Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q4 2022 Earnings Presentation
92 slides from Kemira Oyj's earnings presentation, Feb 10, 2023
Slide 1: Kemira Investor Presentation
FEBRUARY 10, 2023 Kemira Investor Presentation Chemistry with a purpose. Better every day. INVESTOR PRESENTATION
Slide 2: Content
INVESTOR PRESENTATION Content 1. Kemira in brief 2. Investment highlights 3. Kemira as a sustainable investment 4. Pulp & Paper 5. Industry & Water 6. Recent progress 7. Appendix FEBRUARY 10, 2023 INVESTOR PRESENTATION 2
Slide 3: Kemira in brief
INVESTOR PRESENTATION Kemira in brief FEBRUARY 10, 2023 INVESTOR PRESENTATION 3
Slide 4: Chemistry with a purpose. Better every day.
KEMIRA PURPOSE Chemistry with a purpose. Better every day. Our purpose shows the difference we make. Every day since 1920 Chemistry has made an enormous impact on the progress and All this we call chemistry with a purpose. We make quality of human life. Since our foundation in 1920, we have sure it
Slide 5: Kemira in brief
Kemira in brief 2022: REVENUE EUR 3,570 MILLION, OPERATIVE EBITDA EUR 572 MILLION, OPERATIVE EBITDA MARGIN 16.0%, OPERATIVE ROCE 16.2% SEGMENT SPLIT GEOGRAPHIES PRODUCTS ◼ 45% ◼ 55% 10% ◼ 15% Other: APAC e.g. defoamers, ◼ 25% Bleaching Industry & Water Pulp & Paper 40% 1. China dispersants, and pulp
Slide 6: Global reach – local excellence
Global reach – local excellence 62 MANUFACTURING SITES KEMIRA HQ Helsinki, Finland R&D Espoo, Finland Regional HQ Atlanta, USA R&D Regional HQ Atlanta, USA Shanghai, China R&D EMEA 51% Shanghai, China EUR 1,832 MILLION ASIA PACIFIC 9% 2,446 EUR 323 MILLION AMERICAS 40% EUR 1,414 MILLION 931 UNITS IN
Slide 7: We have transformed the company several times over the past 100 years
We have transformed the company several times over the past 100 years 1950 1961 1972 1985-1992 1994 2008 2015 Development of Name changed The “Kemira” Expansion Kemira is listed on Water chemistry Acquisition of first chemicals for to Rikkihappo Oy name adopted continues in the Helsinki stock establ
Slide 8: 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 348 2,200 ◼ 40% ◼ 40% ◼ 20% ◼ 5% Other 2,000 260 Pulp Board & Printing & ◼ 40% 1,800 245 tissue writing papers ◼ 10% 218 Polymers Ble
Slide 9: Industry & Water – strong positions in chosen categories
Industry & Water – strong positions in chosen categories REVENUE AND OPERATIVE EBITDA REVENUE BY APPLICATION REVENUE BY EUR million TYPE AND MARKET GROWTH PRODUCT CATEGORY 1,600 224 192 ◼ 20% 1,400 175 181 ◼ 70% ◼ 10% ◼ 15% ◼ 40% 1,200 Oil & Gas Other Water treatment Other Coagulants 1,000 131 107 1
Slide 10: Investment highlights
INVESTOR PRESENTATION Investment highlights FEBRUARY 10, 2023 INVESTOR PRESENTATION 10
Slide 11: Why invest in Kemira
1. 2. 2. 1. FOCUS ON RESILIENT RESILIENT FOCUS ON PROFITABLE BUSINESS MODEL BUSINESS MODEL PROFITABLE SUSTAINABLE ENABLING ANAN ENABLING SUSTAINABLE GROWTH ATTRACTIVE ATTRACTIVE GROWTH DIVIDEND DIVIDEND Organic growth Why Organic 1-9 growth 2022 26% Dividend Dividend policy: policy: Why 2022 27% Ope
Slide 12: Global megatrends largely favor Kemira – sustainability becoming a key driver
Global megatrends largely favor Kemira – sustainability becoming a key driver for the long term CHANGING GROWING DEMOGRAPHICS ENVIRONMENTAL AWARENESS Growing Changing More efficient use Focus on biobased Tightening Climate change middle-class lifestyles with of scarce natural and recyclable environm
Slide 13: Healthy market growth for Kemira's relevant markets
Healthy market growth for Kemira’s relevant markets KEMIRA RELEVANT MARKET PULP & PAPER RELEVANT MARKET EUR billion EUR billion 1-2% 9.0 9.6 26 CAGR: 2-4% 22 APAC 2021 2026 Packaging & Printing & Pulp Tissue Writing EMEA INDUSTRY & WATER RELEVANT MARKET EUR billion 4-6% 17.7 13.2 Americas 2021 2026
Slide 14: Good profitability improvement track record
Good profitability improvement track record REVENUE Revenue OPERATIVE EBITDA EUR million declined due OPERATIVE EBITDA MARGIN to COVID-19 pandemic EUR million 600 572 20 3,570 +6.6% 500 +62.4% 435 16.0% 17.9% 426 410 2,593 2,659 2,674 2,486 2,427 400 15.9% 15 2,373 2,363 15.4% 2,137 303 311 323 300
Slide 15: Strengthening the foundation and improving profitability
Strengthening the foundation and improving profitability Completion of coagulant Organic growth / Acquisition Operational efficiencies Closure of site / divestment expansion (UK( expansion of site SimAnalytics advanced Completion of dry- process optimization Start-up of Ortigueira Chevron CEOR deal
Slide 16: We invest in core products globally
We invest in core products globally KEY INVESTMENT FOCUS ON CORE PRODUCT GROUPS SINCE 2016 PRODUCTS • Bleaching chemicals ◼ 15% Other: ◼ 25% Bleaching • New chlorate plant in Brazil e.g., defoamers, and pulping • New chlorate line in the U.S. dispersants, • New chlorate line and peroxide capacity in
Slide 17: We will increasingly focus on profitable growth going forward
We will increasingly focus on profitable growth going forward Portfolio Organic growth Continuous operational restructuring & investments and improvements with Fit for Growth focus on improving increased focus on growth fundamentals: Focus on improving relative profitability & cash flow 2014 2020 20
Slide 18: Our two businesses provide a healthy balance of growth opportunities
Our two businesses provide a healthy balance of growth opportunities SEGMENT PULP & PAPER INDUSTRY & WATER Board Printing Water Customer segment Pulp Oil & Gas &Tissue & Writing treatment % of total sales* ~25% ~25% ~10% ~30% ~10% Sustainability relevance Capex relevance M&A relevance
Slide 19: Our path towards 500 MEUR biobased revenue target advances via 4 tracks
Our path towards 500 MEUR biobased revenue target advances via 4 tracks CURRENT 1. PORTFOLIO Boost the sales of commercially available biobased products PRODUCT CONVERSION Convert current products to biobased through a change of raw 2. material and feedstock New products based on 3. NEW BIOBASED CHE
Slide 20: We have established a Growth Accelerator unit
We have established a Growth Accelerator unit to speed up selected strategic GROWTH ACCELERATOR UNIT initiatives Announced in mid-June and will be led by Sampo Lahtinen (PhD, Food Primary focus: Chemistry), former VP, EMEA R&D Objective of the new Accelerate commercialization of new and Organization
Slide 21: Kemira as a sustainable investment
INVESTOR PRESENTATION Kemira as a sustainable investment FEBRUARY 10, 2023 INVESTOR PRESENTATION 21
Slide 22: We have a strong commitment to sustainability
We have a strong commitment to sustainability Five sustainability KPIS SAFETY TRIF* 1.5 by 2025 and 1.1 by 2030 WATER CLIMATE PEOPLE Reach top 10% cross industry norm for Diversity & Inclusion by 2025 Chemical Chemical sector average Chemical sector average WATER Reach Leadership level in water mana
Slide 23: 53% of revenue from products that improve customer resource-efficiency
53% of revenue generated from products that improve customer resource-efficiency PULP & PAPER INDUSTRY & WATER Kemira’s products improve the manufacturing process and enable better resource-efficiency. WATER TREATMENT OIL & GAS For example Municipal and industrial Shale: Our chemistry is helping to
Slide 24: Customer behavior is changing with an increased focus on sustainability
SUSTAINABILITY WILL BE A KEY DRIVER FOR FUTURE GROWTH Customer behavior TO SUPPORT OUR CUSTOMERS IN THE SHIFT TOWARDS HIGHER SUSTAINABILITY, is changing with an WE WILL: Address growing recyclability and increased focus on biodegradability demand for products sustainability Gradually transform our p
Slide 25: We will increase focus on water treatment to improve I&W sustainability
We will increase focus on water treatment to further improve sustainability of I&W portfolio 38% WE WILL CREATE AN ACTION PLAN TO FURTHER IMPROVE THE SUSTAINABILITY of current raw materials PROFILE OF THE I&W PORTFOLIO from recycled sources Further improve the circularity of our business by increasi
Slide 26: We want to ensure profitable growth
FROM BASELINE TARGET REVENUE REVENUE IN 2019 IN 2030 ~100 >500 We want MEUR MEUR to ensure FROM BIOBASED FROM BIOBASED PRODUCTS PRODUCTS profitable growth FROM BASELINE SHARE IN 2019 TARGET SHARE IN 2030 BY BECOMING THE LEADING PROVIDER OF SUSTAINABLE CHEMICAL SOLUTIONS 13%* 40% FOR WATER-INTENSIVE
Slide 27: We already have a significant number of biobased products
CURRENT PO RT FO LIO We already have a significant number of biobased products in our portfolio REVENUE SPLIT BY TYPE IN 2021 BIOBASED REVENUE DEVELOPMENT Recent growth coming from 500 Biobased (> 50%) existing products, sizing in particular. Does not contain Partly Biobased Growth is price fossil-f
Slide 28: We have committed to the Science Based Targets Initiative (SBTi)
We have committed to the Science Based Targets Initiative (SBTi) • Kemira committed to the Science Based Target initiative (SBTi)* in June 2022 • Commitment to cut 50% of emissions from our own operations and energy use (scope 1 and 2 emissions**) by 2030, compared to a 2018 baseline. This target is
Slide 29: How we are reducing our emissions
How we are reducing our emissions SCOPE ■1 & ■2 EMISSIONS 1,000 TONNES CO2eq SCOPE 1 & 2 EMISSIONS 930 Scope 1: 856 -50% by 2030 replacing fossil-based fuels at manufacturing facilities 152 160 Scope 2: 461 -8% 778 696 • energy efficiency improvements • sourcing carbon-free energy: nuclear energy fr
Slide 30: Sustainability performance in 2022 1/2
Sustainability performance in 2022 1/2 SDG KEY FIGURE UNIT 2021 Kemira's sustainability work covers economical, SAFETY environmental and social topics and is guided by the TRIF* 1.5 by 2025 and 1.1 by 2030 UN Sustainable Development Goals (SDGs). *TRIF = total recordable injury frequency per million
Slide 31: Sustainability performance in 2022 2/2
Sustainability performance in 2022 2/2 SAFETY In 2022 systematic work was done to reinforce a culture where people actively promote safety and recognize and correct unsafe behaviors. Kemira’s safety performance in 2022 improved slightly compared to 2021 and the TRIF rate was 2.6. Safety performance
Slide 32: Pulp & Paper
INVESTOR PRESENTATION Pulp & Paper Driving growth as market leader FEBRUARY 10, 2023 INVESTOR PRESENTATION 32
Slide 33: Pulp & Paper chemicals market estimated to grow 1-2%
Pulp & Paper chemicals market estimated to grow 1-2% REVENUE AND OPERATIVE EBITDA • Pulp & Paper chemicals market drivers EUR million 2,200 348 – Hardwood and softwood pulp demand increasing 2,000 driven by growth of packaging needs (e-commerce, 1,800 260 245 non-plastic solutions), growing tissue d
Slide 34: We have a strong position particularly in EMEA
We have a strong position particularly in EMEA PULP PACKAGING & TISSUE PRINTING & WRITING EMEA Market position #1/2 #1/2 #1/2 North America Market position #3/4 #3 #2/3 APAC Market position n.a. #1/2 #1/2 South America Market position #2 #2/3 #2/3 FEBRUARY 10, 2023 INVESTOR PRESENTATION Source: Kemi
Slide 35: Wood fiber is the raw material of the future
WOOD FIBER IS THE RAW MATERIAL OF THE FUTURE • Excellent sustainable raw material: renewable, reusable and recyclable • Fiber use is growing due to existing applications as well as new applications • Industry is innovating to find new uses for wood-based fiber, e.g. in textile fibers • Kemira to ben
Slide 36: Pulp and packaging markets are growing driven by sustainability trends
Pulp and packaging markets are growing driven by sustainability trends PULP & BLEACHING MARKET BOARD AND TISSUE MARKET Demand for virgin fiber increasing due to decline Packaging market growth drivers: APAC, online retail in availability of recycled fiber and growing uses of and move away from plast
Slide 37: Our completed and upcoming capacity expansions will support growth
Our completed and upcoming capacity expansions will support growth POLYMERS BLEACHING EXPANSION NEW PRODUCTION LINE IN SOUTH KOREA IN URUGUAY OF ASA IN CHINA Joint venture with Yongsan Expansion of both sodium Production of ASA sizing agent Chemicals, Kemira a minority chlorate and hydrogen peroxide
Slide 38: We are looking to transform our portfolio more towards biobased products
We are looking to transform our portfolio more towards biobased products C U S T O M E R S S E E K I N G A D D E D VA L U E WE WILL BECOME THE LEADING F R O M S U S TA I N A B I L I T Y A N D P R O V I D E R O F S U S TA I N A B L E B I O M AT E R I A L S C H E M I C A L S O L U T I O N S F O R W AT
Slide 39: Barrier market projected to grow by 8% to 2026
NEW G RO W TH O PPO RT UNIT IES Barrier market projected to grow by 8% to 2026 MARKET DRIVERS KEMIRA HAS A STRONG POSITION Consumer preference for sustainable solutions Kemira’s first generation, partly biobased, barrier, commercialized; second generation biobased product Transition towards phasing
Slide 40: The wood-fiber textile market projected to reach EUR 10 billion by 2030
NEW G RO W TH O PPO RT UNIT IES The wood-fiber textile market projected to reach EUR 10 billion by 2030 TEXTILE MARKET IN TRANSFORMATION Demand for novel sustainable fiber solutions in textiles is high in order to replace cotton and synthetic fibers EUR More than 96% of global EUR 200 billion textil
Slide 41: Services offering is a valuable differentiator
NEW G RO W TH O PPO RT UNIT IES Services offering is a valuable differentiator • Aim to reach EUR 50 million in revenue by 2025, 2022 revenue expected to be around EUR 5 million • New dedicated service organization established to accelerate growth in services COLLABORATION • Commitment to invest in
Slide 42: Maintaining profitability while increasing focus on new growth opportunities
Maintaining profitability while increasing focus on new growth opportunities PRIORITIZED GROWTH ACTIONS FURTHER PROFITABILITY IMPROVEMENT ON-GOING • Capitalize on growth opportunities in pulp and • Continuous performance and packaging • Continue to mitigate impact from cost-structure enhancement, in
Slide 43: We are competitively positioned in the growing fiber-based applications
100 YEARS OF BROADEST PULP & We are EXPERTISE IN FIBER WATER CHEMISTRY PAPER CHEMICAL PRODUCT PORTFOLIO IN THE WORLD competitively positioned in the growing fiber- based LONG ESTABLISHED BROAD CAPABILITIES applications CUSTOMER RELATIONSHIPS TO SERVE CUSTOMERS ACROSS THE GLOBE FEBRUARY 10, 2023 INVE
Slide 44: Industry & Water
INVESTOR PRESENTATION Industry & Water Stronger platform for profitable growth FEBRUARY 10, 2023 INVESTOR PRESENTATION 44
Slide 45: Industry & Water relevant chemicals market estimated to grow 4-5%
Industry & Water relevant chemicals market estimated to grow 4-5% REVENUE AND OPERATIVE EBITDA • Demand for water treatment chemicals expected EUR million 1,600 224 to increase due to 1,400 192 181 175 1,200 – Higher demand for water driven by industrial growth 131 1,000 107 114 and population growt
Slide 46: We have strong positions particularly in EMEA water treatment
We have strong positions particularly in EMEA water treatment MARKET POSITION MARKET OUTLOOK EMEA Water treatment1,2) #1 NORTH AMERICA Water treatment1) #2 APAC Water treatment2) Top 10 OIL & GAS CEOR2) Top 5 Shale2) #2 Oil Sands Tailings2) #1 FEBRUARY 10, 2023 INVESTOR PRESENTATION I&W
Slide 47: We are a key enabler for water treatment & hydrocarbon production
We are a key enabler for reliable and efficient water treatment & hydrocarbon production WATER TREATMENT OIL & GAS • Compliance with increasing regulations in wastewater • CO2 footprint reduction in hydrocarbon production and drinking water treatment quality • Energy security and independence • Ener
Slide 48: Trends in water treatment provide solid opportunities for sustainable growth
Trends in water treatment provide solid opportunities for sustainable growth Relevant water treatment Relevant market trend and products & solutions market expected growth EUR billion Energy efficiency in water treatment CAGR 4-5% 8-9% processes 14.6 Phosphorous recovery and reuse 6-7% regulations a
Slide 49: We are accelerating our investments in water
We are accelerating our investments in water Relevant market trend and expected I&W strategic growth road map in execution growth Building a digital platform through selective Energy efficiency in water expansions and acquisitions 8-9% “Deploying our strong customer base to scale up digital and trea
Slide 50: Water treatment customers focus increasingly on sustainability
Water treatment customers focus increasingly on sustainability • Consumers increasingly aware of sustainability issues • Water treatment customers increasingly focused on reducing CO2 footprint • Kemira survey shows customers are willing to pay a premium for biobased products • Micropollutant remova
Slide 51: Kemira's six actions for cleaner waters in EMEA
Kemira’s six actions 1. The requirements of the Urban Wastewater Treatment Directive (UWWTD) must be implemented fully and equally in all member states. for cleaner 2. 3. Emission limit values (especially phosphorus) in water discharges should be tightened. Digitalization can improve both the qualit
Slide 52: Regulation continues to support growth in European water treatment market
Regulation continues to support growth in European water treatment market Regulation under update Comments & Implications Urban • Basis for wastewater treatment business in Europe Wastewater • Target to better enforce existing legislation in all countries Treatment Directive • Other potential improv
Slide 53: Oil & Gas expected to grow
Oil & Gas expected to grow REVENUE IN OIL & GAS • Long-term market growth opportunities EUR million with Kemira’s selective market 400 350 diversification 300 250 200 • Kemira’s offering 150 100 – Process efficiencies: polymers that reduce energy 50 0 consumption by up to 60% in shale oil fields 201
Slide 54: Our products are essential in mitigating environmental impact in Oil & Gas
Our products are essential in mitigating environmental impact and reducing cost in Oil & Gas energy production CO2 Tailings Water Enabling the restoration of natural landscape Treatment in after oil sands operations Oil Sands cEOR CO2 footprint in mature Reduced water needs by (Chemically fields 50-
Slide 55: Increased production capacity to support growth
Increased production capacity to support growth MOBILE, US GOOLE, UK • State-of-the art facility for • Significant expansion of our production of bio-AMD and existing iron coagulant emulsion polymers production • Supporting the US energy market • Ensuring sufficient supply and in efficient shale Oil
Slide 56: Accelerating sustainable growth in water
Accelerating sustainable growth in water PRIORITIZED GROWTH AREAS FURTHER PROFITABILITY IMPROVEMENT BUSINESS FUNDAMENTALS • Implement growth investment strategy in water through Oil & Gas profitability M&A: • Mitigating inflationary • Actions ongoing to improve • Micropollutants pressures with disci
Slide 57: Latest news and financials
INVESTOR PRESENTATION Latest news and financials FEBRUARY 10, 2023 INVESTOR PRESENTATION 57
Slide 58: 2022 highlights
2022 highlights • Record year for Kemira: record-high revenue and operative EBITDA, continued improvement in customer satisfaction and employee engagement • Smooth operational performance despite volatile operating environment. Deliveries to Russia and Belarus discontinued on March 1. • Strategic fo
Slide 59: We are a fundamentally stronger company
We are a fundamentally stronger company REVENUE OPERATIVE EBITDA LEVERAGE RATIO EUR million EUR million Net debt / operative EBITDA +44% +84% -41% 3,570 572 2.2 2,486 1.3 311 2017 2022 2017* 2022 2017* 2022 *pre IFRS-16 figures FEBRUARY 10, 2023 INVESTOR PRESENTATION 59
Slide 60: Customer satisfaction and employee engagement have continued to improve
Customer satisfaction and employee engagement have continued to improve NET PROMOTER SCORE EMPLOYEE ENGAGEMENT 53 79 (30 in 2017) (71% favorable in 2018*) *2018 method not fully comparable. In FEBRUARY 10, 2023 INVESTOR PRESENTATION 2022 80% of respondents favorable. 60
Slide 61: Financial highlights of 2022
Financial highlights of 2022 Record-high revenue in 2022 EUR million Q4 Q4 Δ% 2022 2021 Δ% • Revenue growth driven by higher sales prices, (except ratios) 2022 2021 particularly in energy-intensive pulp and bleaching chemicals, including caustic soda. Sales volumes Revenue 968.2 718.2 +35% 3,569.6 2
Slide 62: Pulp & Paper: Record year with exceptionally strong Q4 performance
Pulp & Paper: Record year with exceptionally strong Q4 performance Market environment in 2022 REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million 537 556 • Volume demand started to slow down in H2, 488 particularly in Central Europe and China. Some 420 447 production curtailments and shutdowns o
Slide 63: Industry & Water: Strong ending to 2022
Industry & Water: Strong ending to 2022 Market environment in 2022 REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million • Water treatment: good demand in both municipal and 435 412 industrial water treatment. Some softening in industrial 374 322 demand towards year-end. 264 279 301 298 226 244 23
Slide 64: Sustainability highlights 2022
Sustainability highlights 2022 KEY PERFOMANCE INDICATORS: SAFETY PEOPLE WATER CIRCULARITY CLIMATE Reach top 10% cross Reach Leadership level Reduce waste intensity by Scope TRIF* 1.5 by 2025 industry norm for Diversity (A) in water management 15% by 2030 compared to 1&2 emissions -50% and 1.1 by 203
Slide 65: Focus areas during 2023
Focus areas during 2023 OPERATIVE PRIORITIES STRATEGIC PRIORITIES Retain organizational and operational agility as Increased focus on growth: capitalize on well as high customer satisfaction in a rapidly growth pockets within existing businesses; changing operating environment increased focus on M&A
Slide 66: Financials 2022
Financials 2022 FEBRUARY 10, 2023 INVESTOR PRESENTATION 66
Slide 67: Exceptionally strong Q4
Exceptionally strong Q4 Q4/2022 REVENUE AND ORGANIC GROWTH (Y-ON-Y) Organic revenue growth 30% in Q4 2022 EUR million • Growth driven by higher sales prices, particularly in energy-intensive pulp and bleaching chemicals, especially 968 caustic soda 5% 0% 718 38% • Sales volumes declined; lower sales
Slide 68: Record-high revenue and operative EBITDA in 2022
Record-high revenue and operative EBITDA in 2022 JANUARY-DECEMBER 2022 REVENUE AND ORGANIC GROWTH (Y-ON-Y) Organic revenue growth 27% in 2022 EUR million • Higher sales prices in all product groups, particularly in energy-intensive pulp and bleaching chemicals, including 3,570 caustic soda caustic s
Slide 69: Moderation in variable cost increases
Moderation in variable cost increases SALES PRICE VS VARIABLE COST TREND SALES PRICES AND VARIABLE COSTS (ROLLING 12-MONTH CHANGE Y-O-Y) (CHANGE Y-O-Y) EUR million EUR million 269 256 960 900 197 840 188 780 129 720 152 660 138 141 600 122 540 480 97 59 47 42 37 420 34 70 36 360 13 26 28 32 28 25 28
Slide 70: Strong balance sheet
Strong balance sheet NET WORKING CAPITAL DEVELOPMENT 468 467 362 407 254 292 288 287 491 474 • Net working capital increased in 2022 due to 408 434 269 281 324 352 higher inventories and receivables following higher 368 393 402 440 500 542 596 533 raw material prices and strong revenue growth -383 -
Slide 71: Cash flow improved
Cash flow improved ALL KEY FIGURES IN EUR MILLION CASH FLOW FROM OPERATIONS • Cash flow from operations increased to EUR 400 million in 2022. Strong cash flow during H2, particularly Q4. 386 375 400 • 10 MEUR of excess capital returned from Kemira’s Q4 143 146 supplementary pension fund Neliapila in
Slide 72: Kemira's supplementary pension fund Neliapila is well-funded
Kemira’s supplementary pension fund Neliapila is well-funded • Kemira has a supplementary pension fund, Neliapila, closed as of 1991 • As of December 31, 2022, pension fund’s investments had a market value of around EUR ~260 million while pension liabilities totaled EUR ~171 million* • Neliapila ret
Slide 73: Dividend proposed to be increased to EUR 0.62 per share
Dividend proposed to be increased to EUR 0.62 per share • Dividend is proposed to be increased to a new high ◼ Dividend per share Dividend yield • Board of Directors proposes to the AGM a 0.62* dividend of EUR 0.62 per share, totaling 0.58 0.58 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.56 EUR 95 m
Slide 74: Outlook for 2023
Outlook for 2023 ASSUMPTIONS FOR 2023 OUTLOOK • We expect demand in Kemira's end-markets to be resilient despite the significant uncertainty related to the REVENUE global macroeconomic environment, energy prices, and the development of the war in Ukraine. Overall, Kemira’s Kemira’s revenue is expect
Slide 75: Kemira's cost structure and top raw materials
Kemira’s cost structure and top raw materials DIRECT PURCHASES AND EXPOSURE TO OIL RELATED TOP 12 RAW MATERIALS LOGISTICS COSTS 2022 RAW MATERIALS BY SPEND (around 50% of total EUR 2.4 billion raw material spend) ◼ 70% ◼ 30% 1. Sodium hydroxide (caustic soda)* ◼ 15% Not oil Oil & gas 2. Acrylonitril
Slide 76: Kemira has a diversified financing base
Kemira has a diversified financing base 15% Leases GROSS DEBT END OF DECEMBER 31, 2022 EUR 1,022 MILLION, MATURITY PROFILE EXCLUDING LEASES 149 million 39%Bond 450 400 400 EUR 400 million 350 300 16% Other 250 200 169 200 192 200 EUR 169 150 120 million 100 50 0 30%Loans from banks and 2023 Bilatera
Slide 77: Majority of contracts with fixed annual pricing
Majority of contracts with fixed annual pricing Pulp & Paper – Contract types and pricing terms* • Length – Around 95% of contracts are 1-year or longer / only 5% are spot deals • Pricing – Around 65% fixed / 35% formula or spot pricing Industry & Water – Contract types and pricing terms* • Length –
Slide 78: Revenue has a seasonal pattern
Revenue has a seasonal pattern GROUP REVENUE DEVELOPMENT COVID-19 972 968 1,000 impact 900 861 • Revenue typically Q2 and Q3 weighted 800 768 690 693 718 • 2020 exception due to 700 637 614 648 670 662 648 664 658 642 658 COVID-19 pandemic 610 617 622 600 583 597 606 606 0 Q1/17Q2/17Q3/17Q4/17Q1/18Q
Slide 79: Kemira aims to pay an attractive dividend
Kemira aims to pay an attractive dividend KEMIRA’S DIVIDEND POLICY Competitive and over-time increasing dividend No fixed payout ratio We have a solid dividend track record ◼ Dividend per share Dividend yield * 0.62 0.58 0.58 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.56 0.48 5.8% 5.4% 5.4% 4.5% 4.
Slide 80: Appendix
INVESTOR PRESENTATION Appendix FEBRUARY 10, 2023 INVESTOR PRESENTATION 80
Slide 81: Key figures
Key figures EUR million Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 2022 2021 Revenue 968.2 971.9 861.4 768.1 718.2 3,569.6 2,674.4 Operative EBITDA 177.0 152.5 122.1 120.0 97.8 571.6 425.5 margin 18.3% 15.7% 14.2% 15.6% 13.6% 16.0% 15.9% Operative EBIT 123.4 99.5 69.7 68.9 47.0 361.6 225.4 margin 12.7%
Slide 82: Cash flow
Cash flow EUR million Q4 2022 Q4 2021 2022 2021 Net profit for the period 90 10 240 115 Total adjustments 95 82 348 273 Change in net working capital 80 2 -102 -80 Finance expenses -3 -9 -52 -44 Income taxes paid -8 -4 -33 -44 Net cash generated from operating activities 255 81 400 220 Capital expen
Slide 83: Pulp & Paper
Pulp & Paper KEY FINANCIALS EUR million Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 2022 2021 Revenue 556.2 537.3 487.6 446.5 420.4 2,027.7 1,559.6 Operative EBITDA 110.9 92.3 73.6 71.3 60.5 348.0 244.7 margin 19.9 17.2% 15.1% 16.0% 14.4% 17.2% 15.7% Operative EBIT 80.3 61.8 42.8 40.7 30.4 225.7 124.3 m
Slide 84: Industry & Water
Industry & Water KEY FINANCIALS EUR million Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 2022 2021 Revenue 412.0 434.6 373.8 321.5 297.8 1,541.9 1,114.8 Operative EBITDA 66.1 60.3 48.5 48.8 37.3 223.7 180.8 margin 16.1% 13.9% 13.0% 15.2% 12.5% 14.5% 16.2% Operative EBIT 43.1 37.7 26.9 28.2 16.6 135.9 101
Slide 85: Currencies had a positive impact on revenue and operative EBITDA
Currencies had a positive impact on revenue and operative EBITDA KEMIRA REVENUE DISTRIBUTION IN 2022 • Main currency exposure comes via translation ◼ 6% Others impact ◼ 2% BRL ◼ 44% EUR • Transaction risk is limited as revenues and costs ◼ 2% SEK are typically in same currency due to local ◼ 2% GBP
Slide 86: Revenue split by country
Revenue split by country FY 2022 Other APAC 5% China 4% Other EMEA 9% USA 27% Belgium 2% Netherlands 2% France 2% Spain 2% Italy 2% Poland 3% Canada 8% UK 4% Brazil 2% Germany 4% Other Americas 3% Sweden 6% Finland 15% FEBRUARY 10, 2023 INVESTOR PRESENTATION 86
Slide 87: Kemira – largest shareholders and Board of Directors
Kemira – largest shareholders and Board of Directors SHAREHOLDERS ON DECEMBER 31, 2022 KEMIRA BOARD OF DIRECTORS MATTI WERNER % OF SHARES KÄHKÖNEN FUHRMANN 1. Oras Invest 20.6% Chair Member since Member 2020 2. Solidium (owned by State of Finland) 10.2% since 2021 3. Ilmarinen Mutual Pension Insuran
Slide 88: Kemira's Management Board
Kemira’s Management Board JARI ROSENDAL President and CEO With Kemira since 2014 ANTTI SALMINEN PETRI CASTRÉN ESA-MATTI PUPUTTI President CFO EVP, Operational Pulp & Paper With Kemira since 2013 Excellence & Sustainability With Kemira since 2011 With Kemira since 2015 WIDO WAELPUT MATTHEW PIXTON EEV
Slide 89: Pulp & Paper
Pulp & Paper TECHNOLOGY AND MARKET LEADER RAW CUSTOMER INTERMEDIATES PRODUCTS APPLICATIONS CUSTOMERS MATERIALS INDUSTRIES Electricity Tall oil rosin Sodium chlorate Pulping Pulp All the major global Sodium chloride AKD Wax Hydrogen peroxide Bleaching Packaging paper (salt) and board and pulp produce
Slide 90: Industry & Water
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