Kemira (KEMIRA) CMD 2024 summary

Strategic direction and organizational changes

• Accelerating a sustainability-driven growth strategy with a sharpened focus on water solutions and renewable chemistries, launching a new organizational model in 2025 to increase speed, agility, and customer-centricity.

• Transitioned to three business units: Water Solutions (45% of sales), Fiber Essentials (20%), and Packaging & Hygiene Solutions (35%), each with clear mandates and tailored growth or cash flow profiles.

• Integrated R&D into business units for faster product development and commercialization, while centralizing manufacturing and increasing resources for strategy and M&A.

• Leadership team restructured and incentive schemes renewed to align with growth objectives and foster a growth-oriented culture.

• Emphasized maintaining operational excellence and supply chain efficiency to fund growth investments.

Financial targets and performance

• New long-term targets: average annual organic sales growth over 4%, operative EBITDA margin 18–21%, and operative ROCE above 16%.

• Structurally higher margins achieved through commercial excellence, operational efficiency, and portfolio simplification, including divestment of Oil & Gas.

• CapEx guidance increased to 6–7% of sales, with maintenance and improvement capex around 5% in typical years, supporting growth and efficient, fast-payback investments.

• Strong balance sheet with no large debt maturities, net debt/EBITDA at 0.6 in H1 2024, and a maintained dividend policy focused on competitive and gradually increasing dividends.

• Maintains a disciplined M&A approach, prioritizing small to mid-size bolt-on acquisitions, especially in water and renewables.

Growth platforms and business development

• Water Solutions positioned as the main growth engine, aiming to double revenues by 2030, driven by regulatory changes and sustainability trends.

• Renewable chemistry targeted to generate over €500 million in revenue by 2030, with progress in product conversion, new chemistries, and transformational innovation.

• Expansion into adjacent markets such as molded fiber, textile fibers, and digital services, leveraging existing capabilities and customer relationships.

• Active pipeline of M&A targets, with flexibility for larger transformative deals if they fit the strategic and financial framework.

• Digitalization and innovation, such as KemConnect, enhance process efficiency and customer value.