(Stock Exchange Release)
- New strategy confirmed - focus on water and fiber
- Tikkurila to be spun off into a public company
- New customer based organisation
- Guidance for 2008 changed
- Cost reduction programme initiated
Kemira's Board of Directors has made a strategic decision to
concentrate on water and fiber related businesses in the future.
Kemira will initiate a spin-off process to turn Tikkurila, its
Coatings business area, into a public company owned by Kemira's
current shareholders and potential new shareholders on the Helsinki
Stock Exchange. This will take place during the first half of 2009.
Kemira will remain as a shareholder in the Coatings company, widely
known as Tikkurila, in order to retain the value upside in
Tikkurila's shares."These structural changes are part of the strategic development plan
for Kemira and they aim at continuous growth of the long term
shareholder value" says Pekka Paasikivi, Chairman of the Board of
Kemira Oyj. "The listing of Tikkurila will increase transparency of
Kemira's businesses and it will be a good way to enhance the value of
Kemira's total business portfolio. The creation of a new public
company and positive effects that the structural change will have on
Kemira's development will benefit also other stakeholders" Paasikivi
continues."According to our strategy we will first concentrate on reinforcing
the balance sheet, generating positive cash flow and improving
profitability. During the second phase we will seek strong organic
growth", says Harri Kerminen, President and CEO of Kemira Oyj."Structural changes and our customer focused strategy will help us
achieve our financial targets for growth, cash flow and balance sheet
structure during 2009".
Kemira will organize its businesses into three customer based
segments with P/L responsibilities. Water is the common denominator
for all these segments. The Paper segment will focus on serving
customer segments in the pulp and paper industry, while the Water
segment will concentrate on serving customer segments in municipal
and industrial water treatment. A new segment Oil and Mining will
further develop businesses in the growing application areas of the
oil, gas and mining industries where water treatment chemicals are of
great importance.
The new organization will be effective from the beginning of October
2008. Financial reporting will change over to the new structure from
the beginning of 2009.
Profitability"Unfavourable development of raw material prices and energy-related
costs that we anticipated earlier have together with a weak US dollar
affected our result. Kemira's operative full-year profits and
earnings per share are expected to remain below last year's level due
to the current business environment", states Harri Kerminen."We will take decisive action to improve the profitability by
increasing our income and lowering our costs. Effective
cross-selling, active pricing, completing current integration
programs, increasing the utilization rates of our production units,
building a lean global logistics network and cutting costs to
increase our internal efficiency are examples of the concrete actions
that we are going to take" Kerminen concludes.
The annual cost savings target is over EUR 50 million, excluding
Kemira Coatings. The planned savings programme may also lead to a
reduction of approximately 1000 persons worldwide from Kemira's
payroll, including potential sale of businesses. Streamlining of the
global functions may lead to for example to the consolidation of
production sites, the R&D facilities and the warehouse network. A
cost savings programme will be prepared taking into account of all
local requirements before any decisions are made. Further briefings
on these decisions will be given during Q3.
Invitation to press conference
Kemira is pleased to invite the media and analysts to attend a press
conference in which Kemira President and CEO Harri Kerminen will
present the decisions made by Kemira Oyj's Board of Directors today
and mentioned in this release. The press conference will take place
today at 4.15 pm at Kemira House, Porkkalankatu 3, Helsinki. The
press conference will be held in Finnish.
A conference call (in English) will begin today at 5.30 pm Helsinki
time. In order to participate in the conference call, please dial +44
(0)20 7162 0025. Please call in some minutes prior to ensure the
operators have sufficient time to take your name and company
affiliation.
Presentation material will be available on our website
(www.kemira.com) under Investors - Presentations. During the
conference call, the presentation can be followed at this address:
http://wcc.webeventservices.com/view/wl/r.htm?e=113056&s=1&k=CD464DAD9603BA8D7E3EDE91547146F9&cb=genesys
The conference call will be recorded, and you can listen to the sound
file on our website the next day.
Kemira Oyj
Timo Leppä, Executive Vice President, Group Communications
For further information please contact
Kemira Oyj
Harri Kerminen, President and CEO
Tel. +358 10 862 1801
Kemira will be a focused company, the best in water and fiber
management chemistry.
In 2007, Kemira recorded revenue of approximately EUR 2.8 billion and
had a staff of 10,000. Kemira operates in 40 countries.
www.kemira.com
