Kemira (KEMIRA) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered 2% organic growth, driven by strong demand in water treatment and solid performance in both business segments, despite the Oil & Gas divestment.

• Operative EBITDA margin improved to 20.3%, with both segments contributing to margin gains.

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

• SBTi validated emission reduction targets, with a commitment to carbon neutrality by 2045.

• Strategic investments and organizational changes announced, including coagulant capacity expansions, renewable polymer partnerships, and a new operating model effective 2025.

Financial highlights

• Q3 2024 revenue was €727.6 million, down 12% year-over-year due to Oil & Gas divestment; organic growth was 2%.

• Operative EBITDA reached €147.4 million, margin 20.3%; net profit €67.2 million, EPS €0.41.

• Net debt reduced to €309.8 million; leverage ratio at 0.5.

• Solid cash flow generation, with over €300 million operative cash flow year-to-date.

• Operative ROCE at 21.7%; Industry & Water segment ROCE 34.5%.

Outlook and guidance

• Full-year 2024 revenue expected between €2.8–3.2 billion; operative EBITDA €540–640 million.

• Outlook and financial targets remain unchanged, with end-market demand in water treatment and pulp & paper expected to grow.

• Modest variable cost increases expected, with price increases mainly for 2025 contract negotiations.

• Recovery in the pulp and paper market is uncertain and expected to be pushed into 2025.

• Guidance includes Oil & Gas business until its sale on 2.2.2024.