Kemira Oyj Stock Exchange Release July 21, 2016 at 2.30 pm (CET+1) This is a summary of the January - June 2016 Interim report. The complete January - June 2016 Interim report with tables is attached to this release and available at www.kemira.com/investors . Second quarter:
- Revenue decreased 1% to EUR 587.8 million (594.8) due to decline in Oil & Mining market, sales prices and negative foreign currency development. Revenue in local currencies, excluding acquisitions and divestments, decreased also 1% as the Group's volume growth was more than offset by the decline in sales prices.
- Operative EBITDA increased 6% to EUR 78.9 million (74.7) driven by sales volume growth and improved gross margin. Operative EBITDA margin improved to 13.4% (12.6%).
- Earnings per share increased 42% to EUR 0.17 (0.12).
January-June:
- Revenue increased 2% to EUR 1,170.5 million (1,147.8) due to acquisitions. Revenue in local currencies, excluding acquisitions and divestments, decreased 1% due to weak Oil & Mining market and declining sales prices while volumes grew.
- Operative EBITDA increased 8% to EUR 151.7 million (141.1) as a result of improved gross margin and sales volume growth. Operative EBITDA margin improved to 13.0% (12.3%).
- Earnings per share increased 18% to EUR 0.33 (0.28).
- Outlook (unchanged): Kemira continues to focus on profitable growth. Kemira expects its revenue and operative EBITDA to increase in 2016 compared to 2015.
Kemira's President and CEO Jari Rosendal:
"The profitability continued to increase in the second quarter and the Group's operative EBITDA margin was 13.4%. Group's organic growth was negative due to lower sales prices and the difficult market environment in Oil & Mining. However, the two largest segments Pulp & Paper and Municipal & Industrial continued along their growth paths driven by increased sales volumes.
Pulp & Paper showed a strong improvement in profitability with organic growth. Operative EBITDA margin improved to 13.7% from 11.8%. Revenue in local currencies, excluding acquisitions and divestments, increased 1% with continued double-digit growth in APAC and South America. During the second quarter we won new additional Total Chemistry Management (TCM) contracts which are expected to contribute to growth in the future.
Oil & Mining continued to face challenging market conditions with operative EBITDA margin being at around 6%. Short-term, we maintain our cost discipline while we invest in promising growth areas such as Chemical Enhanced Oil Recovery (CEOR) and oil sands.
Municipal & Industrial had an exceptionally strong quarter with operative EBITDA margin above 16%. Revenue growth in local currencies, excluding acquisitions and divestments was 2% driven by higher sales volumes.
In the first half of 2016, Kemira's revenue increased 2% and operative EBITDA increased 8%. I am especially satisfied with the profitability improvement despite the challenging market environment. We are on track with the execution of our strategic plan."
KEY FIGURES AND RATIOS
| EUR million | Apr-Jun 2016 | Apr-Jun 2015 | Jan-Jun 2016 | Jan-Jun 2015 | Jan-Dec 2015 |
| Revenue | 587.8 | 594.8 | 1,170.5 | 1,147.8 | 2,373.1 |
| Operative EBITDA | 78.9 | 74.7 | 151.7 | 141.1 | 287.3 |
| Operative EBITDA, % | 13.4 | 12.6 | 13.0 | 12.3 | 12.1 |
| EBITDA | 69.3 | 66.1 | 140.4 | 131.3 | 263.8 |
| EBITDA, % | 11.8 | 11.1 | 12.0 | 11.4 | 11.1 |
| Operative EBIT | 46.6 | 44.8 | 87.5 | 83.9 | 163.1 |
| Operative EBIT, % | 7.9 | 7.5 | 7.5 | 7.3 | 6.9 |
| EBIT | 34.9 | 34.3 | 74.1 | 72.1 | 132.6 |
| EBIT, % | 5.9 | 5.8 | 6.3 | 6.3 | 5.6 |
| Finance costs, net | -0.3 | -9.3 | -6.3 | -16.8 | -30.8 |
| Profit before taxes | 34.6 | 25.1 | 67.9 | 55.6 | 102.1 |
| Net profit for the period | 26.7 | 19.3 | 52.4 | 45.7 | 77.2 |
| Earnings per share, EUR | 0.17 | 0.12 | 0.33 | 0.28 | 0.47 |
| Capital employed* | 1,709.6 | 1,534.0 | 1,709.6 | 1,534.0 | 1,659.5 |
| Operative ROCE* | 9.8 | 11.0 | 9.8 | 11.0 | 9.8 |
| ROCE*, % | 7.9 | 10.5 | 7.9 | 10.5 | 8.0 |
| Cash flow from operating activities | 57.0 | 11.7 | 83.2 | 54.1 | 247.6 |
| Capital expenditure excl. acquisition | 43.3 | 44.3 | 74.7 | 71.3 | 181.7 |
| Capital expenditure | 43.3 | 159.3 | 72.8 | 186.3 | 305.1 |
| Cash flow after investing activites | 49.8 | -147.2 | 47.5 | -131.2 | -53.8 |
| Equity ratio, % at period-end | 44 | 46 | 44 | 46 | 46 |
| Equity per share, EUR | 7.30 | 7.51 | 7.30 | 7.51 | 7.76 |
| Gearing, % at period-end | 61 | 62 | 61 | 62 | 54 |
| Personnel at period-end | 4,873 | 4,739 | 4,873 | 4,739 | 4,685 |
*12-month rolling average (ROCE, % based on the EBIT)
Kemira provides certain financial performance measures (alternative performance measures) on non-GAAP basis. Kemira believes that alternative performance measures, like operative EBITDA and operative EBIT, followed by Kemira management, provide useful and more comparable information of its operative business performance. Kemira's alternative performance measures should not be viewed in isolation to the equivalent IFRS measures and alternative performance measures should be read in conjunction with the most directly comparable IFRS measures. Definitions of the alternative performance measures can be found in the Definitions of the key figures in this report as well as at www.kemira.com >Investors > Financial information.
KEMIRA'S FINANCIAL TARGETS 2017 AND OUTLOOK FOR 2016 (UNCHANGED)
Kemira will continue to focus on improving its profitability and cash flow. The company will also continue to invest in order to secure future growth to serve selected water-intensive industries.
The company's financial targets for 2017 are:
- Revenue EUR 2.7 billion
- Operative EBITDA-% of revenue 15%
- Gearing level <60%.
The basis for growth is the expanding market for chemicals and Kemira's expertise that helps customers in water-intensive industries to increase their water, energy and raw material efficiency. 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 enabler of growth for Kemira, providing differentiation capabilities in its relevant markets. Outlook for 2016 Kemira continues to focus on profitable growth. Kemira expects its revenue and operative EBITDA to increase in 2016 compared to 2015. Kemira expects its capital expenditure, excluding acquisitions, to be around EUR 200 million in 2016.
Helsinki, July 21, 2016
Kemira Oyj Board of Directors FINANCIAL CALENDAR 2016 AND 2017 Interim report January-September 2016 October 25, 2016 Financial Statements Bulletin 2016 February 8, 2017 Interim report January-March 2017 April 26, 2017 Interim report January-June 2017 July 21, 2017 Interim report January-September 2017 October 25, 2017
Kemira Capital Markets Day will be held on September 15, 2016 in London at Haberdashers' Hall. Press and analyst conference and conference call Kemira will arrange a press conference for analysts, investors and media starting at 4.00 pm (2.00 pm UK time) at GLO Hotel Kluuvi, Kluuvikatu 4, 2nd floor, Helsinki . In the conference, Kemira's President and CEO Jari Rosendal and CFO Petri Castrén will present the results. The press conference will be held in English and will be webcasted at www.kemira.com/investors . The presentation material and the webcast recording will be available on the above mentioned company website. You can 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 69379590 SE: +46 8 5876 9446 UK: +44 20 3140 8286 US: +1 1718 354 1152
Conference id: 7067846
For more information, please contact Kemira Oyj Olli Turunen, Vice President, Investor Relations Tel. +358 10 862 1255
Kemira is a global chemicals company serving customers in water-intensive industries. We provide expertise, application know-how 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 2015, Kemira had annual revenue of EUR 2.4 billion and around 4,700 employees. Kemira shares are listed on the Nasdaq Helsinki Ltd. www.kemira.com
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