Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Kemira Oyj Ord — Q1 2024 Earnings Presentation
29 slides from Kemira Oyj's earnings presentation, Apr 26, 2024
Slide 1: Strong start to the year with a focused portfolio
ANTTI SALMINEN, PRESIDENT & CEO PETRI CASTRÉN, CFO APRIL 26, 2024 Strong start to the year with a focused portfolio JANUARY – MARCH 2024
Slide 2: Kemira has an excellent foundation for future growth
Kemira has an excellent foundation for future growth CUSTOMER EMPLOYEE SATISFACTION (NPS*) ENGAGEMENT Strong financial profile and track record 57 80 • Strong profitability, record-strong balance sheet and good 71 cash flow generation • Improved margin structure and capital efficiency as well as 33
Slide 3: Highlights of Q1 2024
Highlights of Q1 2024 • New Management Board started; annual strategy review ongoing • Strong start to the year with a focused portfolio • Kemira closed the divestment of its Oil & Gas business on February 2, 2024. The benefits of the Oil & Gas divestment visible in strong Q1 2024 financial performa
Slide 4: Financial highlights of Q1 2024
Financial highlights of Q1 2024 Revenue EUR million Q1 Q1 Δ% 2023 • Year-on-year and sequential volume growth (except ratios) 2024 2023 following a gradual market recovery Revenue 763.3 906.0 -16% 3,383.7 • Organic revenue growth -9% in Q1 2024 as sales prices for energy-intensive pulp and bleaching
Slide 5: Pulp & Paper: Continued sequential volume growth; margin strong at 20.9%
Pulp & Paper: Continued sequential volume growth; margin strong at 20.9% Market environment in Q1 2024 REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million • Gradual market recovery continued in Q1 2024 in all 537 556 505 488 geographic regions and product groups 447 421 404 419 423 • Political s
Slide 6: Industry & Water: Strong quarter; Oil & Gas adjusted ROCE over 35%
Industry & Water: Strong quarter; Oil & Gas adjusted ROCE over 35% Market environment in Q1 2024 REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million • Solid demand in both municipal and industrial water 435 412 419 425 treatment market 374 402 390 322 340 291 296 Organic revenue growth Q1 2024:
Slide 7: Kemira's strategic priorities remain unchanged – now focus is on accelerated execution
Kemira’s strategic priorities remain unchanged – now focus is on accelerated execution WATER TREATMENT REVENUE RENEWABLE SOLUTIONS DIGITAL SERVICES REVENUE DEVELOPMENT REVENUE DEVELOPMENT DEVELOPMENT* MEUR MEUR % of revenue 2,000 500 5 400 4 1,500 300 3 1,000 200 2 500 100 1 0 0 0 2020 2021 2022 202
Slide 8: Financials Q1 2024
PETRI CASTRÉN CFO Financials Q1 2024 APRIL 26, 2024 Q1 2024 RESULT PRESENTATION 8
Slide 9: Margin stable y-o-y at a record-high level
Margin stable y-o-y at a record-high level Q1/2024 REVENUE AND ORGANIC GROWTH (Y-ON-Y) Organic revenue growth -9% in Q1 2024 EUR million • Sales prices declined as market prices for energy-intensive 906 pulp and bleaching chemicals declined from elevated levels in -9% 1% -9% 763 Q1 2023. Excluding p
Slide 10: We operate in resilient end-markets
We operate in resilient end-markets KEMIRA’S SALES VOLUME DEVELOPMENT 2016-Q1 2024 (excl. Oil & Gas) 12 month rolling % change y-o-y 20 The impact of the Russia 15 exit and historic downturn in Pulp & Paper market visible 10 in sales volume development in 2022-2023 5 0 -5 -10 -15 -20 2016 2017 2018
Slide 11: Variable costs decline stabilizing
Variable costs decline stabilizing 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 300 1000 900 269 250 256 800 200 700 188197 600 129174 150 152 500 138 14199 122 68 64 100 400 47 42 37 97 59 13 26 34 300 28 3
Slide 12: Record-strong balance sheet
Record-strong balance sheet NET DEBT (EUR million) AND LEVERAGE RATIO* 850 • Balance sheet further strengthened during the quarter 771 due to the proceeds from the Oil & Gas divestment 535 376 • Gearing 23% (32% in Q4 2023) - well below the 2.0 1.3 0.8 financial target range of below 75% 0.6 • Net d
Slide 13: Strong cash flow in a typically lower quarter
Strong cash flow in a typically lower quarter ALL KEY FIGURES IN EUR MILLION CASH FLOW FROM OPERATIONS • Strong cash flow during the quarter; rather stable net 546 working capital 97 Q1 401 133 • Supplementary pension fund Neliapila returned excess 42 Q2 115 143 funds of around EUR 12 million during
Slide 14: Outlook for 2024 (unchanged)
Outlook for 2024 (unchanged) OUTLOOK ASSUMPTIONS BEHIND THE OUTLOOK (SPECIFIED) REVENUE • Kemira’s end-market demand (in volumes) is expected to Kemira’s revenue in local currencies, excluding grow slightly in 2024 following expected gradual demand acquisitions and divestments, is expected to be rec
Slide 15: Save the date! Capital Markets Day
SAVE THE DATE! Kemira will hold a Capital Markets Day during the afternoon of Thursday September 26, 2024. The CMD will be held physically in Helsinki, Finland. The event can also be followed via a live webcast. Save the date in your calendar; a formal invitation to follow. APRIL 26, 2024 Q1 2024 RE
Slide 16: Chemistry with a purpose. Better every day.
4 e mM | cra Chemistry with a purpose. Better every day.
Slide 17: Appendix
Appendix APRIL 26, 2024 Q1 2024 RESULT PRESENTATION 17
Slide 18: Kemira in brief
Kemira in brief LTM EXCL. OIL & GAS: REVENUE EUR 2,812 MILLION, OPERATIVE EBITDA EUR 586 MILLION, OPERATIVE EBITDA MARGIN 20.8%, OPERATIVE ROCE 21.6% SEGMENT SPLIT GEOGRAPHIES PRODUCTS 10% 15% Other: 40% 60% APAC e.g. defoamers, 25% Bleaching Industry & Water Pulp & Paper 35% 1. China disper
Slide 19: 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 2,200 348 40% 45% 15% 1% Other 331 2,000 Pulp Board & Printing & 40% 1,800 260 tissue writing papers 10% Bleaching 245 Po
Slide 20: Industry & Water – strong market positions
Industry & Water – strong market positions REVENUE AND OPERATIVE EBITDA REVENUE BY APPLICATION REVENUE BY EUR million TYPE AND MARKET GROWTH PRODUCT CATEGORY 1,800 336 1,600 90% 10% 15% 60% 1,400 1,200 224 Water treatment Other Other Coagulants 192 175 181 products 1,000 Municipal Industrial
Slide 21: Very limited currency impact in Q1 2024
Very limited currency impact in Q1 2024 KEMIRA REVENUE DISTRIBUTION IN 2023 • Main currency exposure comes via translation 5% Others impact 2% PLN 40% EUR • Transaction risk is limited as revenues and costs 2% BRL are typically in same currency due to local 2% SEK manufacturing. Transactio
Slide 22: Key figures (reported)
Key figures (reported) EUR million Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 2023 2022 Revenue 763.3 808.8 828.7 840.1 906.0 3,383.7 3,569.6 Operative EBITDA 162.5 162.7 160.3 151.0 192.6 666.7 571.6 margin 21.3% 20.1% 19.3% 18.0% 21.3% 19.7% 16.0% Operative EBIT 117.6 112.6 107.6 100.9 141.9 463.0 36
Slide 23: Key figures, Oil & Gas divestment adjusted
Key figures, Oil & Gas divestment adjusted EUR million Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 2023 2022 Revenue 718.8 690.2 694.3 709.1 795.6 2,889.0 3,141.1 Operative EBITDA 159.2 149.3 143.8 133.3 169.4 595.9 518.3 margin 22.2% 21.6% 20.7% 18.8% 21.3% 20.6% 16.5% Operative EBIT 114.4 103.7 97.8 8
Slide 24: Cash flow
Cash flow EUR million Q1 2024 Q1 2023 2023 Net profit for the period 79.0 95.4 211.3 Total adjustments 81.3 98.5 429.4 Change in net working capital -9.3 -50.8 14.9 Finance expenses -15.2 2.4 -18.8 Income taxes paid -38.2 -48.8 -90.8 Net cash generated from operating activities 97.7 96.7 546.0 Capit
Slide 25: Pulp & Paper key financials
Pulp & Paper KEY FINANCIALS EUR million Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 2023 2022 Revenue 422.9 418.8 403.6 421.2 504.6 1,748.2 2,027.7 Operative EBITDA 88.2 87.5 68.9 65.2 109.4 330.9 348.0 margin 20.9 20.9% 17.1% 15.5% 21.7% 18.9% 17.2% Operative EBIT 59.8 58.6 39.8 37.6 80.4 193.4 225.7 m
Slide 26: Industry & Water key financials
Industry & Water KEY FINANCIALS EUR million Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 2023 2022 Revenue 340.5 390.0 425.1 418.9 401.5 1,635.5 1,541.9 Revenue, O&G divestment adjusted 295.9 271.4 290.7 287.9 291.0 1,140.9 1 113,40 Operative EBITDA 74.3 75.2 91.5 85.8 83.3 335.8 223.7 margin 21.8% 19.3%
Slide 27: Revenue split by country
Revenue split by country FY 2023 Other APAC 5% China 4% Other EMEA 8% USA 30% Belgium 2% Netherlands 2% France 2% Spain 2% Italy 2% Poland 3% UK 4% Canada 9% Germany 4% Brazil 2% Sweden 6% Other Americas 3% Finland 13% APRIL 26, 2024 Q1 2024 RESULT PRESENTATION 27
Slide 28: Important information about financial figures
Important information about financial figures Kemira provides certain financial performance measures (alternative performance measures) that are not defined by IFRS. Kemira believes that alternative performance measures followed by capital markets and Kemira management, such as revenue growth in loc
Slide 29: Kemira – www.kemira.com
Kemifa WWW.KEMIRA.COM