Kemira Oyj, Interim Report, April 25, 2025 at 8.30 am (EEST)
Kemira Oyj's January-March 2025 Interim Report: Solid profitability in a softer market environment
This is a summary of the January-March 2025 Interim Report. The complete report with the tables is attached to this release and available at kemira.com/investors.
Q1 2025 performance*
- Revenue decreased by 1%, to EUR 708.8 million (718.8*). Revenue in local currencies, excluding acquisitions and divestments, decreased by 2%, with stable performance in Water Solutions and Fiber Essentials partly offsetting a decline in Packaging & Hygiene Solutions. Overall sales volumes were rather stable year-on-year, while sales prices decreased slightly. Sequentially, sales volumes decreased following soft market development and sales prices were stable.
- Operative EBITDA decreased by 15%, to EUR 135.5 million (159.2*), mainly due to lower sales prices. The operative EBITDA margin was 19.1% (22.2%). EBITDA decreased by 13%, to EUR 134.6 million (154.1).
- Operative EBIT decreased by 25%, to EUR 85.6 million (114.4*).
* Oil & Gas divestment adjusted
Reported performance (Including the Oil & Gas business in the comparison period in Q1 2024)
- Revenue decreased by 7%, to EUR 708.8 million (763.3).
- Operative EBITDA decreased by 17%, to EUR 135.5 million (162.5). The operative EBITDA margin was 19.1% (21.3%). EBITDA decreased by 13%, to EUR 134.6 million (154.1). The differences between operative and reported figures are explained by items affecting comparability.
- Operative EBIT decreased by 27%, to EUR 85.6 million (117.6). EBIT decreased by 22%, to EUR 84.7 million (109.2).
- Cash flow from operating activities decreased to EUR 55.0 million (97.7).
- EPS (diluted) decreased by 23%, to EUR 0.38 (0.49).
The Oil & Gas divestment
Kemira divested its Oil & Gas (O&G) -related portfolio on February 2, 2024. The comparison period in Q1 2024 includes around EUR 45 million of revenue and around EUR 3 million of operative EBITDA from Oil & Gas. Kemira has presented the Oil & Gas divestment adjusted figures and performance in the relevant parts of the report. The adjusted figures reflect the current performance of Kemira's business units and Kemira's management follows the Oil & Gas divestment adjusted figures.
Outlook for 2025 (unchanged)
REVENUE
Kemira's revenue is expected to be between EUR 2,800 and EUR 3,200 million in 2025 (reported 2024 revenue: EUR 2,948.1 million).
OPERATIVE EBITDA
Kemira's operative EBITDA is expected to be between EUR 540 and EUR 640 million in 2025 (reported 2024 operative EBITDA: EUR 585.4 million)
ASSUMPTIONS BEHIND THE OUTLOOK (SPECIFIED)
The increased global economic uncertainty is expected to result in softer volume demand in Kemira's end-markets. The uncertainty is expected to impact the packaging market in particular, while the water treatment market is expected to grow in all regions. In a weaker macroeconomic setting, the raw material environment is expected to remain rather stable as a whole. The outlook assumes no major disruptions to Kemira's manufacturing operations, to the supply chain or to Kemira's energy-generating assets in Finland. The outlook assumes some weakening of the US dollar compared to year-end rate.
PREVIOUS ASSUMPTIONS BEHIND THE OUTLOOK (PUBLISHED ON FEBRUARY 11, 2025)
Kemira's end-market demand (in volumes) is expected to grow slightly during the year. The water treatment market is expected to grow in all regions. Both the pulp and the packaging and hygiene markets are expected to start to recover. Input costs are expected to be stable or to increase slightly. The outlook assumes no major disruptions to Kemira's manufacturing operations, to the supply chain or to Kemira's energy-generating assets in Finland. Foreign exchange rates are expected to remain at approximately current levels.
Kemira's President & CEO, Antti Salminen:
"Uncertainty in the global economy has increased since the start of the year, following the increased threat of a global trade war. Kemira's business model is resilient and we predominantly operate locally, close to our customers. Water Solutions is resilient throughout cycles, whereas Packaging & Hygiene Solutions is more exposed to economic cycles. The evolving tariff landscape will create uncertainty for some of our customers, particularly in packaging, also negatively impacting the demand for our solutions. Following this increased uncertainty, the operating environment in Q1 2025 was mixed. The water treatment market continued to grow slightly, whereas the packaging, hygiene and pulp markets remained soft during the quarter, particularly in APAC and in North America.
Our financial performance during the first quarter was two-fold: we saw solid profitability while revenue was impacted by sluggish demand in packaging. Our organic growth was -2%, with stable demand in Water Solutions and Fiber Essentials partially offsetting lower demand in Packaging & Hygiene Solutions. Our overall sales volumes were rather stable, while sales prices decreased slightly year-on-year. Sequentially, sales volumes decreased and sales prices were stable. The operative EBITDA margin was solid, at 19.1%, within our financial target range of 18-21%. Our balance sheet continues to be strong which provides us with flexibility in an uncertain market environment.
In Water Solutions, our performance was once again robust. Organic growth was stable, with slight volume growth. Sequentially, sales prices increased. The operative EBITDA margin was strong at above 21% during the quarter. Water Solutions has consistently delivered above 20% margins and is a strong backbone for Kemira. In Packaging & Hygiene Solutions, the soft market continued to burden the business unit's performance. Organic growth was -6%, due to continued weakness in China and a softer market environment in North America. The business unit's operative EBITDA margin of 12% is clearly below the Group's financial target range of 18-21% and we are therefore looking at ways to improve business unit profitability. In Fiber Essentials, organic growth was stable, with volumes growing year-on-year and also sequentially. The operative EBITDA margin was strong at above 26% illustrating the strong fundamentals of the business unit.
We took several steps on our growth journey during the first quarter of 2025. Our new operating model came into force on January 1, 2025 and we now operate with three business units. The new structure clarifies our strategic focus as each business unit has a clear role within the portfolio. Our aim is to double the revenue in Water Solutions and in Packaging & Hygiene Solutions we are aiming to transform the business more towards packaging and tissue whilst at the same time improving profitability. The Fiber Essentials business unit, on the other hand, focuses on maximizing cash flow and looking at selective growth opportunities.
We have continued to make progress with our profitable growth strategy this year. In March, we announced a manufacturing joint venture with IFF to produce renewable products on a commercial scale. This unique platform will strengthen our renewable offering and our market position and is an important step for our renewable solutions strategy. The total investment is around EUR 130 million and our ownership in the joint venture is 50%. In addition, we announced a bolt-on acquisition in Water Solutions in early April. We are expanding in North America by acquiring an iron coagulants business in the United States.
Looking ahead and following the increased economic uncertainty, we concentrate on things we can influence: retaining high customer satisfaction and increasing our focus on cost control. Our resilient business model brings us stability and predictability, which enables us to also invest in organic and inorganic growth opportunities as they arise. For 2025, we have kept our outlook unchanged and we expect revenue to be between EUR 2,800 and 3,200 million and operative EBITDA to be between EUR 540 and 640 million."
KEY FIGURES AND RATIOS
| EUR million | Jan-Mar | Jan-Mar | Jan-Dec | |
| 2025 | 2024 | 2024 | ||
| Revenue | 708.8 | 763.3 | 2,948.1 | |
| Revenue, O&G divestment adjusted | 708.8 | 718.8 | 2,903.5 | |
| Operative EBITDA | 135.5 | 162.5 | 585.4 | |
| Operative EBITDA, O&G divestment adjusted | 135.5 | 159.2 | 582.1 | |
| Operative EBITDA, % | 19.1 | 21.3 | 19.9 | |
| Operative EBITDA %, O&G divestment adjusted | 19.1 | 22.2 | 20.0 | |
| EBITDA | 134.6 | 154.1 | 550.7 | |
| EBITDA, % | 19.0 | 20.2 | 18.7 | |
| Operative EBIT | 85.6 | 117.6 | 398.7 | |
| Operative EBIT, O&G divestment adjusted | 85.6 | 114.4 | 395.5 | |
| Operative EBIT, % | 12.1 | 15.4 | 13.5 | |
| Operative EBIT %, O&G divestment adjusted | 12.1 | 15.9 | 13.6 | |
| EBIT | 84.7 | 109.2 | 363.2 | |
| EBIT, % | 12.0 | 14.3 | 12.3 | |
| Net profit for the period | 61.7 | 79.0 | 262.7 | |
| Earnings per share, diluted, EUR | 0.38 | 0.49 | 1.61 | |
| Capital employed* | 1,921.5 | 2,092.9 | 1,920.1 | |
| Capital employed*, O&G divestment adjusted | 1,921.5 | 1,874.2 | 1,920.1 | |
| Operative ROCE*, % | 19.1 | 21.0 | 20.8 | |
| Operative ROCE, %, O&G divestment adjusted | 19.1 | 21.6 | 20.6 | |
| ROCE*, % | 17.6 | 14.9 | 18.9 | |
| Cash flow from operating activities | 55.0 | 97.7 | 484.6 | |
| Capital expenditure excl. acquisition | 27.5 | 26.2 | 167.3 | |
| Capital Expenditure excl. Acquisitions, O&G divestment adjusted | 27.5 | 26.2 | 167.3 | |
| Capital expenditure | 27.6 | 26.2 | 170.5 | |
| Cash flow after investing activities | 75.6 | 178.9 | 411.8 | |
| Equity ratio, % at period-end | 53 | 47 | 53 | |
| Equity per share, EUR | 10.96 | 10.29 | 11.59 | |
| Gearing, % at period-end | 13 | 23 | 16 |
*12-month rolling average
Unless otherwise stated, all comparisons in this report are made to the corresponding period in 2024.
Kemira provides certain financial performance measures (alternative performance measures) that are not defined by IFRS. Kemira believes that alternative performance measures followed by capital markets and by Kemira management, such as revenue growth in local currencies, excluding acquisitions and divestments (=organic growth), EBITDA, operative EBITDA, operative EBIT, cash flow after investing activities and gearing provide useful information on Kemira's comparable business performance and financial position. Selected alternative performance measures are also used as performance criteria in remuneration.
Kemira's alternative performance measures should not be viewed in isolation from 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 report have been individually rounded and consequently the sum of the individual figures may deviate slightly from the total figure presented.J
Financial targets
On September 25, 2024, Kemira announced that its Board of Directors had approved the company's updated, long-term financial targets. Kemira's target for average annual organic growth has been changed to over 4% (previously: above the market growth) and the operative EBITDA margin target has been increased to 18-21% (previously 15-18%). Operative ROCE of over 16% has been added as the third, new target.
Financial reporting schedule 2025
Half-year financial report January-June 2025 July 18, 2025
Interim report January-September 2025 October 24, 2025
Webcast and conference call for analysts, investors and media
Kemira will arrange a webcast for analysts, investors and the media on Friday, April 25, 2025, starting at 10.30 am EEST (8.30 am UK time). During the webcast, Kemira's President & CEO Antti Salminen and CFO Petri Castrén will present results. The webcast will be held in English and can be followed at kemira.com/investors. The presentation material and a recording of the webcast will be available on the above-mentioned company website.
You can attend the Q&A session via conference call. You can access the teleconference by registering on the following link: via conference call. You can access the teleconference by registering on the following link: https://palvelu.flik.fi/teleconference/?id=50050256
After registration you will be provided with phone numbers and a conference ID to access the conference. If you wish to ask a question please dial *5 on your telephone keypad to enter the queue.
For more information, please contact:
Kemira Oyj
Mikko Pohjala, Vice President, Investor Relations
Tel. +358 40 838 0709
mikko.pohjala@kemira.com
Kemira is the global leader in sustainable chemical solutions for water-intensive industries. We deliver tailored products and services to improve the product quality, processes, and resource efficiency of our diverse range of customers. Our focus is on water treatment, as well as on fiber and renewable solutions - enabling sustainability transformation for our customers. In 2024, Kemira reported annual revenue of EUR 2.9 billion with a global team of some 4,700 colleagues. Kemira is listed on the Nasdaq Helsinki www.kemira.com
