Kemira Oyj's interim report January-March 2011: Operative EBIT improved notably

Kemira Oyj Stock exchange release May 3, 2011 at 8.30 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-March 2011 enclosed to this stock exchange release. Kemira's interim report January-March 2011 is attached to this release in pdf format and is also available on the company's web site Kemira Oyj's interim report January-March 2011: Operative EBIT improved notably * Revenue increased 8% to EUR 556.8 million (514.7). * Operative EBIT increased 15% to EUR 44.9 million (39.1) and the margin increased to 8.1% (7.6%). * Profit before tax increased 53% to EUR 48.6 million (31.7). * Earnings per share increased 33% to EUR 0.24 (0.18). * Tikkurila shares were sold on March 31, 2011; proceeds of EUR 97 million were received on April 5, 2011. * Outlook for 2011 remains unchanged from the 2010 year-end report. Kemira's President and CEO Harri Kerminen: "2011 started well for Kemira, despite increased pressure from rising raw material prices. Healthy volume demand and sales price increases drove revenue growth and together with continuous efficiency improvements increased Kemira's operative EBIT to a record level in the first quarter. It is really encouraging that our revenue is growing above the industry rates and at the same time we have been able to increase profitability. We are making good progress on implementing the water chemistry strategy and have achieved an 8.1% EBIT margin versus our mid-term target of 10%. Paper segment reported good revenue growth and continued to improve profitability, reaching 9.0% EBIT margin. Municipal & Industrial segment increased its sales and EBIT margins are stabilizing over the last two quarters and maintained it's EBIT margins at 7.4%. Oil & Mining segment grew revenues 26% and the EBIT margin reached 11.2%. Other segment reported a positive EBIT, which includes another solid quarter in Specialty Chemicals (ChemSolutions). Kemira opened a new research and development center in São Paulo, Brazil in collaboration with VTT Technical Research Centre of Finland. The new R&D center will broaden our business capability in the entire South America region, where we have operations in Brazil, Argentina, Colombia, Chile, and Uruguay. In the global Kemira R&D network, the São Paulo center has the leading role in research programs on biomass utilization, bio-refineries and bioethanol. Kemira sold its remaining Tikkurila shares, corresponding to 14% of all the Tikkurila shares. Kemira owns a minority stake (39%) in Sachtleben, a major titanium dioxide producer. Sachtleben has performed very well since the beginning of the year and the whole TiO2 industry has benefited from a favorable demand and pricing." Key figures and ratios The figures in the tables in the text section for 2010 of the report are for continuing operations excluding Tikkurila, unless otherwise mentioned. Tikkurila Oyj was separated from Kemira on March 26, 2010. EUR million Jan-Mar 2011 Jan-Mar 2010 Jan-Dec 2010 Revenue 556.8 514.7 2,160.9 EBITDA 68.4 62.8 265.7 EBITDA, % 12.3 12.2 12.3 ---------------------------------------------------------------------------- Operative EBIT 44.9 39.1 162.3 EBIT 44.9 38.4 156.1 ---------------------------------------------------------------------------- Operative EBIT, % 8.1 7.6 7.5 EBIT, % 8.1 7.5 7.2 ---------------------------------------------------------------------------- Financial income and expenses -3.8 -7.9 -27.4 ---------------------------------------------------------------------------- Profit before tax 48.6 31.7 137.9 ---------------------------------------------------------------------------- Net profit from continuing operations 37.9 27.7 115.9 ---------------------------------------------------------------------------- Net profit 37.9 558.7*** 646.9*** ---------------------------------------------------------------------------- EPS, EUR, from continuing operations 0.24 0.18 0.73 ---------------------------------------------------------------------------- Capital employed* 1,677.2 1,633.2 1,665.1 ROCE, %* 10.6 7.6 9.9 ---------------------------------------------------------------------------- Cash flow after investments 20.7 132.7** 168.6** ---------------------------------------------------------------------------- Capital expenditure 14.4 16.1 107.8 ---------------------------------------------------------------------------- Equity ratio, % at period-end 53 50** 54** ---------------------------------------------------------------------------- Gearing, % at period-end 42 42** 39** ---------------------------------------------------------------------------- Personnel at period-end 4,952 5,027 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 listing costs. Definitions of key figures are available at > Investors > Financial information. Comparative Q1 2010 figures are provided in parentheses for some financial results, where appropriate. Operating profit, excluding non- recurring items, is referred to as Operative EBIT in the text section and in the tables of this report. Operating profit is referred to as EBIT. Outlook (unchanged) 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 is 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. Press and analyst meeting and conference call Kemira will arrange a press conference for analysts and the media on Tuesday, May 3, 2011 starting at 10.30 am at Kemira House, Porkkalankatu 3, Helsinki. In the conference, Kemira's President and CEO Harri Kerminen will present the results. The press conference will be held in Finnish. Presentation material will be available on Kemira's website at under Investors in English and at in Finnish at 10.30 am. A conference call in English will begin at 1 pm Finnish time. In order to participate in the call, please dial +44 (0)20 7162 0077, code 894289 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. For more information, please contact Kemira Oyj Tero Huovinen, Director, Investor Relations +358 10 862 1980 Kemira is a global two billion euro chemicals 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. Link to the January-March 2011 interim report (.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#1511526]