Kemira Oyj's Interim Report January-June 2012

26 juli 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 Interim Report January-June 2012: http://hugin.info/3008/R/1629422/521875.pdf This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Kemira Oyj via Thomson Reuters ONE [HUG#1629422]