Kemira Oyj’s Financial Statements Bulletin 2024: Continued strong performance in 2024, good volume growth in full year 2024 and Q4 2024

Kemira Oyj’s Financial Statements Bulletin 2024: Continued strong performance in 2024, good volume growth in full year 2024 and Q4 2024

This is a summary of the Financial Statements Bulletin 2024. The complete report with the tables is attached to this release and available at kemira.com/investors.

Q4 2024 performance, unadjusted for the Oil & Gas divestment

• Revenue decreased by 11% to EUR 723.7 million (808.8) due to the divestment of Oil & Gas.

• Operative EBITDA decreased by 17% to EUR 135.0 million (162.7) due to the divestment of Oil & Gas. The operative EBITDA margin decreased to 18.7% (20.1%). EBITDA increased by 127% to EUR 116.5 million (51.3) as the comparison period was impacted by the loss from the divestment of the Oil & Gas business. The differences between operative and reported figures are explained by items affecting comparability, which were mainly related to the new organization and expected underutilization of an energy asset owned via Pohjolan Voima.

• Operative EBIT decreased by 23% to EUR 86.2 million (112.6) due to the divestment of Oil & Gas. EBIT increased by EUR 65.8 million to EUR 67.0 million (1.3) as the comparison period was impacted by the loss from the divestment of the Oil & Gas business. 

• Cash flow from operating activities was strong at EUR 165.4 million (133.3).

• EPS (diluted) increased by 259% to EUR 0.31 (-0.20). The comparison period was impacted by the loss from the divestment of the Oil & Gas business.   

Q4 2024 performance, Oil & Gas divestment adjusted

• The Oil & Gas divestment adjusted revenue increased by 5% to EUR 723.7 million (690.2).  Revenue in local currencies, excluding acquisitions and divestments, increased by 1%, driven by continued strong organic growth in the Industry & Water segment. Kemira's overall sales volumes increased year-on-year, driven by the Industry & Water segment. Sales prices were stable. Sequentially, sales volumes decreased following seasonal trends and sales prices increased.

• The Oil & Gas divestment adjusted operative EBITDA decreased by 10%, to EUR 135.0 million (149.3), mainly due to maintenance shutdowns and timing of miscellaneous fixed costs. The Oil & Gas divestment adjusted operative EBITDA margin was 18.7% (21.6%).

• The Oil & Gas divestment adjusted operative EBIT decreased by 17% to EUR  86.2 million (103.7).

January-December 2024 performance, unadjusted for the Oil & Gas divestment

• Revenue decreased by 13% to EUR 2,948.1 million (3,383.7) due to the divestment of Oil & Gas.

• Operative EBITDA decreased by 12% to EUR 585.4 million (666.7) due to the divestment of Oil & Gas. The operative EBITDA margin increased to 19.9% (19.7), driven by improvement in Industry & Water. EBITDA increased by 2% to EUR 550.7 million (540.0). The differences between operative and reported figures are explained by items affecting comparability, which were mainly related to the new organization and the expected underutilization of an energy asset owned via Pohjolan Voima.

• Operative EBIT decreased by 14%, to EUR 398.7 million (463.0), due to the divestment of Oil & Gas. EBIT increased by 8% to EUR 363.2 million (336.4).

• Cash flow from operating activities was solid, at EUR 484.6 million (546.0). 

• EPS (diluted) increased by 25%, to an all-time high EUR 1.61 (1.28). The comparison period was impacted by the loss from the divestment of the Oil & Gas business.

January-December 2024 performance, Oil & Gas divestment adjusted

• The Oil & Gas divestment adjusted revenue increased by 1% to EUR 2,903.5 million (2,889.0). Revenue in local currencies, excluding acquisitions and divestments, decreased by 1% as revenue declined in the Pulp & Paper segment. Sales volumes increased in both segments. Sales prices decreased, particularly in Pulp & Paper, as sales prices for energy-intensive pulp and bleaching chemicals declined during H1 2024 from an elevated comparison period in H1 2023.

• The Oil & Gas divestment adjusted operative EBITDA was stable at EUR 582.1 million (595.9). The Oil & Gas divestment adjusted operative EBITDA margin was strong, at 20.0% (20.6%).

• The Oil & Gas divestment adjusted operative EBIT decreased by 5% to EUR 395.5 million (415.5).

The Oil & Gas divestment

Kemira divested its Oil & Gas (O&G)-related portfolio on February 2, 2024. All comparisons in this report are made to the comparison period which includes the Oil & Gas-related portfolio. Kemira's 2024 figures include around EUR 45 million of revenue and around EUR 3 million of operative EBITDA from Oil & Gas. Kemira has also presented the Oil & Gas divestment adjusted figures and performance in the relevant parts of the report, which reflect the underlying business performance of Kemira's Pulp & Paper and Industry & Water segments. Kemira's management follows the Oil & Gas divestment adjusted figures. The adjusted figures for the comparison period are also available in a separate stock exchange release, published on February 9, 2024 and on kemira.com/investors.  Kemira's outlook for 2024 includes the Oil & Gas-related portfolio until the closing date of the divestment, February 2, 2024.

Dividend proposal for 2024

The Board of Directors proposes to the Annual General Meeting 2025 a cash dividend of EUR 0.74 per share (0.68), totaling EUR 114 million (104). It is proposed that the dividend be paid in two installments, in April and in November.

Outlook for 2025

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
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:

 "I was pleased with our strong performance in 2024, my first year as Kemira's President & CEO, as our business model continued to show its resilience in a varied market environment. We saw solid growth in the water treatment market whereas the weakness in the pulp & paper market continued during the year. Kemira's adjusted revenue reached EUR 2,904 million in 2024 and we saw good volume growth in both segments. Our organic revenue growth was slightly negative as sales prices in the Pulp & Paper segment declined in H1 2024 from an elevated comparison period before stabilizing in H2 2024. However, we had good organic revenue growth in the Industry & Water segment, particularly in H2 2024. Profitability remained strong and the 2024 adjusted operative EBITDA margin was 20.0%, with good performance in both segments. Cash flow was solid during the year, leading to a record-strong balance sheet. In Q4 2024, we saw continued volume growth and sequentially higher sales prices providing a solid foundation for 2025.     

We took further steps on our profitable growth strategy during the year. We announced our new long-term financial targets during 2024 and we are now aiming for more than 4% organic growth on average while retaining operative EBITDA within 18-21% and operative ROCE above 16%. During the year, we announced several investments and one acquisition as part of our growth strategy. Our new operating model, announced in August 2024, has been operational since January 2025. We are confident that the new organization will better enable us to capture market growth opportunities as we move forward. As of Q1 2025, we will start reporting in line with our new business unit structure: Water Solutions, Packaging & Hygiene Solutions and Fiber Essentials. We will provide more financial information on the new business units during Q1 2025.

The pulp & paper market remained soft during 2024 in all regions due to the weak macroeconomic environment and slower growth in China. While Q4 continued to be soft, we expect the market to start to improve during 2025. Despite the challenging market conditions, the performance of our Pulp & Paper segment, particularly in terms of profitability, was solid during 2024. We had good sales volume growth in 2024 and sales prices stabilized during Q4 2024. The segment's operative EBITDA margin was almost unchanged, at 18.4% in 2024, clearly illustrating the integral nature of our products in our pulp and paper customers' value chain.

We saw solid growth in the Industry & Water end markets across regions, particularly in municipal water treatment. This was also visible in our revenue as we saw good organic revenue growth during the year. Organic growth was particularly strong during Q3 and Q4. Profitability remained strong during the year and the adjusted operative EBITDA margin was above 22%. The last quarter of the year is typically seasonally lower in terms of demand and the Q4 2024 operative EBITDA was also impacted by maintenance shutdowns and timing of miscellaneous fixed costs. During the year, we took several steps as part of our ambition to double revenue in water: we announced several expansion investments and also took our first steps in  the micropollutants removal market with an acquisition in the United Kingdom.

In light of the continued strong performance of 2024, the Board of Directors is proposing to increase the dividend to EUR 0.74 per share, to be paid in two installments. We look ahead at 2025 with confidence thanks to our dedicated employees and our resilient business model. Our view is supported by healthy market growth expectations in Water Solutions and a recovery in the pulp, packaging and hygiene markets. In 2025, we expect revenue to be between EUR 2,800 and 3,200 million and operative EBITDA to be between EUR 540 and 640 million. I want to thank all our stakeholders: our customers, suppliers, shareholders and employees for another successful year."

KEY FIGURES AND RATIOS

*12-month rolling average

Unless otherwise stated, all comparisons in this report are made to the corresponding period in 2023.

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.

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

Annual Report 2024                                                                   February 21, 2025
Interim report January-March 2025                                            April 25, 2025
Half-year financial report January-June 2025                            July 18, 2025
Interim report January-September 2025                                    October 24, 2025

The Annual General Meeting is scheduled for Thursday, March 20, 2025.

Webcast and conference call for analysts, investors and media 

Kemira will arrange a webcast for analysts, investors and the media on Tuesday, February 11, 2025, starting at 1.00 pm EET (11.00 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: https://palvelu.flik.fi/teleconference/?id=50050255

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 a 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