Kemira Oyj's Financial Statements Bulletin 2012

Kemira Oyj Stock exchange release February 6, 2013 at 2.30 pm (CET+1) Fourth quarter: "Fit for Growth" program proceeding as planned. Strong quarter for the Paper segment. * Revenue grew 3% to EUR 558.5 million (543.3). * Operative EBIT was EUR 33.7 million (34.3) with a margin of 6.0% (6.3%). * Earnings per share, excluding non-recurring items, decreased to EUR 0.13 (0.24) mainly due to the weak performance of the titanium dioxide joint venture (Sachtleben). * The reported earnings per share were reduced to EUR -0.28 (0.24) largely due to non-recurring items of EUR 71 million that were mainly related to the structural development of the company. Full year: Financially satisfactory year 2012. Dividend proposal again at EUR 0.53. * Revenue increased 2% to EUR 2,240.9 million (2,207.2). * Operative EBIT decreased 2% to EUR 154.1 million (157.3) with a margin of 6.9% (7.1%). * Earnings per share, excluding non-recurring items, decreased 13% to EUR 0.77 (0.89). * The reported earnings per share decreased to EUR 0.11 (0.89), mainly due to the non-recurring items of EUR 122.4 million related to "Fit for Growth", to the divestment of Kemira's food and pharmaceuticals businesses and to the streamlining of Kemira's operations. * The Board of Directors proposes a cash dividend of EUR 0.53 per share (0.53) to the Annual General Meeting 2013, totaling EUR 81 million (81), equivalent to 69% of the operative net profit. * In 2013, Kemira expects the revenue in local currencies and excluding divestments to be slightly higher and the operative EBIT to be significantly higher than in 2012. Kemira's outlook for 2013 is detailed on page 20. Kemira's President and CEO Wolfgang Büchele: "Despite our ongoing restructuring initiatives, we managed to maintain the fourth quarter revenue and operative EBIT at last year's level, and reached our targets set for 2012. This is an encouraging achievement, considering the stagnating markets in which we are operating. Our competitive landscape for Kemira started to change substantially in 2012. Major global competitors announced their entry into water quality and quantity management as well as oil and mining either by outlining new strategies or by major acquisitions in the respective fields. In addition, the market environment for titanium dioxide changed completely in 2012, causing a deterioration of the performance of the JV Sachtleben with a substantial negative impact on our EPS. We continued to implement "Fit for Growth", including decisions on additional site closures and headcount reductions in Europe and the US. Overall, we achieved the expected 2012 cost savings of EUR 10 million. We also introduced a new performance management system to align all of Kemira's organization towards value creation. The sharpened strategy will be presented at the end of April, 2013, once it has been approved by the Board of Directors. The revenue of Kemira's Paper segment reached EUR 1 billion in 2012 and thus grew 5%, excluding the impact of the Canadian based hydrogen peroxide business divestment at the end of 2011. Due to organic growth and cost saving measures, the Paper segment's profitability reached nearly 9%. The Municipal & Industrial sales volumes recovered after the sudden drop in Q4 2011. Gross margin was kept at the same level as in 2011, despite 30% higher raw material expenses. Fixed costs increased mainly due to higher personnel and manufacturing related expenses, in particular in the first half of the year. Oil & Mining improved its already good profitability, despite sales volumes being under pressure due to low gas prices in the US and global mining activity having slowed down. ChemSolutions sales volumes remained stable compared to 2011. In 2013, besides continuing the implementation of our "Fit for Growth" cost savings program, growth will again move into the center of Kemira's focus. We expect the revenue in local currencies and excluding divestments to be slightly higher than in 2012 and the operative EBIT to be significantly higher than in 2012." Key figures and ratios Oct-Dec 2012 Oct-Dec 2011 Jan-Dec 2012 Jan-Dec EUR million 2011 ------------------------------------------------------------------------------- Revenue 558.5 543.3 2,240.9 2,207.2 EBITDA 15.6 65.9 178.5 259.6 EBITDA, % 2.7 12.1 8.0 11.8 ------------------------------------------------------------------------------- Operative EBIT 33.7 34.3 154.1 157.3 EBIT -37.7 35.3 31.7 158.3 ------------------------------------------------------------------------------- Operative EBIT, % 6.0 6.3 6.9 7.1 EBIT, % -6.8 6.5 1.4 7.2 ------------------------------------------------------------------------------- Share of profit or loss of -5.7 7.2 11.2 31.0 associates ------------------------------------------------------------------------------- Financing income and expenses -4.1 -5.5 -15.7 -20.9 ------------------------------------------------------------------------------- Profit before tax -47.4 37.0 27.2 168.4 ------------------------------------------------------------------------------- Net profit -40.6 37.8 21.5 140.3 ------------------------------------------------------------------------------- EPS, EUR -0.28 0.24 0.11 0.89 ------------------------------------------------------------------------------- Operative EPS, EUR 0.13 0.24 0.77 0.89 ------------------------------------------------------------------------------- Capital employed* 1,673.0 1,705.0 1,673.0 1,705.0 ROCE, %* 2.6 11.1 2.6 11.1 ------------------------------------------------------------------------------- Cash flow after investing 71.8 115.3 activities 9.4 -27.3 ------------------------------------------------------------------------------- Capital expenditure 18.5 129.3 134.1 201.1 ------------------------------------------------------------------------------- Equity ratio, % at period-end 53 51 53 51 ------------------------------------------------------------------------------- Gearing, % at period-end 40 38 40 38 ------------------------------------------------------------------------------- Personnel at period-end 4,857 5,006 4,857 5,006 ------------------------------------------------------------------------------- * 12-month rolling average (ROCE, % based on the reported EBIT). Definitions of key figures are available at > 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. Dividend On December 31, 2012, Kemira Oyj's distributable funds totaled EUR 621,334,254 net profit, which accounted for EUR 68,680,078 for the period. No material changes have taken place in the company's financial position after the balance sheet date. Kemira Oyj's Board of Directors proposes to the Annual General Meeting to be held on March 26, 2013 that a dividend of EUR 0.53 totaling EUR 81 million shall be paid on the basis of the adopted balance sheet for the financial year ended December 31, 2012. Outlook and restructuring program "Fit for Growth" Kemira will continue to focus on improving its 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 market for chemicals related to water quantity and quality management and Kemira's strong know-how in this field. 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 new innovative technologies for Kemira's customers in all relevant markets. Restructuring program "Fit for Growth" Kemira Oyj has started to implement its global restructuring program "Fit for Growth", launched at the end of July, 2012, to improve the company's profitability, its internal efficiency and to accelerate the 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. In 2012, the cost savings impact of "Fit for Growth" was EUR 10 million. The anticipated EUR 60 million cost saving impact of the program is expected to take place as follows: EUR 10 million in 2012, EUR 50 million in 2013 and EUR 60 million in 2014. The ultimate goal of the program is to reach at least 10% EBIT margin in 2014. Redundancies will account for 50% of the expected savings. The remaining 50% will be achieved through the manufacturing network consolidation as well as through the leaner operations. Cost savings estimates for the different segments, based on the detailed plan of measures, are: Paper EUR 22 million, Municipal & Industrial EUR 22 million, Oil & Mining EUR 12 million and ChemSolutions EUR 4 million. Non-recurring charges related to the restructuring program are estimated to be around EUR 85 million, EUR 45 million of which will be severance payments and external services related cost and EUR 40 million will be asset write-downs. EUR 71 million of the restructuring charges were booked in the second half of 2012, and the balance will be booked in the first half of 2013. In the fourth quarter in 2012 non-recurring charges related to "Fit for Growth" amounted to EUR 31 million, EUR 8 million of which were asset write-downs and EUR 23 million were severance payments and external services. The implementation may ultimately lead to a reduction of up to 600 positions globally. Kemira has initiated the co-determination negotiations according to each country's local legislation. In the beginning of the negotiations, it was estimated that the personnel reductions may affect approximately 260 employees working in Finland. As a result of the co-determination negotiations, the head count reduction was 152 in Finland. Additional potential outsourcing in Finland is still under consideration. Kemira had 4,857 employees worldwide at the end of December 2012 (5,006 at the end of 2011). Outlook In 2013, Kemira expects its revenue in local currencies and excluding divestments to be slightly higher than in 2012 and its operative EBIT to be significantly higher than in 2012. The guidance for 2013 is defined as follows. +--------------------------+----------------------------------+ |Kemira guidance |Definition | +--------------------------+----------------------------------+ |Slightly higher/lower |from 0% to 5% or from 0% to -5% | +--------------------------+----------------------------------+ |Higher/lower |from 5% to 15% or from -5% to -15%| +--------------------------+----------------------------------+ |Significantly higher/lower|more than 15% or less than -15% | +--------------------------+----------------------------------+ Financial calendar 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 3.30 pm (1.30 pm 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 . Webcast will be available at also after the event. Presentation material will be available on Kemira's website at under Investors in English and at in Finnish at about 3.00 pm. 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 0077 (calling from Finland: +358 (0)9 2313 9201), code 928409 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 financial statements bulletin 2012: 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#1675681]