Download PDF

1. Company Snapshot

1.a. Company Description

Kemira Oyj operates as a chemicals company in Finland, rest of Europe, the Middle East, Africa, the Americas, and the Asia Pacific.It operates in two segments, Pulp & Paper and Industry & Water.The Pulp & Paper segment develops and commercializes pulp, paper, and packaging chemicals, as well as a range of products for paper wet-end, including packaging and board, and tissue products.


The Industry & Water segment offers coagulants, polymers, and other water treatment chemicals for raw water, waste water and sludge treatment, friction reduction, tailing treatment, mining processes, and oil recovery applications.Kemira Oyj was founded in 1920 and is headquartered in Helsinki, Finland.

Show Full description

1.b. Last Insights on KEMIRA

Kemira Oyj's recent performance was negatively impacted by softer market conditions, leading to declining sales in certain segments. The company's profitability was resilient, with strong EBITDA margins maintained, but this was not enough to offset the decline in sales. Additionally, the formation of a joint venture with IFF, Alpha Bio, may not have had a significant short-term impact, as it is focused on commercial-scale production of renewable biobased materials, which may take time to materialize.

1.c. Company Highlights

2. Kemira's Q3 Earnings: Resilient Profitability Amidst Weakened Market Environment

Kemira reported a 5% year-on-year revenue decline, with a 3% organic decline, but maintained a strong operative EBITDA margin of 20%. Earnings per share (EPS) came in at EUR 0.38, beating analyst estimates of EUR 0.34. The company's Water Solutions unit saw a 2% decline in sales, excluding FX impact, while the Packaging & Hygiene Solutions unit reported flat volume year-on-year. Despite the challenges, Kemira maintained prices and variable costs, defending profitability.

Publication Date: Oct -27

📋 Highlights
  • Stable Profitability Amid Revenue Decline: Maintained 20% operative EBITDA margin despite 5% revenue drop YoY and 3% organic decline.
  • Water Solutions Outperforms: Achieved 23.1% EBITDA margin in Water Solutions vs. 13.6% in Packaging & Hygiene Solutions.
  • Strategic Acquisition: Acquired Water Engineering (US) to accelerate growth in micropollutant removal and industrial water services.
  • Share Buyback Progress: Repurchased EUR 40M shares in Q3 under a EUR 100M program, likely to conclude by year-end.
  • Operational Cash Flow Growth: Cash flow from operations rose to EUR 132M, driven by reduced working capital, despite higher CapEx plans.

Business Unit Performance

The Water Solutions unit reported an operative EBITDA margin of 23.1%, while the Packaging & Hygiene Solutions unit reported a margin of 13.6%. According to Petri Castren, the earnings increase in Packaging & Hygiene Solutions was driven by sales mix and cost savings, with a strong improvement in the third quarter. However, he warned against expecting a linear continuation of this trend, as the business model change will take through to next year.

Growth Strategy and Outlook

Kemira aims to grow significantly in the Water business, particularly in micropollutant removal and industrial water services, through the acquisition of Water Engineering in the United States. The company expects to continue executing its strategy and improving profitability, with a focus on driving volume growth. Kemira's outlook for the rest of the year remains unchanged, with a target of organic growth of more than 4% per year and operative EBITDA performance between 18% and 21%.

Valuation and Cash Flow

With a P/E Ratio of 13.71 and an EV/EBITDA of 6.44, Kemira's valuation appears reasonable. The company's Free Cash Flow Yield is 8.0%, indicating a decent cash generation capability. Analysts estimate next year's revenue growth at 3.3%, which is slightly lower than the company's target. The company's share buyback program, which started in the quarter, is expected to continue, with almost EUR 40 million worth of shares bought back so far.

Market and Competitive Landscape

Kemira operates in a challenging market environment, with a global economic slowdown and reduced global trade impacting the industrial side of the Water Solutions segment. However, the company is well-positioned to navigate these challenges, with a strong balance sheet and a focus on improving profitability. As Antti Salminen noted, the company sees opportunities in collaborating with customers to help them save more and consume fewer virgin raw materials, highlighting the importance of digital services in improving their customers' processes.

3. NewsRoom

Card image cap

European Dividend Stocks To Boost Your Portfolio Income

Nov -12

Source:

Card image cap

Water Treatment Chemicals Market Size and Companies Analysis 2025-2034

Nov -04

Source:

Card image cap

NEW RESEARCH: Kemira Water Index 2025 exposes critical weaknesses in water resilience and alarming consumer unpreparedness

Oct -14

Source:

Card image cap

LVMH: Share transactions disclosure

Sep -09

Source:

Card image cap

The BANK of Greenland issued and early redemption of Senior Non-Preferred capital

Sep -09

Source:

Card image cap

Cointreau Launches First-Ever Ready-To-Serve Range – Introducing Cointreau Citrus Spritz

Sep -09

Source:

Card image cap

What Does the Steep 20% Drop Mean for Rémy Cointreau’s 2025 Outlook?

Sep -09

Source:

Card image cap

Société Foncière Lyonnaise (ENXTPA:FLY): Assessing Valuation After a Year of Solid Share Price Gains

Sep -09

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Pulp & Paper

Expected Growth: 4.5%

Growing demand for sustainable paper products, increasing focus on efficiency and quality, and rising need for expertise in paper and board production drive the growth of Kemira Oyj's Pulp & Paper segment.

Industry & Water

Expected Growth: 4.5%

Growing demand for sustainable and efficient processes in pulp and paper, oil and gas, mining, and water treatment industries drives growth. Increasing focus on environmental sustainability and regulatory compliance also fuels demand for Kemira's chemicals and expertise.

7. Detailed Products

Pulp Cooking

Kemira's pulp cooking products are used to improve the efficiency and quality of the pulping process in paper mills.

Bleaching

Kemira's bleaching products are used to improve the brightness and strength of pulp in paper mills.

Retention and Drainage

Kemira's retention and drainage products are used to improve the efficiency of the papermaking process.

Sizing

Kemira's sizing products are used to improve the strength and water resistance of paper.

Coatings

Kemira's coating products are used to improve the printability and appearance of paper.

Oil and Gas

Kemira's oil and gas products are used to improve the efficiency and safety of oil and gas production.

Mining

Kemira's mining products are used to improve the efficiency and safety of mining operations.

8. Kemira Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Kemira Oyj is moderate due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for Kemira Oyj is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Kemira Oyj is moderate due to the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for Kemira Oyj is high due to the relatively low barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry for Kemira Oyj is high due to the presence of several established competitors in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.64%
Debt Cost 7.27%
Equity Weight 66.36%
Equity Cost 7.83%
WACC 7.64%
Leverage 50.69%

11. Quality Control: Kemira Oyj passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Buzzi Unicem

A-Score: 6.1/10

Value: 6.1

Growth: 7.3

Quality: 7.2

Yield: 3.8

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

View Full Report
Stock-Card
Kemira

A-Score: 5.9/10

Value: 6.5

Growth: 6.0

Quality: 6.0

Yield: 6.9

Momentum: 2.5

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
SOL

A-Score: 5.3/10

Value: 2.2

Growth: 7.3

Quality: 4.9

Yield: 0.6

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
Dottikon Es Holding

A-Score: 4.9/10

Value: 2.5

Growth: 8.6

Quality: 7.0

Yield: 0.0

Momentum: 6.5

Volatility: 4.7

1-Year Total Return ->

View Full Report
Stock-Card
Solvay

A-Score: 4.7/10

Value: 6.0

Growth: 2.1

Quality: 3.4

Yield: 10.0

Momentum: 1.0

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Bachem

A-Score: 4.1/10

Value: 3.3

Growth: 6.8

Quality: 6.4

Yield: 3.8

Momentum: 2.5

Volatility: 1.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.2$

Current Price

19.2$

Potential

-0.00%

Expected Cash-Flows