Kemira Oyj's Interim Report January-March 2019

Strong earnings improvement in the first quarter of 2019 - Seite 2

In Industry & Water, our Oil & Gas revenue grew organically 26% even as the short-term market growth moderated somewhat. Margins in Oil & Gas were good due to pricing and the product mix. In water treatment the market is solid and we are better positioned to meet continued inflationary pressures. The combination of higher sales prices and favorable short-term raw material price fluctuations led to a record-high operative EBITDA margin of 16.8% for the segment in the quarter. During the quarter, some supply disruptions occurred regarding a key polymer raw material. However, our production did not suffer thanks to rapid mitigating actions, but some impact is expected in the second quarter due to higher raw material and logistic costs. With regard to growth investments, we expect to add Chemical Enhanced Oil Recovery polymer capacity in the second half of the year.

All in all, our business is proceeding according to our strategy. We continue to drive for higher profitability and we implement measures to support that." 

KEY FIGURES AND RATIOS

Kemira adopted IFRS 16 accounting standard on January 1, 2019. In the profit and loss statement, the current operating lease expenses are replaced by the depreciation of the right-of-use asset and interest cost associated with lease liability. As a result, it is estimated that the impact on EBIT is small positive and net profit is immaterial in 2019. Kemira currently estimates that the adoption of IFRS 16 accounting standard increases EBITDA margin by approximately 1 percentage point and gearing by approximately 10 percentage points. In 2019, the impact on operative EBITDA due to the adoption of IFRS 16 accounting standard is estimated to be around EUR +30 million. The prior year's figures are not restated. Key figures (except revenue and capital expenditure) of profit and loss statement, balance sheet and cash flow have been impacted by the adoption of the IFRS 16 accounting standard. See pages 28-29 for more details.

EUR million	Jan-Mar 2019	Jan-Mar 2018	Jan-Dec 2018
Revenue	647.8	613.7	2,592.8
Operative EBITDA	95.6	69.4	323.1
Operative EBITDA, %	14.8	11.3	12.5
EBITDA	92.5	68.2	314.8
EBITDA, %	14.3	11.1	12.1
Operative EBIT	50.1	33.9	173.8
Operative EBIT, %	7.7	5.5	6.7
EBIT	47.0	32.7	148.2
EBIT, %	7.3	5.3	5.7
Net profit for the period	29.3	23.0	95.2
Earnings per share, EUR	0.18	0.14	0.58
Capital employed*	1,843.6	1,753.9	1,781.4
Operative ROCE*, %	10.3	9.7	9.8
ROCE*, %	8.8	8.1	8.3
Cash flow from operating activities	65.2	34.5	210.2
Capital expenditure excl. acquisitions	28.3	23.2	150.4
Capital expenditure	28.3	22.4	193.7
Cash flow after investing activities	39.8	16.4	29.0
Equity ratio, % at period-end	39	41	44
Equity per share, EUR	7.39	7.13	7.80
Gearing, % at period-end	74	61	62

*12-month rolling average (ROCE, % based on the EBIT)