JULY 19, 2019 Strong earnings improvement …...Kemira’s mid- to long-term financial targets JULY...

INVESTOR PRESENTATION

Strong earnings improvement continued in Q2

JULY 19, 2019

SEGMENT SPLIT PRODUCTS

JULY 2019 INV E S T OR P RE S E NT A T ION 2

GEOGRAPHIES

Kemira in briefLAST 12 MONTHS: REVENUE EUR 2,643 MILLION, OPERATIVE EBITDA EUR 375 MILLION, OPERATIVE EBITDA MARGIN 14.2%, OPERATIVE ROCE 10.8%

◼ 25% Bleaching

and pulping

◼ 20%

Polymers

◼ 20% Other:

e.g. defoamers,

dispersants,

and biocides

◼ 20%

Coagulants

◼ 15%

Sizing

and

strength

39%

AMERICAS

1.USA

2.Canada

3.Brazil

52%

EMEA

1.Finland

2.Sweden

3.Germany

9%

APAC

1.China

2.South

Korea

3.Thailand

◼ 58%Pulp & Paper

◼ 42%Industry & Water

CUSTOMERS

Several thousand customers

TOP 10 customers are ~25% of revenue

TOP 50 customers are ~50% of revenue

EXAMPLES OF

LARGEST CUSTOMERS

Municipalities, e.g.

Frankfurt, London, New York,

Paris, Shanghai, Singapore

#1 in

water

treatment

in NA and

Europe

#2 in friction reduction in North

American shale oil & gas

#2 globally

Revenue by geographies and product category represent FY 2018.

Why invest in Kemira


Profitable growthOperative EBITDA improved by +35% and

operative EBIT +40% in H1 20191

2

3

Attractive dividendStable dividend and competitive yield

(avg. close to 5%)

Sustainable investmentExcellent sustainability performance

(EcoVadis rating: Gold)

HOW KEMIRA CREATES VALUE

Strategy and Equity Story in summary


FINANCIAL TARGETS (mid- to long-term)

Above the market revenue growth • Operative EBITDA 15-17% • Gearing below 75%

OUR MARKET

FOCUS

Chemicals for Pulp & Paper,

Oil & Gas and Water Treatment

#1 or #2 in our core markets

Market growth estimated to be 2-3% p.a.

supported by higher use of fiber-based

products, resource efficiency and regulation

BUILDING A GREAT

CHEMICALS COMPANY

Great products:

4 core areas are polymers, coagulants,

sizing and bleaching chemicals which meet

our customers’ needs incl. resource efficiency

Great operations:

Deliver reliably with consistent quality

Great people:

Deep application expertise

and innovation capability

EXECUTION – VALUE

OVER VOLUME

Improving product and market mix

Focusing on capital efficiency

Investing selectively in core

product areas with higher return

on capital employed

Global megatrends favor Kemira


REGULATION

Safe drinking

water

More stringent

discharge limits

GROWING MIDDLE

CLASS &

URBANIZATION

E-commerce /

online shopping

Higher use of

water, energy,

tissue and board

SCARCITY

OF RESOURCES

Material and

resource

efficiency

Alternative

materials for

single-use plastic

products

REVENUE EUR million

2 137

2 373 2 363

2 486

2 593

2014 2015 2016 2017 2018

OPERATIVE EBITDAOPERATIVE EBITDA MARGINEUR million

253

287

303311

323

11.8%12.1%

12.8%12.5% 12,5%

2014 2015 2016 2017 2018

INV E S T OR P RE S E NT A T ION 6

Delivering profitable growth

JULY 2019

PRE IFRS 16

1,170

1,417 1,457 1,477 1,520

137

171195 198 192

2014 2015 2016 2017 2018

REVENUE BYPRODUCT CATEGORY


REVENUE BY CUSTOMERTYPE AND MARKET GROWTH

Pulp & Paper – strong business with solid track record

MARKET ENVIRONMENT REVENUE BY GEOGRAPHIES AND

MARKET GROWTH BY REGION

CUSTOMER EXAMPLES

◼ 55%

EMEA

◼ 30%

Americas

◼ 15%

APAC

◼ 40%

Bleaching

& pulping

◼ 25%

Sizing &

strength

◼ 20%Defoamers,

dispersants,

biocides and

other process

chemicals

◼ 10%

Polymers

◼ 5% Other◼ 40%

Pulp

◼ 20%

Printing &

writing papers

◼ 40%

Board &

tissue

-1-2%2-3%1-2%Market

growth

2-3%0-1%1%Market

growth

Nouryon (pulp) #3

Solenis (paper)* #1

Kemira (pulp and paper) m.s. ~16% #2

Ecolab (paper) #4

Note: Revenue by industry, product and geography rounded to the nearest 5%

JULY 2019

* Solenis-BASF combined entity

Kurita (paper) #5

REVENUE AND OPERATIVE EBITDAEUR million

REVENUE BYPRODUCT CATEGORY


REVENUE BY APPLICATIONTYPE AND MARKET GROWTH

Industry & Water – strong positions in chosen categories

REVENUE BY GEOGRAPHIES AND

MARKET GROWTH BY REGION

◼ 40%

Coagulants

◼ 40%

Polymers

◼ 20%

Other

products

such as

defoamers

and biocides

2-3%5-6%2-3%

◼ 50%

EMEA

◼ 45%

Americas

◼ 5%

APAC

◼ 65%

Water treatment

◼ 10%

Other

◼ 25%

Oil & Gas

5-6%3-4%3-4%

WATER TREATMENT

Amsterdam

Barcelona

Frankfurt

London

Oslo

Paris

Stockholm

Los Angeles

Montreal

New York City

Toronto

Melbourne

Shanghai

Singapore

OIL & GAS

Note: Revenue by industry, product and geography rounded to the nearest 5%

Market

growth

Market

growth

CUSTOMER EXAMPLES

JULY 2019


MARKET ENVIRONMENT

Market share

~30% in coagulants and

~20% in polymers

Main competitors in

coagulants:

• Feralco (Europe)

• Kronos (Europe)

• Chemtrade (NA)

• USAlco (NA)

Market share ~25% in

polymers used in shale

oil & gas

Main peers in polymers

(also in water treatment):

• SNF

• Solenis

• Solvay (only O&G)

MUNICIPAL (40%),

customer examples

INDUSTRIAL (60%),

customer examples

Municipal Industrial

947 956906

1,0091,073

116 116107

114

131

2014 2015 2016 2017 2018

2014-2016 figures are pro forma; combination of Municipal & Industrial

and Oil & Mining segments

Kemira’s mid- to long-term financial targets

JULY 2019 9

Targets 2017 2018 IFRS 16 impact H1 2019 Mid- to long-term

target

Revenue MEUR 2,486

Change +5%

MEUR 2,593

Change +4%

- MEUR 1,311

Change +4%

Above-the-market

growth

Operative

EBITDA*

12.5% 12.5% Around +1 %-point 15.4% 15-17%

Gearing* 59% 62% Around +10 %-points 79% Below 75%

Factors H1 2019 comments

Organic growth through volume and sales price increases Group’s organic growth +1%

Oil & Gas becoming larger share of Group (incl. shale, CEOR and oil sands) Revenue from EUR 126m in 2016 to around 300m run-rate

Sales price vs raw material price development Focus on value over volume visible in profitability; higher

sales prices and better product mix

Growth investments – Polymer capacity expansion in Netherlands, AKD

sizing Joint Venture in China, Polymer capacity expansion in the US

Backward integration and growth benefits 2020-21

FINANCIAL TARGETS AND HISTORICAL FIGURES

KEY FACTORS TO WATCH FOR PROFITABILITY IMPROVEMENT

* Targets updated in February 2019 due to IFRS 16 accounting change. 2017-2018 figures are PRE IFRS 16.

INV E S T OR P RE S E NT A T ION

Healthy market growth for Kemira’s relevant markets

2018 2023

Americas EMEA APAC


Source: Management estimation based on various sources

KEMIRA RELEVANT MARKETEUR billion

PULP & PAPER RELEVANT MARKET EUR billion

INDUSTRY & WATER RELEVANT MARKETEUR billion

2018 2023

Pulp Printing & writing Board & tissue

2018 2023

Water treatment Oil & Gas Other

CAGR:2-3%

CAGR:1-2%

CAGR:3-4%

22

27

109

1713

Kemira pays stable and competitive dividend• Kemira’s dividend policy is to pay a stable

and competitive dividend

• Kemira has paid dividend every year since listing of shares in 1994

• Attractive dividend yield

0,53 0,53 0,53 0,53 0,53 0,53 0,53 0.53

5.8% 4.5% 4.4% 5.4% 4.9% 4.4% 4.6% 5.4%

2011 2012 2013 2014 2015 2016 2017 2018


◼ Dividend per share Dividend yield

JULY 2019

Kemira’s dividend yield calculated using the share price at year-end

Our three sustainability priorities


Sustainable products

and solutions

People and integrity

Responsible operations & supply chain

Ensuring responsible operations

to protect our assets, our

environment, employees,

contractors, customers and

communities

Ensuring compliance with

responsible business practices

in our supply chain

Incorporating sustainability into

our products and solutions

Proactive product stewardship

throughout the products’ lifecycle

Culture and commitment to people

Ensuring compliance with

Kemira Code of Conduct

KPI’S AND TARGETS

• Employee engagement index above industry benchmark

• Leadership development activities 2 per people manager position, cumulative target 1500 by 2020 (2015=0)

• Integrity index continuously increasing

KPI’S AND TARGETS

• Carbon Index 80 by 2020 (Baseline 100 in 2012)

• People safety TRIF 2.0 by 2020

Supplier Sustainability Evaluation

• 90% of direct key suppliers screened through sustainability evaluation through assessments and audits (Baseline 60% in 2017)

KPI’S AND TARGETS

At least 50% of our revenue is generated through products improving customers’ resource efficiency

Investing in core product categories with higher return• Top 4 product categories represent 80% of

Group’s revenue, above EUR 2 billion

• Our investments have focused on:

– Bleaching chemicals

– Polymers

– Sizing* chemicals

• Current investments projects

– Netherlands – Expansion of Oil & Gas polymers

– US – Expansion of Oil & Gas polymers

– China – Completion of new Pulp & Paper AKD site


PRODUCTS

◼ 25% Bleaching

and pulping

◼ 20%

Polymers

◼ 20% Other:

e.g. defoamers,

dispersants,

and biocides

◼ 20%

Coagulants

◼ 15%

Sizing*

and

strength

Revenue

EUR 2,642

million

(LTM)

*Sizing = Resistance against water absorption



Latest news andfinancials

Key points in Q2 2019

• Focus on value over volume continued

• Strong profitability improvement despite some softness in the market

• Growth investment projects in China and the Netherlands expected to be ramped-up by year-end


Key financial highlights

Focus on value over volume

• Intention to drive profitability resulted in some lost volumes

• Oil & Gas organic growth +30%

Operative EBITDA +32% to margin of 16.0%

• Improved product mix

• Effective price and cost management combined with favorable raw material price development

• IFRS 16 impact EUR +8.3 million in Q2

• Favorable currency development

Operative EBIT +34% to margin of 9.1%


EUR million

(except ratios)

Q2

2019

Q2

2018

Δ% FY

2018

Revenue 663.6 647.6 +2 2,592.8

Operative EBITDA 106.1 80.2 +32 323.1

of which margin 16.0% 12.4% 12.5%

Operative EBIT 60.3 45.1 +34 173.8

of which margin 9.1% 7.0% 6.7%

Net profit 35.2 23.5 +50 95.2

EPS, EUR 0.22 0.14 +54 0.58

Pulp & Paper – profitability improving

Market environment

• Some short-term softness in the market

Organic growth -3%

• Intentional focus on improving product mix

• Exit of ECOX business impacted sales volumes

Operative EBITDA margin 14.4%

• Value over volume visible also in EBITDA and EBIT leading to improved profitability

• Cost savings initiated – related one-time costs recognized in Q2

• *IFRS 16 impact EUR +3.2 million in Q2 and EUR +6.5 million in H1


OPERATIVE EBITDA AND OPERATIVE EBITDA-%

EUR million

REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y)

EUR million

372 369 363373 369 376 385 390 381 373

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2017 2018 2019

0% +1% +2% +5% +5% +6% +7% +4% -3%

46.0 47.8 48.555.4

42.7 45.452.3 51.2 50.7 53.7

12.4% 13.0% 13.4%14.9%

11.6% 12.1%13.6% 13.1% 13.3%

14.4%

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

2017 2018 2019

+0%

Industry & Water – exceptional profitability

Market environment

• Water treatment market solid

• Oil & gas shale market growth rate slowing in the short-term

Organic growth +4%

• Our Oil & Gas business had strong organic growth, +30% to EUR 77 million, partly driven by oil sands tailings treatment business

• Focus on key customers

Operative EBITDA margin exceptionally high 18.1%

• Favorable product mix and polymer raw material price development

• *IFRS 16 impact EUR +5.0 million in Q2 and EUR +9.4 million in H1


22.929.3

36.0

25.3 26.634.8 36.7 33.3

45.052.4

9.6%11.8%

13.9%

9.6%10.9%

12.8% 12.9% 12.3%

16.8%18.1%

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

2017 2018 2019

OPERATIVE EBITDA AND OPERATIVE EBITDA-%

EUR million

238 248 259 264245

272 284 271 267290

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2017 2018 2019

+9% +15% +20% +14%

REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y)

EUR million

+11% +11% +2% +4%+6% +5%

Clear improvement in safety

• We have 5,067 employees and annually 1,000-1,200 contractors working with us

• We produce some 5.3 Mton of products at 64 manufacturing sites in 28 countries every year

• We deliver nearly 1,000 shipments daily by road, rail and sea

• Our TRIF is 2.5, including own employees and contractors

• Our LTIF of 1.5 is among the best of the global chemical companies*

Total Recordable Injuries Frequency

# of injuries per 1 million hours

(Kemira Employees and Contractors in our facilities)


Safety record on the right track –target has to be zero injuries

5.8

7.2

3.43.9 3.5

2.5

2014 2015 2016 2017 2018 2019 YTD

*Based on the ICCA (the International Council of Chemical Associations)

database and the latest reported company data

2.7 2.7

1.5

2.2 2.01.5

2014 2015 2016 2017 2018 2019 YTD

Lost Time Injuries Frequency

# of injuries per 1 million hours

(Kemira Employees and Contractors in our facilities)

Key operative focus areas in H2 2019

1. Active price management

2. Modify product & service offering to cater better profitable growth

3. Improve operational excellence

4. Ramp-up CEOR* polymer capacity addition in the Netherlands

5. Start-up new AKD sizing manufacturing site in China

6. Construction of emulsion polymer capacity in the US on time and in budget, start-up expected beginning of 2021

7. Prudent cost-control in all areas


*CEOR, chemical enhanced oil recovery

PETRI CASTRÉN, CFO JULY 19, 2019


Financials Q2 2019

Successful pricing drives improvement


80.2

Q22018

Sales volumes Sales prices Variable costs Fixed costs Currencyimpact

Other Q22019

Adoption ofIFRS 16standard

"Pre IFRS 16comparison"

-6.6+23.4

+4.8 -0.5 +5.7 -0.8

OPERATIVE EBITDA BRIDGE

EUR million

648 -4% +2% 0% 664

Q2 2018 Salesvolumes

Salesprices

Currencyimpact

Acquisitions Q2 2019

+4%

REVENUE AND ORGANIC GROWTH (Y-ON-Y)

EUR millionOperative EBITDA margin 16.0%

• Focus on value over volume is bearing fruit

• Due to the adoption of IFRS 16 -standard, fixed costs do not include operating lease expenses in 2019, corresponding to a positive EBITDA impact of EUR +8.3 million in Q2 and EUR +16.0 million in H1

97.8-8.3106.1

SALES PRICE VS VARIABLE COST TREND(ROLLING 12-MONTH CHANGE Y-O-Y)

-180

-120

-60

0

60

120

180

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Brent oil, USD Sales prices* Variable costs*

SALES PRICES AND VARIABLE COSTS(CHANGE Y-O-Y)

95

-3 -10

-16-20

-10

-2 -2

114

8

24

28

-9

-18

-26-23

-16

-4

3

11

23

4742

3734

23

-18-23

-23 -13

0

1613

13

2636

38

29

11

-5

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

2016 2017 2018 2019

Net impact on EBITDA (sales prices-variable costs)

Sales prices

Variable costs


Net impact of sales price & variable costs positive

* 12-month rolling change vs previous year in EUR million

EUR millionEUR million

Cash flow has improved clearly


ALL KEY FIGURES IN EUR MILLION

271

205 210

58

122

2016 2017 2018 H1 2018 H1 2019

118 124 106

41 34

95 66

44

22 34

2016 2017 2018 H1 2018 H1 2019

213

CASH FLOW FROM OPERATIONS

CAPITAL EXPENDITURE EXCL. ACQUISITIONS

◼ Growth capex190

150

• Cash flow supported by improved profitability

• Kemira’s Pension Fund Neliapila returned excess capital of EUR 15 million to Group in Q1

• IFRS 16 impact EUR +14 million on cash flow from operations in H1

• Typically cash flow is H2-weighted, especially due to changes in net working capital

• In H1 the largest capital expenditures were related to polymer expansion in the Netherlands and new AKD manufacturing site in China

• CAPEX excl. acquisitions estimated to be around EUR 180-220 million in 2019

63 68

ROCE improving, adoption of IFRS 16 increased reported net debt

9.9% 9.7% 9.8% 9.7%

10.8%

2016 2017 2018 Q2 2018LTM

Q2 2019LTM

634694 741 773

921

Dec 31 2016

Dec 312017

Dec 312018

Jun 302018

Jun 302019


NET DEBT (EUR million) AND LEVERAGE RATIO*

OPERATIVE RETURN ON CAPITAL EMPLOYED

2.32.22.1

• ROCE improvement driven by Industry & Water

• Ongoing investment projects are expected to improve Group’s ROCE once up and running

• Increase in net debt resulted mainly from the adoption of IFRS 16 as operating leases (EUR 135 million) are part of debt

– Excluding IFRS 16 impact, net debt would have been EUR 786 million and leverage ratio 2.2

• Average cost of net debt excluding leases is 1.9% and duration is 27 months

2.52.5

* Leverage ratio = Net debt / last 12 months operative EBITDA

Outlook for 2019

“Kemira expects its operative EBITDA (2018: EUR 323.1 million) to increase from the prior year on a comparable basis, excluding the impact of IFRS 16 accounting change.”


EUR

million

2014 2015 2016 2017 2018 2019

outlook

Operative

EBITDA

253 287 303 311 323 Increase

Operative EBITDA figures for 2014-2018 are ”pre IFRS-16”.

Majority of contracts with fixed annual pricingPulp & Paper – Contract types and pricing terms on high level

• Length – Around 95% of contracts are 1-year or longer / only 5% are spot deals

• Pricing – Around 70% fixed / 30% formula or spot pricing

Industry & Water – Contract types and pricing terms

• Length – Around 60% of contracts are 1-yr or longer / 40% spot deals

• Pricing – Around 60% fixed / 40% formula or spot pricing, incl. Oil & Gas where contracts are either formula or spot based


VARIABLE COST SPLIT 2018EUR 1.6 billion

TOP 10 RAW MATERIALSBY SPEND

1. Sodium hydroxide (caustic soda)*

2. Acrylonitrile (OD)

3. Aluminium hydrate

4. Colloidal silica dispersion*

5. Amines (OD)

6. Petroleum solvents (OD)

7. Acrylic acid (OD)

8. Alpha olefin (OD)

9. Acrylic ester (OD)

10. Fatty acid

Top 10 account for 50%of Kemira’s raw material spend

OD = Oil & gas derivative

* Mainly trading materials


EXPOSURE TO OIL RELATEDRAW MATERIALS

Kemira’s variable cost split and top raw materials

◼ 30%Oil & gas

related

◼ 70%Not oil

related

◼ 70%Raw materials

◼ 15%Electricity & energy

◼ 15%Logistics

JULY 2019


Mid- to long-term financial targets were updated due to IFRS 16 in February 2019

Targets until

end of 2018

Revenue

Operative EBITDA-% 14-16%

IFRS 16

impact

-

Gearing

Around +1%-point

Approx. +10%-pointsBelow 60%

2017

EUR 2.5 billion

2018

EUR 2.6 billion

12.5% 12.5%

59% 62%

Above-the-market

growth

Financial

targets (mid- to long-term)

Above-the-market

growth

15-17%

Below 75%

• IFRS 16 will affect primarily the accounting for Kemira Group’s operating leases

• Operating lease expenses are replaced by the depreciation of the right-of-use assets and interest cost associated with lease liability

• The impact on EBIT is small positive and on net profit immaterial

• No restatement of previous year figures, instead we will provide enough data for analysis


IFRS 16 impact on financials

EUR million

(except ratio)

FY

2018

Impact on

H1 2019

Estimated impact

on FY 2019, around

Operative EBITDA 323.1 +16.0 +30

of which margin 12.5% +1.2 %-point +1 %-point

Impact on balance sheet

EUR million

(except ratio) Dec 31, 2018

Impact on

June 30, 2019

Net debt 741 +135

Gearing 62% +12%-points

EUR million Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 2018 2017

Revenue 663.6 647.8 661.8 669.6 647.6 2,592.8 2,486.0

Operative EBITDA 106.1 95.6 84.5 89.0 80.2 323.1 311.3

margin 16.0% 14.8% 12.8% 13.3% 12.4% 12.5% 12.5%

Operative EBIT 60.3 50.1 44.8 50.0 45.1 173.8 170.3

margin 9.1% 7.7% 6.8% 7.5% 7.0% 6.7% 6.9%

Net profit 35.2 29.3 26.5 22.1 23.5 95.2 85.2

Earnings per share, EUR 0.22 0.18 0.17 0.14 0.14 0.58 0.52

Cash flow from operations 57.2 65.2 88.2 64.2 23.4 210.2 205.1

Capex excl. acquisitions 39.9 28.3 53.2 34.3 39.8 150.4 190.1

Net debt 921 842 741 744 773 741 694

NWC ratio (rolling 12 m) 10.9% 10.6% 10.2% 9.8% 9.6% 10.2% 9.4%

Operative ROCE (rolling 12 m) 10.8% 10.3% 9.8% 9.8% 9.7% 9.8% 9.7%

Personnel at period-end 5,067 4,973 4,915 4,798 4,858 4,915 4,732

PLEASE NOTE FINANCIAL IMPACT OF IFRS 16 ADOPTION FROM THE PREVIOUS SLIDE

Key figures


EUR million Q2 2019 Q2 2018 2018 2017

Net profit for the period 35 24 95 85

Total adjustments 69 53 220 204

Change in net working capital -22 -32 -51 -34

Finance expenses -17 -11 -30 -25

Income taxes paid -8 -10 -24 -25

Net cash generated from operating activities 57 23 210 205

Purchases of subsidiaries, acquisitions and assoc. comp. -2 2 -43 0

Capital expenditure -40 -40 -150 -190

Proceeds from sale of assets 1 1 7 3

Change in long-term loan receivables 0 0 5 -5

Cash flow after investing activities 17 -13 29 13

Cash flow


Currencies

Currency exchange rates had around EUR +31 million impact on revenue andEUR +12 million impact on the operative EBITDA in H1 2019 compared to H1 2018.

Guidance: 10% change in our main foreign currencies would approximately haveEUR 15 million impact on operative EBITDA on an annualized basis.


◼ 42% EUR

◼ 7% Others

KEMIRA REVENUE DISTRIBUTION H1 2019 KEMIRA COST DISTRIBUTION H1 2019

◼ 2% SEK

◼ 4% CNY

◼ 4% CAD

◼ 37% USD

◼ 6% Others

◼ 5% CNY

◼ 5% CAD

◼ 6% SEK

◼ 30% USD

◼ 43% EUR◼ 2% BRL

◼ 2% GBP

◼ 3% GBP

◼ 2% PLN

KEY FINANCIALS

Pulp & Paper


*12-month rolling average


Revenue 373.4 380.8 390.4 385.2 376.0 1,520.2 1,476.9


margin 14.4% 13.3% 13.1% 13.6% 12.1 12.6% 13.4%

Operative EBIT 24.0 20.6 24.1 26.6 22.0 91.6 104.8

margin 6.4% 5.4% 6.2% 6.9% 5.9% 6.0% 7.1%

Operative ROCE*, % 7.6% 7.7% 7.8% 8.5% 8.3% 7.8% 9.0%

Capital expenditure (excl. M&A) 23.3 17.3 28.8 20.7 21.4 85.1 138.3

Cash flow after investing

activities

36.2 25.1 -13.5 20.6 2.3 29.9 15.7

KEY FINANCIALS

Industry & Water


*12-month rolling average


Revenue 290.2 267.0 271.5 284.4 271.7 1,072.6 1,009.1


margin 18.1% 16.8% 12.3% 12.9% 12.8% 12.3% 11.3%

Operative EBIT 36.3 29.5 20.8 23.4 23.0 82.2 65.5

margin 12.5% 11.0% 7.7% 8.2% 8.5% 7.7% 6.5%

Operative ROCE*, % 16.9% 15.4% 13.6% 12.5% 12.6% 13.6% 11.0%

Capital expenditure (excl. M&A) 16.5 11.0 24.4 13.6 18.4 65.3 51.7

Cash flow after investing

activities

5.7 27.8 23.8 26.8 6.1 52.5 46.9

FY 2018

Revenue split by country


USA 27%

Canada 6%

Brazil 3%

Uruguay 2%

Other Americas 1%

Finland 16%Sweden 5%

Germany 5%

Poland 3%

UK 3%

Spain 2%

Other APAC 4%

South Korea 1%

China 4%

Russia 2%

Netherlands 2%

France 2%

Italy 2%

Other EMEA 9%

Norway 1%

Key figures and ratios – 5-year summary

EUR million (except ratios) 2014 2015 2016 2017 2018

Revenue 2,136.7 2,373.1 2,363.3 2,486.0 2,592.8

Operative EBITDA 252.9 287.3 302.5 311.3 323.1

of which margin 11.8% 12.1% 12.8% 12.5% 12.5%

Operative EBIT 158.3 163.1 170.1 170.3 173.8

of which margin 7.4% 6.9% 7.2% 6.9% 6.7%

Cash flow from operations 74.2 247.6 270.6 205.1 210.2

Capital expenditure, excluding acq. 140.6 181.7 212.6 190.1 150.4

Gearing at period-end 42 54 54 59 62

Inventories 197 207 217 224 284

Personnel at period-end 4,248 4,685 4,818 4,732 4,915


Per share figures – 5-year summary2014 2015 2016 2017 2018

Earnings per share, EUR 0.59 0.47 0.60 0.52 0.58

Cash flow from operating activities per

share, EUR

0.49 1.63 1.78 1.35 1.38

Equity per share, EUR 7.57 7.76 7.68 7.61 7.80

Dividend per share, EUR 0.53 0.53 0.53 0.53 0.53

Share price, EUR, end of period 9.89 10.88 12.13 11.50 9.85

Market capitalization, EUR million

(excl. treasury shares)

1,504 1,654 1,848 1,752 1,502

Number of shares, million

(excl. treasury shares)

152.1 152.1 152.4 152.4 152.4

P/E ratio 16.7 23.3 20.1 22.3 17.0

P/CF ratio 20.2 6.7 6.8 8.5 7.1

P/B ratio 1.3 1.4 1.6 1.5 1.3

Dividend yield, % 5.4 4.9 4.4 4.6 5.4

INV E S T OR P RE S E NT A T ION 38JULY 2019


Pulp & Paper –driving growth as market leader


Pulp & Paper chemicals market estimated to grow 1-2%

• Pulp & Paper chemicals market drivers

– Hardwood and softwood pulp demand increasing driven by growth of packaging needs (e-commerce, non-plastic solutions), growing tissue demand and lack of recycled fiber

– Demand increase continues for packaging, driven by online shopping, last-mile delivery, product safety and non-plastic solutions

– Growth in tissue demand driven by increasing wealth in emerging countries

– Ongoing digitalization of media drives decline of graphic paper demand

• Growth areas, pulp and board & tissue, represent over 80% of our Pulp & Paper revenue

– Ongoing capacity additions suit well for the need of growing demand



1,170

1,417 1,457 1,477 1 520

137

171195 198 192

2014 2015 2016 2017 2018

◼ 40%

Pulp

◼ 20%

Printing &

writing papers◼ 40%

Board & tissue

-1-2%2-3%1-2%Market

growth

REVENUE BY CUSTOMER TYPE

Strong demand in pulp market creating growth opportunitiesNew pulp mill projects are driven byincreasing demand for board and tissue

• Food and liquid packaging board isgrowing particularly fast in Asia

• Pulp is produced close to fiber sources andthen shipped to board, paper, and tissue mills or used captively in an integrated mill

• Growth in board = 1 new pulp mill per year

Multiple pulp mill projects realised and expected in Northern Europe creating opportunities for Kemira to grow withthe market

In addition, a few large scale pulp millprojects expected in South America


Confirmed new capacity /

debottlenecking 2016-2020

Possible new mills 2020-2022

Äänekoski

Kuusankoski

Kuopio

Paltamo

Kemi

Östrand

Värobacka

Svetlogorsk

Steti

Viljandi/Tartto

Vologda

Bratsk ->

Uts-Ilimsk ->

Sveza

Bleaching investment – case Joutseno


• In Joutseno we doubled our chlorate capacity in Q4 2017

– Excellent timing, pulp production grew simultaneously in Finland

• Multiple pulp mills are located nearby with annual production of over 2Mt

• Part of chlorate production can be also exported in dry format to APAC

EUR 50 MILLION INVESTMENT IN 2017

Acquisition via JV in China

• Agreed to form joint venture with Tiancheng

• NewCo will produce mainly AKD wax and its key raw material fatty acid chloride (FACL)

– AKD is sizing chemical used in board and paper to createresistance against liquid absorption

– NewCo also plans to produce coagulants for water treatment

• Kemira strengthens its position and secures supply of key raw material for AKD wax

• Kemira has 80% of NewCo

– Investment for 80% around EUR 55 million

• Ramp-up after completion investments

– Good contribution to P&L after ramp-up


AKD WAX SUPPLIED FROM YANZHOU, CHINA TO KEMIRA SITES GLOBALLY

We leverage acquisition synergieswith our global production


Telêmaco

Borba

Washougal

St. CatharinesHelsingborg

Joutseno

Nanjing

Hallam

Gunsan

Pasuruan

Wellgrow

Krems

TarragonaYanzhou

NewCo

Acquisition in China is excellentstrategic fitAcquired asset fulfills our key criteria for acquisitions

GROWTH – End-products in growing markets

APAC – Enables profitable growth in APAC

SUPPLY – Backward integr. & self-sufficiency (FACL)

SUSTAINABILITY – FACL from renewable raw material

LOCATION – Close to our existing production

PROFITABILITY – Accretive after ramp-up


END-PRODUCTSWHERE AKD WAXIS USED

Pulp & Paper


TECHNOLOGY AND MARKET LEADER

Value chain part covered by Kemira

RAW

MATERIALSINTERMEDIATES PRODUCTS APPLICATIONS

CUSTOMER

INDUSTRIESCUSTOMERS

Electricity

Sodium chloride(salt)

Crude tall oil

Cationic monomer

Acrylonitrile

Acrylic acid

Olefins

Fatty acids

Maleic anhydride

Sulfur

Tall oil rosin

AKD Wax

Isomerized olefinsAcrylamide

Sodium chlorate

Hydrogen peroxide

Polymers

Defoamers

Coagulants

Biocides

Sizing

Strength Additives

Surface additives

Colorants

Sulfuric acid

Pulping

Bleaching

Retention

Wet-end processcontrol

WQQM

Sizing

Strength

Surface treatment

Coloring

Pulp

Packagingand board

Printingand writing

Tissue

All the major global paper and pulp producers

MAIN COMPETITORS: Solenis, Nouryon, Ecolab, Kurita, SNF



Industry & Water -stronger platformfor profitable growth

Industry & Water relevant chemicals market estimated to grow 3-4%

• Demand for water treatment chemicals expected to increase due to

– Higher demand for water driven by industrial growth and population growth

– More stringent discharge limits for waste water

– Better dewatering of sludge

– Phosphorus recovery

– Water reuse

• Higher demand for Oil & Gas solutions expected

– Shale friction reducer market expected to grow due to higher energy demand and increasing number of wells fracked

– Oil sands operators face regulatory requirements for their tailings treatment

– Chemical Enhanced Oil Recovery lucrative in certain fields due to better yield from existing reservoirs


947 956906

1,009 1,073

116 116 107 114131

2014 2015 2016 2017 2018


◼ 65%

Water treatment

◼ 10%

Other◼ 25%

Oil & Gas

2-3%5-6%2-3%Market

growth

REVENUE BY APPLICATION

2014-2016 figures are pro forma; combination of Municipal & Industrial and

Oil & Mining segments

Kemira is a market leader in water treatment chemistry


Serving most European cities

Drinking water plants and wastewater plants

• No of ship-to countries ~ 80

• No of ship-to points ~ 9 000

• No of ship-from points ~ 30-40

I&W EMEA customer locations. Dot size

correlates with ship-to volumes.

Not representative for Eastern Europe due to

roll-out of Kemira ERP system.

1. The requirements of the Urban Wastewater Treatment Directive (UWWTD) must be implemented fully and equally in all member states.

2. Emission limit values (especially phosphorus) in water discharges should be tightened.

3. Digitalization can improve both the quality of monitoring and the cost efficiency of water treatment.

4. Emerging pollutants need to be included in the legislation.

5. Pollution from storm-water overflows must be limited and discharges safely disinfected.

6. Clearer guidance is needed on applying innovation and sustainability criteria in public procurement for water treatment.

Kemira’ssix actions for cleaner waters


Implementation of wastewater treatment directive varies in EU• There are significant

implementation gaps of the Urban Wastewater Treatment Directive, even though the first collection and treatment requirements of the Directive already entered into force in 2001


0

10

20

30

40

50

60

70

80

90

100

Austr

ia

Belg

ium

Bulg

aria

Cro

atia

Cypru

s

Cze

ch R

ep

ub

lic

Denm

ark

Esto

nia

Fin

land

Fra

nce

Germ

any

Gre

ece

Hung

ary

Ire

land

Italy

Latv

ia

Lithu

ania

Luxe

mb

ou

rg

Ma

lta

Neth

erla

nds

Pola

nd

Port

ug

al

Rom

ania

Slo

vakia

Slo

ven

ia

Spa

in

Sw

ede

n

United

Kin

gd

om

2010 2012 2014

Degree of compliance in water discharges*

% of subjected load

* Degree of compliance with Article 5 of the Directive, which sets the requirements for water discharges to sensitive areas.

Source: European Commission, 9th report on the implementation status concerning urban waste water treatment.

Oil & Gas growing fast

Growing market demand with our selective market diversification assuring growth

Kemira’s offering

• Process efficiencies: polymers that reduce energy consumption by 60% in shale oil fields

• Cost reduction: higher concentrated liquids that make offshore oil recovery more cost effective (CEOR)

• Addressing environmental regulations: tailing treatment in oil sands

New innovative technologies driving expansion


0

50

100

150

200

250

300

2013 2014 2015 2016 2017 2018

REVENUE IN OIL & GASEUR million

REVENUE SPLIT

◼ 10%Other

◼ 60%Shale fracking

◼ 30%Oil sands and

Chemical Enhanced

Oil Recovery Figures rounded to closest 5%

Oil

price

Organic growth

>30%

CEOR-polymer deal with Chevron

• Strategically important multi-year Chemical Enhanced Oil Recovery deal with Chevron

• EUR 30 million polymer capacity addition, announced in October 2017, progressing well

• CEOR market size approximately EUR 1 billion of which EUR 500 million accessible to Kemira

• Market growth estimated to be 5% driven by enhanced production from existing fields

• Kemira is committed to provide enhanced solutions for challenging water intensive environments and technologies that can enable CEOR


Industry & Water


TECHNOLOGY AND MARKET LEADER IN WATER TREATMENT AS WELLAS IN NICHE APPLICATIONS IN OIL & GAS

MAIN COMPETITORS

Coagulants: mainly local small companies, Feralco, USALCO, Kronos, PVS,

Polymers: SNF, Solvay, Ecolab, SolenisValue chain part covered by Kemira

INTERMEDIATES PRODUCTS APPLICATIONS SALES CHANNELS CUSTOMERS

Acrylonitrile

Acrylic acid

Sulfuric acid

Hydrochloric acid

Aluminium hydrate

Iron ore

Pickling liquor

Copperas

Various monomers

Acrylamide

Cationic monomer

Polymers (EPAM, DPAM)

Al Coagulants

Fe Coagulants

Dispersants &antiscalants

Biocides

Emulsifiers

Defoamers

Formulations

Raw water & waste water treatment

Sludge treatment

Friction reduction

Enhanced oil recovery

Tailings treatment

Mining processes

Direct sales

Distributor/reseller

Service companies

RAW

MATERIALS

Municipalities

Private operators

Industrial customers

Pumpers

Oil & Gas operators

Service companies

Mine operators


Appendix


SHAREHOLDERS ON JUNE 30, 2019

% OF SHARES

1. Oras Invest 18.2%

2. Solidium (owned by State of Finland) 14.0%

3. Varma Mutual Pension Insurance Company 3.4%

4. Ilmarinen Mutual Pension Insurance Comp. 2.6%

5. Kemira Oyj 1.7%

Total number of shares 155,342,557

Foreign ownership of shares 30.0%

Total number of shareholders 32,919

KEMIRA BOARD OF DIRECTORS


Kemira – largest shareholders andBoard of Directors

JARI PAASIKIVI

Chairman

Member since 2012

Oras Invest Oy, CEO

KERTTU

TUOMAS

Vice Chairman

Member

since 2010

WOLFGANG

BÜCHELE

Member in

2009-2012 and

since 2014

KAISA

HIETALA

Member

since 2016

TIMO

LAPPALAINEN

Member since

2014

SHIRLEY

CUNNINGHAM

Member

since 2017

Kemira’s Management Board


Jukka Hakkila, Chief Legal Officer, (with Kemira since 2005) acts as secretary of Management Board and Board of Directors.

JARI ROSENDAL

President and CEO

With Kemira since 2014

KIM POULSEN

President

Pulp & Paper


ANTTI SALMINEN

President

Industry & Water


PETRI CASTRÉN

CFO


MATTHEW PIXTON

CTO


ESA-MATTI PUPUTTI

EVP, Operational

Excellence


EEVA SALONEN

EVP, Human Resources


Priority KPI+Target Performance Comments Progress

Sustainable products

and solutions

Product sustainability

Share of revenue from products used for

use-phase resource efficiency. At least

50% of Kemira’s revenue generated

through products improving customers’

resource efficiency.

In Q2 2019 four R&D projects and two joint R&D projects

were started to improve customer resource efficiency. Other

R&D projects are targeted to improve product quality or

safety. In Q2 one R&D project to improve customer phase

resource efficiency was commercialized.

Responsible

operations and supply

chain

Workplace safety

Achieve zero injuries on long term;

TRIF* 2.0 by end of 2020.

YTD 2019 TRIF was 2.5. The preventive work with

Behaviour Based Safety and using leading indicators like

hazardous conditions and activities on a daily basis are

beginning to show results via lower number of people

incidents as well as severity. EMEA completed face-to-

face EHSQ training in June.

Climate change

Kemira Carbon Index ≤ 80 by end of

2020 (2012 = 100). This KPI is reported

once a year.

Efforts to decrease carbon footprint continue mainly by

sourcing a higher share of electricity from low carbon

sources. During Q2, started E3 Energy Reviews in six of

our manufacturing plants. Work to develop a longer-term

climate change target started in Q2.

Supplier Management

% of direct key suppliers screened

through sustainability assessments and

audits (cumulative %). The target

includes 5 sustainability audits for

highest risk** suppliers every year, and

cumulatively 25 by 2020.

Sustainability screening of key suppliers continues as

planned. During Q2 two ethical audits and 8 new

assessments were conducted. Total 29 suppliers are

currently in progress to be evaluated during the second

half of the year.

Corporate responsibility performance Q2/2019

JULY 2019 INV E S T OR P RE S E NT A T ION

49%

51%

Baseline average2016-2017

2018

10088 91 93

86 85 83 80

12 13 14 15 16 17 18 Target2020

69% 72%

90%

11 13

25

0

10

20

30

40

50

0%

20%

40%

60%

80%

100%

Baseline 2018 YTD2019

Target 2020

% of key suppliers # of audits (cumul.)

* TRIF = Number of Total Recordable Injury Frequency per million hours, Kemira + contractor, year-to-date

** Suppliers with lowest sustainability assessment score

7,2

3,43,9 3,5

2,52,0

15 16 17 18 YTD2019

Target2020

58

Priority KPI+target Performance CommentsProgress

People and

integrity

Employee engagement index based on

Voices@Kemira biennial survey

The index at or above the external

industry norm. The participation rate

target in Voices@Kemira is 75% or

above.

Engagement currently 2% above external industry norm.

Company wide strategy communication and engagement is

ongoing across staff and stakeholders.

Leadership development activities

provided, average

Two leadership development activities

per person in manager position during

2016-2020, the cumulative target is 1,500

by 2020.

123 leadership activities in Q2. Leadership activities overall

1671 vs target 1500 by year 2020.

Integrity index

KPI to measure compliance with the

Kemira Code of Conduct. The target is to

maintain the Integrity Index level above

the external industry norm.

Currently at 10% above external industry norm. Mandatory

training on the Kemira Code of Conduct and general

awareness-building on GDPR was continued for Kemira

employees.

Corporate responsibility performance Q2/2019

JULY 2019 INV E S T OR P RE S E NT A T ION

58%67% 71%75%

85% 84%

2013 2015 2017 2018

Engagement Participation

494

1 036

1 533 1 500

2016 2017 2018 Target 2020

87%

84%

2018

Integrity Index Participation

Read more about Corporate

Responsibility in Kemira

59

https://kemira.sharepoint.com/sites/intra/SitePages/content/Corporate-responsibility.aspx?nodeId=1915f489-0ecf-46fb-b9f8-801d88a1b32d

Important information about financial figuresKemira provides certain financial performance measures (alternative performance measures) on non-GAAP basis. Kemira believes that alternative performance measures, such as organic growth*, EBITDA, operative EBITDA, cash flow after investing activities, and gearing followed by capital markets and Kemira management, provide useful information of its comparable business performance and financial position. Selected alternative performance measures are also used as performance criteria in remuneration.

Kemira’s alternative performance measures should not be viewed in isolation to the equivalent IFRS measures and alternative performance measures should be read in conjunction with the most directly comparable IFRS measures. Definitions of the alternative performance measures can be found in the Definitions of the key figures in this report, as well as at www.kemira.com > Investors > Financial information.

All the figures in this interim report have been individually rounded and consequently the sum of individual figures may deviate slightly from the sum figure presented.

* Revenue growth in local currencies, excluding acquisitions and divestments


JULY 19, 2019 Strong earnings improvement …...Kemira’s mid- to long-term financial targets JULY...

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