Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q3 2009 Earnings Presentation
28 slides from Kemira Oyj's earnings presentation, Oct 28, 2009
Slide 1: Committed to clean water
Committed to clean water Harri Kerminen, President & CEO October 28, 2009
Slide 2: Disclaimer
DISCLAIMER This presentation contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or our future financial performance, including, but not limited to, strategic plans, potential growth, planned operational changes, expected capital expenditures a
Slide 3: Q3 highlights
Q3 highlights Water is the connection Kemifra
Slide 4: Increased operative EBIT and very strong cash flow
Increased operative EBIT and very strong cash flow Cash flows after investments very strong EUR 125.8 million • Gearing down to 87% Operative EBIT from continuing businesses* increased by 22%, or EUR 11.9 million • Lower costs • Very good performance in Municipal & Industrial • EBIT 10% Towards sust
Slide 5: Key figures Q3
Key figures Q3 Q3/2008 Q3/2008 (EUR million) Q3/2009 2008 Continuing Reported Revenue 645.8 741.9 780.0 2,832.7 Operative EBIT 65.3 53.4 56.5 132.6 Operative EBIT, % 10.1 7.2 7.2 4.7 Operative EPS (EUR) 0.33 0.16 0.29 EPS (EUR) 0.33 0.28 -0.02 Equity ratio, % 37 40 34 Gearing, % 87 87 107 CapEx excl
Slide 6: Operative EBIT, % of revenue Q3/2009 vs. Q3/2008
Operative EBIT, % of revenue Q3/2009 vs. Q3/2008 18 Q3/09 Q3/09 Q3/08 16 14 12 10 8 Q3/09 Q3/09 6 Q3/08 Q3/08 Q3/08 4 2 0 Paper Municipal & Oil & Mining Tikkurila Industrial 6
Slide 7: Key figures Q1−Q3
Key figures Q1−Q3 Q1−Q3/2008 Q1−Q3/2008 (EUR million) Q1−Q3/2009 Continuing Reported Revenue 1,905.4 2,057.6 2,205.1 Operative EBIT 147.2 114.7 120.9 Operative EBIT, % 7.7 5.6 5.5 Operative EPS (EUR) 0.62 0.37 EPS (EUR) 0.61 0.55 CapEx excl. acquisitions 50.5 116.3 Cash flows after investments 175.3
Slide 8: Cash flows after investments 2005−2009, EUR million
Cash flows after investments 2005−2009, EUR million 200 150 100 50 0 -50 2005 2006 2007 2008 Q1- Q3/2009 -100 -150 -200 8
Slide 9: Balance sheet
Balance sheet Balance sheet strenghtened due to very strong cash flow. No refinancing needs until 2011 when existing EUR 750 million revolving credit facility will be renegotiated (unused amount September 30: EUR 424 million). (EUR million) 30 Sep 09 31 Dec 08 Net debt 906.2 1,049.1 Equity 1,046.3 9
Slide 10: Segments – Q3 highlights
Segments — Q3 highlights Water is the connection Kemifra
Slide 11: Paper
Paper Revenue decreased by 14% • Customer demand continued to be weak • Some signs of improving demand in packaging boards in Asia and Eastern Europe EBIT EUR 14.8 million (11.7*), EBIT-% rose to 6.4% (4.4%*) • Lower fixed and variable costs compensated lower sales volumes (EUR million) Q3/09 Q3/08
Slide 12: Municipal & Industrial
Municipal & Industrial Excellent result in Q3 Revenue at previous year’s level • Demand in municipal water treatment remained good, despite the decline in some geographical markets • Weaker demand in some customer industries EBIT EUR 24.9 million (7.3), EBIT-% rose to 16.0% (4.7%) • Lower fixed and
Slide 13: Oil & Mining
Oil & Mining Revenue declined by 25% • In the oil and gas industry, demand remained flat • Demand recovery expected in oil and gas as prices increase • Some signs of improvement were seen in metals EBIT EUR 3.5 million (3.5*), EBIT-% rose to 6.3% (4.7%*) • Lower sales volumes • Lower fixed and varia
Slide 14: Tikkurila
Tikkurila Very good result despite lower volumes and currencies Revenue declined by 18% • Slowdown in new construction and in building material sales • Currency exchange effect -24 M€ EBIT EUR 26.3 million (30.4), EBIT-% rose to 16.6% (15.7%) • Lower sales volumes, higher average sales prices • Fixe
Slide 15: 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 Non-recurring project costs in Group expenses (EU
Slide 16: Outlook
Outlook Kemira’s progress in January−September 2009 was very good. However, the market situation is expected to remain challenging. Kemira will continue its efficiency improvement measures launched earlier. Kemira's revenue for October–December 2009 is expected to remain behind the previous year due
Slide 17: Strategy
Strategy Water is the connection Kemifra
Slide 18: Vision │ A leading water chemistry company
Vision │ A leading water chemistry company Target customers • Focus on customers operating in water- intensive industries Water quality and quantity management • Water use, reuse, recycling, and recovery Bringing value to customers’ processes • Improvement of energy, water, and raw material efficien
Slide 19: Market position by segment
Market position by segment Paper #2 worldwide* Municipal & Industrial #1 in coagulants and #5 in flocculants worldwide* Oil & Mining #1–4 position depending on product offering* Tikkurila #1 in decorative paints in Finland, Sweden and Russia** *Management estimate **Combination of local external sou
Slide 20: Focus on water-intensive customer industries
Focus on water-intensive customer industries Water quality and quantity management (WQQM) for water-intensive industries Kemira Group Municipal & Paper Oil & Mining ChemSolutions* Tikkurila Industrial Reshape and Develop and grow Develop and Value creation Listing once market reposition grow conditi
Slide 21: Seeking for sustainable growth
Seeking for sustainable growth Focus on organic growth New products for current markets Improving customers’ energy, water, and process efficiency • Biodegradable biocides and disinfection, scale prevention, defoamers, odor control, biogas production enhancers, nutrients recovery from sludge, etc. A
Slide 22: Expansion in selected growth markets
Expansion in selected growth markets North America Europe Targeted growth Targeted growth Focus on cash flow Focus on cash flow Paper Reposition Paper Reposition Municipal & Strengthen Municipal & Strengthen Industrial Industrial Oil & Mining Expand Oil & Mining Expand APAC South America Foothold in
Slide 23: Roadmap for strategy implementation
Roadmap for strategy implementation Sustainable growth • Developing new products, applications, and technology EBIT, cash flow • Expansion in selected growth markets • Building on water quality and quantity management projects with customers Integration • Transfer of water technology and competences
Slide 24: Vision │ A leading water chemistry company
Vision │ A leading water chemistry company Focus on water-intensive industries Growth from water related applications Expansion in selected growth markets Continuous investments in research and development 24
Slide 25: Water is the connection
Water is the connection Kemifra
Slide 26: Background material
Background material Water is the connection Kemifra
Slide 27: Cash flows
Cash flows (EUR million) Q1−Q3/2009 Q1−Q3/2008 2008 Funds from operations 178.6 141.7 118.9 Change in net working capital 48.6 -64.6 -28.7 Cash flows from operations 226.8 77.1 90.2 CapEx excl. acquisitions -50.5 -116.3 -161.0 Acquisitions -3.6 -140.4 -180.8 Sale of assets 2.6 245.3 254.3 Cash flows
Slide 28: Water is the connection
Water is the connection Kemifra