Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — H1 2005 Earnings Presentation
34 slides from Kemira Oyj's earnings presentation, Jul 28, 2005
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Slide 2: Kemira Group Interim Report January – June 2005
Kemira Group Interim Report January – June 2005 Lasse Kurkilahti, President & CEO 28 July 2005 IR Contact: Päivi Antola, paivi.antola@kemira.com, tel. +358 1086 21140
Slide 3: Contents
Contents January – June Group Highlights Business Areas in January – June Development of the Kemira Share Looking Ahead 3
Slide 4: January - June Group Highlights
January - June Group Highlights
Slide 5: A Strong First Half of the Year
A Strong First Half of the Year Revenue up 9% EBIT up 35%; all business areas improved Higher raw material costs were passed along into selling prices EPS up 50% to EUR 0.30 ROCE up to 9.4% (8.1%) Industrial dispute in the Finnish paper industry affected Q2 Acquisitions of Finnish Chemicals and Verd
Slide 6: Growth Boosted by Acquisitions
Growth Boosted by Acquisitions Change excl. MEUR H1/05 H1/04 Change acquisitions 2004 Revenue 929.9 850.7 9% -2% 1,695.1 EBIT 69.9 51.8 35% 25% 111.6 Organic growth compensated partly for the revenue decline caused by: Industrial dispute in the paper industry in Finland (-30 MEUR) Divestment of the
Slide 7: Revenue in H1
Revenue in H1 Other Paints & 1% 2800 Coatings Pulp & Paper 25 % 2400 Chemicals 2000 MEUR 34 % 1600 1200 800 Industrial 400 Chemicals Kemwater 0 21 % 19 % 2001 2002 2003 2004* 2005 Q1 Q2 Q3 Q4 Total: 929.9 MEUR *Continuing operations 7
Slide 8: EBIT
EBIT 200 10 % 150 8 6 MEUR 100 4 50 2 0 0 2001 2002 2003 2005 2004* EBIT % Excluding a write-down of 78 MEUR in Q4/02 *Continuing operations 8
Slide 9: Q2 Profitability Up
Q2 Profitability Up Q2/05 Q2/04* Change 2004* Revenue (MEUR) 526.2 456.3 15% 1,695.1 EBIT (MEUR) 39.6 30.6 29% 111.6 EPS (EUR) 0.15 0.16 -6% 0.50 ROCE, % 9.4 8.1 8.6 Free cash flow (MEUR) -250.1 33.1 107.6 *Continuing operations, pro forma 9
Slide 10: Q2 Revenue up by 15%, EBIT up by 29%
Q2 Revenue up by 15%, EBIT up by 29% Revenue EBIT + Price increases + Price increases + Volumes + Volumes + Acquisitions (Finnish + Acquisitions Chemicals, Verdugt, + Depreciation Eaglebrook, E.QU.I.P., etc.) − Industrial dispute in the Finnish paper industry − Industrial dispute in the Finnish pape
Slide 11: Balance Sheet
Balance Sheet 30 June 05 31 Dec 04 Equity ratio, % 40 47 Gearing, % 85 21 Capital employed (MEUR) 1,858.7 1,205.9 Personnel 8,285 7,137 11
Slide 12: Net Working Capital Increased Seasonally
Net Working Capital Increased Seasonally MEUR H1/05 H1/04* 2004* Cash flows from operations -9.4 51.6 231.0 Acquisitions -285.4 -3.4 -57.9 CapEx excl. acquisitions -51.6 -51.1 -107.2 Sale of fixed assets 52.8 15.7 41.7 Cash flows from investing activities -284.2 -38.8 -123.4 Free cash flow -293.6 12
Slide 13: CapEx Excluding Acquisitions
CapEx Excluding Acquisitions Total in January - June 2005 (H1/2004): -51.6 MEUR (-51.1) Maintenance 31 % Improvement 38 % Expansion 31 % 13
Slide 14: Business Areas in January - June
Business Areas in January - June
Slide 15: Pulp & Paper Chemicals in Q2
Pulp & Paper Chemicals in Q2 Revenue up by 23% to EUR 171.8 million Acquisitions of Finnish Chemicals and E.QU.I.P. Change excluding acquisitions -8% The industrial dispute in the Finnish paper industry cut revenue by ~ 30 MEUR EBIT up by 10% to EUR 6.7 million, ROCE 8.7% (9.7%) Efficiency measures
Slide 16: Pulp & Paper Chemicals revenue and EBIT
Pulp & Paper Chemicals Revenue EBIT & ROCE 600 50 12 % 500 10 40 400 8 30 € million 300 € million 6 200 20 4 100 10 2 0 0 0 01 02 03 04 05 01 02 03 04 05 Q1 Q2 Q3 Q4 EBIT % ROCE The figures are not fully comparable due to changes in the business structure. 16
Slide 17: Pulp & Paper Chemicals' Outlook
Pulp & Paper Chemicals’ Outlook Capacity utilization of the customer industry is estimated to be good during the latter part of the year Price rises in raw materials and especially in energy putting pressure on earnings Revenue and EBIT estimated to grow 17
Slide 18: Kemwater in Q2
Kemwater in Q2 Revenue up by 29% to EUR 92.0 million Volumes and prices up, especially in Europe Acquisition of Eaglebrook in November 2004 Smaller acquisitions in Poland and Slovenia in 2004 EBIT up by 23% to EUR 9.0 million, ROCE 14.8%* (17.8%) Higher raw material costs compensated by: Higher sell
Slide 19: Kemwater revenue and EBIT
Kemwater 300 Revenue EBIT & ROCE 250 30 25 % 25 20 200 € million 20 150 15 € million 15 100 10 10 50 5 5 0 0 0 01 02 03 04 05 01 02 03 04 05 Q1 Q2 Q3 Q4 EBIT % ROCE The figures are not fully comparable Q4/04 excluding extra write-downs and due to changes in business structure. costs of 11 MEUR. 19
Slide 20: Kemwater's Outlook
Kemwater’s Outlook Demand for water treatment chemicals expected to grow Price increases in raw materials putting earnings under pressure Revenue estimated to grow substantially EBIT estimated to increase 20
Slide 21: Industrial Chemicals in Q2
Industrial Chemicals in Q2 Revenue up by 32% to EUR 112.9 million Acquisition of Verdugt Average prices of TiO2 in euros up 8%, volumes on par with Q2/04 Volumes of formic acid products up, also prices slightly up Sales volumes and prices of sodium percarbonate similar to Q2/04 EBIT was EUR 7.1 mill
Slide 22: Industrial Chemicals revenue and EBIT
Industrial Chemicals Revenue EBIT & ROCE 500 60 Net sales 18 % 400 50 16 14 40 € million 300 12 € million 30 10 200 8 20 6 100 4 10 2 0 0 0 01 02 03 05 04* 01 02 03 05 04* Q1 Q2 Q3 Q4 EBIT % ROCE The figures are not fully comparable *Continuing operations due to changes in the business structure. 22
Slide 23: Industrial Chemicals' Outlook
Industrial Chemicals’ Outlook The rise in titanium dioxide prices is estimated to even out Increases in the prices of raw materials and energy are squeezing earnings TiO2 volumes estimated to be higher than in 2004, thanks to the expansion investments made Sales of organic acids and organic acid der
Slide 24: Paints & Coatings in Q2
Paints & Coatings in Q2 Revenue up 6% to EUR 138.2 million Favourable market conditions in most of the main markets Growth in Russia continued Impact of UK coatings disposal -5.6 MEUR (-4%) EBIT up by 6% to EUR 20.1 million, ROCE 14.5% (12.5%) Prices up, offsetting higher raw material costs 24
Slide 25: Paints & Coatings revenue and EBIT
Paints & Coatings Revenue EBIT & ROCE 500 50 14 % 400 40 ------ 30 ------ 10 300 ------ € million € million 20 6 ------ 200 10 2 0 100 -2 -10 0 -20 -6 01 02 03 04 05 01 02 03 04 05 Q1 Q2 Q3 Q4 EBIT % ROCE 25
Slide 26: Paints & Coatings' Outlook
Paints & Coatings’ Outlook Demand expected to be good Due to the UK divestment, revenue estimated to be on the level of 2004 EBIT estimated to increase 26
Slide 27: Outlook for 2005 – Kemira Group
Outlook for 2005 – Kemira Group Full-year revenue, operating profit and EPS are estimated to increase on the pro forma figures posted in 2004. All forecasts and estimates mentioned in this report are based on the current judgement of the economic environment and the actual results may be significant
Slide 28: Development of the Kemira Share
Development of the Kemira Share
Slide 29: Shareholder Value Doubled
Shareholder Value Doubled 1400 30 June 2005: 1200 Market cap 1,327 MEUR, 1000 milj. € P/B 1.4 2 Jan 2003: 800 Market cap 713 MEUR, 600 P/B 0.7 400 01 02 03 04 05 Market cap Equity BV 29
Slide 30: Shareholders 30 June 2005
Shareholders 30 June 2005 (30 June 2004) International Institutions 11.2 % (7.9) Finnish Institutions 22.6 % (25.5) Finnish State 55.1 % (56.2) Households 7.8 % (7.0) Kemira 3.3 % (3.4) Minimum state ownership 15% 30
Slide 31: Looking Ahead
Looking Ahead O 7 = ® ¥
Slide 32: Future Kemira
Future Kemira A global group of leading chemicals businesses with high mutual synergy Continuously improving profitability Growth: organic and through M&A Businesses with unique positions Participative corporate culture 32
Slide 33: From Good to Great
From Good to Great Implementation: Strategy Strategy Culture Culture Brand Brand Everyone at Kemira Kemira will have a strong, Everyone at Kemira will will know and participative company culture understand what Kemira understand what Kemira which will be created brand means and their role is and whe
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