Economic Responsibility 

By the end of 2010, Kemira achieved most of its financial goals. Strong profitability fosters growth in both mature and emerging markets.

In 2008, Kemira’s Board of Directors set five financial goals for the company. These goals were further specified in September 2010.

“We have now achieved three of the five goals. Cash flow after investments and dividends is positive. Return on capital employed has improved continually. In addition, we have reached the lower end of our targeted gearing level of 40 to 60 percent,” says Jyrki Mäki-Kala, Chief Financial Officer of Kemira.

Additionally, in Kemira’s revenue and operating profit percentage targets, the company has progressed well. The operative EBIT rose to about 7.5 percent in 2010 (2009: 6.3 %).

The company reached its goal of five percent organic growth during 2010. Mäki-Kala believes that organic growth will continue to improve with the implementation of its water strategy. “Research and development, as well as the various business operations, will create new products, expertise and applications that will spur growth.”

Kemira’s growth target was revised and divided into two in September 2010. In mature markets, mainly in Europe and North America, Kemira is seeking revenue growth of at least three percent. In the emerging markets of Asia, South America and Russia, its minimum goal for revenue growth is seven percent. “We want to grow in highly active markets. Mature markets are still important, but growth in these markets corresponds to general economic growth,” Mäki-Kala points out.

Solid foundation for growth

In the last quarter of 2010, Kemira completed its extensive cost-savings program, which was launched in the summer of 2008. The program helped Kemira save EUR 60 million in fixed costs. “This program, which required great effort from Kemira’s personnel, helped the company improve profitability and cash flow. It also introduced a new perspective on cost structure,” says Mäki-Kala.

Kemira further improved its balance sheet by issuing new shares in late 2009 and listing Tikkurila’s shares in March 2010. According to Mäki-Kala, a strong balance sheet allows for flexible implementation of Kemira’s strategy. It also enables organic growth as well as growth through acquisitions. In line with its strategy, Kemira has made significant investments in research and product development as well as in expansion to new geographic areas.

“In order to reach our strategic goals, we need to gain a stronger foothold in Asia and South America, the two markets where the demand for water expertise is growing the fastest in the world. On both continents, water shortages and the related municipal and industrial problems call for more effective solutions.”

Kemira pays taxes and other fees to 40 countries, with obligations to 10 financial institutions. Based on a conservative estimate, Kemira has a financial responsibility towards approximately 100,000 representatives of different interest groups. This includes around 5,000 employees and their families, 30,000 shareholders and 10,000 customers, as well as approximately 30,000 suppliers.

“A great number of people and companies trust that Kemira will bear its financial responsibility. This requires profitable business operations. Only a profitable company can help its customers succeed, be a reliable partner, increase share value and offer an inspiring work environment to its employees,” Mäki-Kala sums up.