Kemira Annual Report 2005

In November, Kemira announcedit was to purchase the Russian paintcompany Kraski Teks. After the transactionwas completed in February,Kemira’s paint business moved intothe leading position in Russia.In December, the company announcedit was purchasing theLanxess paper chemicals business.With this deal, Kemira will becomethe world’s leading supplier of pulpand paper chemicals. Lanxess is aglobally operating supplier of paperchemicals, whose main strength isfunctional wet-end paper chemicals.Approval by the competition authoritiesmust be obtained before thedeal can close.A sharp rise in raw materialand energy pricesPrices of raw materials and energyrose substantially during the year.The acquisitions that were madeincreased energy consumption. Theincreases in the prices of raw materialsand energy were for a large partpassed on into selling prices.Kemira – from Good to GreatIn the spring of 2005, the companylaunched a development programdubbed Kemira from Good toGreat with the aim of ensuring thatgood plans are put into action speedily.The focuses of the program arestrategy, operational performance,corporate culture and the companyidentity. During the year, 18 mee -tings were arranged as part of thethorough review of all of Kemira’sbusiness areas, strategic businessunits and largest production networks,examining their presentstate and formulating developmentplans and monitoring systems.Steady dividend payoutpolicy continuesThe Board of Directors will proposea dividend of EUR 0.36 per share forthe 2005 fiscal year, correspondingto a dividend payout ratio of 49%.For the 2004 fiscal year, a dividendof EUR 0.34 was paid per share.Net sales by business areaNet sales by regionOperating income bymain business areaPulp & Paper Chemicals 37%Kemwater 18%Performance Chemicals 22%Paints & Coatings 23%Group net sales EUR 1,994.4 millionFinland 18%Other EU 43%Other Europe 9%America 24%Asia 5%Other 1%Pulp & Paper Chemicals 34%Kemwater 16%Performance Chemicals 21%Paints & Coatings 29%Group operating income EUR 165.5 millionincluding income outside main businessareas EUR -26.8 million.Capital employed by business area**25ROCE, % by business area**Personnel by business area2015105Pulp & Paper Chemicals 43%Kemwater 13%Performance Chemicals 25%Paints & Coatings 17%Other 2%Capital employed total EUR 1,662.9 million.** 12-month moving average.0Pulp & Paper Chemicals 8,8%Kemwater 15,0%Performance Chemicals 10,0%Paints & Coatings 20,2%Group’s ROCE 9.9%.** 12-month moving average.Pulp & Paper Chemicals 28%Kemwater 19%Performance Chemicals 18%Paints & Coatings 30%Muut 5%Group personnel 7,670 (end of year).3