2009-05-06 08:00:00 CEST
2009-05-06 08:05:33 CEST
REGULATED INFORMATION
Kemira Oyj - Interim report (Q1 and Q3)
Kemira Oyj's Interim Report January-March 2009
Kemira Group
Stock Exchange Release
May 6, 2009 at 9.00 am (CET+1)
Kemira's operating profit excluding non-recurring items increased in
Q1
* Revenue in January-March 2009: EUR 608.7 million
(January-March 2008: EUR 683.6 million). Revenue from continuing
business operations decreased by 3%.
* Operating profit excluding non-recurring items: EUR 28.1
million (January-March 2008: EUR 27.2 million). Operating profit in
continuing business operations increased by 9%.
* Earnings per share: EUR 0.05 (EUR 0.12).
* During the second quarter of the year, Kemira's revenue is
expected to fall compared to the second quarter of 2008 due to
reduced demand in customer industries. Operating profit excluding
non-recurring items is expected to decrease in Tikkurila, but rise
in the rest of the Group.
Key Figures and Ratios
EUR million 1-3/2009 1-3/2008 1-12/2008
Revenue 608.7 683.6 2,832.7
EBITDA 57.1 67.6 243.3
EBITDA, % 9.4 9.9 8.6
Operating profit, excluding non-recurring 28.1 27.2 132.6
items
Operating profit 28.1 33.0 74.0
Operating profit, excluding non-recurring 4.6 4.0 4.7
items, %
Operating profit, % 4.6 4.8 2.6
Financial income and expenses -16.1 -11.2 -69.5
Profit before tax 8.2 21.9 1.8Profit before tax, % 1.3 3.2 0.1
Net profit 6.1 16.0 1.8
EPS, EUR 0.05 0.12 -0.02
Capital employed* 2,068.5 2,043.5 2,062.8
ROCE %* 3.0 6.3 3.5
Free cash flow after investments -34.4 -9.0 2.7
Equity ratio, % 34 36 34
Gearing, % 113 99 107
Personnel at period-end 8,926 10,138 9,405
* 12-month rolling average
Continuing business operations
1-3/2008 continuing business 1-3/2008
EUR million 1-3/2009 operations reported
Revenue 608.7 629.3 683.6
Operating profit 28.1 25.8 33.0
Operating profit, % 4.6 4.1 4.8
In the figures for continuing business operations, the impact of the
titanium dioxide business that was transferred to a joint venture is
excluded, as well as non-recurring items.
Kemira's President and CEO Harri Kerminen:"Kemira's operating profit from continuing businesses increased by 9%
in January-March from the same period a year earlier, which is a good
achievement in the current, extremely difficult market environment.
The decrease in sales volumes especially in pulp and paper chemicals
and in Tikkurila, as well as higher raw material prices compared to
Q1 in 2008, was partly compensated by sales price increases. Although
demand in customer industries declined, revenue from Kemira's
continuing businesses fell only by 3%.
In the Financial Statements Bulletin for 2008 we estimated operating
profit excluding non-recurring items to decrease in Tikkurila, but
rise in the rest of the Group during the first quarter of the year
compared to the same period a year earlier. Excluding Tikkurila,
Kemira's operating profit from continuing businesses increased by 70%
in Q1 and revenue grew by 3%.
Kemira's core businesses are based on common water knowledge and
product portfolio. We will continue to integrate the organization and
operations, and our key priority is to focus on customer groups,
geographic areas and products that deliver a genuine competitive
advantage."
The new strategy announced in June 2008 caused changes in Kemira's
business structure. Financial reporting will reflect the new
structure from the beginning of 2009. Kemira's new reporting segments
are Paper, Water, Oil & Mining, Tikkurila and Other. The segment
Other consists of specialty chemicals such as organic salts and acids
and the Group expenses not charged to the segments (some research and
development costs and the costs of the CEO Office).
Financial Performance in January-March 2009
Revenue from Kemira Group's continuing business operations fell by 3%
in January-March 2009.
Kemira Group's reported revenue for January-March 2009 totaled EUR
608.7 million (January-March 2008: EUR 683.6 million). In extremely
volatile market conditions, demand for paints and coatings decreased
considerably as new construction, building material sales and housing
sales slowed down in all key markets. Paper and pulp chemical sales
declined following weaker demand in customer industries. Demand for
municipal water treatment solutions remained good, but in industrial
water treatment demand fell in some customer industries. The Oil &
Mining segment also experienced a decline in customer demand and
revenue. The demand and price of specialty chemicals supplied to the
food, feed and pharmaceutical industries remained healthy.
Sales price increases contributed about EUR 64 million to revenue
growth while a decline in sales volumes reduced revenue by some EUR
100 million. Acquisitions generated revenue growth of some EUR 9
million. The currency exchange effect had an approximately EUR 9
million negative impact on revenue and the establishment of the joint
venture in the titanium dioxide business in 2008 decreased revenue in
January-March by EUR 54 million.
Revenue, EUR million 1-3/2009 1-3/2008 1-12/2008
Paper 225.0 247.7 1,003.3
Water 150.7 136.3 583.7
Oil & Mining 54.4 67.5 275.4
Tikkurila 111.2 145.2 648.1
Other 85.2 116.8 414.8
Eliminations -17.8 -29.9 -92.6
Total 608.7 683.6 2,832.7
Operating profit for January-March came to EUR 28.1 million (EUR 33.0
million including EUR 5.8 million in non-recurring items). Operating
profit from continuing business operations increased by 9%. Sales
price increases were enforced in response to the significant increase
in raw material prices last year, which, together with the cost
savings achieved and good demand for specialty chemicals, contributed
to the increase in operating profit. Operating profit was eroded
particularly by lower sales volumes in the paints and coatings
business and in the paper and pulp chemicals business, as well as
higher raw material prices and freight costs compared to Q1 last
year.
The establishment of the joint venture in the titanium dioxide
business in 2008 decreased operating profit by EUR 1 million because
as of September 1, 2008 Kemira's share of the joint venture's results
has been reported below operating profit.
Operating profit, excluding
non-recurring items, EUR million 1-3/2009 1-3/2008 1-12/2008
Paper 7.5 12.4 41.5
Water 10.4 6.2 25.0
Oil & Mining 2.0 1.9 8.4
Tikkurila 4.0 11.7 59.2
Other 4.2 -5.0 -1.6
Eliminations 0.0 0.0 0.1
Total 28.1 27.2 132.6
+-------------------------------------------------------------------+
| Bridge 1-3/2008 to | | | | | |
| 1-3/2009 | | | | | |
| | Kemira | | | Oil & | |
| Operating profit, | Group | Paper | Water | Mining | Tikkurila |
| excluding | | | | | |
| non-recurring | | | | | |
| items, EUR million | | | | | |
|---------------------+--------+-------+-------+--------+-----------|
| Operating profit, | 27.2 | 12.4 | 6.2 | 1.9 | 11.7 |
| 1-3/2008 | | | | | |
|---------------------+--------+-------+-------+--------+-----------|
| Price | 64 | 25 | 13 | 8 | 9 |
|---------------------+--------+-------+-------+--------+-----------|
| Volume | -39 | -17 | -4 | -9 | -12 |
|---------------------+--------+-------+-------+--------+-----------|
| Currency exchange | 1 | 1 | 0 | 0 | -1 |
|---------------------+--------+-------+-------+--------+-----------|
| Variable costs | -30 | -15 | -5 | 3 | -7 |
|---------------------+--------+-------+-------+--------+-----------|
| Other | 5 | 1 | 0 | -2 | 3 |
|---------------------+--------+-------+-------+--------+-----------|
| Operating profit, | 28.1 | 7.5 | 10.4 | 2.0 | 4.0 |
| 1-3/2009 | | | | | |
+-------------------------------------------------------------------+
Profit before tax in January-March amounted to EUR 8.2 million (EUR
21.9 million) and net profit totaled EUR 6.1 million (EUR 16.0
million). Earnings per share were EUR 0.05 (EUR 0.12).
The annual savings target of Kemira's global cost savings program is
over EUR 85 million. With the planned measures being implemented, the
related savings are expected to materialize in 2009-2010. These
savings will affect the entire Group and will be achieved by
streamlining the Group structure, organization and operating models.
Financial Position and Cash Flows
In January-March, the Group reported cash flows of EUR -22.1 million
(EUR 20.2 million) from operating activities. Cash flows weakened as
working capital grew from the low level at the turn of the year,
especially in Tikkurila. Raw material prices declined and raw
material purchases decreased, resulting a fall in trade payables in
all segments. Net cash flow from investing activities was EUR -12.3
million (EUR -29.2 million). Like in January-March 2008, there were
no acquisitions during the period. Free cash flow after investments
was EUR -34.4 million (EUR -9.0 million). Cash flow effect from
expansion and improvement investments was EUR -7.6 million (EUR -32.6
million).
At the end of March, the Group's net debt stood at EUR 1,095.0
million (December 31, 2008: EUR 1,049.1 million). The weaker cash
flows contributed to some EUR 34 million to net debt and currency
exchange rates fluctuations some EUR 12 million.
At the period-end, interest-bearing liabilities stood at EUR 1,220.4
million. Fixed-rate loans accounted for 49% of total interest-bearing
loans. The average interest rate on the Group's interest-bearing
liabilities was 5.9% (5.3). At the end of March, the duration of the
Group's interest-bearing loan portfolio was 17 months (December 31,
2008: 17 months).
The unused amount of the EUR 750 million revolving credit facility
that falls due in 2012 was EUR 304.3 million at the end of March, and
the amount obtained from the commercial paper markets was EUR 101.0
million. Utilization of revolving credit facility increased from the
year end as less funding from commercial paper market was raised and
as company increased liquidity position in form of cash. Cash and
cash equivalents totaled EUR 125.4 million on March 31, 2009. Based
on its current structure, the Group will encounter no significant
refinancing needs in 2009-2010, since the current loan arrangements
cover its financing needs.
At the end of March, equity ratio stood at 34 % (December 31, 2008:
34%) while gearing was 113% (December 31, 2008: 107%). Gearing rose
as a result of the increase in net liabilities.
The Group's net financial expenses for January-March totaled EUR 16.1
million (11.2 million). This increase in net financial expenses from
Q1/2008 can be attributed to smaller foreign exchange gains and the
increase in interest expenses due to larger liabilities.
Capital Expenditure
Gross capital expenditure in the reporting period, excluding
acquisitions, amounted to EUR 12.7 million (EUR 38.6 million).
Expansion investments represented around 33% of capital expenditure
excluding acquisitions, improvement investments around 27% and
maintenance investments around 40%.
Group depreciation came to EUR 29.0 million (EUR 34.6 million).
Cash flow from the sale of assets was EUR 0.4 million (EUR 9.4
million). The Group's net capital expenditure totaled EUR 12.3
million (EUR 29.2 million).
Research and Development
In January-March, reported research and development expenditure
totaled EUR 11.4 million (EUR 15.5 million), accounting for 2% (2%)
of revenue.
Human Resources
The number of Group employees totaled 8,926 at the end of March
(10,138).
Near-Term Risks and Uncertainty Factors
Key risks and uncertainty factors affecting Kemira's business are
related to general economic developments and their impact on the
demand for Kemira's products.
Sharp fluctuations in global electricity and oil prices will affect
raw material prices and thereby reflect on Kemira's performance.
Furthermore, currency exchange rate volatility in Kemira's key
currencies may affect the Group's figures.
A detailed account of Kemira's risk management principles and
practices is available at the company's website at www.kemira.com. An
account of financial risks was published in the Notes to the Accounts
section of the Financial Statements for 2008. Kemira's environmental
report discusses environmental and accident risks.
Segments
Paper
We offer chemical products and integrated systems that support
sustainable development and help customers in the pulp and paper
industry to improve their profitability, as well as their raw
material and energy efficiency.
EUR million 1-3/2009 1-3/2008 1-12/2008
Revenue 225.0 247.7 1,003.3
EBITDA 19.8 25.1 69.4
EBITDA, % 8.8 10.1 6.9
Operating profit, excluding non-recurring 7.5 12.4 41.5
items
Operating profit 7.5 12.4 -2.6
Operating profit, excluding non-recurring 3.3 5.0 4.1
items, %
Operating profit, % 3.3 5.0 -0.3
Capital employed* 830.7 816.0 826.7
ROCE %* -0.9 5.9 -0.3
Capital expenditure, excl. acquisitions 5.1 13.9 51.7
Free cash flow after investments, excl.
interest and taxes 6.3 38.1 15.5
* 12-month rolling average
The Paper segment's revenue in January-March decreased by 9% to EUR
225.0 million (EUR 247.7 million) as demand in customer industries
plummeted. The currency exchange effect had an approximately EUR 2
million positive impact on revenue.
The consumption of paper used in magazines and newspapers and the
number of printed merchandizing items has fallen, particularly in the
traditional markets in Europe and North America. To adapt production
to weaker demand, Paper segment's customers in the paper industry
have cut back and shut down capacity and cleared stocks. In addition,
the general economic slowdown reflects on global demand for packaging
boards.
Operating profit excluding non-recurring items for January-March was
EUR 7.5 million (EUR 12.4 million). This downward trend could be
attributable to the lower sales volumes of paper and pulp chemicals
and higher raw material prices and freight costs compared to Q1 a
year earlier. Although variable costs rose in January-March 2009 by
some EUR 15 million compared to the same period in Q1/2008, costs
fell in the first quarter from the high levels recorded at the end of
last year. Sales price increases had an approximately EUR 25 million
effect on operating profit. Lower sales volumes pushed operating
profit down by some EUR 17 million.
In January 2009, Kemira and the Chinese Tiancheng Ltd. set up a joint
venture Kemira-Tiancheng Chemicals (Yanzhou) Co., Ltd to produce AKD
wax, and adhesives derived from this wax, for the paper and board
industry. Kemira has a 51 per cent holding in the joint venture and
Tiancheng 49 per cent.
Kemira has been taking measures over a period of several years to
adjust its paper and pulp chemicals business to the increasingly
challenging chemicals market. In addition to shorter temporary
production shut-downs, AKD wax production in Vaasa, Finland, was shut
down in March 2009. Over the last few years, six production
facilities have been shut down in North America, and this year Kemira
will shut down its polymer production in Columbus, USA.
Water
We offer services for municipal and industrial water treatment. Our
strengths are high-level process know-how, a comprehensive range of
water treatment chemicals, and reliable customer deliveries.
EUR million 1-3/2009 1-3/2008 1-12/2008
Revenue 150.7 136.3 583.7
EBITDA 16.4 12.6 41.0
EBITDA, % 10.9 9.2 7.0
Operating profit, excluding non-recurring 10.4 6.2 25.0
items
Operating profit 10.4 6.6 5.3
Operating profit, excluding non-recurring 6.9 4.5 4.3
items, %
Operating profit, % 6.9 4.8 0.9
Capital employed* 356.1 325.6 342.7
ROCE %* 2.5 11.8 1.6
Capital expenditure, excl. acquisitions 2.1 8.2 29.7
Free cash flow after investments, excl.
interest and taxes 8.2 6.5 -13.8
* 12-month rolling average
Water's revenue in January-March 2009 rose by 11% to EUR 150.7
million (EUR 136.3 million). Organic growth in local currencies was
6%. Revenue growth could be largely attributed to price increases
enforced in response to the significant increase in raw material
prices last year. Acquisitions contributed some EUR 6 million to
revenue growth.
Demand for municipal water treatment products remained healthy. In
the industrial water treatment business, demand has decreased in some
customer industries due to lower capacity utilization rates but in
other industries, such as the food industry and power production,
demand for water treatment chemicals has been stable. Total delivery
volumes fell slightly in January-March compared to the same period a
year earlier.
Operating profit excluding non-recurring items was EUR 10.4 million
(EUR 6.2 million). Sales price increases contributed about EUR 13
million to operating profit growth while lower sales volumes
decreased it by some EUR 4 million. Variable cost increase in
January-March was some EUR 5 million compared to the same period in
2008. Acquisitions contributed approximately EUR 1 million to the
operating profit.
The general recession has reduced the availability of recycled raw
material in the industry, resulting in higher manufacturing costs. At
the same time, however, raw material prices fell in the first quarter
from the very high levels seen at the end of last year.
Oil & Mining
We offer a large selection of groundbreaking chemical solutions for
the oil and mining industries, where water plays a central role.
Utilizing our expertise, our customers are able to improve their
efficiency and productivity.
EUR million 1-3/2009 1-3/2008 1-12/2008
Revenue 54.4 67.5 275.4
EBITDA 4.5 6.5 15.3
EBITDA, % 8.3 9.6 5.6
Operating profit, excluding non-recurring 2.0 1.9 8.4
items
Operating profit 2.0 3.8 1.9
Operating profit, excluding non-recurring 3.7 2.8 3.1
items, %
Operating profit, % 3.7 5.6 0.7
Capital employed* 162.6 153.2 160.4
ROCE %* 0.1 -0.1 1.2
Capital expenditure, excl. acquisitions 0.6 2.9 8.8
Free cash flow after investments, excl.
interest and taxes -7.4 12.1 14.3
* 12-month rolling average
Oil & Mining's revenue in January-March was EUR 54.4 million (EUR
67.5 million). Revenue fell as a result of weaker demand in the
mining industry. The currency exchange effect had an approximately
EUR 4 million positive impact on revenue.
Operating profit excluding non-recurring items was EUR 2.0 million
(EUR 1.9 million). Sales price increases had about EUR 8 million
effect on operating profit. Variable cost decrease in January-March
was some EUR 3 million compared to the same period in 2008. Lower
sales volumes pushed operating profit down by some EUR 9 million.
Oil & Mining's business is based on Kemira's water competence and
water treatment product range. It offers chemical extraction and
process solutions for the oil and mining industries, where water
plays a central role. Oil & Mining is using Kemira's existing
organization, production facilities and R&D network to strengthen its
presence outside North America.
Tikkurila
Our product range consists of decorative paints and coatings for the
wood and metal industries. We provide consumers, professional
painters and industrial customers with branded products and expert
services in approximately 40 countries.
EUR million 1-3/2009 1-3/2008 1-12/2008
Revenue 111.2 145.2 648.1
EBITDA 8.5 16.4 78.2
EBITDA, % 7.6 11.3 12.1
Operating profit, excluding non-recurring 4.0 11.7 59.2
items
Operating profit 4.0 11.7 59.2
Operating profit, excluding non-recurring 3.6 8.1 9.1
items, %
Operating profit, % 3.6 8.1 9.1
Capital employed* 318.5 317.5 323.6
ROCE %* 16.2 22.9 18.3
Capital expenditure, excl. acquisitions 4.2 6.1 32.1
Free cash flow after investments, excl.
interest and taxes -27.5 -15.1 52.2
* 12-month rolling average
Tikkurila's revenue in January-March was EUR 111.2 million (EUR 145.2
million). The decrease is associated with the general economic
recession, which caused a slowdown in new construction and in the
sales of building materials and resulted in more sluggish housing
sales in all key markets. The currency exchange effect had an
approximately EUR 17 million negative impact on revenue. Acquisitions
generated revenue growth of some EUR 2 million.
Operating profit excluding non-recurring items for January-March was
EUR 4.0 million (EUR 11.7 million). Lower sales volumes pushed
operating profit down by some EUR 12 million. Variable cost increase
in January-March was about EUR 7 million compared to the same period
in 2008. Sales price increases and changes in the product mix had an
approximately EUR 9 million effect on operating profit.
The logistics and service center in Mytisch, near Moscow, was
introduced in February. This center will enable Tikkurila to provide
considerably better customer services in Moscow and its surroundings,
and includes both decorative paints and industrial paints operations.
In addition, it provides facilities for extensive customer training,
which is an integral part of Tikkurila's marketing.
Erkki Järvinen took over as Tikkurila Oy's President and CEO on
January 1, 2009. Järvinen was previously the President and CEO of
Rautakirja Oy, a Sanoma Corporation company.
At the beginning of January, Tikkurila announced the launch of a
Group-wide savings program in order to ensure that its business
remains competitive in the future. The company has set an annual
savings target of EUR 25 million. This cost savings program covers
the entire personnel of the Tikkurila Group, totaling approximately
3,800 persons, and may lead to reductions of around 500 employees
affecting all of Tikkurila's operating countries. Co-determination
negotiations were initiated at Tikkurila's site in Vantaa, Finland,
in January. These negotiations were concluded on April 15, 2009. The
organizational streamlining and savings program will lead to a
reduction of 163 employees in Finland. Due to Tikkurila's cost
savings program, Kemira will book approximately EUR 3 million
non-recurring costs in April-June 2009.
Kemira Oyj's Shares and Shareholders
In January-March, Kemira Oyj's share price registered a high of EUR
6.27 and a low of EUR 4.26, the share price averaging EUR 5.03. On
March 31, the company's market capitalization, excluding treasury
shares, totaled EUR 585.3 million.
On March 31, the company's share capital totaled EUR 221.8 million
and the number of registered shares was 125,045,000. Kemira holds
3,854,771 treasury shares, accounting for 3.1% of outstanding company
shares and voting rights.
Share-Based Incentive Plan for Management
In February, Kemira Oyj's Board of Directors decided to introduce a
new share-based incentive plan aimed at Strategic Management Board
members, as part of the company's incentive and commitment schemes.
This plan is divided into three one-year performance periods: 2009,
2010, and 2011. Payment depends on the achievement of the set
operating profit targets. The program also includes a three-year
goal, which is tied to the development of operating profit as a
percentage of revenue by the end of 2011. Any payments will be paid
as a combination of Kemira shares and cash payments covering the
payable taxes, in accordance with the achievement of set goals. The
combined value of shares and cash payments paid out in the course of
the three-year share-based incentive plan may not exceed the
individual's gross salary for the same period. Shares transferable
under the plan comprise treasury shares or Kemira Oyj shares
available in public trading.
In addition to the new share-based incentive plan aimed at Strategic
Management Board members, Kemira has had a share-based incentive plan
aimed at key personnel since 2004, in which members of the Management
Board will no longer participate. Share-based incentive plans aim to
align the goals of shareholders and key personnel in order to
increase the value of the company, motivate key personnel, and
provide competitive shareholder-based incentives.
AGM Decisions
Kemira Oyj's Annual General Meeting, held on April 8, 2009, confirmed
a dividend of EUR 0.25 per share for 2008. The dividend was paid out
on April 22, 2009.
The AGM reelected members Elizabeth Armstrong, Juha Laaksonen, Pekka
Paasikivi, Kaija Pehu-Lehtonen, Jukka Viinanen and Jarmo Väisänen to
the Board of Directors and Wolfgang Büchele was elected as a new
member. Pekka Paasikivi was elected to continue as the Board's
chairman and Jukka Viinanen was elected as vice-chairman. The
remuneration paid to the members of the Board of Directors remained
unchanged.
The AGM elected KPMG Oy Ab, Authorized Public Accountants, to serve
as the Company's auditor, with Pekka Pajamo, Authorized Public
Accountant, acting as principal auditor.
The AGM decided that Article 13 of the current Articles of
Association be amended to read as follows: "Notices to the general
meeting of shareholders and other communications to the shareholders
shall be communicated by the Board of Directors by publishing an
announcement in at least two nationwide newspapers, determined by the
Board of Directors, no earlier than two months and no later than 21
days before the general meeting of shareholders."
The Annual General Meeting authorized the Board of Directors to
decide upon the repurchase of a maximum of 2,395,229 treasury shares
("Share repurchases authorization"). Shares will be repurchased by
using unrestricted equity either through a direct offer with equal
terms to all shareholder at a price determined by the Board of
Directors or otherwise than in proportion to the existing
shareholdings of the Company's shareholders in public trading on the
NASDAQ OMX Helsinki Ltd ("Stock Exchange") at the market price quoted
at the time of the repurchase. Shares shall be acquired and paid for
in accordance with the Rules of Stock Exchange and Euroclear Finland
Ltd. Shares may be repurchased to be used in implementing or
financing mergers and acquisitions, developing the Company's capital
structure, improving the liquidity of the Company's shares or
implementing the Company's share-based incentive plans. In order to
realize the aforementioned purposes the shares acquired may be
retained, transferred further or cancelled by the Company. The Board
of Directors will decide upon other terms related to share
repurchase. The Share repurchase authorization is valid until the end
of the next Annual General Meeting.
The Annual General Meeting authorized the Board of Directors to
decide to issue a maximum of 12,500,000 new shares and transfer a
maximum of 6,250,000 treasury shares held by the Company ("Share
issue authorization"). The new shares may be issued and the Company's
own shares held by the Company may be transferred either against
payment or, as part of the implementation of the Company's
share-based incentive plans, without payment. Said new shares may be
issued and said Company's own shares held by the Company may be
transferred to the Company's shareholders in proportion to their
current shareholdings in the Company, or through a directed share
issue if the Company has a weighty financial reason to do so, such as
financing or implementing mergers and acquisitions, developing its
capital structure, improving the liquidity of the Company's shares or
if this is justified for the purpose of implementing the Company's
share-based incentive plans. The directed share issue may be carried
out without payment only in connection with the implementation of the
Company's share-based incentive plan. The subscription price of new
shares shall be recognized under unrestricted equity capital fund.
The consideration payable for Company's own shares shall be
recognized under unrestricted equity capital fund. The Board of
Directors will decide upon other terms related to share issue. The
Share issue authorization is valid until the end of the next Annual
General Meeting.
Board Committees
In April, Kemira Oyj's Board of Directors elected the members of the
Audit Committee and the Compensation Committee from among Board
members. The Board's Audit Committee members are Juha Laaksonen,
Kaija Pehu-Lehtonen and Jarmo Väisänen. The Audit Committee is
chaired by Juha Laaksonen. The Board's Compensation Committee members
are Pekka Paasikivi, Kaija Pehu-Lehtonen and Jukka Viinanen. The
Compensation Committee is chaired by Pekka Paasikivi.
In addition, the Board decided to form a Nomination Committee which
consists of the representatives of the three largest shareholders as
of 31 May 2009, the Chairman of the Board of Directors acting as an
expert member. The Nomination Committee is to prepare proposals
concerning the composition and remuneration of the Board of Directors
to be elected in the Annual General Meeting.
Outlook
In 2009, Kemira will continue the performance improvement measures
launched earlier. Key focus areas in 2009 will be profitability
improvement and reinforcing cash flow and balance sheet.
The annual savings target of the announced global cost savings
program is more than EUR 85 million. These savings are expected to be
realized in 2009-2010. Tikkurila accounts for EUR 25 million of the
savings target.
The market situation is challenging in many of Kemira's customer
industries. General economic trends are generating major
uncertainties in customers' and Kemira's business operations. During
the second quarter of the year, Kemira's revenue is expected to fall
compared to the second quarter of 2008 due to reduced demand in
customer industries. Operating profit excluding non-recurring items
is expected to decrease in Tikkurila, but rise in the rest of the
Group due to the efficiency-boosting measures.
Helsinki, May 5, 2009
Board of Directors
All forward-looking statements in this review are based on the
management's current expectations and beliefs about future events,
and actual results may differ materially from the expectations and
beliefs contained in the forward-looking statements.
For further information, please contact:
Jyrki Mäki-Kala, CFO
Tel. +358 10 86 21589
Päivi Antola, Senior Manager, IR & Financial Communications
Tel. +358 10 86 21140
Kemira will hold a press conference on its January-March 2009 results
for the media and analysts at its head office (Porkkalankatu 3)
today, starting at 10:30 a.m. Presentation material is available on
Kemira's website at www.kemira.com.
Kemira Oyj will publish its results for January-June on Thursday,
July 30, 2009 at 9:00 a.m.
KEMIRA GROUP
The figures are unaudited.
All figures in this financial report have been rounded and
consequently the sum of individual figures can deviate from the
presented sum figure.
This Interim Consolidated Financial Statement has been prepared in
compliance with IAS 34.
Changes to the accounting policies as of January 1, 2009:
- IFRS 8 Operating Segments. The adoption of the standard has changed
the way in which segment information is presented. The segment
information in the financial statements changed at the beginning of
2009 owing to the reorganization of the Group. The comparative
figures have been published with separate release March 2009.
- IAS 23 Borrowing costs. The adoption of the amended standard will
mean a change to the consolidated financial statements' accounting
policies but will not have any material effect on the future
financial statements.
- IAS 1 Presentation of Financial Statements. The amendment of the
standard has changed the presentation of the income statement and the
statement of changes in equity.
The following changes of accounting principles have not had effect on
financial statement of the Group:
- Amendment of IFRS 2 Share-based Payment
- Amendments of IAS 1 Presentation of Financial Statements and IAS 32
Financial Instruments: Presentation
- Amendments of IFRS 1 First-time Adoption of IFRS and IAS 27
Consolidated and Separate Financial Statements
- IFRIC 15 Agreements for the Construction of Real Estate
INCOME STATEMENT 1-3/ 1-3/
EUR million 2009 2008 2008
Revenue 608.7 683.6 2,832.7
Other operating
income 3.4 13.7 51.5
Expenses -555.0 -629.7 -2,640.8
Depreciation and
impairments -29.0 -34.6 -169.4
Operating profit 28.1 33.0 74.0
Financial income and
expenses, net -16.1 -11.2 -69.5
Share of profit or loss of
associates -3.8 0.1 -2.7
Profit before tax 8.2 21.9 1.8
Income tax -2.1 -5.9 -
Net profit for the
period 6.1 16.0 1.8
Attributable to:
Equity holders of
the parent 5.7 14.8 -1.8
Minority interest 0.4 1.2 3.6
Net profit for the
period 6.1 16.0 1.8
STATEMENT OF COMPREHENSIVE 1-3/ 1-3/
INCOME
EUR million 2009 2008 2008
Net profit for the
period 6.1 16.0 1.8
Other comprehensive
income, net of tax:
Available-for-sale
- change in fair
value - - 35.3
Exchange
differences -7.9 -11.4 -74.2
Hedge of net
investment in
foreign entities -0.8 1.9 9.1
Cash flow hedging:
amount entered in
shareholders'
equity -2.6 -5.3 -22.0
Other changes -0.5 -0.1 2.1
Other comprehensive
income, net of tax -11.8 -14.9 -49.7
Total comprehensive
income -5.7 1.1 -47.9
Attributable to:
Equity holders of
the parent -5.3 0.2 -49.4
Minority interest -0.4 0.9 1.5
Total comprehensive
income -5.7 1.1 -47.9
BALANCE SHEET
EUR million
31.3. 31.12.
ASSETS 2009 2008
Non-current assets
Goodwill 660.9 655.1
Other intangible
assets 106.5 111.6
Property, plant and
equipment 757.4 765.7
Holdings in
associates 131.7 135.6
Available-for-sale financial
assets 159.8 159.8
Deferred tax assets 11.9 12.7
Defined benefit pension
receivables 54.1 54.0
Other investments 11.5 11.5
Total non-current
assets 1,893.8 1,906.0
Current assets
Inventories 295.6 319.3
Receivables
Interest-bearing
receivables 5.7 7.6
Interest-free
receivables 505.7 507.4
Total receivables 511.4 515.0
Money market
investments -
cash equivalents 100.0 87.1
Cash and cash
equivalents 25.4 32.3
Total current assets 932.4 953.7
Total assets 2,826.2 2,859.7
EQUITY AND 31.3. 31.12.
LIABILITIES
2009 2008
Equity attributable
to equity
holders of the
parent 957.7 962.8
Minority interest 12.8 13.2
Total equity 970.5 976.0
Non-current
liabilities
Interest-bearing non-current
liabilities 1,059.4 609.2
Deferred tax
liabilities 84.2 89.9
Pension liabilities 67.3 67.5
Provisions 61.2 61.8
Total non-current
liabilities 1,272.1 828.4
Current liabilities
Interest-bearing current
liabilities 161.0 559.3
Interest-free current
liabilities 414.0 485.2
Provisions 8.6 10.8
Total current
liabilities 583.6 1,055.3
Total liabilities 1,855.7 1,883.7
Total equity and
liabilities 2,826.2 2,859.7
CONSOLIDATED CASH FLOW
STATEMENT
EUR million
1-3/ 1-3/
2009 2008 2008
Cash flows from operating
activities
Adjusted operating
profit 54.2 62.5 217.0
Interests and other
financing items -6.9 -11.2 -75.2
Dividend income - - 1.0
Income taxes paid -6.1 -4.2 -23.9
Total funds from
operations 41.2 47.1 118.9
Change in net
working capital -63.3 -26.9 -28.7
Total cash flows from
operating activities -22.1 20.2 90.2
Cash flows from investing
activities
Capital expenditure for
acquisitions - - -180.8
Other capital
expenditure -12.7 -38.6 -161.0
Proceeds from sale
of assets 0.4 9.4 254.3
Net cash used in investing
activities -12.3 -29.2 -87.5
Cash flow after investing
activities -34.4 -9.0 2.7
Cash flows from financing
activities
Change in
non-current loans
(increase +,
decrease -) 60.2 -9.2 426.6
Change in non-current loan
receivables
(decrease +,
increase -) -1.2 0.5 -7.1
Short-term
financing, net
(increase +,
decrease -) -13.1 29.0 -282.1
Dividends paid - - -64.2
Other -5.5 -7.6 -9.1
Net cash used in financing
activities 40.4 12.7 64.1
Net change in cash and cash
equivalents 6.0 3.7 66.8
Cash and cash equivalents at end of
period 125.4 56.3 119.4
Cash and cash
equivalents at
beginning of period 119.4 52.6 52.6
Net change in cash and cash
equivalents 6.0 3.7 66.8
STATEMENT OF CHANGES IN
EQUITY
EUR million
Capital
paid-in Fair
in value
Share excess and other Exchange
of
capital par reserves differences
value
Shareholders' equity 221.8 257.9 68.2 -41.1
at January 1, 2008
Total comprehensive - - -5.1 -9.3
income
Dividends paid - - - -
Share-based - - - -
compensations
Shareholders' equity at 221.8 257.9 63.1 -50.4
March 31, 2008
Shareholders' equity at 221.8 257.9 81.4 -104.6
January 1, 2009
Total comprehensive - - -2.7 -8.0
income
Share-based - - - -
compensations
Shareholders' equity at 221.8 257.9 78.7 -112.6
March 31, 2009
Treasury Retained Minority
shares earnings interests Total
Shareholders' equity at
January 1, 2008 -25.9 591.1 15.3 1,087.3
Total comprehensive
income - 14.6 0.9 1.1
Dividends paid - -60.6 - -60.6
Share-based
compensations - 0.3 - 0.3
Shareholders' equity at
March 31, 2008 -25.9 545.4 16.2 1,028.1
Shareholders' equity at
January 1, 2009 -25.9 532.2 13.2 976.0
Total comprehensive
income - 5.4 -0.4 -5.7
Share-based
compensations - 0.2 - 0.2
Shareholders' equity at
March 31, 2009 -25.9 537.8 12.8 970.5
Kemira had in its possession 3,854,465 of its treasury
shares at December 31, 2008. 306 shares granted according
share-based incentive plan were returned 2009. Kemira had
in its possession 3,854,771 of its treasury shares at
March 31, 2009. Their average acquisition share price was
EUR 6.73 and the treasury shares represented 3.1% of the
share capital and of the aggregate number of votes
conferred by all the shares. The equivalent book value of
the treasury shares is EUR 6.8 million.
KEY FIGURES
1-3/ 1-3/
2009 2008 2008
Earnings per share,
basic and
diluted, EUR 0.05 0.12 -0.02
Cash flow from
operations
per share, EUR -0.18 0.17 0.74
Capital expenditure,
EUR million 12.7 38.6 341.8
Capital expenditure
/ revenue, % 2.1 5.7 12.1
Average number of shares
(1000),
basic * 121,190 121,191 121,191
Average number of shares
(1000),
diluted * 121,190 121,191 121,191
Number of shares at
the end
of the period
(1000), basic * 121,190 121,191 121,191
Number of shares at the end
of the
period (1000),
diluted * 121,190 121,191 121,191
Equity per share,
attributable to
equity holders of the
parent, EUR 7.90 8.35 7.94
Equity ratio, % 34.4 36.2 34.1
Gearing, % 112.8 98.8 107.5
Interest-bearing net
liabilities,
EUR million 1,095.0 1,015.9 1,049.1
Personnel (average) 8,987 10,100 9,954
* Number of shares
outstanding, excluding the
number of shares
bought back.
REVENUE BY BUSINESS 1-3/ 1-3/
AREA
EUR million 2009 2008 2008
Paper external 223.9 243.5 987.6
Paper Intra-Group 1.1 4.2 15.7
Water external 150.7 135.8 582.2
Water Intra-Group - 0.5 1.5
Oil & Mining
external 57.0 67.0 273.3
Oil & Mining
Intra-Group -2.6 0.5 2.1
Tikkurila external 111.2 145.2 648.1
Tikkurila
Intra-Group - - -
Other external 65.9 92.1 341.5
Other Intra-Group 19.3 24.7 73.3
Eliminations -17.8 -29.9 -92.6
Total 608.7 683.6 2,832.7
OPERATING PROFIT BY 1-3/ 1-3/
BUSINESS AREA
EUR million 2009 2008 2008
Paper 7.5 12.4 -2.6
Water 10.4 6.6 5.3
Oil & Mining 2.0 3.8 1.9
Tikkurila 4.0 11.7 59.2
Other 4.2 -1.5 10.1
Eliminations - - 0.1
Total 28.1 33.0 74.0
CHANGES IN PROPERTY, PLANT
AND EQUIPMENT 1-3/2009 1-3/2008 2008
EUR million
Carrying amount at
beginning of year 765.7 984.3 984.3
Acquisitions of
subsidiaries - - 6.3
Increases 11.2 28.7 127.9
Decreases -0.5 -1.0 -9.4
Disposal of
subsidiaries - -0.5 -168.1
Depreciation and
impairments -23.5 -28.7 -144.5
Exchange rate
differences and
other changes 4.5 -1.6 -30.8
Net carrying amount
at end of period 757.4 981.2 765.7
CHANGES IN
INTANGIBLE ASSETS 1-3/2009 1-3/2008 2008
EUR million
Carrying amount at
beginning of year 766.7 738.9 738.9
Acquisitions of
subsidiaries - - 36.3
Increases 1.5 9.9 24.3
Decreases - - -
Disposal of
subsidiaries - - -8.1
Depreciation and
impairments -5.5 -5.9 -24.9
Exchange rate
differences and
other changes 4.7 -8.5 0.2
Net carrying amount
at end of period 767.4 734.4 766.7
CONTINGENT 31.3. 31.12.
LIABILITIES
EUR million 2009 2008
Mortgages 43.3 43.3
Assets pledged
On behalf of own 5.2 5.2
commitments
Guarantees
On behalf of own 13.6 14.1
commitments
On behalf of 1.2 1.2
associates
On behalf of 9.8 5.5
others
Operating leasing
liabilities
Maturity within 21.4 20.9
one year
Maturity after one 117.1 115.0
year
Other obligations
On behalf of own 1.7 2.6
commitments
On behalf of 1.9 1.9
associates
Major off-balance sheet
investment commitments
There were no major contractual commitments for the
acquisition of property, plant and equipment on March 31,
2009.
Litigation
The Group has extensive international
operations and is involved in a number of legal
proceedings incidental to these operations. The
Group does not expect the outcome of any legal
proceedings currently pending to have
materially adverse effect upon its consolidated
results or financial position.
RELATED PARTY
Transactions with related parties have not
changed materially after annual closing 2008.
DERIVATIVE
INSTRUMENTS
EUR million
31.3.2008 31.12.2008
Nominal Fair Nominal Fair
value value value value
Currency instruments
Forward contracts 409.3 -3.8 427.6 11.7
of which hedges of
net investment
in a foreign
operation - - - -
Currency options
Bought - - - -
Sold - - - -
Currency swaps 27.4 -5.8 27.6 -5.6
Interest rate
instruments
Interest rate swaps 385.1 -8.4 338.8 -6.9
of which cash flow
hedge 322.6 -6.3 304.4 -6.5
Interest rate
options
Bought 110.0 -0.1 110.0 -0.1
Sold - - - -
Bond futures 10.0 -0.1 10.0 -
of which open 10.0 -0.1 10.0 -
Other instruments
GWh GWh
Electricity forward
contracts,
bought 1,435.6 -15.2 1,431.5 -10.7
of which cash flow
hedge 1,383.0 -14.1 1,378.9 -9.7
Electricity forward
contracts,
sold 52.6 1.2 52.6 1.2
of which cash flow
hedge - - - -
K tons K tons
Natural gas hedging 15.6 -1.7 15.6 -2.0
of which cash flow
hedge 15.6 -1.7 15.6 -2.0
Salt derivatives 172.8 1.2 212.8 2.0
The fair values of the instruments
which are publicly traded are based on
market valuation on the date of
reporting. Other instruments have been
valuated based on net present values
of future cash flows. Valuation models
have been used to estimate the fair
values of options.
Nominal values of the financial
instruments do not necessarily
correspond to the actual cash flows
between the counterparties and do not
therefore give a fair view of the risk
position of the Group.
QUARTERLY
INFORMATION 2009 2008 2008 2008 2008
EUR million Q1 Q4 Q3 Q2 Q1
Revenue
Paper external 223.9 246.4 263.0 234.7 243.5
Paper Intra-Group 1.1 0.4 4.7 6.4 4.2
Water external 150.7 146.8 155.9 143.7 135.8
Water Intra-Group - 0.2 0.1 0.7 0.5
Oil & Mining
external 57.0 66.0 73.6 66.7 67.0
Oil & Mining
Intra-Group -2.6 0.6 0.9 0.1 0.5
Tikkurila external 111.2 103.5 193.7 205.7 145.2
Tikkurila
Intra-Group - - - - -
Other external 65.9 64.8 93.9 90.7 92.1
Other Intra-Group 19.3 17.1 10.4 21.1 24.7
Eliminations -17.8 -18.2 -16.2 -28.3 -29.9
Total 608.7 627.6 780.0 741.5 683.6
Operating profit
Paper 7.5 -33.5 10.9 7.6 12.4
Water 10.4 -13.3 7.3 4.7 6.6
Oil & Mining 2.0 -7.7 3.4 2.4 3.8
Tikkurila 4.0 -12.6 30.4 29.7 11.7
Other 4.2 -1.0 17.5 -4.9 -1.5
Eliminations - - 0.3 -0.2 -
Total 28.1 -68.1 69.8 39.3 33.0
Operating profit, excluding
non-recurring items
Paper 7.5 9.8 11.7 7.6 12.4
Water 10.4 6.9 7.3 4.6 6.2
Oil & Mining 2.0 0.6 3.5 2.4 1.9
Tikkurila 4.0 -12.6 30.4 29.7 11.7
Other 4.2 7.0 3.3 -6.9 -5.0
Eliminations - - 0.3 -0.2 -
Total 28.1 11.7 56.5 37.2 27.2
DEFINITIONS OF KEY
FIGURES
Earnings per share Equity ratio, %:
(EPS):
Net profit Total equity x 100 /
attributable to
equity holders Total assets - prepayments
of the parent / received
Average number of
shares
Cash flow from Gearing, %:
operations:
Cash flow from Interest-bearing net
operations,
after change in liabilities x 100 /
net working capital Total equity
and before investing
activities
Cash flow from Interest-bearing net
operations liabilities:
per share: Interest-bearing liabilities
-
Cash flow from money market investments -
operations /
Average number of cash and cash
shares equivalents
Equity per share: Return on capital employed
Equity attributable (ROCE), %:
to equity
holders of the Operating profit + share of
parent at profit
end of period / or loss of associates x 100
/
Number of shares at (Net working capital +
end of period property, plant and
equipment
available for use +
intangible
assets + investments in
associates) *
* Average
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