11/1/2023

Strategy and business model

Kemira strategy towards 2030

Sustainability transformation driving profitable growth – by the end of 2030 over 500 million of our revenue will come from renewable solutions portfolio.



Kemira is a global leader in sustainable chemical solutions for water intensive industries.



We enable more sustainable processes and products for our customers



We aim for
long-term growth



We continue to drive profitability and operational excellence

RESILIENT BUSINESS MODEL

Kemira has a resilient business model that is supported by a well-diversified customer base.

Majority of contracts with fixed annual pricing

Pulp & Paper – Contract types and pricing terms*
Length – Around 95% of contracts are 1-year or longer / only 5% are spot deals
Pricing – Around 65% fixed / 35% formula or spot pricing

Industry & Water – Contract types and pricing terms*
Length – Around 70% of contracts are 1-yr or longer / 30% spot deals
Pricing – Around 70% fixed (particularly in municipal) / 30% formula or spot pricing, incl. Oil & Gas where contracts are either formula or spot based

*contract length does not necessarily correlate with fixed pricing. Kemira has a number of multi-year contracts that are based on formula pricing.

Customer concentration: Kemira has around 5,000 customers with the largest single customer accounting for 5% of revenue. 50 largest customers account for around 50% of revenue.

STRONG PROFITABILITY IMPROVEMENT STORY

In recent years, one of Kemira’s key strategic focus areas has been to improve profitability. Proactive action have been taken on three fronts: improving customer profitability (e.g. customer-level reporting and pricing actions), efficiency of operations (e.g. investments in backward integration and cost savings actions) and simplification of product portfolio and product mix.

As a result, Kemira’s margins have improved clearly. Kemira updated its financial targets in November 2020 and increased its operative EBITDA margin target to 15-18% (previously 15-17%).

 

Strategic review

Kemira announced a strategic review of its Oil & Gas business

Kemira will evaluate the strategic options for its Oil & Gas business, including a potential sale of the business. Kemira will provide updates on the progress of the strategic review in due course. The announced strategic review will have no impact on Kemira's operational activities. Kemira's outlook for 2023 is based on Kemira's existing portfolio, including the Oil & Gas business.

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Strengthening the foundation and improving profitability

Increasing focus on growth

After several years of focusing on profitability improvement, Kemira is placing stronger emphasis on profitable growth. Growth is increasingly expected to come from water treatment applications (organically or inorganically) as well as from renewable solutions.

Sustainability and renewable solutions playing an increasingly important role for Kemira’s future growth

Kemira aims to expand its renewable solutions portfolio clearly to reach EUR 500 million in revenue by the end of 2030. Several partnerships have been announced, one with Danimer to develop renewable barrier coatings applications and one with International Flavors and Fragrances to commercialize their sugar-based raw material for Kemira’s end-market applications.