Good organic growth INVESTOR PRESENTATION Kemira in brief FY2017: - - PowerPoint PPT Presentation

INVESTOR PRESENTATION

Good organic growth

APRIL 27, 2018

SEGMENT SPLIT PRODUCTS

GEOGRAPHIES

Kemira in brief

FY2017: REVENUE EUR 2,486 MILLION, OPERATIVE EBITDA EUR 311 MILLION, OPERATIVE EBITDA MARGIN 12.5%, OPERATIVE ROCE 9.7%

 25% Bleaching and pulping  20% Polymers  20% Other: e.g. defoamers, dispersants, and biocides  20% Coagulants  15% Sizing and strength

39% AMERICAS 1.USA 2.Canada 3.Brazil 52% EMEA 1.Finland 2.Sweden 3.Germany 9% APAC 1.China 2.South Korea 3.Indonesia

 59%

Pulp & Paper

 41%

Industry & Water

CUSTOMERS 2,000 customers TOP 10 customers are ~25% of revenue TOP 50 customers are ~45 of revenue EXAMPLES OF LARGEST CUSTOMERS

Municipalities, e.g. Frankfurt, London, New York, Paris, Shanghai, Singapore #1 in water treatment in NA and Europe #2 in friction reduction in North American shale oil & gas #1 globally

Global trends favor Kemira

Trends, among others How Kemira benefits from the trend E-commerce /

• nline

shopping Recycling

Increasing need for packaging material More chemicals required for stronger paper/board

Plastics to be replaced by biobased products

Increased demand of biobased and more sustainable technologies

Regulation driving better water quality Finding oil reservoirs becoming harder

With chemistry water can be purified better With polymers increasing amount of oil can be extracted from current and new oil fields

Plastics to be replaced by biobased products

REVENUE EUR million

2,229 2,137 2,373 2,363 2,486 2013 2014 2015 2016 2017

OPERATIVE EBITDA OPERATIVE EBITDA MARGIN EUR million

252 253 287 303 311 11.3% 11.8% 12.1% 12.8% 12.5% 2013 2014 2015 2016 2017

Delivering profitable growth

1,068 1,170 1,417 1,457 1,477 130 137 171 195 198 2013 2014 2015 2016 2017

REVENUE AND OPERATIVE EBITDA REVENUE BY PRODUCT CATEGORY

REVENUE BY CUSTOMER TYPE AND MARKET GROWTH

Pulp & Paper – market leader with solid track record

MARKET ENVIRONMENT REVENUE BY GEOGRAPHIES AND MARKET GROWTH BY REGION CUSTOMER EXAMPLES

 50% EMEA  35% Americas  15% APAC  35% Bleaching & pulping  25% Sizing & strength  20%

Defoamers, dispersants, biocides and

• ther process

chemicals

 10% Polymers  10% Other  40% Pulp  20% Printing & writing papers  40% Board & tissue

• 1-2%

2-3% 1-2% Market growth 2-3% 0-1% 0-1% Market growth

AkzoNobel (pulp) #4 BASF (paper) #2 Solenis (paper) #3 Kemira (pulp and paper) m.s. ~16% #1 Ecolab (paper) #5

Note: Revenue by industry, product and geography rounded to the nearest 5%

REVENUE BY PRODUCT CATEGORY

REVENUE BY APPLICATION TYPE AND MARKET GROWTH

Industry & Water – strong positions in chosen categories

REVENUE BY GEOGRAPHIES AND MARKET GROWTH BY REGION

 40% Coagulants  40% Polymers  20% Other products such as defoamers and biocides

2-3% 5-6% 2-3%

 50% EMEA  45% Americas  5% APAC  70% Water treatment  10% Other  20% Oil & Gas

5-6% 3-4% 3-4%

WATER TREATMENT

Amsterdam Barcelona Frankfurt London Oslo Paris Stockholm Los Angeles Montreal New York City Toronto Melbourne Shanghai Singapore

OIL & GAS

Note: Revenue by industry, product and geography rounded to the nearest 5%

Market growth Market growth

CUSTOMER EXAMPLES

938 921 906 906 924 945 973 1,009 1,016 111 107 105 107 105 105 112 113 117 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018

REVENUE AND OPERATIVE EBITDA ROLLING 12 MONTHS MARKET ENVIRONMENT

Market share ~30% in coagulants and ~20% in polymers Main competitors in coagulants:

• Feralco (Europe)
• Kronos (Europe)
• Chemtrade (US)
• USAlco (US)

Market share ~25% in polymers used in shale oil & gas Main peers in polymers (also in water treatment):

• SNF
• BASF
• Solenis
• Solvay (only O&G)

MUNICIPAL (40%), customer examples INDUSTRIAL (60%), customer examples

Municipal Industrial

2015 2016 2017 Pulp & Paper Group Pulp & Paper Pulp & Paper Group Industry & Water Industry & Water Industry & Water Volatility & inflation Mid- to long- term target

Our key actions to improve margins

12.5%

Operative EBITDA margin 14-16%

New bleaching capacity in Finland Optimization

• f operations:

majority of savings in logistics Oil sands Chemical Enhanced Oil Recovery

12.1%

New two segment structure

12.8%

Estimated end of 2017 run-rate 100% 100% 75% 0% Low 25% Low Low Full run-rate by EO 2017 EO 2017 2018 2019 1-2 yrs 2-3 yrs 2-5 yrs 3-5 yrs

AkzoNobel’s paper chemicals Advanced Water Treatment Volatility and inflation

Acquisition in China

Kemira offers stable and competitive dividend

• Cash flow from operations has been partly

invested into future growth and partly distributed to shareholders as dividends

• Kemira has paid dividend every year since

listing of shares in 1994

• Kemira offers attractive dividend yield

0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.13 0.37 0.47 0.44 0.51 0.61 0.43

5.8% 4.5% 4.4% 5.4% 4.9% 4.4% 4.6%

2011 2012 2013 2014 2015 2016 2017

 Dividend per share  Dividend yield

Kemira’s dividend yield calculated using the share price at year-end  Growth investments per share

Expansion of pulp chemicals, Oulu (FI)

Progress in profitable growth

Acquisition Opening / expansion of site Operational efficiencies Opening of Tarragona coagulant site (ES) Acquisition BASF AKD emulsion business Opening of EMEA service center Expansion of dry and emulsion polyacrylamide (US) Opening of Nanjing (CN) site Closure of Longview (US) AkzoNobel’s paper chemicals acquisition Acquisition of Soto Industries (US) Closure of Soave (IT) Start-up of Ortigueira (BR) sodium chlorate site and announcement of Joutseno (FI) expansion Acquisition

• f Polymer

Services (US) Botlek (NL) modernization BOOST operational excellence program launch Bradford (UK) expansion San Giorgio (IT) expansion Closures of Ottawa (CA) and Zaramillo (ES) Closure of site Q4 16 Transportation agreement with Odyssey Q1 17 Odyssey go-live in North America Two segment structure

• perational

Start-up of Joutseno (FI) chlorate expansion Announcement

• f acquisition

via JV in China Q1 14 Q2 17 Q3 14 Q4 14 Q1 15 Q2 15 Q4 15 Q1 16 Q2 14 Q3 17 Q2 16

11.3%

2013 operative EBITDA

12.5%

2017 operative EBITDA

Q3 15 Q3 16

Q4 17

INVESTOR PRESENTATION

Latest news and financials

Key financial highlights

• Organic growth +7%

– Demand is growing in every market we serve – Strong momentum continued especially in Oil & Gas

• Operative EBITDA flat at reported figures,

underlying development better

– Positive impact of organic growth was offset by increased variable costs and currency headwind

• Currencies EUR -7 million on EBITDA level

– Q1 was below our expectations but we expect better performance in the coming quarters

• Earnings per share +17%

– Finance costs were lower due to EUR 3.6 million gain from the sale of shares in power plant companies EUR million (except ratios) Q1 2018 Q1 2017 Δ% FY 2017 Revenue 613.7 610.0 +1 2,486.0 Operative EBITDA 69.4 69.0 +1 311.3

• f which margin

11.3% 11.3%

• 12.5%

Operative EBIT 33.9 34.9

• 3

170.3

• f which margin

5.5% 5.7%

• 6.9%

Net profit 23.0 19.8 +16 85.2 EPS, EUR 0.14 0.12 +17 0.52

Q1 2018

In big picture, operative EBITDA on positive trend Profitability improvement measures overshadowed by pressure from raw material prices During the last year market has moved from deflatory to inflatory environment

ROLLING 12-MONTH OPERATIVE EBITDA AND OPERATIVE EBITDA-%

262 276 285 287 294 298 301 303 299 297 301 311 312 12.1% 12.4% 12.3% 12.1% 12.2% 12.4% 12.7% 12.8% 12.5% 12.3% 12.3% 12.5% 10% 11% 12% 13% 14% 15% 16% 200 220 240 260 280 300 320 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017 2018

Positive long-term operative EBITDA trend

12.5%

Pulp & Paper – good underlying market with major regional differences

Market environment and performance

• EMEA strong and South America solid
• North America battles with shrinking market

in process and functional chemicals

• In APAC growth continues but profitability a

challenge Q1 organic growth +5%

• FX offsetting reported revenue growth

Profitability drivers

• Profitability improvement to continue when

price increases go through - current sales prices were not yet sufficient to cover increase in raw material prices

• In addition to sales prices, new capacity at

Joutseno and Chinese acquisition are expected to improve profitability in mid-term

183 191 196 195 193 192 189 198 194 12.5% 12.9% 13.4% 13.4% 13.2% 13.0% 12.8% 13.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018

13.2%

ROLLING 12-MONTH OPERATIVE EBITDA AND EBITDA-% EUR million

Megatrend e-commerce drives need for packaging material

Megatrend

• Retail e-commerce grew

+25% globally in 2017 led by Amazon, eBay, Alibaba, etc.

• Growth in e-commerce

drives packaging material production volumes

Impact on pulp and paper producers

New board capacity regularly announced, especially in APAC and EMEA, e.g.

• Chinese Nine Dragon to

add 3 million tons of packaging paper capacity by June 2019

• APP to expand Guangxi

(CN) mill by 2 new board machines with production

• f 1.8 Mton/a
• Hamburger Rieger (DE)

to invest in new 500 kt/a containerboard machine

Impact on Kemira

• Kemira serves board

producers with process and functional chemicals

• Kemira has strong

references in conversions and new start-ups

• Also beneficial for

Kemira’s pulp bleaching business as pulp is the intermediate product for board

Industry & Water – growth driven by Oil & Gas

Market demand drivers

• Fracking activity continued to grow in shale
• il & gas industry
• Underlying economic growth increasing demand

in industrial water treatment

• Municipal water treatment growing with the help
• f tighter regulation

Revenue and operative EBITDA trend improving

• In Q1, strong +11% organic growth

938 921 906 906 924 945 973 1,009 1,016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 111 107 105 107 105 105 112 113 117 11.8% 11.6% 11.5% 11.8% 11.4% 11.1% 11.5% 11.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018

ROLLING 12-MONTH REVENUE EUR million ROLLING 12-MONTH OPERATIVE EBITDA AND EBITDA-% EUR million

11.5%

CEOR deal signed with Chevron

• Strategically important multi-year Chemical Enhanced

Oil Recovery deal signed with Chevron

• EUR 30 million capacity addition, announced in October

2017, progressing well

• CEOR market size approximately EUR 1 billion of

which EUR 500 million accessible to Kemira

• Market growth estimated to be 5% driven by enhanced

production from existing fields

• Kemira is committed to provide enhanced solutions for

challenging water intensive environments and technologies that can enable CEOR

• Our offering provides enhanced and improved oil

recovery with focus around polymer injectivity, chemical stability, shear tolerance, thermal stability and efficacy

Group’s organic revenue growth continued

Q1 2018

Group’s organic growth +7%

• Pulp & Paper +5%
• Industry & Water +11%

Operative EBITDA margin 11.3%

• Flat compared to prior year
• Good revenue growth was offset by raw material

prices and FX

• Fixed costs slightly below prior-year level

72.8 78.9 80.8 70.0 69.0 77.1 84.5 80.7 69.4 12.5% 13.4% 13.6% 11.7% 11.3% 12.5% 13.6% 12.7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 610 +4%

• 7%

0% 614 Q1 2017 Sales volumes Sales prices Currency impact Acquisitions Q1 2018 +4%

REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million OPERATIVE EBITDA AND OPERATIVE EBITDA MARGIN EUR million

11.3%

Currencies are currently headwind due to translation, transactional risk limited

Currency exchange rates had EUR -41 million impact on revenue and EUR -7 million impact on the operative EBITDA in Q1 2018 Guidance: 10% change in our main foreign currencies would approximately have EUR 15 million impact on operative EBITDA on an annualized basis

 46% EUR  9% Others KEMIRA REVENUE DISTRIBUTION Q1 2018 KEMIRA COST DISTRIBUTION Q1 2018  3% SEK  3% CNY  4% CAD  33% USD  10% Others  4% CNY  5% CAD  8% SEK  28% USD  45% EUR  2% BRL

SALES PRICE VS VARIABLE COST TREND

• 200
• 150
• 100
• 50

50 100 150 200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Brent oil, USD Sales prices* Variable costs*

SALES PRICES AND VARIABLE COSTS (CHANGE Y-O-Y)

9 5

• 3
• 10
• 16
• 20
• 10
• 2
• 2
• 9
• 18
• 26
• 23
• 16
• 4

3 11 23

• 18
• 23
• 23
• 13

16 13 13 26

• 30
• 20
• 10

10 20 30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 Net impact on EBITDA (sales prices-variable costs) Sales prices Variable costs

Variable costs spiked in Q1, sales prices following

* 12-month rolling change vs previous year in EUR million

Pulp & Paper – good organic growth but profitability disappointed

• Organic growth continued with volume growth at +3%, driven by chlorate capacity addition in

Finland and good underlying demand, especially in Europe

• FX headwind had -6% impact on revenue
• Profitability hampered by FX and sharp variable cost increases
• EMEA performing well but North America and China were behind

362 361 365 369 372 369 363 373 369 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 47.9 49.3 51.8 46.3 46.0 47.8 48.5 55.4 42.7 13.2% 13.7% 14.2% 12.6% 12.4% 13.0% 13.4% 14.9% 11.6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018

+3% +1%

• 4%
• 2%

0% +1% +2% +5%

REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million OPERATIVE EBITDA AND OPERATIVE EBITDA MARGIN EUR million

+5%

Industry & Water – strong growth continued

• Strong organic growth, heavy FX headwind from USD
• Oil & Gas +21% to EUR 46 million in Q1 2018, organic growth in O&G over 30%
• Profitability improving in Oil & Gas driven by sales price increases and volume growth
• Newer growth areas, such as water treatment for oil sands and CEOR, continue to be margin-dilutive

until fully scaled up and optimized

220 227 231 228 238 248 259 264 245 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 24.9 29.6 29.0 23.7 22.9 29.3 36.0 25.3 26.6 11.3% 13.1% 12.5% 10.4% 9.6% 11.8% 13.9% 9.6% 10.9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018

• 7%
• 5%

0% +9% +15%

• 5%

+6% +20% +11%

REVENUE AND ORGANIC REVENUE GROWTH (Y-ON-Y) EUR million OPERATIVE EBITDA AND OPERATIVE EBITDA MARGIN EUR million

Development of selected key figures

9.8% 9.9% 9.7% 9.5% 9.7% 2015 2016 2017 Q1 2017 Q1 2018 642 634 694 661 678 2015 2016 2017 Q1 2017 Q1 2018

ALL KEY FIGURES IN EUR MILLION EXCEPT RATIOS

248 271 205 12 34 2015 2016 2017 Q1 2017 Q1 2018 104 118 124 20 16 78 95 66 17 7 2015 2016 2017 Q1 2017 Q1 2018

CASH FLOW FROM OPERATIONS CAPITAL EXPENDITURE EXCL. ACQUISITIONS NET DEBT AND LEVERAGE RATIO RETURN ON CAPITAL EMPLOYED

2.2 2.1 2.2 2.2 2.2  Growth capex

• New chlorate plant in Brazil and new chlorate line

in Finland

• Capacity additions due to integration of acq.
• Polymer capacity in Italy and UK

50 60 59 53 58 65 78 95 66

2015 2016 2017

IN 2015-2017, ON AVERAGE AROUND EUR 80 MILLION INVESTED INTO GROWTH

CAPEX guidance 160-200 MEUR in 2018

Expansion Improvement Maintenance

190

CAPITAL EXPENDITURE EXCLUDING ACQUISITIONS

EUR million and share of revenue

213

RECENT LARGEST VALUE CREATING INVESTMENTS CAPEX GUIDANCE

• In 2018, capital expenditure estimated to be

EUR 160-200 million

– Includes capacity expansion in Oil & Gas

182 7.7% 9.0% 7.6%

VARIABLE COST SPLIT 2017 EUR 1.5 billion TOP 10 RAW MATERIALS BY SPEND 1. Sodium hydroxide 2. Acrylonitrile 3. Colloidal silica dispersion 4. Amines 5. Aluminium hydrate 6. Petroleum solvents 7. Sodium chloride (salt) 8. Acrylic ester 9. Acrylic acid

• 10. Fatty acid

Top 10 account for 43%

• f Kemira’s raw material spend

EXPOSURE TO OIL RELATED RAW MATERIALS

Kemira’s variable cost split and top raw materials

 30%

Oil & gas related

 70%

Not oil related

 70%

Raw materials

 10%

Electricity & energy

 20%

Logistics

NET DEBT / OPERATIVE EBITDA AND GEARING

42% 41% 42% 54% 54% 59% 2012 2013 2014 2015 2016 2017

GROSS DEBT MATURITY PROFILE, END OF MARCH 2018 EUR 908 MILLION (Cost of debt 2.0%)

Debt portfolio is well diversified

1.9x 2.1x 2.1x 2.2x 1.8x 2.2x 532m 694m 456m 486m 634m 642m NET DEBT OPERATIVE EBITDA

249m 311m 252m 253m 303m 287m 50 100 150 200 250 300 350 400 450 2018 2019 2020 2021 2022 2023 2024 2025 Bilaterals Bonds Undrawn RCF Undrawn Bilaterals Others

150 200

400 114 205 90 149 40

Per share figures – 5-year summary

2013 2014 2015 2016 2017 Earnings per share, EUR

• 0.21

0.59 0.47 0.60 0.52 Cash flow from operating activities per share, EUR 1.32 0.49 1.63 1.78 1.35 Equity per share, EUR 7.32 7.57 7.76 7.68 7,61 Dividend per share, EUR (*2017 proposal to the AGM) 0.53 0.53 0.53 0.53 0.53* Share price, EUR, end of period 12.16 9.89 10.88 12.13 11.50 Market capitalization, EUR million (excl. treasury shares) 1,849 1,504 1,654 1,848 1,752 Number of shares, million (excl. treasury shares) 152.0 152.1 152.1 152.4 152.4 P/E ratio

• 16.7

23.3 20.1 22.3 P/CF ratio 9.2 20.2 6.7 6.8 8.5 P/B ratio 1.7 1.3 1.4 1.6 1.5 Dividend yield, % 4.4 5.4 4.9 4.4 4.6

Key figures and ratios

EUR million (except ratios) 2013 2014 2015 2016 2017 Q1 2018 Q1 2017 Revenue 2,229.1 2,136.7 2,373.1 2,363.3 2,486.0 613.7 610.0 Operative EBITDA 251.9 252.9 287.3 302.5 311.3 69.4 69.0

• f which margin

11.3% 11.8% 12.1% 12.8% 12.5% 11.3% 11.3% Operative EBIT 164.2 158.3 163.1 170.1 170.3 33.9 34.9

• f which margin

7.4% 7.4% 6.9% 7.2% 6.9% 5.5% 5.7% Net profit

• 25.9

95.8 77.2 97.9 85.2 23.0 19.8 Cash flow from operations 200.3 74.2 247.6 270.6 205.1 34.5 12.2 Capital expenditure, excluding acq. 133.5 140.6 181.7 212.6 190.1 23.2 36.9 Gearing at period-end 41 42 54 54 59 61 59 Inventories 170 197 207 217 224 237.1 230.2 Personnel at period-end 4,453 4,248 4,685 4,818 4,732 4,740 4,771

EUR million Q1 2018 Q1 2017 2017 2016 Net profit for the period 23 20 85 98 Total adjustments 42 45 204 187 Change in net working capital

• 31
• 42
• 34

29 Finance expenses

• 1
• 4
• 25
• 20

Income taxes paid 1

• 7
• 25
• 23

Net cash gen. from operating activities 34 12 205 271 Purchases of subsidiaries and acquisit. 1 2 Capital expenditure

• 23
• 37
• 190
• 213

Proceeds from sale of assets 4 3 37 Change in long-term loan receivables

• 5

1 Cash flow after investing activities 16

• 25

13 98

Cash flow

EUR million Q1 2018 Q1 2017 Δ% 2017 2016 Δ% Revenue 368.7 372.2

• 1

1,476.9 1,457.3 +1 Operative EBITDA 42.7 46.0

• 7

197.7 195.3 +1 margin 11.6% 12.4%

• 13.4%

13.4%

• Operative EBIT

18.9 23.8

• 20

104.8 111.6

• 6

margin 5.1% 6.4%

• 7.1%

7.7%

• Operative ROCE*, %

8.6% 9.5%

• 9.0%

10.0%

• Capital expenditure

13.4 29.8

• 55

138.3 125.1 +11 Cash flow after investing activities 16.7

• 22.9
• 15.7

105.7

• 85

KEY FINANCIALS

Pulp & Paper

*12-month rolling average

EUR million Q1 2018 Q1 2017 Δ% 2017 2016 Δ% Revenue 245.0 237.8 +3 1,009.1 906.0 +11 Operative EBITDA 26.6 22.9 +16 113.6 107.2 +6 margin 10.9% 9.6%

• 11.3%

11.8%

• Operative EBIT

15.0 11.1 +35 65.5 58.5 +12 margin 6.1% 4.7%

• 6.5%

6.5%

• Operative ROCE*, %

11.8% 9.4%

• 11.0%

9.7%

• Capital expenditure

9.0 3.6 +150 51.7 85.5

• 39

Cash flow after investing activities

• 1.2

14.4

• 46.9

35.6 +32 KEY FINANCIALS

Industry & Water

*12-month rolling average

FY 2017

Revenue split by country

USA 27% Canada 6% Brazil 3% Uruguay 2% Other Americas 1% Finland 14% Sweden 6% Germany 5% Poland 3% UK 3% Spain 2% Other APAC 4% South Korea 1% China 4% Russia 2% Netherlands 2% France 2% Italy 2% Other EMEA 9% Norway 2%

INVESTOR PRESENTATION

Pulp & Paper – driving growth as market leader

Above-the-market growth and operative EBITDA of 14-16%

Our winning formula to continue growth

INVEST IN GROWTH AND R&D

• Capacity additions
• More than 10 new products in

2016 and 2017

IMPROVE CUSTOMER EXPERIENCE

• TOP 50 customers are EUR 1bn
• Customer satisfaction to 98%

MAXIMIZE CAPACITY UTILIZATION

• Bleaching ran flat out 9 years
• Paper chemicals varying

REDUCE COMPLEXITY

• Group: 240 products out in 2016
• Around 250 products out in 2017

MANAGE FIXED COSTS

• 2017 business overheads

below 2016 level

ENHANCE PERFORMANCE CULTURE

• New mgmt. structure
• Employee engagement – 15/16

survey items improved since 2015

Board and paper production shifting to emerging markets

GROWTH OF BOARD AND PAPER PRODUCTION BY REGION 2015-2030 55mt growth in APAC by 2030 BIGGEST PRODUCERS ARE: China, USA, Japan, Germany, India, Sweden, Korea, Canada, Finland, Brazil BIGGEST GROWTH AREAS ARE: China, India, Indonesia, Brazil, Russia, Vietnam TOTAL BOARD & PAPER PRODUCTION: 2015: 402 million tons 2030: 461 million tons CAGR%: around 1 % / annum

North America 2015: 82 mt 2030: 75 mt Latin America 2015: 21 mt 2030: 31 mt . Europe 2015: 85 mt 2030: 78 mt Oceania 2015: 4 mt 2030: 4 mt China 2015: 106 mt 2030: 139 mt

• E. Europe

2015: 18 mt 2030: 26 mt Africa 2015: 4 mt 2030: 6 mt Japan 2015:26 mt 2030:21 mt Rest of Asia 2015: 55 mt 2030: 82 mt

Strong market positions and strategic investments

REGION MARKET POSITION GROWTH TREND GROWTH STRATEGY EMEA North America APAC South America #1 #2/3 #1 #3 Exceptional customer experience Transformation from paper to board Continue to grow with major players (TCM) and assess future investments Assess future bleaching investments

Board and paper production in APAC will be bigger than Europe and North America combined by 2020 >90% of global board and paper production growth in APAC Kemira now #1 with close to 10% share in APAC

• Revenue doubled to around

EUR 200 million in 3 years

Fragmented market provides good potential for profitable growth Continue to grow revenue and market share

PULP & PAPER RELEVANT CHEMICALS MARKET 2017

We have become market leader in APAC

 EMEA  North America  APAC  South America

2-3% 2-3%

• 1-0%

0-1%

CAGR 2017-2022

Strong demand in pulp market creating growth opportunities

New pulp mill projects are driven by increasing demand for board and tissue

• Food and liquid packaging board is

growing particularly fast in Asia

• Pulp is produced close to wood sources and

then shipped to board, paper, and tissue mills

• Growth in board = 1 new pulp mill per year

Multiple pulp mill projects realised and expected in Northern Europe creating

• pportunities for Kemira to grow with

the market In addition, a few large scale pulp mill projects expected in South America

Confirmed new capacity / debottlenecking 2016-2020 Possible new mills 2020-2022

• Kemira’s capacity in sodium chlorate was

fully utilized, hence the need for additional capacity

• Capacity doubled in Joutseno with around

EUR 50 million investment

• Investment realized according to budget

and start-up was ahead of schedule in early September 2017

• Part of the production will be shipped to

APAC to support the growth in the region

KEMIRA BLEACHING CHEMICALS REVENUE GROWTH

2014 2015 2016 2017

Successful value creating investments – case Joutseno

+7% +10% +6% +5% CAGR + 7%

Acquisition via JV in China

• Agreed to form joint venture with Tiancheng
• NewCo will produce mainly AKD wax and its key

raw material fatty acid chloride (FACL)

– AKD is sizing chemical used in board and paper to createresistance against liquid absorption – NewCo also plans to produce coagulants for water treatment

• Kemira strengthens its position and secures

supply of key raw material for AKD wax

• Kemira will have 80% of NewCo

– Investment for 80% around EUR 55 million – Closing expected in H1 2018

• Ramp-up in H2/18 after completion investments

– Good contribution to P&L in 2019 after ramp-up

AKD WAX SUPPLIED FROM YANZHOU, CHINA TO KEMIRA SITES GLOBALLY

We leverage acquisition synergies with our global production

Telêmaco Borba Washougal

• St. Catharines

Helsingborg Joutseno Nanjing Hallam Gunsan Pasuruan Wellgrow Krems Tarragona Yanzhou NewCo

Acquisition in China is excellent strategic fit

Acquired asset fulfills our key criteria for acquisitions GROWTH – End-products in growing markets APAC – Enables profitable growth in APAC SUPPLY – Backward integr. & self-sufficiency (FACL) SUSTAINABILITY – FACL from renewable raw material LOCATION – Close to our existing production PROFITABILITY – Accretive in 2019 after ramp-up

END-PRODUCTS WHERE AKD WAX IS USED

Pulp & Paper

TECHNOLOGY AND MARKET LEADER

Value chain part covered by Kemira RAW MATERIALS INTERMEDIATES PRODUCTS APPLICATIONS CUSTOMER INDUSTRIES CUSTOMERS Electricity Sodium chloride (salt) Crude tall oil Cationic monomer Acrylonitrile Acrylic acid Olefins Fatty acids Maleic anhydride Sulfur Tall oil rosin AKD Wax Isomerized olefins Acrylamide Sodium chlorate Hydrogen peroxide Polymers Defoamers Coagulants Biocides Sizing Strength Additives Surface additives Colorants Sulfuric acid Pulping Bleaching Retention Wet-end process control WQQM Sizing Strength Surface treatment Coloring Pulp Packaging and board Printing and writing Tissue All the major global paper and pulp producers MAIN COMPETITORS: BASF, Akzo Nobel, Solenis, Ecolab, SNF

INVESTOR PRESENTATION

Industry & Water - stronger platform for profitable growth

New structure creates growth and efficiency opportunities

Leveraging the full potential of new combined segment

• Full geographical reach in all regions
• Global polymer expert network
• Water treatment expertise for O&G and Mining

Structural change means faster decision making More efficient development and roll-out of new innovations Important part of segment’s profitability improvement

• On Group-level cost savings EUR 15-20 million

Oil & Mining Municipal & Industrial  70%

Water treatment

 20%

Oil & Gas

 10%

Other applications

Industry & Water

The next generation of sludge treatment will focus on customer performance and value created KemConnect Smart Dewatering combines a complete chemicals portfolio, continuous chemistry optimization and real-time monitoring to a new business model

ADVANCED WATER TREATMENT CASE EXAMPLE

Innovation case – KemConnect Smart Dewatering

Dewatering Today Smart Dewatering Tomorrow

Disposal Cost KemConnect Service Fee Disposal Cost Customer Net Savings Chemical Cost

Resilient business set for growth

Growing market demand with our selective market diversification assuring growth Kemira’s offering

• Process efficiencies: polymers that reduce

energy consumption by 60% in shale oil fields

• Cost reduction: higher concentrated liquids that

make offshore oil recovery more cost effective (CEOR)

• Addressing environmental regulations: tailing

treatment in oil sands

New innovative technologies driving expansion

50 100 150 200 250 2013 2014 2015 2016 2017

REVENUE IN GROWTH INITIATIVES

EUR million

REVENUE IN GROWTH INITIATIVES

EUR million  25%

Other

 50%

Shale fracking

 25%

Oil sands and Chemical Enhanced Oil Recovery

Oil Price + 56% in 2017

Our innovations make shale industry more efficient

SHALE MARKET

• Polymer market size

+200M EUR and growing at double digit today

• Polymer more favorable

product based on cost/performance

KEMIRA

• Provides unique chemistries, friction reducers,

that reduce energy needed during hydraulic fracturing

• Volume growth over 100% in 1-9/2017
• Differentiating from competitors with innovative products

Market shares in polymers used for fracking

#1 market position with

• ver 30%

market share

KEMIRA

Others Competitor B Competitor C Competitor A

Long-term growth potential in CEOR

CHEMICAL ENHANCED OIL RECOVERY MARKET

• CEOR market size

EUR 1bn of which EUR 500 million accessible to Kemira

• Market growth estimated

to be 5% driven by decline

• f production from existing

fields

KEMIRA

• Kemira’s MaxXtract solution tailored specifically to customer

needs, incorporating chemistry, equipment and services

• Kemira’s knowhow in polymers helps oil producers
• Potential for > EUR 100 million revenue in 5 years

Substantial long-term growth potential within existing CEOR projects and through new projects

Oil sands has grown from 0 to above EUR 30m in 3 years

OIL SANDS MARKET

• Market size is around

EUR 400 million

• Projects are capex-heavy

but developed projects are considered as sunken costs

KEMIRA

Offers total solutions to reduce environmental concerns Customer base expanding Revenue has grown to above EUR 30 million in 3 years Target to more than double current revenues in 2-3 years

Companies

• perating in oil

sands market

(examples)

Industry & Water

TECHNOLOGY AND MARKET LEADER IN WATER TREATMENT AS WELL AS IN NICHE APPLICATIONS IN OIL & GAS

MAIN COMPETITORS Coagulants: mainly local small companies, Feralco, USALCO, Kronos, PVS, Polymers: SNF, Solvay, Ecolab, Solenis, BASF

Value chain part covered by Kemira

INTERMEDIATES PRODUCTS APPLICATIONS SALES CHANNELS CUSTOMERS Acrylonitrile Acrylic acid Sulfuric acid Hydrochloric acid Aluminium hydrate Iron ore Pickling liquor Copperas Various monomers Acrylamide Cationic monomer Polymers (EPAM, DPAM) Al Coagulants Fe Coagulants Dispersants & antiscalants Biocides Emulsifiers Defoamers Formulations Raw water & waste water treatment Sludge treatment Friction reduction Enhanced oil recovery Tailings treatment Mining processes Direct sales Distributor/reseller Service companies RAW MATERIALS Municipalities Private operators Industrial customers Pumpers Oil & Gas operators Service companies Mine operators

INVESTOR PRESENTATION

Appendix

SHAREHOLDERS ON MARCH 31, 2018

% OF SHARES

• 1. Oras Invest

18.2%

• 2. Solidium (owned by State of Finland)

16.7%

• 3. Varma Mutual Pension Insurance Company

3.4%

• 4. Ilmarinen Mutual Pension Insurance Comp.

2.1%

• 5. Kemira Oyj

1.8% Total number of shares 155,342,557 Foreign ownership of shares 26.4% Total number of shareholders 35,815

KEMIRA BOARD OF DIRECTORS

Kemira – largest shareholders and Board of Directors

JARI PAASIKIVI Chairman Member since 2012 Oras Invest Oy, CEO KERTTU TUOMAS Vice Chairman Member since 2010 WOLFGANG BÜCHELE Member in 2009-2012 and since 2014 KAISA HIETALA Member since 2016 TIMO LAPPALAINEN Member since 2014 SHIRLEY CUNNINGHAM Member since 2017

Kemira’s Management Board

Jukka Hakkila, Chief Legal Officer, acts as secretary of Management Board and Board of Directors.

PULP & PAPER

Kim Poulsen

OPERATIONAL EXCELLENCE

Esa-Matti Puputti

INDUSTRY & WATER

Antti Salminen

CFO

Petri Castrén

HUMAN RESOURCES

Eeva Salonen

CTO

Matthew R. Pixton

PRESIDENT AND CEO

Jari Rosendal

Priority Target Performance 2017 Comments Progress Responsible

• perations and supply

chain Climate change Kemira Carbon Index ≤ 80 by end

• f 2020 (2012 = 100)

Sourcing of low carbon energy, especially carbon- free electricity, continued according to plan. As part

• f the E3 Plus program, four Energy Review site

visits were performed during Q1 2018. Until now, the performed energy reviews cover more than 90% of Kemira’s total energy consumption. Additionally, internal Energy Management Audits were carried out in Joutseno and Helsinki.

People Safety Achieve zero injuries on long term; TRIF* 2.0 by end of 2020

Slight increase in the number of TRIs compared to last year. Safety campaign and critical safety standard implementation initiated this quarter should help to reduce TRIs going forward. No single reason for increase of incidents identified.

Supplier Management

% of direct key suppliers screened through sustainability assessments and audits (cumulative %). The target includes 5 sustainability audits for highest risk** suppliers every year, and cumulatively 25 by 2020. Target scope expanded to cover both supplier sustainability assessments and audits.

Corporate responsibility performance Q1 2018

100 88 91 92 86 85 80 50 100 150

Priority Target Performance Comments Progress People and integrity Employee engagement index based on Voices@Kemira biennial survey The index at or above the external industry norm. Participation rate in Voices@Kemira 75 % or above.

Global people employee engagement survey Voices@Kemira was postponed from autumn 2017 until Q2 2018, and will be conducted by IBM April 9- 20th 2018.

Leadership development activities provided, average Two (2) leadership development activities per people manager position during 2016-2020, cumulative target 1500 by 2020.

Overall we are tracking well to achieve target. Cumulative figure by the end of Q1 2018 is 1,147.

Corporate responsibility performance Q1 2018

* TRIF = Number of Total Recordable Injury Frequency per million hours, Kemira + contractor, year-to-date ** suppliers with lowest sustainability assessment score

Important information about financial figures

Kemira provides certain financial performance measures (alternative performance measures)

• n non-GAAP basis. Kemira believes that alternative performance measures, such as organic

growth*, EBITDA, operative EBITDA, cash flow after investing activities, and gearing followed by capital markets and Kemira management, provide useful information of its comparable business performance and financial position. Selected alternative performance measures are also used as performance criteria in remuneration. Kemira’s alternative performance measures should not be viewed in isolation to the equivalent IFRS measures and alternative performance measures should be read in conjunction with the most directly comparable IFRS measures. Definitions of the alternative performance measures can be found in the Definitions of the key figures in this report, as well as at www.kemira.com > Investors > Financial information. All the figures in this interim report have been individually rounded and consequently the sum

• f individual figures may deviate slightly from the sum figure presented.

* Revenue growth in local currencies, excluding acquisitions and divestments