• EBITDA Margin: 19.1%, stable despite softer market conditions.
• Organic Revenue: Slight decline in Q1, driven by negative growth in packaging and hygiene solutions.
• Sales Volumes: Stable overall; growth in water solutions and fiber essentials.
• Water Solutions EBITDA: Over 21%, indicating strong profitability.
• Fiber Essentials EBITDA: Over 26%, reflecting robust performance.
• Net Debt: EUR 216 million, with leverage at 0.4 turns.
• Operating Return on Capital: 19.1%.
• Capital Expenditures: Expected to be approximately EUR 200 million for the full year.
• Dividend: Increase to EUR 0.74 per share, paid in two installments.
• Sales Price Decline: Slightly more than 2% year-on-year, stable sequentially.
• Fixed Costs: Increased by EUR 4 million year-on-year, down EUR 13 million from Q4.
• Cash Flow: Solid performance despite seasonal weakness.

• Warning! GuruFocus has detected 8 Warning Signs with SEOAY.

Release Date: April 25, 2025

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

Positive Points

• Kemira Oyj (KOYJF) maintained solid profitability with an EBITDA margin of 19.1% despite a softer market environment.
• The company's local business model provides resilience against direct tariff impacts, contributing to stable performance.
• Water solutions and fiber essentials divisions showed volume growth, highlighting the robustness of these segments.
• Kemira Oyj (KOYJF) announced several growth investments, including a joint venture with IFF for bio-based materials and capacity increases in Thailand.
• The company received approval for a dividend increase to EUR0.74 per share, indicating confidence in financial stability.

Negative Points

• Market uncertainty increased, particularly affecting demand in the packaging and hygiene solutions area.
• Organic revenue slightly declined in Q1, driven by negative growth in the packaging and hygiene solutions division.
• Sales volumes and prices declined in the packaging and hygiene solutions segment, with significant market softness in China and North America.
• Contract manufacturing volumes in water solutions were below expectations, impacting fixed cost absorption and profitability.
• The company faces challenges in implementing price increases in the packaging and hygiene solutions area due to market softness.

Q & A Highlights

Q: Can you confirm that sales prices won't decline more year over year in the coming quarters as the electricity price will be maybe less meaningful? A: Confirming future outcomes is difficult, but the price decline is indeed reflecting higher electricity prices from a year ago. We expect that this factor will be less significant in the coming quarters. (Petri Castren, CFO)

Q: Given the current market conditions, how successful are the announced price increases, and how do you expect variable costs to develop sequentially? A: It's challenging to predict the success of price increases, but we have a strong track record in implementing them. The market is particularly tough in the packaging and hygiene solutions area. We expect variable costs to remain stable across our raw material basket. (Antti Salminen, CEO; Petri Castren, CFO)

Q: Why do you keep your EBITDA guidance unchanged despite softer volumes and increased uncertainty? A: Despite the turbulent environment, a significant portion of our business is resilient to economic turmoil, which gives us confidence in maintaining our guidance. (Antti Salminen, CEO; Petri Castren, CFO)

Q: What drove negative volumes in packaging and hygiene solutions, and is it due to losing market share? A: We have not lost market share. The decline is due to reduced demand in the value chain, particularly driven by consumer sentiment in China and global trade disruptions. (Antti Salminen, CEO)

Q: Could you talk about Kemira's PFAS removal ambitions and when this business will be a material contributor to revenue? A: The PFAS removal business is already generating revenue, but predicting when it will become a significant contributor is difficult. We are working with traditional and new technologies and monitoring regulatory developments. (Antti Salminen, CEO)

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