Kemira Oyj's Interim Report January-September 2017: Revenue growth continued

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Kemira Oyj
Interim Report
October 25, 2017 at 8.30 am (CET+1)

Kemira Oyj's Interim Report January-September 2017: Revenue growth continued

This is a summary of the January - September 2017 Interim report. The complete January - September 2017 Interim report with tables is attached to this release and available at www.kemira.com/investors.

Third quarter:

Revenue increased 4% and was EUR 622.2 million (596.3) as volume growth continued in both segments, especially in North American oil & gas business. Revenue in local currencies, excluding acquisitions and divestments, increased 7%.
Operative EBITDA increased 5% to EUR 84.5 million (80.8) mainly due to volume growth. Sales prices increased slightly compared to prior year. Operative EBITDA margin was 13.6% (13.6%). EBITDA decreased 10% due to a EUR 12.7 million settlement for a damage claim (Dortmund, Germany) relating to the alleged old infringement of competition law in the hydrogen peroxide business during 1994-2000.
EPS decreased to EUR 0.12 (0.16) due to the settlement for the damage claim.

January-September:

Revenue increased 5% to EUR 1,849.4 million (1,766.8) due to volume growth mainly in North American oil & gas business. Revenue in local currencies, excluding acquisitions and divestments, increased 4%.
Operative EBITDA decreased 1% to EUR 230.6 million (232.5) with operative EBITDA margin of 12.5% (13.2%). EBITDA decreased 7% mainly due to the settlement for the damage claim.
EPS decreased to EUR 0.36 (0.49) mainly due to the settlement for the damage claim.

Kemira's President and CEO Jari Rosendal:

"Revenue growth continued in the third quarter. Organic growth was 7%, which is a good achievement. The Group's operative EBITDA improved thanks to respective EBITDA improvement of more than 20% in Industry & Water.

In Pulp & Paper, volume growth continued. Contract manufacturing agreements related to AkzoNobel paper chemical's acquisition are coming to an end and we are close to the targeted synergy run-rate of EUR 20 million. Our investment of EUR 50 million in bleaching chemical capacity in Finland started production ahead of the schedule and is now ramping up. We expect full capacity utilization during H1 2018.

In Industry & Water, the organic growth accelerated to 15% driven by strong sales volume development in the North American oil & gas business. In addition to the volume growth, somewhat higher sales prices are starting to offset the increases of raw material price. Lower fixed costs also contributed to the double-digit improvement in profitability. The uptake in oil & gas market and our operational efficiency measures are bearing fruit.

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Hurricanes Harvey and Irma impacted North American chemical industry but we are relieved to report that our employees are safe and our assets were not damaged. Hurricanes caused some disruptions to supply of raw materials, which had limited financial impact on Kemira during the third quarter.

The execution of our strategy continues as planned. Our new organizational structure is in place and the operational excellence program BOOST is advancing both in Europe and North America. We are excited about the prospects of the announced joint venture in China, which will secure supply of a key raw material, strengthen further our position in Pulp & Paper and accelerate profitable growth in APAC."

KEY FIGURES AND RATIOS

EUR million	Jul-Sep 2017	Jul-Sep 2016	Jan-Sep 2017	Jan-Sep 2016	Jan-Dec 2016
Revenue	622.2	596.3	1,849.4	1,766.8	2,363.3
Operative EBITDA	84.5	80.8	230.6	232.5	302.5
Operative EBITDA, %	13.6	13.6	12.5	13.2	12.8
EBITDA	70.2	78.3	203.9	218.7	284.2
EBITDA, %	11.3	13.1	11.0	12.4	12.0
Operative EBIT	47.7	46.5	126.3	134.0	170.1
Operative EBIT, %	7.7	7.8	6.8	7.6	7.2
EBIT	33.4	43.7	99.6	117.8	147.0
EBIT, %	5.4	7.3	5.4	6.7	6.2
Finance costs, net	-7.4	-6.9	-21.8	-13.2	-19.1
Profit before taxes	26.1	36.8	78.0	104.7	128.0
Net profit for the period	20.0	27.3	59.5	79.7	97.9
Earnings per share, EUR	0.12	0.16	0.36	0.49	0.60

Capital employed*	1,759.9	1,711.5	1,759.9	1,711.5	1,718.2
Operative ROCE*	9.2	9.8	9.2	9.8	9.9
ROCE*, %	7.3	7.9	7.3	7.9	8.6
Cash flow from operating activities	92.9	85.0	133.7	168.2	270.6
Capital expenditure excl. acquisition	43.8	48.5	125.9	123.2	212.6
Capital expenditure	43.8	48.5	125.9	121.3	210.6
Cash flow after investing activites	50.4	36.9	9.2	84.4	97.8
Equity ratio, % at period-end	43	45	43	45	45
Equity per share, EUR	7.26	7.48	7.26	7.48	7.68
Gearing, % at period-end	63	58	63	58	54

Personnel at period-end	4,749	4,843	4,749	4,843	4,818

*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.

All the figures in this interim report have been individually rounded and consequently the sum of individual figures can deviate from the presented sum figure.

OUTLOOK FOR 2017 (UNCHANGED)

Kemira expects its operative EBITDA to increase from the prior year (2016: EUR 302.5 million).

MID- AND LONG-TERM FINANCIAL TARGETS (UNCHANGED)

Kemira aims at above-the-market revenue growth with operative EBITDA margin of 14-16%. The gearing target is below 60%.

Helsinki, October 24, 2017

Kemira Oyj
Board of Directors

PRESS AND ANALYST CONFERENCE AND CONFERENCE CALL

Kemira will arrange a press conference for the analysts, investors, and media on Wednesday, October 25, 2017, starting at 10.30 am (8.30 am UK time) at GLO Hotel Kluuvi, Kluuvikatu 4, 2nd Floor, Helsinki. During 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 conference, please call ten minutes before the conference begins:

FI +358 9 7479 0404
SE +46 8 5065 3942
UK +44 330 336 9411
US +1 719 457 2086

Conference ID: 9222963

For more information, please contact:

Kemira Oyj
Olli Turunen, 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' product quality, process and resource efficiency. Our focus is on pulp & paper, oil & gas and water treatment. In 2016, Kemira had annual revenue of around EUR 2.4 billion and 4,800 employees. Kemira shares are listed on the Nasdaq Helsinki Ltd.
www.kemira.com

Kemira Oyj Interim Report January-September 2017

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Kemira Oyj via Globenewswire

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