Kemira Oyj : Kemira Oyj's Interim Report January-March 2013: Improved profitability supported by organic growth

    Kemira Oyj : Kemira Oyj's Interim Report January-March 2013: Improved
                  profitability supported by organic growth

Kemira Oyj
Stock exchange release
April 23, 2013 at 2.30 pm (CET+1)

  *Organic revenue growth of 3%.
  *Operative EBIT increased 9% to EUR 42.2 million (38.6) with a margin of
    7.5% (7.0%).
  *Earnings per share, excluding non-recurring items, decreased to EUR 0.17
    (0.19) due to EUR 12 million lower income from the associated companies.
  *The reported earnings per share were reduced to EUR 0.01 (0.19) mainly due
    to the write-down of EUR 23 million related to the sale of Kemira's shares
    in the Joint Venture Sachtleben.
  *With the net debt of EUR 357 million (532), the gearing fell to 30% (42%
    at the end of December, 2012) due to the proceeds of EUR 178 million
    received from the divestments of Kemira's food and pharmaceuticals
    businesses and the shares in JV Sachtleben.
  *Outlook for 2013 is unchanged, Kemira expects revenue in local currencies,
    excluding divestments to be slightly higher than in 2012 and operative
    EBIT to be significantly higher than in 2012.

Kemira's President and CEO Wolfgang Büchele:

The year 2013 started with organic revenue growth of 3% and an operative EBIT
improvement of 9%. The growth was driven by the increased sales volumes in
Paper, Municipal & Industrial and ChemSolutions. Polymer sales volumes to Oil
& Gas in North America recovered, but sales volumes to Mining continued to
decline and resulted in lower revenue for Oil & Mining.

"Fit for Growth" cost savings for the first quarter, 2013 were EUR 9 million
and, together with increased sales volumes were the main reason for the
profitability improvement. 11 of Kemira's manufacturing sites and 2 production
plants are either closed or have been decided to be closed. This and other
efficiency measures have resulted in a reduction of 519 employees (including
91 employees in the divested food and pharmaceutical businesses). The ultimate
goal of the "Fit for Growth" program is to reach at least 10% EBIT margin in
2014.

Today, Kemira has presented its sharpened strategy "From redesign to
expansion" in conjunction with the new financial targets for 2016. Kemira
targets profitable, above-the-market growth driven by fast growing
differentiated product lines in Paper and Oil & Mining. The Municipal &
Industrial segment's focus will be on improving profitability and together
with ChemSolutions, on maximizing cash flow generation.

Financial targets for 2016 are EUR 2.6 - 2.7 billion in revenue with an EBITDA
margin of 15% and a gearing less than 60%.

Continuous efficiency improvement is the key enabler for the successful
strategy implementation. Therefore, in addition to the implementation of "Fit
for Growth", we have announced today our plan to consolidate our six support
function service hubs in Europe into a multifunction Business Service Center
in Gdansk, Poland. The planned center enables Kemira to serve all of its
customers in EMEA in a unified way. We also plan to close our production
facility in Vaasa, Finland, belonging to the Paper segment. The purpose for
the planned closure is to optimize the utilization of our global process
chemicals production network. The profitability turnaround in Municipal &
Industrial requires us to implement additional efficiency measures in order to
further reduce fixed cost and streamline the manufacturing network.

Key figures and ratios (figures for 2012 are restated)

                                      Jan-Mar 2013 Jan-Mar 2012 Jan-Dec
EUR million                                                        2012
Revenue                                      560.9        552.9 2,240.9
Operative EBITDA                              63.5         62.8   249.4
Operative EBITDA, %                           11.3         11.4    11.1
EBITDA                                        61.1         62.1   179.9
EBITDA, %                                     10.9         11.2     8.0
Operative EBIT                                42.2         38.6   155.5
Operative EBIT, %                              7.5          7.0     6.9
EBIT                                          39.2         36.4    33.1
EBIT, %                                        7.0          6.6     1.5
Share of profit or loss of associates         -1.2         10.8    11.2
Financing income and expenses                -24.7        -10.3   -15.7
 thereof non-recurring items              -24.2            -       -
Profit before tax                             13.3         36.9    28.6
Net profit                                     2.8         30.2    22.4
EPS, EUR                                      0.01         0.19    0.12
Operative EPS, EUR                            0.17         0.19    0.77
Capital employed*                          1,595.6      1,717.0 1,673.0
ROCE, %*                                       2.2         10.5     2.6
Cash flow after investing activities         189.9         -8.1    71.8
Capital expenditure                           29.0         19.4   134.1
Equity ratio, % at period-end                   50           51      51
Gearing, % at period-end                        30           45      42
Personnel at period-end                      4,662        5,051   4,857

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

Definitions of key figures are available at www.kemira.com > Investors >
Financial information. Comparative 2012 figures are provided in parentheses
for some financial results, where appropriate. Operating profit, excluding
non-recurring items, is referred to as Operative EBIT. Operating profit is
referred to as EBIT.

Events after the review period

Changes to company management

Jukka Hakkila, Group General Counsel has been appointed new deputy CEO as of
May 6, 2013.

Frank Wegener has been appointed as the President of Municipal & Industrial
segment (previously President, ChemSolutions) and Hannu Virolainen has been
appointed as the President, ChemSolutions segment (previously the President of
Municipal & Industrial) as of May 1, 2013.

Along with its sharpened strategy presented on April 23, 2013, Paper
management has been decided to relocate to Hong Kong, China as of September 1,
2013.

On April, 23, 2013, Kemira announced a plan to establish a multifunction
Business Service Center in Gdansk, Poland to serve all of Kemira's businesses
in EMEA. In addition to cost efficiency, the planned center enables unified
service level to all our customers. The scope of the new center is planned to
include all transactional activities in the support functions. Once fully
implemented, the annual cost savings for the support functions re-organizing
in EMEA are expected to be close to EUR 10 million and the related
non-recurring restructuring charges are expected to amount approximately EUR
20 million.

Kemira also announced that it is planning to close its production facility in
Vaasa, Finland, belonging to the Paper segment. The purpose for the planned
closure is to optimize the utilization of our global process chemicals
production network. The annual cost savings for the planned site closure are
expected to reach EUR 5 million and the related non-recurring restructuring
charges are expected to be approximately EUR 15 million. Continuous efficiency
improvement is the key enabler for the successful strategy implementation.

Kemira's new financial targets for 2016, restructuring program "Fit for
Growth" and outlook for 2013 (unchanged)

Kemira will continue to focus on improving its profitability and reinforcing
the positive cash flow. The company will also continue to invest in order to
secure the future growth in the water quality and quantity management
business.

Kemira's financial targets have been revised in connection to its strategy
update on April, 23, 2013. The company's new financial targets for 2016 are:

  orevenue EUR 2.6 - 2.7 billion (previously: revenue growth in mature
    markets > 3% per year, and in emerging markets > 7% per year)
  oEBITDA-% of revenue 15%
  ogearing level < 60%.

The basis for growth is the expanding market for chemicals related to the
water quality and quantity management and Kemira's strong expertise in this
field. Customers' needs to increase operational efficiency create
opportunities for Kemira to develop new products and services for both,
current and new customers. Research and Development is a critical organic
growth enabler for Kemira and provides differentiation capabilities in the
water quality and quantity management markets. Kemira will invest in
innovation, technical expertise (knowledge) and competencies (behavior) in
targeted focus areas.

Restructuring program "Fit for Growth"

Kemira Oyj has started to implement its global restructuring program "Fit for
Growth", launched at the end of July, 2012, in order to improve the company's
profitability, its internal efficiency and to accelerate the growth in
emerging markets without sacrificing business opportunities in the mature
markets. The cost savings target with the planned program is EUR 60 million on
an annualized basis. In 2012, the cost savings impact of "Fit for Growth" was
EUR 10 million.

The anticipated EUR 60 million cost saving impact of the program is expected
to be as follows: EUR 10 million in 2012, EUR 50 million in 2013 and EUR 60
million in 2014. The ultimate goal of the program is to reach at least 10%
EBIT margin in 2014. Redundancies will account for 50% of the expected
savings. The remaining 50% will be achieved through the manufacturing network
consolidation as well as through the leaner operations. Based on the detailed
plan of measures, the cost savings estimates for the different segments, based
on the detailed plan of measures, are as follows: Paper EUR 22 million,
Municipal & Industrial EUR 22 million, Oil & Mining EUR 12 million and
ChemSolutions EUR 4 million.

Non-recurring charges related to the restructuring program are estimated to be
around EUR 85 million, of which EUR 45 million will be severance payments and
external services related cost and EUR 40 million will be asset write-downs.
EUR 71 million of the restructuring charges were booked in 2012, EUR 2 million
in the first quarter of 2013 and the balance will be booked in the second
quarter of 2013. In the first quarter of 2013, non-recurring charges related
to "Fit for Growth" mainly related to severance payments and external
services.

The implementation may ultimately lead to a reduction of up to 600 positions
globally. Kemira has initiated the co-determination negotiations according to
each country's local legislation. Kemira had 4,662 employees worldwide at the
end of March 2013 (5,181 at the end of June 2012).

Outlook (unchanged)

In 2013, Kemira expects its revenue in local currencies and excluding
divestments to be slightly higher than in 2012 and its operative EBIT to be
significantly higher than in 2012. The guidance for 2013 is defined as
follows.

Kemira guidance            Definition
Slightly higher/lower      from 0% to 5% or from 0% to -5%
Higher/lower               from 5% to 15% or from -5% to -15%
Significantly higher/lower more than 15% or less than -15%

Press and analyst conference and conference call

Kemira will arrange a press conference for analysts and the media starting at
4.00 pm (2.00 pm UK time) at Kluuvi, 3^rd floor, Aleksanterinkatu 9, 00100
Helsinki. In the conference, Kemira's President and CEO Wolfgang Büchele will
first present the results and then give a group level strategy update of
Kemira, followed by segment specific strategy presentations by Petri Helsky,
President, Paper segment, Randy Owens and President, Oil & Mining segment.
Municipal & Industrial segment will be presented by Wolfgang Büchele.

The press conference will be held in English and will be webcasted at
www.kemira.com . Webcast will be available at www.kemira.com also after the
event. Presentation material will be available on Kemira's website at
www.kemira.com under Investors in English and at www.kemira.fi in Finnish at
about 3.30 pm.

Conference call in connection to the press and analyst conference

You can also listen to the conference live over the phone and attend the Q&A
session via a conference call. In order to participate in the call, please
dial +44 (0)20 7162 0077 (dial-in from US: +1 334 323 6201, Finland: +358 (0)9
2313 9201), code 931127 ten minutes before the conference begins.

For more information, please contact

Kemira Oyj
Tero Huovinen, Director, Investor Relations
Phone +358 10 862 1980

Kemira is a global chemicals company serving customers in water-intensive
industries. We provide expertise and chemicals that improve our customers'
water, energy and raw material efficiency. Our focus is on pulp & paper, oil &
gas, mining and water treatment. In 2012, Kemira had annual revenue of EUR 2.2
billion and around 4,900 employees. Kemira shares are listed on the NASDAQ OMX
Helsinki Ltd.
www.kemira.com

January-March 2013 Interim report

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