Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
Kemira’s Annual General Meeting 2013Annual General Meeting, March 26, 2013Wolfgang Büchele, President and CEO
Kemira – global EUR 2.2 billion chemicals company (2012)
R&D andtechnology centres
NAFTARevenue: EUR 689 million (31%)Personnel: 1,279
EMEARevenue: EUR 1,233 million (55%)Personnel: 2,804
South AmericaRevenue: EUR 173 million (8%)Personnel: 423
Asia PacificRevenue: EUR 146 million (6%)Personnel: 351
2
Satisfactory financial performance in 2012
3
Revenue EUR 2,240.9 million (2,207.2 in 2011), +2%- Revenue in emerging markets grew 9%, driven by Paper in APAC region
Operative EBIT EUR 154.1 million (157.3), -2%- Operative EBIT margin 6.9% (7.1%)- ”Fit for Growth” launched in July 2012, to reach 10% EBIT margin in 2014
Operative earnings per share EUR 0.77 (0.89)- Lower income from associated companies had EUR 0.13 negative impact
Board of Directors proposes EUR 0.53 dividend (0.53), 69% payout ratio (60%)
Cash flow after investing activities and severance paymentsEUR 71.8 million (115.3)
4
Operating profit (EBIT) includes EUR 122 million of non-recurring items
Operative EBIT 2011 Operative EBIT 2012 Non-recurring items Operating profit (EBIT)2012
EUR million
157 154 -122 32
• ”Fit for Growth” –restructuring charges, EUR 71 million
• Divestment of food and pharmaceutical businesses, EUR 18 million
• Streamlining of Kemira’s operations, EUR 33 million
5
Kemira profitability has not reachedthe targeted EBIT margin level for the last 5 years
-15%
-10%
-5%
0%
5%
10%
15%
0%
20%
40%
60%
80%
100%
120%
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
Gearing Revenue growth Operative EBIT, %
Revenue growth in maturemarkets > 3%
Revenue growth in emergingmarkets > 7%
EBIT margin > 10%
Gearing < 60%
Cash flow after investmentsand dividends > 0
Revenue growth has also remained below the mid-term financial targetGearing is at the level of 40%, well below the 60% targetCash flow after investments and dividends has on average been positive
Kemira financial targets
Three strategic priorities for achievingprofitable growth
6
Simplicity
*Water quality and quantity management
Growth above market
average
EBIT >10%Substantially growing and strengthening emerging market presence
Further sharpen the strategy –strengthening focus on WQQM*
Improving efficiency
7
Kemira operative EBIT margin trend by segments
”Fit for Growth” launched to adress profitability• Product mix optimization and growth driving profitability improvement in
Paper and in Oil & Mining
• Implemented cost savings and efficiency improvements will boost marginsin Municipal & Industrial and ChemSolutions
New organization in operation since October, 2012- Accelerating growth, especially in the emerging markets and reducing complexity- New performance management system introduced to focus the whole organization
on value creation
Personnel reduction- Up to 600 employees, 12% of the total workforce
- Most of the co-determination negotiations have been accomplished
Manufacturing network optimization- Almost 20% of all production sites either decided to be closed or under review
Leaner operation- NWC* ratio target is 11% in 2014 (12.8% in 2012, 13.4% in 2011)
Sharpened strategy will be presented in April, 2013
8
Significant structural change ongoing
*Net working capital
0%5%
10%15%20%25%30%35%40%45%
Jan
Feb
Mar
Apr
May Jun
Jul
Aug
Sep Oct
Nov
Dec Jan
Feb
Mar
Apr
May Jun
Jul
Aug
Sep Oct
Nov
Dec
2011 2012
Oras Invest and Solidium Varma and IlmarinenOther Finnish shareholders Foreign shareholders
9
Kemira share price developed almostin line with the sector in 2012
60
70
80
90
100
110
120
Dec
NovOct
Sep
AugJu
lJu
nM
ayApr
Mar
Feb
Jan
Dec
NovOct
Sep
AugJu
lJu
nM
ayApr
Mar
Feb
Jan
20122011
Kemira STOXX chemicals (Europe)
• Profit warnings in November, 2011 and in April, 2012 impacted negatively• Launch of ”Fit for Growth” has narrowed the gap against the sector index• Non-Finnish shareholding has increased since the launch of ”Fit for Growth”
Kemira share price performance Kemira ownership structure
6.6 %7.0 %7.4 %7.8 %8.2 %8.6 %9.0 %9.4 %
8/11 10/11 11/11 1/12 2/12 4/12 5/12 7/12 8/12 10/12 11/12 1/13 3/13
Operative EBIT-% FY 2013 Operative EBIT-% FY 2014
Sharpened strategy will get Kemira back to the growth track
10
2,000
2,100
2,200
2,300
2,400
2,500
8/11 10/11 11/11 1/12 2/12 4/12 5/12 7/12 8/12 10/12 11/12 1/13 3/13
Kemira revenue research analysts estimate trend
Kemira operative EBIT -% research analysts estimate trend
• Operative EBIT-% expectations increasedafter the launch of ”Fit for Growth”
• Additional confidenceneeded before the EBIT margin of 10% is in the expectations
20132014
• Analysts have become more confident in Kemira’s ability to achieve the EBIT margin target by cost reduction
• Less confidence in Kemira’s competitive advantages to achieve growth
EUR million
Sharpened strategy will enable accelerated growth
11
August 2012
Initial strategic considerations Strategic agenda Sharpened
Strategy 2020
November 2012
Strategy presented in April, 2013, after BoD approval
• Market and competition
• Segments• Regions• R&D• M&A strategy
• Proposed future strategy
• Risks andcontingency plans
• Strategic roadmap including detailed measures
• Strategic business plan
Kemira in the value chain of Water Quality and Quantity Management
12
13
Strong market growth with Oil & Mining as well as in APAC and SA
Source: Management estimation based on various sources
Kemira’s strategically relevant market (EUR 27 billion in 2012) will grow to EUR 34 billion in 2020 (CAGR 3.1%)
7.7 9.3
7.79.5
9.4
13.22.0
2.3
2012 2020
Paper M&I O&M ChemSolutions
2.4%
2.7%
4.3%
1.8%
9.4 11.6
8.710.1
6.4
9.32.3
3.3
2012 2020
EMEA NAFTA APAC SA
2.7%
1.9%
4.8%
4.6%
Kemira’s strategically relevant market size per segment 2012-2020 EUR billion
Kemira strategically relevant market size per region 2012-2020 EUR billion
Kemira has clear competitive advantagesFurther portfolio renewal and efficiency improvements still required
14
• One of the leading global suppliers to the paper industry with long-term commitment
• Capability to tailor products and services to customers’ needsbased on innovation and profound manufacturing capabilities
• Strong innovation platform
• High quality products and reliable supplier
Kemira strengths in its strategically relevant market:
Research and development project portfolio management
15
• Research portfolio allocation and balance managed by Technology Management Board (TMB)
• R&D management to ensure cross-segment interest in steering and working teams
• Research-projects owned mainly by the segments
• 10-20% of the R&D resources focusing on strategic projects, 40%-50% to new product
development and 30%-40% to product upgrades
Understanding customers’ needs is a key competitive advantage
16
• Kemira’s Fennobond enables yield advantage resulting in 5%-10 % lighter* endcustomer product
• Chemicals help customers to optimize their raw material use e.g fiber consumption
• Customers’ process efficiency improves by using right chemistry
*Source: MetsäBoard
…10,000 miles later
Well established in a competitive market
17
Total market share** of biggest players
Leading market position in its strategically relevant market
- Kemira has strong market position and is committed to pulp and paper businesses
- Kemira has the capability to further increase its market share in the growing oil & gas market
5 competitors
6 competitors
5 competitors
3 competitors
Fragmented competition
7 competitors
Consolidation is likely to continue
- The market consists of eight global players* and numerous local players
- Competitive landscape has changed substantially in 2012, major global competitors entering
the water quality and quantity management business, especially in the oil and mining industries
*Kemira, Ecolab, BASF, Clariant, SNF, Ashland, GE Water, AkzoNobel
0% 20% 40% 60% 80% 100%
Oil & Mining
Municipal
ChemSolutions
Paper
Industrial
Pulp
Kemira Major competitors
**2012 figures. Management estimate for Kemira’s strategically relevant markets
Kemira’s approach to sustainability
18
0
5
10
15
20
25
Total Recordable Injuries (LTA+RWC+MTC) Kemira employees and contractors # of injuries per 1 million hours, 12 month rolling average
Total EMEA Total NA Total SA Total APAC ALL
Improving occupational health and safety
19TRI = Total Recordable InjuriesLTA = Lost Time Accidents
• Lost Time Accident (LTA) rate of Kemira employees reached in 2012 an all-time low level of 2.3 accidents per 1 million hours (12 month rolling average)
• 2013 the new Safety Key Performance Indicator will be Total Recordable Injuries (TRI) rate, which includes LTA, Restricted Work Cases (RWC) and Medical Treatment Cases (MTC)
RWC = Restricted Work CasesMTC = Medical Treatment Cases
Chemical industryaverage*
*Source: US department of labor 2011
World class
Why to invest into Kemira - creating shareholder value
• ”Fit for Growth” program• New organization fosters growth in high margin businesses• Strict cash flow management
• Excellent funding position• Relevant financial assets• M&A possible also short term, if profitability and synergy criteria
are all met
• Leverage mature markets with existing strengths• Well established position in US Oil and Gas markets,
especially in shale gas• Packaging and Board, as well as Tissue driving growth in Asia
Substantialearnings
improvementpotential
Organicgrowth
Strongbalancesheet
• Strong focus on improving shareholder returns• Stable dividend yield
20
Operative EBIT will be significantly higher in 2013
Revenue in local currencies and excluding divestments expected to
increase 0%-5% in 2013 compared to 2012
-Jan-Dec 2012 revenue: EUR 2,240.9 million
Operative EBIT expected to increase more than 15% in 2013
compared to 2012
- Jan-Dec 2012 operative EBIT: EUR 154.1 million
21
Outlook for 2013