2012-10-24 13:30:00 CEST
2012-10-24 13:30:56 CEST
REGULATED INFORMATION
Kemira Oyj - Interim report (Q1 and Q3)
Kemira Oyj's Interim Report January-September 2012
Kemira Oyj
Stock exchange release
October 24, 2012 at 2.30 pm (CET+1)"Fit for Growth" restructuring program successfully launched
Third quarter:
* Revenue grew 2% to EUR 567.2 million (558.3) supported by favorable currency
exchange.
* Operative EBIT increased 14% to EUR 46.5 million (40.8) with a margin of
8.2% (7.3%) mainly due to lower fixed costs and favorable currency exchange.
* Earnings per share, excluding non-recurring items increased 10% to EUR 0.23
(0.21).
* The reported earnings per share was reduced to EUR 0.00 (0.21), mainly due
to the non-recurring items of EUR 46 million that were largely related to"Fit for Growth"
January-September:
* Revenue increased 1% to EUR 1,682.4 million (1,663.9).
* Operative EBIT decreased 2% to EUR 120.4 million (123.0) with a margin of
7.2% (7.4%).
* Earnings per share, excluding non-recurring items, were EUR 0.64 (0.65).
* The reported earnings per share was decreased to EUR 0.39 (0.65), mainly due
to the non-recurring items of EUR 51 million that were largely related to"Fit for Growth".
* Kemira outlook for 2012 remains unchanged with expected revenue and
operative EBIT in 2012 to be approximately at the same level as in 2011.
Kemira's President and CEO Wolfgang Büchele:"Our third quarter was driven by a slight volume recovery and the first positive
impacts from the restructuring program "Fit for Growth".
In the Paper segment, sales volumes increased, especially in Asia. This,
together with improved sales price management strengthened Paper's operative
EBIT. The operative EBIT margin continued to increase in the Municipal &
Industrial. This was mainly a result of continued volume recovery, lower fixed
costs and stabilization of raw material prices. In Oil & Mining, sales volumes
have been negatively impacted by the lower natural gas and metal prices, yet,
the segment maintained its good profitability. ChemSolutions recovered quickly
after a weaker Q2 and improved its profitability.
Improving profitability remains our key focus. We will focus on substantially
further improving profitability in order to meet our financial targets and to be
a relevant long term player in the water quality and quantity management
business. Our global restructuring program "Fit for Growth" is being implemented
according to plan and the first results could already be captured in the third
quarter.
The co-determination negotiations have progressed and our new organization has
become operational as of October 1. We have also started the optimization of our
manufacturing network, as communicated during the Capital Markets Day in
September. Meanwhile, it has been decided to close or sell 7 sites by the end of
H1 of 2013, and additional 7 sites are currently under review.
Looking ahead to the rest of 2012, uncertainties related to the de-icing
business and current high raw material prices might have negative impact on our
result, and visibility related to the demand for some of our main product lines
is currently low. On the other hand, the current currency exchange rate is
expected to continue to support our top line and the cost savings related to our
restructuring are expected to positively impact our operative EBIT. Thus, Kemira
maintains its guidance for revenue and operative EBIT for 2012."
Key figures and ratios
Jul-Sep 2012 Jul-Sep 2011 Jan-Sep 2012 Jan-Sep 2011 Jan-Dec
EUR million 2011
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Revenue 567.2 558.3 1,682.4 1,663.9 2,207.2
EBITDA 43.9 64.2 163.3 193.7 259.6
EBITDA, % 7.7 11.5 9.7 11.6 11.8
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Operative EBIT 46.5 40.8 120.4 123.0 157.3
EBIT 0.4 40.8 69.3 123.0 158.3
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Operative EBIT, % 8.2 7.3 7.2 7.4 7.1
EBIT, % 0.0 7.3 4.1 7.4 7.2
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Share of profit or 0.3 9.0 16.9 23.8 31.0
loss of associates
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Financing income -2.7 -7.7 -11.6 -15.4 -20.9
and expenses
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Profit before tax -2.0 42.1 74.6 131.4 168.4
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Net profit 1.1 32.9 62.1 102.5 140.3
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EPS, EUR 0.00 0.21 0.39 0.65 0.89
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Operative EPS, EUR 0.23 0.21 0.64 0.65 0.89
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Capital employed* 1,709.1 1,696,3 1,709.1 1,696.3 1,705.0
ROCE, %* 7.5 10.4 7.5 10.4 11.1
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Cash flow after 62.4 142.6 115.3
investing
activities 46.3 56.7
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Capital 115.6 71.8 201.1
expenditure 45.2 37.3
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Equity ratio, % at 52 52 51
period-end 52 52
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Gearing, % at 40 35 38
period-end 40 35
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Personnel at 5,013 5,033 5,013 5,033 5,006
period-end
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* 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 "Fit for Growth"
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 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 new innovative
technologies for Kemira's customers in all relevant markets.
Restructuring program "Fit for Growth"
Kemira Oyj has started to implement its global restructuring program "Fit for
Growth", launched at the end of July, 2012, to improve the company's
profitability, its internal efficiency and to accelerate the 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. In the third quarter of 2012, the cost savings impact of "Fit for Growth"
was EUR 3 million.
The anticipated EUR 60 million cost saving impact of the program is expected to
take place as follows: EUR 10 million in 2012, EUR 50 million in 2013 and EUR
60 million in 2014. The ultimate goal of the program is to reach at least 10%
EBIT margin in 2014. Redundancies will account for 50% of the expected savings.
The remaining 50% will be achieved through the manufacturing network
consolidation as well as through the leaner operations. Cost savings estimates
for the different segments, based on the detailed plan of measures, are: Paper
EUR 22 million, Municipal & Industrial EUR 22 million, Oil & Mining EUR 12
million and ChemSolutions EUR 4 million.
Non-recurring charges related to the restructuring program are estimated to be
around EUR 85 million, EUR 35 million of which will be severance payments and
external services related cost and EUR 50 million will be asset write-downs. EUR
60 million of the restructuring charges will be booked in the second half of
2012, and the balance in the first half of 2013. In the third quarter in 2012
non-recurring charges related to "Fit for Growth" amounted to EUR 40 million,
EUR 23 million of which were asset write-downs and EUR 17 million were severance
payments and external services.
The implementation may ultimately lead to a reduction of up to 600 positions
globally. Kemira has initiated the co-determination negotiations according to
each country's local legislation. In the beginning of the negotiations, it was
estimated that the personnel reductions may affect approximately 260 employees
working in Finland. As a result of the co-determination negotiations, the head
count reduction will be 152 in Finland. Additional potential outsourcing in
Finland is still under consideration. Kemira had 5,013 employees worldwide at
the end of September 2012.
Outlook
In 2012, Kemira expects the revenue and operative EBIT to be at the
approximately 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 an oil price level of USD 115 per barrel.
Financial calendar 2012 and 2013
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
3.30 pm (1.30 pm 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 . Webcast will be
available at www.kemira.com also after the event. 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 3.00 pm.
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 71620 177, code 924012 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
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