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Wolfgang Bchele, President and CEO

Kemira Capital Markets Day 2013, September 10

Delivering a profitable water pure-play

Structural changes starting to deliver results


New organization structure Fit for Growth Equity value Sachtleben divestment Food and pharmaceuticals business divestment Performance management system Compensation structure Stringent capital allocation Segment roles: growth and/or cash focus Lean operation LEAN manufacturing Process architecture

+35%
3F acquisition

Net debt

-28%

Q2 2012 Result
Kemira Capital Markets Day 2013

CMD 2013
2

Managing businesses from their growth regions

Oil & Mining management based in Atlanta, US Municipal & Industrial management relocating from Helsinki to Frankfurt EMEA Paper management relocating from Helsinki to Frankfurt

Paper management relocating from Helsinki to Hong Kong

Kemira Capital Markets Day 2013

Differentiated products together with balanced wet and dry shale portfolio driving revenue recovery in Oil & Mining
15% reduction in total number of US oil (+17%) and gas (-56%) rigs in 2013 compared to January 2012
1,600 1,400 1,200 1,000 +6% 800 600 400 200 0 76 74 72 70 68 # of Oil rigs in the US*

Oil & Mining revenue increasing sequentially despite decreased oil and gas drilling activity Differentiated products share of revenue increasing to 82%
82% +5%

EUR million 82 80 78

# of Gas rigs in the US*

Jan 2012 Jun 2012 Dec 2012 Mar 2013 Jun 2013
*) Source: Baker Hughes International

2012

Q4 2012

Q1 2013

Q2 2013
4

Kemira Capital Markets Day 2013

Restructuring initiatives improving profitability in Municipal & Industrial


Revenue, EUR million 800 700 600 500

9.2%
665 687

644

7.1%
Operative EBIT margin

7.1%
400 300 200 100 0 2010 2011 2012 1-6 2013
Kemira Capital Markets Day 2013 5

343

5.7%

Others Polymers Coagulants

No change in outlook for 2013 or financial targets for 2014 and 2016
2013
Revenue (local currencies and excl. divestments) Operative EBIT EBIT margin Revenue EBITDA margin 0%-5% growth vs 2012 increase >15% vs 2012 10% EUR 2.6 2.7 billion 15%

2014

2016

Gearing

below 60%

Kemira Capital Markets Day 2013

Fit for Growth helping to deliver 2013 profit target*


2012-2013

15 Fit for Growth savings expected to be EUR 10 15-20 million higher in H2 2013 vs H2 2012 5 0

Fit for Growth savings, EUR million

7 3 Q3 2012 Q4 2012

10

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Input prices trending up

Propylene price trend


1300 1150 1000 850
1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/1211/1212/12 1/13 2/13 3/13 4/13 5/13 6/13

0.80 0.70 0.60 0.50 0.40 EU (EUR/MT, ICIS) NA (USD/pound, CMAI)


Kemira Capital Markets Day 2013 7

*) Revenue in local currencies, excl. divestments 0%-5% growth vs 2012, Operative EBIT +15% vs 2012

External indicators show stable economic development in EMEA and NAFTA, uncertainty in emerging markets
Kemira early warning dashboard Indicators Status Trend Change Lead1

Overall

WTI crude oil futures OECD + Emerging market bus. confidence index FOEX China BHKP pulp Chicago fed nat. activity

(9/13) (6/13) (9/13) (7/13) (8/13) (8/13) (9/13) (8/13)

6 4

EMEA NA

IFO manufacturing business expectations Eurozone PMI survey S&P 500 index ISM business supplier deliveries

SA
APAC

Brazil industry production % growth Brazil company leading indicator Major 5 Asia companies leading indicator China containerized freight index

(6/13) (6/13) (6/13) (8/13)


Trend

4 8 6 6 4 6 6 6 8 2

Normal: indicator moves within standard deviation corridor Above: indicator moves above standard deviation corridor Below: indicator moves below standard deviation corridor

Contracting: indicator has decreased for at least 3 consecutive months Expanding: indicator has increased for at least 3 consecutive months

1. Lead time is the estimated time (months) between movement of indicator vs. resultant 2. Average new order value (3 months rolling) Kemira Capital Markets Day 2013 8

Operative EBIT margin target of 10% in 2014


2013-2015

Quarterly operative EBIT bridge, EUR million 10% 7%


5 5 40 1 4 55

Q2 operative EBIT 2013

Excluding one off expenses in Q2 2013

Fit for Growth full run rate

M&I restructuring

Additional efficiency measures (Vaasa, BSC, 3F synergies)

Average quarterly EBIT, including all the announced efficiency measures

Fixed cost inflation is expected to be compensated through additional benefits from LEAN manufacturing roll-out, further M&I turnaround measures and growth
Kemira Capital Markets Day 2013 9

Capital allocation focusing on growth markets and product lines

2013-2015

Targeted payback time for new greenfield investments is max. 7 years and max. 5 years for capacity additions on existing products Focus on Paper in China, strengthening Oil & Mining in mature markets, South America, Middle East and Africa
Capex split average 2010-2012 Targeted capex split 2016
Differentiated products

Capex-to-sales ratio

6.0% 5.0%

65%

35%

30%

70%

Commodity products 2012


Kemira Capital Markets Day 2013

2016e
10

Acquisitions expected to contribute to growth target


2013-2015

Current 36% gearing means EUR 280 million headroom against the targeted <60% gearing Strict M&A criteria for focused growth
Must strengthen our market position and/or our technologies/competencies EBIT accretive in second full year after closing

3F acquisition demonstrates Kemiras M&A strategy


Accessing technologies lacking in the portfolio (e.g. monomers) Accelerating geographical expansion in order to shorten the strategic path (e.g. dry polyacrylamides in the US)

Kemira Capital Markets Day 2013

11

Portfolio focus shifting from commodity to differentiated business


Positioning based on 2 years performance
Profitability O&M NAFTA Paper SA O&M EMEA Evaluating exit options CS M&I Paper EMEA NAFTA M&I NAFTA M&I APAC M&I SA O&M APAC O&M SA Paper EMEA Paper APAC

2013-2015

Revenue growth

Kemira Capital Markets Day 2013

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Portfolio restructuring improving return on capital employed


June 2013 Goodwill Other intangible assets* Property, plant and equipment* Investment in associates NWC Operative EBIT margin 1-6 2013 Operative ROCE, rolling 12 months
*)

2013-2015

Ambition in 2016 Lower Unchanged >30% higher Unchanged 11%-11.5% ~11% >15% LEAN manufacturing and SKU reduction 5% capex to sales target in 2016

520m 58m 650m 2 11.3% 7.3% 10.4%

Fit for Growth and continuous efficiency measures

Prepayments (see note 13 in the Financial Statements 2012) of EUR 111 million are excluded from Kemira operative ROCE.
Kemira Capital Markets Day 2013 13

Innovation focusing on Paper and Oil & Mining


Technology Management Board targeting 50% reduction in development times for R and D projects Dedicated global team and structured process to drive ideation
Oil & Mining

2015-2017

R&D projects per New Product Development stage


Development
ChemSolutions Municipal & Industrial

Scale-up
ChemSolutions Municipal & Industrial

Paper Oil & Mining

Paper

Kemira Capital Markets Day 2013

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2017-2020

Heading towards remote control and combining waste water treatment with energy generation
Energy and clean water from waste by Microbial Fuel Cell assisted water treatment Remote control and monitoring of water management: serving industries from a central location

Kemira Capital Markets Day 2013

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Renewed revolving credit facility further improves financial position and secures future growth financially
Debt per June, 2013 Gross debt: EUR 565 million Net Debt: EUR 425 million Net Debt/Annualized operative EBITDA YTD 2013: 1.7 Gross debt maturing in 2013 relates mainly to commercial papers issued on the Finnish markets
Kemira average interest rate (at the end of the period)
5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2008 2009 2010 2011 2012 6/2013 4.3% 1.7% 2.0% 2.0%

1.6% 1.7%

Debt maturity profile, EUR million


2013 0 -100 -200 -300 -400 -500 Gross debt Undrawn EUR 400 million 5+1+1 year Revolving Credit Facility
Kemira Capital Markets Day 2013 16

2014

2015

2016

2017

2018

2019

2020

2021

>2022

Dividend policy remains unchanged


Dividend policy is to distribute a dividend that is 40%-60% of Kemiras operative net profit Dividend yield has on average been over 4% in 2005-2012 (leading yield in the European chemical sector)
69% 61% 53% 39% 37% 38% 42% 36% 60% 59%

2009

2010* Gearing

2011 Payout ratio

2012

2013**

*) In addition in March, 86% of Tikkurila shares were distributed as dividend to Kemira shareholders (Tikkurila market capitalization was EUR 600 million after its listing) **) Gearing at the end of June, 2013 Kemira Capital Markets Day 2013 17

Cultural change supporting Kemiras transformation into water quality and quantity management pure-play
2017-2020 Expand Best-in-class in its ability to leverage global performance culture, talents and operations Be recognized industry and technology leader in chosen target markets

2015-2017 Accelerate

Build a strong employer brand to attract and retain leadership and expert talents

Grow through new products & services and accelerate expansion in emerging markets Achieve a sustainable position in all target markets

2013-2015 Focus

Establish a performance and innovation driven culture that fosters collaboration, learning and organizational agility

2012-2013 Redesign

Building blocks for a high performing organization in place: Clear accountabilities, performance management system, process architecture

Reach target profitability by implementing Fit for Growth


Kemira Capital Markets Day 2013 18

Michael Lffelmann, SVP restructuring

Kemira Capital Markets Day 2013, September 10

Increased focus on efficiency and savings

EUR 60 million Fit for Growth savings in 2014


Zero loss of identified Fit for Growth savings, implementation timeline sharpened
EUR million >45 60

19 10 Savings impact 2012 Savings impact 2013 Savings impact 2014

Expected savings

Realized savings

Kemira Capital Markets Day 2013

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Implementing LEAN to continue focus on cost efficiencies


Why is LEAN important for Kemira?

Reduce complexity

Reduce costs

Offsetting Kemiras fixed cost inflation through ongoing cost savings driven by continuous improvement process

Increase competitiveness

Kemira Capital Markets Day 2013

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LEAN savings of EUR 6 million already implemented


EUR million

0.5 0.5

6 5

Helsingborg

Botlek

Bradford

Total

Kemira Capital Markets Day 2013

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Global roll-out of standardized LEAN savings modules

1. Weighing & filling

2. Material handling benchmark

3. LEAN lab & in-process analysis

4. Self-loading

5. Remote operators

Kemira Capital Markets Day 2013

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Strong focus on implementation discipline


Enhanced implementation
Higher and constant drive to achieve results Continuous identification of savings Greater sense of urgency

Resources
Closer interaction and follow-up Full time LEAN resources Dedicated manufacturing optimization resources

Tools
Action based with financial tracking Standardized LEAN tools Additional training for sites

Delivering high performance driven culture


Kemira Capital Markets Day 2013 24

Frank Wegener, President, Municipal & Industrial

Kemira Capital Markets Day 2013, September 10

Accelerating the turnaround in Municipal & Industrial

Fit for Growth has started to improve profitability


Municipal & Industrial targets cross-the-cycle operative EBIT margin of 10% in 2014 1) Targeted Fit for Growth savings above EUR 20 million 2) New organization and customer segmentation leading to more than EUR 5 million additional savings 3) Further benefits from manufacturing network optimization, SKU reduction and R&D portfolio improvements

Revenue
EUR million 180 +2% 178

Operative EBIT %
174
+2% 165 10% 8% 6% 4% 2% 0% 3.5% +49% 5.2% 6.9% +29% 8.9%

175
170 165 160 155 150 Q1 2012 Q1 2013 161

Q2 2012

Q2 2013

Q1 2012

Q1 2013

Q2 2012

Q2 2013

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Municipal & Industrial faces challenges


Municipal business under margin pressure in emerging markets Coagulant business facing local competition - players of very different sizes and business drivers
EUR million 700 11% 680 9% 665 7% 6% 6% 620 600 580 560 2009 Revenue 2010 2011 2012 2% 0% Operative EBIT margin 608 4% 12% 687 10% 8%

660
644 640

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New business model and organization to address the challenging business environment
Historic business model
Uniform service approach with limited customer segmentation Sales force weighted more towards direct sales vs. distribution sales

New business model


Sales model with simplified organization and channel strategy Headcount reduction of ~50 employees R&D focus in line with strategy, portfolio reduced by 40% World class coagulant footprint focusing on mature markets

Global geographical focus with scattered manufacturing footprint Limited focus on production technology

Over 1,000 SKUs

Number of SKUs reduced by 50%

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Segmented customer business model increasing profitability


Historic model unsegmented
>9,000 municipal and industrial customers buying coagulants and polymers
>9000 customers >4500 customers

New model with two customer segments


Price
Paying for: Effective treatment

Paying for:

Reliable delivery and effective treatment Value and performance


Kemira offering: Reliable delivery and effective treatment Tailor made solutions Fast time to resolution Technical support
>4500 customers

Paying for: Faster resolution Some technical support and Tailored solutions with immediate resolution, tech support part of offering

Kemira Capital Markets Day 2013

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Securing competitive position through manufacturing network consolidation


Fit for Growth measures will be fully implemented by the end of Q2 2014
6 sites closed, closure of 2 sites and 2 production plants under implementation 2 sites to be closed only after new Tarragona coagulant site is on stream (delayed to Q1 2014)

Further manufacturing optimization through economies of scale and the use of industrial by-products Additional rationalization expected in NAFTA
Coagulants New product sites Sites and production plants closed or decided to be closed

*)

Europoort and Krems (production plants), Lauterburg, Sevilla, Flix, Tarragona old, St. Petersburg, Houston, Savannah, Xoxla, Camacari, Romania Kemira Capital Markets Day 2013 30

Legislation and regulatory enforcement driving demand


Positive regulatory developments Sludge treatment (dewatering) in Europe China expected to invest EUR 50 billion to water in the next 5 years Market growth expected to accelerate in 2016

4.4 3.8 3.4 1.9

R&D to secure competitive offering and meet long term growth opportunities

1.8 1.6

Coagulants Others

Polymers

2.6

3.0

3.4

2012

2016

2020

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Accelerating the turnaround in Municipal & Industrial

Streamlined business model focused on maximizing cash flow generation

1
BUSINESS

2
EFFICIENCY

Structural profitability improvement through reduction of complexity, customer segmentation and organizational optimization Selective application and production process development as well as new products paving the way to a sustainable future

Focus on mature markets, capture selected growth opportunities in APAC

3
GEOGRAPHY

4
INNOVATION

Kemira Capital Markets Day 2013

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Dr. Heidi Fagerholm, CTO

Kemira Capital Markets Day 2013, September 10

Innovating for growth

Research Center network focusing on competence development and regional business support
Espoo, Finland Atlanta, GA, USA
Oil & Gas Minerals & Metals Paper TCS Fundamental Paper research M&I TCS

Total personnel 250 Patent families ~350

Shanghai, China
Paper applications Tissue TCS

Sao Paolo, Brazil


Minerals & Metals TCS
TCS = Technical Customer Service & Production Support Kemira Capital Markets Day 2013 34

R&D portfolio aligned with strategy


Increase in total portfolio value by 50% from 2013 to 2020 Increase in cross-regional participation across R&D projects Every second project has an external research partner FTE per project growing more than 50% due to increased focus

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Innovation focusing on Paper and Oil & Mining


Share of R&D projects in various NPD stages

Development

Scale-up

Commercialization

M&I

CS

M&I

CS Other

Paper O&M O&M Paper SWEET*

*) Center of water efficiency excellence Kemira Capital Markets Day 2013 36

Innovation sales target EUR 250 million in 2016


Targeting to double innovation driven sales from 5% in 2012 to ~10% of total sales in 2016
Kemira innovation sales*, EUR million 160 140 120 100 80 60 40 20 0 2011
Fennobond strength

New innovation areas

140
M&I

106
O&M

KemFlow friction reducer KemFlow biocide Fennobind binders

Tagged antiscalants Guar replacement Green friction reducer Rheology modifiers

40

Paper
Kemflite, control & monitoring

Performic acid Next Fennobind generation

2012

2013**

*) Sales from new products or existing products for new applications launched within the previous 5 years **) Annualized Jan-Jun 2013 innovation sales
Kemira Capital Markets Day 2013 37

Polymers account for 50% of Kemiras differentiated product revenue


Case study: Polymers in flocculation and sludge dewatering Technical benefits for customer include improved reject water quality and increased solid content of sludge Global polymer market growing from EUR 7 billion to EUR 10 billion in 2020 Kemira targeting faster than market growth

Kemira Capital Markets Day 2013

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Case Fennobind For better printability in Paper & Board


Innovative binder concept

Benefits for customer:


Significant cost savings via decreased binder demand on coating application Increased sustainability through reduced dependency on oil-based chemistry Creating innovative high performance binder concept based on future chemistry and application requirements

Kemira:

The global binder market for paper and board is EUR 2.5 billion

Particle diameter 46 nm
Fennobind

Kemira Capital Markets Day 2013

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Shale Gas & Oil


Slick water and hybrid fracturing uses Kemiras polymers Dynamic Market
Gas and oil rigs dependent on energy price Guar price volatility - key for gel fracturing (wet shale)
600 1,400 # of Oil rigs in the US* 1,000 # of Gas rigs in the US*

New fracturing technologies developing rapidly to improve production rates



200

Hybrid fracturing New and rapidly developing fracturing methods


Increased water usage water reuse high brine Polymer usage increasing in wet shale Polymer as a co-treatment/replacement for gel fracturing
30 25 20 15 10

1/12

6/12

12/12

3/13

6/13

Implications

Guar price index


India NCDEX guar split quotations

5
0
12/07 6/08 12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12 12/12

Kemira Capital Markets Day 2013

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Removing volatility in shale gas and oil through technology and applications
Innovation driven growth
Customer focused New products wet and dry shale Portfolio of products for water management New slick water friction reducers for high brines Products with improved handling inversion, cold temperature Guar replacement under development Growing multi-product patented portfolio Applications knowledge & partnerships with key service companies Gel Feature Proppant carrying capacity Stability of gel Gel formation/Breaking Ease of hydration Friction reduction properties Reduction of number of products to use for hybrid fracs Guar + + + Kemira + + + + + +

Accomplishments

Relevant market size for polymers is about EUR 1 billion

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Success Story
Tagged antiscalants for Oil & Gas stimulation and production Benefits for customer:
Deeper water, more complex wells, and the optimization of mature fields Scale risk minimization, differentiated detection, peace of mind & production optimization. Lower costs (Capex flexibility, optimized chemical usage, lower equipment & operational costs)

Kemira:
New tagged antiscalant technology based on proven polymeric scale inhibitor

Relevant market size for downhole scale squeeze business is about EUR 100 million

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Building a culture of innovation throughout the organization


Innovation Community to inspire people, to stimulate creativity and to create enablers for an innovation culture Training to enhance innovation capabilities Create measurable success criteria for innovation work Innovate today for a prosperous tomorrow

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Kemira Capital Markets Day 2013, September 10

Appendix

Kemira Capital Markets Day 2013

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Kemira Group revenue growth trend

15% 10% 5% 0% -5% -10% -15%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2009 Organic growth

2010 Currency

2011 Acquisitions Divestments

2012 Total growth

2013

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Differentiated products expected to grow substantially above the market, commodity products focusing on efficiency improvements
Differentiated products
Growth target substantially above the market Driven by innovation and expertise Higher margins due to higher value to the customer Flexible manufacturing capabilities with sufficient scale Higher barriers to entry (technology)
1000 800 600 400 200 Differentiated products revenue, EUR million 781 843

879
455

0
2010 2011 2012 1-6 2013

Commodity products revenue, EUR million 1500 1000 500 0 2010 2011 2012 1-6 2013
46

Commodity products

1380

1365

1362

Targeting growth, but slightly lower than the market Maximizing profitability and cash flow by leveraging existing capacity

675

Kemira revenue split into differentiated and commodity products


Differentiated product lines
%-of total revenue in 1-6 2013 Polymers Sizing and strength Defoamers, dispersants, biocides and other process chemicals

Commodity product lines


Coagulants Bleaching chemicals Formic acid and derivatives Miscellaneous commodity products*

Paper M&I O&M

10% 20% 55%

20% -

15% 5% 25%

5% 65% 5%

25% -

25% 10% 15%

ChemSolutions
Kemira

20%

10%

10%

25%

15%

80%
5%

20%
15%

*) Mainly sodium percarbonate, colorants, acrylamide, inorganic salts and acids as well as caustic soda Kemira Capital Markets Day 2013 47

Mature markets continue to stay important in all segments


EMEA (57% of total revenue)
Revenue, EUR million 621 646

NAFTA (29% of total revenue)


Revenue, EUR million 345 333

1-6 2012

1-6 2013

1-6 2012

1-6 2013

GM % 38% 37%

GM % 39% 39%

1-6 2012

1-6 2013

1-6 2012

1-6 2013
Kemira Capital Markets Day 2013 48

Kemira Group operative EBIT bridge, EUR million


EUR million

74.6
100 90 80 70 60

17.0

-9.1

-5.7

3.2

-2.0

4.2

82.2

50
40 30 20 10 0 1-6 2012 Sales volumes Sales prices Variable costs Fixed costs Currency impact Others, incl. acquisitions and divestments 1-6 2013

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Good balance between sales and raw material prices


Kemira sales prices vs variable costs
EUR million 200 150 100 50 0 -50 -100 -150

Q4
2007

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2008

2009 Brent oil, USD

2010 Sales price*

2011 Variable costs*

2012

2013

*) 12-month rolling change in EUR million vs corresponding period in previous year, excl. Tikkurila and Pigments Kemira Capital Markets Day 2013 50

Fit for Growth full EUR 60 million impact in 2014


Cost savings impact in operative EBIT in Q2 2013 was EUR 10 million
EUR 4 million impacted variable costs EUR 6 million impacted fixed costs
Fit for Growth status Q2 2013, EUR million
70 60 60 >45 50 40 30 20 10 10 0 Savings impact 2012 Savings impact 2013 Savings impact 2014 19

Expected cost savings impact in operative EBIT 2013 is > EUR 45 million Expected cost savings impact in operative EBIT 2014 EUR 60 million

Expected savings

Realized savings

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Fit for Growth required EUR 76 million in restructuring costs


EUR 5 million booked YTD 2013 Total non-recurring severance payments and external services EUR 46 million Total non-recurring asset write-downs EUR 30 million

Realized restructuring charges, EUR million


45 30 15 5 41 30

0
Severance payments and external services 2012 Asset write-downs 2012 Severance payments and external services 2013
Kemira Capital Markets Day 2013 52

Key figures and ratios


EUR million (except ratios) 4-6/2013 4-6/2012 % 1-6/2013 1-6/2012 % 2012

Revenue
Operative EBITDA of which margin Operative EBIT of which margin Share of profit or loss of associates Financing income and expenses Operative EPS, EUR Operative ROCE* Capital expenditure

569.3
61.5 10.8 40.0 7.0 0.1 -4.2 0.14 10.4 30.9

562.3
58.2 10.3 36.0 6.4 5.8 1.4 0.21 10.5 51.0

1
6 11 -33 -39

1,130.2
125.0 11.1 82.2 7.3 -1.1 -28.9 0.31 10.4 59.9

1,115.2
121.0 10.8 74.6 6.7 16.6 -8.9 0.41 10.5 70.4

1
3 10 -24 -15

2,240.9
249.4 11.1 155.5 6.9 11.2 -15.7 0.77 10.0 134.1

Casf flow after investing activities**


Gearing, % at period-end Personnel at period-end

10.5
36 4,664

24.2
44 5,181

-57
-10

200.4
36 4,664

16.1
44 5,181

-10

71.8
42 4,857

*12-month rolling average **2012 numbers include EUR 5.3 million dividends and EUR 27.3 million paid-in-capital from JV Sachtleben. 1-6/2013 numbers include EUR 97.5 million received from the divestment of the JV Sachtleben shares and EUR 80.6 million from the divestment of the food and pharmaceuticals businesses.
Kemira Capital Markets Day 2013 53

Profitable growth accelerated in Paper


April-June 2013

Revenue increased by 6% to EUR 265 million (249)


EMEA revenue increased more than 10% driven by sales volume growth in all main product lines Sales prices decreased slightly Currency exchange -1%

Operative EBIT increased 21% to EUR 19.5 million (16.1)


Organic revenue growth Higher sales and marketing expenses compensated by Fit for Growth savings Operative EBIT margin increased to 7.4% (6.5%)

Strong cash flow


EUR million Revenue Q2/2013 265 Q2/2012 249 % 6 1-6/2013 524 1-6/2012 497 % 5 2012 1,006

Operative EBIT
Operative EBIT, % Cash flow

19.5
7.4 18

16.1
6.5 10

21
80

39.2
7.5 48

34.9
7.0 9

12
433

75.3
7.5 8

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Profitable growth in Municipal & Industrial


April-June 2013

Revenue increased 2% to EUR 178 million (174)


Revenues increased in all regions, except APAC Currency exchange -1%

Operative EBIT increased 33% to EUR 15.9 million (12.0)


Increased sales prices and sales volumes, as well as lower fixed costs Higher variable costs due to increased propylene based raw material prices during Q1 2013 Operative EBIT margin increased to 8.9% (6.9%)

EUR million Revenue

Q2/2013 178

Q2/2012 174

% 2

1-6/2013 343

1-6/2012 335

% 2

2012 687

Operative EBIT
Operative EBIT, % Cash flow

15.9
8.9 5

12.0
6.9 -3

33
-

24.5
7.1 5

17.7
5.3 4

38
25

39.2
5.7 39

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Oil & Mining sales volume increase offset by sales price decline
April-June 2013

Revenue decreased 5% to EUR 79.9 million (84.5)


-4% impact related to exiting from low margin products as communicated earlier (full impact of EUR 10 million will be realized by the end of 2013, YTD 2013 impact EUR 7 million) Sales volumes increased for the first time in six quarters Sales prices declined
EUR million Revenue Q2/2013 79.9 Q2/2012 84.5

Operative EBIT decreased to EUR 3.5 million (7.2)


Price pressure in the market Increased R&D spend to accelerate the differentiation Variable costs started to come down towards the end of the quarter

% -5

1-6/2013 156

1-6/2012 170

% -8

2012 321

Operative EBIT
Operative EBIT, % Cash flow

3.5
4.4 -8

7.2
8.5 1

-51
-

8.6
5.5 -10

15.5
9.1 -18

-45
-

25.9
8.1 -5

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ChemSolutions revenue was impacted by the food and pharmaceuticals businesses divestment
April-June 2013

Revenue decreased 16% to EUR 46 million (55)


Organic growth 7%, continued strong sales volumes growth of formic acid and derivatives product lines Divestment of food and pharmaceuticals businesses had -22% impact

Operative EBIT increased 57% to EUR 1.1 million (0.7)


Higher sales volumes and lower variable costs Strong market pressure on Sodium Percarbonate product line

EUR million Revenue

Q2/2013 46

Q2/2012 55

% -16

1-6/2013 107

1-6/2012 114

% -6

2012 228

Operative EBIT
Operative EBIT, % Cash flow

1.1
2.4 -4

0.7
1.3 -2

57
-

9.9
9.2 77

6.5
5.7 13

52
-

15.1
6.6 24

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Kemira capital expenditure


EUR million
160 140 120 100 80 60 40 20 0

134

109
98

76 69
56 Expansion Maintenance and improvement
2008 2009 2010 2011 2012 1-6 2013
58

Kemira Capital Markets Day 2013

Net working capital ratio


Kemira ambition is to keep net working capital ratio* between 11%-11.5%
15%

14.1% 13.3%
13%

13.4% 12.8%

11.3%
11%

11.3%

9%

2008
*) Rolling 12-month average

2009

2010

2011

2012
Kemira Capital Markets Day 2013

1-6 2013
59

Cash flow statement


EUR million
Operative EBITDA Change in net working capital Cash flow from operations* Capital expenditure Other investing activities Cash flow after investing activities*

Q2 2013
61.5 -6.8 38.6 -30.9 2.8 10.5

Q2 2012
58.2 -0.6 47.5 -51.0 27.7 24.2

1-6/2013
125.0 -11.1 78.9 -59.9 181.4 200.4

1-6/2012
121.0 -43.2 57.9 -70.4 28.6 16.1

FY 2012
249.4 -21.1 176.3 -134.1 29.6 71.8

*2012 numbers include EUR 5.3 million dividends and EUR 27.3 million paid-in-capital from JV Sachtleben. 1-6/2013 numbers include EUR 97.5 million received from the divestment of the JV Sachtleben shares and EUR 80.6 million from the divestment of the food and pharmaceuticals businesses.

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Kemira Capital Markets Day 2013, September 10

Market and product specifications


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Paper and Oil & Mining driving growth


Business focus Paper: Growing above market, targeting wet-end chemistry market leadership O&M: Growing above market
9.4

Kemiras relevant market (EUR 27 billion in 2012) will grow to EUR 34 billion in 2020 (CAGR 3.3%)
4.3%

13.2 1.8% 2.4% 2.0 9.3 2.7% 9.5

M&I: Improving profitability, maximizing cash


7.7

2.3

7.7

ChemSolutions: Maximizing cash by a product driven business model


Source: Management estimation based on various sources

2012
Paper O&M

2020
M&I

2012'
ChemSolutions

2020'

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Paper segment - Demand for sizing and strength chemicals is growing fastest globally
Pulp and paper industry trends increasing chemical demand: Increased use of recycled fibres Hardwood replacing softwood in virgin pulp Lightweighting of packaging and board grades Higher filler loads in graphic papers New digital printing methods Lower water / energy consumption
Market size, EUR billion (CAGR: 2.4%)

2.0% 1.8 1.6 1.5 0.9 1.5 2012 1.8 2.0 1.1 2.0% 1.9 2.0 2.1 2.2 3.5% 2020 GAGR 2.3 1.3% 3.0%

1.0

1.7

2016

2020

2012

2016

Defoamers, biocides and other wet-end process chemicals Polymers Miscellaneous commodity chemicals Sizing and strength Bleaching chemicals
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Paper segment - Technology and market leader in paper wet-end chemistry


RAW MATERIALS Electricity Sodium chloride (salt) Crude tall oil Cationic monomer Acrylonitrile Acrylic acid Olefins Fatty acids Maleic anhydride Sulfur INTERMEDIATES Tall oil rosin AKD Wax Isomerized olefins Acrylamide PRODUCTS Sodium chlorate Hydrogen peroxide Polymers Defoamers Coagulants Biocides Sizing Strength Additives Surface additives Colorants Sulfuric acid APPLICATIONS Pulping Bleaching Retention Wet-end process control WQQM Sizing Strength Surface treatment Coloring CUSTOMER IDUSTRIES Pulp Packaging and board Printing and writing Tissue CUSTOMERS All the major global paper and pulp producers

Value chain part covered by Kemira


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Oil & Mining segment - Strong market growth across all product lines
High oil price spurs demand for identifying new sources Global growth of shale gas and wet shale Declining ore assays require improved processing Increasing environmental pressure which increases demand for waste water treatment
Market size, EUR billion (CAGR: 4.7%)

6.1 5.1 4.3

3.1 2012

3.6

4.3 2.0 2.4 2016 2.9 2020

2016

2020

2012

Polymers

Defoamers, biocides and other process chemicals


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Miscellaneous commodity products


65

Oil & Mining segment - Winning market share with competitive combination of innovation chemicals and application knowledge
RAW MATERIALS Acrylonitrile Acrylic acid Various monomers Miscellaneous specialty chemicals and commodities INTERMEDIATES Acrylamide PRODUCTS Polymers Dispersants & Antiscalants Biocides Emulsifiers Defoamers Coagulants Formulations APPLICATIONS Friction Reduction Formation & Well Scale Control Asset integrity Microbial Induced Corrosion Enhanced Oil Recovery Drilling muds Concentrate thickening Mineral slurry preservation Mining processes Scale Control CUSTOMERS Pumpers Oil & Gas operators Service companies Mine operators

Value chain part covered by Kemira


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Municipal & Industrial - Commodity product lines expected to grow, but slightly slower than the market
Demand drivers for raw and waste water as well as sludge treatment chemicals: Legislation and regulatory enforcements determine required treated water and sludge quality standards Water reuse is most cost efficient solution to meet the increasing water demand
Realized restructuring charges, EUR billion

3.3%
3.4 1.6 2.6 2012 Coagulants Polymers 3.8 1.8 3.0 2016 4.4 1.9 3.4 2020 2.8% 3.2% GAGR

Antiscalants, biocides, defoamers, miscellaneous commodity chemicals


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Municipal & Industrial - Technology and market leader in raw and waste water as well as sludge treatment
Kemira is the only major supplier producing major water treatment chemicals, polymers and coagulants thereby enabling comprehensive application support Cost competitiveness through backward integration into virgin raw materials 60-70% of sourced raw materials are recycled utilizing waste streams from industrial producers, providing an additional cost advantage
RAW MATERIALS Acrylonitrile Sulfuric acid Hydrochloric acid Aluminium hydrate Iron ore Pickling liquor Copperas INTERMEDIATES Acrylamide PRODUCTS Polymers (EPAM, DPAM) Al Coagulants Fe Coagulants APPLICATIONS Raw water treatment Wastewater treatment Sludge treatment SALES CHANNEL Direct sales Distributor/reseller Service companies CUSTOMERS Municipalities Private operators Industrial customers

Antiscalants Biocides Defoamers Value chain part covered by Kemira

Advanced water treatment

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