This is a summary of the January - March 2016 Interim report. The complete January - March 2016 Interim report with tables is attached to this release and available at www.kemira.com/investors.
- Revenue increased 5% to EUR 582.7 million (553.0) mainly due to the acquisition of AkzoNobel's paper chemicals business. Revenue in local currencies, excluding acquisitions and divestments, decreased 2%.
- Operative EBITDA increased 10% to EUR 72.8 million (66.4) with a margin of 12.5% (12.0%).
- Earnings per share were EUR 0.16 (0.16).
- Outlook (unchanged): Kemira continues to focus on profitable growth. Kemira expects its revenue and operative EBITDA to increase in 2016 compared to 2015.
Kemira's President and CEO Jari Rosendal:
"The year started according to our expectations. The Pulp & Paper segment had a strong first quarter with revenue growth and improvement in profitability. The Municipal & Industrial segment maintained its volume growth, and the Oil & Mining segment took actions to mitigate the challenging market environment while maintaining focus on the long-term opportunities. In January-March the Group's revenue increased 5% and operative EBITDA 10%, and resulted an improved EBITDA margin of 12.5%.
In the Pulp & Paper segment, revenue in local currencies, excluding acquisitions and divestments, increased 3%. We had a very good growth in APAC and South America. The operative EBITDA margin of the segment improved for the fourth consecutive quarter to 13%. Strong demand for pulp continues and therefore the timing is excellent for the new sodium chlorate plant in Brazil, which successfully started up in March 2016. In addition, we announced in March the investment in the additional sodium chlorate capacity in Finland, which is expected to be operational during the fourth quarter of 2017.
The Oil & Mining segment continued to face a challenging market in the U.S. shale operations. However, the segment was able to improve its operative EBITDA margin from 5% to 9% compared to the fourth quarter of 2015, which is a good achievement in this market. We have taken actions to protect our existing business and have maintained discipline in cost management. We continue to invest in new applications and promising growth areas, such as Chemical Enhanced Oil Recovery.
In the Municipal & Industrial segment, the volume growth continued at 3%, while sales prices declined leading to a 1% revenue growth in local currencies, excluding acquisitions and divestments. We are overcoming the temporary cost increase in North America, which was due to the disruption caused by a closure of a supplier's site in the fourth quarter of 2015. The operative EBITDA margin improved sequentially and was almost 13%.
We continue to grow and focus on improved profitability through operational improvements, leveraging growth, and capturing synergies. After the first quarter, Kemira is on track to increase its revenue and operative EBITDA in 2016."
KEY FIGURES AND RATIOS
Definitions of key figures are available at www.kemira.com > Investors > Financial information. Comparative 2015 figures are provided in parentheses for some financial results, where appropriate. Operative EBITDA, operative EBIT and operative ROCE do not include non-recurring items.
FINANCIAL TARGETS 2017 AND OUTLOOK for 2016 (unchanged)
Kemira will continue to focus on improving its profitability and cash flow. The company will also continue to invest in order to secure future growth to serve selected water-intensive industries.
The company's financial targets for 2017 are:
- Revenue EUR 2.7 billion
- Operative EBITDA-% of revenue 15%
- Gearing level <60%.
The basis for growth is the expanding market for chemicals and Kemira's expertise that helps customers in water-intensive industries to increase their water, energy and raw material efficiency. The need to increase operational efficiency in our customer industries creates opportunities for Kemira to develop new products and services for both current and new customers. Research and Development is a critical enabler of growth for Kemira, providing differentiation capabilities in its relevant markets.
Outlook for 2016
Kemira continues to focus on profitable growth. Kemira expects its revenue and operative EBITDA to increase in 2016 compared to 2015.
Kemira expects its capital expenditure, excluding acquisitions, to be around EUR 200 million in 2016.
Kemira is a global chemicals company serving customers in water-intensive industries. We provide expertise, application know-how and chemicals that improve our customers' water, energy and raw material efficiency. Our focus is on pulp & paper, oil & gas, mining and water treatment. In 2015, Kemira had annual revenue of EUR 2.4 billion and around 4,700 employees. Kemira shares are listed on the Nasdaq Helsinki Ltd.