2. DISCLAIMER
This presentation contains, or may be deemed to contain, forward-looking statements. These statements relate to future
events or our future financial performance, including, but not limited to, strategic plans, potential growth, planned operational
changes, expected capital expenditures and future cash sources and requirements, that involve known and unknown risks,
uncertainties and other factors that may cause Kemira Oyj’s or its businesses’ actual results of operations, levels of activity,
performance or achievements to be materially different from those expressed or implied by any forward-looking statements.
In some cases, such forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,”
“should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of
those terms or other comparable terminology.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by,
the forward-looking statements contained in this presentation, possibly to a material degree. All forward-looking statements
made in this presentation are based on information presently available to management and Kemira Oyj assumes no
obligation to update any forward-looking statements, unless obligated to do so under applicable law or regulation.
2
3. Q3 2011 Highlights
Revenue EUR 558.3 million (554.4 in Q3 2010)
• Organic growth +6%
• Currency exchange and divestments -5%
Operative EBIT EUR 40.8 million (42.5)
• Volumes and prices EUR +22 million
• Variable and fixed costs EUR -20 million
• Divestments and currency EUR -3 million
• Operative EBIT margin was 7.3% (7.7%)
Profit before taxes EUR 42.1 million (46.0)
• Q3 2010 comparable profit before taxes EUR 42.5 million
• Financial expenses EUR -7.7 million (-3.0)
• Profit from the associated companies EUR 9.0 million (3.0)
Cash flow after investments EUR 56.7 million (6.6)
• Change in net working capital EUR 33 million (-23)
3
5. Kemira Group revenue trend
Q3 2011 revenue of EUR 558.3 million is the highest quarterly revenue with
current Kemira company structure to date
MEUR
580
• +2% growth from Q2 2011
560
• Higher sales prices
540
• Stable volumes
520
500
480
460
440
Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311
5
7. January-September 2011 highlights
Revenue EUR 1,663.9 million (1,614.3 in 1-9/2010)
• Increase of 3%
• Organic growth 6%
Operative EBIT EUR 123.0 million (122.1)
• Increase of 1%
• Operative EBIT margin was 7.4% (7.6%)
• Raw material prices increased substantially
Profit before tax EUR 131.4 million (115.0)
• Increase of 14%
• 1-9/2010 comparable profit before taxes EUR 108 million
• Financial expenses EUR -15 million (-21)
• Income from the JV Sachtleben EUR 24 million (7)
7
9. Kemira operative EBIT 1-9/2011 vs 1-9/2010
MEUR 73.1 -61.7 • Volume and price increase offset
higher variable and fixed costs
-9.3
122.1 -3.6 2.4 123.0
Jan-Sep 2010 Sales volumes Variable costs Fixed costs Currency Others, incl. Jan-Sep 2011
and prices impact acquisitions
and
divestments
9
10. Outlook 2011
We expect that the volume recovery
that was seen in 2010 will continue in 2011
Kemira expects revenue
to be slightly higher in 2011 than in 2010
Despite rising raw material prices,
Kemira’s operative EBIT in 2011
is expected to be higher than in 2010
Kemira expects capital expenditure to be between EUR 100-110 million in 2011
10
12. Paper in Q3/2011
Revenue decreased to EUR 243.4 million (259.9 in Q3 2010)
• Divestment and currency exchange had EUR 21 million negative effect
• Organic revenue growth 2%, sales price increases had a positive effect
• Pulp demand was stable, slightly lower compared to Q2 2011
• Sales volumes to Packaging board increased
• Stable demand within most paper grades
Operative EBIT decreased 10%
• Operative EBIT margin 7.6% (7.9%)
• Currency exchange and divestment had a negative effect
Strong cash flow
Chemical solutions for
(EUR million) Q3/11 Q3/10 1-9/11 1-9/10 FY10 the water-intensive
pulp and paper
Revenue 243.4 259.9 738.8 741.3 984.3 industry to improve
Operative EBIT 18.5 20.5 61.2 54.0 75.6 the profitability as well
as water, raw material
Operative EBIT, % 7.6 7.9 8.3 7.3 7.7 and energy efficiency
12
13. Municipal & Industrial in Q3/2011
Revenue increased 6% vs Q3/2010
• Sales volumes to municipal and industrial customers increased
• Increased average sales prices
• Effect from currency exchange -3%
Operative EBIT EUR 15.4 million (14.5)
• Higher sales prices and volumes
• Operative EBIT margin improved significantly from Q2 2011
Strong cash flow
(EUR million) Q3/11 Q3/10 1-9/11 1-9/10 FY10 Water treatment, water
Revenue 173.7 164.0 498.1 476.1 643.6 purification and sludge
treatment solutions for
Operative EBIT 15.4 14.5 37.9 46.8 59.0 municipalities and
Operative EBIT, % 8.9 8.8 7.6 9.8 9.2 industries
13
14. Municipal & Industrial sales prices and variable costs
• A lag between variable cost change vs sales prices
• A marginal effect to operative EBIT on average
Sales prices*
Variable costs*
Q4/05
Q1/06
Q3/06
Q4/06
Q1/07
Q2/07
Q3/07
Q4/07
Q1/08
Q2/08
Q3/08
Q4/08
Q1/09
Q2/09
Q3/09
Q4/09
Q1/10
Q2/10
Q3/10
Q4/10
Q1/11
Q2/11
Q3/11
Q2/06
*rolling 12-months change vs previous year
14
15. Oil & Mining in Q3/2011
Revenue increased 9% vs Q3/2010
• Favorable pricing and higher sales volumes
• Organic growth 11%
• Currency exchange had a negative effect
Operative EBIT increased 16%
• EBIT margin improved to 11.7% (11.0%)
• Highest margin to date for Oil & Mining segment
• Price increases and higher sales volumes had a positive effect Chemical solutions for
the oil and mining
industries, where water
Strong cash flow plays a central role.
(EUR million) Q3/11 Q3/10 1-9/11 1-9/10 FY10
Revenue 87.2 80.2 255.7 224.9 297.5
Operative EBIT 10.2 8.8 27.7 22.1 28.6
Operative EBIT, % 11.7 11.0 10.8 9.8 9.6
15
16. Other (Specialty chemicals and Group expenses)
Specialty chemicals (ChemSolutions)
• Customers in the food, feed, and pharmaceutical
industries and airports runway de-icing
• EBIT margin decreased to 8.1% (12.7%)
• Significantly higher variable costs
Group expenses
• Q3 2011 at the same level as in Q3 2010
(EUR million) Q3/11 Q3/10 1-9/11 1-9/10 FY10
Revenue 54.0 50.3 171.3 172.0 235.5
Operative EBIT -3.3 -1.3 -3.8 -0.8 -0.9
Incl. other and eliminations
16
17. JV Sachtleben (Kemira ownership 39%)
TiO2 pricing environment has been favorable driven by strong demand.
Capacity utilization rates have been restored to sound basis after some
plant closures during recent years.
Income from JV Sachtleben over tripled to EUR 23.8 million TiO2
(EUR 6.8 million in 1-9/2010) in 1-9/2011.
Main reasons for this:
1) Supply/demand balance has been extremely tight in 2011 enabling price increases
2) Kemira made in 2008 a strategic decision to combine its TiO2 business together with
Rockwood. The combination resulted in significant synergies that are now reflected in
the results.
In the past few years both Kemira and Rockwood have stated that they do not consider
TiO2 to be a long-term core business.
Therefore, although we are currently happy with the performance of this business, we
continue to consider and evaluate strategic options for this business for the long-term.
TiO2 = titanium dioxide
17
19. Global economic outlook with uncertainty and low visibility
Alternative GDP growth scenarios
6 120
• Back-on-track
5 100 • U-shape low growth period
Crude oil price, USD per barrel
4 • Second dip of W-downturn
GDP growth % yoy
80
3
60
2
40 Implications to Kemira in
1
case of U-shape scenario
0 20 • Paper: low visibility, declining demand
‐1 0 • M&I: lower raw material prices, stable
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 demand
• O&M: minor impact to current business,
delay of some future growth projects
GDP Oil Price
• ChemSolutions: non-cyclical food&feed,
very good market position in pharma
Source: IMF Statistics /Global Economic Outlook 2011
• World GDP, constant prices Percent change
• Crude Oil (petroleum), Simple average of three spot prices (APSP); Dated Brent, West Texas Intermediate, 19
and the Dubai Fateh Dollars per barrel
20. Raw material cost management has improved since 2008
Truly global supply chain organization with tight integration to sales
Time lag “reaction time” between pricing and costs have been reduced since 2008
EUR million
200
Plan
150
100
50
Source
0
-50
Q4/2007
Q1/2008
Q2/2008
Q3/2008
Q4/2008
Q1/2009
Q2/2009
Q3/2009
Q4/2009
Q1/2010
Q2/2010
Q3/2010
Q4/2010
Q1/2011
Q2/2011
Q3/2011
-100 Deliver
-150
Sales price* Variable costs*
*12-month rolling change vs previous year
Excl. Tikkurila and Pigments 20
22. Addressing water related megatrends
Oil & Mining: EUR 8 billion market
• Role of water continuously rising
• #1-4 market position
Sustainable
extraction of natural
resources
Water
efficiency
and reuse
Efficient and advanced Clean water –
processing of cities, industries,
biomasses water systems
Paper: EUR 10 billion market Municipal & Industrial: EUR 10 billion market
• Increased recycling, new products, emerging markets • Rising environmental regulation/awareness
• #1-3 in nearly all markets we address by region • #1 position in coagulants
22
23. Recognized leader in our main target markets
Brand profile Customer-driven innovator
Customer loyalty Industry-leading
Investor perception strong profit X premium multiple
23
24. Water chemistry strategy – value creation
Business opportunities driven by growing
demand for efficient use of water
Profitability Growth
• Pricing management • SWEET – new water
• Raw material cost chemistry applications
management • Emerging markets with
• Product-customer mix significant opportunities
optimization • Mature markets with
• Productivity special growth niches
improvement projects • Strenghtening of localized
production capability
Broad and Engaged and
Strong balance Leading market
differentiated dedicated
sheet positions
offering employees
24
