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Kemira Oyj's interim report January-September 2011: Stable performance


October 27, 2011 - London

Kemira Oyj
Stock exchange release
October 27, 2011 at 08.30 am (CET+1)

Disclosure procedure

Kemira Oyj follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority and hereby publishes its interim report January-September 2011 enclosed to this stock exchange release. Kemira's interim report January-September 2011 is attached to this release in pdf format and is also available on the company's web site at www.kemira.com.

Third quarter:

  • Revenue was EUR 558.3 million (554.4).
  • Operative EBIT decreased 4% to EUR 40.8 million (42.5) with a margin of 7.3% (7.7%).
  • Profit before tax decreased 8% to EUR 42.1 million (46.0).
  • Cash flow after investments increased to EUR 56.7 million (6.6).

January-September:

  • Revenue increased 3% to EUR 1,663.9 million (1,614.3).
  • Operative EBIT increased 1% to EUR 123.0 million (122.1) with a margin of 7.4% (7.6%).
  • Profit before taxes increased 14% to EUR 131.4 million (115.0).
  • Earnings per share from continuing operations increased 12% to 0.65 (0.58).
  • Gearing improved to 35% (39% as of December 31, 2010).


Kemira's President and CEO Harri Kerminen:

"Kemira's organic revenue growth in the third quarter was 6%. Sales prices were higher and sales volumes remained at the same level as in the comparable period last year. Operative EBIT improved 9% compared to the second quarter, 2011.

Raw material prices have stabilized during the quarter, but looking at the first nine months of 2011, we have seen a substantial increase in raw material prices. So far, we have been successful in offsetting higher costs with sales prices. Reasons for decreased operative EBIT compared to the third quarter in 2010 were the FWA divestment made in the latter part of 2010 and negative currency exchange effect.
 
Paper segment successfully implemented sales price increases to cover higher raw material costs. Operative EBIT margin was close to the level of comparable quarter last year. The Municipal & Industrial segment's revenue growth picked up in the third quarter driven by both volume growth and sales price increases. Operative EBIT margin improved significantly compared to the previous quarter. The Oil & Mining segment's organic revenue growth was over 10% with an operative EBIT margin of nearly 12% being the highest quarterly margin to date for the segment.

Kemira owns a minority stake (39%) in Sachtleben, a major titanium dioxide producer. The performance of Sachtleben continued to be very strong. Kemira's share of the Sachtleben profits tripled compared to the third quarter last year and was close to EUR 10 million in the quarter.


The visibility for upcoming quarters is not as clear as when compared to the first half of 2011. However, outlook for the full year 2011 revenue and operative EBIT remains unchanged. Kemira's revenue is expected to be slightly higher and operative EBIT higher than in 2010.

Key figures and ratios
The figures for 2010 are for continuing operations excluding Tikkurila, unless otherwise stated. Tikkurila Oyj was separated from Kemira on March 26, 2010.

EUR million Jul-Sep 2011 Jul-Sep 2010 Jan-Sep
2011
Jan-Sep
2010
Jan-Dec 2010
Revenue 558.3 554.4 1,663.9 1,614.3 2,160.9
EBITDA 64.2 70.5 193.7 201.6 265.7
EBITDA, % 11.5 12.7 11.6 12.5 12.3
Operative EBIT 40.8 42.5 123.0 122.1 162.3
EBIT 40.8 46.0 123.0 128.9 156.1
Operative EBIT, % 7.3 7.7 7.4 7.6 7.5
EBIT, % 7.3 8.3 7.4 8.0 7.2
Share of profit or loss of associates 9.0 3.0 23.8 6.8 9.2
Financial income and expenses -7.7 -3.0 -15.4 -20.7 -27.4
Profit before tax 42.1 46.0 131.4 115.0 137.9
Net profit from continuing operations 32.9 35.8 102.5 90.8 115.9
Net profit 32.9 35.8 102.5 621.8*** 646.9***
EPS, EUR, from continuing operations 0.21 0.23 0.65 0.58 0.73
Capital employed* 1,696.3 1,643.3 1,696.3 1,643.3 1,665.1
ROCE, %* 10.4 9.4 10.4 9.4 9.9
Cash flow after investing activities 56.7 6.6 142.6 141.2** 168.6**
Capital expenditure 37.3 46.6 71.8 79.1 107.8
Equity ratio, % at period-end 52 52** 52 52** 54**
Gearing, % at period-end 35 43** 35 43** 39**
Personnel at period-end 5,033 4,985 5,033 4,985 4,935

* 12-month rolling average
**Includes Tikkurila until March 25, 2010
***Net profit January-December 2010 includes a non-recurring income of EUR 529.2 million from the separation of Tikkurila consisting of the difference between the market price of Tikkurila on March 26, 2010 and the shareholder's equity of Tikkurila on March 25, 2010 less the transfer tax related to Tikkurila's listing as well as the listing costs.

Definitions of key figures are available at www.kemira.com > Investors > Financial information. Comparative 2010 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

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 do investments to secure the future growth in the water treatment business.

Kemira's financial targets remain as communicated in connection with the Capital Markets Day in September 2010. 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 are the growing water chemicals markets and Kemira's strong know-how in 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 new and current 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 new innovative technologies for Kemira's customers globally and locally.

Kemira expects the volume recovery that was seen in 2010 to continue in 2011, and Kemira's revenue is expected to be slightly higher than in 2010. Despite the rising raw material prices, Kemira expects the operative EBIT in 2011 to be higher than in 2010. Kemira expects capital expenditure to be between EUR 100-110 million in 2011.

Other events after the review period

On October 26, Kemira Board of Directors appointed Wolfgang Büchele (PhD, Chemistry) Kemira Oyj's President and Chief Executive Officer as of April 1, 2012. Büchele has been a member of Kemira's Board of Directors since 2009. He succeeds the current President and CEO, Harri Kerminen who will retire.


Press conference and conference call

Kemira will arrange a press conference for analysts and the media on Thursday, October 27, 2011 starting at 10.30 am at Kemira House, Porkkalankatu 3, Helsinki. In the conference, Kemira's chairman of the board, Pekka Paasikivi will present Kemira's new President and CEO as of April 1, 2012, Wolfgang Büchele. After the presentation, current President and CEO Harri Kerminen will present the January-September 2011 results. Conference will end with a Q&A session. The press conference will be held in English. 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 10.30 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 or watch the conference via webcast (link to the webcast available here: www.kemira.com under Investors). In order to participate in the call, please dial +44 (0)20 7162 0025, code 905820 ten minutes before the conference begins. Presentation material will be available on Kemira's website. A recording of the conference call will be available on Kemira's website later the same day. This conference call replace the one originally scheduled at 1 pm today.




Additional information:

Tero Huovinen, Director, Investor Relations
Tel. +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

Link to the Interim report January-September 2011 (.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

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