Kemira well underway to return to profitable growth Kemira Capital Markets Day Wolfgang Büchele President and CEO

Transcription

1 Kemira well underway to return to profitable growth Kemira Capital Markets Day 2012 President and CEO

2 Three strategic priorities for achieving profitable growth Improving efficiency Simplicity Substantially growing and strengthening emerging market presence Further sharpen the strategy strengthening focus on WQQM* EBIT >10% Growth above market average *Water quality and quantity management 2

3 Launching Fit for Growth to address deteriorating profitability Kemira group revenue and operative EBIT margin trend MEUR % % 6.9 % % 6.3 % 6.3 % Q111 Q211 Q311 Q411 Q112 Q212 3

4 Leaner organization driving accelerated growth Less organizational levels accelerate decision making Clearly defined roles foster agility Strategic leadership CEO Segment head P&L responsibility EMEA NAFTA SA APAC Regional Business Units will assume operational business responsibilities including full P&L responsibility. Most business decisions will be taken on regional level closer to customers. 4

5 EBIT 10% margin achieved through Fit for Growth restructuring EUR 60 million cost savings 1. Redundancies and leaner organization will contribute 50% to the savings 2. Manufacturing network consolidation: 35% 3. Leaner operation: 15% Reported between Q Q2 2013: Restructuring charges of EUR 85 million EUR 35 million cash cost, mainly for redundancy payments EUR 50 million in write-downs 5

6 1. Co-determination negotiations largely finalized by end September, 2012 Up to 600 employees affected, of which up to 500 in EMEA, and up to 100 in NAFTA New organization operational as of October 1, 2012 Four segments to be reported as of January 1, 2013 Management Board Business Regions - EMEA, NAFTA, SA and APAC Segment Paper Segment M&I Segment O&M Segment Chem Solutions 6

7 2. Consolidating our manufacturing network 74 sites is not adequate for EUR 2.2 billion in revenue Site categorization started to enable consolidation of the manufacturing network - Minimizing manufacturing cost and increasing efficiency through hubs - Access to key raw materials determines future plant locations - Currently 14 sites under review Europe North America Germany Spain South America Asia Pacific Coagulants Polymers Common process chemicals and Paper wet-end chemicals India Nanjing Bleaching chemicals New production sites under construction 7

8 3. Reducing complexity and increased standardization results in leaner operation Process improvements reduce complexity and reduce cost Improved customer segmentation to increase profitability Utility related cost savings - EUR 5 million expected to be saved by improved energy efficiency Reduced logistics and maintenance cost - Fewer but larger transactions through efficient channel management - Reduced inventory Kemira produces >5,000 SKUs* in total 90% of sales generated by ~1,000 SKUs Kemira works with >12,000 customers 90% of sales derived from ~2,200 customers *SKU = stock-keeping unit 8

9 Sharpened strategy will enable accelerated growth August 2012 Initial strategic considerations November 2012 Strategic agenda Board of Directors approval, March 2013 Sharpened Strategy 2020 Market and competition Segments Regions R&D M&A strategy Proposed future strategy Risks and contingency plans Strategic roadmap including detailed measures Strategic business plan 9

10 Kemira s playing field has largerly been defined Growing concern about the environment Water scarcity coupled with increasing usage Growing demand for energy, metals and minerals Water market EUR 500 billion* WQQM market EUR 166 billion* Accessible market EUR 26 billion*, based on current business portfolio** *2011 figures. Management estimate based on various sources **Paper, M&I, O&M, ChemSolutions 10

11 Kemira has clear competitive advantages Further portfolio renewal and efficiency improvements still required Accessible market (based on current Kemira portfolio) EUR 26 billion, CAGR : 3.3% Kemira market share in 2011: 8.5% WQQM process chemicals*, 40% of Kemira revenue Water treatment chemicals**, 38% of Kemira revenue 22% of Kemira revenue is non-wqqm related Kemira strengths in its accessible market: 1. Leading global supplier to the paper industry with long-term commitment. 2. Capability to tailor products and applications to customers needs based on innovation and profound manufacturing capabilities. 3. Strong innovation platform. 4. High quality products and reliable supplier. *Process chemicals: Chemicals used to improve efficient water use in manufacturing processes, or to ensure process stability or to improve yield of natural resources or biomass based materials **Water treatment chemicals: Chemicals used within the water cycle from collection, treatment, distribution through to wastewater treatment and reuse 11

12 All segments have a clear, defined role within Kemira s portfolio Paper: Strong position and product portfolio; potential to drive growth in SA via Pulp and in APAC via Paper chemicals, and improve profitability by participating in the market consolidation in EMEA and NAFTA. Municipal & Industrial: Strong position in standard water treatment chemicals in EMEA and NAFTA. Growth and long term sustainable position in emerging markets requires investment into significant portfolio renewal. Oil & Mining: Strong profitable growth in mature markets and fast penetration into additional geographical areas (SA, MEA and APAC), and into complementary chemical products. ChemSolutions: Profitability improvement through product mix optimization. Option to further drive efficiency and value creation through highly streamlined formic acid driven business model. 12

13 Well established in a competitive market Leading market position in its accessible market Paper and pulp markets are consolidated, Kemira has strong market position and is committed to this business. Kemira has the capability to further increase its market share in the growing oil & gas market. Consolidation is likely to continue The market consists of eight global players* and numerous local players. Despite the competition, oil & gas commands the highest margin within Kemira s portfolio, supported by latest technology and R&D driven innovation. Kemira determined to grow above market by focusing on fast growing regional subsegments, especially in the emerging markets. Total market share** of biggest players Pulp Industrial Paper ChemSolutions Municipal Oil & Mining 5 competitors 6 competitors 5 competitors 3 competitors Fragmented competition 7 competitors 0% 20% 40% 60% 80% 100% Kemira Major competitors *Kemira, Ecolab, BASF, Clariant, SNF, Ashland, GE Water, AkzoNobel **2011 figures. Management estimate for Kemira s accessible markets 13

14 Strong market growth with Oil & Gas as well as in APAC and SA B % 2-3% B B B B % 6-7% B B B % 1-2%* Market CAGR GDP CAGR Accessible market total: Paper Pulp Oil & Gas Mining Municipal 5.0% 6-7% 2011: 26 B 2020: 35 B 3.3% 3.4% Industrial ChemSolutions 14 Source: Management estimation based on various sources. *Eurozone GDP

15 Research & Development is a critical enabler for organic growth and further differentiation Key competence areas: Water quality and quantity management 350 scientists working in R&D R&D spending 1.8% of group revenues in 2011 Strong IP portfolio: 330 patent families, 1350 patents Global R&D with four centers: Espoo (FIN), Atlanta (US), Shanghai (China), Sao Paulo (BRZ) Focus on wet-end and biomass value chain based offerings. Chemicals to improve bioprocesses, membrane technology and water reuse. Products and applications for unconventional sources of oil & gas recovery as well as mining. Manufacturing technology improvement and analytics. 15

16 Selected M&A opportunities looked at especially in the growth markets as well as to enter new competencies Immediate focus is on Fit for Growth M&A criteria for future growth - Strengthen our market position and/or competencies - EBIT accretive in second full year after closing Strengthen portfolio - Smaller acquisitions to gain stronger position in the defined growth sub-segments - Larger acquisitions will only be assessed once the sharpened strategy is finalized and Fit for Growth has been fully implemented 16

17 Kemira roadmap and up to 2020 Clear direction to achieve sustainable profitable growth FIT Restructuring - Fit for Growth A cost reduction Complexity reduction 10% EBIT margin GROWTH Sharpening the strategy Strengthen focus on WQQM* Strengthen position in emerging markets Growth above market average *Water quality and quantity management 17

18 We will deliver profitable growth Jyrki Mäki-Kala, CFO, President and CEO Jukka Hakkila, Group General Counsel Petri Helsky, Paper Hannu Virolainen, M&I Randy Owens, O&M Frank Wegener, ChemSolutions Hilton Casas de Almeida, SA Heidi Fagerholm, CTO Antti Salminen, SCM Eeva Salonen, HR Joe Chan, APAC 18

19 DISCLAIMER This presentation contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or our future financial performance, including, but not limited to, strategic plans, potential growth, planned operational changes, expected capital expenditures and future cash sources and requirements, that involve known and unknown risks, uncertainties and other factors that may cause Kemira Oyj s or its businesses actual results of operations, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In some cases, such forward-looking statements can be identified by terminology such as may, will, could, would, should, expect, plan, anticipate, intend, believe, estimate, predict, potential, or continue, or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the forward-looking statements contained in this presentation, possibly to a material degree. All forward-looking statements made in this presentation are based on information presently available to management and Kemira Oyj assumes no obligation to update any forward-looking statements, unless obligated to do so under applicable law or regulation. 19