Kemira cmd-2013-presentation

Delivering a profitable water pure-play

Kemira Capital Markets Day 2013, September 10

Wolfgang Büchele, President and CEO

Structural changes starting to deliver results

Food and pharmaceuticals

business divestment

Sachtleben

divestment

Stringent

capital allocation

LEAN

manufacturing

3F acquisition

New organization

structure

Fit for Growth

Segment roles:

growth and/or cash focus

-28%

+35%

Net

debt

Equity

value

Kemira Capital Markets Day 2013 2

Performance

management

system

Compensation

structure

Process

architecture

Lean

operation

Q2 2012

Result

CMD

2013

Managing businesses from their growth regions

Oil & Mining

management based

in Atlanta, US

Municipal & Industrial

management relocating

from Helsinki to Frankfurt

Paper management

relocating from Helsinki

to Hong Kong

EMEA Paper management

relocating from Helsinki to

Frankfurt


68

70

72

74

76

78

80

82

2012 Q4 2012 Q1 2013 Q2 2013

0

200

400

600

800

1,000

1,200

1,400

1,600

Jan 2012 Jun 2012 Dec 2012 Mar 2013 Jun 2013

Differentiated products together with balanced wet and dry shale portfolio driving revenue recovery in Oil & Mining 15% reduction in total number of US oil (+17%) and gas

(-56%) rigs in 2013 compared to January 2012

Oil & Mining revenue increasing sequentially

despite decreased oil and gas drilling activity

Differentiated products share of revenue

increasing to 82%

+6%

+5%

# of Oil rigs

in the US*

EUR

million

82%

# of Gas rigs

in the US*

*) Source: Baker Hughes International


Restructuring initiatives improving profitability in Municipal & Industrial

0

100

200

300

400

500

600

700

800

2010 2011 2012 1-6 2013

7.1%

5.7%

7.1%

9.2%

644 665

687

343 Others

Polymers

Coagulants

Operative

EBIT margin

Revenue,

EUR million


2013

Revenue (local currencies

and excl. divestments)

2014 2016

Operative EBIT

0%-5% growth vs 2012

EBIT margin 10%

Revenue

EBITDA margin

Gearing

EUR 2.6 – 2.7 billion

15%

below 60%

increase >15% vs 2012

No change in outlook for 2013 or financial targets for 2014 and 2016


Fit for Growth helping to deliver 2013 profit target*

Fit for Growth savings

expected to be EUR

15-20 million higher in

H2 2013 vs H2 2012

Input prices

trending up

*) Revenue in local currencies, excl. divestments 0%-5% growth vs 2012, Operative EBIT +15% vs 2012

2012-2013

Propylene price trend


0.40

0.50

0.60

0.70

0.80

850

1000

1150

1300

1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/1211/1212/12 1/13 2/13 3/13 4/13 5/13 6/13

EU (EUR/MT, ICIS) NA (USD/pound, CMAI)

3

7 9 10

0

5

10

15

Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013

Fit for Growth savings, EUR million

External indicators show stable economic development in EMEA and NAFTA, uncertainty in emerging markets Kemira early warning dashboard


1. Lead time is the estimated time (months) between movement of indicator vs. resultant 2. Average new order value (3 months rolling)

Indicators Status Trend Change Lead1

Overall WTI crude oil futures (9/13) 6

OECD + Emerging market bus. confidence index (6/13) 4

FOEX China BHKP pulp (9/13) 4

Chicago fed nat. activity (7/13) 8

EMEA IFO manufacturing business expectations (8/13) 6

Eurozone PMI survey (8/13) 6

NA S&P 500 index (9/13) 4

ISM business supplier deliveries (8/13) 6

SA Brazil industry production % growth (6/13) 6

Brazil company leading indicator (6/13) 6

APAC Major 5 Asia companies leading indicator (6/13) 8

China containerized freight index (8/13) 2

Contracting: indicator has decreased for at least 3 consecutive months

Expanding: indicator has increased for at least 3 consecutive months

Normal: indicator moves within standard deviation corridor

Above: indicator moves above standard deviation corridor

Below: indicator moves below standard deviation corridor

Trend

Operative EBIT margin target of 10% in 2014

Fixed cost inflation is expected to be compensated through additional benefits from

LEAN manufacturing roll-out, further M&I turnaround measures and growth

Q2 operative EBIT 2013 Excluding one offexpenses in

Q2 2013

Fit for Growthfull run rate

M&I restructuring Additional efficiencymeasures

(Vaasa, BSC,3F synergies)

Average quarterly EBIT,including all the

announced efficiencymeasures

2013-2015

40

55 4 1 5

5


10% Quarterly operative EBIT bridge, EUR million

7%

Capital allocation focusing on growth markets and product lines

Targeted payback time for new greenfield investments is max. 7 years and max. 5 years

for capacity additions on existing products

Focus on Paper in China, strengthening Oil & Mining in mature markets,

South America, Middle East and Africa

65% 35%

6.0% 5.0%

2012 2016e

Capex split average

2010-2012

Targeted capex split

2016

Capex-to-sales ratio

30% 70%


2013-2015

Differentiated products

Commodity products

• Current 36% gearing means EUR 280 million

headroom against the targeted <60% gearing

• Strict M&A criteria for focused growth

– Must strengthen our market position and/or our

technologies/competencies

– EBIT accretive in second full year after closing

• 3F acquisition demonstrates Kemira’s M&A strategy

– Accessing technologies lacking in the portfolio (e.g. monomers)

– Accelerating geographical expansion in order to shorten

the strategic path (e.g. dry polyacrylamides in the US)

Acquisitions expected to contribute to growth target 2013-2015


Positioning based on 2 years performance

Portfolio focus shifting from commodity to differentiated business


2013-2015

Revenue growth

Profitability

O&M SA O&M

APAC

M&I SA

M&I

APAC

M&I

NAFTA

O&M

EMEA

Paper

SA

O&M

NAFTA

Paper

NAFTA

Paper

EMEA Paper

APAC CS Evaluating exit

options

M&I

EMEA

Portfolio restructuring improving return on capital employed

June

2013

Ambition

in 2016

Goodwill 520m Lower

Other intangible assets* 58m Unchanged

Property, plant and equipment* 650m >30%

higher

Investment in associates 2 Unchanged

NWC 11.3% 11%-11.5%

Operative EBIT margin 1-6 2013 7.3% ~11%

Operative ROCE,

rolling 12 months 10.4% >15%

5% capex to sales target in 2016

LEAN manufacturing and SKU

reduction

Fit for Growth and continuous

efficiency measures

*) Prepayments (see note 13 in the Financial Statements 2012) of EUR 111 million are excluded from Kemira operative ROCE.

13

2013-2015

Kemira Capital Markets Day 2013

Innovation focusing on Paper and Oil & Mining

Technology Management

Board targeting 50%

reduction in development

times for ”R” and ”D”

projects

Dedicated global team

and structured process

to drive ideation

R&D projects per New

Product Development stage

Development

Scale-up


2015-2017

Paper

Oil &

Mining

Municipal

& Industrial

ChemSolutions

Paper Oil &

Mining

Municipal

& Industrial

ChemSolutions

Heading towards remote control and combining waste water treatment with energy generation

Remote control and monitoring of water management:

serving industries from a central location


Energy and clean water from waste by Microbial

Fuel Cell assisted water treatment

2017-2020

Renewed revolving credit facility further improves financial position and secures future growth financially

Debt per June, 2013

Gross debt:

EUR 565 million

Net Debt:

EUR 425 million

Net Debt/Annualized

operative EBITDA

YTD 2013: 1.7

Gross debt maturing in

2013 relates mainly to

commercial papers

issued on the Finnish

markets

4.3%

1.7% 2.0% 2.0% 1.6%

1.7%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2008 2009 2010 2011 2012 6/2013

-500

-400

-300

-200

-100

0

2013 2014 2015 2016 2017 2018 2019 2020 2021 >2022

Gross debt Undrawn EUR 400 million 5+1+1 year Revolving Credit Facility

Debt maturity profile, EUR million

Kemira average interest rate (at the end of the period)


Dividend policy remains unchanged

Dividend policy is to distribute a dividend that is 40%-60% of Kemira’s operative net

profit

Dividend yield has on average been over 4% in 2005-2012

(leading yield in the European chemical sector)


*) In addition in March, 86% of Tikkurila shares were distributed as dividend to Kemira shareholders (Tikkurila market capitalization was EUR 600 million after its listing)

**) Gearing at the end of June, 2013

53%

39% 38%

42% 36%

37%

61% 60% 59% 69%

2009 2010* 2011 2012 2013**

Gearing Payout ratio

Cultural change supporting Kemira’s transformation into water quality and quantity management pure-play

2013-2015

Focus

2017-2020

Expand

Be recognized industry and technology leader in chosen target markets

2015-2017

Accelerate

Grow through new products & services

and accelerate expansion in emerging

markets

Achieve a sustainable position

in all target markets

2012-2013

Redesign

Reach target profitability

by implementing “Fit for

Growth”

Best-in-class in its ability to

leverage global performance

culture, talents and operations

Build a strong employer brand to attract

and retain leadership and expert talents

Establish a performance and innovation driven

culture that fosters collaboration, learning and

organizational agility

Building blocks for a high performing organization in

place: Clear accountabilities, performance

management system, process architecture


Increased focus on efficiency and savings


Michael Löffelmann, SVP restructuring

EUR 60 million Fit for Growth savings in 2014

>45

60

10

19

Savings impact 2012 Savings impact 2013 Savings impact 2014

Expected savings Realized savings

Zero loss of identified Fit for Growth savings,

implementation timeline sharpened

EUR million


Offsetting

Kemira’s fixed

cost inflation

through ongoing

cost savings driven

by continuous

improvement

process

Implementing LEAN to continue focus on cost efficiencies Why is LEAN important for Kemira?

Reduce complexity

Reduce costs

Increase competitiveness


LEAN savings of EUR 6 million already implemented


5

0.5

0.5

6

Helsingborg Botlek Bradford Total

EUR million

5. Remote

operators

4.

Self-loading

3.

LEAN lab &

in-process

analysis

Global roll-out of standardized LEAN savings modules


2.

Material handling

benchmark

1.

Weighing

& filling

Strong focus on implementation discipline


Enhanced implementation • Higher and constant drive to achieve results

• Continuous identification of savings

• Greater sense of urgency

Resources

• Closer interaction and follow-up

• Full time LEAN resources

• Dedicated manufacturing

optimization resources

Tools

• Action based with financial tracking

• Standardized LEAN tools

• Additional training for sites

Delivering high performance driven culture

Accelerating the turnaround in Municipal & Industrial


Frank Wegener, President, Municipal & Industrial

Fit for Growth has started to improve profitability

Revenue EUR million

Operative EBIT %

Municipal & Industrial targets cross-the-cycle operative EBIT margin of 10% in 2014

1) Targeted Fit for Growth savings above EUR 20 million

2) New organization and customer segmentation leading to more than EUR 5 million

additional savings

3) Further benefits from manufacturing network optimization, SKU reduction and R&D portfolio

improvements

161

165

174

178

150

155

160

165

170

175

180

Q1 2012 Q1 2013 Q2 2012 Q2 2013

3.5%

5.2%

6.9%

8.9%

0%

2%

4%

6%

8%

10%

Q1 2012 Q1 2013 Q2 2012 Q2 2013

+2%

+2%

+49%

+29%


Municipal & Industrial faces challenges

• Municipal business under

margin pressure in emerging

markets

• Coagulant business facing local

competition - players of very

different sizes and business

drivers

608

644

665

687 11%

9%

7%

6%

0%

2%

4%

6%

8%

10%

12%

560

580

600

620

640

660

680

700

2009 2010 2011 2012

Revenue Operative EBIT margin

EUR million


Historic business model New business model

New business model and organization to address the challenging business environment


• Sales model with simplified organization

and channel strategy

• Headcount reduction of ~50 employees

• R&D focus in line with strategy, portfolio reduced

by 40%

• Uniform service approach with limited

customer segmentation

• Sales force weighted more towards

direct sales vs. distribution sales

• Global geographical focus with scattered

manufacturing footprint

• Limited focus on production technology

• World class coagulant footprint focusing on

mature markets

• Over 1,000 SKU’s • Number of SKU’s reduced by 50%

Segmented customer business model increasing profitability

Historic model –

unsegmented

New model with two customer

segments


Kemira offering:

• Reliable delivery and effective treatment

• Tailor made solutions

• Fast time to resolution

• Technical support

Paying for:

Reliable delivery and effective treatment

Value and

performance

Price >9,000 municipal and industrial

customers buying coagulants and polymers >9000

customers

>4500

customers

>4500

customers

Paying for:

Effective treatment

Paying for:

Faster resolution

Some technical support

and

Tailored solutions with

immediate resolution,

tech support part of

offering

Securing competitive position through manufacturing network consolidation

Fit for Growth measures will be fully implemented by the end of Q2 2014 • 6 sites closed, closure of 2 sites and 2 production plants under implementation

• 2 sites to be closed only after new Tarragona coagulant site is on stream (delayed to Q1 2014)

Further manufacturing optimization through economies of scale and the use of industrial by-products

Additional rationalization expected in NAFTA

*) Europoort and Krems (production plants), Lauterburg, Sevilla, Flix, Tarragona old, St. Petersburg, Houston, Savannah, Xoxla, Camacari, Romania

Coagulants

New product sites

Sites and production plants

closed or decided to be

closed


Legislation and regulatory enforcement driving demand

• Sludge treatment (dewatering)

in Europe

• China expected to invest EUR 50

billion to water in the next 5 years

R&D to secure competitive offering and

meet long term growth opportunities

Positive regulatory developments

Market growth expected to

accelerate in 2016

2.6 3.0 3.4

1.6 1.8

1.9

3.4

3.8

4.4

2012 2016 2020

Coagulants

Others

Polymers


Accelerating the turnaround in Municipal & Industrial

Streamlined business

model focused on

maximizing cash flow

generation

Focus on mature

markets, capture

selected growth

opportunities in APAC

Structural profitability

improvement through

reduction of complexity,

customer segmentation and

organizational optimization

Selective application and

production process

development as well as

new products paving the

way to a sustainable future

4 3

2 1 BUSINESS

INNOVATION GEOGRAPHY

EFFICIENCY


Innovating for growth


Dr. Heidi Fagerholm, CTO

Research Center network focusing on competence development and regional business support

Shanghai,

China • Paper

applications

• Tissue

• TCS

Espoo, Finland • Fundamental

• Paper research

• M&I

• TCS

Sao Paolo, Brazil • Minerals & Metals

• TCS

Atlanta, GA, USA • Oil & Gas

• Minerals & Metals

• Paper

• TCS

TCS = Technical Customer Service & Production Support


Total personnel 250

Patent families ~350

• Increase in total portfolio value by

50% from 2013 to 2020

• Increase in cross-regional

participation across R&D projects

• Every second project has an external research

partner

• FTE per project growing more than 50% due to

increased focus

R&D portfolio aligned with strategy


Innovation focusing on Paper and Oil & Mining

Development Scale-up

Share of R&D projects in various NPD stages

Commercialization

Paper

O&M

M&I CS

M&I CS

Paper O&M

SWEET*

Other

*) Center of water efficiency excellence


40

106

140

0

20

40

60

80

100

120

140

160

2011 2012 2013**

Innovation sales target EUR 250 million in 2016

Kemira innovation sales*, EUR million

*) Sales from new products or existing products for new applications launched within the previous 5 years

**) Annualized Jan-Jun 2013 innovation sales

Fennobond

strength

Fennobind

binders Kemflite,

control & monitoring

KemFlow

friction

reducer

KemFlow

biocide


O&M

Paper

M&I

Tagged antiscalants

Guar replacement

Green friction

reducer

Rheology modifiers

Performic acid

Next Fennobind

generation

New innovation areas

Targeting to double innovation driven sales from 5% in 2012 to ~10% of total sales in 2016

Polymers account for 50% of Kemira’s differentiated product revenue

• Case study: Polymers in flocculation

and sludge dewatering

• Technical benefits for customer include

improved reject water quality and

increased solid content of sludge

• Global polymer market growing from

EUR 7 billion to EUR 10 billion in 2020

• Kemira targeting faster than market

growth


Benefits for customer:

• Significant cost savings via decreased binder

demand on coating application

• Increased sustainability through reduced

dependency on oil-based chemistry

Kemira:

• Creating innovative high performance binder

concept based on future chemistry and

application requirements

The global binder market for paper

and board is EUR 2.5 billion

Case Fennobind – For better printability in Paper & Board Innovative binder concept


Fennobind

Particle diameter 46 nm

Shale Gas & Oil Slick water and hybrid fracturing uses Kemira’s polymers


Dynamic Market

• Gas and oil rigs dependent on energy price

• Guar price volatility - key for gel fracturing (wet shale)

New fracturing technologies developing rapidly

to improve production rates

• Hybrid fracturing

• New and rapidly developing fracturing methods

Implications

• Increased water usage → water reuse → high brine

• Polymer usage increasing in wet shale

• Polymer as a co-treatment/replacement for gel fracturing

200

600

1,000

1,400

1/12 6/12 12/12 3/13 6/13

# of Oil rigs in the US*

# of Gas rigs in the US*

0

5

10

15

20

25

30

12/07 6/08 12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12 12/12

Guar price index India NCDEX guar split quotations

Removing volatility in shale gas and oil through technology

and applications


Innovation driven growth

• Customer focused

• New products wet and dry shale

• Portfolio of products for water management

Accomplishments

• New slick water friction reducers for high brines

• Products with improved handling → inversion, cold

temperature

• Guar replacement under development

• Growing multi-product patented portfolio

• Applications knowledge & partnerships with key

service companies

Relevant market size for polymers is

about EUR 1 billion

Gel Feature Guar Kemira

Proppant carrying capacity + +

Stability of gel + +

Gel formation/Breaking + +

Ease of hydration - +

Friction reduction properties - +

Reduction of number of products to

use for hybrid fracs

- +

Benefits for customer:

• Deeper water, more complex wells, and the optimization of mature

fields

• Scale risk minimization, differentiated detection, peace of mind &

production optimization.

• Lower costs (Capex flexibility, optimized chemical usage, lower

equipment & operational costs)

Kemira:

• New tagged antiscalant technology based on proven polymeric

scale inhibitor

Relevant market size for downhole scale squeeze

business is about EUR 100 million

Success Story Tagged antiscalants for Oil & Gas stimulation and production


Building a culture of innovation throughout the organization Innovation Community to inspire people,

to stimulate creativity and to create

enablers for an innovation culture

Training to enhance innovation

capabilities

Create measurable success criteria

for innovation work

”Innovate today for

a prosperous tomorrow”


44

Appendix



Kemira Group revenue growth trend

-15%

-10%

-5%

0%

5%

10%

15%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2009 2010 2011 2012 2013

Organic growth Currency Acquisitions Divestments Total growth

45 Kemira Capital Markets Day 2013

46

Differentiated products expected to grow substantially above the market, commodity products focusing on efficiency improvements Differentiated products

• Growth target substantially above the market

• Driven by innovation and expertise

• Higher margins due to higher value to the

customer

• Flexible manufacturing capabilities with

sufficient scale

• Higher barriers to entry (technology)

781 843 879

455

0

200

400

600

800

1000

2010 2011 2012 1-6 2013

Commodity products

• Targeting growth, but slightly lower than

the market

• Maximizing profitability and cash flow by

leveraging existing capacity

Differentiated products revenue, EUR million

1380 1365 1362

675

0

500

1000

1500

2010 2011 2012 1-6 2013

Commodity products revenue, EUR million

Kemira revenue split into differentiated and commodity products

Differentiated product lines Commodity product lines

%-of total

revenue in

1-6 2013

Polymers Sizing and

strength

Defoamers,

dispersants,

biocides and

other process

chemicals

Coagulants Bleaching

chemicals

Formic acid

and derivatives

Miscellaneous

commodity

products*

Paper 10% 20% 15% 5% 25% - 25%

M&I 20% - 5% 65% - - 10%

O&M 55% - 25% 5% - - 15%

Chem-

Solutions

- - - - - 80% 20%

Kemira 20% 10% 10% 25% 15% 5% 15%

47

*) Mainly sodium percarbonate, colorants, acrylamide, inorganic salts and acids as well as caustic soda


Mature markets continue to stay important in all segments

621 646

1-6 2012 1-6 2013

EMEA (57% of total revenue) Revenue, EUR million

345 333

1-6 2012 1-6 2013

NAFTA (29% of total revenue) Revenue, EUR million

38% 37%

1-6 2012 1-6 2013

GM %

39% 39%

1-6 2012 1-6 2013

GM %


Kemira Group operative EBIT bridge, EUR million

0

10

20

30

40

50

60

70

80

90

100

1-6 2012 Sales volumes Sales prices Variable costs Fixed costs Currency impact Others, incl.acquisitions and

divestments

1-6 2013

74.6 17.0 82.2 4.2 3.2 -9.1 -5.7 -2.0

49

EUR million


Good balance between sales and raw material prices Kemira sales prices vs variable costs

*) 12-month rolling change in EUR million vs corresponding period in previous year, excl. Tikkurila and Pigments

-150

-100

-50

0

50

100

150

200

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007 2008 2009 2010 2011 2012 2013

Brent oil, USD Sales price* Variable costs*

50

EUR million


”Fit for Growth” full EUR 60 million impact in 2014

• Cost savings impact in operative

EBIT in Q2 2013 was EUR 10 million

– EUR 4 million impacted variable costs

– EUR 6 million impacted fixed costs

• Expected cost savings impact in

operative EBIT 2013 is > EUR 45 million

• Expected cost savings impact in

operative EBIT 2014 EUR 60 million

”Fit for Growth” status Q2 2013,

EUR million

>45

60

10

19

0

10

20

30

40

50

60

70

Savings impact2012

Savings impact2013

Savings impact2014

Expected savings Realized savings


”Fit for Growth” required EUR 76 million in restructuring costs

• EUR 5 million booked YTD 2013

• Total non-recurring severance payments and external services EUR 46 million

• Total non-recurring asset write-downs EUR 30 million

41

30

5

0

15

30

45

Severance payments and external services2012

Asset write-downs 2012 Severance payments and external services2013

Realized restructuring charges,

EUR million


Key figures and ratios

EUR million (except ratios) 4-6/2013 4-6/2012 % 1-6/2013 1-6/2012 % 2012

Revenue 569.3 562.3 1 1,130.2 1,115.2 1 2,240.9

Operative EBITDA 61.5 58.2 6 125.0 121.0 3 249.4

of which margin 10.8 10.3 - 11.1 10.8 - 11.1

Operative EBIT 40.0 36.0 11 82.2 74.6 10 155.5

of which margin 7.0 6.4 - 7.3 6.7 - 6.9

Share of profit or loss

of associates

0.1 5.8 - -1.1 16.6 - 11.2

Financing income and expenses -4.2 1.4 - -28.9 -8.9 - -15.7

Operative EPS, EUR 0.14 0.21 -33 0.31 0.41 -24 0.77

Operative ROCE* 10.4 10.5 - 10.4 10.5 - 10.0

Capital expenditure 30.9 51.0 -39 59.9 70.4 -15 134.1

Casf flow after investing

activities**

10.5 24.2 -57 200.4 16.1 - 71.8

Gearing, % at period-end 36 44 - 36 44 - 42

Personnel at period-end 4,664 5,181 -10 4,664 5,181 -10 4,857

*12-month rolling average

**2012 numbers include EUR 5.3 million dividends and EUR 27.3 million paid-in-capital from JV Sachtleben. 1-6/2013 numbers include EUR 97.5 million received from the

divestment of the JV Sachtleben shares and EUR 80.6 million from the divestment of the food and pharmaceuticals businesses.


Profitable growth accelerated in Paper April-June 2013

Revenue increased by 6% to

EUR 265 million (249) • EMEA revenue increased more than 10% driven by

sales volume growth in all main product lines

• Sales prices decreased slightly

• Currency exchange -1%

EUR million Q2/2013 Q2/2012 % 1-6/2013 1-6/2012 % 2012

Revenue 265 249 6 524 497 5 1,006

Operative EBIT 19.5 16.1 21 39.2 34.9 12 75.3

Operative EBIT, % 7.4 6.5 - 7.5 7.0 - 7.5

Cash flow 18 10 80 48 9 433 8

Operative EBIT increased 21% to

EUR 19.5 million (16.1) • Organic revenue growth

• Higher sales and marketing expenses compensated by

”Fit for Growth” savings

• Operative EBIT margin increased to 7.4% (6.5%)

Strong cash flow


Profitable growth in Municipal & Industrial April-June 2013

Revenue increased 2% to

EUR 178 million (174) • Revenues increased in all regions, except APAC

• Currency exchange -1%

EUR million Q2/2013 Q2/2012 % 1-6/2013 1-6/2012 % 2012

Revenue 178 174 2 343 335 2 687

Operative EBIT 15.9 12.0 33 24.5 17.7 38 39.2

Operative EBIT, % 8.9 6.9 - 7.1 5.3 - 5.7

Cash flow 5 -3 - 5 4 25 39


EUR 15.9 million (12.0) • Increased sales prices and sales volumes, as well as

lower fixed costs

• Higher variable costs due to increased propylene

based raw material prices during Q1 2013

• Operative EBIT margin increased to 8.9% (6.9%)


Oil & Mining sales volume increase offset by sales price decline April-June 2013

Revenue decreased 5% to

EUR 79.9 million (84.5) • -4% impact related to exiting from low margin products

as communicated earlier (full impact of EUR 10 million

will be realized by the end of 2013, YTD 2013 impact

EUR 7 million)

• Sales volumes increased for the first time in

six quarters

• Sales prices declined

EUR million Q2/2013 Q2/2012 % 1-6/2013 1-6/2012 % 2012

Revenue 79.9 84.5 -5 156 170 -8 321

Operative EBIT 3.5 7.2 -51 8.6 15.5 -45 25.9

Operative EBIT, % 4.4 8.5 - 5.5 9.1 - 8.1

Cash flow -8 1 - -10 -18 - -5

Operative EBIT decreased to

EUR 3.5 million (7.2) • Price pressure in the market

• Increased R&D spend to accelerate

the differentiation

• Variable costs started to come down towards

the end of the quarter


ChemSolutions revenue was impacted by the food and pharmaceuticals businesses divestment

April-June 2013

Revenue decreased 16% to

EUR 46 million (55) • Organic growth 7%, continued strong sales volumes

growth of formic acid and derivatives product lines

• Divestment of food and pharmaceuticals businesses

had -22% impact

EUR million Q2/2013 Q2/2012 % 1-6/2013 1-6/2012 % 2012

Revenue 46 55 -16 107 114 -6 228

Operative EBIT 1.1 0.7 57 9.9 6.5 52 15.1

Operative EBIT, % 2.4 1.3 - 9.2 5.7 - 6.6

Cash flow -4 -2 - 77 13 - 24


EUR 1.1 million (0.7) • Higher sales volumes and lower variable costs

• Strong market pressure on Sodium Percarbonate

product line


Kemira capital expenditure

0

20

40

60

80

100

120

140

160

2008 2009 2010 2011 2012 1-6 2013

EUR million

Expansion

Maintenance and

improvement

134

56

98

76 69

109


Net working capital ratio Kemira ambition is to keep net working capital ratio* between 11%-11.5%

14.1%

13.3%

11.3%

13.4%

12.8%

11.3%

9%

11%

13%

15%

2008 2009 2010 2011 2012 1-6 2013

*) Rolling 12-month average


Cash flow statement

EUR million Q2 2013 Q2 2012 1-6/2013 1-6/2012 FY 2012

Operative EBITDA 61.5 58.2 125.0 121.0 249.4

Change in net working capital -6.8 -0.6 -11.1 -43.2 -21.1

Cash flow from operations* 38.6 47.5 78.9 57.9 176.3

Capital expenditure -30.9 -51.0 -59.9 -70.4 -134.1

Other investing activities 2.8 27.7 181.4 28.6 29.6

Cash flow after investing activities* 10.5 24.2 200.4 16.1 71.8


*2012 numbers include EUR 5.3 million dividends and EUR 27.3 million paid-in-capital from JV Sachtleben. 1-6/2013 numbers include EUR 97.5 million

received from the divestment of the JV Sachtleben shares and EUR 80.6 million from the divestment of the food and pharmaceuticals businesses.

Market and product specifications

61



62

Paper and Oil & Mining driving growth

Kemira’s relevant market (EUR 27 billion

in 2012) will grow to EUR 34 billion in

2020 (CAGR 3.3%)

Paper: Growing above market,

targeting wet-end chemistry

market leadership

O&M: Growing above market

M&I: Improving profitability,

maximizing cash

ChemSolutions: Maximizing cash

by a product driven business model

Source: Management estimation based on various sources

7.7 9.3

7.7 9.5

9.4

13.2

2.0

2.3

2012 2020 2012' 2020'

O&M Paper

2.4%

ChemSolutions M&I

4.3%

2.7%

1.8%

Business focus

1.5 1.7 1.9 2.0 2.1 2.2

0.9 1.0

1.1

1.8 2.0

2.3 1.5

1.6 1.8

2012 2016 2020 2012 2016 2020

Defoamers, biocides and other wet-end process chemicals

Paper segment - Demand for sizing and strength chemicals is growing fastest globally

Pulp and paper industry trends increasing

chemical demand:

• Increased use of recycled fibres

• Hardwood replacing softwood in virgin

pulp

• Lightweighting of packaging and board

grades

• Higher filler loads in graphic papers

• New digital printing methods

• Lower water / energy consumption

Market size,

EUR billion (CAGR: 2.4%)

GAGR

Sizing and strength

Miscellaneous commodity chemicals

Bleaching chemicals

Polymers

3.5%

2.0%

3.0%

1.3%

2.0%


Paper segment - Technology and market leader in paper wet-end chemistry

Value chain part covered by Kemira

RAW

MATERIALS INTERMEDIATES PRODUCTS APPLICATIONS

CUSTOMER

IDUSTRIES CUSTOMERS

Electricity

Sodium chloride

(salt)

Crude tall oil

Cationic monomer

Acrylonitrile

Acrylic acid

Olefins

Fatty acids

Maleic anhydride

Sulfur

Tall oil rosin

AKD Wax

Isomerized olefins

Acrylamide

Sodium chlorate

Hydrogen peroxide

Polymers

Defoamers

Coagulants

Biocides

Sizing

Strength Additives

Surface additives

Colorants

Sulfuric acid

Pulping

Bleaching

Retention

Wet-end process

control

WQQM

Sizing

Strength

Surface treatment

Coloring

Pulp

Packaging

and board

Printing

and writing

Tissue

All the major

global paper

and pulp

producers


Oil & Mining segment - Strong market growth across all product lines

• High oil price spurs demand for

identifying new sources

• Global growth of shale gas and wet

shale

• Declining ore assays require improved

processing

• Increasing environmental pressure

which increases demand for waste

water treatment

Market size,

EUR billion (CAGR: 4.7%)

3.1 3.6 4.3

2.0 2.4 2.9

4.3

5.1

6.1

2012 2016 2020 2012 2016 2020

Polymers Defoamers, biocides

and other process

chemicals

Miscellaneous

commodity

products


Oil & Mining segment - Winning market share with competitive combination of innovation chemicals and application knowledge


RAW

MATERIALS INTERMEDIATES PRODUCTS APPLICATIONS CUSTOMERS

Acrylonitrile

Acrylic acid

Various monomers

Miscellaneous

specialty chemicals

and commodities

Acrylamide Polymers

Dispersants &

Antiscalants

Biocides

Emulsifiers

Defoamers

Coagulants

Formulations

Friction Reduction

Formation & Well Scale

Control

Asset integrity Microbial

Induced Corrosion

Enhanced Oil Recovery

Drilling muds

Concentrate thickening

Mineral slurry

preservation

Mining processes

Scale Control

Pumpers

Oil & Gas

operators

Service

companies

Mine operators


Municipal & Industrial - Commodity product lines expected to grow, but slightly slower than the market

Demand drivers for raw and waste water as well as sludge treatment chemicals:

• Legislation and regulatory enforcements determine required treated water and

sludge quality standards

• Water reuse is most cost efficient solution to meet the increasing water demand

2.6 3.0 3.4

1.6 1.8 1.9

3.4 3.8

4.4

2012 2016 2020 GAGR

Coagulants Antiscalants, biocides, defoamers, miscellaneous commodity chemicals

3.2%

2.8%

3.3%

Polymers

Realized restructuring charges,

EUR billion


Municipal & Industrial - Technology and market leader in raw and waste water as well as sludge treatment • Kemira is the only major supplier producing major water treatment chemicals, polymers and coagulants – thereby

enabling comprehensive application support

• Cost competitiveness through backward integration into virgin raw materials

• 60-70% of sourced raw materials are recycled utilizing waste streams from industrial producers, providing an

additional cost advantage

RAW

MATERIALS INTERMEDIATES PRODUCTS APPLICATIONS SALES CHANNEL CUSTOMERS

Acrylonitrile

Sulfuric acid

Hydrochloric acid

Aluminium hydrate

Iron ore

Pickling liquor

Copperas

Acrylamide Polymers (EPAM, DPAM)

Al Coagulants

Fe Coagulants

Antiscalants

Biocides

Defoamers

Raw water treatment

Wastewater treatment

Sludge treatment

Advanced water treatment

Direct sales

Distributor/reseller

Service companies

Municipalities

Private operators

Industrial customers



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