Outlook and financial targets

Outlook for 2020

(updated July 17, 2020)

Kemira provided an outlook for H2 2020 on July 17, 2020: Operative EBITDA in H2 2020 expected to be lower than in H1 2020

OUTLOOK FOR JULY-DECEMBER 2020
Operative EBITDA in H2 2020 is expected to be lower than in H1 2020 (H1 2020: EUR 214 million).

Assumptions behind Kemira’s outlook for July-December 2020:
Overall demand in Kemira’s end markets in H2 2020 is expected to be approximately at the same level as in Q2 2020. Demand in Pulp & Paper is expected to remain approximately at the Q2 2020 level, with printing and writing demand to remain weak. Also in Industry & Water, demand is expected to remain approximately at the Q2 2020 level. The shale market is not anticipated to recover in 2020.

Kemira’s outlook for H2 2020 assumes no significant disruptions to Kemira’s manufacturing operations or supply chain.

Previous outlook (published April 27, 2020):
On April 27, 2020, Kemira withdrew its outlook for 2020 due to the uncertainty following the COVID-19 pandemic and the oil price drop.

Kemira’s financial targets
Revenue Above-the-market revenue growth
Operative EBITDA margin 15-17%
Gearing level​ below 75%​

Definitions of key figures

  1. Operative EBITDA
    Operating profit (EBIT) + depreciation and amortization + impairments – items affecting comparability

    Items affecting comparability 1)
    Restructuring and streamlining programs + transaction and integration expenses in acquisitions + divestment of businesses and other disposals + other items

    Operative EBIT
    Operating profit (EBIT) – items affecting comparability

    Interest-bearing net liabilities
    Interest-bearing liabilities – cash and cash equivalents

    Equity ratio, %
    Total equity x 100                             
    Total assets – prepayments received

    Gearing, %
    Interest-bearing net liabilities x 100
    Total equity

    Interest cover
    Operating profit + depreciation, amortization and impairments
    Finance costs, net

    Return on investment (ROI), %
    (Profit before taxes + interest expenses + other financial expenses) x 100
    (Total assets –  non-interest-bearing liabilities)2)

    Return on equity (ROE), %
    Net profit attributable to equity owners of the parent x 100
    Equity attributable to equity owners of the parent 2)

    Cash flow return on investment (CFROI), %
    Net cash generated from operating activities  x 100
    (Total assets – interest-free liabilities)2)

    Cash flow after investing activities

    Net cash generated from operating activities + net cash used in investing activities

    Operative return on capital employed (OPERATIVE ROCE), %
    Operative EBIT + share of profit or loss of associates x 100 3)
    Capital employed 4)5)

    Return on capital employed (ROCE), %)
    Operating profit + share of the results of associates x 1003)
    Capital employed 4) 5)

    Capital turnover
    Revenue                    
    Capital employed 4) 5)

    Interest-bearing net liabilities / EBITDA
    Interest-bearing net liabilities
    Operating profit (EBIT) + depreciation and amortization +, impairments

    Net financial cost, %
    (Finance costs, net – dividend income – exchange rate differences) x 100
    Interest-bearing net liabilities 2)

    Net working capital
    Inventories + trade receivables + other receivables, excluding derivatives, accrued interest income and other financing items – trade payables – other liabilities, excluding derivatives, accrued interest expenses and other financing items

    1) Non-GAAP measures excludes the effects of significant items of income and expenses which may have an impact on the comparability in the financial reporting of Kemira Group. Restructuring and streamlining programs; transaction and integration expenses in acquisition; divestments of businesses and other disposals are considered to be the most common items affecting comparability.
    2) Average
    3) Operating profit and share of profit or loss of associates taken into account for a rolling twelve month period ending at the end of the review period.
    4) 12-month rolling average
    5) Capital Employed = property, plant and equipment + intangible assets + net working capital + investments in associates

  2. Earnings per share (EPS)
    Net profit attributable to equity owner of the parent
    Average number of shares

    Net cash generated from operating activities per share
    Net cash generated from operating activities
    Average number of shares

    Dividend per share
    Dividend paid
    Number of shares

    Dividend payout ratio, %
    Dividend per share x 100
    Earnings per share (EPS)

    Dividend yield, %
    Dividend per share x 100
    Share price

    Equity per share
    Equity attributable to equity owners of the parent
    Number of shares

    Share price, year average
    Shares traded (EUR)
    Shares traded (volume)

    Price per earnings per share (P/E)
    Share price                     
    Earnings per share (EPS)

    Price per equity per share
    Share price                                                                           
    Equity per share attributable to equity owners of the parent

    Price per net cash generated from operating activities per share
    Share price                                                                   
    Net cash generated from operating activities per share

    Share turnover, %
    Number of shares traded x 100
    Average number of shares

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