Edited from: Annual report and accounts 2008 and “2009 outlook”
Kemira says that it has changed its strategy and will focus on water and fibre management chemistry. Phase one will involve enhancing its profitability, improving its cash flows and strengthening its balance sheet. Phase two will involve pursuing strong organic growth.
“We have an excellent strategy focusing on water, and we are on the right track with the changes we have initiated. We will make Kemira into a very successful company,” says president and chief executive officer, Harri Kerminen.
Kemira says that its strategy, “Profitability over Growth”, represents a policy that guides all its actions. It is seeking to strengthen its balance sheet by focusing on its core business, and to improve its profitability for example through cost saving measures and combining its production, warehousing and R&D networks.
Kemira will continue to focus on improving profitability, cash flow and its balance sheet in 2009. “Strengthening the balance sheet will be one of our key focus areas in 2009,” says Kerminen.
In addition, Kemira has launched a group-wide cost savings programme with a savings target of more than €60m in 2009–2010.
Looking ahead, the company is building a “new, unified Kemira” to support its strategic direction. Its goal is to develop a global culture which is focused on profitability, performance and the implementation of its strategy. It will improve the cooperation between various segments and functions and build a common understanding and commitment to shared targets.
Its water treatment strategy is based on its customer’s water recycling and water treatment needs which it says are “showing very powerful future growth”. To meet the resulting demand, it will provide an extensive product portfolio.
“We will focus on businesses that have water technology as their uniting factor. Kemira has a strong competence, leading technology, and an extensive product range in water and fibre management chemistry. Our segments, Paper, Water, and Oil & Mining, can all use the same product know-how and chemistry in their operations which we have built through dedicated research and development work, as well as the numerous acquisitions,” say Kerminen.
Kemira believes that global environmental challenges create new business opportunities. Population growth, urbanisation and the rapid growth of industrial production in the developing markets will lead to growing demand for natural resources. In such a setting, effective water management is required in order to guarantee a secure, high-quality water supply. More restrictive legislation, mounting requirements for clean water in developing countries and the development of new water treatment technologies are providing Kemira with new opportunities.
“We focus on water and fibre management chemistry. Our core business consists of three customer-oriented segments, Paper, Water and Oil & Mining, which are extensively utilising a shared product portfolio as well as our know-how in water chemistry and product applications. We implement our strategy through an integrated structure and uniform processes and procedures,” says Kerminen.
Outlook
In many of Kemira’s customer industries, the market situation is challenging. General economic trends are generating big uncertainty in customers’ and Kemira’s business operations.
Kemira will continue the efficiency-boosting work underway. Its key focus areas will be improving profitability and reinforcing its cash flow and balance sheet. The annual savings target of the announced global cost savings programme is over €85m, which should be achieved during 2009-2010.
Financial targets
(1) Organic revenue growth 5%/year;
(2) Earnings before interest and taxes (EBIT), 10% of revenue;
(3) Cash flow after investments and dividends: positive;
(4) Return on capital employed (ROCE), %: continuous improvement; and
(5) Gearing targeted level 40–80%.
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Financial highlights: Kemira, year ended 31 December
|
|
2008 |
2007 |
2006 |
2005 |
2004 |
|
Sales (€ m) |
2,833 |
2,810 |
2,523 |
1,994 |
1,695 |
|
Operating Profit (€ m) |
74 |
143 |
194 |
166 |
112 |
|
Net Profit (€ m) |
2 |
67.5 |
109 |
88 |
15 |
|
Total Assets (€ m) |
2,860 |
2,828 |
2,769 |
2,331 |
2,043 |
|
Diluted earnings per share (€) |
-0.02 |
0.53 |
0.90 |
0.73 |
0.65 |
|
Number of Employees |
9,405 |
10,008 |
9,186 |
7,717 |
9,714 |
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Kemira
Company Structure
Kemira is a worldwide chemical group. The holding company of the Kemira Group is called Kemira Oyj. It comprises of group management, administration and other service functions. In 2004, Kemira spun off its GrowHow business.
More about Kemira Structure
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