Kemira Oyj - Half Year financial report

Kemira Oyj's Interim Report January-June 2012

Kemira Oyj
Stock exchange release
July 26, 2012 at 8.30 (CET+1)


Sales volumes and prices improved from Q1, fixed cost pressure continued


Second quarter:


  * Revenue grew 2% to EUR 562.3 million (548.8) supported by favourable
    currency exchange.
  * Operative EBIT decreased 4% to EUR 35.7 million (37.3) with a margin of
    6.3% (6.8%) mainly due to higher fixed costs.
  * Earnings per share remained at EUR 0.20 (0.20).

January-June:

  * Revenue increased 1% to EUR 1,115.2 million (1,105.6).
  * Operative EBIT decreased 10% to EUR 73.9 million (82.2) with a margin of
    6.6% (7.4%).
  * Earnings per share decreased 11% to EUR 0.39 (0.44).
  * Kemira outlook for 2012 remains unchanged with expected revenue and
    operative EBIT in 2012 to be approximately at the same level as in 2011.
  * To accelerate growth and improve profitability, Kemira has launched a global
    restructuring program "Fit for Growth" aimed to save EUR 60 million on an
    annualized basis.


Kemira's President and CEO Wolfgang Büchele:"In the second quarter Kemira once again was able to compensate the lower sales
volumes and higher raw material prices with sales price increases. In Paper, as
well as in Municipal & Industrial, sales volumes recovered slightly. Fixed
costs, however, continued to increase in all segments and resulted in a decrease
in the operative EBIT. ChemSolutions operative EBIT decreased substantially
mainly due to an extended maintenance shutdown of ChemSolutions' Oulu plant in
Finland as well as higher variable costs.

After the first half of 2012, Kemira's operative EBIT is below the comparable
period of 2011.
Our profitability is the fundamental issue we need to improve in order to
continue to be a relevant player within the water quality and quantity
management business, and to meet our guidance for 2012.

Therefore, Kemira announced today its global restructuring program "Fit for
Growth" to improve the company's profitability, internal efficiency and to
accelerate growth in emerging markets. The cost savings target with the planned
program is EUR 60 million on an annualized basis. The ultimate goal of the
program is to reach Kemira's financial targets in an accelerated mode. Revenue
growth target for Kemira is above 3% in the mature markets and 7% in the
emerging markets. Kemira's EBIT margin target is at least 10%.


The "Fit for Growth" restructuring program is based on the following measures:
  * Reducing internal complexity by renewing and simplifying the organizational
    structure in order to foster accelerated growth, innovation and application
    focus.
  * Improving internal efficiency by reducing organizational layers and by
    placing substantial responsibility into the regions by implementing regional
    business units reporting to the segment heads with full profit and loss
    responsibility.
  * Optimizing and rebalancing the manufacturing network.


The implementation of these measures may ultimately lead to a reduction of up to
600 positions globally, from which approximately 250 could be in Finland. Kemira
will initiate the co-determination negotiations according to each country's
local legislation. Kemira had 5,181 employees worldwide at the end of June 2012.


Non-recurring charges related to the restructuring program are estimated to be
around EUR 85 million. These charges are expected to be accounted for within the
next four quarters."

Key figures and ratios

                    Apr-Jun 2012 Apr-Jun 2011 Jan-Jun 2012 Jan-Jun 2011 Jan-Dec
 EUR million                                                               2011
-------------------------------------------------------------------------------
 Revenue                   562.3        548.8      1,115.2      1,105.6 2,207.2

 EBITDA                     57.6         61.1        119.4        129.5   259.6

 EBITDA, %                  10.2         11.1         10.7         11.7    11.8
-------------------------------------------------------------------------------
 Operative EBIT             35.7         37.3         73.9         82.2   157.3

 EBIT                       32.8         37.3         68.9         82.2   158.3
-------------------------------------------------------------------------------
 Operative EBIT, %           6.3          6.8          6.6          7.4     7.1

 EBIT, %                     5.8          6.8          6.2          7.4     7.2
-------------------------------------------------------------------------------
 Share of profit or          5.8          7.3         16.6         14.8    31.0
 loss of associates
-------------------------------------------------------------------------------
 Financing income            1.4         -3.9         -8.9         -7.7   -20.9
 and expenses
-------------------------------------------------------------------------------
 Profit before tax          40.0         40.7         76.6         89.3   168.4
-------------------------------------------------------------------------------
 Net profit                 31.1         31.7         61.0         69.6   140.3
-------------------------------------------------------------------------------
 EPS, EUR                   0.20         0.20         0.39         0.44    0.89
-------------------------------------------------------------------------------
 Capital employed*       1,722.4      1,684.1      1,722.4      1,684.1 1,705.0

 ROCE, %*                   10.3         10.4         10.3         10.4    11.1
-------------------------------------------------------------------------------
 Cash flow after                                      16.1         85.9   115.3
 investing
 activities                 24.2         65.2
-------------------------------------------------------------------------------
 Capital                                              70.4         34.5   201.1
 expenditure                51.0         20.1
-------------------------------------------------------------------------------
 Equity ratio, % at                                     52           55      51
 period-end                   52           55
-------------------------------------------------------------------------------
 Gearing, % at                                          44           37      38
 period-end                   44           37
-------------------------------------------------------------------------------
 Personnel at              5,181        5,065        5,181        5,065   5,006
 period-end
-------------------------------------------------------------------------------
* 12-month rolling average

Definitions of key figures are available at www.kemira.com > Investors >
Financial information. Comparative 2011 figures are provided in parentheses for
some financial results, where appropriate. Operating profit, excluding non-
recurring items, is referred to as Operative EBIT. Operating profit is referred
to as EBIT.

Outlook and restructuring program


Kemira's vision is to be a leading water chemistry company. Kemira will continue
to focus on improving profitability and reinforcing positive cash flow. The
company will also continue to invest in order to secure the future growth in the
water quality and quantity management business.

Kemira's financial targets remain as earlier communicated. The company's medium
term financial targets are:

  * revenue growth in mature markets > 3% per year, and in emerging markets >
    7% per year
  * EBIT, % of revenue > 10%
  * positive cash flow after investments and dividends
  * gearing level < 60%.


The basis for growth is the expanding water chemicals market and Kemira's strong
know-how in the water quality and quantity management. Increasing water
shortage, tightening legislation and customers' needs to increase operational
efficiency create opportunities for Kemira to develop new water applications for
both current and new customers. Investment in research and development is a
central part of Kemira's strategy. The focus of Kemira's research and
development activities is on the development and commercialization of the new
innovative technologies for Kemira's customers globally and locally.

Today, Kemira Oyj announced a global restructuring program "Fit for Growth" to
improve the company's profitability, its internal efficiency and to accelerate
growth in emerging markets without sacrificing business opportunities in the
mature markets. The cost savings target with the planned program is EUR 60
million on an annualized basis. The ultimate goal of the program is to reach
Kemira Group's targets for revenue growth and EBIT margin.

The program is based on the following measures:
  * Reducing internal complexity by renewing and simplifying the organizational
    structure in order to foster accelerated growth, innovation and application
    focus.
  * Improving internal efficiency by reducing organizational layers and by
    placing substantial responsibility into the regions by implementing regional
    business units reporting to the segment heads with full profit and loss
    responsibility.
  * Optimizing and rebalancing the manufacturing network.


The implementation of these measures may ultimately lead to a reduction of up to
600 positions globally, from which approximately 250 could be in Finland. Kemira
will initiate the co-determination negotiations according to each country's
local legislation. Kemira had 5,181 employees worldwide at the end of June 2012.


Non-recurring charges related to the restructuring program are estimated to be
around EUR 85 million. These charges are expected to be accounted for within the
next four quarters.

In 2012, Kemira expects the revenue and operative EBIT to be at approximately
the same level as in 2011. In the near term, an uncertainty in Europe and a
slowdown in global economic growth may affect the demand for our products in the
customer industries. This guidance assumes current currency exchange rates and
oil price level.

Financial calendar 2012 and 2013

Interim Report January-September 2012
October 24, 2012
Financial results for the year 2012
February 6, 2013

Interim Report January-March 2013                                        April
23, 2013
Interim Report January-June 2013                                        July
23, 2013
Interim Report January-September 2013
October 22, 2013


The Annual General Meeting 2013 is scheduled for Tuesday, March 26, 2013 at
1.00 pm (CET+1).


Press and analyst conference and conference call

Kemira will arrange a press conference for analysts and the media starting at
10.00 am (8.00 am UK time) at Kemira House, Porkkalankatu 3, Helsinki. In the
conference, Kemira's President and CEO Wolfgang Büchele and Chief Financial
Officer Jyrki Mäki-Kala will present the results. The press conference will be
held in English and will be webcasted at www.kemira.com . Presentation material
will be available on Kemira's website at www.kemira.com under Investors in
English and at www.kemira.fi in Finnish at about 10.00 am.

Conference call in connection to the press and analyst conference

You can also listen to the conference live over the phone and attend the Q&A
session via a conference call. In order to participate in the call, please dial
+44 (0)20 7162 0025, code 920266 ten minutes before the conference begins. A
recording of the conference call will be available on Kemira's website later the
same day.




For more information, please contact


Tero Huovinen, Director, Investor Relations
+358 10 862 1980


Kemira is a global over two billion euro water chemistry company that is focused
on serving customers in water-intensive industries. The company offers water
quality and quantity management that improves customers' energy, water, and raw
material efficiency. Kemira's vision is to be a leading water chemistry company.

www.kemira.com
www.waterfootprintkemira.com

[HUG#1629422]

Attachments:

Interim Report January-June 2012.pdf