• Revenue: Expected to be between EUR2.8 billion and EUR3.2 billion for 2025.
• Operative EBITDA: Expected between EUR540 million and EUR640 million for 2025.
• Volume Growth: 4% for the full year 2024, with 5% growth in Q4.
• Organic Revenue Growth: 3% for the full year 2024 in the water segment.
• EBITDA Margin: 20% reported for 2024; 22.2% for the water segment.
• Net Debt: Below EUR300 million, with leverage at 0.5x.
• Dividend Proposal: EUR0.74 per share, an increase of EUR0.06 from the previous year.
• Capital Expenditures: EUR167 million for 2024, expected to exceed EUR200 million in 2025.
• Cash Flow: EUR165 million in Q4 2024.

• Warning! GuruFocus has detected 2 Warning Signs with OGI.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Kemira Oyj (KOYJF) reported its second-best year ever in 2024, with strong margin performance and increased volumes in both segments.
• The company made significant progress in its strategic growth initiatives, including several smaller investments and a bolt-on acquisition.
• Kemira Oyj (KOYJF) introduced new long-term financial targets and a new leadership team, indicating a commitment to profitable growth.
• The company's sustainability efforts were validated by the SBTI, with emission reduction targets for Scope 1, 2, and 3 on track.
• Kemira Oyj (KOYJF) maintained a high customer satisfaction score, achieving an all-time high net promoter score of 59.

Negative Points

• The pulp and paper market remained soft in 2024, with expected recovery delayed to the latter half of 2025.
• Despite overall growth, organic growth was modestly negative due to a 5% decline in prices, excluding certain segments.
• Fixed costs included higher miscellaneous and maintenance costs, impacting the Industry & Water segment.
• The company faces ongoing fixed cost pressures, particularly from salary inflation, despite a stabilizing economic environment.
• Kemira Oyj (KOYJF) anticipates modest cost inflation in 2025, which may require price adjustments to maintain profitability.

Q & A Highlights

Q: To what extent do your pulp and paper prices benefit from electricity prices? And do you expect recovering end markets in pulp and paper to also support higher price contribution in 2025? A: We expect the markets to recover, especially towards the latter half of the year, which should support pricing. Currently, electricity prices are not expected to have a drastic impact on our 2025 performance. However, any permanent changes in electricity prices could affect our bleaching chemistry business.

Q: Could you please give more color on the fixed cost pressure? Do you expect the fixed cost pressure to intensify further in 2025 or do you expect your own measures to counter this? A: We expect a stabilizing environment with salary inflation pressures easing. Our new operating model aims to manage fixed costs more efficiently. We are also investing in growth, particularly in R&D and new ventures, but will maintain profitability.

Q: Your guidance seems conservative given expected market recovery and price hikes. Can you explain the rationale behind this? A: The guidance range accounts for potential market and economic uncertainties. While we expect improvement from 2024, factors like currency fluctuations and input cost changes could impact results. The guidance reflects confidence in achieving targets despite these variables.

Q: Can you comment on the seasonality of Industry & Water now that it is without the oil and gas segment? A: The seasonality remains, particularly in North America, where water consumption and treatment chemical usage are lower towards year-end. This results in a typical Q4 dip, which is weather-related and not significantly altered by portfolio changes.

Q: Regarding the new plant investment with IFF in Finland, is it expected to be completed in 2025, and can you comment on the payback time? A: We cannot provide specific details on the timeline or payback period at this stage. Once plans are finalized, we will announce the investment details.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.