Kemira has reported strong revenue growth in Q4 but its profitability got impacted by continued inflationary pressures. 

 

In Q4, revenue increased by 19% to a record-high, EUR 718.2 million (605.6). Revenue in local currencies, excluding acquisitions and divestments, increased strongly by 16% following higher sales prices and sales volumes. 

 

Operative EBITDA decreased by 9% to EUR 97.8 million (107.9) due to higher variable costs that were partly offset by higher sales prices. The operative EBITDA margin decreased to 13.6% (17.8%) following higher raw material and energy prices. EBITDA decreased by 24% to EUR 69.5 million (91.2). The differences between operative and reported figures are explained by items affecting comparability, which were mainly related to a provision caused by the expected underutilization of a single-asset energy company in Pori, Finland majority owned by Kemira via Pohjolan Voima. Operative EBIT decreased by 17% to EUR 47.0 million (57.0). EBIT decreased by 56% to EUR 17.5 million (40.3). Cash flow from operating activities was EUR 80.8 million (146.4). EPS (diluted) decreased by 62% to EUR 0.05 (0.14), mainly due to items affecting comparability.

 

For the full year 2021, company's revenue increased by 10% to a record-high, EUR 2,674.4 million (2,427.2). Revenue in local currencies, excluding acquisitions and divestments, increased strongly by 11% mainly due to higher sales volumes and sales prices. Operative EBITDA decreased by 2% to EUR 425.5 million (435.1). The operative EBITDA margin decreased to 15.9% (17.9%) following higher raw material and energy prices. EBITDA decreased by 10% to EUR 373.2 million (413.2).

 

As per company's outlook for 2022, revenue in local currencies, excluding acquisitions and divestments, is expected to increase from 2021 (EUR 2,674.4 million). Operative EBITDA is expected to be within a +/- 5% range of the operative EBITDA in 2021 (EUR 425.5 million).

 

Kemira’s President and CEO Jari Rosendal commented, "We saw strong end-market growth in both our segments in 2021. Revenue grew by 10% to EUR 2,674 million, a record revenue for Kemira, driven by strong organic growth in both segments. Kemira’s operative EBITDA was EUR 426 million in 2021. Our profitability in 2021 was impacted by significantly higher raw material, energy and transportation costs as well as supply chain bottlenecks. Operative EBITDA margin in 2021 was 15.9%, within our financial target range of 15-18%.

 

In Pulp & Paper, revenue increased by 7%. We saw strong demand across customer segments and in all regions. Operative EBITDA margin was 15.7% in 2021 and it was impacted by inflationary pressures.

 

In Industry & Water, revenue grew by 15%. Our water treatment business continued to perform strongly driven by growing customer demand. We also saw significant revenue growth in the Oil and Gas business driven by the strong rebound in shale and oil sands tailings demand. Operative EBITDA margin was 16.2% in 2021 following inflationary pressures.

 

In 2020, we announced our increased focus on profitable growth. During 2021, we completed our capacity expansions in the U.S, South Korea and the U.K., which will strengthen our market positions in the relevant markets. Also the expansion of bleaching capacity in Uruguay continued and it will contribute positively to our EBITDA as of 2023. In 2021, we announced an expansion of ASA sizing capacity in China, which will further strengthen our market-leading position in sizing products once the investment is completed in 2023. In addition, Kemira’s biobased strategy progressed during the year with the first biodegradable coatings sales for the paper and board industry taking place in 2021. We continue to aim for EUR 500 million in biobased revenue by 2030.

 

Looking ahead, market demand is expected to remain strong in 2022. We expect strong inflationary pressures to continue in 2022, particularly during the first half of the year. As a result, we will continue our cost mitigation actions to compensate for inflationary pressures and to defend margins. We expect revenue in local currencies, excluding acquisitions and divestments, to increase from 2021 (EUR 2,674.4 million). In terms of profitability, we expect operative EBITDA to be within a +/-5% range of the operative EBITDA in 2021 (EUR 425.5 million). The Board of Directors is proposing a dividend of EUR 0.58 per share to be paid in two installments in April and November.

 

To conclude, 2021 was yet another exceptional year. I am pleased that both employee engagement and customer satisfaction have remained high despite the challenging operating environment. I would like to thank all our customers, employees, suppliers and partners for their continued trust in Kemira in 2021."