Kemira Oyj · OMXHEX:KEMIRA
Kemira Oyj — Q1 2008 Earnings Presentation
35 slides from Kemira Oyj's earnings presentation, Apr 29, 2008
Slide 1: Interim Report January-March 2008
Interim Report January-March 2008 Harri Kerminen, President & CEO IR: Andreas Langhoff, tel +358 10 862 1140 April 29, 2008 1
Slide 2: Contents
Contents Kemira Group – Q1 Highlights Business Areas – Q1 Highlights Outlook 2008 2
Slide 3: Kemira Group – Q1 Highlights
Kemira Group – Q1 Highlights 3
Slide 4: Key Figures for Q1
Key Figures for Q1 (MEUR) Q1/08 Q1/07 Ch-% 2007 Revenue 683.6 673.3 2 2,810.2 Operative EBIT 27.2 48.1 -43 174.6 Operative EBIT, % 4.0 7.1 6.2 EBIT 33.0 48.9 -33 143.1 EBIT, % 4.8 7.3 5.1 EPS (EUR) 0.12 0.22 -45 0.53 ROCE, % 6.3 10.2 7.1 Cash flow after CapEx, excl. acquisitions -9.0 -117.6 -82.5
Slide 5: Revenue Development and Capital turnover 2004-2008
Revenue Development and Capital turnover 2004-2008 Q1/08: 683.6 MEUR (Q1/07: 673.3 MEUR) MEUR 3000 2 2400 1,5 1800 1 1200 0,5 600 0 0 04* 05 06 07 08 Q1 Q2 Q3 Q4 Capital turnover *Continuing operations 5
Slide 6: Revenue Q1 2008 vs. Q1 2007
Revenue Q1 2008 vs. Q1 2007 MEUR 22 -20 16 -6 -18 16 684 673 2007 Price Volume Currency Acquisitions Divestments Other 2008 6
Slide 7: Revenue Q1 2008 vs. Q1 2007
Revenue Q1 2008 vs. Q1 2007 MEUR +9 -25 +4 +22 684 673 +1 Revenue Q1 Pulp&Paper Water Specialty Coatings Other & Revenue Q1 2007 Eliminations 2008 7
Slide 8: Operative EBIT by Quarter
Operative EBIT by Quarter Q1/08: 27.2 MEUR (Q1/07: 48.1 MEUR) MEUR 12 200 10 150 8 6% 100 4 50 2 0 0 04 05 06 07 08 EBIT % 8
Slide 9: Operating Profit Q1 2008 vs. Q1 2007
20 07 50 MEUR Pr ic e Vo 16 lu m e 8 Cu r re n cy -3 Va ria bl e co st s -32 Fi xe d co st s -9 Ac q ui si ti on s 0 Di ve Operating Profit Q1 2008 vs. Q1 2007 st m en No t 0 n -r ec ur 9 ri n g ite m s 5 O th e r -2 20 08 33
Slide 10: Operative EBIT Q1 2008 vs. Q1 2007
Operative EBIT Q1 2008 vs. Q1 2007 MEUR 48.1 -6.0 -5.2 -6.5 5.8 33.0 -1.1 -2.1 27.2 Operating Pulp&Paper Water Specialty Coatings Other & Operating Non-recurring Operating profit excl. Eliminations profit excl. 2007 profit Q1 2008 non-recurring non-recurring Q1 2007 Q1 2008 10
Slide 11: Operative EPS by Quarter
Operative EPS by Quarter EUR % 1 12 0,8 10 0,6 8 0,4 6 0,2 4 0 2 04 05 06 07 08 -0,2 0 ROCE, 12-month rolling average (operative) 11
Slide 12: Balance Sheet
Balance Sheet 31 Mar 08 31 Mar 07 Net debt (MEUR) 1,015.9 964.5 Equity (MEUR) 1,028.1 1,105.1 Equity ratio, % 36 39 Gearing, % 99 87 Capital employed (MEUR) 2,028.2 2,051.0 Personnel 10,138 9,405 12
Slide 13: Cash Flows
Cash Flows MEUR Q1/2008 Q1/2007 Funds from operations 47.1 68.2 Change in net working capital -26.9 -98.2 Cash flows from operations 20.2 -30.0 Acquisitions - -23.2 CapEx excl. acquisitions -38.6 -55.1 Sale of assets 9.4 -32.5* Cash flows from investing activities -29.2 -110.8 Free cash flow -9.0 -1
Slide 14: CapEx excluding Acquisitions
CapEx exluding Acquisitions CapEx in Q1/2008: 38.6 MEUR (55.1) Depreciation in Q1/2008: 34.6 MEUR (33.7) Maintenance 16 % Improvement 37 % Expansion 47 % 14
Slide 15: Business Areas
Business Areas Kemira
Slide 16: Revenue
Revenue MEUR Q1/08 Q1/07 Ch-% 2007 Kemira Pulp&Paper 263.9 262.7 0 1,043.0 Kemira Water 179.5 157.9 +14 686.4 Kemira Specialty 107.0 103.5 +3 425.9 Kemira Coatings 145.2 135.8 +7 625.2 Other -12.0 13.4 29.7 Kemira Group 683.6 673.3 +2 2,810.2 16
Slide 17: Operating profit, excluding non-recurring items
Operating profit, excluding non-recurring items MEUR Q1/08 Q1/07 Ch-% Q4/07 2007 Kemira Pulp&Paper 15.6 21.6 -28 12.3 79.8 Kemira Water 6.8 12.0 -43 6.9 46.7 Kemira Specialty 3.8 10.3 -63 -2.0 24.1 Kemira Coatings 11.7 12.8 -9 -3.5 64.3 Other -10.7 -8.6 -24 -9.6 -40.3 Kemira Group 27.2 48.1 -43 4.1
Slide 18: Kemira Pulp&Paper
Kemira Pulp&Paper Kemira 18
Slide 19: Pulp&Paper in Q1
Kemira Pulp&Paper in Q1 Organic revenue growth in local currencies 5% Revenue depressed by weak USD and divested businesses Operative EBIT 15.6 MEUR (21.6) High raw material and energy prices, reflected particularly strongly on profitability of paper chemicals business Negative impact from
Slide 20: Kemira Pulp&Paper
Kemira Pulp&Paper Revenue & Capital turnover Operative EBIT & ROCE MEUR MEUR % 100 15 1200 2 90 1000 80 1,5 70 10 800 60 50 600 1 40 400 5 30 0,5 20 200 10 0 0 0 0 04 05 06 07 04 05 06 07 08 Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE The figures are not fully comparable. 20
Slide 21: Pulp&Paper's Outlook
Kemira Pulp&Paper’s Outlook It is estimated that the demand for pulp chemicals from KPP’s customer industries will remain high Restructuring carried out in the customer industries in North America and Europe will have an adverse impact on the demand for paper chemicals Growth is anticipated ma
Slide 22: Kemira Water
Kemira Water Kemira —_ 22
Slide 23: Water in Q1
Kemira Water in Q1 Revenue up 14% Organic growth 13% in local currencies Currency effect -5% Acquisitions +9 MEUR Operative EBIT 6.8 MEUR (12.0) High raw material costs, reflected particularly strongly on profitability of polymers business Other non-recurring profits 2.4 MEUR Operati
Slide 24: Kemira Water
Kemira Water Revenue & Capital turnover Operative EBIT & ROCE MEUR MEUR % 800 2 50 20 700 40 600 1,5 15 500 30 400 1 10 20 300 200 0,5 5 10 100 0 0 0 0 04 05 06 07 08 04 05 06 07 08 Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE The figures are not fully comparable. 24
Slide 25: Water's Outlook
Kemira Water’s Outlook Demand for water treatment chemicals expected to remain at a good level Good organic growth Acquisitions completed in 2007 will increase revenue Focus on integration of acquired companies, development of new products and improvement of profitability The forecast for
Slide 26: Kemira Specialty
Kemira Specialty Kemira LFLAAS ES | \ ee
Slide 27: Specialty in Q1
Kemira Specialty in Q1 Revenue impacted by: Weak USD dollar Low prices in TiO2 Operative EBIT 3.8 MEUR (10.3) Low euro sales prices in Ti02 Negative impact from USD Profitability improved compared to Q4/07 The evaluation of strategic alternatives for Chemidet was concluded, focus on
Slide 28: Kemira Specialty
Kemira Specialty Revenue & Capital turnover Operative EBIT & ROCE MEUR MEUR % 500 2 50 15 400 40 1,5 10 30 300 1 20 5 200 10 0,5 100 0 0 04 05 06 07 08 0 0 -10 -5 04 05 06 07 08 Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE The figures are not fully comparable. 28
Slide 29: Specialty's Outlook
Kemira Specialty’s Outlook Demand for titanium dioxide, organic acids and sodium percarbonate is expected to be good Titanium dioxide average sales price in euros are not expected to rise during the first half of the year, despite of some implemented price increases in dollar markets 29
Slide 30: Kemira Coatings
Kemira Coatings Kemira
Slide 31: Coatings in Q1
Kemira Coatings in Q1 Revenue up 7% Organic growth 5% Timing of Easter in March and cold and rainy weather in Northern Europe in March had a negative effect on sales growth Operative EBIT 11.7 MEUR (12.8) Increases in cost of some raw materials and packaging materials New logistics and c
Slide 32: Kemira Coatings
Kemira Coatings Revenue & Capital turnover Operative EBIT & ROCE MEUR MEUR % 700 80 25 2 600 70 20 60 500 1,5 50 15 400 40 1 10 300 30 20 5 200 0,5 10 0 100 0 0 0 -10 -5 04 05 06 07 08 04 05 06 07 08 Q1 Q2 Q3 Q4 Capital turnover EBIT % ROCE 32
Slide 33: Coatings' Outlook
Kemira Coatings’ Outlook Demand is estimated to remain at a good level in most market areas Strongest growth anticipated in Russia and other CIS countries 33
Slide 34: Group's Outlook
Kemira Group’s Outlook Growth is expected to continue moderately Mainly through organic growth Operating profit and EPS are expected to increase from 2007 (excluding non- recurring items) Increase in prices of oil-based raw materials and energy and weakened USD puts challenges to full-year r
Slide 35: Thank You
Thank You IR: Andreas Langhoff, tel +358 10 862 1140 April 29, 2008 35