Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q1 2007 Earnings Presentation
30 slides from Kemira Oyj's earnings presentation, May 2, 2007
Slide 1: Focus to Profitability
Focus to Profitability Lasse Kurkilahti, President & CEO May 2, 2007 Investor Relations: Andreas Langhoff, tel. +358 1086 21140
Slide 2: Contents
Contents Q1 Group Highlights Q1 Business Area Highlights Outlook 2
Slide 3: Q1 Group Highlights
Q1 Group Highlights O = = ® ¥
Slide 4: Key Figures for Q1
Key Figures for Q1 Q1/07 Q1/06 Change Revenue (MEUR) 673.3 552.9 22% EBIT (MEUR) 48.9 45.5 7% EBIT, % 7.3 8.2 EPS (EUR) 0.22 0.21 5% ROCE, % 10.2 9.9 Cash flow after CapEx, excl. acquisitions (MEUR) -117.6 -41.5 EBIT increased 18%, excluding effect of non-recurring items. Non-recurring items include
Slide 5: Revenue up 22% in Q1
Revenue up 22% in Q1 700 23% -2% -1% 650 600 1% -2% 673 2% 550 500 553 450 400 2006 Price Volume Currency Acquisitions Divestments Other 2007 5
Slide 6: Revenue Development and Capital turnover
Revenue Development and Capital turnover 2003-2007 Q1/07: 673.3 MEUR, +22% (Q1/06: 552.9 MEUR) MEUR 3000 2 2400 1,5 1800 1 1200 0,5 600 0 0 03 05 06 07 04* Q1 Q2 Q3 Q4 Capital turnover *Continuing operations 6
Slide 7: EBIT by Quarter
EBIT by Quarter Q1/07: 48.9 MEUR, +7% (Q1/06: 45.5 MEUR) MEUR 12 200 10 150 8 6 % 100 4 50 2 0 0 03 05 06 07 04* * Continuing operations Q4/06 restated EBIT % 7
Slide 8: EBIT up 7% in Q1
8 0 10 20 30 40 50 60 70 20 MEUR 06 Pr ic e Vo lu m e C ur re nc Va y EBIT up 7% in Q1 ria b le co st s Fi xe d co st s A cq u is i tio n s D iv e N st m on en -r t e cu rr in g ite m s O th er 20 07
Slide 9: EPS by Quarter
EPS by Quarter EUR % 1 14 0,9 12 0,8 0,7 10 0,6 8 0,5 6 0,4 0,3 4 0,2 2 0,1 0 0 2004* * Continuing operations 2003 2005 2006 2007 excluding a non-recurring charge of 44.2 MEUR in Q4/04. Q4/06 restated ROCE, 12-month rolling average 9
Slide 10: Balance Sheet
Balance Sheet 31 Mar 07 31 Mar 06 Change Net debt (MEUR) 964.5 690.6 40% Equity (MEUR) 1,105.1 1,057.6 Equity ratio, % 39 42 Gearing, % 87 65 Capital employed (MEUR) 2,051.0 1,818.8 13% Personnel 9,405 8,734 8% 10
Slide 11: Cash Flows
Cash Flows MEUR Q1/07 Q1/06 Cash flows from operations -30.0 -20.3 Acquisitions -23.2 -30.3 CapEx excl. acquisitions -55.1 -27.2 Sale of fixed assets -32.5* 6.0 Cash flows from investing activities -110.8 -51.5 Free cash flow -140.8 -71.8 * incl. Kemapco loan repaiment 11
Slide 12: CapEx excluding Acquisitions
CapEx exluding Acquisitions CapEx in Q1/07: 55.1 MEUR (27.2) Investment in chemical plant in Uruguay 12 MEUR Investment in paint factory in Sweden 6 MEUR Depreciation in Q1/07: 33.7 MEUR (29.4) Maintenance 26 % Improvement 39 % Expansion 35 % 12
Slide 13: Personnel
Personnel Personnel 31 March 2007: 9,405 (8,734) Asia Other Americas 4% Russia 7% Pulp&Paper 16 % 15 % 25 % Eastern Europe 10 % Coatings 37 % Water 20 % Specialty Europe 11 % 65 % 13
Slide 14: Shareholders 31 March 2007
Shareholders 31 March 2007 (31 March 2006) International Institutions 24.0% (18.1) Finnish State Finnish 48.6% (48.7) Institutions 16.3% (21.1) Households Kemira 8.0% (8.8) 3.1% (3.3) Minimum state ownership 15% 14
Slide 15: Shareholder Value
Shareholder Value IKRALY 18,30 T T T T T T T T T T T T m+ 4 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 15 Kemira
Slide 16: Q1 Business Area Highlights
Q1 Business Area Highlights O = = ® ¥
Slide 17: Pulp&Paper in Q1
Kemira Pulp&Paper in Q1 Revenue up 22% Organic growth 4%, excluding the currency effect Foreign exchange rates had a 3% negative impact on revenue Integration of Lanxess paper chemicals continued to progress well EBIT down to 23.0 from 26.0 Non-recurring items in Q1/07 were +1.3 MEUR, in Q1/06 4.1 M
Slide 18: Pulp&Paper
Kemira Pulp&Paper Revenue & Capital turnover EBIT & ROCE MEUR MEUR % 1100 2 100 20 1000 90 900 80 1,5 15 800 70 700 60 600 1 50 10 500 40 400 30 300 0,5 5 200 20 100 10 0 0 0 0 03 04 05 06 07 04* 03 05 06 07 Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE The figures are not fully comparable. 18
Slide 19: Pulp&Paper's Outlook
Kemira Pulp&Paper’s Outlook Revenue for 2007 is anticipated to grow from previous year level High production-capacity utilization rates are expected in customer industry Acquisition of Lanxess EBIT expected to increase Successful integration of acquired companies Price increases 19
Slide 20: Water in Q1
Kemira Water in Q1 Revenue up 84% Organic growth 7%, excluding the currency effect Foreign exchange rates had a 5% negative impact on revenue EBIT up 86%, ROCE 13.0% (13.6%) Cytec water chemicals’ included for the first time in Q1 figures Integration of Cytec water treatment chemicals progressing Ex
Slide 21: Water
Kemira Water Revenue & Capital turnover MEUR MEUR EBIT & ROCE % 500 2 40 20 450 35 400 1,5 30 15 350 300 25 250 1 20 10 200 15 150 0,5 10 5 100 50 5 0 0 0 0 04* 03 05 06 07 03 04 05 06 07 Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE The figures are not fully comparable. Q4/04 excluding extra write-downs
Slide 22: Water's Outlook
Kemira Water’s Outlook Revenue expected to increase from previous year level Acquisitions Demand for water treatment chemicals expected to remain at a good level EBIT expected to increase Focus on integration of acquired companies 22
Slide 23: Specialty in Q1
Kemira Specialty in Q1 Revenue down 13% Lower volumes in Ti02 Low demand for deicer chemicals due to mild weather in Europe US dollar impact depressing sales by 3% EBIT down to 10.3 MEUR from 11.3 MEUR Low volumes in Ti02, deicing, currency impact ROCE 10.0% (10.5%) Agreement on buing TRI-K Industri
Slide 24: Specialty
Kemira Specialty Revenue & Capital turnover EBIT & ROCE MEUR MEUR 500 2 % 50 20 400 1,5 40 15 300 30 1 10 200 20 0,5 5 100 10 0 0 0 0 04* 03 05 06 07 03 05 06 07 04* Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE The figures are not fully comparable. *Continuing operations 24
Slide 25: Specialty's Outlook
Kemira Specialty’s Outlook Revenue and EBIT expected to be in line with their 2006 levels Competition expected to remain tough in Ti02 and euro prices to be lower than a year ago Specialty pigments are expected to increase their share of Ti02 sales Sales of organic acids and their derivatives are an
Slide 26: Coatings in Q1
Kemira Coatings in Q1 Revenue up 15% Organic growth 12% Good sales in all market areas, due to warm spring EBIT up 33% Good sales performance and efficient cost management ROCE 24.6% (20.2%) Acquisitions of 70% holding in OOO Gamma and OOO Ohtinski in Russia completed in April Q1/07 Q1/06 Ch% 2006 R
Slide 27: Coatings
Kemira Coatings Revenue & Capital turnover EBIT & ROCE MEUR MEUR % 600 2 80 28 70 ------ 24 500 1,5 60 20 400 50 16 40 ------ 300 1 12 30 ------ 8 200 20 0,5 10 4 100 0 0 0 0 -10 -4 03 04 05 06 07 03 04 05 06 07 Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE 27
Slide 28: Coatings' Outlook
Kemira Coatings’ Outlook Revenue expected to increase from previous year level Demand remaining at a good level in all market areas Strongest growth anticipated in Russia and other CIS countries EBIT expected to grow (excluding EUR 16.4 million in non- recurring income in operating profit for 2006)
Slide 29: Outlook
Outlook Revenue expected to grow in 2007 Previous acquisitions and organic growth Demand for Kemira’s products is projected to remain at a healthy level Operating profit and earnings per share for 2007 are expected to show an increase from 2006 levels Raw material and energy prices and transportatio
Slide 30: Just add
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