Kemira Oyj · OMXHEX:KEMIRA

Kemira Oyj — Q2 2007 Earnings Presentation

34 slides from Kemira Oyj's earnings presentation, Jul 26, 2007

  1. Slide 1: Interim Report January-June 2007

    Interim Report January-June 2007 Lasse Kurkilahti, President & CEO IR: Andreas Langhoff, tel +358 10 862 1140 July 26, 2007 1

  2. Slide 2: Contents

    Contents ƒ Kemira Group - Q2 Highlights ƒ Business Areas - Q2 Highlights ƒ Outlook 2

  3. Slide 3: Improved performance in Q2 2007

    Improved performance in Q2 2007 ƒ Revenue EUR 753.0 (647.5) million, +16% ƒ Organic growth in local currencies +6% ƒ Operating profit*, EUR 56.6 (42.8) million, +32% ƒ Operating profit-%*, 7.5% (6.6%) ƒ Earnings per share EUR 0.27 (0.26), +4% ƒ * Excluding non-recurring items 3

  4. Slide 4: Key Figures for Q2 and Q1-Q2

    Key Figures for Q2 and Q1-Q2 (MEUR) Q2/07 Q2/06 Ch-% Q1-Q2/07 Q1-Q2/06 Ch-% Revenue 753.0 647.5 16 1 426.3 1 200.4 19 Operating profit 57.6 51.5 12 106.5 97.0 10 Operating profit, % 7.6 8.0 7.5 8.1 Operating profit, excl. non- 56.6 42.8 32 104.7 83.0 26 recurring items Operating profit, %, excl. non

  5. Slide 5: Revenue up 16% in Q2

    Revenue up 16% in Q2 MEUR 800 14% -1% 0% 750 753 700 3% -2% 2% 673 650 600 647 550 553 500 450 400 2006 Price Volume Currency Acquisitions Divestments Other 2007 5

  6. Slide 6: Revenue Development and Capital turnover 2003-2007

    Revenue Development and Capital turnover 2003-2007 Q2/07: 753.0 MEUR, +16% (Q2/06: 647.5 MEUR) MEUR 3000 2 2400 1,5 1800 1 1200 0,5 600 0 0 04* 03 05 06 07 Q1 Q2 Q3 Q4 Capital turnover *Continuing operations 6

  7. Slide 7: Operating profit up 12% in Q2

    Operating profit up 12% in Q2 ƒ Operating profit, excluding non-recurring items, EUR 57 (43) million, +32% MEUR 80 19% -5% 70 -7% -20% 23% 9% -1% -15% 10% 60 50 58 51 40 30 20 10 0 s s e 06 07 s s t e er y en m n st ic st m nc th 20 20 tio Pr ite co co lu m re O Vo i st is ur g le d e in u xe b C iv

  8. Slide 8: Operating profit by Quarter

    Operating profit by Quarter Q2/07: 57,6 MEUR, +12% (Q2/06: 51.5 MEUR) MEUR 12 200 10 150 8 6% 100 4 50 2 0 0 04* 06* 03 05 07 EBIT % * 2004 Continuing operations * Q4/06 restated 8

  9. 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* 2006* 2003 2005 2007 * Continuing operations excluding a non-recurring ROCE, 12-month rolling average charge of 44.2 MEUR in Q4/04. * Q4/06 restated 9

  10. Slide 10: Balance Sheet

    Balance Sheet 30 Jun 07 30 Jun 06 Change Net debt (MEUR) 1 067.1 770.2 39% Equity (MEUR) 1 086.1 1 042.9 Equity ratio, % 37 40 Gearing, % 98 74 Capital employed (MEUR) 2 103.5 1 824.1 8% Personnel 10 588 9 695 9% 10

  11. Slide 11: Cash Flows

    Cash Flows MEUR Q1-Q2/07 Q1-Q2/06 Funds from operations 131.6 108.1 Change in net working capital -108.5 -79.8 Cash flows from operations 23.1 28.3 Acquisitions -44.6 -102.2 CapEx excl. acquisitions -121.1 -59.6 Sale of fixed assets -26.0* 33.8 Cash flows from investing activities -191.7 -128.0 Free

  12. Slide 12: CapEx excluding Acquisitions

    CapEx exluding Acquisitions CapEx in Q1-Q2/07: 121.1 MEUR (59.6) ƒ Investment in chemical plant in Uruguay 23.0 MEUR ƒ Investment in paint factory in Sweden 8.5 MEUR ƒ IT investment in Corporate Center 10.5 MEUR ƒ Environmental investment in Pori 8.8 MEUR Depreciation in Q1-Q2/07: 66.0 MEUR (59.4) M

  13. Slide 13: Personnel

    Personnel Personnel 30 June 2007: 10,588 (30 June 2006: 9,695) Other Asia 5% Americas 4% Russia Pulp&Paper (3 %) (8 %) 16 % 15 % 23 % (14 %) (17 %) (25 %) Eastern Europe Coatings 11 % 40 % (11 %) (40 %) Water 21 % (15 %) Specialty Europe 11 % 65 % (12 %) (66 %) 13

  14. Slide 14: Business Areas

    Business Areas Kemira 14

  15. Slide 15: Operating profit, excluding non-recurring items

    Operating profit, excluding non-recurring items MEUR Q2/07 Q2/06 Ch-% Q1-Q2/07 Q1-Q2/06 Ch-% Kemira Pulp&Paper 23.4 17.3 +35 45.1 38.8 +16 Kemira Water 13.0 9.4 +38 24.9 15.8 +58 Kemira Specialty 7.1 9.6 -26 17.4 20.9 -17 Kemira Coatings 27.3 21.7 +26 40.1 31.3 +28 Other -14.2 -15.2 +7 -22.8 -23.8 +

  16. Slide 16: Operating profit-%, excluding non-recurring items

    Operating profit-%, excluding non-recurring items % Q2/07 Q2/06 Q1-Q2/07 Q1-Q2/06 2006 Kemira Pulp&Paper 9.0 6.7 8.8 8.3 8.0 Kemira Water 7.0 9.2 7.0 8.1 7.6 Kemira Specialty 6.4 8.9 8.1 9.2 9.3 Kemira Coatings 14.5 12.7 12.4 10.8 9.9 Kemira Group 7.5 6.6 7.3 6.9 6.8 16

  17. Slide 17: Kemira Pulp&Paper

    Kemira Pulp&Paper Kkemira 17

  18. Slide 18: Pulp&Paper in Q2

    Kemira Pulp&Paper in Q2 ƒ Revenue up 1% ƒ Organic growth 7% in local currencies ƒ Foreign exchange rates had a 4% negative impact on revenue ƒ Divestment of the South Korean hydrogen peroxide business in 2006 ƒ Operating profit, excl. non-recurring items EUR 23.4 (17.3) million, +35% ƒ Non-recurring

  19. Slide 19: Kemira Pulp&Paper

    Kemira Pulp&Paper Revenue & Capital turnover EBIT & ROCE MEUR MEUR % 100 20 1200 2 90 1000 80 15 1,5 70 800 60 600 1 50 10 40 400 30 0,5 5 20 200 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. 19

  20. Slide 20: Pulp&Paper's Outlook

    Kemira Pulp&Paper’s Outlook ƒ Revenue for 2007 is anticipated to grow from previous year level ƒ High production-capacity utilization rates are expected in customer industry ƒ Acquisition of Lanxess ƒ New products and solutions ƒ EBIT expected to increase ƒ Successful integration of acquired compani

  21. Slide 21: Kemira Water

    Kemira Water Kemira

  22. Slide 22: Water in Q2

    Kemira Water in Q2 ƒ Revenue up 81%, Organic growth 2% in local currencies ƒ Foreign exchange rates had a 1% negative impact on revenue ƒ Operating profit up 35%, ROCE 12.1% (13.9%) ƒ Cytec water treatment chemicals included for the first time ƒ Integration benefits not yet visible ƒ Integration of

  23. Slide 23: Kemira Water

    Kemira Water Revenue & Capital turnover EBIT & ROCE MEUR MEUR % 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

  24. Slide 24: Water's Outlook

    Kemira Water’s Outlook ƒ Revenue expected to increase from previous year level ƒ Acquisitions ƒ Demand for water treatment chemicals expected to remain at a good level ƒ Operating profit expected to increase ƒ Focus on integration of acquired companies 24

  25. Slide 25: Kemira Specialty

    Kemira Specialty Kemira 7. # rs 4 4:5 & _ \ + -

  26. Slide 26: Specialty in Q2

    Kemira Specialty in Q2 ƒ Revenue up 3% ƒ Organic growth 2% in local currencies. USD impact depressing sales by 3% ƒ Tough competition in TiO2 continued ƒ Operating profit down to 7.1 MEUR from 11.7 MEUR ƒ Lower euro sales prices in Ti02 ƒ ROCE 9.1% (11.2%) ƒ Initiation of process to evaluate strateg

  27. Slide 27: Kemira Specialty

    Kemira Specialty Revenue & Capital turnover EBIT & ROCE MEUR MEUR % 500 2 50 20 400 40 1,5 15 300 30 1 10 200 20 0,5 5 100 10 0 0 0 0 03 05 06 07 04* 04* 03 05 06 07 Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE The figures are not fully comparable. *Continuing operations 27

  28. Slide 28: Specialty's Outlook

    Kemira Specialty’s Outlook ƒ Revenue and EBIT expected to be below their 2006 levels ƒ Competition expected to remain tough in Ti02 ƒ Development in US housing markets ƒ Weak dollar giving competitive edge to US producers in Europe ƒ Euro prices to be lower than a year ago ƒ The evaluation of strate

  29. Slide 29: Kemira Coatings

    Kemira Coatings Kemira SE _@ i

  30. Slide 30: Coatings in Q2

    Kemira Coatings in Q2 ƒ Revenue up 11% ƒ Organic growth 9% ƒ Good sales development in all market areas continued ƒ Operating profit, excl. non-recurring items EUR 27.3 (21.7) million, +26%, ƒ Operating profit-%, excl. non-recurring items 14.5% (12.7%) ƒ Good sales performance and efficient cost man

  31. Slide 31: Kemira 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 31

  32. Slide 32: Coatings' Outlook

    Kemira Coatings’ Outlook ƒ Revenue expected to increase from previous year level ƒ Demand remaining at a good level in all market areas ƒ Strongest growth anticipated in Russia and other CIS countries ƒ EBIT expected to grow (excluding EUR 16.4 million in non-recurring income in operating profit for

  33. Slide 33: Outlook

    Outlook ƒ Revenue expected to grow in 2007 ƒ Previous acquisitions and organic growth ƒ Demand for Kemira’s products is projected to remain at a healthy level ƒ Operating profit and earnings per share for 2007 are expected to show an increase from 2006 levels ƒ Raw material and energy prices and tra

  34. Slide 34: IR contact

    IR: Andreas Langhoff, tel +358 10 862 1140 July 26, 2007 34

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