Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q1 2002 Earnings Presentation
35 slides from Kemira Oyj's earnings presentation, 2002
Slide 1: Growth Strategy
Growth Strategy World-scale leaders Leading in Europe High with a strong Baltic rim base Pulp & Kemwater Paper C. Paints and Coatings Growth World-scale ambitions performer Industrial To be separated Chemicals Agro Low Average High Competitiveness www.kemira.com 1
Slide 2: Pulp and Paper Chemicals
Pulp and Paper Chemicals Mergers & acquisitions Global number 6 as paper chemical 1200 Net sales € mill. supplier Acquistions 800 Complete solutions from pulping to paper production 400 Latest acquisition: excellent match 0 Organic Net sales acquisition growth technologically, geographically a
Slide 3: Pulp and Paper Chemicals Industry
Pulp and Paper Chemicals Industry Global market for pulp and paper chemicals est. 13.5 B€ Bleaching chemicals 3.0 B€ Major suppliers chloride dioxide, oxygen, ozone, peroxide Hercules 900 M$ dithionite Eka Chemicals 750 M€ Process chemicals 2.8 alum, retention, BASF 700 M€ deposit control, Nalco 650
Slide 4: Kemwater - World Leader in Chemical Water Purification
Kemwater - World Leader in Chemical Water Purification 400 Mergers & World leader in coagulants 350 Net sales, € mill. acquisitions 300 Acquisition based growth and stable 250 profitability 200 150 Local/regional business by low cost 100 raw material sourcing and logistics 50 Differentiated
Slide 5: Kemwater Strategy
Kemwater Strategy Geographical expansion in Americas/Asia Mergers & Market restructuring acquisitions Cost Product efficiency and service differentiation Recycled raw materials Sludge management Production technology Service concepts Overall manufacturing structure Complete water sol
Slide 6: Coagulant Consumption
Coagulant Consumption Pohjakartta /Geodata Oy, lupa N:o 1164 /2000 18 kg / person 5.5 kg / person 2.5 kg / person 5 kg / person 1.5 kg / person Total market 10 million tonnes € 1.5 billion www.kemira.com 6
Slide 7: Industrial Chemicals - Growth through Innovation and Excellent Business Practices
Industrial Chemicals - Growth through Innovation and Excellent Business Practices Mergers & Benefits from Kemira’s 600 acquisitions Net sales, € mill. synergistic competencies 500 Platform for organic growth with 400 300 high profitability and strong 200 cash-flow 100 Differentiation into spec
Slide 8: Paints and Coatings
Paints and Coatings Decorative paints ~70 % Mergers & coatings ~30 % of sales 1200 acquisitions Net Sales, € mill. (coatings: metal and coil coating, wood 1000 finishes) 800 Biggest decorative paint company 600 in Nordic countries 400 200 Target to become a leading (1-5) 0 paint company in Eur
Slide 9: Paint consumption in Europe
Paint consumption in Europe Population, Million People Pohjakartta /Geodata Oy, lupa N:o 1164 /2000 <20 l / person <10 l / person 49 5 148 <5 l / person 62 8 26 5 82 39 Total market 15 51 5,700,000 58 11 22 tonnes 22 15 58 9 62 49 11 9 www.kemira.com
Slide 10: Agro Separation
Agro Separation Agro to be separated from the rest of Kemira Strategic partner for Agro sought for the development and further strengthening of Agro The Government has given its support to the new strategy and has expressed its readiness to participate as a partial owner in Agro after the sepa
Slide 11: Kemira Group's Growth Strategy until 2004
Kemira Group´s Growth Strategy until 2004 4000 Mergers & acquisitions 3500 Net sales, € m illion 3000 2500 2000 Agro 1500 1000 500 0 Net sales 2001 Organic growth www.kemira.com 11
Slide 12: Highlights 1Q 2002
Highlights 1Q 2002 Sales € 656 million, growth 1% Operating income € 53 million (€ 57 million), 8% of net sales EPS € 0.26 (€ 0.28) Equity / share € 9.65 North American specialty paper chemicals acquisition (Vinings) included from 1 February www.kemira.com 12
Slide 13: Kemira Group 1Q 2002
Kemira Group 1Q 2002 30 Chemicals € million 37 % 20 Agro 1Q 2002 46 % 1Q 2001 10 Other 0 2% Agro Chemicals Coatings Paints & Paints & Coatings 15 % Net sales 1Q 2002: € 656 m Operating income 1Q 2002: € 53 m www.kemira.com 13
Slide 14: Growth Potential
Growth Potential Acquisitions Agro Other -specialty paper chemicals company 12 % 1% (Vinings) in North America Paints and Organic growth Coatings - Pulp & Paper Chemicals: calcium sulphate, 4% specialty paper chemicals in Brazil - Idustrial Chemicals: TiO2, formics, sodium percarbonate - Paints
Slide 15: AGM 3.4.2002
AGM 3.4.2002 Dividend € 0.30 - 51% pay-out ratio of net result Share buy-back - further 1,928,000 shares up to 5 % of shares - 4,190,000 shares already in the possession of the company - to be used for personnel profit plan, management incentive programme or acquisitions or to be sold on Helsink
Slide 16: Chemicals
Chemicals Net sales Operating income 900 Net sales % 120 14 100 12 600 10 80 € million € million 8 60 6 300 40 4 20 2 0 0 0 97 98 99 00 01 02 97 98 99 00 01 02 Q1 Q2 Q3 Q4 www.kemira.com 16
Slide 17: Chemicals
Chemicals Industrial Pulp and Pulp and Chemicals Industrial Paper C. Paper C. 39% Chemicals 43% 38 % 44 % Kemwater Kemwater 18 % 18% Net sales 2001: € 901 m Net sales 1Q 2002: € 254 m www.kemira.com 17
Slide 18: Pulp & Paper Chemicals
Pulp & Paper Chemicals Sales + 24% over 2001 y-o-y Sulphur Bleaching chemicals chemicals Continued production cut-backs within pulp & paper industry Finnish paper and board production -6% and chemical pulp production +3% in 1Q 2002 y-o-y Synergistic acquisition of specialty paper chemicals i
Slide 19: Kemwater
Kemwater Vision of Sales growth 11% over 2001 y-o-y emistry Good start for the year St. Petersburg as growth potential New entry to the service concept Net sales 1Q 2002: € 45 m www.kemira.com 19
Slide 20: Industrial Chemicals
Industrial Chemicals Sales up by 5% y-o-y Fine Chemicals TiO2 volumes + 10%, prices -15% y-o-y Demand for formic acid and calcium Chemidet chloride good Sodium percarbonate market CC-products developes favourably Fine Chemicals result clearly Pigments Formics better than last year Net sale
Slide 21: Paints and Coatings
Paints and Coatings Net sales Operating income 500 50 % 14 400 40 10 30 300 € million € million 20 6 200 10 2 0 100 -2 -10 0 -20 -6 97 98 99 00 01 02 97 98 99 00 01 02 Q1 Q2 Q3 Q4 www.kemira.com 21
Slide 22: Paints and Coatings
Paints and Coatings Coatings 30% Coatings 29% Deco 71% Deco 70% Net sales 2001: € 445 m Net sales 1Q 2002: € 101 m www.kemira.com 22
Slide 23: Paints and Coatings
Paints and Coatings Deco Sales on the same level as last year Strong growth in the Baltic countries and Russia Synergies from Alcro-Beckers integration kicking in Coatings Sales 12% below 2001 y-o-y Low investment levels of customer industry and agriculture UK market especially depressed
Slide 24: Agro
Agro Net sales Operating income % 1 200 110 90 10 1 000 70 € million 800 50 6 € million 600 30 2 400 10 -10 -2 200 -30 0 -50 -6 97 98 99 00 01 02 97 98 99 00 01 02 Q1 Q2 Q3 Q4 www.kemira.com 24
Slide 25: Agro
Agro Food Chain Food Chain Partner Partner 28% 29% Agro Agro Nitrogen Nitrogen 40 % 42 % Specialty Crop Care Specialty 11% Crop Care 13% Animal Intermediates Intermediates Animal Nutrition 11% 12% Nutrition 7% 7% Net sales 2001: € 1 158 m Net sales 1Q 2002: € 312 m www.kemira.com 25
Slide 26: Agro Specialties
Agro Specialties Sales on a par with last year, volumes and prices unchanged Feed phosphates business developed favourably – new 40,000 tonnes feed acidifier plant to be built in Helsingborg, Sweden 200 000 t/a capacity decrease in Denmark Operating income was better than last year www.kemir
Slide 27: Agro Nitrogen
Agro Nitrogen Sales below 2001 Prices down by 10%, volumes on the same level as last year Operating income was lower than last year Increasing efficiency in Continental Europe continues according to plan Adapting to lower demand by production cut-backs EU antidumping duty of Russian AN d
Slide 28: Kemira Group
Kemira Group Net sales Operating income % 2800 200 10 180 2400 160 8 2000 140 € million 1600 120 6 € million 100 1200 80 4 800 60 40 2 400 20 0 0 0 97 98 99 00 01 02 97 98 99 00 01 02 Q1 Q2 Q3 Q4 www.kemira.com 28
Slide 29: Gearing
Net debt 1 050 100 900 80 750 60 € million Gearing 600 450 40 300 20 150 0 0 97 98 99 00 01 02 www.kemira.com 29
Slide 30: Net Financing Expenses
Net Financing Expenses 60 7 50 6 Average interest rate 5 40 € million 4 30 3 20 2 10 1 0 0 97 98 99 00 01 02 Q1 Q2 Q3 Q4 Average interest rate www.kemira.com 30
Slide 31: Cash Flow
Cash Flow 550 450 350 € million 250 150 50 -50 -150 97 98 99 00 01 1Q 02 Cash flow from operations Cash flow after investments and disposals www.kemira.com 31
Slide 32: Net Income and CFROI
Net Income and CFROI 250 16 14 200 12 150 10 € million CFROI % 8 100 6 4 50 2 0 0 97 98 99 00 01 02 EPS* 0.81 0.61 0.23 0.73 0.58 0.26 CFPS 2.00 0.96 1.41 1.69 1.03 0.00 *) excluding non-recurring items 2000 www.kemira.com 32
Slide 33: Valuation / Ownership
Valuation / Ownership Market capitalisation / equity Ownership 30 April 2002 1500 Finnish 1200 instit. Public 29.9 % 6.7 % 900 € million Kemira 600 3.4 % Int. instit. 300 3.8 % Finnish 0 State 95 96 97 98 99 00 01 02 56.2 % Equity / share € 9.65 State’s minimum 15% Option programme until 4,2
Slide 34: Outlook for the Year 2002 (1)
Outlook for the Year 2002 (1) Chemicals – Higher demand for pulp & paper chemicals as customer industry starts recovering towards year end – North American specialty paper chemicals acquisition strengthens the Group´s position in the global market – Demand for water treatment chemicals continues s
Slide 35: Outlook for the Year 2002 (2)
Outlook for the Year 2002 (2) Agro – Specialty fertilizer market is expected to develop favourably – Demand of nitrogen fertilizers has not improved contrary to expectation, which means production cut-backs – Agro’s operating income is expected to improve – Kemira aims to separate Agro into a new