20 8 100 6 10 4 0 0 2 96 97 98 99 00 -10 0 96 97 98 99 00 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 14
Slide 15: Tikkurila
Tikkurila Net sales by business unit CPS Paints Alcro Paints 33 % 35 % Beckers Coatings Coatings 32 % Net sales 2000: € 345m Net sales - pro forma 7/23/2008 www.kemira.com 15
Slide 16: Paints and Coatings
Paints and Coatings Paints Sales 6 % over 99 y-o-y Sales growth in Russia, Poland, Hungary and Sweden Acquisition of Alcro-Beckers – net sales € 190m and price about € 180m – three strong brands together: Alcro, Beckers and Tikkurila Restructuring and additional marketing costs about € 4m Co
Slide 17: CPS
CPS Tinting system deal closed – Colourants sold to new company, CPS Color Oy Kemira's holding 28 % – 50 % shareholding in tinting machine business sold to Swisslog – total sales price € 200m, capital gain € 96m – strategic conflict removed, sales sharply up Tikkurila financial figures include c
Slide 18: Kemira Agro
Kemira Agro Net sales Operating income 1 200 150 15 1 000 100 10 800 € million € million 600 50 5% 400 200 0 0 0 96 97 98 99 00 -50 -5 96 97 98 99 00 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 18
Slide 19: Kemira Agro
Kemira Agro Net sales by business unit Kemira Intermediates Agro Kemira Specialties Animal nutrition Agro 44 % Nitrogen 56 % Food chain partner Specialty crop care Net sales 2000: € 1,116m Net sales - pro forma for KAS 7/23/2008 www.kemira.com 19
Slide 20: Kemira Agro Specialties
Kemira Agro Specialties Volumes up by 2 % In EU market prices of NPK have risen 20-35 % y-o-y depending on the markets High ammonia prices offset KAS's result Fertilizer production started in China Stake in the Lithuanian UAB Kemira-Lifosa increased from 33% to 51% Write-downs of € 5m 7/
Slide 21: Kemira Agro Nitrogen
Kemira Agro Nitrogen Market prices of N almost double y-o-y, volumes up by 3 % Gas prices increased due to higher oil prices, partly offset by hedged gas Non-recurring costs of € 82m for Rozenburg closure New ownership structure sought to enhance shareholder value Supply/demand balance imp
Slide 22: Fertilizer industry reorganisation
Fertilizer industry reorganisation Significant Capacity Reductions Announced Over Past 12 Months • approximately 10% of total Western European capacity and 14% of CAN/AN capacity Sete Sete (Cedest), (Cedest),France France Mazingarbe Mazingarbe 120Kt 120KtNPK NPK (Grande (GrandeParoisse), Paroisse),
Slide 23: Kemira Pigments
Kemira Pigments 60 Operating income 20 % Net sales 500 50 15 400 40 € million 10 € million 300 30 200 20 5 10 100 0 0 0 96 97 98 99 00 -10 -5 96 97 98 99 '00 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 23
Slide 24: Titanium dioxide
Titanium dioxide Sales 37 % below 99 due to sale of US and Dutch units Pori volumes up by 9 % y-o-y and average prices up by 14 % y-o-y Pori capacity expansion to 120 000 tpy completed, further potential identified Vision: "Focused and competitive Ti02 producer" Pigments will be part of In
Slide 25: Kemira Group
Kemira Group Net sales 250 Operating income 12 % 2800 10 200 2400 2000 8 € million 150 € million 1600 6 1200 100 4 800 400 50 2 0 0 0 96 97 98 99 '00 96 97 98 99 '00 Q1 Q2 Q3 Q4 7/23/2008 www.kemira.com 25
Slide 26: Net debt and 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 7/23/2008 www.kemira.com 26
Slide 27: Net financing expenses
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 Q1 Q2 Q3 Q4 Average interest rate 7/23/2008 www.kemira.com 27
Slide 28: Cash flow
Cash flow 550 450 350 € million 250 150 50 -50 -150 96 97 98 99 00 Cash flow from operations Cash flow after investments and disposals 7/23/2008 www.kemira.com 28
Slide 29: Net income and CFROI
Net income and CFROI 250 16 14 200 12 150 10 € million CFROI % 100 8 6 50 4 0 2 96 97 98 99 00 -50 0 EPS* 0.86 0.81 0.61 0.23 0.73 CFPS 2.05 2.00 0.96 1.41 1.69 7/23/2008 *) excluding non-recurring items 2000 29 www.kemira.com
Slide 30: Financial targets
Financial targets Profitable growth, capital efficiency and healthy balance sheet Target 1999 2000 > 2001 Growth rate (%) 5 11 1) >10 EBIT margin (%) 4 8 1) >10 EPS growth (%) neg. 217 >10 CFROI (%) 9 11 >10 Gearing 2) (%) 95 37 40-100 1) Continuing operations 2) Net debt/(equity + minorit
Slide 31: Valuation / ownership
Valuation / ownership Market capitalisation / equity Ownership 31 Dec. 2000 1500 Finnish Instit. 1200 Kemira 20,8 % 4,0 % 900 Int. Instit. € million 15,1 % Public 600 6,7 % 300 Finnish 0 State 95 96 97 98 99 00 53,4 % • Dividend proposal 0.30 €/share • Mandate proposal 1/3 Â 15 % • -95 option progra
Slide 32: Share performance
Share performance 150 Kemira Peer group 125 Index 100 75 50 0 0 0 0 0 00 00 00 20 2 2 2 . 7. 1. 4. 10 1. 1. 1. 1. Peer Group: Akzo Nobel, BASF, Ciba Specialty Chemicals, Clariant, DSM, Grande Paroisse, Laporte, Norsk Hydro, Perstorp, SKW Trostberg, Solvay 7/23/2008 www.kemira.com 32
Slide 33: Outlook for the year (1)
Outlook for the year (1) Kemira Chemicals – The market outlook for Pulp & Paper Chemicals is good due to high operating rates at pulp and paper companies, however the first quarter indications somewhat lower – Kemwater's growth strategy focus on larger units, the market outlook is good – Industria
Slide 34: Outlook for the year (2)
Outlook for the year (2) Kemira Agro – World fertiliser consumption is expected to increase 1 % – World grain inventories fell below security level, 17 % of the consumption – Feed phosphates will benefit from BSE – China's membership in the WTO, restructuring of European fertiliser industry and an
Slide 35: Income statement
Income statement EUR million 2000 1999 Net sales 2486 2526 Income from associates -1 3 Other income 31 33 Costs -2170 -2263 Depreciation -171 -188 Operating income 175 111 Financing income and expenses -30 -52 Net income before non-recurring items, tax and minority interests 145 59 Non-recurring ite
Slide 36: Income statement for continuing operations
Income statement for continuing operations EUR million 2000 1999 Net sales 2124 1920 Share of net income of assoc. companies -1 3 Other operating income 28 30 Expenses -1834 -1699 Depreciation -150 -139 Operating income 167 115 Financing income and expenses -23 -33 Net income before group contributi
Slide 37: Income statement for discontinuing operations
Income statement for discontinuing operations EUR million 2000 1999 Net sales 362 606 Share of net income of assoc. companies 0 0 Other operating income 3 3 Expenses -337 -564 Depreciation -21 -49 Operating income 7 -4 Financing income and expenses -7 -19 Net income before group contribution, taxes
Slide 38: Balance sheet
Balance sheet EUR million 31.12.2000 31.12.1999 Assets Non-current assets Intangible assets 89 80 Tangible assets 1049 1328 Investments 138 78 Total non-current assets 1276 1486 Current assets Inventories 349 456 Receivables Interest-bearing receivables 11 23 Interest-free receivables 516 550 Total
Slide 39: Balance sheet
Balance sheet EUR million 31.12.2000 31.12.1999 Liabilities and shareholders' equity Shareholders' equity Share capital 217 217 Other shareholders' equity 905 751 Total shareholders' equity 1122 968 Minority interests 18 15 Long-term liabilities Interest-bearing long-term liabilities 573 849 Deferre
Slide 40: Cash flow
Cash flow EUR million 2000 1999 Cash flow from operations 214 181 Capital expenditure -218 -168 Sales of assets 527 18 Cash fow before financing 523 31 Financing -365 -38 Increase/decrease of liquid funds 158 -7 7/23/2008 www.kemira.com 40
Slide 41: Simplified business structure
Simplified business structure Customer segmentation: Kemira Chemicals focuses on industry and Kemira Agro on food chain Kemira Kemira Agro Chemicals Sales Operating Net sales Operating EUR million income income Titanium +210 +++ dioxide pigments Phosphoric -160 - +120 + acid, animal feed phosphates,