2014-07-22 13:30:00 CEST
2014-07-22 13:30:58 CEST
REGULATED INFORMATION
Kemira Oyj - Interim report (Q1 and Q3)
Kemira Oyj's Interim Report January-June 2014: Revenue and operative ebit stable for continued business, revised outlook for 2014
Kemira Oyj
Stock Exchange Release
July 22, 2014 at 2.30 pm (CET+1)
This is a summary of the January-June 2014 Interim report. The complete January-
June 2014 Interim report with tables is attached to this release and available
at www.kemira.com/investors.
Second quarter:
* Reported revenue decreased 9% to EUR 518.2 million (569.3), due to
divestments and unfavorable currency exchange rates. Revenue in local
currencies, excluding acquisitions and divestments, remained flat.
* Operative EBIT decreased 8% to EUR 37.0 million (40.0) with a margin of
7.1% (7.0%). Operative EBIT in local currencies, excluding acquisitions and
divestments remained flat.
* On July 7, Kemira signed a preliminary agreement to acquire AkzoNobel's
paper chemical business.
January-June:
* Reported revenue decreased 7% to EUR 1,048.1 million (1,130.2), due to
divestments and unfavorable currency exchange rates. Organic revenue growth
reached 1%.
* Operative EBIT decreased 11% to EUR 73.3 million (82.2) with a margin of
7.0% (7.3%).
* Operative EBITDA decreased 6% to EUR 117.7 million (125.0) with a margin of
11.2% (11.1%).
* Operative earnings per share were EUR 0.29 (0.31).
* Kemira maintains its revenue outlook for 2014, but revises its profitability
outlook. Kemira starts to apply operative EBITDA as its profitability metric
(previously: operative EBIT) for 2014 outlook. Kemira expects operative
EBITDA in 2014 to be approximately at the same level as in 2013 (previously:
operative EBIT was expected to be slightly higher in 2014 as in 2013). This
change from EBIT to EBITDA guidance is consistent with Kemira's earlier
communicated operative EBITDA margin target and also consistent with the
chemical industry practice. Detailed definition in the outlook chapter.
Kemira's President and CEO Jari Rosendal:
Recent divestments and unfavorable currency exchange rate fluctuations continued
to impact Kemira's reported revenue. Revenue in local currencies, excluding
acquisitions and divestments remained flat with modest sales volume growth.
Paper and Oil & Mining sales volumes continued to grow at above-the-market rate.
However, increased competition in Municipal & Industrial and our actions to
improve segment's profitability continued to impact sales volumes negatively.
Operative EBIT decreased 8% with somewhat higher margin. The main reasons for
the decline, in addition to the unfavorable currency exchange rates, were the
divestment of formic acid business as well as the increased depreciation related
to the ramp up of our new manufacturing facilities in Nanjing and Dormagen, and
amortization related to our recent acquisitions. We expect benefits of these
investments to start to become more visible in the second half of 2014.
Kemira's strategic choices presented in April 2013 remain intact. We focus on
the development, application expertise, and supply of chemicals for pulp &
paper, oil & gas, mining and water treatment. In order to gain a stronger
position in the selected markets and to accelerate organic growth, we will
invest into new, and expand our present manufacturing capacity with new and
improved technologies. Going forward, we will also increase R&D investments for
innovations to improve our customers processes.
We are also actively evaluating inorganic growth opportunities. In the beginning
of July 2014, we announced a preliminary agreement to acquire AkzoNobel's paper
chemical business. It is a great fit for Kemira as it fulfills our acquisition
criteria by strengthening our market position and technological capabilities. In
addition, we expect to achieve significant synergies with this acquisition. The
transaction is expected to close during the first quarter of 2015.
Efficiency and continuous profitability improvement remain our top priorities
and are the key enablers for successful strategy implementation.
KEY FIGURES AND RATIOS
Jan-Jun Jan-Jun Jan-Dec
EUR million Apr-Jun 2014 Apr-Jun 2013 2014 2013 2013
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Revenue 518.2 569.3 1,048.1 1,130.2 2,229.1
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Operative EBITDA 60.2 61.5 117.7 125.0 251.9
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Operative 11.6 11.2 11.3
EBITDA, % 10.8 11.1
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EBITDA 34.9 41.6 112.6 102.7 141.9
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EBITDA, % 6.7 7.3 10.7 9.1 6.4
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Operative EBIT 37.0 40.0 73.3 82.2 164.2
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Operative EBIT, 7.1 7.0 7.4
% 7.0 7.3
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EBIT 10.0 13.3 64.3 52.5 42.6
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EBIT, % 1.9 2.3 6.1 4.6 1.9
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Share of profit
or loss of 0.0 0.0 -1.1
associates 0.1 -1.1
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Financing income -8.5 -13.8 -39.0
and expenses -4.2 -28.9
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Profit before 1.5 50.5 2.5
tax 9.2 22.5
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Net profit 1.8 3.7 44.9 6.5 -25.9
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Earnings per 0.00 0.28 -0.21
share, EUR 0.02 0.03
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Operative
earnings per 0.14 0.29 0.70
share, EUR 0.14 0.31
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Capital 1,306.6 1,306.6 1,366.5
employed* 1,505.1 1,505.1
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Operative ROCE* 11.9 10.4 11.9 10.4 11.9
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ROCE* 4.2 0.6 4.2 0.6 3.0
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Capital 34.0 59.6 197.5
expenditure 30.9 59.9
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Cash flow after
investing -39.5 90.8 195.7
activities 10.5 200.4
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Equity ratio, % 49 49 51
at period-end 51 51
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Gearing, % at 41 41 41
period-end 36 36
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Personnel at 4,296 4,296 4,453
period-end 4,664 4,664
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*12-month rolling average (ROCE, % based on the reported EBIT)
Definitions of key figures are available at www.kemira.com > Investors >
Financial information. Comparative 2013 figures are provided in parentheses for
some financial results, where appropriate. Operative EBITDA, operative EBIT,
operative earnings per share and operative ROCE are excluding non-recurring
items.
KEMIRA'S FINANCIAL TARGETS for 2016 (unchanged) AND OUTLOOK 2014 (updated)
Kemira will continue to focus on improving its profitability and reinforcing
positive cash flow. The company will also continue to invest in order to secure
future growth in the water quality and quantity management business.
The company's financial targets for 2016 are:
* revenue EUR 2.6-2.7 billion
* EBITDA-% of revenue 15%
* gearing level < 60%.
In addition, Kemira expects its medium-term operating tax rate to be in the
range of 22%-24%. The operating tax rate excludes non-recurring items and the
impact of the income from associated companies.
The basis for growth is the expanding market for chemicals related to water
quality and quantity management and Kemira's strong expertise in this field. The
need to increase operational efficiency in our customer industries creates
opportunities for Kemira to develop new products and services for both current
and new customers. Research and Development is a critical organic growth enabler
for Kemira and it provides differentiation capabilities in the water quality and
quantity management markets. Kemira will invest in innovation, technical
expertise, and competencies in the targeted focus areas.
Outlook (revised from the Interim Report January-March 2014)
Revised outlook: In 2014, Kemira expects its revenue in local currencies and
excluding acquisitionsand divestments to be slightly higher than in 2013 and its
operative EBITDA to be approximately at the same level as in 2013.
Previous outlook: In 2014, Kemira expects its revenue in local currencies and
excluding acquisitions and divestments to be slightly higher than in 2013 and
its operative EBIT to be higher than in 2013.
The guidance for 2014 is defined as follows:
Kemira guidance Definition
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Approximately at the same level from -5% to 5%
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Slightly higher/lower from 0% to 5% or from 0% to -5%
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Higher/lower from 5% to 15% or from -5% to -15%
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Significantly higher/lower more than 15% or less than -15%
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Helsinki, July 22, 2014
Kemira Oyj
Board of Directors
FINANCIAL CALENDAR 2014 AND 2015
Interim Report January-September 2014 October 22, 2014
Financial results for the year 2014 February
10, 2015
Interim Report January-March 2015 April 24, 2015
Interim Report January-June 2015 July 22, 2015
Interim Report January-September 2015 October 23, 2015
Kemira Capital Markets Day will be held in London on September 9, 2014.
Kemira Oyj's Annual Report 2014 will be published the week starting on February
23, 2015.
The Annual General Meeting is scheduled for Monday, March 23, 2015 at 1.00 pm
(CET+1). The Board of Directors of the company will convene the meeting.
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 Jari Rosendal and the CFO Petri Castrén
will present the Q2 2014 results. The press conference will be held in English
and will be webcasted at www.kemira.com/investors. Webcast will be available at
www.kemira.com/investors also after the event. Presentation material will be
available on Kemira's website at www.kemira.com/investors under Investors in
English and at www.kemira.com/fi/sijoittajat 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
ten minutes before the conference begins:
FI: +358 9 817 10465
SE: +46 85 1999355
UK: +44 20 31940550
US: +1 855 2692605
No PIN code requested.
For more information, please contact
Kemira Oyj
Tero Huovinen, VP, Investor Relations
+358 10 862 1980
Kemira is a global chemicals company serving customers in water-intensive
industries. We provide expertise and chemicals that improve our customers'
water, energy and raw material efficiency. Our focus is on pulp & paper, oil &
gas, mining and water treatment. In 2013, Kemira had annual revenue of EUR 2.2
billion and around 4,500 employees. Kemira shares are listed on the NASDAQ OMX
Helsinki Ltd. www.kemira.com
[HUG#1833071]
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