Kemira Group

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Kemira Group

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Title: Kemira Group


1
(No Transcript)
2
Kemiras Growth Continuesfrom the Pole
PositionLasse Kurkilahti, President CEOMarch
2006
Investor Relations Päivi Antola, tel. 358 1086
21140
3
Contents
  • Strategy
  • Strategies of the Business Areas
  • Looking Forward

4
  • Strategy

5
Business Areas
Pulp Paper Chemicals
Performance Chemicals
Paints Coatings
Water Treatment Chemicals
6
Revenue 2005, Pro Forma EUR 2.4 Billion
Including Lanxess paper chemicals, Kraski Teks,
Finnish Chemicals and Verdugt for the whole year
(Reported percentage in 2005)
7
Revenue in 2005
MEUR
Total 1,994.4 MEUR, 18 (2004 1,695.1 MEUR)
Continuing operations
8
EBIT in 2005
EBIT by quarter
MEUR
Total 2005 165.5 MEUR, 48 (2004 111.6
MEUR) The pie chart excludes Other and
eliminations.
Continuing operations. Excluding a write-down of
78 MEUR in Q4/02
9
EPS by QuarterROCE

EUR
Continuing operations excluding a non-recurring
charge of 44.2 MEUR in Q4/04. Q4/02 exludes a
write-down of 78 MEUR.
10
Shareholders 28 February 2006
(1 March 2005)
Minimum state ownership 15
11
Shareholder Value
12
Goal
  • A global group of leading chemicals businesses
    with unique positions and high mutual synergy
  • Great profitability, continuous improvement
  • Continuous growth organic and through MA
  • Participative, entrepreneurial company culture
  • ? More ambition, more dynamics

13
Kemira - 1 in the World
Management estimates
14
Building Blocks
  • Divestments
  • - Coil coating (2005)
  • - UK industrial coatings business (2004)
  • - GrowHow (2004)
  • - Fine Chemicals (2004)
  • - Calcium Chloride business (2004)
  • - Ecocat (2004)
  • - Kemira Engineering (2004)
  • - Polargas (2003)

Acquisitions Pulp Paper Chemicals Lanxess
paper chemicals (2006) Finnish Chemicals
(2005) E.QU.I.P (2004) Rhodia (2003)
Vulcan (2003) Kemwater Eaglebrook (2004)
Zlotniki (2004) Belinka (2004) Kemiron
(2003) Performance Chemicals Verdugt
(2005) Paints Coatings Teks (2006)
Kolorit paints (2004)
15
Opportunities for Improved Profitability
  • Streamlining the production network
  • Professional attitude towards customers and
    suppliers
  • Economies of scale, utilizing the leading
    position
  • Internal synergies to use
  • New Sales Ratio up
  • Idle / low productive capital out
  • ? World class internal efficiency

16
Opportunities for Growth
  • Organic growth
  • Extended sales
  • New products
  • Opportunity 5 / year
  • Mergers and acquisitions

17
Opportunities within the Business Areas
  • Pulp Paper Chemicals
  • Implementing consolidation in selected areas
  • Efficiency programs
  • Global market EUR 20 billion, growth 700 MEUR/a
  • Performance Chemicals
  • Applications
  • Customer orientation
  • Global niche market EUR 1.4 billion, growth 100
    MEUR/a

  • Kemwater
  • Implement coagulant strategy with more speed
  • Widen the product portfolio
  • Global target market EUR 8 billion, growth 600
    MEUR/a
  • Paints Coatings
  • Eastern Europe
  • Geographical target market EUR 4 billion, growth
    250 MEUR/a


18
Financial Benchmarks
  • Earnings / share
  • Continuous improvement
  • Cash flow after capital expenditure (excl.
    acquisitions)
  • Positive
  • Return on capital employed
  • gt 20 Great
  • 15 - 20 Good
  • 10 - 15 Acceptable
  • lt 10 Not acceptable
  • ? Basis for incentive systems
  • Growth organic and through MA

19
  • Strategies of the Business Areas

20
Pulp Paper Chemicals after the Lanxess Paper
Chemicals acquisition
  • No 1 pulp paper chemicals supplier in the world
  • Revenue 2005, pro forma 1,050 MEUR (incl.
    Lanxess FC/Q1)
  • Good market position
  • Globally No 1
  • Europe No 2
  • North America No 3
  • Nordic No 1



21
Kemiras Pulp and Paper Chemicals
Paper making
Coating
Pulping Bleaching
Hydrogen Peroxide Sodium Chlorate
Chlorine Dioxide Sodium Borohydride
Caustic Sulphur Products Peracetic
Acid Bleaching Additives Defoamers
Deposit Control Water Treatment
Retention Deposit Control
Defoamers Water Treatment Deinking
Sizing Wet Dry Strength Optical
Brighteners Colourants
Calcium Sulphate Titanium Dioxide
Dispersing Agents Deposit Control
Bleaching Chemicals Specialty Chemicals Pigments
Additives
Lanxess contribution Complementing /
Strengthening
22
Pulp and Paper Chemicals Market is Growing
Total Market EUR 20 billion

BleachingGrowth 2/a
CoatingGrowth 4/a
EUR 5.5 billion
  • Kemiras share
  • Bleaching 8
  • Specialty 8
  • Pigments lt1

EUR 7.7 billion
EUR 6.8 billion
Management estimates. Includes Lanxess paper
chemicals.
Specialty ChemicalsGrowth 5/a
23
Fragmented Market Giving Opportunities for Growth
Company

24
Pulp Paper Chemicals
Revenue
EBIT ROCE
MEUR


MEUR
The figures are not fully comparable due to
changes in the business structure.
25
Kemwater
  • The leading global supplier of coagulation
    chemicals to municipal waterworks solutions for
    the management of industrial waste water and
    sludge
  • Revenue 2005 364 MEUR
  • Leading market position
  • (coagulants)
  • Global No 1
  • North America No 1
  • Europe No 1
  • Nordic No 1



26
Differentiation Drivers / Total Business Potential
  • RD focus (Disinfection, Odourand toxic
    removal)
  • Polymers/specialities
  • SNF
  • Buchman
  • Cytec
  • Degussa

Marketing leverage
EUR 2 billionGrowth rate 5/a
  • Sludge management (organic)

Coagulants(organic/acquisitions)
Package deals
EUR 2 billionGrowth rate 8/a
Raw materials/metals Package deals
EUR 2 billionGrowth rate 4/a
  • Industrial outsourcing (organic/acquisitions)
  • Ondeo
  • Veolia
  • Remondis

EUR 2 billionGrowth rate 15/a
27
Coagulant Consumption
Scandinavia 18 kg/p
Russia 1,5 kg/p
North America 5 kg/p
Europe 5,3kg/p
Asia 1,4 kg/p
Mid East 0,7 kg/p
Central America 1,5 kg/p
Africa 0,6 kg/p
South America 1,5 kg/p
Australia1,4 kg/p
Kilos/Person
28
Main Coagulant Players
Europe
North America
(Management estimates)
29
Kemwater
MEUR
Revenue

EBIT ROCE
MEUR

Q4/04 excluding extra write-downs and costs of 11
MEUR.
The figures are not fully comparable due to
changes in business structure.
30
KIES Concept
Customer core business Value adding process
Raw material
End product
  • Pickling
  • Galvanizing
  • Anodizing
  • Acid regeneration
  • Neutralization
  • Water treatment
  • Caustic
  • Acid
  • Coagulants
  • Flocculants
  • Etc.
  • Regeneration of chemicals
  • Waste effluent treatment
  • Product for sale
  • Effluent streams
  • Landfill
  • Added value processes

KIES concept
Backward integration Chemical knowledge Forward
integration Access to chemicals Inorganic
chemistry and Cost efficient Kemwater
raw separation know how material. Sludge
management
31
Kemicond Process
Centrifuge 30 - 40 DS
Sulphuric acid
Hydrogen peroxide
Polymer
Belt filter press 25 - 35 DS
Sewage sludge 1-6 DS
Chamber filter press 40 - 55 DS
Reaction time gt 1hour pH 4-5 Temp 20C
Screw press 35 - 50 DS
32
Performance Chemicals
  • Leading position in growing specialty chemicals
    markets
  • Revenue 2005 431 MEUR
  • Good market position
  • TiO2 Pigments Leading producer of TiO2 for
    printing inks
  • ChemSolutions No 1 globally in selected customer
    segments
  • Chemidet No 3 globally




33
Global Market Potential
Kemiras position
Market size
Growth/a
  • TiO2 Pigments 7,000 MEUR GDP 7
  • TiO2 pigments for printing ink 200 MEUR 2-5 1
  • FDC (Food, Drugs, Cosmetics,
  • UV-Titan) 200 MEUR 2-10 2-3
  • ChemSolutions
  • Organic Salts 150 MEUR 2-3 1
  • Organic Derivatives 20 MEUR 3-10 1
  • Acidifiers Preservatives 150 MEUR 5-10 1
  • Formic Acid 250 MEUR 3-4 2
  • Chemidet
  • Detergent bleaching solutions 300 MEUR 0-10 3
  • (sodium percarbonate)

34
ChemSolutionsSegments and Market Positions
Management estimates
35
Performance Chemicals
Revenue
EBIT ROCE
MEUR
MEUR

Net sales
The figures are not fully comparable due to
changes in the business structure.
Continuing operations
36
Paints Coatings
  • Leading player in North and East Europe with
    strong local brands (Tikkurila, Alcro, Beckers,
    Vivacolor, etc.)
  • Revenue 2005 458 MEUR
  • Leading market positions
  • in decorative paints
  • Finland No 1
  • Sweden No 1
  • Baltic No 1
  • Poland No 2-3
  • Russia No 1



and industrial paints
37
Paint Consumption in Europe by Area
Consumption per capita highest in Western
Europe Significant growth potential in Eastern
Europe
Population/country million people
Pohjakartta /Geodata Oy, lupa No 1164 /2000
5
145
9
5
7
26
5
17
10
83
39
48
16
11
22
16
31
8
Source Industry sources
38
Decorative Paint Market in Russia
Brands by price segment
Tikkurila, Akzo Nobel, Caparol, ICI
Top
Düfa, Finncolor
Yaroslavskie Kraski, Empils, Teks, Cherkessk,
Zagorsky, Pigment, Odilak, Kotovsky, Raduga
Medium
Low
Source Management estimates
  • Significant growth potential in Russia
  • Population of 145 million people
  • Decorative paint consumption lt 4 litres per
    capita (over 15 litres in Scandinavia)
  • Total size of the Russian paint market
    approximately 450 million litres

39
Paints Coatings
Revenue
EBIT ROCE
MEUR
MEUR

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40
  • Looking Forward

41
Goal
  • A global group of leading chemicals businesses
    with unique positions and high mutual synergy
  • Great profitability, continuous improvement
  • Continuous growth organic and through MA
  • Participative, entrepreneurial company culture
  • ? More ambition, more dynamics

42
Kemira from Good to Great
Performance Strategy
Culture
Brand
We have a strong, participative and
entrepreneurial culture. We will create it
through an open dialogue.
We are regarded as the leading expert in
chemicals solutions. The strong brand
increases our competitiveness.
All our actions lead towards world class
operative efficiency. Our strategy is unique,
sharp and clear. Our work is based on our
strategy every day.
Everyone can influence their work and get
rewarded for good performance. People enjoy
their work at Kemira.
  • Brand Promises
  • Reliable
  • Cooperative
  • Responsible
  • Proactive

43
Outlook for 2006 Kemira Group
  • Kemira Groups full-year revenue, EBIT and EPS
    are estimated to increase on 2005
  • The high prices of energy and raw materials will
    continue to put negative pressure on profits

All forecasts and estimates mentioned in this
report are based on the current judgement of the
economic environment and the actual results may
be significantly different.
44
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