Kemira Oyj

Annual Report (ESEF) • Feb 16, 2024

74370031Y7RK5H88CQ48-2023-12-31-en 74370031Y7RK5H88CQ482023-01-012023-12-31iso4217:EUR74370031Y7RK5H88CQ482022-01-012022-12-31iso4217:EURxbrli:shares74370031Y7RK5H88CQ482023-12-3174370031Y7RK5H88CQ482022-12-3174370031Y7RK5H88CQ482021-12-3174370031Y7RK5H88CQ482022-12-31ifrs-full:IssuedCapitalMember74370031Y7RK5H88CQ482022-12-31ifrs-full:SharePremiumMember74370031Y7RK5H88CQ482022-12-31ifrs-full:OtherReservesMember74370031Y7RK5H88CQ482022-12-31kemira:ReserveForInvestedUnrestrictedEquityMember74370031Y7RK5H88CQ482022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482022-12-31ifrs-full:TreasurySharesMember74370031Y7RK5H88CQ482022-12-31ifrs-full:RetainedEarningsMember74370031Y7RK5H88CQ482022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember74370031Y7RK5H88CQ482022-12-31ifrs-full:NoncontrollingInterestsMember74370031Y7RK5H88CQ482023-01-012023-12-31ifrs-full:RetainedEarningsMember74370031Y7RK5H88CQ482023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember74370031Y7RK5H88CQ482023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember74370031Y7RK5H88CQ482023-01-012023-12-31ifrs-full:OtherReservesMember74370031Y7RK5H88CQ482023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482023-01-012023-12-31ifrs-full:TreasurySharesMember74370031Y7RK5H88CQ482023-12-31ifrs-full:IssuedCapitalMember74370031Y7RK5H88CQ482023-12-31ifrs-full:SharePremiumMember74370031Y7RK5H88CQ482023-12-31ifrs-full:OtherReservesMember74370031Y7RK5H88CQ482023-12-31kemira:ReserveForInvestedUnrestrictedEquityMember74370031Y7RK5H88CQ482023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482023-12-31ifrs-full:TreasurySharesMember74370031Y7RK5H88CQ482023-12-31ifrs-full:RetainedEarningsMember74370031Y7RK5H88CQ482023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember74370031Y7RK5H88CQ482023-12-31ifrs-full:NoncontrollingInterestsMember74370031Y7RK5H88CQ482021-12-31ifrs-full:IssuedCapitalMember74370031Y7RK5H88CQ482021-12-31ifrs-full:SharePremiumMember74370031Y7RK5H88CQ482021-12-31ifrs-full:OtherReservesMember74370031Y7RK5H88CQ482021-12-31kemira:ReserveForInvestedUnrestrictedEquityMember74370031Y7RK5H88CQ482021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482021-12-31ifrs-full:TreasurySharesMember74370031Y7RK5H88CQ482021-12-31ifrs-full:RetainedEarningsMember74370031Y7RK5H88CQ482021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember74370031Y7RK5H88CQ482021-12-31ifrs-full:NoncontrollingInterestsMember74370031Y7RK5H88CQ482022-01-012022-12-31ifrs-full:RetainedEarningsMember74370031Y7RK5H88CQ482022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember74370031Y7RK5H88CQ482022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember74370031Y7RK5H88CQ482022-01-012022-12-31ifrs-full:OtherReservesMember74370031Y7RK5H88CQ482022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482022-01-012022-12-31ifrs-full:TreasurySharesMember Kemira Oyj Financial Statements 2023 Kemira Oyj Energiakatu 4 Tel. +358 10 8611 Business ID0109823-0 FI-00180 Helsinki, Finland Fax +358 108621 119 Registered officeHelsinki www.kemira.com Financial Statements 2023 Table of contents BOARD OF DIRECTORS' REVIEW 2023 ........................................ 3 3. Capital expenditures, acquisitions and divestments ..................................................................... 48 5.5. Management of financial risks .................................... 78 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) ) .............. 27 3.1. Goodwill ............................................................................ 48 5.6. Derivative instruments .................................................. 82 Consolidated Income Statement ........................................... 27 3.2. Other intangible assets ................................................. 50 6. Group structure .............................................................. 84 Consolidated Statement of Comprehensive 3.3. Property, plant and equipment ................................... 52 6.1. Related parties ................................................................ 84 Income ......................................................................................... 27 3.4. Leases ............................................................................... 54 6.2. The Group's subsidiaries and investments in 86 Consolidated Balance Sheet .................................................. 28 3.5. Other shares .................................................................... 56 associates ........................................................................ Consolidated Statement of Cash Flow ................................ 29 3.6. Business combinations ................................................. 57 7. Off-balance sheet items ............................................... 88 Consolidated Statement of Changes in Equity .................. 30 3.7. Assets classified as held-for-sale ............................... 58 7.1. Commitments and contingent liabilities ................... 89 Notes to the Consolidated Financial Statements ............. 32 4. Working capital and other balance sheet items ..... 60 7.2. Events after the balance sheet date .......................... 89 1. The Group's material accounting policies for the 32 4.1. Inventories ........................................................................ 60 Consolidated Financial Statements .......................... 4.2. Trade receivables and other current receivables ... 60 KEMIRA OYJ'S FINANCIAL STATEMENTS (FAS) ) ................... 90 2. Financial performance .................................................. 36 4.3. Trade payables and other current liabilities ............ 61 BOARD OF DIRECTORS' PROPOSAL FOR 109 2.1. Segment information ..................................................... 36 4.4. Deferred tax liabilities and assets .............................. 62 PROFIT DISTRIBUTION AND SIGNATURES ) ............................ 2.2. Other operating income and expenses ...................... 40 4.5. Defined benefit pension plans and employee 65 AUDITOR'S REPORT ........................................................................ 110 2.3. Share-based payments ................................................. 42 benefits ............................................................................. ESEF FINANCIAL STATEMENT REPORT ..................................... 114 2.4. Depreciation, amortization and impairments .......... 44 4.6. Provisions ......................................................................... 69 OTHER FINANCIAL INFORMATION .............................................. 2.5. Finance income and expenses ..................................... 45 5. Capital structure and financial risks ......................... 70 Group key figures ...................................................................... 2.6. Income taxes .................................................................... 46 5.1. Capital structure ............................................................. 70 Definition of key figures .......................................................... 2.7. Earnings per share .......................................................... 47 5.2. Shareholders' equity ...................................................... 72 Reconciliation to IFRS figures ................................................ 2.8. Other comprehensive income ...................................... 47 5.3. Interest-bearing liabilities ............................................ 73 Quarterly earnings performance ........................................... 5.4. Financial assets and liabilities by measurement 74 SHARES AND SHAREHOLDERS .................................................... categories ......................................................................... INFORMATION FOR INVESTORS .................................................. ) Part of the audited Financial Statements 2023 This is a translation of the Finnish original Financial Statements and Board of Directors' Review 2023. KEMIRA 2023 | FINANCIAL STATEMENTS | 2 Board of Directors’ Review 2023 In 2023, Kemira Group’s revenue decreased by 5% to EUR 3,383.7 million (3,569.6). Revenue in local currencies, excluding acquisitions and divestments, decreased by 2% as the impacts from the weak pulp and paper market were not fully compensated by revenue growth in the Industry & Water segment. Operative EBITDA increased by 17% to a record-high of EUR 666.7 million (571.6) following strong improvement in the Industry & Water segment. The operative EBITDA margin increased to 19.7% (16.0%) with both segments reporting record-high margins. EBITDA decreased by 3% to EUR 540.0 million (558.8). The differences between operative and reported figures are explained by items affecting comparability, which were mainly related to the expected loss from the divestment of the Oil & Gas business. Operative EBIT increased by 28% to EUR 463.0 million (361.6). EBIT decreased by 3% to EUR 336.4 million (347.6). Cash flow from operating activities was very strong at EUR 546.0 million (400.3). EPS, diluted decreased by 14% to EUR 1.28 (1.50) mainly due to the expected loss from the divestment of the Oil & Gas business. The Board of Directors proposes to the Annual General Meeting 2024 a cash dividend of EUR 0.68 per share (0.62), totaling EUR 104 million (95). It is proposed that the dividend be paid in two installments, in April and November. KEY FIGURES AND RATIOS EUR million 2023 2022 2021 EUR million 2023 2022 2021 Revenue 3,383.7 3,569.6 2,674.4 Capital employed 2,155.5 2,238.0 1,995.0 Operative EBITDA 666.7 571.6 425.5 Operative ROCE, % 21.5 16.2 11.3 Operative EBITDA, % 19.7 16.0 15.9 ROCE, % 15.6 15.5 8.5 EBITDA 540.0 558.8 373.2 Cash flow from operating activities 546.0 400.3 220.2 EBITDA, % 16.0 15.7 14.0 Capital expenditure excl. acquisition 204.9 197.9 168.8 Operative EBIT 463.0 361.6 225.4 Capital expenditure 206.8 197.9 169.8 Operative EBIT, % 13.7 10.1 8.4 Cash flow after investing activities 349.3 222.3 57.3 EBIT 336.4 347.6 170.1 Equity ratio, % at period-end 48.3 46.2 42.8 EBIT, % 9.9 9.7 6.4 Equity per share, EUR 10.84 10.89 8.68 Net profit for the period 211.3 239.7 115.2 Gearing, % at period-end 31.8 45.8 63.3 Earnings per share, diluted, EUR 1.28 1.50 0.70 Personnel (average) 4,946 4,936 4,947 12-month rolling average (ROCE, % based on the EBIT). Unless otherwise stated, all comparisons in this report are made to the corresponding period in 2022. Kemira provides certain financial performance measures (alternative performance measures) that are not defined by IFRS. Kemira believes that alternative performance measures followed by capital markets and Kemira management, such as revenue growth in local currencies, excluding acquisitions and divestments (=organic growth), EBITDA, operative EBITDA, operative EBIT, cash flow after investing activities, and gearing, provide useful information about Kemira’s 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 from 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 report have been individually rounded, and consequently the sum of the individual figures may deviate slightly from the total figure presented. In addition to the above key figures and ratios, other key figures which are describing the Group's financial performance are presented in the Other financial information section under Group key figures. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 3 Financial performance in 2023 Revenue decreased by 5%. Revenue in local currencies, excluding acquisitions and divestments, decreased by 2% as sales volumes in the Pulp & Paper segment declined as a consequence of a weak market environment. In Industry & Water, sales volumes increased slightly. Overall sales prices increased, driven by higher sales prices in Industry & Water. Revenue 2023 2022 ∆% Organic growth, % Currency impact, % Acq. & div. impact, % EUR, million EUR, million Pulp & Paper 1,748.2 2,027.7 -14 -11 -2 -2 Industry & Water 1,635.5 1,541.9 +6 +9 -2 0 Total 3,383.7 3,569.6 -5 -2 -2 -1 Revenue growth in local currencies, excluding acquisitions and divestments Geographically, the revenue split was as follows: EMEA (Europe, Middle East, Africa) 48% (51%), the Americas 43% (40%), and Asia Pacific 9% (9%). Operative EBITDA increased by 17%, a record-high of EUR 666.7 million (571.6). Operative EBITDA grew strongly in Industry & Water, following higher sales prices. In Pulp & Paper, operative EBITDA declined slightly, mainly due to lower sales volumes. Variable costs overall moderated during the year. The operative EBITDA margin improved to a record-high, 19.7%, following improvement in both segments, particularly in Industry & Water. Both segments had a record-high margin in 2023. Variance analysis, EUR million Jan-Dec Operative EBITDA, 2022 571.6 Sales volumes -61.8 Sales prices +114.3 Variable costs +106.9 Fixed costs -49.3 Currency exchange -4.0 Others -11.0 Operative EBITDA, 2023 666.7 Operative EBITDA 2023 2022 ∆% 2023 2022 EUR, million EUR, million %-margin %-margin Pulp & Paper 330.9 348.0 -5 18.9 17.2 Industry & Water 335.8 223.7 +50 20.5 14.5 Total 666.7 571.6 +17 19.7 16.0 EBITDA decreased by 3% to EUR 540.0 million (558.8). The difference between it and operative EBITDA is explained by items affecting comparability. Items affecting comparability were mainly related to the expected loss of EUR 101 million from the divestment of the Oil & Gas business (including transaction fees), a provision of EUR 12 million related to the expected underutilization of a single-asset energy company in Pori, Finland, majority owned by Kemira via Pohjolan Voima and a loss of EUR 10 million related to the divestment of the majority of Kemira's colorants business. Items affecting comparability in the comparison period mainly related to an expected loss from the divestment of most of our colorants business, environmental provisions, Kemira's exit from Russia and a manufacturing unit sale to a customer. Items affecting comparability, EUR million 2023 2022 Within EBITDA -126.7 -12.8 Pulp & Paper -22.9 -11.4 Industry & Water -103.7 -1.4 Within depreciation, amortization and impairments 0.0 -1.2 Pulp & Paper 0.0 -1.2 Industry & Water 0.0 0.0 Total items affecting comparability in EBIT -126.7 -14.0 Depreciation, amortization, and impairments were EUR 203.6 million (211.2), including the EUR 6.9 million (9.4) amortization of purchase price allocation. Operative EBIT increased by 28% compared to the previous year. EBIT decreased by 3%, and the difference between the two is explained by items affecting comparability, which are described above in the EBITDA section. Items affecting comparability in the comparison period are also described above in the EBITDA section. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 4 Net finance costs totaled EUR -44.4 million (-39.4). The increase was due to foreign exchange valuations. Income taxes were EUR -80.7 million (-68.5), with the reported tax rate being 28% (22%)), which was impacted by the divestment of the Oil & Gas business. Net profit for the period decreased by 12% mainly due to the expected loss from the divestment of the Oil & Gas business. Financial position and cash flow Cash flow from operating activities in January-December 2023 increased to a record-high, EUR 546.0 million (400.3), due to lower net working capital. Cash flow after investing activities was also very strong, at EUR 349.3 million (222.3). At the end of the period, interest-bearing liabilities totaled EUR 937.8 million (1,021.8), including lease liabilities of EUR 121.4 million (148.9). The average interest rate of the Group’s interest-bearing loan portfolio (excluding leases) was 2.8% (2.4%), and the duration was 16 months (22). Fixed-rate loans accounted for 77% (83%) of net interest-bearing liabilities, including lease liabilities. Short-term liabilities maturing in the next 12 months amounted to EUR 322.1 million. On December 31, 2023, cash and cash equivalents totalled EUR 402.5 million (250.6). The Group has a EUR 400 million undrawn committed credit facility maturing in 2026. At the end of the period, Kemira Group’s net debt was EUR 535.2 million (771.2), including lease liabilities. The equity ratio was 48% (46%), while gearing was 32% (46%). The fair value of Pohjolan Voima and Teollisuuden Voima shares decreased in 2023, mainly due to lower forward electricity prices and long-term forecasts. Olkiluoto 3 started regular electricity production during Q2 2023 and Kemira's indirect ownership through PVO's B2 shares was valued using the discounted cash flow method for the first time in Q2 2023. Kemira is exposed to transaction and translation currency risks. The Group's most significant transaction currency risks arise from the US dollar, the Chinese renminbi, the Canadian dollar and the Swedish krona. At the end of the year, the US dollar denominated exchange rate risk against EUR had an equivalent value of approximately EUR 132 million, of which 56% was hedged on an average basis. The Chinese renminbi denominated exchange rate risk against EUR had an equivalent value of approximately EUR 115 million, of which 69% was hedged on an average basis. The Canadian dollar denominated exchange rate risk against EUR was approximately EUR 56 million, of which 56 % was hedged on an average basis. The Swedish krona denominated exchange rate risk against EUR had an equivalent value of approximately EUR 35 million, of which 73% was hedged on an average basis. In addition, Kemira is exposed to smaller transaction risks against EUR, mainly in relation to the Korean won, the Danish krona, the Polish zloty and the Norwegian krona and against USD mainly in relation to the Canadian dollar and the Brazilian real, with annual exposure in those currencies being approximately EUR 152 million. As Kemira’s consolidated financial statements are compiled in euros, Kemira is also subject to a currency translation risk to the extent to which the income statement and balance sheet items of subsidiaries located outside Finland are reported in a currency other than the euro. The most significant translation exposure derives from the US dollar and the Canadian dollar. The strengthening of currencies against the euro would increase Kemira’s revenue and EBITDA through a translation effect. Capital expenditure In January-December 2023, capital expenditure excluding acquisitions increased by 4% to EUR 204.9 million (197.9). Capital expenditure excluding acquisitions (capex) can be broken down as follows: expansion capex 16% (22%), improvement capex 28% (29%), and maintenance capex 55% (49%). Research and Development In January-December 2023, total research and development expenses were EUR 34.2 million (33.4), representing 1.0% (0.9%) of the Group’s revenue. Kemira’s research and development is an enabler of growth and further differentiation. New product launches contribute to the efficiency and sustainability of customer processes as well as to improved profitability. Both Kemira’s future market position and profitability depend on the company’s ability to understand and meet current and future customer needs and market trends, as well as on its ability to innovate with differentiated products and applications. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 5 At the end of 2023, Kemira had 419 (401) patent families, including 2,041 (2,101) granted patents, and 963 (1,026) pending applications. During 2023, Kemira applied for 55 (34) new patents and started 11 new product development projects, 82% of them aiming to improve customers' resource efficiency. At the same time, Kemira started the commercialization of four new product development projects, all contributing to improving resource efficiency in customer processes. Kemira also has started several external partnerships in order to innovate and commercialize new renewable solutions for its customers. Human resources At the end of the period, Kemira Group had 4,915 employees (4,902). Kemira had 790 (756) employees in Finland, 1,709 (1,690) employees elsewhere in EMEA, 1,484 (1,525) in the Americas, and 932 (931) in APAC. Non-financial information DISCLOSURE OF NON-FINANCIAL INFORMATION Kemira discloses key non-financial information in this section according to the requirements laid down in the EU Directive and Finnish Accounting Act. More information on the non- financial and sustainability matters is provided in the Sustainability Report. The non-financial disclosures are based on the latest Global Reporting Initiative (GRI) disclosures, which are prepared in accordance with the latest GRI standards and are externally assured by an independent third-party. Kemira’s most relevant risks are described separately in the risk section on page 21. OVERVIEW OF KEMIRA’S BUSINESS Kemira is a global leader in sustainable chemical solutions for water intensive industries and provides best suited products and expertise to improve our customers’ product quality, and process and resource efficiency. Kemira has two business areas: Pulp & Paper and Industry & Water. Kemira has operations in around 40 countries and had 60 manufacturing facilities at the end of 2023. In Pulp & Paper, Kemira offers chemical solutions for bleaching, packaging, and printing and writing products. The main product categories in Pulp & Paper are bleaching chemicals, sizing and strength chemicals, various process chemicals, and polymers. In Industry & Water, Kemira offers chemical solutions for municipal and industrial water treatment. In December 2023, Kemira announced it is divesting its Oil & Gas related business and the divestment was closed on February 2, 2024. The main product categories in Industry & Water are coagulants and polymers. Profitable sustainable growth is Kemira’s strategic priority. Sustainability is integrated into Kemira’s strategy and long-term success as Kemira’s customers are increasingly asking for sustainable products. Kemira provides its customers with solutions that help them to improve the resource efficiency of their operations. In 2023, 59% of Kemira’s revenue came from products that improve customer resource efficiency. Kemira's customers focus increasingly on the recyclability and biodegradability of their products. As a result, renewable solutions form one of Kemira's strategic focus areas. Kemira’s renewable solutions strategy is covered in more detail in the Annual Review. More information on Kemira’s value creation model can be found on page 8 of the Annual Review. CORPORATE SUSTAINABILITY PRIORITIES Kemira has systematic procedures in place to evaluate and address the economic, environmental, and social impacts of its own operations and business relationships. Our sustainability work is based on day-to-day responsible practices in all our operations. Our corporate sustainability priorities are based on the most material impacts across our business model; on the increasing expectations of our customers, investors, and other stakeholders; and on our commitment to the Kemira Code of Conduct and internationally agreed sustainability principles. Kemira is a signatory of the United Nations Global Compact, and our sustainability work is guided by the UN Sustainable Development Goals (SDGs). Kemira is also committed to operating according to the principles of Responsible Care®, a voluntary commitment created by the global chemical industry to drive continuous improvement and achieve excellence in environmental, health and safety, and security performance. Kemira’s sustainability work focuses on five themes, which cover the most material topics and their impact: Safety, People, Water, Circularity, and Climate. Kemira measures progress in the priority areas through group-level key performance indicators (KPI) and targets that are approved by the Board of Directors. The relevant management processes relating to material corporate sustainability issues are continuously developed and implemented as part of our integrated management system, which is externally certified against ISO 9001:2015 for Quality, ISO 14001:2015 for Environment, and ISO 45001:2018 for Occupational Health and Safety. Kemira also regularly reviews its stakeholders expectations and concerns regarding sustainability. Kemira conducted a double-materiality assessment in 2023 based on the BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 6 upcoming Corporate Sustainability Reporting Directive (CSRD) methodology. The results and process are described in more detail on pages 8-10 of Kemira's sustainability report. MANAGEMENT OF CORPORATE SUSTAINABILITY Sustainability is a key element of Kemira’s strategy. Work on sustainability is led by the Sustainability Director, who reports to the EVP, Operational Excellence and Sustainability. The sustainability work is governed by the cross-functional and cross-business Sustainability Steering Team, which develops Kemira’s ambition level in sustainability and steers the work of dedicated sustainability programs. The team has a range of participants from strategy to business and manufacturing representatives, including Management Board members. The Board of Directors oversees the implementation of strategy as well as reviews risks, including environmental and social matters. In 2022, the Board of Directors included sustainability- related targets, reduction of Scope 1 and Scope 2 emissions and development of Kemira’s renewable solutions revenue, as key performance indicators in the performance period 2023– 2025 of Kemira’s long-term incentive plan. The same sustainability-related targets are also included in the new performance period 2024–2026 of Kemira's long-term incentive plan. MATERIAL TOPICS More information on sustainability at Kemira and the outcome of Kemira’s sustainability targets in 2023 can be found on page 14. Environmental and climate-related matters Kemira's conducted a double-materiality analysis in 2023. Based on the analysis, Kemira has identified topics related to climate, circularity, water, and safety as its environmental sustainability focus areas. In climate, we continuously strive to reduce our environmental impact. In 2022, Kemira committed to the Science-Based Targets Initiative (SBTi) and simultaneously updated its climate target for Scope 1 and Scope 2 emissions. Kemira is committed to reducing its combined Scope 1 and Scope 2 emissions by 50% by 2030, from a 2018 baseline of 930,000 tons CO2e. This target is in line with limiting global warming to 1.5 °C, which is currently the most ambitious criterion for setting climate change mitigation targets. Kemira’s long-term ambition is to be carbon neutral by 2045 for combined Scope 1 and 2 emissions. As part of its SBTi commitment, Kemira also committed to developing a quantified near-term Scope 3 target within the timeframe set by the Science Based Target initiative framework. Kemira will submit these updated targets to be validated by the SBTi when they are finalized in H1 2024. Kemira is working actively with its suppliers through a supplier engagement program to find ways to reduce Scope 3 emissions. In water, we work to mitigate water-related risks and grasp water-related opportunities. Kemira operates in businesses that use a lot of water and water is a common denominator for Kemira’s both segments. Water is one of Kemira's strategic focus areas and Kemira has ambitions to grow in water treatment. In terms of Kemira’s operations, Kemira aims to continuously improve freshwater use intensity in its operations. Our sustainability target as of 2022 is to reach Leadership level in CDP Water Security rating by the end of 2025. In terms of circularity, we aim to reduce waste and increase the use of renewable raw materials. Kemira's sustainability target is to reduce disposed production waste intensity by 15% by 2030 from a 2019 baseline level. In 2020, we introduced a new group-level KPI to increase our revenue from renewable solutions from EUR 100 million to 500 EUR million by 2030. In conjunction with the revenue target, Kemira is working to increase the share of renewable and recycled raw materials of the raw materials it uses. This will allow Kemira to reduce pressure on natural resources, and support our customers in moving away from fossil-based raw materials. Social and employment-related matters Kemira has identified people and safety as its social sustainability focus areas. Ensuring workplace safety is a key priority in all our operations. High people, process, and environmental safety performance is fundamental to our business and to our customers. Our target in safety is to improve TRIF (total recordable injury frequency per million working hours for Kemira’s employees and contractors) to 1.5 by 2025 and to 1.1 by 2030. Also fostering a strong company culture and commitment of our employees are important success factors for our business. In people, our target is to reach the top 10% cross-industry norm for Diversity, Equity, & Inclusion by 2025. Respect for human rights Our Code of Conduct is the foundation for how we conduct business at Kemira. In our code we state that we are committed to the principles of The Universal Declaration of Human Rights and the core conventions of the International Labour Organization (ILO) and the United Nations’ Global Compact, and we expect our suppliers and business partners to share these principles. Further we work by the United Nations Guiding Principles which require companies to conduct due diligence to protect and respect human rights. We have a public statement for slavery and human trafficking, where our approach to human rights issues is outlined more in detail. Kemira’s Code of Conduct for Business Partners (CoC-BP), supported by the Kemira BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 7 Sustainability Policy, set out principles for responsible business conduct, respect for human rights, and provision of appropriate working conditions as well as environmental responsibility. Kemira’s latest Human Rights Impact Assessment was conducted in 2021 to identify human rights impacts throughout Kemira operations and value chain. Kemira has a Human Rights Council that oversees and develops Kemira’s human rights related processes. More information on Kemira’s approach to human rights is available in Kemira’s sustainability report. Anti-corruption and bribery Kemira's anti-corruption principles are included in the Code of Conduct. Kemira does not tolerate improper or corrupt payments made either directly or indirectly to a customer, government official, or third party, including facilitation payments, improper gifts, entertainment, gratuities, favors, donations, or any other improper transfer of value. We engage only reputable sales representatives and other third parties who share the same commitment. Code of Conduct training is mandatory for all our employees, and there are advisory, monitoring, and reporting procedures in place to ensure full compliance with the Code. We maintain an ethics and compliance Whistleblowing line for employees to enable them to report potential violations of the Code of Conduct or any other concerns. Mandatory anti-bribery training is provided for selected groups of personnel who need to have a comprehensive understanding of Kemira’s anti-corruption principles. Awareness of anti- corruption matters is delivered through our Code of Conduct training to all employees. Kemira has conducted an ethics and compliance risk assessment to evaluate corruption-related and bribery-related risks in its operations. There were no confirmed incidents of corruption in 2023. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 8 EU taxonomy The European Union’s target is to reduce net greenhouse gas emissions to zero by 2050. In order to reduce greenhouse gas emissions and to better engage the private sector in the green transition, the EU has introduced the EU taxonomy, a common classification system to define environmentally sustainable economic activities. The aim of the taxonomy is to classify economic activities based on their contribution to six environmental objectives 1) climate change mitigation, 2) climate change adaptation, 3) sustainable use and protection of water and marine resources, 4) transition to a circular economy, 5) pollution prevention and control, and 6) protection and restoration of biodiversity and ecosystems. The EU taxonomy is still developing and as yet does not cover all economic activities. For 2023, companies are required to disclose what proportion of their turnover, capital expenditure (CapEx), and operating expenditure (OpEx) are both eligible and aligned according to the EU taxonomy’s two environmental objectives and eligible according to the EU taxonomy's environmental objectives 3–6. * The manufacturing sector, which Kemira is considered to be part of, is largely out of scope of the current legislation. Currently it mainly includes the manufacturing of basic materials and chemicals such as chlorine, soda ash, and hydrogen. Kemira on the other hand mostly produces specialty chemicals and therefore its current eligibility and alignment figures are low. The EU taxonomy's third environmental objective covers the sustainable use of water. However, it does not include enabling activities for the sustainable use of water, but instead focuses more on the activities that are directly linked to water infrastructure from construction to operation to renewal of water infrastructure. Kemira's products are essential for clean drinking water and wastewater, but they are currently excluded from the scope of the EU taxonomy. Kemira is in active dialogue with the EU commission regarding the scope of the EU taxonomy and the importance of chemicals as an enabler for the water infrastructure. ACCOUNTING PRINCIPLES EU taxonomy requires the disclosure of three financial indicators: turnover, capital expenditure (CapEx), and operating expenditure (OpEx). These indicators are defined by the EU taxonomy and the definitions differ from the IFRS-definitions of CapEx and OpEx, which are used elsewhere in Kemira’s financial reporting. Kemira has calculated the KPIs based on the definitions by the EU taxonomy and has taken a conservative approach when interpreting the EU Taxonomy Regulation. The EU taxonomy also requires companies to disclose how they have avoided double counting of their economic activities. Kemira avoided double-counting by ensuring that turnover, CapEx, and OpEx were only allocated once to the taxonomy activities and only to one environmental objective: climate change mitigation. KEMIRA does not contribute to multiple environmental objectives. KEMIRA’S TAXONOMY-ELIGIBLE AND TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (PLEASE SEE TABLES ON FOLLOWING PAGES FOR A MORE DETAILED BREAKDOWN) Key Performance Indicator Total (MEUR) Share of taxonomy- eligible economic activities (%) Share of taxonomy non- eligible economic activities (%) Share of taxonomy aligned economic activities (%) Share of taxonomy non- aligned economic activities (%) Turnover 3383.7 0 100 0 100 Capital expenditure (CapEx) as per definition of the EU Taxonomy 243.9 1 99 0 100 Operating expenditure (OpEx) as per definition of the EU Taxonomy 107.8 0 100 0 100 Turnover in EU Taxonomy equals revenue in Kemira's financial reporting. Capex as per definition of the EU taxonomy equals Kemira's reported capital expenditure added with additions into right-of-use assets. Opex as per definition of the EU taxonomy equals direct R&D and maintenance expenditure. Please refer to the Financial Statements note 2.1 for more information on revenue, 3 for capital expenditure and 2.2 for operating expenditure. Turnover. Kemira’s eligible turnover mainly consisted of industrial by-products, such as hydrogen and waste heat that is sold for district heating. Kemira’s waste heat turnover is taxonomy-aligned, while hydrogen turnover is not taxonomy-aligned due to the lack of life- cycle-assessments in a form required in the EU Taxonomy Regulation. Capital expenditure. Kemira had no revenue-related CapEx as the taxonomy-eligible turnover consisted of industrial by-products for which Kemira does not specifically spend CapEx. In terms of individually sustainable CapEx, Kemira spent EUR 2.6 million CapEx on electric vehicles in 2023. Operating expenditure. Kemira had no revenue-related OpEx as the taxonomy-eligible turnover consisted of industrial by-products for which Kemira does not specifically spend OpEx on. Based on Kemira's analysis, individually sustainable OpEx was not material in 2023. Taxonomy-eligibility means that an activity is classified in the taxonomy, which is an indication that it might have a substantial contribution to one of the six environmental objectives of the taxonomy. Taxonomy-aligned means that an activity is environmentally sustainable, according to the EU taxonomy criteria. Economic activities are considered to be aligned according to the EU taxonomy when they: • Make a substantial contribution to one of the six objectives mentioned above and they comply with certain technical screening criteria • Do no significant harm (DNSH) to the achievement of any other objective of the EU taxonomy BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 9 • Comply with minimum safeguards for human rights, taxation, corruption, and fair competition Kemira has assessed its eligible revenue based on the above categories to determine whether the taxonomy-eligible activities are also taxonomy-aligned activities. In 2023, Kemira performed a minimum safeguards self-assessment in relation to the EU Taxonomy reporting in the fields on human rights, taxation, corruption, and fair competition. The conclusion from this assessment is that Kemira meets the EU Taxonomy minimum safeguards on a group level. In its taxonomy reporting, Kemira has taken into account the latest regulation regarding DNSH criteria and delegated acts. Individually sustainable CapEx / OpEx refers to CapEx / OpEx that enables an economic activity to be conducted in a low-carbon manner or to reduce greenhouse gas emissions. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 10 TURNOVER Financial year 2023 2023 Substantial contribution criteria DNSH criteria ('Does Not Significantly Harm') Economic Activities (1) Code (a) (2) Turnover (3) Proportion of Turnover, year 2023 (4) Climate Change Mitigation (5) Climate Change Adaptation (6) Water (7) Pollution (8) Circular Economy (9) Biodiversity (10) Climate Change Mitigation (11) Climate Change Adaptation (12) Water (13) Pollution (14) Circular Economy (15) Biodiversity (16) Minimum Safeguards (17) Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) turnover, year 2022 (18) Category enabling activity (19) Category transitional activity (20) MEUR % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy aligned) Production of heat/cool from waste heat 4.25 7.0 0.2% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y 0.2% Turnover of environmentally sustainable activities (Taxonomy Aligned (A.1) 7.0 0.2% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% Of which Enabling 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Of which Transitional 0.0% 0.0% A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of hydrogen 3.10 4.9 0.1% EL N/EL N/EL N/EL N/EL N/EL 0.1% Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 4.9 0.1% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% A. Turnover of Taxonomy eligible activities (A.1+A.2) 11.9 0.4% 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.4% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy-non-eligible activities 3,371.8 99.6% TOTAL 3,383.7 100.0% EL = eligible N/EL= non-eligible BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 11 CAPEX Financial year 2023 2023 Substantial contribution criteria DNSH criteria ('Does Not Significantly Harm') Economic Activities (1) Code (a) (2) CapEx (3) Proportion of CapEx, year 2023 (4) Climate Change Mitigation (5) Climate Change Adaptation (6) Water (7) Pollution (8) Circular Economy (9) Biodiversity (10) Climate Change Mitigation (11) Climate Change Adaptation (12) Water (13) Pollution (14) Circular Economy (15) Biodiversity (16) Minimum Safeguards (17) Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) CapEx, year 2022 (18) Category enabling activity (19) Category transitional activity (20) MEUR % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy aligned) Production of heat/cool from waste heat 4.25 0.0 0.0% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y 0.0% CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Of which Enabling 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Of which Transitional 0.0% 0.0% A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of hydrogen 3.10 0.0 0.0% EL N/EL N/EL N/EL N/EL N/EL 0.0% Transport by motorbikes, passenger cars and light commercial vehicles 6.5 2.6 1.1% EL N/EL N/EL N/EL N/EL N/EL 0.5% CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 2.6 1.1% 1.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% A. CapEx of Taxonomy eligible activities (A.1+A.2) 2.6 1.1% 1.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities 241.3 98.9% TOTAL 243.9 100.0% EL = eligible N/EL= non-eligible BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 12 OPEX Financial year 2023 2023 Substantial contribution criteria DNSH criteria ('Does Not Significantly Harm') Economic Activities (1) Code (a) (2) OpEx (3) Proportion of OpEx, year 2023 (4) Climate Change Mitigation (5) Climate Change Adaptation (6) Water (7) Pollution (8) Circular Economy (9) Biodiversity (10) Climate Change Mitigation (11) Climate Change Adaptation (12) Water (13) Pollution (14) Circular Economy (15) Biodiversity (16) Minimum Safeguards (17) Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) OpEx, year 2022 (18) Category enabling activity (19) Category transitional activity (20) MEUR % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy aligned) Production of heat/cool from waste heat 4.25 0.0 0.0% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y 0.0% OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Of which Enabling 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Of which Transitional 0.0% 0.0% A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of hydrogen 3.10 0.0 0.0% EL N/EL N/EL N/EL N/EL N/EL 0.0% Transport by motorbikes, passenger cars and light commercial vehicles 6.5 0.0 0.0% EL N/EL N/EL N/EL N/EL N/EL 0.0% OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% A. OpEx of Taxonomy eligible activities (A.1+A.2) 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities 107.8 100.0% TOTAL 107.8 100.0% EL = eligible N/EL= non-eligible BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 13 Sustainability Kemira's sustainability work covers economical, environmental and social topics and is guided by the UN's Sustainable Development Goals (SDGs). Our focus is on Clean Water and Sanitation (SDG6), Decent Work and Economic Growth (SDG8), Responsible Consumption and Production (SDG12) and Climate Action (SDG13). More information on sustainability at Kemira can be found in the 2023 Sustainability report. SUSTAINABILITY PERFORMANCE IN 2023 SAFETY TRIF improved slightly to 2.5 in 2023 (2022: 2.6). Kemira will continue its safety-related activities and projects to improve safety awareness and to steer performance toward the 2024 TRIF target of 1.9. PEOPLE Kemira's target is to reach the Glint top 10% of the cross industry benchmark for Diversity, Equity & Inclusion (DEI) by end of 2025. In 2023, our Inclusion index score improved by 2 points to 78 and we reached the top 25% (benchmark score of 80 needed to reach cross industry top 10%). In Q4 2023, we continued with DEI workshops, to reach employees at 31/60 manu- facturing sites. By the end of 2023, over 500 employees had completed the eLearning on DEI awareness, with positive overall feedback. Kemira's employee engagement score in November 2023 was 80 (74 external manufacturing benchmark) with all items well above the benchmark. CIRCULARITY Kemira continued to progress its renewable solutions strategy during 2023 and e.g. announced the next steps in its partnership with IFF, in December 2023. Renewable solutions revenue declined slightly to around EUR 230 million following lower prices for renewable sizing chemicals. In terms of waste reduction, Kemira both began new and continued existing waste intensity reduction initiatives, the benefits of which are expected to be seen in the coming years. Waste intensity in 2023 decreased compared to 2022. WATER Kemira further improved its water data reporting and data quality during 2023, with a systematic revision of water balances at all manufacturing sites. In 2023, freshwater use intensity improved, mostly due to the divestment of the colorants business and lower production volumes at some water-intensive sites. The CDP Water Security questionnaire results are expected to be available during Q1 2024.. CLIMATE In 2023, we continued to develop a near-term Scope 3 emission reduction target, as part of the Science Based Targets Initiative (SBTi) commitment. Kemira plans to submit the Scope 1 and 2 and Scope 3 targets to SBTi for validation during H1 2024. In 2023, the absolute Scope 1 and 2 emissions decreased, in line with the SBTi reduction commitment for 2023. The decrease in absolute Scope 1+2 emissions is related to our zero-carbon energy sourcing ambition and to improvements in the carbon footprint of our energy suppliers. Furthermore, the Scope 1+2 emissions intensity (tons CO2e per ton of production) also improved. In January 2023, Kemira launched a Supplier Engagement Program to improve its understanding of the life cycle impacts associated with its products. One of the key priorities is to collect product carbon footprint (PCF) and life cycle assessment (LCA) data from raw materials suppliers to develop actions to reduce CO2 emissions in our value chain. SDG KPI UNIT 2023 2022 SAFETY 2.5 2.6 TRIF 1.5 by 2025 and 1.1 by the end of 2030 *TRIF = total recordable injury frequency per million hours, Kemira + contractors PEOPLE In the top 25% Slightly below top 25% Reach top 10% cross industry norm for Diversity & Inclusion by the end of 2025 CIRCULARITY kg/tonnes of production 4.4 4.6 1) Reduce waste intensity by 15% by the end of 2030 from a 2019 baseline of 4.6 kilograms of disposed production waste per metric tonnes of production Renewable solutions > EUR 500 million revenue by the end of 2030 ~230 ~250 WATER Rate scale A-D N/A B Reach the Leadership level (A) in water management by the end of 2025 measured by CDP Water Security scoring methodology. CLIMATE ktCO2e 625 856 Scopes 1 & 2 emissions -50% by the end of 2030 compared to 2018 baseline of 930 ktCO2e Scope 1: Direct greenhouse gas emissions from Kemira's manufacturing sites, e.g. the generation of energy and emissions from manufacturing processes. Scope 2: Indirect greenhouse gas emissions from external generation and purchase of electricity, heating, cooling, and steam 1) Comparison period figure has been recalculated. More information in the Sustainability report. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 14 Segments PULP & PAPER Pulp & Paper has unique expertise in applying chemicals and in supporting pulp and paper producers in innovating and constantly improving their operational efficiency as well as end product performance and quality. The segment develops and commercializes new products to meet the needs of its customers, thus ensuring a leading portfolio of products and services for the bleaching of pulp as well as the paper wet-end, focusing on packaging, board and tissue. Pulp & Paper continues to leverage its strong application portfolio in North America and EMEA while also building a strong position in the emerging Asian and South American markets. EUR million 2023 2022 Revenue 1,748.2 2,027.7 Operative EBITDA 330.9 348.0 Operative EBITDA, % 18.9 17.2 EBITDA 308.0 336.6 EBITDA, % 17.6 16.6 Operative EBIT 216.3 225.7 Operative EBIT, % 12.4 11.1 EBIT 193.4 213.1 EBIT, % 11.1 10.5 Capital employed 1,282.0 1,337.7 Operative ROCE, % 16.9 16.9 ROCE, % 15.1 15.9 Capital expenditure excl. M&A 124.4 122.5 Capital expenditure incl. M&A 126.2 122.5 Cash flow after investing activities 216.3 207.2 12-month rolling average The segment’s revenue decreased by 14%. Revenue in local currencies (excluding divestments and acquisitions) decreased by 11% due to lower sales volumes. Sales volumes decreased in all product groups following weak market demand, particularly in pulp and bleaching chemicals. Sales prices declined slightly, again mainly due to lower market prices for pulp and bleaching chemicals. Beyond pulp and bleaching chemicals, sales prices were rather stable. The market prices of caustic soda were at a high level during Q1 2023, but then moderated in Q2-Q4 2023. Currencies had a negative impact. In EMEA, revenue decreased by 18% to EUR 891.4 million (1,088.6), mainly due to lower sales volumes, which declined across product groups. Sales prices decreased due to lower market prices for energy-intensive pulp and bleaching chemicals, including caustic soda. In the Americas, revenue decreased by 11%, to EUR 573.1 million (647.1). Revenue in local currencies, excluding acquisitions and divestments, decreased by 6% due to lower sales volumes across product groups. Sales prices increased. In APAC, revenue decreased by 3%to EUR 283.6 million (292.0). Revenue in local currencies, excluding acquisitions and divestments, increased by 2% due to higher sales volumes, particularly in sizing chemicals. Sales prices declined. Operative EBITDA decreased by 5%mainly due to lower sales volumes. The operative EBITDA margin increased to 18.9%, an all-time high. EBITDA decreased by 8%. The difference between it and operative EBITDA is explained by items affecting comparability, which mainly consisted of a provision of EUR 12 million related to the expected underutilization of a single- asset energy company in Pori, Finland, majority owned by Kemira via Pohjolan Voima and a loss of EUR 10 million from the divestment of most of our colorants business. Items affecting comparability in the comparison period mainly related to an expected loss from the divestment of most of our colorants business, environmental provisions, Kemira's exit from Russia and a manufacturing unit sale to a customer. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 15 INDUSTRY & WATER Industry & Water supports municipalities and water-intensive industries in the efficient and sustainable use of resources. In water treatment, Kemira enables the optimization of various stages of the water cycle. Kemira started to review the strategic options for its Oil & Gas business in 2023 and completed the divestment of its Oil & Gas business on February 2, 2024. EUR million 2023 2022 Revenue 1,635.5 1,541.9 Operative EBITDA 335.8 223.7 Operative EBITDA, % 20.5 14.5 EBITDA 232.0 222.2 EBITDA, % 14.2 14.4 Operative EBIT 246.7 135.9 Operative EBIT, % 15.1 8.8 EBIT 143.0 134.5 EBIT, % 8.7 8.7 Capital employed 873.5 900.3 Operative ROCE, % 28.2 15.1 ROCE, % 16.4 14.9 Capital expenditure excl. M&A 80.5 75.4 Capital expenditure incl. M&A 80.5 75.4 Cash flow after investing activities 242.5 100.9 12-month rolling average The segment’s revenue increased by 6%. Revenue in local currencies, excluding acquisitions and divestments, increased by 9%. The increase was driven by higher sales prices in water treatment. Sales volumes were rather stable. Currencies had a negative impact. In the water treatment business, revenue increased by 1% due to higher sales prices. Sales volumes declined, mainly due to soft demand in industrial water treatment. Revenue in the Oil & Gas business increased by 21%to EUR 457.1 million (377.5), due to higher sales volumes, particularly in shale. Sales prices decreased. In EMEA, revenue decreased by 2%to EUR 730.4 million (746.4). Sales volumes decreased, mainly due to soft demand in industrial water treatment, including mining. Sales prices increased in water treatment. Currencies had a positive impact. In the Americas, revenue increased by 15%to EUR 885.1 million (767.1). Revenue in local currencies, excluding acquisitions and divestments, increased by 19%, following higher sales volumes in the Oil and Gas business and higher sales prices in water treatment. In APAC, revenue decreased by 30%to EUR 20.0 million (28.4). Operative EBITDA increased by 50%following higher sales prices in water treatment. The operative EBITDA margin increased to a record-high of 20.5%due to strong performance in water treatment. The operative EBITDA margin also improved in the Oil & Gas business. Currencies had a negative impact. EBITDA increased by 4% and the difference to operative EBITDA is explained by items affecting comparability, which were mainly related to the expected loss of EUR 101 million from the divestment of the Oil & Gas business, including transaction fees. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 16 The parent company’s financial performance Kemira Oyj’s revenue decreased to EUR 2,030.4 million (2,206.7) in 2023. EBITDA was EUR 195.7 million (220.4). The parent company’s financing income and expenses were EUR -24.9 million (172.7), following lower dividend income from group companies and the write-off of group company shares. The net result for the financial year decreased to EUR 104.2 million (314.7), following lower revenue and increased financing expenses. The total capital expenditure was EUR 18.2 million (23.2), excluding investments in subsidiaries. Kemira Oyj had 500 (2022: 502, 2021: 502) employees on average during 2023. Kemira Oyj’s shares and shareholders On December 31, 2023, Kemira Oyj’s share capital amounted to EUR 221.8 million and the number of shares was 155,342,557. Each share entitles the holder to one vote at the Annual General Meeting. At the end of December 2023, Kemira Oyj had 49,659 registered shareholders (48,403 on December 31, 2022). Non-Finnish shareholders held 34.7% of the shares (31.5% on December 31, 2022), including nominee-registered holdings. Households owned 19.0% of the shares (19.3% on December 31, 2022). Kemira held 1,722,725 treasury shares (1,990,197 on December 31, 2022), representing 1.1% (1.3% on December 31, 2022) of all company shares. Kemira Oyj’s share price increased by 17% during the reporting period and closed at EUR 16.79 on the Nasdaq Helsinki at the end of December 2023 (14.33 on December 31, 2022). The shares registered a high of EUR 18.22 and a low of EUR 13.51 in January-December 2023, and the average share price was EUR 15.36. The company’s market capitalization, excluding treasury shares, was EUR 2,579 million at the end of December 2023 (2,198 on December 31, 2022). In January-December 2023, Kemira Oyj’s share trading turnover on the Nasdaq Helsinki was EUR 688 million (EUR 462 million in January-December 2022). The average daily trading volume was 174,707 shares (146,311 in January-December 2022). The total volume of Kemira Oyj’s share trading in January-December 2023 was 57 million shares (49 million shares in January-December 2022), 23% (25% in January-December 2022) of which was executed on other trading platforms (e.g. Turquoise, CBOE DXE). Source: Nasdaq and Kemira.com. FLAGGING NOTIFICATIONS March 1, 2023: The shareholding of Solidium Oy in Kemira decreased to 5.01 per cent. January 17, 2023: The shareholding of Impax Asset Management Group plc in Kemira decreased to 4.99 per cent. Management shareholding The members of the Board of Directors as well as the Interim President and CEO and his Deputy held 214,529 (330,988) Kemira Oyj shares on December 31, 2023 or 0.14% (0.21%) of all outstanding shares and voting rights (including treasury shares and shares held by the related parties and controlled corporations). Petri Castrén, Interim President and CEO, held 56,140 shares on December 31, 2023. Members of the Management Board, excluding the Interim President and CEO and his Deputy, held a total of 245,128 shares on December 31, 2023 (237,515), representing 0.16% (0.15%) of all outstanding shares and voting rights (including treasury shares and shares held by the related parties and controlled corporations). Up-to- date information regarding the shareholdings of the Board of Directors and Management is available on Kemira’s website at kemira.com/investors. Amount of shares % of shares Owners Dec 31, 2023 Dec 31, 2022 Dec 31, 2023 Dec 31, 2022 Board of Directors 55,702 66,932 0.04 0.04 Interim President and CEO 56,140 169,069 0.04 0.11 CEO's Deputy 102,687 94,987 0.07 0.06 Members of the Management Board (excl. CEO and CEO's Deputy) 245,128 237,515 0.16 0.15 in 2022, the shareholding refers to the previous President and CEO's holding BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 17 OWNERSHIP DECEMBER 31, 2023 % of shares and votes Owners 2023 2022 Corporations 26.0 25.1 Financial and insurance corporations 4.0 3.7 General government 13.6 17.6 Households 19.0 19.3 Non-profit institutions 2.7 2.9 Non-Finnish shareholders incl. nominee registered 34.7 31.5 SHAREHOLDING BY NUMBER OF SHARES HELD DECEMBER 31, 2023 Number of shares Number of shareholders % of shareholders Shares total % of shares and votes 1 - 100 19,087 38.4% 919,462 0.6 101 - 500 18,297 36.8% 4,839,778 3.1 501 - 1,000 5,882 11.8% 4,503,491 2.9 1,001 - 5,000 5,381 10.8% 11,238,360 7.2 5,001 - 10,000 574 1.2% 4,126,138 2.7 10,001 - 50,000 351 0.7% 6,560,370 4.2 50,001 - 100,000 38 0.1% 2,666,853 1.7 100,001 - 500,000 33 0.1% 6,160,766 4.0 500,001 - 1,000,000 7 0.0% 5,296,157 3.4 1,000,001 - 9 0.0% 109,031,182 70.2 Total 49,659 100.0% 155,342,557 100.0 LARGEST SHAREHOLDERS DECEMBER 31, 2023 Shareholder Number of shares % of shares and votes 1 Oras Invest Ltd 33,553,000 21.6 2 Solidium Oy 7,782,765 5.0 3 Varma Mutual Pension Insurance Company 5,332,678 3.4 4 Nordea Funds 3,896,196 2.5 5 Ilmarinen Mutual Pension Insurance Company 3,700,000 2.4 6 Elo Mutual Pension Insurance Company 2,277,000 1.5 7 Etola Group Oy 1,000,000 0.6 8 Veritas Pension Insurance Company Ltd. 861,372 0.6 9 Laakkonen Mikko Kalervo 770,000 0.5 10 Nordea Life Assurance Finland Ltd. 738,047 0.5 11 The State Pension Funds 560,000 0.4 12 Paasikivi Pekka Johannes 462,200 0.3 13 Säästöpankki Funds 392,194 0.3 14 Valio Pension Fund 379,450 0.2 15 OP-Henkivakuutus Ltd. 340,902 0.2 Kemira Oyj 1,722,725 1.1 Nominee registered and foreign shareholders 53,835,387 34.7 Others, Total 37,738,641 24.2 Total 155,342,557 100.0 BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 18 SHARE KEY FIGURES 2023 2022 2021 2020 2019 PER SHARE FIGURES Earnings per share (EPS), basic, EUR ¹⁾ 1.30 1.51 0.71 0.86 0.72 Earnings per share (EPS), diluted, EUR ¹⁾ 1.28 1.50 0.70 0.86 0.72 Net cash generated from operating activities per share, EUR ¹⁾ 3.56 2.61 1.44 2.45 2.53 Dividend per share, EUR ¹⁾ ²⁾ 0.68 0.62 0.58 0.58 0.56 Dividend payout ratio, % ¹⁾ ²⁾ 52.4 41.0 82.2 67.5 77.6 Dividend yield, % ¹⁾ ²⁾ 4.1 4.3 4.4 4.5 4.2 Equity per share, EUR ¹⁾ 10.84 10.89 8.68 7.80 7.98 Price per earnings per share (P/E ratio) ¹⁾ 12.95 9.48 18.88 15.07 18.37 Price per equity per share ¹⁾ 1.55 1.32 1.54 1.66 1.66 Price per cash flow from operations per share ¹⁾ 4.72 5.49 9.27 5.28 5.24 Dividend paid, EUR million ²⁾ 104.5 95.1 88.8 88.7 85.5 SHARE PRICE AND TRADING Share price, high, EUR 18.22 14.94 14.66 14.24 14.99 Share price, low, EUR 13.51 10.36 12.64 8.02 9.77 Share price, average, EUR 15.36 12.57 13.67 11.55 12.56 Share price on Dec 31, EUR 16.79 14.33 13.33 12.94 13.26 Number of shares traded (1,000) ³⁾ 43,852 37,017 57,478 75,885 53,048 % on number of shares 29 24 38 50 35 Market capitalization on Dec 31, EUR million ¹⁾ 2,579 2,198 2,041 1,979 2,024 NUMBER OF SHARES AND SHARE CAPITAL Average number of shares, basic (1,000) ¹⁾ 153,573 153,320 153,092 152,879 152,630 Average number of shares, diluted (1,000) ¹⁾ 155,051 154,261 153,785 153,373 153,071 Number of shares on Dec 31, basic (1,000) ¹⁾ 153,620 153,352 153,127 152,924 152,649 Number of shares on Dec 31, diluted (1,000) ¹⁾ 155,303 154,894 154,068 153,744 153,385 Increase (+) / decrease (-) in number of shares outstanding (1,000) 267 225 203 275 139 Share capital, EUR million 221.8 221.8 221.8 221.8 221.8 1) Number of shares outstanding, excluding the number of treasury shares. 2) The dividend for 2023 is the Board of Directors' proposal to the Annual General Meeting. 3) Shares traded on Nasdaq Helsinki only) Definition of key figures are disclosed in the section on the Definition of key figures. AGM decisions Annual General Meeting Kemira Oyj's Annual General Meeting, held on March 22, 2023, approved the Board of Directors' proposal for a dividend of EUR 0.62 per share for the financial year 2022. The dividend was paid in two installments. The first installment of EUR 0.31 per share was paid on April 5, 2023. The Annual General Meeting authorized the Board of Directors to decide the record date and the payment date for the second installment of the dividend. The Board of Directors decided on the record date and the payment date for the second installment of the dividend of EUR 0.31 at its meeting on October 23, 2023. The payment date of the second installment of the dividend was November 2, 2023. Kemira announced the resolution of the Board of Directors with a separate stock exchange release and confirmed the record and the payment dates. The 2023 AGM authorized the Board of Directors to decide upon the repurchase of a maximum of 6,000,000 of the company’s own shares. This corresponds to approximately 3.9% of all shares and votes in the company. The shares will be repurchased by using unrestricted equity, either through a tender offer with equal terms to all shareholders at a price determined by the Board of Directors or otherwise in proportion to the existing shareholdings of the company’s shareholders in public trading on the Nasdaq Helsinki Ltd (the “Helsinki Stock Exchange”), at the market price quoted at the time of repurchase. The price paid for the shares repurchased through a tender offer under such an authorization shall be based on the market price of the company’s shares in public trading. The minimum price to be paid would be the lowest market price of the shares quoted in public trading during the authorization period and the maximum price would be the highest market price quoted during the authorization period. Shares shall be acquired and paid for in accordance with the rules of the Helsinki Stock Exchange and and the rules of Euroclear Finland Ltd as well as other applicable regulations. Shares may be repurchased to be used in implementing or financing mergers and acquisitions, developing the company’s capital structure, improving the liquidity of the company’s shares, or to be used for the payment of the annual fee payable to the members of the Board of Directors or implementing the company’s share-based incentive plans. In order to realize the aforementioned purposes, the shares acquired may be retained, transferred further or cancelled by the company. The Board of Directors will decide on other terms related to the share repurchase. The share repurchase authorization is valid until the BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 19 end of the next Annual General Meeting. The authorization was not used by December 31, 2023.5 The Annual General Meeting authorized the Board of Directors to decide to issue a maximum of 15,600,000 new shares (corresponding to approximately 10% of all company shares and votes) and/or transfer a maximum of 7,800,000 of the company’s own shares (corresponding to approximately 5% of all company shares and votes) held by the company (“Share issue”). The new shares may be issued and the company’s own shares held by the company may be transferred either for consideration or without consideration. The new shares may be issued and the company's own shares held by the company may be transferred to the company’s shareholders in proportion to their current shareholdings in the company, or by disapplying the shareholders’ pre-emption right, through a directed share issue, if the company has a weighty financial reason to do so, such as financing or implementing mergers and acquisitions, developing the capital structure of the company, improving the liquidity of the company’s shares or, if it is justified, for the payment of the annual fee payable to the members of the Board of Directors or implementing the company’s share-based incentive plans. The directed share issue may be carried out without consideration only in connection with the implementation of the company’s share-based incentive plans. The subscription price of new shares shall be recorded to the invested unrestricted equity reserves. The consideration payable for the company's own shares shall be recorded to the invested unrestricted equity reserves. The Board of Directors shall decide upon other terms related to the share issues. The share issue authorization is valid until May 31, 2024. The share issue authorization has been used and shares owned by the Group were conveyed to members of the Board and key employees in connection with remuneration. The Annual General Meeting decided that the Articles of Association are to be amended by adding a new article regarding the organization of the general meeting, so that the general meeting can be held completely without a meeting venue, as a so-called remote meeting. The Annual General Meeting decided to amend the Charter of the Nomination Board by adding new sections to the Charter relating to instructions for holders of nominee-registered shares to use the right to nominate a member to the Nomination Board, to practices when a qualified shareholder refuses to nominate a member to the Nomination Board or when two or several qualified shareholders hold an equal number of shares, the unanimity of the Nomination Board’s decisions as well as to procedures relating to amendments to the Charter. The AGM elected Ernst & Young Oy to serve as the company’s auditor, with Mikko Rytilahti, Authorized Public Accountant, acting as the key audit partner. Corporate governance and group structure Kemira Oyj’s corporate governance is based on the Articles of Association, the Finnish Companies Act and Nasdaq Helsinki’s rules and regulations on listed companies. Furthermore, the company complies with the Finnish Corporate Governance Code. The company’s corporate governance is presented as a separate statement on the company’s website. BOARD OF DIRECTORS On March 22, 2023, the Annual General Meeting elected eight members to the Board of Directors. The Annual General Meeting re-elected Tina Sejersgård Fanø, Werner Fuhrmann, Matti Kähkönen, Timo Lappalainen, Annika Paasikivi and Kristian Pullola and elected Fernanda Lopes Larsen and Mikael Staffas as new members to the Board of Directors. Matti Kähkönen was elected as the Chair of the Board of Directors and Annika Paasikivi was elected as the Vice Chair. In 2023, Kemira’s Board of Directors met 13 times, with a 98% attendance rate. Kemira Oyj’s Board of Directors has appointed two committees: the Personnel and Remuneration Committee and the Audit Committee. The Personnel and Remuneration Committee is chaired by Matti Kähkönen and has Tina Sejersgård Fanø, Timo Lappalainen, Annika Paasikivi and Mikael Staffas as members. In 2023, the Personnel and Remuneration Committee met 4 times, with a 95% attendance rate. The Audit Committee is chaired by Timo Lappalainen and has Werner Fuhrmann, Fernanda Lopes Larsen and Kristian Pullola as members. In 2023, the Audit Committee met 5 times, with a 100% attendance rate. STRUCTURE In 2023, Kemira divested the majority of its colorants business and its Oil & Gas-related portfolio. The divestment of the colorants business was closed on May 5, 2023, while the divestment of the Oil & Gas business was closed after the review period on February 2, 2024. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 20 Short-term risks and uncertainties PRICE AND AVAILABILITY OF RAW MATERIALS AND COMMODITIES A significant and sudden increase in the cost of raw materials, commodities or logistics could place Kemira’s profitability at risk if Kemira is not able to pass on such increases to product prices without delay. For instance, considerable and/or rapid changes in oil, energy, and electricity prices could materially impact Kemira’s profitability. Changes in the raw material supplier field, such as consolidation or decreasing capacity, may also increase raw material prices. Furthermore, significant demand changes in industries that are the main users of certain raw materials may lead to raw material price fluctuations. In 2023, raw material and commodity prices decreased compared to 2022. Energy and electricity prices also stabilized in Europe as market turmoil caused by the war in Ukraine largely dissipated. In Europe, electricity prices are expected to remain above long-term average levels, with seasonal variation. Poor availability of certain raw materials may affect Kemira’s production and also profitability if Kemira fails to prepare for this by mapping out alternative suppliers or opportunities for process changes. Raw material and commodity related risks can be effectively monitored and managed by Kemira's centralized Sourcing unit. Risk management measures include, for instance, forward-looking forecasting of key raw materials and commodities, synchronization of raw material purchase agreements and sales agreements, captive manufacturing of some of the critical raw materials, strategic investment in energy-generating companies and hedging a portion of the energy and electricity spend. In 2023, Kemira demonstrated good resilience in managing raw material risks. During 2023, energy markets in Europe stabilized to a large extent and improved their resilience related to the war in Ukraine. Nevertheless, Kemira continues to monitor the situation closely. SUPPLIERS The continuity of Kemira’s business operations is dependent on the accurate supply of good- quality products and services. Kemira currently has in place numerous partnerships and other agreements with third-party product and service suppliers to secure its business continuity. Certain products used as raw materials are considered critical as the purchase can be made economically only from a sole or a single source. In the event of a sudden and significant loss or interruption to the supply of such a raw material, Kemira’s operations could be impacted and this could have a negative effect on Kemira. Ineffective procurement planning, supply source selection, contract administration, as well as inadequate supplier relationship management, create a risk of Kemira not being able to fulfill its promises to customers. The war in Ukraine or the COVID-19 pandemic did not cause significant impacts to Kemira’s manufacturing operations in 2023. Disruptions to energy availability or changes in energy pricing could increase counterparty risk in energy hedging. Kemira is monitoring the energy counterparty risk actively and has been reducing exposure to this risk during 2023. Kemira sources a large share of its electricity in Finland at production cost (the Mankala principle) through its partial ownership of the electricity producing hydro and nuclear assets of Teollisuuden Voima and Pohjolan Voima. Significant long-term disruptions to the production levels of these assets could have an adverse financial impact on Kemira. Kemira continuously aims to identify, analyze and engage third-party suppliers in a way that ensures security of supply and the competitive pricing of end products and services. Collaborative relationships with key suppliers are developed in order to uncover and realize new value and to reduce risk. Supplier performance is also regularly monitored as a part of the supplier performance management process. Due to the high-risk environment related to suppliers in the chemical industry, risk management and mitigation in this area is subject to a continuous level of high focus. HAZARD RISKS Kemira’s production activities are exposed to many hazard risks – such as fires and explosions, machinery breakdowns, natural catastrophes, exceptional weather conditions and environmental incidents – and to the consequent possible liabilities as well as the risks to employee health and safety. These risk events may derive from several factors, including (but not limited to) unauthorized IT system access by a malicious intruder or other cyber security issues causing possible damage to systems, which in turn could lead to financial losses and supply disruptions. A systematic focus on achieving set targets, certified management systems, efficient hazard prevention programs, the promotion of an active safety culture, adequate maintenance and competent personnel all play a central role in managing these hazard risks. In addition, Kemira has several insurance programs that protect the company against the financial impacts of hazard risks. Kemira continuously monitors, assesses and upgrades its cyber security for workstations, customer equipment and cloud services and actively trains and educates its personnel on BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 21 detecting and reporting on possible cyber security threats. Kemira's Board of Directors regularly reviews cyber security risks. Kemira's operations rely on functional and up-to-date IT systems. Kemira successfully completed its group-wide enterprise resource planning system renewal during 2023, without any negative impact on Kemira's operations. CHANGES IN CUSTOMER DEMAND A significant, unforeseen decline in the use of certain chemicals (e.g. chemicals for packaging and board production) or in the demand for customers’ products and operations could have a negative impact on Kemira’s business. A significant decline in certain raw material and utility prices (e.g. oil, gas, and metals) may shift customers’ activities towards areas where fewer chemicals are needed. Also, increasing awareness of and concern about climate change and more sustainable products may alter customer demand, for instance, in favor of water treatment technologies with lower chemical consumption. On the other hand, possible capacity expansion by customers could increase chemical consumption and could challenge Kemira’s current production capacity. In order to manage and mitigate this risk, Kemira systematically monitors leading and early warning indicators that focus on market development. Kemira has also continued to focus on the sustainability of its business and is further improving the coordination and cooperation between the Business Development, R&D and Sales units, in order to better understand the future needs and expectations of its customers. During 2023, Kemira's new Growth Accelerator unit has initiated the first projects intended to accelerate the commercialization of new, renewable solutions. Timely capital investments as well as continuous discussions and follow-ups with customers ensure Kemira’s ability to respond to changes in demand. Kemira’s geographical and customer industry diversification also provide partial protection against the risk of changed customer demands. To respond to expected changes in customer requirements, Kemira has also revised its strategy to focus more on renewable solutions and has started several external partnerships in order to innovate and commercialize new renewable solutions for its customers. Renewable solutions are a significant component of Kemira’s growth ambitions for the future. Kemira expects to invest in renewable solutions projects, the commercialization of which involves risks related to e.g. market demand. ECONOMIC CONDITIONS AND GEOPOLITICAL CHANGES Uncertainties in global economic and geopolitical development are considered to include direct and indirect risks, such as a lower-growth period in global GDP and possible, unexpected trade-related political decisions, both of which could have unfavorable impacts on the demand for Kemira’s products. Certain political actions or changes, especially in countries that are important to Kemira, could cause business interference or other adverse consequences. Possible extended strikes in Finland could create near-term risks to customer demand or to Kemira's ability to run its operations. The ongoing war in Ukraine, sanctions against Russia as well as rising geopolitical tensions in the Middle East have increased uncertainty in the global economy. Possible trade or supply chain disruptions following geopolitical tensions in eastern Asia and the Middle East could also have an impact on Kemira’s operations. Kemira sources materials, has several local manufacturing facilities and derives around 10% of its revenue from the APAC region. Kemira does not have meaningful operations in the Middle East but could be exposed to e.g. supply chain disruptions. Weak economic development may bring about customer closures or consolidations, resulting in a diminishing customer base. The liquidity of Kemira’s customers could weaken, resulting in increased credit losses for Kemira. Despite the increased economic uncertainty in 2023, Kemira did not see material credit losses. Unfavorable market conditions may also decrease the availability and add to the price risk of certain raw materials. Kemira’s geographical and customer industry diversification only provides partial protection against these risks. Kemira continuously monitors geopolitical events and changes and aims to adjust its business accordingly. Trade war-related risks are also actively monitored and taken into account. COMPETITION Kemira operates in a rapidly changing and competitive business environment that represents a considerable risk to meeting its goals. New players seeking a foothold in Kemira’s key business segments may use aggressive means as a competitive tool, which could affect Kemira’s financial results. Major competitor or customer consolidations could change market dynamics and could possibly also change Kemira’s market position. Kemira is seeking growth in product categories that are less familiar and where new competitive situations prevail, particularly in renewable solutions. In the long term, completely new types of technology may considerably alter the current competitive situation. This risk is managed at both Group and segment levels, through continuous monitoring of markets and competitors. The company aims to respond to its competition through the active BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 22 management of customer relationships and continuous development of its products and services, to further differentiate itself from competitors and to be competitive. ACQUISITIONS In addition to organic growth, acquisitions are a potential way to achieve corporate goals and strategies. Consolidations are driven by chemical manufacturers’ interests in realizing synergies and establishing footholds in new markets. Acquisitions and/or partnerships may also be needed in order to enter totally new geographical markets or new product markets. However, the integration of acquired businesses, operations and personnel also involves risks. If integration is unsuccessful, the results may fall short of the targets for such acquisitions. Kemira has created mergers and acquisitions procedures and has established Group-level resources dedicated to actively managing merger and acquisition activities and to supporting the execution of its business transactions. In addition, external advisory services are used to screen potential merger and acquisition targets. INNOVATION AND RESEARCH & DEVELOPMENT Kemira’s research and development is a critical enabler of organic growth and further differentiation. Kemira’s future market position and profitability depend on its ability to understand and meet current and future customer needs and market trends, and its ability to innovate new differentiated products and applications. Furthermore, new product launches contribute to the efficiency and sustainability of Kemira’s and its customers’ processes, as well as to improved profitability. Failure to innovate or focus on disruptive new technologies and products, or to effectively commercialize new products or service concepts may result in the non-achievement of growth targets and may negatively impact Kemira’s competitive situation. Innovation- and R&D-related risks are managed through effective R&D portfolio management and close collaboration between R&D and the two business segments. There is close coordination and cooperation between the Business Development, R&D and the Sales and Marketing units in order to better understand the future needs and expectations of Kemira's customers. During 2023, Kemira's new Growth Accelerator unit initiated the first projects to accelerate the commercialization of new renewable solutions. With the continuous development of innovation processes, Kemira is aiming for more effective and stringent project execution. Kemira continues to focus on the development of more differentiated and sustainable products and processes and is also continuously monitoring the sales of its new products and applications. CHANGES IN LAWS AND REGULATIONS Kemira’s business is subject to various laws and regulations which have a relevance in the development and implementation of Kemira’s strategy. Laws and regulations can generally be considered an opportunity for Kemira, as where tightening regulation is expected to drive water treatment market growth, for example phosphorus removal of effluent before discharging to recipient. However, certain legislative initiatives supporting, for instance, the use of biodegradable raw materials or biological water treatment, or limiting the use of aluminum, may also have a negative impact on Kemira’s business. Significant changes in chemical, environmental or transportation laws and regulations may also impact Kemira’s profitability through an increase in production and transportation costs. At the same time, such changes may also create new business opportunities for Kemira. As an example, possible restrictions for plastic packaging would likely benefit the fiber-based packaging industry and therefore also Kemira. In addition, Kemira is actively following the European Commission's proposal for Packaging and Packaging Waste Regulations and its implications, particularly for disposable packaging. Inclusion of new substances in the REACH authorization process may also place further requirements on Kemira, where failure to obtain the relevant authorization could impact Kemira’s business. Certain legislative proposals, especially in Europe, such as the PFAS restriction proposed during 2023, may in the long-term result in additional requirements for managing Kemira's manufacturing assets. However, tightening PFAS regulation is also expected to drive the demand for water treatment applications. In addition, the changes in import/export and customs-related regulations create the need for monitoring and mastering global trade compliance, in order to ensure compliant product importation, for example. Kemira continuously follows regulatory developments in order to maintain its awareness of proposed and upcoming changes to those laws and regulations that may have an impact, for instance, on its sales, production and product development needs. Kemira is actively collaborating with industry groups and other stakeholders and has established an internal process to manage substances of potential concern and to create management plans for them. These plans cover the options for replacing certain substances if they become subject to stricter regulation, for example. Kemira has also increased its focus and resources in the management of global trade compliance. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 23 Regulatory effects are also systematically taken into consideration in strategic decision making. Kemira takes an active role in regulatory discussions whenever this is justified from the perspective of the industry or business. For example, there are currently many regulatory discussions ongoing in the EU, as the EU is conducting a major review of its water legislation and directives. This may have a positive demand-related impact for Kemira in the future, due to the need for water to be treated more carefully. The EU has launched several initiatives, such as the EU Chemicals Strategy for Sustainability (CSS) and the Fit-for-55 program as part of its Green Deal policy. Kemira is closely following these initiatives and their potential implications for the chemicals sector and for Kemira. We expect the first contours to become visible during 2024. TALENT MANAGEMENT To secure competitiveness and profitable growth, as well as to improve operational efficiency, it is essential to attract and to retain personnel with the right skills and competence. Kemira is continuously identifying people with high potential and the key competencies for future needs. Through the systematic development and improvement of compensation schemes, learning programs and career development programs, Kemira aims to ensure the continued presence of skilled personnel in the future. CLIMATE-RELATED RISKS Kemira has identified certain climate-related risks that could have an impact on Kemira’s operations or on customer demand. Increased awareness of and concern about climate change and more sustainable products may, for example, change customer demand in favor of water treatment technologies with lower chemical consumption. Higher awareness of the impacts of climate change could lead to a more rapid transition to sustainable, fossil-free energy sources, which could lead to higher energy prices and subsequently impact the availability of energy. This could have a negative impact on Kemira as parts of Kemira’s manufacturing operations are energy-intensive. A part of Kemira’s raw materials are fossil- based. Kemira has taken action to increase the share of renewable and recyclable raw materials in its portfolio and to reduce reliance on oil and gas derivatives. Many of Kemira's customers, particularly in the Pulp & Paper segment, have ambitions to be carbon neutral, which will likely have implications for Kemira and on the chemicals used in the customers' processes. Extreme weather patterns related to climate change, such as hurricanes and floods, could also impact Kemira’s supply chain and suppliers as well as Kemira’s own manufacturing sites. Several climate-related risks are included in Kemira’s enterprise risk management portfolio and active monitoring and mitigation planning continues. In 2023, Kemira continued efforts on climate risk scenario analysis, in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) framework. A climate risk assessment for Kemira's own manufacturing locations is planned for late 2023 and early 2024. RISKS AND IMPACTS OF THE WAR IN UKRAINE Following the war in Ukraine, Kemira exited Russia in May 2022. At the end of December 2023, Kemira's net assets in Russia amounted to around EUR 5 million and consisted mainly of cash and cash equivalents denominated in Russian roubles. Kemira is working to repatriate funds from Russia. A detailed description of Kemira’s risk management principles is available on the company’s website at kemira.com/investors. Financial risks are described in the Notes to the Financial Statements for the year 2023. Dividend policy and dividend distribution On December 31, 2023, Kemira Oyj’s distributable funds totaled EUR 713,680,177of which net profit for the period was EUR 104,191,302. No material changes have taken place in the company’s financial position after the balance sheet statement date. Kemira Oyj’s Board of Directors proposes to the Annual General Meeting to be held on March 20, 2024 that a dividend of EUR 0.68 per share, totaling EUR 104 million, be paid on the basis of the adopted balance sheet for the financial year that ended on December 31, 2023. The dividend will be paid in two installments. The first installment, EUR 0.34 per share, will be paid to shareholders who are registered in the company’s shareholder register maintained by Euroclear Finland Oy on the record date for the dividend payment: March 22, 2024. The Board of Directors proposes that the first installment of the dividend be paid out on April 4, 2024.The second installment, of EUR 0.34 per share, will be paid in November 2024. The second installment will be paid to shareholders who are registered in the company’s shareholder register maintained by Euroclear Finland Oy on the record date for the dividend payment. The Board of Directors will decide the record date and the payment date for the second installment at its meeting in October 2024. The record date is planned for October 29, 2024, and the dividend payment date for November 5, 2024 at the earliest. Kemira’s dividend policy is to pay a competitive dividend that increases over time. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 24 Changes in Kemira's Management Board On December 19, 2023,Kemira announced that Antti Salminen was appointed as President and CEO, as of February 12, 2024. On August 1, 2023, Kemira announced that President & CEO Jari Rosendal had passed away unexpectedly on July 31, after a short illness. On July 18, 2023 Kemira announced that the Board of Directors and President & CEO Jari Rosendal had reached an agreement that he would leave his position in 2024 at the latest and that the Board of Directors would initiate a search for his successor. CFO Petri Castrén will act as Interim President & CEO until the new President & CEO starts in the position. On July 11, 2023, Kemira announced that President & CEO Jari Rosendal is on sick leave. Kemira Oyj’s Group General Counsel, CEO's Deputy Jukka Hakkila assumed the duties of President & CEO in the period July 11, 2023 to July 17, 2023 until Petri Castrén was appointed as Interim President & CEO. On March 21, 2023, Kemira announced that Tuija Pohjolainen-Hiltunen was appointed as President, Industry & Water segment, as of May 1, 2023. On February 1, 2023, Kemira announced that Linus Hildebrandt was appointed as Executive Vice President, Strategy. He started on June 1, 2023. Other events during the review period PROPOSALS OF THE NOMINATION BOARD TO THE ANNUAL GENERAL MEETING 2024 On December 21, 2023, Kemira announced the proposals of the Nomination Board to the Annual General Meeting 2023. The Nomination Board proposes to the Annual General Meeting of Kemira Oyj that eight members be elected to the Board of Directors and that the present members Tina Sejersgård Fanø, Werner Fuhrmann, Matti Kähkönen, Timo Lappalainen, Fernanda Lopes Larsen, Annika Paasikivi, Kristian Pullola and Mikael Staffas be re-elected as members of the Board of Directors. In addition, the Nomination Board proposes that Matti Kähkönen be re-elected as the Chair of the Board of Directors and that Annika Paasikivi be re-elected as the Vice Chair. All the nominees have consented to the positions and are independent of the company’s significant shareholders, with the exception of Annika Paasikivi. Annika Paasikivi is the President & CEO of Oras Invest Oy and Oras Invest Oy owns over 10% of Kemira Oyj’s shares. Regarding the selection procedure for the members of the Board of Directors, the Nomination Board recommends that shareholders take a position on the proposal as a whole at the Annual General Meeting. This recommendation is based on the fact that Kemira’s shareholders' Nomination Board is separate from the Board of Directors, in line with a good Nordic governance model. The Nomination Board, in addition to ensuring that individual nominees for membership of the Board of Directors possess the required competences, is responsible for making sure that the proposed Board of Directors as a whole also has the best possible expertise and experience required by the company, that the diversity principles of the company will be met and that the composition of the Board of Directors meets the other requirements of the Finnish Corporate Governance Code for listed companies. The Nomination Board proposes that the remuneration paid to the members of the Board of Directors will be increased as follows (current remuneration in parentheses): for the Chair EUR 125,000 per year (EUR 118,000), for the Vice Chair and the Chair of the Audit Committee EUR 70,000 per year (EUR 67,000), for the Chair of the Personnel and Remuneration Committee (if the person is not the Chair or Vice Chair of the Board of Directors) EUR 65,000 per year (new) and for the other members EUR 54,000 per year (EUR 52,000). The Nomination Board proposes that the fee payable for each meeting of the Board of Directors and the Board Committees will be increased and will be paid based on the method of participation and the location of the meeting, as follows: participating remotely or in a meeting arranged in the member’s country of residence EUR 750 (EUR 600), participating in a meeting arranged on the same continent as the member’s country of residence EUR 1,500 (EUR 1,200) and participating in a meeting arranged on a different continent than the member’s country of residence EUR 3,000 (EUR 2,400). Travel expenses are proposed to be paid in accordance with Kemira's travel policy. In addition, the Nomination Board proposes to the Annual General Meeting that the annual fee be paid as a combination of the company's shares and cash in such a manner that 40% of the annual fee is paid with the company's shares owned by the company or, if this is not possible, shares purchased from the market, and 60% is paid in cash. The shares will be transferred to the members of the Board of Directors and, if necessary, acquired directly on BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 25 behalf of the members of the Board of Directors within two weeks of the release of Kemira's interim report January 1 – March 31, 2024. The meeting fees are proposed to be paid in cash. The Nomination Board has consisted of the following representatives: Ville Kivelä, Chief Investment Officer of Oras Invest Oy as the Chair of the Nomination Board; Pauli Anttila, Investment Director, Solidium Oy; Lisa Beauvilain, Global Head of Sustainability & Stewardship, Executive Director, Impax Asset Management plc and Hanna Kaskela, Senior Vice President, Sustainability & Communications, Varma Mutual Pension Insurance Company as members of the Nomination Board and Matti Kähkönen, Chair of Kemira's Board of Directors as an expert member. Acquisitions and divestments On December 4, 2023, Kemira announced that it has signed an agreement to divest its Oil & Gas-related portfolio to Sterling Specialty Chemicals LLC, a US subsidiary of Artek Group, a global industrial chemicals group based in India. On May 5, 2023, Kemira announced the closing of the divestment of most of its colorants business to ChromaScape. On January 25, 2023, Kemira announced that it had acquired SimAnalytics, a Finnish process optimization start-up. Kemira invested in SimAnalytics in August 2021 and has now acquired the remainder of the business. The acquisition will support Kemira's ambition to grow in services, with data-driven predictive services and machine learning solutions. Events after the review period On February 2, 2024, Kemira announced that it had closed the divestment of its Oil & Gas related portfolio. Approximately 250 employees will transfer to the buyer as part of the transaction, which includes Kemira’s manufacturing facilities in Mobile, Columbus and Aberdeen in the United States and the novel liquid polymer (NLP) manufacturing assets in Botlek, the Netherlands. The closing of the Teesport manufacturing facility in the United Kingdom is expected to happen later, subject to site-specific closing conditions. Outlook for 2024 REVENUE Kemira's revenue is expected to be between EUR 2,700 million and EUR 3,200 million in 2024 (reported 2023 revenue: EUR 3,383.7 million). OPERATIVE EBITDA Kemira's operative EBITDA is expected to be between EUR 480 and EUR 580 million in 2024 (reported 2023 operative EBITDA: EUR 666.7 million). ASSUMPTIONS BEHIND THE OUTLOOK Kemira’s end-market demand (in volumes) is expected to grow slightly in 2024 following expected gradual demand recovery in the pulp & paper market. The water treatment market is expected to remain steady in 2024. Input costs are expected to remain rather stable during the year. The outlook assumes no major disruptions to Kemira’s manufacturing operations, supply chain or to Kemira’s energy-generating assets in Finland. Foreign exchange rates are expected to remain at approximately current levels. The outlook for 2024 includes the Oil & Gas business until February 2, 2024, the closing date of the divestment transaction. Financial targets Kemira aims for above-market revenue growth, with an operative EBITDA margin of 15-18%. The target for gearing is below 75%. Helsinki, February 8, 2024 Kemira Oyj Board of Directors All forward-looking statements in this review are based on the management’s current expectations and beliefs about future events. Actual results may differ materially from the expectations and beliefs contained in the statements. BOARD OF DIRECTORS' REVIEW KEMIRA 2023 | FINANCIAL STATEMENTS | 26 Consolidated Income Statement Year ended 31 December EUR million Note 2023 2022 Revenue 2.1. 3,383.7 3,569.6 Other operating income 2.2. 8.6 18.2 Operating expenses 2.2. -2,852.3 -3,029.3 Share of the results of associates 6.2. 0.1 0.3 EBITDA 540.0 558.8 Depreciation, amortization and impairments 2.4. -203.6 -211.2 Operating profit (EBIT) 336.4 347.6 Finance income 2.5. 12.7 4.8 Finance expenses 2.5. -49.3 -42.3 Exchange differences 2.5. -7.7 -1.9 Finance costs, net 2.5. -44.4 -39.4 Profit before tax 292.0 308.2 Income taxes 2.6. -80.7 -68.5 Net profit for the period 211.3 239.7 Net profit attributable to Equity owners of the parent company 199.1 231.7 Non-controlling interests 6.2. 12.2 8.0 Net profit for the period 211.3 239.7 Earnings per share for net profit attributable to the equity owners of the parent company, EUR Basic 2.7. 1.30 1.51 Diluted 2.7. 1.28 1.50 The above Consolidated Income Statement should be read in conjunction with the accompanying notes. Consolidated Comprehensive Income Year ended 31 December EUR million Note 2023 2022 Net profit for the period 211.3 239.7 Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences in translating foreign operations -16.9 17.5 Cash flow hedges -54.1 39.2 Items that will not be reclassified subsequently to profit or loss Other shares -61.3 98.6 Remeasurements of defined benefit plans 18.9 31.8 Other comprehensive income for the period, net of tax 2.8. -113.4 187.1 Total comprehensive income for the period 97.9 426.7 Total comprehensive income attributable to Equity owners of the parent company 84.9 418.9 Non-controlling interests 6.2. 13.0 7.8 Total comprehensive income for the period 97.9 426.7 Items in the Consolidated Statement of Comprehensive Income are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in Note 2.8. Other comprehensive income. The above Consolidated Comprehensive Income should be read in conjunction with the accompanying notes. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 27 Consolidated Balance Sheet As at 31 December EUR million Note 2023 2022 ASSETS NON-CURRENT ASSETS Goodwill 3.1. 480.9 510.5 Other intangible assets 3.2. 51.1 61.2 Property, plant and equipment 3.3. 939.6 1,080.2 Right-of-use assets 3.4. 123.0 146.0 Investments in associates 6.2. 4.8 5.1 Other shares 3.5. 305.4 383.3 Deferred tax assets 4.4. 31.8 27.1 Other financial assets 5.4. 7.9 31.0 Receivables of defined benefit plans 4.5. 106.3 78.4 Total non-current assets 2,050.9 2,322.8 CURRENT ASSETS Inventories 4.1. 281.8 433.7 Interest-bearing receivables 5.4. 0.3 0.3 Trade receivables and other receivables 4.2. 468.2 603.7 Current income tax assets 29.9 18.7 Cash and cash equivalents 5.4. 402.5 250.6 Total current assets 1,182.7 1,307.0 Assets classified as held-for-sale 3.7. 255.6 21.3 Total assets 3,489.3 3,651.1 The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes. As at 31 December EUR million Note 2023 2022 EQUITY AND LIABILITIES EQUITY Equity attributable to equity owners of the parent company Share capital 221.8 221.8 Share premium 257.9 257.9 Fair value and other reserves 163.4 278.8 Unrestricted equity reserve 196.3 196.3 Translation differences -53.8 -36.0 Treasury shares -11.6 -13.4 Retained earnings 890.9 764.5 Total equity attributable to equity owners of the parent company 5.2. 1,664.8 1,669.9 Non-controlling interests 6.2. 19.4 14.7 Total equity 1,684.2 1,684.6 NON-CURRENT LIABILITIES Interest-bearing liabilities 5.3. 615.7 838.1 Other financial liabilities 5.4. 10.8 9.4 Deferred tax liabilities 4.4. 81.3 118.2 Liabilities of defined benefit plans 4.5. 69.8 66.9 Provisions 4.6. 37.8 38.4 Total non-current liabilities 815.4 1,070.9 CURRENT LIABILITIES Interest-bearing liabilities 5.3. 322.1 183.7 Trade payables and other liabilities 4.3. 489.4 635.2 Current income tax liabilities 56.6 57.2 Provisions 4.6. 16.9 18.8 Total current liabilities 884.9 894.9 Total liabilities 1,700.3 1,965.8 Liabilities classified as held-for-sale 3.7. 104.8 0.7 Total equity and liabilities 3,489.3 3,651.1 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 28 Consolidated Statement of Cash Flow EUR million Note 2023 2022 CASH FLOW FROM OPERATING ACTIVITIES Net profit for the period 211.3 239.7 Adjustments for Depreciation, amortization and impairments 2.4. 203.6 211.2 Income taxes 2.6. 80.7 68.5 Finance costs, net 2.5. 44.4 39.4 Share of the results of associates 6.2. -0.1 -0.3 Gains and losses on sale of non-current assets 98.6 5.5 Other adjustments 2.1 23.8 Cash flow before change in net working capital 640.7 587.8 Change in net working capital Increase (-) / decrease (+) in inventories 97.6 -100.3 Increase (-) / decrease (+) in trade and other receivables 19.0 -95.1 Increase (+) / decrease (-) in trade payables and other liabilities -101.7 93.7 Change in net working capital 14.9 -101.8 Cash flow from operations before financing items and taxes 655.6 486.0 Interests paid -41.6 -35.1 Interests received 8.0 5.0 Other finance items, net 14.7 -22.1 Income taxes paid -90.8 -33.5 Net cash generated from operating activities 546.0 400.3 The above Consolidated Statement of Cash Flow should be read in conjunction with the accompanying notes. EUR million Note 2023 2022 CASH FLOW FROM INVESTING ACTIVITIES Purchases of subsidiaries and asset acquisitions, net of cash acquired -1.9 0.0 Capital expenditure in property, plant and equipment and intangible assets -204.9 -197.9 Decrease (+) / increase (-) in loan receivables 0.4 0.8 Proceeds from sale of subsidiaries and businesses, net of cash disposed 9.0 0.0 Proceeds from sale of other shares 0.4 0.0 Proceeds from sale of property, plant and equipment, and intangible assets 0.2 19.1 Net cash used in investing activities -196.7 -178.0 CASH FLOW FROM FINANCING ACTIVITIES Proceeds from non-current interest-bearing liabilities (+) 5.1. 0.2 195.9 Repayments of non-current interest-bearing liabilities (-) 5.1. 0.0 -202.8 Short-term financing, net increase (+) / decrease (-) 5.1. -50.7 21.4 Repayments of lease liabilities -37.3 -35.1 Dividends paid to equity owners of the parent company -95.2 -88.9 Dividends paid to non-controlling interest -8.3 -7.0 Net cash used in financing activities -191.3 -116.4 Net increase (+) / decrease (-) in cash and cash equivalents 158.0 105.9 Cash and cash equivalents on Dec 31 402.5 250.6 Exchange gains (+) / losses (-) in cash and cash equivalents -6.1 2.3 Cash and cash equivalents on Jan 1 250.6 142.4 Net increase (+) / decrease (-) in cash and cash equivalents 158.0 105.9 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 29 Consolidated Statement of Changes in Equity Equity attributable to equity owners of the parent company EUR million Share capital Share premium Fair value and other reserves Unrestricted equity reserve Exchange differences Treasury shares Retained earnings Total Non- controlling interests Total equity Equity on January 1, 2023 221.8 257.9 278.8 196.3 -36.0 -13.4 764.5 1,669.9 14.7 1,684.6 Net profit for the period — — — — — — 199.1 199.1 12.2 211.3 Other shares — — -61.3 — — — — -61.3 — -61.3 Exchange differences in translating foreign operations — — — — -17.8 — — -17.8 0.9 -16.9 Cash flow hedges — — -54.1 — — — — -54.1 — -54.1 Remeasurements of defined benefit plans — — — — — — 18.9 18.9 — 18.9 Total other comprehensive income — — -115.5 — -17.8 — 18.9 -114.3 0.9 -113.4 Total comprehensive income — — -115.5 — -17.8 — 218.1 84.9 13.0 97.9 Transactions with owners Dividends paid — — — — — — -95.2 -95.2 -8.3 -103.5 Treasury shares issued to the target group of a share-based incentive plan — — — — — 1.7 — 1.7 — 1.7 Treasury shares issued to the Board of Directors — — — — — 0.1 — 0.1 — 0.1 Share-based payments — — — — — — 3.3 3.3 — 3.3 Transfers in equity — — 0.1 — — — -0.1 0.0 — 0.0 Other items — — — — — — 0.2 0.2 — 0.2 Total transactions with owners — — 0.1 — — 1.8 -91.8 -89.9 -8.3 -98.2 Equity on December 31, 2023 221.8 257.9 163.4 196.3 -53.8 -11.6 890.9 1,664.8 19.4 1,684.2 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 30 Equity attributable to equity owners of the parent company EUR million Share capital Share premium Fair value and other reserves Unrestricted equity reserve Exchange differences Treasury shares Retained earnings Total Non- controlling interests Total equity Equity on January 1, 2022 221.8 257.9 140.9 196.3 -53.7 -14.9 580.5 1,328.8 13.9 1,342.7 Net profit for the period — — — — — — 231.7 231.7 8.0 239.7 Other shares — — 98.6 — — — — 98.6 — 98.6 Exchange differences in translating foreign operations — — — — 17.7 — — 17.7 -0.2 17.5 Cash flow hedges — — 39.2 — — — — 39.2 — 39.2 Remeasurements of defined benefit plans — — — — — — 31.8 31.8 — 31.8 Total other comprehensive income — — 137.8 — 17.7 — 31.8 187.3 -0.2 187.1 Total comprehensive income — — 137.8 — 17.7 — 263.5 418.9 7.8 426.7 Transactions with owners Dividends paid — — — — — — -88.9 -88.9 -7.0 -95.9 Treasury shares issued to the target group of a share- based incentive plan — — — — — 1.5 — 1.5 — 1.5 Treasury shares issued to the Board of Directors — — — — — 0.1 — 0.1 — 0.1 Treasury shares returned — — — — — 0.0 — 0.0 — 0.0 Share-based payments — — — — — — 9.2 9.2 — 9.2 Transfers in equity — — 0.1 — — — -0.1 0.0 — 0.0 Other items — — — — — — 0.4 0.4 — 0.4 Total transactions with owners — — 0.1 — — 1.6 -79.4 -77.7 -7.0 -84.7 Equity on December 31, 2022 221.8 257.9 278.8 196.3 -36.0 -13.4 764.5 1,669.9 14.7 1,684.6 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 31 Notes to the Consolidated Financial Statements 1. The group's material accounting policies for the consolidated financial statements GROUP PROFILE Kemira Oyj is a Finnish public limited liability company, domiciled in Helsinki, and its registered address is Energiakatu 4, FI-00180 Helsinki, Finland. Kem ira Oyj's shares are listed on Nasdaq Helsinki Oy. The parent company Kemira Oyj and its subsidiaries together form the Kemira Group. A list of subsidiaries is disclosed in Note 6.2. Kemira is a global chemicals company serving customers in water-intensive industries. The company provides expertise in applications and chemicals that improve customers' efficient use of water, energy, and raw materials. Kemira’s two segments, Pulp & Paper and Industry & Water, focus on customers in the pulp & paper and oil & gas, mining and water treatment industries, respectively. The Board of Directors of Kemira Oyj has approved the Consolidated Financial Statements for publication at its meeting on February 8, 2024. Under the Finnish Limited Liability Companies Act, the General Meeting of Shareholders is entitled to decide on the adoption of the financial statements. A copy of the Consolidated Financial Statements is available at www.kemira.com or at Energiakatu 4, FI-00180 Helsinki, Finland. In compliance with the reporting requirements of the European Single Electronic Format (ESEF), Kemira also publishes the Consolidated Financial Statements and the Board of Directors' report as an xHTML file, which is available at www.kemira.com BASIS OF PREPARATION FOR THE CONSOLIDATED FINANCIAL STATEMENTS The Group has prepared its Consolidated Financial Statements in accordance with the International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations, adopted by the European Union. The Consolidated Financial Statements have been prepared in accordance with IFRS standards and IFRIC Interpretations effective on December 31, 2023. The Notes to the Consolidated Financial Statements also comply with the requirements of the Finnish accounting and corporate legislation that supplement the IFRS regulations. The Consolidated Financial Statements are presented in EUR million and have been prepared based on historical cost, except for the items measured at fair value through other comprehensive income including unlisted PVO/TVO shares, financial assets and liabilities at fair value through profit or loss, and share-based payments which are measured at fair value. Individual figures presented in the Consolidated Financial Statements have been rounded to the nearest exact figure. Therefore, the sum of the individual figures may deviate from the sum figure presented in the Consolidated Financial Statements. The key figures are calculated using exact values. NEW, AMENDED IFRS STANDARDS AND IFRIC INTERPRETATIONS INTO EFFECT IN 2023 The Group has applied the following standards and amendments for the first time to its annual reporting period commencing January 1, 2023: • Amendments to the standard IAS 12, Income taxes: Deferred taxes related to assets and liabilities arising from a single transaction. As a result of the amendments, deferred taxes have also been recognized in connection with initial recognition of the leases for new lease contracts ( Note 4.4. Deferred tax liabilities and assets). • Amendments to the standard IAS 1, Presentation of financial statements: Disclosure of accounting policies. The amendment clarifies in which situations the accounting policy is material and it must be disclosed. The amendment did not have any significant impact on the Consolidated Financial Statements. • Amendments to the standard IAS 8, Accounting policies, changes and errors in accounting estimates: Definition of accounting estimates. The amendment clarifies the definition and application of the accounting estimates. The amendments did not have any significant impact on the Consolidated Financial Statements. • Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules. Pillar Two Model Rules will come into effect in Finland by 1 January 2024 with a legislation implementing a Council Directive ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups (Pillar CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 32 Two). The amendment to IAS 12 requires to disclose that the exception on recognizing and disclosing information about deferred tax assets and liabilities that are related to the Pillar Two income taxes has been applied. Kemira has applied the exception provided in IAS12, and it has not recognized or disclosed information on deferred tax assets or liabilities related to Pillar Two income taxes. It is not expected that Pillar Two has an impact on the amount of the Group's income taxes. NEW, AMENDED IFRS STANDARDS AND IFRIC INTERPRETATIONS NOT YET ADOPTED • Amendments to the standard IAS 1, Classification of liabilities into current and non-current. The amendments clarify how to classify debts as current or non-current when the entity has the right to postpone the payment of the debt for at least 12 months. • Amendments to IFRS 16 Leases: Lease Liability in Sale and Leaseback. The amendment requires a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. The new requirements do not prevent a seller-lessee from recognizing in profit or loss any gain or loss relating to the partial or full termination of a lease. • Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements. The amendment provides additional disclosures about supplier finance arrangements that enables investors to assess the effects on a company's liabilities, cash flow, and exposure to liquidity risk. • Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability. The amendment provides guidance for identifying a situation where a currency cannot be considered freely exchangeable and guides in these situations to take this into account in the exchange rate used in reporting and provide additional information on the matter. New IFRS standards, amendments to standards and IFRIC interpretations effective on or after January 1, 2024 are not expected to have a material impact on the Group. CONSOLIDATION PRINCIPLES OF SUBSIDIARIES AND NON-CONTROLLING INTERESTS The Consolidated Financial Statements include the parent company Kemira Oyj and its subsidiaries. Subsidiaries are all entities that the Group has control over (voting rights generally being over 50 percent). The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity, and when it has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de- consolidated from the date on which this control ceases. All intra-group transactions are eliminated when preparing the Consolidated Financial Statements. Intra-group shareholdings are eliminated using the acquisition method. The consideration transferred for acquisition of a subsidiary is defined as an aggregate of the fair values of the assets transferred, the liabilities assumed, and the equity interest issued by the Group. The consideration transferred may include the fair value of any asset or liability resulting from the contingent consideration arrangement. Acquisition- related costs are expensed as incurred. Identifiable assets acquired, and liabilities and contingent liabilities that are assumed in a business combination are measured at their fair values on the acquisition date. On an acquisition-by- acquisition basis, the Group recognizes any non-controlling interest in the acquiree either at fair value or at the non- controlling interest’s proportionate share of the acquiree’s net assets. The amount that exceeds the aggregate of consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the net assets acquired is recognized as goodwill in the Balance Sheet. If this is less than the fair value of the net assets of the subsidiary acquired by bargain purchase, the difference is recognized directly in the Income Statement. Net profit or loss for the financial year and other comprehensive income attributable to the equity holders of the parent and non-controlling interests are presented in the Income Statement and in the Statement of Comprehensive Income. The portion of equity attributable to non-controlling interests is stated as an individual item separately from the equity to the equity holders of the parent company. Total comprehensive income shows separately the total amounts attributable to the equity holders of the parent company and to non-controlling interests. The Group recognizes negative non-controlling interests, unless the non-controlling interest does not have a binding obligation to cover the losses up to the amount of their investment. If the parent company’s ownership interest in the subsidiary is reduced but control is retained, then the transactions are treated as equity transactions. When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured at its fair value, and the difference is recognized as profit or loss. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 33 ASSOCIATES Associated companies are companies over which the Group exercises significant influence (voting rights generally being 20–50 percent), but does not control. Holdings in associated companies are consolidated using the equity method. If the Group’s share of the associate’s losses exceeds the carrying amount of the investment, the exceeding losses will not be consolidated unless the Group has a commitment to fulfill the obligations on behalf of the associate. The Group’s share of the associated companies’ net profit for the financial year is stated as a separate item in the consolidated Income Statement in operating profit, in proportion to the Group’s holdings. The Group’s share of the movements of its associates in other comprehensive income is recognized in the Group’s other comprehensive income. FOREIGN CURRENCY TRANSLATION The Consolidated Financial Statements are presented in euros, which is the Group’s presentation currency and the parent company’s functional and presentation currency. Items included in the financial statements of each of the Group’s entities are measured by using the currency of the primary economic environment in which the entity operates (the functional currency). If the functional currency of the subsidiary is other than the euro, its Income Statement is translated into euros using the financial year’s average foreign currency exchange rates, and the balance sheets are translated using the exchange rates quoted on the balance sheet date. Translating the net profit for the period using different exchange rates in the Income Statement and in the balance sheet causes a translation difference recognized as equity on the Balance Sheet. The change in this translation difference is presented under Other Comprehensive Income. Goodwill and fair value adjustments to the carrying amounts of the assets and liabilities that arise from the acquisition of a foreign entity are accounted for as part of the assets and liabilities of the foreign entity, and are translated into euros at the rate quoted on the balance sheet date. Translation differences in the loans granted to some foreign subsidiaries are treated as an increase or decrease in other comprehensive income. When the Group ceases to have control over a subsidiary, the accumulated translation difference is transferred into the Income Statement as part of the gain or loss on the sale. In their day-to-day accounting, the Group companies translate foreign currency transactions into their functional currency at the exchange rates quoted on the transaction date. In the Financial Statements, foreign currency denominated receivables and liabilities are measured at the exchange rates quoted on the balance sheet date. Non- monetary items are measured using the rates quoted on the transaction date. Any foreign exchange gains and losses related to business operations are treated as adjustments to sales and purchases. Exchange rate differences associated with financing transactions and the hedging of the Group’s overall foreign currency position are stated in foreign exchange gains or losses under finance income and expenses. THE ITEMS IN THE FINANCIAL STATEMENTS THAT INCLUDE ACCOUNTING ESTIMATES AND ACCOUNTING POLICIES THAT REQUIRE JUDGMENT BY THE MANAGEMENT When preparing Consolidated Financial Statements in accordance with IFRS, the management is required to make accounting estimates and assumptions concerning the future. The resulting accounting estimate will seldom be equal to the actual results. In addition, management is required to exercise judgment when applying the accounting policies. Estimates and assumptions are continuously evaluated, and are based on past experience and expectations of future events that may have financial implications and are considered to be reasonable under the circumstances. The following table lists items in the financial statements that include significant accounting estimates and includes the notes related to them. Also included are the accounting policies and the sensitivity analysis applied to the items. The items that include accounting estimates are subject to a risk of changes in the carrying amount of assets and liabilities during the next financial period. The items in the Financial Statements Note in the Financial Statements Goodwill 3.1. Goodwill Fair value of shares in the PVO Group 3.5. Other shares Deferred taxes and uncertain tax positions 2.6. Income taxes and 4.4. Deferred tax liabilities and assets Defined benefit pension plans 4.5. Defined benefit pension plans and employee benefits Provisions 4.6. Provisions EFFECTS OF THE UKRAINE WAR ON THE FINANCIAL STATEMENTS Following the war in Ukraine, Kemira exited Russia in May 2022. At the end of December 2023, Kemira's net assets in Russia amounted to around EUR 5 million and consisted mainly of cash and cash equivalents denominated in Russian roubles. Kemira is working to repatriate funds from Russia. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 34 EFFECTS OF CLIMATE-RELATED MATTERS IN FINANCIAL STATEMENTS Sustainability is a key driver of Kemira's profitable growth strategy. Sustainability at Kemira focuses on five topics: safety, people, circularity, water, and climate. Kemira's ambition is to be carbon neutral by 2045. Climate-related matters have an impact in several areas of Kemira's Consolidated Financial Statements. As a chemicals company operating in an energy-intensive industry, Kemira has two Power Purchase Agreements in wind power and an ownership in Pohjolan Voima Oyj and Teollisuuden Voima Oyj (Note 3.5 Other Shares) producing CO2-free electricity with nuclear and hydro power plants in Finland. CO2-emissions and energy efficiency matters are considered in capital investments, thus also affecting non-current assets (Note 3.3 Property, Plant and Equipment) as well as future cash flow forecasts used in goodwill impairment testing (Note 3.1 Goodwill). Kemira has a partnership with Danimer Scientific Inc. to develop fully biobased barrier coatings for paper and board products, generating intangible assets (Note 3.2 Other Intangible Assets). In addition, Kemira has an undrawn revolving credit facility of EUR 400 million with sustainability targets (Note 5.5 Management of Financial Risk). Kemira's long-term incentive programs for years 2023-2025 and 2024-2026 also include climate-related targets in the KPIs measured. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 35 2. Financial performance 2.1 SEGMENT INFORMATION Kemira's organization consists of two segments: Pulp & Paper and Industry & Water. Pulp & Paper Pulp & Paper has expertise in applying chemicals and supporting pulp and paper producers in innovating and constantly improving their operational efficiency. The segment develops and sells products to meet the needs of its customers, thus ensuring a leading portfolio of products and services for the paper wet-end, focusing on packaging and board as well as tissue products. Industry & Water Industry & Water supports municipalities and water intensive industries in the efficient and sustainable utilization of resources. In water treatment, the segment helps in the optimization of every stage of the water cycle. In the oil and gas industry, the segment helps to improve yield from existing reserves and reduce water and energy use. ALTERNATIVE PERFORMANCE MEASURES Kemira provides certain financial performance measures (alternative performance measures) that are not defined by IFRS. Kemira believes that alternative performance measures followed by capital markets and Kemira management, such as revenue growth in local currencies, excluding acquisitions and divestments (=organic growth), EBITDA, operative EBITDA, operative EBIT, cash flow after investing activities and gearing provide useful information about Kemira’s 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 from the equivalent IFRS measures and should instead be read in conjunction with the most directly comparable IFRS measures. Definitions of the key figures is disclosed in the section Definitions of key figures. INCOME STATEMENT ITEMS 2023, EUR million Pulp & Paper Industry & Water Group Revenue ¹⁾ 1,748.2 1,635.5 3,383.7 EBITDA ²⁾ 308.0 232.0 540.0 Depreciation, amortization and impairments -114.6 -89.0 -203.6 Share of the results of associates 0.1 0.0 0.1 Operating profit (EBIT) ²⁾ 193.4 143.0 336.4 Finance costs, net -44.4 Profit before tax 292.0 Income taxes -80.7 Net profit for the period 211.3 1) Revenue consists mainly of sales of products to external customers, and there is no internal sales between the segments. 2) Includes items affecting comparability. ITEMS AFFECTING COMPARABILITY IN EBITDA AND EBIT 2023, EUR million Pulp & Paper Industry & Water Group Operative EBITDA 330.9 335.8 666.7 Restructuring and streamlining programs -0.9 Transaction and integration expenses in acquisitions -0.2 Divestment of businesses and other disposals -125.9 Other items 0.4 Total items affecting comparability -22.9 -103.7 -126.7 EBITDA 308.0 232.0 540.0 Operative EBIT 216.3 246.7 463.0 Items affecting comparability in EBITDA -22.9 -103.7 -126.7 Items affecting comparability in depreciation, amortization and impairments 0.0 0.0 0.0 Operating profit (EBIT) 193.4 143.0 336.4 Quarterly information on items affecting comparability is disclosed in the section on Reconciliation of IFRS figures. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 36 BALANCE SHEET ITEMS 2023, EUR million Pulp & Paper Industry & Water Group Segment assets 1,539.6 791.2 2,330.8 Reconciliation to total assets as reported in the Group balance sheet: Other shares 305.4 Deferred income tax assets 31.8 Other investments 7.9 Defined benefit pension receivables 106.3 Other assets 304.5 Cash and cash equivalents 402.5 Assets classified as held-for-sale 255.6 Total assets 3,489.3 Segment liabilities 276.6 175.8 452.4 Reconciliation to total liabilities as reported in the Group balance sheet: Interest-bearing non-current financial liabilities 615.7 Interest-bearing current financial liabilities 322.1 Other liabilities 308.1 Liabilities classified as held-for-sale 104.8 Total liabilities 1,805.1 OTHER ITEMS 2023, EUR million Pulp & Paper Industry & Water Group Capital employed by segments on Dec 31 1,263.0 615.4 1,878.4 Capital employed by segments ¹⁾ 1,282.0 873.5 2,155.5 Operative ROCE, % 16.9 28.2 21.5 Capital expenditure 126.2 80.5 206.8 Cash flow after investing activities ²⁾ 216.3 242.5 349.3 1) 12-month rolling average. 2) Cash flows related to financing items and taxes have not been addressed to segments. INCOME STATEMENT ITEMS 2022, EUR million Pulp & Paper Industry & Water Group Revenue ¹⁾ 2,027.7 1,541.9 3,569.6 EBITDA ²⁾ 336.6 222.2 558.8 Depreciation, amortization and impairments ²⁾ -123.5 -87.8 -211.2 Share of the results of associates 0.3 0.0 0.3 Operating profit (EBIT) ²⁾ 213.1 134.5 347.6 Finance costs, net -39.4 Profit before tax 308.2 Income taxes -68.5 Net profit for the period 239.7 1) Revenue consists mainly of sales of products to external customers, and there is no internal sales between the segments. 2) Includes items affecting comparability. ITEMS AFFECTING COMPARABILITY IN EBITDA AND EBIT 2022, EUR million Pulp & Paper Industry & Water Group Operative EBITDA 348.0 223.7 571.6 Restructuring and streamlining programs -4.5 Transaction and integration expenses in acquisitions 0.0 Divestment of businesses and other disposals -4.6 Other items -3.6 Total items affecting comparability -11.4 -1.4 -12.8 EBITDA 336.6 222.2 558.8 Operative EBIT 225.7 135.9 361.6 Items affecting comparability in EBITDA -11.4 -1.4 -12.8 Items affecting comparability in depreciation, amortization and impairments -1.2 0.0 -1.2 Operating profit (EBIT) 213.1 134.5 347.6 Quarterly information on items affecting comparability is disclosed in the section Reconciliation of IFRS figures. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 37 BALANCE SHEET ITEMS 2022, EUR million Pulp & Paper Industry & Water Group Segment assets 1,629.4 1,139.8 2,769.2 Reconciliation to total assets as reported in the Group balance sheet: Other shares 383.3 Deferred income tax assets 27.1 Other investments 31.0 Defined benefit pension receivables 78.4 Other assets 111.5 Cash and cash equivalents 250.6 Assets classified as held-for-sale 21.3 Total assets 3,651.1 Segment liabilities 354.9 249.0 603.9 Reconciliation to total liabilities as reported in the Group balance sheet: Interest-bearing non-current financial liabilities 838.1 Interest-bearing current financial liabilities 183.7 Other liabilities 340.1 Liabilities classified as held-for-sale 0.7 Total liabilities 1,966.5 OTHER ITEMS 2022, EUR million Pulp & Paper Industry & Water Group Capital employed by segments on Dec 31 1,274.6 890.8 2,165.3 Capital employed by segments ¹⁾ 1,337.7 900.3 2,238.0 Operative ROCE, % 16.9 15.1 16.2 Capital expenditure 122.5 75.4 197.9 Cash flow after investing activities ²⁾ 207.2 100.9 222.3 1) 12-month rolling average. 2) Cash flows related to financing items and taxes have not been addressed to segments. INFORMATION ABOUT GEOGRAPHICAL AREAS: REVENUE BY GEOGRAPHICAL AREA BASED ON CUSTOMER LOCATION EUR million 2023 2022 Finland, domicile of the parent company 448.1 546.5 Other Europe, Middle East and Africa 1,171.9 1,286.0 Americas 1,458.8 1,413.6 Asia Pacific 304.9 323.5 Total 3,383.7 3,569.6 NON-CURRENT ASSETS BY GEOGRAPHICAL AREA EUR million 2023 2022 Finland, domicile of the parent company 821.9 918.9 Other Europe, Middle East and Africa 441.7 499.0 Americas 483.2 619.7 Asia Pacific 166.0 179.7 Total 1,912.8 2,217.3 Information about major customers The Group has several significant customers. No more than 10% of the Group's revenue was accumulated from any single external customer in 2023 or 2022.  The Group's accounting policies Segment reporting Segment information is presented in a manner consistent with the Group’s internal organizational and reporting structure. Kemira's management evaluates the performance of the segments based on operative EBITDA and operative EBIT, among other factors. Assets and liabilities dedicated to a particular segment’s operations are included in that segment’s total assets and liabilities. Segment assets include property, plant and equipment, intangible assets, right-of-use assets, investments in associates, inventories, and certain current non- interest-bearing receivables. Segment liabilities include certain current non-interest-bearing liabilities. Geographically, Kemira’s operations are divided into three business regions: Europe, the Middle East and Africa (EMEA), the Americas and the Asia Pacific (APAC). CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 38 Revenue recognition IFRS 15 standard establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers to an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group recognizes revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the good or service underlying the particular performance obligation is transferred to the customer. The Group's revenue consists mainly of contract types that include sales of chemical products as well as services and equipment which are related to sales of these chemical products. In 2023 and 2022, services have not formed a significant part of the Group's revenue. Revenue recognition occurs at the point when the control of the products is transferred to the customer. Generally, in the Group's sales agreements, control is transferred to the customer based on delivery terms and the revenue is recognized at a point in time. The Group provides delivery and handling services in conjunction with the sale of chemical products to customers. The delivery and handling services are recognized at the same time as revenue from products and are not treated as a separate performance obligation. Kemira recognizes the sale of products and the delivery and handling services for the same reporting period. Discounts provided to customers are not a significant component of the sales price in Kemira’s sales contracts. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 39 2.2 OTHER OPERATING INCOME AND EXPENSES OTHER OPERATING INCOME EUR million 2023 2022 Gains on the sale of non-current assets ¹⁾ 0.1 10.8 Rental income 0.7 0.6 Services 3.1 2.0 Other income from operations ²⁾ 4.8 4.8 Total 8.6 18.2 1) In 2022, gains on the sale of non-current assets relate mainly to sold assets in Uruguay. 2) Other income from operations consists mainly of insurance compensations in 2023 and of indirect tax credits in Brazil in 2022. OPERATING EXPENSES EUR million 2023 2022 Materials and supplies ³⁾ 1,754.2 2,033.0 Employee benefit expenses 440.8 428.9 External services and other expenses ⁴⁾ ⁵⁾ 440.5 332.0 Freights and delivery expenses 216.9 235.4 Total 2,852.3 3,029.3 3) In 2023, materials and supplies included EUR 7.1 million (5.7) Government grants for energy intensive industry in several European countries. 4) Includes equipment costs, travel expenses, leases, office related expenses, insurance, consulting, and other operational expenses. Other expenses in 2023 include EUR 101.2 million expected loss on divestment of the Oil & Gas business, including transaction fees. Kemira completed the divestment in February 2024. 5) In 2023, other operating expenses included research and development expenses of EUR 34.2 million (32.8) including government grants received. Government grants received for R&D were EUR 0.6 million (0.6). The extent of the grants received reduces the research and development expenses. EMPLOYEE BENEFIT EXPENSES EUR million Note 2023 2022 Wages, salaries and emoluments Wages and salaries ⁶⁾ 330.4 323.2 Share-based payments 2.3. 13.1 16.0 Total 343.5 339.2 Indirect employee benefit expenses Expenses for defined benefit pension plans and employee benefits 4.5. 2.0 2.3 Pension expenses for defined contribution plans 34.9 29.8 Other employee benefit costs 60.4 57.6 Total 97.3 89.7 Total employee benefit expenses 440.8 428.9 6) Includes emoluments of Kemira Oyj's CEO and the Board of Directors. The salaries and fees of Kemira Oyj's CEO and members of the Board of Directors are disclosed in Note 6.1. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 40 NUMBER OF PERSONNEL 2023 2022 Average number of personnel by geographical area Europe, Middle East and Africa 2,512 2,497 Americas 1,506 1,513 Asia Pacific 928 925 Total 4,946 4,936 Personnel in Finland, average 806 780 Personnel outside Finland, average 4,140 4,156 Total 4,946 4,936 Number of personnel on Dec 31 4,915 4,902 AUDITOR'S FEES AND SERVICES EUR million 2023 2022 Audit fees 1.8 1.6 Tax services 0.1 0.3 Other services 0.1 0.1 Total 2.0 1.9 Ernst & Young Oy is acting as the principal auditor for Kemira Group.  The Group's accounting policies Government grants Government grants for investments are recognized as a deduction from the carrying amount of PP&E. The grants are recognized in the income statement as smaller depreciation over the asset’s useful life. Government grants for research activities are recognized as a deduction from expenses. Certain other grants are recognized either as a deduction from expenses or as other income from operations. Research and developments costs Research and development costs are recognized as an expense as incurred. Development costs are capitalized as intangible assets when it can be shown that a development project will generate a probable future economic benefit, and the costs attributable to the development project can reliably be measured. Capitalized development costs include material, labor, and testing costs, as well as any capitalized borrowing costs that are directly attributable to bringing the asset ready for its intended use. Other development costs that do not meet these criteria are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in the subsequent periods. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 41 2.3 SHARE-BASED PAYMENTS Share incentive plans 2019–2023 In December 2018, Kemira's Board of Directors of Kemira Oyj decided to establish a long-term incentive plan for 2019–2023. Kemira has a long-term share incentive plan directed towards a group of key employees, which is composed of two one-year performance periods for the years 2019 and 2020, and three three-year performance periods for the years 2019–2021, 2020–2022 and 2021–2023.The Board has decided on the plan’s performance criteria and the targets for each criterion at the beginning of each performance period. The rewards for the performance periods have been paid partly in Kemira Oyj's shares and partly in cash. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the participant. As a rule, no reward has been paid if a participant's employment or service has ended before the reward payment. The shares paid as a reward may not be transferred during the restriction period, which ends two years after the end of the performance period. If a participant's employment or service has ended during the restriction period, the participant has, as a rule, gratuitously returned the shares given as a reward without consideration. The restriction period only applies to the one-year performance period. Share incentive plans 2022–2026 In December 2021, the Board of Directors of Kemira Oyj decided to establish a long-term share incentive plan directed to a group of key employees in Kemira. The long-term share incentive plan includes three three-year performance periods: years 2022–2024, 2023–2025 and 2024– 2026. The Board shall decide on the plan’s performance criteria and on the required performance levels for each criterion at the beginning of each performance period. The Board shall decide on the plan’s participants and share allocations at the beginning of each performance period. The potential reward is paid partly in Kemira Oyj's shares and partly in cash. The cash portion covers taxes and tax-related costs arising from the reward to the participant. As a rule, no reward will be paid if a participant's employment or service ends before the reward payment. Share incentive plan 2020 2020-2022 2021-2023 2022-2024 2023-2025 Performance period (calendar year) 2020 2020-2022 2021-2023 2022-2024 2023-2025 Restriction period of shares 2 years ¹⁾ ¹⁾ ¹⁾ ¹⁾ Issue year of shares 2021 2023 2024 2025 2026 Share price at the grant date 13.41 13.41 12.57 13.32 14.58 Number of transferred shares from the plans 194,097 254,375 — — — Estimated number of shares on December 31, 2023 — — 492,637 510,950 532,209 Number of participants on December 31, 2023 — — 82 86 84 Performance criteria Intrinsic value ²⁾ Intrinsic value ²⁾ and organic growth-% Intrinsic value ²⁾ and organic growth-% Intrinsic value ²⁾ and organic growth-% ³⁾ 1) A restriction period is not applied to three-year performance periods. 2) The amount of the reward is based on the intrinsic value which is defined as follows: operative EBITDA * 8 - net debt. 3) ROCE-%, average organic revenue growth-%, Kemira CO2 emission reduction from Scope 1 & 2 and revenue growth of renewable products. Share incentive plan 2024–2026 Participation in the long-term share incentive plan’s performance period 2024–2026 is directed to approximately 90 people. The reward to be paid from the 2024–2026 performance period, if the criteria are fulfilled, will amount up to a maximum of 630,000 Kemira Oyj shares. In addition, a cash proportion covering the taxes and tax-related costs arising from the reward is included. Restricted Share Plan 2024 In December 2023, the Board of Directors of Kemira Oyj decided to establish a restricted share plan. In particular, the Restricted Share Plan can be used as a commitment instrument in specific executive recruitment situations. The terms allow the plan to be used with careful consideration also in retention situations. The restricted share plan is continuous. The Board approves for each calendar year an annual quota of shares, which can be granted within the respective year under the RSP. The annual quota shall mean a net number of shares together with a cash proportion required for covering all taxes. The total amount of shares offered during the year cannot exceed the respective quota approved by the Board. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 42 The plan offers participants an opportunity to receive a predetermined number of company shares after a specific restriction period, which can vary from twelve (12) to forty (40) months with a decision by the Board of Directors. No earning criteria is applied to the restricted share plan and the delivery of the share reward is subject to the continuation of the employment. The maximum aggregated amount of shares that may be granted under the Restricted Share Plan in year 2024 is 70,000 Kemira shares. In addition, a cash proportion intended to cover the taxes and tax-related costs arising from the reward is included. No persons were under the plan during 2023. THE EFFECT OF SHARE-BASED PAYMENTS ON OPERATING PROFIT EUR million Note 2023 2022 Rewards provided in shares 5.9 7.4 Rewards provided in cash 7.1 8.6 Total 2.2. 13.1 16.0  The Group's accounting policies Share-based payments The Group has equity-settled share-based incentive plans under which the Group receives services from persons as consideration for the share-based rewards. The potential rewards for these services are provided to the person partly in shares and partly in cash. The Group's share incentive plan includes persons in several different countries where the Group is obliged under local tax laws or regulations to pay the tax liability to the tax authorities on behalf of a person in cash. The Group's share-based incentive plans have been entirely classified as an equity-settled transaction. The rewards granted on the basis of a share-based arrangement are recognized as personnel expenses in the income statement and in equity. The expense is recognized on a straight-line basis over the vesting period, which is the period over which the specified vesting conditions are to be satisfied. The fair value of the share awards has been determined at the grant date minus the estimated expected dividends that will not be received during the vesting period. The fair value of the rewards is based on the Group's estimate of the number of shares to which the right is expected to be vested at the end of the vesting period. An estimate of the number of shares is reviewed at each balance sheet date. The potential effect of revisions to estimates is recognized as a personnel expense in the income statement, with the corresponding fair value adjustment made to equity. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 43 2.4 DEPRECIATION, AMORTIZATION AND IMPAIRMENTS EUR million 2023 2022 Amortization of intangible assets and depreciation of property, plant and equipment Other intangible assets ¹⁾ 19.0 21.0 Buildings and constructions 23.8 23.3 Machinery and equipment 116.3 123.0 Other tangible assets 6.4 6.3 Total 165.5 173.6 Depreciations of right-of-use assets Land 1.6 1.7 Buildings and constructions 10.3 10.2 Machinery and equipment 25.6 24.0 Other tangible assets 0.6 0.8 Total 38.1 36.7 Impairments of intangible assets and property, plant and equipment ²⁾ Goodwill 0.0 0.0 Buildings and constructions 0.0 0.1 Machinery and equipment 0.0 0.9 Other tangible assets 0.0 0.0 Total 0.0 1.0 Total depreciation, amortization and impairments 203.6 211.2 1) Amortization of intangible assets related to business acquisitions amounted to EUR 6.9 million (9.4) during the financial year 2023. 2) In 2022, the impairment losses are related to Kemira's exit from the Russian market due to the war in Ukraine. Goodwill impairment tests are disclosed in Note 3.1. Goodwill.  The Group's accounting policies Depreciation/amortization Depreciation/amortization is calculated on a straight-line basis over the asset’s estimated useful life. Land is not depreciated. The most commonly applied depreciation/amortization periods according to the Group’s accounting policies are presented in the following table. Depreciation of property, plant and equipment and amortization of intangible assets in years Buildings and constructions 20-40 Machinery and equipment 3-15 Development costs a maximum of 8 years Customer relationships 5-7 Technologies 5-10 Non-compete agreements 3-5 Other intangible assets 5-10 Right-of-use assets during a lease term Depreciation/amortization of an asset begins when it is available for use and it ceases at the moment when the asset is classified under IFRS 5 as held for sale, or is included in the disposal group. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 44 2.5 FINANCE INCOME AND EXPENSES EUR million 2023 2022 Finance income Dividend income 0.0 0.0 Interest income Interest income from loans and receivables 10.3 3.5 Interest income from financial assets at fair value through profit or loss 2.3 1.1 Other finance income 0.1 0.2 Total 12.7 4.8 Finance expense Interest expenses Interest expenses from other liabilities -32.9 -23.5 Interest expenses from financial liabilities at fair value through profit or loss -4.2 -6.6 Interest expenses from lease liabilities -7.8 -7.1 Other finance expenses ¹⁾ -4.5 -5.1 Total -49.3 -42.3 Exchange differences Exchange differences from financial assets and liabilities at fair value through profit or loss 16.6 -22.2 Exchange differences, other -24.4 20.2 Total -7.7 -1.9 Total finance income and expenses -44.4 -39.4 Net finance expenses as a percentage of revenue, % 1.3 1.1 Net interest as a percentage of revenue, % 1.0 0.9 EUR million 2023 2022 Change in Consolidated Statement of Comprehensive Income from hedge accounting instruments Cash flow hedge accounting: amount recognized in the Consolidated Statement of Comprehensive Income ²⁾ -54.1 39.2 Total -54.1 39.2 Exchange differences Realized 13.2 20.0 Unrealized -20.9 -21.9 Total -7.7 -1.9 1) Includes EUR 1.2 million (1.8) of arrangement fees relating to loans in 2023. 2) Consists mostly from changes in fair value of derivatives under hedge accounting treatment. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 45 2.6 INCOME TAXES EUR million 2023 2022 Current taxes -87.3 -72.6 Taxes for prior years 2.6 -2.0 Change in deferred taxes 4.1 6.1 Total -80.7 -68.5 RECONCILIATION BETWEEN TAX EXPENSE AND TAX CALCULATED AT DOMESTIC TAX RATE EUR million 2023 2022 Profit before tax 292.0 308.2 Tax at parent company's tax rate 20% -58.4 -61.6 Foreign subsidiaries' different tax rate -8.0 -4.5 Non-deductible expenses and tax-exempt profits -30.8 1.6 Share of profit or loss of associates -0.1 -0.1 Tax losses during the period without deferred tax -1.3 -1.8 Tax for prior years 2.6 -2.0 Effect of change in tax rates -0.1 0.0 Utilization of prior years' tax losses with no deferred tax 1.0 1.2 Changes in deferred taxes 14.4 -1.3 Income taxes in the Income Statement -80.7 -68.5 In 2023, the effective tax rate of the Group was 27.6% (22.2%), which was impacted by the divestment of the Oil & Gas business. TAX LOSSES AND RELATED DEFERRED TAXES Tax losses carried forward Recognized deferred taxes Unrecognized deferred taxes EUR million 2023 2022 2023 2022 2023 2022 Expiry within 5 years 42.6 67.6 7.9 9.1 2.2 7.3 Expiry after 5 years 2.5 3.7 0.6 0.2 0.0 0.8 No expiry 52.5 119.0 9.2 12.0 7.5 24.4 Total 97.6 190.3 17.7 21.3 9.7 32.4 At the end of 2023, the subsidiaries had EUR 31.1 million (105.4) tax losses, of which no deferred tax benefits have been recognized. The subsidiaries' tax losses are incurred in different currencies and born mainly in China. The changes during the year 2023 relate mainly to the mergers in Brazil and utilization of unrecognized deferred taxes in the USA and Brazil.  The Group's accounting policies Income taxes The Group’s tax expense for the period comprises current tax, adjustments from prior tax periods and deferred tax. Tax is recognized in the income statement, except where it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity. The current income tax charge is calculated based on tax laws enacted or substantively enacted on the balance sheet date in the countries where the parent company and its subsidiaries and associated companies operate and generate taxable income.  The items in the financial statements that include significant accounting estimates and accounting policies that require judgment Deferred taxes and uncertain tax positions The management regularly evaluates the positions taken in the tax returns to identify situations where the applicable tax regulation may be subject to interpretation. The management evaluates also other potential uncertainties related to the tax positions identified in the tax audits or tax disputes. Taxes of uncertain tax positions are recognized based on estimated outcome and probability. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 46 2.7 EARNINGS PER SHARE 2023 2022 Earnings per share, basic Net profit attributable to equity owners of the parent company, EUR million 199.1 231.7 Weighted average number of shares ¹⁾ 153,573,071 153,319,710 Basic earnings per share, EUR 1.30 1.51 Earnings per share, diluted Net profit attributable to equity owners of the parent company, EUR million 199.1 231.7 Weighted average number of shares ¹⁾ 153,573,071 153,319,710 Adjustments: Average number of treasury shares it is possible to be issued on the basis of the share-based payments 1,478,009 941,054 Weighted average number of shares for diluted earnings per share 155,051,080 154,260,764 Diluted earnings per share, EUR 1.28 1.50 1) Weighted average number of shares outstanding, excluding the number of treasury shares held by Kemira Oyj.  The Group's accounting policies Earnings per share The basic earnings per share are calculated by dividing the profit attributable to the equity owners of the parent company by the weighted average number of shares issued during the period excluding treasury shares held by parent company Kemira Oyj. The diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares with the dilutive effect of all the potential dilutive shares, such as shares from share-based payments. 2.8 OTHER COMPREHENSIVE INCOME EUR million 2023 2022 Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations -17.5 19.7 Cash flow hedges -67.7 50.4 Items that will not be reclassified subsequently to profit or loss Other shares -76.7 123.2 Remeasurements of defined benefit plans 23.3 40.8 Other comprehensive income for the period before taxes -138.7 234.1 Tax effects relating to components of other comprehensive income 25.1 -47.1 Other comprehensive income for the period, net of tax -113.4 187.1 THE TAX RELATING TO COMPONENTS OF OTHER COMPREHENSIVE INCOME 2023 2022 EUR million Before tax Tax charge (-) /credit (+) After tax Before tax Tax charge (-) /credit (+) After tax Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations -17.5 0.6 -16.9 19.7 -2.2 17.5 Cash flow hedges -67.7 13.6 -54.1 50.4 -11.2 39.2 Items that will not be reclassified subsequently to profit or loss Other shares -76.7 15.3 -61.3 123.2 -24.7 98.6 Remeasurements of defined benefit plans 23.3 -4.4 18.9 40.8 -9.0 31.8 Total other comprehensive income -138.7 25.1 -113.4 234.1 -47.1 187.1 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 47 3. Capital expenditures and acquisitions 3.1 GOODWILL EUR Million Note 2023 2022 Net book value on Jan 1 510.5 514.0 Acquisition of subsidiaries and business acquisitions 2.3 0.0 Impairments 0.0 0.0 Transferred to assets classified as held-for-sale ¹⁾ ²⁾ 3.7. -26.5 -11.3 Exchange differences -5.3 7.7 Net book value on Dec 31 480.9 510.5 1) In 2023, goodwill was reclassified as held-for-sale assets which is related to the sale of the Oil & Gas business. See Note 3.7. for further details regarding the held-for-sale assets. 2) In 2022, goodwill was reclassified as held-for-sale assets which is related to the sale of the colorant business within the Pulp & Paper segment. See Note 3.7. for further details regarding the held-for-sale assets. Impairment testing of goodwill Goodwill is allocated to the two individual cash-generating units that are the Group's reportable segments. The reportable segment represents the lowest level within the Group at which goodwill is monitored for internal management purposes. The Group’s two reportable segments are Pulp & Paper and Industry & Water. A summary of the tested net book values and goodwill relating to the Group’s reportable segments is presented in the following table. 2023 2022 EUR Million Net book value of which goodwill Net book value of which goodwill Pulp & Paper 1,263 349 1,275 350 Industry & Water 615 132 891 160 Total 1,878 481 2,165 510 The Group carries out its impairment testing of goodwill annually, or whenever there is an indication that the recoverable amount may be less than its carrying amount. The recoverable amounts of cash-generating units have been determined based on value in use calculations which require the use of estimates and assumptions. The key assumptions in value in use calculations are the EBITDA margin and discount rate. The long-term EBITDA margin assumption used for the impairment testing of goodwill is based on past experience regarding EBITDA margins and reflects the management's perception of developments in sales prices and sales volumes during the forecast period. The impact of climate-related risks to the Group's long-term performance have been considered in the cash flow forecasts. The cash flow forecasts used in the impairment testing are based on cash flow forecasts approved by the management covering a five-year horizon. The expected growth used to extrapolate cash flows in the subsequent five-year forecast period was assumed to be 1% (2022: 1%) in both cash-generating units Pulp & Paper and Industry & Water. The discount rates applied were based on the Group's adjusted Weighted Average Cost of Capital (WACC) before taxes. The risk-adjusted WACC rate was defined for both cash- generating units. The pre-tax discount rates used in performing the impairment tests of the Group's reportable segments are presented in the following table. % 2023 2022 Pulp & Paper 9.3 8.5 Industry & Water 9.3 8.5 In addition, an impairment test based on market value has been carried out as part of impairment testing. The value in use calculation based on cash flow forecasts has been validated by comparing it against the quoted market value of Kemira Oyj. During the financial years 2023 and 2022, impairment tests have not indicated any impairment, and no impairment loss has been recognized in the income statement. Sensitivity analysis In 2023, as part of the impairment testing, the Group carried out a sensitivity analysis that assessed key changes in assumptions as follows: a decrease of 2 percentage points in EBITDA margin, a decrease of 10% in estimated cash flow during the forecast period, an increase of 1 and 2 percentage points in the discount rates or a decrease of 10% in cash flows and an increase of 2 percentage points in the discount rate. Based on the sensitivity analyses carried out, the management has estimated that changes in the key assumptions of EBITDA margins, discount rates and cash flows would not result in the CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 48 cash-generating units carrying amount exceeding the recoverable amount and therefore there would be no impairment losses recorded in either of the reportable segments.  The Group's accounting policies Goodwill Goodwill arises from business combinations. Goodwill represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired. Goodwill is measured at cost less the accumulated impairment losses. Impairment testing On each balance sheet date, the Group assesses whether there is any indication of an asset’s impairment. If any indication of impairment exists, the recoverable amount of the asset or the cash-generating unit is calculated on the basis of the value in use or the net selling price. For the purpose of impairment testing goodwill, a cash-generating unit has been defined as an operating segment. Two or more operating segments are not combined into one reportable segment. The recoverable amount of a reportable segment is defined as its value in use, which consists of the discounted future cash flows to the unit. Estimates of future cash flows are based on the continuing use of an asset and forecasts by the management. Cash flow estimates do not include the effects of improved asset performance, investments, or future reorganizations. Goodwill impairment is tested by comparing the recoverable amount with the carrying amount for the reportable segments Pulp & Paper and Industry & Water. The carrying amount includes goodwill, intangible assets and PP&E, right-of-use assets, and working capital. The Group does not have intangible assets with indefinite useful lives other than goodwill. All goodwill has been allocated to the reportable segments. An impairment loss is recognized whenever the carrying amount of an asset or a cash- generating unit exceeds its recoverable amount. An impairment loss is recognized in the income statement. If there has been a positive change in the estimates used to determine an asset's recoverable amount since the last impairment loss was recognized, an impairment loss recognized for previous years is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognized for the previous years. An impairment loss for goodwill is never reversed.  The items in the financial statements that include significant accounting estimates and accounting policies that require judgment Impairment test of goodwill The impairment tests of goodwill and other assets include determining future cash flows which, with regard to the most significant assumptions, are based on EBITDA margin and discount rates. Significant adverse developments in cash flows and interest rates may necessitate the recognition of an impairment loss. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 49 3.2 OTHER INTANGIBLE ASSETS Other intangible assets 2023, EUR million Prepayments Total Acquisition cost on Jan 1 333.7 11.1 344.8 Additions 17.8 -7.5 10.3 Purchases of subsidiaries and business acquisitions 1.2 0.0 1.2 Decreases ¹⁾ -0.9 0.0 -0.9 Transferred to assets classified as held-for-sale ¹⁾ -13.3 0.0 -13.3 Reclassifications 0.0 -0.1 -0.1 Exchange rate differences and other changes -4.0 0.0 -4.0 Acquisition cost on Dec 31 334.5 3.4 337.9 Accumulated amortization on Jan 1 -283.8 -283.8 Accumulated amortization relating to decreases and transfers 0.9 0.9 Amortization during the financial year -19.0 -19.0 Impairments 0.0 0.0 Transferred to assets classified as held-for-sale ¹⁾ 11.6 11.6 Exchange rate differences 2.9 2.9 Accumulated amortization on Dec 31 -287.4 -287.4 Net book value on Dec 31 47.1 3.4 50.5 Emission rights 0.6 Net book value including emission rights on Dec 31 51.1 1) In 2023, other intangible assets amounting EUR 1.6 million were reclassified as held-for-sale assets. These assets are used by the Oil & Gas business. See Note 3.7. for further details regarding the held-for-sale assets. The Group holds assigned emissions allowances under the EU Emissions Trading System at its Helsingborg site in Sweden and UK Emission Trading System at its Bradford site in the UK. At the Group level, the allowances showed a surplus of 112,573 tons of carbon dioxide in 2023 (a surplus of 87,862 tons). Other intangible assets 2022, EUR million Prepayments Total Acquisition cost on Jan 1 330.5 4.1 334.6 Additions 10.2 7.1 17.3 Purchases of subsidiaries and business acquisitions 0.0 0.0 0.0 Decreases -3.5 0.0 -3.5 Transferred to assets classified as held-for-sale ²⁾ -4.0 0.0 -4.0 Reclassifications 0.0 -0.1 -0.1 Exchange rate differences and other changes 0.5 0.0 0.5 Acquisition cost on Dec 31 333.6 11.1 344.8 Accumulated amortization on Jan 1 -267.9 -267.9 Accumulated amortization relating to decreases and transfers 3.5 3.5 Amortization during the financial year -21.0 -21.0 Impairments 0.0 0.0 Transferred to assets classified as held-for-sale ²⁾ 2.3 0.0 2.3 Exchange rate differences -0.7 -0.7 Accumulated amortization on Dec 31 -283.8 -283.8 Net book value on Dec 31 49.8 11.1 60.9 Emission rights 0.3 Net book value including emission rights on Dec 31 61.2 2) In 2022, other intangible assets amounting EUR 1.8 million were reclassified as held-for-sale assets. These assets are used by the colorant business within the Pulp & Paper segment. See Note 3.7. for further details regarding the held-for- sale assets.  The Group's accounting policies Other intangible assets Other intangible assets include, for instance, software and software licenses and patents, technologies, non-compete agreements and customer relationships acquired in business combinations. On the contrary, cloud-based software as service acquisitions generally do not, by their nature, meet the characteristics of an intangible asset and are therefore recognized as an expense. Intangible assets are measured at cost less accumulated CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 50 amortization and any impairment losses. The Group has no intangible assets that have an indefinite useful life other than goodwill. Emission rights Emission rights purchased on the market are accounted for as intangible assets measured at cost. Emission rights received free of charge are measured at their nominal value (zero). Emission rights are not amortized. A provision for the fulfillment of the obligation to return emission rights are recognized if the free-of-charge emissions are not sufficient to cover actual emissions. The Group’s consolidated balance sheet shows no items related to emission rights when the volume of actual emissions is lower than that of the free-of-charge emissions allowances and the Group has not bought allowances on the market. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 51 3.3 PROPERTY, PLANT AND EQUIPMENT 2023, EUR million Land Buildings and constructions Machinery and equipment Other property, plant and equipment Prepayments and assets under construction ¹⁾ Total Acquisition cost on Jan 1 47.5 552.0 1,819.5 97.5 153.2 2,669.7 Additions 0.2 55.3 129.9 7.5 1.1 194.0 Acquisitions of subsidiaries and business acquisitions — — — — — — Decreases — -2.2 -41.7 -2.1 — -46.0 Disposed of subsidiaries — — — — — — Transferred to assets classified as held-for-sale ²⁾ -1.7 -80.0 -223.3 -8.0 -17.0 -330.0 Reclassifications — — 4.6 — -4.4 0.1 Exchange rate differences and other changes -0.3 -7.6 -25.9 -2.3 -1.8 -37.8 Acquisition cost on Dec 31 45.8 517.5 1,663.1 92.6 131.1 2,450.1 Accumulated depreciation on Jan 1 -9.9 -270.2 -1,249.6 -59.9 -1,589.6 Accumulated depreciation related to decreases and transfers — 2.2 41.6 2.1 45.9 Depreciation during the financial year — -23.8 -116.3 -6.4 -146.5 Impairments — — — — — Transferred to assets classified as held-for-sale ²⁾ — 20.0 130.7 6.7 157.5 Exchange rate differences — 2.7 17.8 1.7 22.3 Accumulated depreciation on Dec 31 -9.9 -269.0 -1,175.8 -55.8 -1,510.5 Net book value on Dec 31 35.9 248.5 487.3 36.8 131.1 939.6 1) Prepayment and non-current assets under construction are mainly composed of plant investments. 2) In 2023, property, plant and equipment amounting EUR 172.5 million were reclassified as held-for-sale assets. These assets are used by the Oil & Gas business. See Note 3.7. for further details regarding the held-for-sale assets. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 52 2022, EUR million Land Buildings and constructions Machinery and equipment Other property, plant and equipment Prepayments and assets under construction ¹⁾ Total Acquisition cost on Jan 1 50.1 551.8 1,827.1 92.7 106.7 2,628.5 Additions 0.2 31.2 93.3 6.7 49.1 180.3 Decreases -1.7 -34.4 -105.5 -1.9 -0.6 -143.9 Disposed of subsidiaries 0.0 0.0 0.0 0.0 0.0 0.0 Transferred to assets classified as held-for-sale ²⁾ 0.0 -1.6 -10.2 -0.3 0.0 -12.0 Reclassifications 0.0 0.0 2.5 0.0 -2.4 0.1 Exchange rate differences and other changes -1.2 5.0 12.3 0.3 0.3 16.8 Acquisition cost on Dec 31 47.5 552.0 1,819.5 97.5 153.2 2,669.7 Accumulated depreciation on Jan 1 -10.0 -277.0 -1,223.4 -55.0 -1,565.4 Accumulated depreciation related to decreases and transfers 0.1 30.2 100.3 1.8 132.4 Depreciation during the financial year 0.0 -23.3 -123.0 -6.3 -152.7 Impairments 0.0 -0.1 -0.9 0.0 -1.0 Transferred to assets classified as held-for-sale ²⁾ 0.0 0.8 6.2 0.2 0.0 7.2 Exchange rate differences 0.0 -0.9 -8.7 -0.5 -10.2 Accumulated depreciation on Dec 31 -9.9 -270.2 -1,249.6 -59.9 -1,589.6 Net book value on Dec 31 37.6 281.8 569.9 37.6 153.2 1 080,2 1) Prepayment and non-current assets under construction are mainly composed of plant investments. 2) In 2022, property, plant and equipment amounting EUR 4.8 million were reclassified as held-for-sale assets. These assets are used by the colorant business within the Pulp & Paper segment. See Note 3.7. for further details regarding the held- for-sale assets.  The Group's accounting policies Property, plant and equipment Property, plant and equipment are measured at cost less accumulated depreciation and any impairment losses. The residual values and useful lives of the assets are reviewed at least at the end of each financial year. Gains and losses on the sale of non-current assets are included in other operating income and expenses. Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of the asset in question when it is probable that they will generate future economic benefits and the costs can be reliably measured. The costs of major inspections or the overhaul of an asset performed at regular intervals and identified as separate components are capitalized and depreciated over their useful lives. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 53 3.4 LEASES CHANGE IN RIGHT-OF-USE ASSETS 2023, EUR million Land Buildings and constructions Machinery and equipment Other property, plant and equipment Total Net book value Jan 1 31.5 37.8 74.8 1.9 146.0 Additions 0.4 5.2 31.3 0.2 37.1 Depreciation and impairments -1.6 -10.3 -25.6 -0.6 -38.1 Transferred to assets classified as held-for-sale ¹⁾ -3.8 -2.8 -11.1 -0.1 -17.8 Reclassifications 0.0 0.0 0.0 0.0 0.0 Exchange rate differences and other changes -0.7 -0.6 -2.9 0.0 -4.2 Net book value Dec 31 25.8 29.4 66.5 1.3 123.0 1) In 2023, right-of-use assets amounting EUR 17.8 million were reclassified as held-for-sale assets. These assets are used by the Oil & Gas business. See Note 3.7. for further details regarding the held-for-sale assets. 2022, EUR million Land Buildings and constructions Machinery and equipment Other property, plant and equipment Total Net book value Jan 1 33.1 29.5 71.1 2.1 135.8 Additions 0.4 19.0 25.5 0.7 45.6 Depreciation and impairments -1.7 -10.2 -24.0 -0.8 -36.7 Transferred to assets classified as held-for-sale ²⁾ 0.0 -0.3 -0.1 0.0 -0.4 Reclassifications 0.0 0.0 0.0 0.0 0.0 Exchange rate differences and other changes -0.4 -0.1 2.4 -0.1 1.7 Net book value Dec 31 31.5 37.8 74.8 1.9 146.0 2) In 2022, right-of-use assets amounting EUR 0.4 million were reclassified as held-for-sale assets. These assets are used by the colorant business within the Pulp & Paper segment. See Note 3.7. for further details regarding the held-for-sale assets. Maturity of lease liabilities has been presented in Note 5.3. Interest-bearing liabilities. Changes in lease liabilities and payments related to lease liabilities has been presented in Note 5.1. Capital Structure. In 2023, the amount of lease expenses recognized in the income statement for leases of short-term or low-value assets is EUR 3 million (4).  The Group's accounting policies Leases At the time of entering into an agreement, the Group assesses whether it is a lease or whether it contains a lease. An agreement is a lease in accordance with IFRS 16 if the agreement gives the Group, as lessee, the right to control the asset and control its use for a specified period, against consideration. The Group's leases are mainly for land, buildings, and transport equipment. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 54 The lease is recognized as a right-of-use asset and a corresponding liability when the leased asset is available to the Group. The rent paid is divided into debt and interest expenses. Interest expenses are recognized in the income statement over the lease term and the asset is amortized over the lease term. Assets and liabilities arising from leases are initially measured at present value. Lease liabilities include the net fair value of rentals, consisting of a fixed payment and a variable rent that are index- or price-level dependent. The lease liability is discounted to its present value using an interest rate on the additional loan, consisting of the reference interest rate and the lessee's credit margin, which the lessee would pay on the acquisition of the corresponding asset by debt financing. This additional loan rate will vary depending on the duration of the lease and the currency. The lease term is the period during which the lease cannot be canceled. The Group leases typically have a fixed term, and some contracts have options for renewal. The option is included in the lease liability if it is reasonably certain that the option will be exercised. If there is a change in the estimate of the exercise of the option, the lease liability and the related asset are reassessed. A right-of-use asset is measured at cost, which includes the original amount of the lease liability. In building leases, lease and non-lease components are treated separately wherever they can be identified and distinguished from the right-of-use asset. In subsequent periods, the accumulated depreciation and impairment losses are deducted from the asset. Fixed assets are tested for impairment in accordance with IAS 36 Impairment of Assets. Payments for short-term and low-value leases are recognized as an expense in the income statement on a straight-line basis over the lease term. Leases with a maximum term of 12 months are regarded as short-term. Low value assets include IT equipment, office furniture and other low value machines. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 55 3.5 OTHER SHARES 2023, EUR million The shares of Pohjolan Voima Group Other non-listed shares Total Net book value on Jan 1 380.6 2.7 383.3 Additions — — — Decreases — -0.3 -0.3 Change in fair value -76.7 — -76.7 Reclassifications — -1.0 -1.0 Net book value on Dec 31 303.9 1.4 305.4 2022, EUR million Net book value on Jan 1 257.3 2.7 260.0 Additions — — — Decreases — — — Change in fair value 123.2 — 123.2 Net book value on Dec 31 380.6 2.7 383.3 SHARES IN THE POHJOLAN VOIMA GROUP EUR million Class of shares Holding, % Class of assets 2023 2022 Pohjolan Voima Oyj A 5 hydro power 100.2 126.3 Pohjolan Voima Oyj B 2 nuclear power 47.9 79.3 Pohjolan Voima Oyj ¹⁾ B2 7 nuclear power 62.9 21.3 Teollisuuden Voima Oyj A 2 nuclear power 92.2 152.8 Other Pohjolan Voima Oyj C2, G5, G6, M several several 0.8 0.8 Total 303.9 380.6 1) TVO announced on April 16, 2023 that Olkiluoto 3 is ready and regular electricity production has started. In Q2 2023, PVO B2 share series (Olkiluoto 3) was valued for the first time using the discounted cash flow method. Kemira's value of the ownership of PVO B2 share series increased to EUR 62.9 million at year-end 2023. Kemira Oyj owns 5% of Pohjolan Voima Oyj, a company of the Pohjolan Voima Group, and 1% of its joint venture Teollisuuden Voima Oyj. Discounted cash flow assumptions and sensitives 2023 2022 Short-term discount rate 5.1% 5.1% Long-term discount rate 5.1% 5.1% Electricity price estimate EUR/MWh 51.85 - 69.32 57.62 - 85.80 Forward electricity prices EUR/MWh 44.25 - 95.25 68.60 - 158.10 A 10% decrease or increase in the electricity market price in the future would negatively or positively impact on the fair value of the shares by approximately EUR +/- 98 million (+/- 47). An increase or decrease of one percentage point in the discount rate would negatively or positively impact on the fair value of the shares by approximately EUR -49 million (-38) or approximately EUR 69 million (53). CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 56  The Group's accounting policies Other shares Other shares are classified at fair value through other comprehensive income. Changes in the fair value of other shares are recognized in other comprehensive income under equity in the fair value reserve taking the tax effect into account and including gains and losses from sales. The dividends are recognized in the profit or loss statement. Other shares include non-listed companies, the shareholdings in Pohjolan Voima Oyj (PVO) and Teollisuuden Voima Oyj (TVO) representing the largest investments. PVO and its joint venture TVO comprise a private energy generating group owned by Finnish manufacturing and power companies, to which it supplies energy at cost. Kemira Group has A series shares in TVO and A, B, C, G, and M series shares in PVO. The shareholdings of PVO's B series are related to the holdings in TVO and TVO operates three nuclear power plant units (Olkiluoto 1, 2 and 3) in Olkiluoto in the municipality of Eurajoki in Finland. Different share series entitle the shareholder to electricity generated by different power plants. The owners of each share series are responsible for the fixed costs of the series in question in proportion to the number of the shares they hold, regardless of whether they use their power/energy share or not, and for variable costs in proportion to the amount of energy used. Kemira Oyj’s ownership in the PVO Group, which entitles it to electricity from the power plants in regular production is measured at the fair value based on the discounted cash flow resulting from the difference between the market price of the electricity and the cost price. The forward electricity price quotations for the Finnish price area published by the Nordic Electricity Exchange have been used as the basis for the market price for the electricity for the first five years, and after this, the development of the electricity price is based on a fundamental simulation model of the Nordic electricity market. The impact of inflation in the coming years is taken into account in the price of the electricity and the cost prices. The cost prices are determined by each share series. Future cash flows have been discounted based on the estimated useful lifecycles of the plants related to each share series, and hydro power also includes terminal value. The discount rate has been calculated using the annually determined average weighted cost of capital.  The items in the financial statements that include significant accounting estimates and accounting policies that require judgment Estimated fair value of shares in the PVO Group The Group’s shareholding in the unlisted PVO Group is measured at fair value, based on the discounted cash flow resulting from the difference between the market price of electricity and the cost price using the valuation model. Developments in the actual fair value may differ from the estimated value due to factors, such as electricity prices, inflation, the forecast period, or the discount rate. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 57 3.6 BUSINESS COMBINATIONS In Q3 2021, Kemira acquired a minority interest in the advanced process optimization start-up SimAnalytics Oy. In Q1 2023, Kemira acquired the rest of the business and now has a 100% interest in the acquired business. The acquisition was not material to Kemira's consolidated income statement and balance sheet. The acquisition calculation under IFRS 3 is provisional. The fair values of the net assets and goodwill may change during the 12-month period during which the acquisition calculation will be finalized. The purchase price of EUR 3 million was paid in cash, except for certain payments which will be paid later. The purchase price is divided into two installments, of which EUR 2 million was paid in Q1 2023 and EUR 1 million was paid earlier in 2021. The remainder of the payments to the acquired company's employees, made after the acquisition date, are remunerations for services under IFRS 3 and these payments have no effect on goodwill. Based on preliminary acquisition calculations, EUR 1 million was allocated to intangible assets such as software. A provisional goodwill of EUR 2 million arises mainly from the expected synergies. The acquired business has been consolidated into the Pulp & Paper segment, beginning in Q1 2023.  The Group's accounting policies Business combinations The acquisition method is applied to business combinations. The consideration transferred for acquisition of a subsidiary is defined as an aggregate of the fair values of the assets transferred, the liabilities assumed and the equity interest issued by the Group. The consideration transferred may include the fair value of any asset or liability resulting from the contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired, and liabilities and contingent liabilities that are assumed in a business combination are measured at their fair values on the acquisition date. 3.7 ASSETS CLASSIFIED AS HELD-FOR-SALE Sale of the Oil & Gas business to Sterling Specialty Chemicals, LLC ASSETS CLASSIFIED AS HELD-FOR-SALE AT FAIR VALUES EUR million Note 2023 2022 Goodwill 3.1. 0.0 — Intangible assets 3.2. 1.6 — Property, plant and equipment 3.3. 109.5 — Right-of-use assets 3.4. 17.8 — Deferred tax assets 4.4. 19.2 — Inventories 4.1. 48.3 — Trade receivables and other receivables 4.2. 57.0 — Cash and cash equivalents 5.4. 2.2 — Total 255.6 — LIABILITIES DIRECTLY ASSOCIATED WITH THE ASSETS CLASSIFIED AS HELD-FOR-SALE EUR million Note 2023 2022 Liabilities related to right-of-use assets 5.3. 24.1 — Deferred tax liabilities 4.4. 32.1 — Trade payables and other liabilities 4.3. 44.0 — Current income tax liabilities 4.6 — Total 104.8 — On December 4, 2023, Kemira signed an agreement to divest its Oil & Gas-related portfolio to Sterling Specialty Chemicals LLC, a US subsidiary of Artek Group, a global industrial chemicals group based in India. The revenue to be carved-out from Kemira was around EUR 430 million in 2022. This includes Kemira’s Oil & Gas business, which had a revenue of EUR 373 million in 2022. The remaining carved-out revenue of around EUR 57 million consisted of non-Oil & Gas industrial polymer sales through indirect channels. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 58 Approximately 250 employees are expected to transfer to the buyer as part of the transaction, which includes Kemira’s manufacturing facilities in Mobile, Columbus and Aberdeen in the United States. The Teesport manufacturing facility in the United Kingdom is included in the transaction, subject to certain site-specific closing conditions being fulfilled. In addition, the novel liquid polymer (NLP) manufacturing assets, which are part of Kemira’s manufacturing facility in Botlek, the Netherlands, are included in the transaction, but Kemira will continue to operate the plant under a long-term agreement and will retain the employees. The total consideration on a cash and debt-free basis amounts to approximately USD 280 million, around EUR 260 million, subject to ordinary closing adjustments. On February 2, 2024, Kemira announced that it had closed the divestment of its Oil & Gas related portfolio. The closing of the Teesport manufacturing facility in the United Kingdom is expected to happen later, subject to site-specific closing conditions. The transaction will be carried out as a combination of a share and assets sale. As of Q4 2023, the assets and liabilities related to the sale of the Oil & Gas business were classified as a disposal group held for sale according to IFRS 5. As a result, the assets and liabilities related to the sale of the Oil & Gas business were presented in the consolidated balance sheet, on separate lines. The reclassification has an effect on the reported values of balance sheet items and the expected loss from the sale of the Oil & Gas business is EUR 101 million, including transaction fees. The Oil & Gas business is part of Kemira's Industry & Water segment. Sale of the colorants business to ChromaScape, LLC ASSETS CLASSIFIED AS HELD-FOR-SALE AT FAIR VALUE EUR million Note 2023 2022 Goodwill 3.1. — 0.0 Intangible assets 3.2. — 1.8 Property, plant and equipment 3.3. — 4.8 Right-of-use assets 3.4. — 0.4 Inventories — 14.3 Total — 21.3 LIABILITIES DIRECTLY ASSOCIATED WITH THE ASSETS CLASSIFIED AS HELD-FOR-SALE EUR million Note 2023 2022 Liabilities of defined benefit plans 4.5. — 0.3 Liabilities related to right-of-use assets — 0.4 Total — 0.7 Kemira announced the closing of the divestment of most of its colorants business to ChromaScape, LLC on May 4, 2023. The loss from the sale of the colorants business was EUR 25 million, of which EUR 10 million was recognized during the 2023 reporting period. The colorants business was part of Kemira's Pulp & Paper segment. Revenue from the business in 2022 was approximately EUR 50 million and 59 employees transferred to ChromaScape, LLC as part of the transaction. The sale included one manufacturing site at Goose Creek, Bushy Park in South Carolina, USA. Kemira retained its APAC related colorants business. As of Q3 2022, the assets and liabilities related to the sale of the colorants business were classified as a disposal group held for sale according to IFRS 5. As a result, the assets and liabilities related to the sale of the colorants business were presented in the consolidated balance sheet, on separate lines.  The Group's accounting policies Non-current assets held for sale Non-current assets are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale transaction and a sale is considered highly probable. Since the time of classification, the assets have been valued at the lower of carrying amount and fair value less costs to sell. Depreciation on these assets discontinues at the time of classification. Non-current assets classified as held for sale is disclosed separately in the balance sheet. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 59 4. Working capital and other balance sheet items NET WORKING CAPITAL EUR million Note 2023 2022 Inventories 4.1. 281.8 433.7 Trade receivables and other receivables 4.2. 468.2 603.7 Excluding financing items in other receivables ¹⁾ -18.6 -71.1 Trade payables and other liabilities 4.3. 489.4 635.2 Excluding financing items in other liabilities ¹⁾ -37.0 -31.4 Total 278.9 362.4 1) Includes mainly interest income and expenses, exchange gains and losses and hedging related items. Due to the Oil & Gas divestment, in net working capital in 2023, EUR 48.3 million of inventory, EUR 57.0 million of trade receivables and other receivables and EUR 44.0 million trade payables and other payables have been reclassified as held-for-sale. Kemira has completed the divestment in February 2024. Quarterly information on net working capital is disclosed in the section on Reconciliation to IFRS figures. 4.1 INVENTORIES EUR million 2023 2022 Materials and supplies 113.0 147.8 Finished goods 149.4 264.7 Prepayments 19.4 21.2 Total 281.8 433.7 In 2023, EUR 2.4 million (9.2) of the inventory value was recognized as an expense in order to decrease the book values of the inventories to correspond with their net realizable value.  The Group's accounting policies Inventories Inventories are measured at the lower of cost and net realizable value. Costs are determined on a first-in first-out (FIFO) basis or by using a weighted average cost formula, depending on the nature of the inventory. The cost of finished goods and work in progress include the proportion of production overheads at normal capacity. The net realizable value is the sales price received in the ordinary course of business less the estimated costs for completing the asset and sales costs. 4.2 TRADE RECEIVABLES AND OTHER CURRENT RECEIVABLES EUR million 2023 2022 Trade and other receivables Trade receivables 386.2 449.6 Prepayments 8.5 7.1 Prepaid expenses and accrued income 38.9 110.5 Other current receivables 34.7 36.4 Total 468.2 603.7 AGING OF OUTSTANDING TRADE RECEIVABLES 2023 EUR million Receivables, gross amount Expected credit losses Receivables, net amount Not due trade receivables 327.9 -0.1 327.7 Trade receivables 1-90 days overdue 58.1 -0.3 57.8 Trade receivables more than 91 days overdue 5.0 -4.3 0.6 Total 390.9 -4.8 386.2 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 60 2022 EUR million Receivables, gross amount Expected credit losses Receivables, net amount Not due trade receivables 389.2 -0.7 388.5 Trade receivables 1-90 days overdue 61.1 -0.1 61.0 Trade receivables more than 91 days overdue 4.7 -4.6 0.1 Total 454.9 -5.3 449.6 In 2023, the impairment loss (+) /gain(-) of trade receivables amounted to EUR -0.2 million (2.2). In 2023, items that were due in a time period longer than one year included trade receivables of EUR 0.3 million (0.7), prepaid expenses and an accrued income of EUR 1.3 (0.5), other receivables of EUR 0.1 (0.3) and prepayments of EUR 0.0 (1.7).  The Group's accounting policies Trade receivables, loan receivables, and other current receivables Trade receivables, loan receivables, and other current receivables are initially recognized at fair value and subsequently measured at amortized cost, taking impairment into account. These items are subject to a simplified impairment model in accordance with the IFRS 9 standard, where the estimated amount of credit losses is based on the expected credit losses over their expected life. The expected credit loss rates for the impairment model vary for trade receivables in EMEA, Americas, and APAC according to age distribution and geographical area. Credit loss rates are based on sales payment profiles and historical credit losses. The expected credit losses for trade receivables are recognized using the simplified impairment model in accordance with IFRS 9. The expected credit losses are calculated by multiplying the book value of unpaid trade receivables by the expected credit loss rate according to geographical area. Any overdue trade receivables over 180 days are assessed based on a specific risk assessment. In addition, an estimate of a credit loss is recognized for individual trade receivables when there is objective evidence that the receivables will not be recovered on all the original terms. Trade receivables, loan receivables, and other current receivables do not include a significant financial component. 4.3 TRADE PAYABLES AND OTHER CURRENT LIABILITIES EUR million 2023 2022 Trade payables and other liabilities Prepayments received 1.6 2.5 Trade payables 226.7 292.8 Accrued expenses 218.4 277.0 Other non-interest-bearing current liabilities 42.7 63.0 Total 489.4 635.2 Accrued expenses Employee benefits 89.7 94.2 Items related to revenue and purchases 91.4 149.8 Interest 7.7 7.2 Exchange rate differences 6.9 2.8 Other 22.7 22.9 Total 218.4 277.0  The Group's accounting policies Trade payables and other current liabilities Trade and other payables are presented as current liabilities if payment is due within 12 months after the financial period. Trade payables are initially recognized at fair value and subsequently measured at amortized cost. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 61 4.4 DEFERRED TAX LIABILITIES AND ASSETS EUR million On Jan 1, 2023 Recognized in the income statement Recognized in other comprehensive income Recognized in equity Acquired subsidiaries and items classified as held-for-sale Exchange differences and reclassifications On Dec 31, 2023 Deferred tax liabilities Intangible and fixed assets 73.2 -0.8 0.0 0.0 -29.4 -2.5 40.4 Leased assets ¹⁾ 0.0 3.1 0.0 0.0 -1.2 -0.2 1.7 Other shares 52.7 0.0 -15.3 0.0 0.0 0.0 37.3 Financial instruments 16.5 0.0 -11.6 0.0 0.0 -1.9 3.0 Defined benefit arrangements 15.9 0.2 5.1 0.0 0.0 -0.3 20.9 Fair value adjustments of net assets acquired 0.6 -0.3 0.0 0.0 0.2 0.0 0.4 Other accruals 4.3 1.8 -0.6 0.7 -1.4 -0.2 4.5 Total 163.1 4.0 -22.5 0.7 -31.9 -5.1 108.3 Deducted from deferred tax assets -44.9 -27.0 Deferred tax liabilities in the balance sheet 118.2 81.3 Deferred tax assets Intangible and fixed assets 0.0 5.8 0.0 0.0 -7.2 9.4 8.0 Provisions and accruals 20.7 0.8 0.0 0.0 -10.3 6.5 17.7 Lease liabilities ¹⁾ 0.0 4.4 0.0 0.0 -1.5 1.3 4.2 Financial instruments 0.0 0.5 2.0 0.0 0.0 -1.9 0.6 Tax losses and tax credits 21.3 -3.4 0.0 0.0 0.0 -0.7 17.2 Defined benefit arrangements 2.6 -0.2 0.7 0.0 0.0 0.4 3.4 Other 27.5 0.2 0.0 0.0 -0.2 -19.8 7.7 Total 72.0 8.1 2.7 0.0 -19.2 -4.8 58.8 Deducted from deferred tax liabilities -44.9 -27.0 Deferred tax assets in the balance sheet 27.1 31.8 1) As a result of the amendment in IAS 12 standard, as of January 1, 2023, deferred taxes have been recognized in connection with initial recognition of the leases for new lease contracts. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 62 EUR million On Jan 1, 2022 Recognized in the income statement Recognized in other comprehensive income Recognized in equity Acquired subsidiaries and items classified as held-for-sale Exchange differences and reclassifications On Dec 31, 2022 Deferred tax liabilities Intangible and fixed assets 57.3 14.6 0.0 0.0 0.0 1.2 73.2 Leased assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other shares 28.0 0.0 24.7 0.0 0.0 0.0 52.7 Financial instruments 7.0 0.0 9.5 0.0 0.0 0.0 16.5 Defined benefit arrangements 14.6 -1.6 3.0 0.0 0.0 0.0 15.9 Fair value adjustments of net assets acquired 1.1 -0.5 0.0 0.0 0.0 0.0 0.6 Other accruals 4.4 -6.2 3.7 2.2 0.0 0.0 4.3 Total 112.4 6.3 40.9 2.2 0.0 1.3 163.1 Deducted from deferred tax assets -35.3 -44.9 Deferred tax liabilities in the balance sheet 77.1 118.2 Deferred tax assets Intangible and fixed assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provisions and accruals 20.3 -1.6 0.0 0.0 0.0 1.9 20.7 Lease liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Financial instruments 0.3 0.0 -0.3 0.0 0.0 0.0 0.0 Tax losses and tax credits 11.2 -0.1 0.0 0.0 0.0 10.2 21.3 Defined benefit arrangements 10.9 0.1 -6.0 0.0 0.0 -2.4 2.6 Other 23.0 14.0 0.0 0.0 0.0 -9.6 27.5 Total 65.8 12.4 -6.3 0.0 0.0 0.1 72.0 Deducted from deferred tax liabilities -35.3 -44.9 Deferred tax assets in the balance sheet 30.5 27.1  The Group's accounting policies Deferred taxes Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of the assets and liabilities and their carrying amounts in the Consolidated Financial Statements. Deferred tax in the initial recognition of goodwill is recognized only in cases where goodwill is locally tax deductible. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 63 Deferred income tax assets are recognized only to the extent that it is probable that a future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset the current tax assets against current tax liabilities, and when the deferred income taxes assets and liabilities relate to the income taxes levied by the same taxation authority on either the same tax entity or different taxable entities where there is an intention to settle the balances on a net basis.  The items in the financial statements that include significant accounting estimates and accounting policies that require judgment Deferred taxes For the recognition of deferred tax assets for tax losses and other items, the management assesses the amount of a probable future taxable profit against which unused tax assets can be utilized. Actual profits may differ from the forecasts and in such cases affect taxes in future periods. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 64 4.5 DEFINED BENEFIT PENSION PLANS AND EMPLOYEE BENEFITS The Group has several defined benefit pension plans and other employee benefit obligations. The main defined benefit pension plans are in Finland, Sweden, Germany, and the UK. Finland The Group's most significant defined benefit plan is in Finland through Pension Fund Neliapila, which takes care of part of some employees' supplementary pension benefits. The Pension Fund Neliapila covers employees whose employment with Kemira began before January 1, 1991, meaning that the fund is closed to new employees. Currently the majority of the members of Pension Fund Neliapila are pensioners. At the end of 2023, the obligations of Pension Fund Neliapila totaled EUR 156.2 million (156.9) and assets of the plan totaled EUR 262.5 million (235.3). Pension Fund Neliapila's supplementary benefit includes old-age pensions, disability pensions, survivors' pensions, and funeral grants. The aggregated pension benefit is 66 percent of the pension salary. To qualify for a full pension, an employee must have accrued a pensionable service of 25 years. The supplementary pension benefit is the difference between the aggregated and compulsory pension benefits. The Board of Directors of Pension Fund Neliapila decided in December 2023 to return the fund's surplus of EUR 14 million to Kemira Group companies. The return of surplus will be paid by Pension Fund Neliapila when approval is obtained from the Financial Supervisory Authority. The approval is required by the Pension Fund Act. The surplus payment is expected to be paid during the first half of 2024. The Group has not recognized any items regarding the return of surplus in the Consolidated Financial Statements 2023. Sweden In Sweden, there is a defined benefit pension plan called the ITP 2 plan for white-collar employees. To qualify for a full pension, an employee must have a projected period of pensionable service, from the date of entry until retirement age, of at least 30 years. The pension arrangements comprise the normal retirement pension, complementary retirement pensions and a survivors' pension. In addition, Kemira must have credit insurance from PRI Pensionsgaranti Mutual Insurance Company for the ITP 2 plan pension liability. At the end of 2023, the defined benefit obligations in Sweden totaled EUR 38.2 million (38.3). ASSETS AND LIABILITIES OF DEFINED BENEFIT PLANS RECOGNIZED IN THE BALANCE SHEET EUR million 2023 2022 Present value of defined benefit obligations 233.9 231.5 Fair value of plans' assets -272.2 -244.4 Surplus (-) / Deficit (+) -38.3 -12.8 The effect of asset ceiling 1.8 1.4 Net receivables (-) / liabilities (+) of defined benefit plans recognized in the Balance Sheet -36.5 -11.4 Liabilities of defined benefit plans 69.8 66.9 Receivables of defined benefit plans -106.3 -78.4 Net receivables (-) / liabilities (+) of defined benefit plans recognized in the Balance Sheet -36.5 -11.4 AMOUNTS OF DEFINED BENEFIT PLANS RECOGNISED IN THE INCOME STATEMENT Service costs 2.0 2.3 Net interest cost ¹⁾ -0.5 0.7 Defined benefit plans' expenses (+) / income (-) in the Income Statement 1.5 3.0 1) Net interest costs are presented in net finance costs, in the Consolidated Income Statement. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 65 DEFINED BENEFIT PLANS RECOGNIZED IN THE OTHER COMPREHENSIVE INCOME EUR million 2023 2022 Items resulting from remeasurements of defined benefit plans ²⁾ Actuarial gains (-) / losses (+) in defined benefit obligations arising from changes in demographic assumptions 0.3 -0.4 Actuarial gains (-) / losses (+) in defined benefit obligations arising from changes in financial assumptions ³⁾ 1.9 -70.3 Actuarial gains (-) / losses (+) in defined benefit obligations arising from experience based assumptions 6.9 9.7 Actuarial gains (-) / losses (+) in plan assets ³⁾ -32.2 23.3 Effect from asset ceiling 0.3 0.8 Defined benefit plans' expenses (+) / income (-) in the other comprehensive income -22.8 -37.0 2) The remeasurements of defined benefit plans are included in the Statement of Comprehensive Income as part of Other comprehensive income. The item has been disclosed net of tax and the related income tax is disclosed in Note 2.8. Other comprehensive income. 3) In 2023 and 2022, the actuarial gains and losses are mainly due to return on assets, change in the discount rate and inflation in pension plan in Sweden and Pension Fund Neliapila. CHANGES IN PLAN ASSETS OVER THE PERIOD IN DEFINED BENEFIT PLANS EUR million 2023 2022 Defined benefit obligation on Jan 1 231.5 312.0 Current service costs 1.6 2.3 Interest costs 8.4 3.6 Actuarial losses (+) / gains (-) 9.1 -61.1 Exchange differences on foreign plans 0.0 -4.7 Benefits paid -16.8 -16.2 Curtailments and settlements ⁴⁾ 0.0 -3.4 Transferred to liabilities classified as held-for-sale — -0.4 Other items 0.0 -0.6 Present value of defined benefit obligations on Dec 31 233.9 231.5 4) In 2022, the defined benefit (DB) pension plan has been converted to a defined contribution plan In Norway. DB pension obligations have been transferred to an insurance company. CHANGES IN PLAN ASSETS OVER THE PERIOD IN DEFINED BENEFIT PLANS EUR million 2023 2022 Fair value on Jan 1 244.4 292.0 Interest income 9.0 2.9 Contributions 0.4 0.2 Return of surplus assets ⁵⁾ — -10.0 Actuarial losses (-) / gains (+) 32.2 -23.3 Exchange differences on foreign plans 0.1 -0.6 Benefits paid -13.3 -12.8 Curtailments and settlements ⁴⁾ 0.0 -3.5 Transferred to assets classified as held-for-sale — -0.1 Other items -0.5 -0.4 Fair value of plan assets on Dec 31 272.2 244.4 5) In 2022, Pension Fund Neliapila paid to a surplus return of EUR 10 million to Kemira Group companies. PLAN ASSETS BY ASSET CATEGORY IN DEFINED BENEFIT PLANS EUR million 2023 2022 Interest rate investments and other assets 144.1 124.2 Shares and share funds 79.5 75.8 Properties occupied by the Group 46.8 42.8 Kemira Oyj's shares 1.9 1.6 Total assets 272.2 244.4 The Finnish Pension Fund Neliapila has most of the defined benefit plan’s assets. At the end of 2023, the Pension Fund Neliapila's assets amounted to EUR 262.5 million (235.3), which consisted of interest rate investments and other assets of EUR 134.5 million (115.7), shares and share funds of EUR 79.4 million (75.1), properties of EUR 46.8 million (42.8), and Kemira Oyj's shares of EUR 1.9 million (1.6). In the Pension Fund Neliapila, the investment position is managed within an asset-liability matching (ALM) framework that has been developed to combine long-term investments in line with the obligations under the pension plan. In Pension Fund Neliapila, a market risk can be considered a significant investment risk. The market risk arising from cyclical fluctuations of the financial market, is managed by ensuring that the investment position is sufficiently diversified. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 66 The income (+) / expense (-) of the actual returns on the plan assets of the Group's defined benefit plan were EUR 41.2 million (-20.5). SIGNIFICANT ACTUARIAL ASSUMPTIONS % 2023 2022 Discount rate 3.1 - 4.5 3.7 - 4.7 Inflation rate 1.6 - 3.1 2.0 - 3.2 Future salary increases 2.1 - 2.5 2.5 - 3.2 Future pension increases 2.0 - 2.3 2.1 - 2.8 The significant assumptions used in calculating the obligations of the Finnish Pension Fund Neliapila were as follows: discount rate 3.1% (3.8%), inflation rate 2.1% (2.6%), future salary increases 2.1% (2.6%), and future pension increases 2.3% (2.8%). Sensitivity analysis The sensitivity analysis is based on keeping other assumptions constant when one assumption is changed. In practice, this is unlikely to occur and changes in some of the assumptions may correlate with each other. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method has been applied as when calculating the pension liability recognized within the balance sheet. If the discount rate would be 0.5 percentage points lower in all of the significant countries, the defined benefit obligation would increase by EUR 11.9 million (5.1%), if all other assumptions were held constant. SENSITIVITY ANALYSIS - PENSION FUND NELIAPILA IN FINLAND Defined benefit obligation Impact on defined benefit obligation EUR million 2023 2022 2023 2022 Discount rate 3.1% (3.8%) 156.2 156.9 Discount rate +0.5% 149.2 149.8 -4.5% -4.5% Discount rate -0.5% 163.8 164.6 4.9% 4.9% Future pension increases 2.3% (2.8%) 156.2 156.9 Future pension increases +0.5% 163.0 163.8 4.4% 4.4% Future pension increases -0.5% 149.8 150.5 -4.1% -4.1% A change in the mortality assumption where life expectancy is increased by one year will increase the defined benefit obligation by EUR 6.9 million (4.4%). SENSITIVITY ANALYSIS - ITP 2 PENSION PLAN IN SWEDEN Defined benefit obligation Impact on defined benefit obligation EUR million 2023 2022 2023 2022 Discount rate 3.8% (3.65%) 38.2 38.4 Discount rate +0.5% 36.0 36.0 -5.8% -6.0% Discount rate -0.5% 40.7 40.9 6.4% 6.7% Future salary increases 2.1% (2.5%) 38.2 38.4 Future salary increases +0.5% 38.9 39.0 1.6% 1.8% Future salary increases -0.5% 37.7 37.7 -1.5% -1.7% A change in the mortality assumption where life expectancy is increased by one year will increase the defined benefit obligation by EUR 1.5 million (3.8%). Expected contributions to the defined benefit plans for the year ending on December 31, 2024, are EUR 4.1 million. In addition, Pension Fund Neliapila is expected to pay a surplus return of EUR 14 million to Kemira Group companies during the first half of 2024. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 67  The Group's accounting policies Defined benefit pension plans and employee benefits The Group has different post-employment schemes, including both defined contribution and defined benefit pension plans in accordance with the local legislation and practices of the countries in which it operates. Pension plans are generally funded through contributions to pension insurance companies or a separate pension fund. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as their compensation level and years of service. The liability recognized in the balance sheet in respect to the defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and with their terms to maturity approximating the terms of the related pension obligation. In countries where there is no deep market in such bonds, the market rates for government bonds are used. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Current service costs are included in the Consolidated Income Statement in the employee benefit expenses and net interest costs on finance income and finance expense. Past service costs are recognized immediately in profit or loss. For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual, or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expenses when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.  The items in the financial statements that include significant accounting estimates and accounting policies that require judgment Defined benefit pension plans Determining pension liabilities under defined benefit pension plans includes a number of actuarial assumptions, and significant changes in these assumptions may affect the amounts of pension liabilities and expenses. Actuarial calculations include assumptions by the management, such as the discount rate and assumptions of salary increases and the termination of employment contracts. The pension liability is calculated by independent actuaries. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 68 4.6 PROVISIONS EUR million Personnel related provisions Restructuring provisions Environmental provisions ¹⁾ Other provisions ²⁾ Total Non-current provisions On January 1, 2023 0.1 0.0 17.3 20.9 38.4 Exchange rate differences 0.0 0.0 0.0 0.0 0.0 Additional provisions and increases in existing provisions 0.0 0.0 0.0 12.3 12.3 Used during the financial year 0.0 0.0 -0.2 -0.2 -0.4 Unused provisions reversed -0.1 0.0 0.0 -0.3 -0.3 Reclassification 0.0 0.0 -4.7 -7.5 -12.2 On December 31, 2023 0.1 0.0 12.4 25.3 37.8 Current provisions On January 1, 2023 0.4 0.0 10.1 8.3 18.8 Exchange rate differences 0.0 0.0 0.0 0.0 0.0 Additional provisions and increases in existing provisions 0.0 0.1 1.8 2.4 4.3 Used during the financial year -0.1 0.0 -8.2 -9.0 -17.3 Unused provisions reversed 0.0 -0.1 -0.7 -0.4 -1.1 Reclassification 0.0 0.0 4.7 7.5 12.2 On December 31, 2023 0.3 0.0 7.7 8.9 16.9 1) The Group's operations in the chemical industry are governed by numerous international agreements as well as regional and national legislation all over the world. The Group treats its environmental liabilities and risks according to established internal principles and procedures. In 2023, provisions for environmental remediation totaled EUR 20.1 million (27.4). The biggest provisions relate to site closures and reconditioning of the sediment of a lake in Vaasa, Finland. 2) Other provisions totaled EUR 34.2 million (29.2). The biggest provisions relate to expected liabilities for energy company producing steam in Pori, Finland, owned via Pohjolan Voima. EUR million 2023 2022 Breakdown of the total amount of provisions Non-current provisions 37.8 38.4 Current provisions 16.9 18.8 Total 54.6 57.2  The Group's accounting policies Provisions Provisions for restructuring costs, personnel related costs, environmental obligations, legal claims, and onerous contracts are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount of this obligation can be made. A restructuring provision is recognized when there is a detailed and appropriate plan prepared for it and the implementation of the plan has begun or has been notified to those whom the restructuring concerns. The amount recognized as a provision is the present value of the expenditure expected to be required to settle the obligation on the balance sheet date using a pre-tax interest rate that reflects current market assessments of the time value of money and the risks specific to the obligation.  The items in the financial statements that include significant accounting estimates and accounting policies that require judgment Provisions Recognizing provisions requires the management’s estimates, since the precise amount of obligations related to the provisions is not known when preparing the Financial Statements. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 69 5. Capital structure and financial risks 5.1 CAPITAL STRUCTURE EUR million 2023 2022 Equity 1,684.2 1,684.6 Total assets 3,489.3 3,651.1 Gearing, % ¹⁾ 32 46 Equity ratio, % ²⁾ 48 46 1) The definition of the key figure for Gearing is 100 × Interest-bearing net liabilities / Total equity. 2) The definition of the key figure for the Equity ratio is 100 × Total equity / (Total assets - prepayments received). INTEREST-BEARING NET LIABILITIES EUR million Note 2023 2022 Non-current interest-bearing liabilities 5.3. 615.7 838.1 Current interest-bearing liabilities 5.3. 322.1 183.7 Interest-bearing liabilities 937.8 1,021.8 Cash and cash equivalents 5.4. 402.5 250.6 Interest-bearing net liabilities 535.2 771.2 Quarterly information on interest-bearing net liabilities is disclosed in the section on the Reconciliation with IFRS figures. Kemira aims at above-the-market revenue growth with an operative EBITDA margin of 15–18%. The gearing target is below 75%. The revolving credit facility agreement and some bilateral loan agreements contain a covenant according to which company gearing must be below 115%. The Board of Directors proposes a per-share dividend of EUR 0.68 for 2023 (0.62), corresponding to a dividend payout ratio of 52% (41%). Kemira's dividend policy aims at a competitive dividend that increases over time.  The Group's accounting policies Dividend distribution Any dividend proposed by the Board of Directors is not deducted from distributable equity until it has been approved by the Annual General Meeting. Interest-bearing liabilities and cash and cash equivalents The accounting policies for interest-bearing liabilities and cash and cash equivalents are described in Note 5.4. Financial assets and liabilities by measurement category. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 70 INTEREST-BEARING NET LIABILITIES CONNECTED IN CASH FLOW STATEMENTS EUR million Non-current interest-bearing liabilities including payments of non-current portion Current interest-bearing liabilities Interest-bearing liabilities total Cash and cash equivalents Interest-bearing net liabilities Net book value on Jan 1, 2023 875.5 146.3 1,021.8 250.6 771.2 Change in net liabilities with cash flows Proceeds from non-current liabilities (+) 0.2 0.2 0.2 Payments of non-current liabilities (-) — — — Payments of lease liabilities (-) -37.3 -37.3 -37.3 Proceeds from current liabilities (+) and payments (-) -50.7 -50.7 -50.7 Change in cash and cash equivalents 158.0 -158.0 Change in net liabilities without cash flows Increases in lease liabilities (+) 36.4 36.4 36.4 Effect on change in exchange gains and losses -4.4 -6.8 -11.1 -6.1 -5.0 Other changes without cash flows ¹⁾ -21.5 — -21.5 — -21.5 Net book value on Dec 31, 2023 849.0 88.8 937.8 402.5 535.2 1) Due to the Oil & Gas divestment EUR 24.1 million of lease liabilities have been reclassified as held-for-sale. Kemira has completed the divestment in February 2024. EUR million Non-current interest-bearing liabilities including payments of non-current portion Current interest-bearing liabilities Interest-bearing liabilities total Cash and cash equivalents Interest-bearing net liabilities Net book value on Jan 1, 2022 865.0 127.1 992.2 142.4 849.8 Change in net liabilities with cash flows Proceeds from non-current liabilities (+) 195.9 195.9 195.9 Payments of non-current liabilities (-) -202.8 -202.8 -202.8 Payments of lease liabilities (-) -35.1 -35.1 -35.1 Proceeds from current liabilities (+) and payments (-) 21.4 21.4 21.4 Change in cash and cash equivalents 105.9 -105.9 Change in net liabilities without cash flows Increases in lease liabilities (+) 44.5 44.5 44.5 Effect on change in exchange gains and losses 5.0 -2.5 2.5 2.3 0.2 Other changes without cash flows 2.9 0.2 3.2 — 3.2 Net book value on Dec 31, 2022 875.5 146.3 1,021.8 250.6 771.2 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 71 5.2 SHAREHOLDERS' EQUITY SHARE CAPITAL AND TREASURY SHARES EUR million Number of shares outstanding (1,000) Number of treasury shares (1,000) Number of shares (1,000) Book value of share capital Book value of treasury shares January 1, 2023 153,352 1,990 155,343 221.8 13.4 Treasury shares issued to the participants in the share incentive plan 2020-2022 254 -254 — — -1.7 Treasury shares issued to the Board of Directors 13 -13 — — -0.1 December 31, 2023 153,619 1,723 155,343 221.8 11.6 January 1, 2022 153,127 2,215 155,343 221.8 14.9 Treasury shares issued to the participants in the share incentive plan 2019-2021 221 -221 — — -1.5 Treasury shares issued to the Board of Directors 16 -16 — — -0.1 The shares returned by the participants from the share incentive plans -13 13 — — 0.1 December 31, 2022 153,352 1,990 155,343 221.8 13.4 Kemira Oyj has one class of shares. Each share entitles its holder to one vote at the Annual General Meeting. On December 31, 2023, the share capital was EUR 221.8 million and the number of shares was 155,342,557 including 1,722,725 treasury shares. Under the Articles of Association of Kemira Oyj, the company does not have a minimum or maximum share capital or a par value for a share. All issued shares have been fully paid. Kemira had possession of 1,722,725 (1,990,197) treasury shares on December 31, 2023. The average share price of the treasury shares was EUR 6.73, and they represented 1.1% (1.3%) of the share capital, and the aggregate number of votes conferred by all shares. The aggregate par value of the treasury shares is EUR 2.5 million (2.8). Share premium The share premium is a reserve accumulated through subscriptions entitled by the management stock option program of 2001. This reserve is based on the old Finnish Companies Act (734/1978), and the value of the reserve will no longer change. Fair value reserves The fair value reserve is a reserve accumulated based on other shares measured at fair value and hedge accounting. Other reserves Other reserves originate from local legal requirements. On December 31, 2023, other reserves were EUR 4.1 million (4.0). Unrestricted equity reserve The unrestricted equity reserve includes other equity-type investments and the subscription price of shares to the extent that they will not, based on a specific decision, be recognized in share capital. Exchange differences The foreign currency exchange differences arise from the translation of foreign subsidiaries' financial statements. Additionally, loans have been granted to some foreign subsidiaries, and the exchange differences of these have been included in foreign currency exchange differences.  The Group's accounting policies Treasury shares Purchases of own shares (treasury shares), including the related costs, are deducted directly from equity in the Consolidated Financial Statements. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 72 5.3. INTEREST-BEARING LIABILITIES MATURITY OF INTEREST-BEARING LIABILITIES 2023, EUR million 2024 2025 2026 2027 2028 2029- Book value, total Loans from financial institutions — 190.9 — 120.0 — — 310.9 Bonds 199.6 — — — 193.9 — 393.5 Lease liabilities 27.6 20.0 16.6 11.5 7.8 38.0 121.4 Other non-current liabilities 6.1 1.0 16.0 — — — 23.2 Other current liabilities 88.8 — — — — — 88.8 Total amortizations of interest- bearing liabilities 322.1 211.9 32.6 131.5 201.7 38.0 937,8 2022, EUR million 2023 2024 2025 2026 2027 2028- Book value, total Loans from financial institutions — — 192.4 — 120.0 — 312.4 Bonds — 199.9 — — — 191.2 391.0 Lease liabilities 30.9 24.6 17.9 13.8 8.7 53.0 148.9 Other non-current liabilities 22.4 0.8 — — — — 23.2 Other current liabilities 146.3 — — — — — 146.3 Total amortizations of interest- bearing liabilities 199.6 225.2 210.2 13.8 128.7 244.2 1,021.8 At year-end 2023, the Group's interest-bearing net liabilities were EUR 535.2 million (771.2). For more information, see Note 5.1. Capital structure. MATURITY OF NON-CURRENT INTEREST-BEARING LIABILITIES BY CURRENCY 2023 Book value, total Currency, EUR million 2024 2025 2026 2027 2028 2029- EUR 206.8 155.3 18.9 122.1 195.2 14.0 712.3 USD 12.4 52.4 10.4 8.3 5.9 19.4 108.7 GBP 0.9 0.5 0.2 0.0 — 1.7 3.3 Other 13.3 3.8 3.0 1.1 0.6 2.9 24.6 Total 233.3 211.9 32.6 131.5 201.7 38.0 849.0 2022 Book value, total Currency, EUR million 2023 2024 2025 2026 2027 2028- EUR 23.6 206.6 153.4 2.2 121.8 206.4 714.1 USD 15.8 12.4 52.9 9.4 6.3 24.3 121.1 GBP 0.7 0.8 0.6 0.3 0.1 10.1 12.7 Other 13.2 5.5 3.3 1.9 0.5 3.3 27.7 Total 53.4 225.2 210.2 13.8 128.7 244.2 875.5 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 73 5.4. FINANCIAL ASSETS AND LIABILITIES BY MEASUREMENT CATEGORY FINANCIAL ASSETS 2023 2022 EUR million Note Book values Fair values Book values Fair values Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Fair value through profit and loss 5.6. Derivatives not qualifying for hedge accounting 3.6 — 3.6 — 3.6 13.3 — 13.3 — 13.3 Fair value through other comprehensive income 5.6. Derivatives qualifying for hedge accounting Cash flow hedges ¹⁾ 15.9 — 15.9 — 15.9 81.7 — 81.7 — 81.7 Other shares 3.5. The shares of Pohjolan Voima Group 303.9 — — 303.9 303.9 380.6 — — 380.6 380.6 Other non-listed shares 1.4 — — 1.4 1.4 2.7 — — 2.7 2.7 Amortized cost Other non-current assets ²⁾ 6.3 — 6.3 — 6.3 6.6 — 6.6 — 6.6 Other current receivables ²⁾ 0.3 — 0.3 — 0.3 0.3 — 0.3 — 0.3 Trade receivables ²⁾ 4.2. 386.2 — 386.2 — 386.2 449.6 — 449.6 — 449.6 Cash and cash equivalents Cash in hand and at bank accounts 271.0 — 271.0 — 271.0 245.3 — 245.3 — 245.3 Deposits and money market investments ³⁾ 131.5 — 131.5 — 131.5 5.3 — 5.3 — 5.3 Assets classified as held-for-sale ⁴⁾ 3.7. 57.1 — 57.1 — 57.1 — — — — — Total financial assets 1,177.2 — 871.9 305.3 1,177.2 1,185.4 — 802.1 383.3 1,185.4 1) Includes derivative contracts of EUR 1.6 million (24.4) maturing after the year 2024. 2) In 2023, other non-current assets and other current receivables include expected credit losses of EUR 0.2 million (0.4) in accordance with the IFRS 9 standard. Trade receivables include expected credit losses of EUR 4.8 million (5.3). Trade receivables are disclosed in more detail in Note 4.2. Trade receivables and other receivables. 3) Deposits and money market investments comprise bank deposits and other liquid investments with a maximum original maturity of three months. 4) In 2023, trade receivables amounting EUR 54.8 million and cash and cash equivalents EUR 2.2 million were reclassified as held-for-sale assets. These assets are used by the Oil & Gas business. Kemira has completed the divestment in February 2024. See Note 3.7. for further details regarding the held-for-sale assets. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 74 FINANCIAL LIABILITIES 2023 2022 EUR million Note Book values Fair values Book values Fair values Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Fair value through profit and loss 5.6. Derivatives not qualifying for hedge accounting 4.1 — 4.1 — 4.1 2.3 — 2.3 — 2.3 Fair value through other comprehensive income 5.6. Derivatives qualifying for hedge accounting Cash flow hedges ¹⁾ 3.6 — 3.6 — 3.6 1.6 — 1.6 — 1.6 Amortized cost Interest-bearing liabilities 5.3. Non-current loans from financial institutions 311.3 — 312.7 — 312.7 312.4 — 312.2 — 312.2 Bonds 193.9 — 189.8 — 189.8 391.1 — 379.2 — 379.2 Current portion 199.6 — 200.2 — 200.2 — — — — — Non-current leasing liabilities 93.9 — 93.9 — 93.9 118.0 — 118.0 — 118.0 Current portion 27.6 — 27.6 — 27.6 30.9 — 30.9 — 30.9 Other non-current liabilities 16.7 — 16.8 — 16.8 16.7 — 16.6 — 16.6 Current portion 6.1 — 6.3 — 6.3 6.5 — 6.8 — 6.8 Current loans from financial institutions 88.8 — 88.7 — 88.7 146.3 — 146.1 — 146.1 Non-interest-bearing liabilities Other non-current liabilities 8.7 — 8.7 — 8.7 9.3 — 9.3 — 9.3 Other current liabilities 26.2 — 26.2 — 26.2 45.5 — 45.5 — 45.5 Trade payables 4.3. 226.7 — 226.7 — 226.7 292.8 — 292.8 — 292.8 Liabilities classified as held-for-sale ²⁾ 3.7. 45.6 — 45.6 — 45.6 0.4 — 0.4 — 0.4 Total financial liabilities 1,252.7 — 1,250.9 — 1,250.9 1,373.6 — 1,361.6 — 1,361.6 1) Includes derivative contracts of EUR -2.1 million (-0.0) maturing after the year 2024. 2) In 2023, lease liabilities amounting EUR 24.1 million and trade payables EUR 21.5 million were reclassified as held-for-sale assets. These liabilities are used by the Oil & Gas business. Kemira has completed the divestment in February 2024. In 2022, lease liabilities amounting EUR 0.4 million classified as assets held-for sale related to colorant business within the Pulp & Paper segment. See Note 3.7. for further details regarding the held-for-sale assets. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 75 There were no transfers between levels 1–3 during the financial year. Level 3 specification, financial assets EUR million 2023 2022 Net book value on Jan 1 383.3 260.0 Effect on other comprehensive income -76.7 123.2 Increases -0.3 — Decreases -1.0 — Net book value on Dec 31 305.4 383.3  The Group's accounting policies When a financial asset or financial liability is initially recognized on the trade date, it is measured at cost, which equals the fair value of the consideration given or received. Financial Assets The Group’s financial assets are classified for subsequent measurement as financial assets at fair value through profit or loss, at amortized cost and at fair value through other comprehensive income. Category Financial instrument Fair value through profit or loss Currency forward contracts, currency swaps, interest rate swaps, electricity derivative contracts and natural gas derivative contracts, certificates of deposit, and commercial papers Amortized cost Non-current loan receivables, cash at bank and in hand, bank deposits, trade receivables, and other receivables Fair value through other comprehensive income Other investments: shares, derivatives qualifying for hedge accounting (cash flow or fair value hedging) Financial assets at fair value through income statements All derivatives are recognized at fair value on the balance sheet. Fair value is the amount for which an asset could be exchanged or loans paid between knowledgeable, willing parties in an arm’s length transaction. These derivative contracts to which hedge accounting in accordance with IFRS 9 is not applied are classified as financial assets at fair value through profit or loss. In the balance sheet, these derivative contracts are shown under prepaid expenses and accrued income and accrued expenses and prepaid income. Any gains or losses arising from changes in fair value are recognized through profit or loss on the transaction date. Financial assets at amortized cost Financial assets at amortized cost include non-current receivables carried at amortized cost using the effective interest rate method and accounting for any impairment. Cash and cash equivalents Cash and cash equivalents consist of cash at bank and in hand, demand deposits and other short-term, highly liquid investments. Items classified as cash and cash equivalents have a maximum maturity of three months from the date of purchase. Credit facilities in use are included in current interest-bearing liabilities. Financial assets at fair value through other comprehensive income The accounting policy of Other shares is described in Notes 3.5. Other shares. The accounting treatment of change in the fair value of the derivatives qualifying for hedge accounting is presented in 5.6. Derivatives. Impairment of financial assets The Group assesses any impairment losses on its financial instruments on each balance sheet date. An impairment of a financial asset is recognized in accordance with the requirements of the expected credit loss model of the IFRS 9 standard. For items measured at an amortized cost, the amount of the impairment loss equals the difference between the asset’s carrying amount and the present value of estimated future cash flows from the receivable. This is discounted at the financial asset’s original effective interest rate. For items measured at fair value, the fair value determines the amount of impairment. Impairment charges are recognized in the income statement. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 76 The Group sells certain trade receivables to finance companies within the framework of limits stipulated in the agreement. The credit risk associated with these sold receivables and contractual rights to the financial assets in question are transferred from the Group on the selling date. The related expenses are recognized in the financial expenses. Financial liabilities Financial liabilities are classified as financial liabilities accounted at fair value through profit or loss, at amortized cost and at fair value through other comprehensive income. Financial liabilities at fair value through profit or loss include derivatives to which hedge accounting is not applied, whereas derivatives which are qualified for hedge accounting are booked at fair value through other comprehensive income. Other financial liabilities are initially recognized in the balance sheet at the initial value of received net assets with direct costs deducted. Later, these financial liabilities are measured at amortized cost, and the difference between the received net assets and amortizations is recognized as an interest cost over the loan term. Changes in the fair value of loans under fair value hedge accounting are booked in the income statement together with the changes in the fair value of derivatives under fair value hedge accounting. If the terms of a loan measured at amortized cost are modified and the loan is not derecognized, the gain or loss of the modification is booked in the income statement at the point of modification and amortized over the life of the modified loan. Profit or loss is equal to the difference between the present value of the cash flows under the original and modified terms discounted at the original effective interest rate. Category Financial instrument Financial liabilities at fair value through profit or loss Currency forward contracts and currency swaps, interest rate swaps, electricity derivative contracts, and natural gas derivative contracts Amortized cost Current and non-current loans, pension loans, bonds, lease liabilities, and trade payables Financial liabilities at fair value through other comprehensive income Derivatives qualifying for hedge accounting (cash flow hedging) The following levels are used to measure fair value: Level 1: Fair value is determined based on quoted market prices. Level 2: Fair value is determined with valuation techniques. Fair value refers either to the value that is observable from the market value of elements of the financial instrument or the market value of corresponding financial instruments, or to the value that is observable by using commonly accepted valuation models and techniques if the market value can be reliably measured with them. Level 3: Fair value is determined by using valuation techniques, which use inputs that have a significant effect on the recorded fair value and the inputs are not based on observable market data. Level 3 mainly includes the shares of Pohjolan Voima Group. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 77 5.5 MANAGEMENT OF FINANCIAL RISKS Kemira Group Treasury's objective is to ensure sufficient funding in the most cost efficient way, and to manage financial risks. Approved by the Board of Directors, treasury policy defines the principles of treasury management. The Board of Directors approves the annual Treasury plan and the maximum permissible financial risk levels. Financial risk management aims to protect the Company from unfavorable changes in financial markets, thereby contributing to safeguarding the Company’s profit performance and shareholders’ equity and to ensure sufficient sources of finance. Management of financial risks is centralized in the Group Treasury, which uses for hedging purposes derivative instruments whose market values and risks can be monitored continuously and reliably. Foreign exchange risk Foreign currency transaction risk arises from currency flows, assets, and liabilities denominated in currencies other than the domestic currency. Transaction risks arise from cash flows and balance sheet items where changes in exchange rates will have an impact on earnings and cash flows. Translation risk arises when the currency denominated income statement and balance sheet items of group companies located outside the euro area are consolidated into euro. The transaction risk is hedged mainly using foreign currency forwards. The Group's most significant transaction currency risks arise from the US dollar, the Chinese renminbi, the Canadian dollar and Swedish krona. At the end of the year, the US dollar denominated exchange rate risk against EUR had an equivalent value of approximately EUR 132 million (54), the average hedging rate and hedging ratio being 1.09 and 56% (68%), respectively. The Chinese renminbi denominated exchange rate risk was approximately EUR 115 million (86), the average hedging rate and hedging ratio being 7.77 and 69% (68%), respectively. The Canadian dollar denominated exchange rate risk was approximately EUR 56 million (56), the average hedging rate and hedging ratio being 1.47 and 56% (52%), respectively. The denominated exchange rate risk of the Swedish krona against EUR had an equivalent value of approximately EUR 35 million (36), the average hedging rate and hedging ratio being 11.55 and 73% (64%), respectively. In addition, Kemira is exposed to smaller transaction risks against EUR mainly in relation to Korean won, the Danish krona, Polish zloty and the Norwegian krona and against USD mainly in relation to the Canadian dollar and the Brazilian real with the annual exposure in those currencies being approximately EUR 152 million. 2023 2022 Transaction exposure, the most significant currencies, EUR million USD against EUR CNY against EUR CAD against EUR SEK against EUR USD against EUR CNY against EUR CAD against EUR SEK against EUR Operative cash flow forecast, net ¹⁾ 131,8 -115,1 55,5 -35,3 54,2 -86,4 55,7 -35,8 Loans, net 390,8 57,6 0,0 -9,3 411,9 59,9 13,6 -15,8 Derivatives, operative cash flow hedging, net -74,5 82,8 -39,9 25,3 -31,0 63,6 -29,5 26,2 Derivatives, hedging of loans, net -180,1 -57,6 0,0 9,9 -170,6 -59,2 -13,5 16,6 Total 268,0 -32,3 15,6 -9,4 264,4 -22,1 26,3 -8,8 1) Based on a 12-month foreign currency operative cash flow forecast. At the end of 2023, the foreign currency operative cash flow forecast for 2024 was EUR 542 million of which 61% was hedged (58%). The hedge ratio is monitored daily. A minimum of 40% and a maximum of 100% of the forecast flow must always be hedged. A 10 percent strengthening of the euro against the Swedish krona, based on the exchange rates as of December 31, 2023 and without hedging, would increase EBITDA approximately EUR 4 million, and a 10 percent strengthening of the euro against the Chinese renminbi without hedging would increase EBITDA approximately EUR 12 million. Whereas, a 10 percent strengthening of the euro against the Canadian dollar and the US dollar without hedging would cause a EUR 6 and 13 million negative impact on EBITDA, respectively. A corresponding decrease in the exchange rates would have approximately an equal opposite impact. On the balance sheet date, the market value of currency derivatives included in cash flow hedge accounting was EUR 4.7 million (0.3). Cash flow hedge accounting deals have been done to hedge highly probable currency flows. In 2023, no ineffectiveness in derivatives under hedge accounting was recognized in the Income statement (-). The most significant translation risk currencies are the US dollar, the Canadian dollar, the Swedish krona, the Polish zloty, the Brazilian real and the Chinese renminbi. Kemira's main equity items denominated in foreign currencies are in the Canadian dollar, the Swedish krona and US dollar. The objective is to hedge the balance sheet risk by maintaining a balance between foreign currency denominated liabilities and assets, currency by currency. In hedging the net investment in its units abroad, Kemira monitors the equity ratio. Long-term CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 78 loans and currency derivatives can be used for hedging net investments in foreign subsidiaries. These hedges do not apply to hedge accounting. Loans in US dollars have been granted to some foreign subsidiaries and currency differences have been included in foreign currency translation differences. Interest rate risk Kemira is exposed to interest rate risks through interest-bearing loans and derivatives. Movements in interest rates creates re-pricing and price risks generating fluctuation in cash flows and fair values of loans and derivatives . A total of 77% (83%) of the Group’s entire net debt portfolio including lease liabilities was fixed at the end of 2023. The net financing cost of the Group was 5.6% (4.2%). The net financing cost is attained by dividing yearly net interest and other financing expenses, excluding exchange rate differences and dividends by the average interest bearing net debt figure for the corresponding period. The most significant impact on the net financing cost arises from variation in the interest rate levels of the euro, the US dollar and the Chinese renminbi. In accordance with treasury policy, the Group’s interest rate risk is measured with the duration which describes the average repricing moment of the loan portfolio excluding lease liabilities. The duration must be in the range of 6–60 months. The Kemira Group Treasury manages duration by borrowing with fixed and floating rate loans in addition to the interest rate derivatives. On the balance sheet date, the Group had no outstanding interest rate derivatives. The duration of the Group’s interest-bearing loan portfolio excluding lease liabilities was 16 months (22) at the end of 2023. On the balance sheet date, the average interest rate of the loan portfolio was approximately 2.8% (2.4%). During 2024, Kemira will reprice 30% (21%) of the Group's net debt portfolio as shown in the table below. 2023 1–5 years Time to interest rate fixing, EUR million <1 year > 5 years Total Floating net liabilities 123.8 — — 123.8 Fixed net liabilities ¹⁾ — 290.0 — 290.0 Total 123.8 290.0 — 413.8 2022 1–5 years Time to interest rate fixing, EUR million <1 year > 5 years Total Floating net liabilities 132.3 — — 132.3 Fixed net liabilities ¹⁾ — 290.0 200.0 490.0 Total 132.3 290.0 200.0 622.3 1) Excluding lease liabilities. If interest rates rose by one percentage point on January 1, 2024, the resulting net interest expenses before taxes resulting from loans, cash, deposits, and money market investments over the next 12 months would decrease by approximately EUR 0.5 million (-0.3). Consequently, a decrease of one percentage point would increase net interest expenses by EUR 0.5 million. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 79 Commodity price risk Kemira Group is exposed to commodity market price variation, mainly from the price of electricity. Kemira Group takes hedging measures with respect to its commodity purchases in order to even out its raw material costs. In line with its hedging policy, the Group hedges its existing sales agreements in such a way that the hedges cover the commitments made. Hedging policy aims to minimize the cash flow risk of electricity and natural gas purchases. The price of electricity varies greatly according to the market situation. The company primarily uses electricity derivatives as hedging instruments. Regional price risks in Finland and Sweden are hedged. The outstanding electricity derivatives are treated in accordance with cash flow hedge accounting. The forecast for physical deliveries of the underlying assets, or purchases, are not recorded until the delivery period. A +/- 10% change in the market price of electricity hedging contracts outstanding at year end would impact the valuation of these contracts EUR +/- 3.6 million (+/- 11.9). This impact would be in equity. In addition to the electricity derivatives, the Group manages the price risk of electricity by entering into long-term electricity sourcing agreements. The Group also has shares of 5% of Pohjolan Voima Oy (PVO) and 1% share of Teollisuuden Voima Oy. More information on the share ownership can be found in Note 3.5. Natural gas price risk is hedged with derivative contracts. The outstanding natural gas derivatives are treated in accordance with cash flow hedge accounting. A +/- 10% change in the market price of natural gas hedging contracts outstanding at year end would impact the valuation of these contracts EUR +/- 0.0 million (-). This impact would be in equity. Credit risk The Group is exposed to credit risks through commercial accounts receivables, as bank account balances, deposits, short-term investments, and derivatives. The Group’s treasury policy defines the credit rating requirements for the counterparties of investment activities and derivative agreements as well as the related investment policy. The Group seeks to minimize its counterparty risk by dealing solely with counterparties that are financial institutions with a solid credit rating, as well as by spreading agreements among them. Counterparty risk is being monitored on a regular basis. The counterparty risk in treasury operations is due to the fact that a contractual party to a financing transaction is not necessarily able to fulfill its contractual obligations. Risks are mainly related to investment activities and the counterparty risks associated with derivative contracts. The Group Treasury approves the new banking relationships of subsidiaries. Financial institution counterparties, used by the Group Treasury, have a credit rating of at least an investment grade based on Standard & Poor’s credit rating information. The maximum risk assignable to the Group’s financial institution counterparties on the balance sheet date amounted to EUR 414.8 million (342.5). Kemira monitors its counterparty risk on a monthly basis by defining the maximum risk associated with each counterparty based on the market value of receivables. Kemira has defined an approved limit for each financial institution. No material changes related to the Group's credit risk were associated with financing transactions in the year 2023 and these transactions did not result in credit losses during the financial year. Kemira has a group-wide credit policy related to commercial activities. According to the policy, each customer has a predefined risk category and credit limit. These are constantly monitored. Based on the customer evaluation, Kemira decides the applicable payment terms to minimize credit risks. Pre-approved payment terms have been defined at the group level. If necessary, securities and documentary credit, such as letters of credit, are applied. The Group does not have any significant credit risk concentrations due to its extensive customer base across the world. The credit losses related to trade receivables are described in Note 4.2. In the USA, Kemira has an accounts receivable purchase facility worth USD 75 million, enabling Group companies in the USA to sell certain account receivables to the counterparty. The credit risk of the accounts receivables is transferred to the financial institutions and 95.1% of the receivables transferred are derecognized from the balance sheet. The amount of outstanding receivables transferred, which also reflects the fair value of the receivables before the transfer was EUR 30.5 million (60.3) on December 31, 2023. The amounts recognized in the balance sheet are EUR 4.6 million (4.3) in assets and EUR 0.9 million (1.4) in liabilities. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 80 Liquidity and refinancing risks Kemira's liquidity is secured with cash and cash equivalents, account overdrafts and a revolving credit facility. At the end of 2023, the Group’s cash and cash equivalents stood at EUR 402.5 million (250.6), of which cash in bank accounts accounted for EUR 271.0 million (245.3) and bank deposits EUR 131.5 million (5.3). In addition, the Group has a revolving credit facility of EUR 400 million linked to sustainability targets which will mature on April 17, 2026. At the turn of the year 2023/2024, the revolving credit facility was undrawn. The Group has a EUR 600 million domestic commercial paper program enabling it to issue commercial papers with a maximum maturity of one year. At the end of 2023, the Group did not have commercial papers outstanding on the market (30). Kemira manages its refinancing risk with a diversified loan portfolio. Long-term financing consists of bonds and bilateral loan agreements with several financial institutions. In addition, the Group had leasing liabilities in accordance with the IFRS 16 standard of EUR 121.4 million (148.9) at the end of the year. According to Group treasury policy, the Group must have committed credit facilities to cover planned funding needs, the current portion of long term debt, commercial paper borrowings, and other uncommitted short-term loans in the next 12 months. The average maturity of outstanding loans excluding lease liabilities may temporarily be under the 3-year minimum target. The average maturity of debt excluding lease liabilities at the end of 2023 was 2.5 years (3.2). LOAN REPAYMENTS 2023 Total drawn Loan type, EUR million ¹⁾ Undrawn 2024 2025 2026 2027 2028 2029- Loans from financial institutions — — 191.2 — 120.0 — — 311.2 Bonds — 200.0 — — — 200.0 — 400.0 Revolving credit facility 400.0 — — — — — — — Lease liabilities — 33.9 26.1 19.8 13.9 9.5 37.1 140.2 Commercial paper program 600.0 — — — — — — — Other interest-bearing non-current liabilities — 6.1 1.0 16.0 — — — 23.2 Other interest-bearing current liabilities — 88.8 — — — — — 88.8 Total interest-bearing liabilities 1,000.0 328.8 218.3 35.8 133.9 209.5 37.1 963.4 2022 Total drawn Loan type, EUR million ¹⁾ Undrawn 2023 2024 2025 2026 2027 2028- Loans from financial institutions — — — 192.8 — 120.0 — 312.8 Bonds — — 200.0 — — — 200.0 400.0 Revolving credit facility 400.0 — — — — — — — Lease liabilities — 39.4 30.7 22.3 16.9 11.4 78.2 198.8 Commercial paper program 570.0 30.0 — — — — — 30.0 Other interest-bearing non-current liabilities — 15.9 0.8 — — — — 16.7 Other interest-bearing current liabilities — 123.0 — — — — — 123.0 Total interest-bearing liabilities 970.0 208.3 231.4 215.1 16.9 131.4 278.2 1,081.3 1) Loan structure presented by type and maturity using contractual undiscounted payments. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 81 5.6 DERIVATIVE INSTRUMENTS Nominal values, EUR million Maturity structure 2023 2022 2024 2025 2026 2027 2028 Total Total Currency derivatives Forward contracts 789.6 — — — — 789.6 619.9 Inflow 440.2 — — — — 440.2 350.5 of which cash flow hedges 48.7 — — — — 48.7 32.4 Outflow 349.3 — — — — 349.3 269.4 of which cash flow hedges 217.1 — — — — 217.1 39.2 Commodity derivatives Commodity forward contracts (GWh) 372.8 182.7 67.9 14.5 — 637.8 1,129.3 of which cash flow hedges 372.8 182.7 67.9 14.5 — 637.8 1,129.3 The nominal values of the financial instruments do not necessarily correspond to the actual cash flows between the counterparties, and therefore individual items do not give a fair view of the Group's risk position. Fair values, EUR million 2023 2022 Positive Negative Net Positive Negative Net Currency derivatives Forward contracts 8.4 -4.2 4.2 15.0 -3.6 11.3 of which cash flow hedges 4.8 -0.1 4.7 1.7 -1.4 0.3 Commodity derivatives Commodity forward contracts ¹⁾ 11.2 -3.5 7.7 80.0 -0.2 79.8 of which cash flow hedges 11.2 -3.5 7.7 80.0 -0.2 79.8 1) Includes fair value of electricity forward contracts of EUR 1.6 million (24.4) and EUR -2.1 million (-0.0) maturing after the year 2024. Commodity derivatives are mainly electricity derivatives. The Group has ISDA or EFET Master netting agreements with the counterparties of derivative contracts. They allow the net settlement of outstanding market value within the scope of the agreement in case of non-payment defined in the agreement. At the end of the reporting period, counterparty risk according to master netting agreements was EUR 15.4 million (91.9) to Kemira and EUR 3.5 million (0.8) to counterparties. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 82  The Group's accounting policies Derivatives The fair values of currency, interest rate, and commodity derivatives, as well as publicly traded shares are based on prices quoted in active markets on the balance sheet date. The value of other financial instruments measured at fair value is determined on the basis of valuation models using information available in the financial market. All the derivatives are measured at their fair values on the balance sheet date. Changes in the value of forward contracts are calculated by measuring the contracts against the forward exchange rates on the balance sheet date and comparing them with the counter values calculated through the forward exchange rates on the date of entry into the forward contracts. The fair value of interest rate derivatives is determined using the market value of similar instruments on the balance sheet date. Other derivatives are measured at the market price on the balance sheet date. Derivative assets maturing during the following 12 months are presented in the balance sheet as part of line item Trade receivables and other receivables whereas derivatives with a maturity of over 12 months are posted to Other financial assets under Non-current assets . Derivative liabilities maturing under 12 months are presented in the balance sheet as part of line item Trade payables and other liabilities where as fair value of derivatives with maturity after 12 months are posted under Non-current liabilities to Other financial liabilities. Hedge accounting Hedge accounting is applied according to IFRS 9. This refers to a method of accounting aimed at allocating one or more hedging instruments in such a way that their fair value offsets, in full or in part, the changes in the fair value or cash flows of the hedged item. Hedged items must be highly probable. The Group applies hedge accounting for hedging interest rate risk, currency risk, commodity risk, and fair value if interest rate swaps, electricity derivatives and foreign exchange derivatives meet hedge accounting criteria. Hedge effectiveness is monitored as required by IFRS 9. Effectiveness refers to the capacity of a hedging instrument to offset changes in the fair value of the hedged item or cash flows from a hedged transaction, which are due to the realization of the risk being hedged. A hedging relationship is considered to be highly effective when the change in the fair value of the hedging instrument offsets changes in the cash flows attributable to the hedged items. Hedge effectiveness is assessed prospectively. Hedge effectiveness testing is repeated on each balance sheet date. Hedge accounting is discontinued when the criteria for hedge accounting are no longer fulfilled. Gains or losses recognized in other comprehensive income and presented under equity are derecognized and transferred immediately in the income statement, if the hedged item is sold or falls due. However, gains or losses arising from changes in the fair value of those derivatives not fulfilling the hedge accounting criteria are recognized directly in the income statement. At the inception of a hedge, the Group documents the existence of the economic relationship of the hedged item and hedging instrument, including the identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged, the objectives of risk management, and the strategy for undertaking hedging, as well as the description of how hedge effectiveness is assessed. Cash flow hedging Cash flow hedging is used to hedge against variability in cash flows attributable to a particular risk associated with a recognized asset or liability in the balance sheet or a highly probable forecast transaction. Currency, interest rate, and commodity derivatives are used as hedging instruments in cash flow hedging. Cash flow hedge accounting, specified in IFRS 9, is applied by the Group to selected hedging items only. Changes in the fair value of derivative instruments associated with cash flow hedge are recognized in other comprehensive income (including the tax effect) and presented under equity, providing that they fulfill the criteria set for hedge accounting and are based on effective hedging. The ineffective portion of the gain or loss on the hedging instrument is recognized under financial items in the income statement. Derivatives not fulfilling the hedge accounting criteria are recognized in financial items through profit or loss. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 83 6. Group structure 6.1 RELATED PARTIES Parties are considered to be related if one party has the ability to control or exercise significant influence on the other party, or if the parties exercise joint control in making financial and operating decisions. The Group's related parties include the parent company, subsidiaries, associates, joint-ventures, and the Pension Fund Neliapila. Related parties also include the members of the Board of Directors and the Group's Management Board, the CEO and his Deputy, and their immediate family members. EMPLOYEE BENEFITS PAID TO THE CEO, THE INTERIM CEO, CEO'S DEPUTY AND MEMBERS OF THE MANAGEMENT BOARD EUR Salaries and other benefits Bonuses Share- based payments ¹⁾ 2023 Total 2022 Total Interim CEO Petri Castrén (since 18 July 2023) ²⁾ 228,722 — — 228,722 — CEO Jari Rosendal (until 11 July 2023) ³⁾ 560,532 637,720 3,176,802 4,375,054 1,453,573 CEO's Deputy Jukka Hakkila ⁴⁾ 197,416 100,114 311,285 608,815 424,703 Other members of Management Board ⁵⁾ ⁶⁾ 2,077,802 833,528 1,928,214 4,839,544 3,622,495 Total 2,835,749 1,571,362 5,416,301 9,823,412 5,500,771 1) Includes share and cash portions. Share-based incentive plans for the management and key personnel are disclosed in Note 2.3. Share-based payments. 2) Includes benefits related to Petri Castrén since 18 July 2023. 3) The CEO Jari Rosendal left on sick leave on July 11, 2023 and he died after a short illness on July 31, 2023. The final salary and ongoing incentive plans 2020-2022, 2021-2023 and 2022-2024 were paid in cash in accordance with the terms of the plans to his death estate. These are included in the figures disclosed in 2023. 4) Jukka Hakkila acted as CEO's Deputy from July 11 to July 17, 2023. No remuneration was paid to the CEO's Deputy based on CEO substitution. 5) Other members of the Management Board on December 31, 2023 are EVP Strategy Linus Hildebrandt, CTO Matthew R. Pixton, EVP Operational Excellence Esa-Matti Puputti, President Segment Industry & Water Tuija Pohjolainen-Hiltunen, President Segment Pulp & Paper Antti Salminen and EVP Human Resources Eeva Salonen. Other members of the Management Board who are employed by a Finnish Kemira company do not have any supplementary pension arrangements in addition to their statutory pensions. The members of the Management Board who are employed by a foreign Kemira company participate in the pension systems based on statutory pension arrangements and market practices. The Kemira policy is that all new supplementary pension arrangements are defined contribution plans. 6) Includes benefits related to Petri Castrén until 17 July 2023. Employment terms and conditions of the Interim CEO Remuneration of the Interim CEO comprises a monthly salary including a car benefit and a mobile phone benefit and performance-based incentives. The performance-based incentives consist of an annual short-term bonus plan and a long-term share incentive plan. The annual short-term bonus plan is based on terms approved by the Board of Directors and the maximum bonus is 80% of the annual base salary. The long-term share incentive plan is based on the terms of the plan. The maximum reward is based on his main position as CFO and it is determined as a number of shares and a cash portion intended to cover taxes and the tax- related costs arising from the reward. The Interim CEO belongs to the Finnish Employees’ Pension Act (TyEL) scheme, which provides pension security based on the years of service and earnings as stipulated by law. No supplementary pension has been offered to the Interim CEO. The mutual termination notice period is 6 months. The Interim CEO is entitled to a severance pay of 6 months’ salary in addition to the salary earned during the notice period, in case the company terminates his service. The Board of Directors' emoluments On March 22, 2023, the Annual General Meeting decided that the Board of Directors' annual fee shall be paid as a combination of the company’s shares and cash in such a manner that 40% of the annual fee is paid with Kemira shares owned by the company or, if this is not possible, then with Kemira shares acquired from the securities market, and 60% is paid in cash. On May 10 and 19, 2023 the 13,097 shares owned by the company were distributed to the members of the Board of Directors. There are no special terms or conditions associated with owning the shares received as the annual fee. The members of the Board of Directors are not eligible for any of Kemira Oyj's short-term bonus plans, long-term share incentive plans or supplementary pension plans. The meeting fees are paid in cash and travel expenses are paid according to Kemira's travel policy. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 84 MEMBERS OF THE BOARD OF DIRECTORS Number of shares Share value, EUR Cash compensation, EUR ⁵⁾ 2023 Total, EUR 2022 Total, EUR Matti Kähkönen, Chair 3,019 47,644 80,556 128,200 119,600 Annika Paasikivi, Vice Chair 1,714 27,049 49,551 76,600 71,600 Wolfgang Büchele (until March 22, 2023) — — 5,400 5,400 59,600 Shirley Cunningham (until March 22, 2023) — — — — 62,600 Tina Sejersgård Fanø (since March 24, 2022) 1,330 20,989 43,011 64,000 54,200 Werner Fuhrmann 1,330 20,989 45,411 66,400 59,600 Timo Lappalainen 1,714 27,049 52,551 79,600 77,600 Fernanda Lopes Larsen (since March 22, 2023) 1,330 20,431 43,569 64,000 — Kristian Pullola 1,330 20,989 41,811 62,800 59,000 Jari Paasikivi, Chair (until March 24, 2022) — — — — 3,600 Mikael Staffas (since March 22, 2023) 1,330 20,989 38,211 59,200 — Total 13,097 206,132 400,068 606,200 567,400 5) Includes both annual fees and meeting fees. TRANSACTIONS CARRIED OUT WITH RELATED PARTIES EUR million 2023 2022 Revenue Associated companies 0.0 0.1 Leases, purchases of goods and services Associated companies 31.6 25.3 Pension Fund Neliapila 0.8 0.7 Total 32.4 25.9 Receivables Associated companies 5.7 0.0 Liabilities Associated companies 7.2 4.4 Pension Fund Neliapila 0.7 1.4 Real estate owned by Pension Fund Neliapila is leased to the Group. Commitments for these real estate leases are treated in accordance with IFRS 16 Leases. Related parties include Pension Fund Neliapila, which is a separate legal entity. Neliapila manages Kemira's voluntarily organized additional pension fund. It also manages part of the pension assets of the Group's personnel in Finland. The assets include Kemira Oyj's shares representing 0.07% of the company's outstanding shares. Supplementary benefit in Neliapila and surplus return are disclosed in more detail in Note 4.5. Defined benefit pension plans and employee benefits. The amount of contingent liabilities on behalf of the associates are presented in Note 7.1. Commitments and contingent liabilities. There were no loans granted to key management personnel at the end of 2023 or 2022, nor were there contingency items or commitments on behalf of key management personnel. Persons close to key management personnel do not have any significant business relationship with the Group. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 85 6.2 THE GROUP'S SUBSIDIARIES AND INVESTMENTS IN ASSOCIATES SUBSIDIARIES City Country Kemira Group's holding, % Kemira Oyj's holding, % Non- controlling interest's holding, % Kemira Oyj (parent company) Helsinki Finland Aliada Quimica de Portugal Lda. Estarreja Portugal 50.1 0.0 49.9 AS Kemivesi Lehmja Küla Estonia 100.0 100.0 0.0 Corporación Kemira Chemicals de Venezuela, C.A. Caracas Venezuela 100.0 0.0 0.0 Industry Park i Helsingborg Förvaltning AB Helsingborg Sweden 100.0 0.0 0.0 JSC "Kemira HIM" St. Petersburg Russia 100.0 0.0 0.0 Kemifloc a.s. Přerov Czech Republic 51.0 0.0 49.0 Kemifloc Slovakia s.r.o. Prešov Slovakia 51.0 0.0 49.0 Kemipol Sp. z.o.o. Police Poland 51.0 0.0 49.0 Kemira (Asia) Co., Ltd. Shanghai China 100.0 0.0 0.0 Kemira (Jining) Environmental Engineering Co., Ltd. Jining China 100.0 0.0 0.0 Kemira (Thailand) Co., Ltd. Bangkok Thailand 100.0 0.0 0.0 Kemira (Vietnam) Company Limited Long Thanh Vietnam 100.0 0.0 0.0 Kemira Argentina S.A. Buenos Aires Argentina 100.0 15.8 0.0 Kemira Australia Pty Ltd Hallam Australia 100.0 0.0 0.0 Kemira Cell Sp. z.o.o. Ostroleka Poland 55.0 55.0 45.0 Kemira Chemicals (Nanjing) Co., Ltd. Nanjing China 100.0 100.0 0.0 Kemira Chemicals (Shanghai) Co., Ltd. Shanghai China 100.0 100.0 0.0 Kemira Chemicals (UK) Ltd. Bradford United Kingdom 100.0 100.0 0.0 Kemira Chemicals (Yanzhou) Co., Ltd. Yanzhou City China 100.0 100.0 0.0 City Country Kemira Group's holding, % Kemira Oyj's holding, % Non- controlling interest's holding, % Kemira Chemicals AS Gamle Fredrikstad Norway 100.0 0.0 0.0 Kemira Chemicals Brasil Ltda. São Paulo Brazil 100.0 99.9 0.0 Kemira Chemicals Canada Inc. St. Catharines Canada 100.0 100.0 0.0 Kemira Chemicals Germany GmbH Frankfurt am Main Germany 100.0 0.0 0.0 Kemira Chemicals Korea Corporation Gunsan-City South Korea 100.0 100.0 0.0 Kemira Chemicals NV Aartselaar Belgium 100.0 0.0 0.0 Kemira Chemicals Oy Helsinki Finland 100.0 0.0 0.0 Kemira Chemicals Pte. Ltd. Singapore Singapore 100.0 0.0 0.0 Kemira Chemicals, Inc. Atlanta, GA United States 100.0 60.8 0.0 Kemira Chemie GesmbH Krems Austria 100.0 100.0 0.0 Kemira Chile Comercial Limitada Santiago Chile 100.0 99.0 0.0 Kemira Chimie S.A.S.U. Strasbourg France 100.0 0.0 0.0 Kemira Europe Oy Helsinki Finland 100.0 100.0 0.0 Kemira Gdańsk Sp. z o.o. Gdańsk Poland 100.0 0.0 0.0 Kemira Germany GmbH Frankfurt am Main Germany 100.0 100.0 0.0 Kemira Hong Kong Company Limited Hong Kong China 100.0 100.0 0.0 Kemira Ibérica S.A. Barcelona Spain 100.0 0.0 0.0 Kemira International Finance B.V. Rotterdam Netherlands 100.0 100.0 0.0 Kemira Italy S.p.A. San Giorgio di Nogaro Italy 100.0 0.0 0.0 Kemira Japan Co., Ltd. Tokyo Japan 100.0 0.0 0.0 Kemira Kemi AB Helsingborg Sweden 100.0 0.0 0.0 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 86 City Country Kemira Group's holding, % Kemira Oyj's holding, % Non- controlling interest's holding, % Kemira Kopparverket KB Helsingborg Sweden 100.0 0.0 0.0 Kemira KTM d.o.o. Ljubljana Slovenia 100.0 100.0 0.0 Kemira Research Center Shanghai Co., Ltd. Shanghai China 100.0 100.0 0.0 Kemira Rotterdam B.V. Rotterdam Netherlands 100.0 0.0 0.0 Kemira South Africa (Pty) Ltd. Weltevreden park South Africa 100.0 0.0 0.0 Kemira Świecie Sp. z.o.o. Swiecie Poland 100.0 100.0 0.0 Kemira Taiwan Corporation Taipei Taiwan 100.0 0.0 0.0 Kemira TC Wanfeng Chemicals (Yanzhou) Co., Ltd. Yanzhou City China 80.0 0.0 20.0 Kemira Uruguay S.A. Fray Bentos Uruguay 100.0 0.0 0.0 Kemira Water Danmark A/S Copenhagen Denmark 100.0 100.0 0.0 Kemira Water Solutions Canada Inc. Varennes Canada 100.0 0.0 0.0 Kemira Water Solutions, Inc. Atlanta, GA United States 100.0 0.0 0.0 Kemwater ProChemie s.r.o. Bradlec Czech Republic 95.1 0.0 4.9 PT Kemira Chemicals Indonesia Pasuruan Indonesia 99.8 99.8 0.2 PT Kemira Indonesia Surabaya Indonesia 100.0 76.2 0.0 SimAnalytics Oy Helsinki Finland 100.0 100.0 0.0 ASSOCIATES City Country Kemira Group's holding, % Kemira Oyj's holding, % Honkalahden Teollisuuslaituri Oy Lappeenranta Finland 50.0 0.0 Kemira Yongsan Chemicals Co., Ltd ¹⁾ Seoul South Korea 35.0 0.0 1) This associate produces dry polyacrylamide and cationic monomer, which are used for retention and drainage in packaging and paper production, as well as in wastewater treatment and in sludge dewatering. INVESTMENTS IN ASSOCIATES EUR million 2023 2022 Net book value on Jan 1 5.1 4.8 Additions 0.0 0.0 Decreases 0.0 0.0 Share of the profit/loss for the period 0.1 0.3 Exchange rate differences -0.3 0.0 Net book value on Dec 31 4.8 5.1 A summary of the associates' financial information is presented in the following table. The presented figures equal the figures in the financial statements of the each associate, not the portion of Kemira Group. EUR million 2023 2022 Assets 52.3 59.0 Liabilities 38.6 44.8 Revenue 33.4 25.3 Profit (+) / loss (-) for the period 0.6 0.8 Related party transactions carried out with associates are disclosed in Note 6.1. Related parties. NON-CONTROLLING INTERESTS EUR million 2023 2022 Net book value on Jan 1 14.7 13.9 Dividends -8.3 -6.9 Share of the profit for the period 12.2 8.0 Exchange rate differences 0.8 -0.3 Net book value on Dec 31 19.4 14.7 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 87 CHANGES IN THE GROUP STRUCTURE New subsidiaries acquired and established • Kemira acquired the remaining 90% share of SimAnalytics Oy on January 24, 2023. • Kemira established a new company Kemira Chemicals Pte. Ltd on February 8, 2023 to Singapore. • Kemira established a new company KEMIRA (MALAYSIA) SDN.BHD on January 1, 2023 to Malaysia. Changes in the holdings on group companies with the Group • Kemira Water Solutions Brasil and Kemwater Brasil Ltda merged with and into Kemira Chemicals Brasil Ltda on June 30, 2023. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 88 7. Off-balance sheet items 7.1 COMMITMENTS AND CONTINGENT LIABILITIES COMMITMENTS EUR million 2023 2022 Guarantees On behalf of own commitments 109.5 108.4 On behalf of associates 11.7 12.5 On behalf of others 2.7 2.5 Other obligations On behalf of own commitments 0.7 0.7 On behalf of others 0.0 16.3 The most significant off-balance sheet investments commitments On December 31, 2023, major amounts of contractual commitments for the acquisition of property, plant, and equipment were EUR 6.0 million (42.8) for plant investments. In addition, the Group has a lease commitment related to the R&D Center to be constructed in Finland, with a value of EUR 46.5 million. Litigation While the Group is involved in some legal proceedings, such as litigations, arbitrations, administrative and tax proceedings incidental to its global operations, the Group does not expect that the outcome of any of these legal proceedings will have a materially adverse effect upon its consolidated results or financial position.  The Group's accounting policies Contingent liabilities A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed by the occurrence of uncertain future events not wholly within the control of the Group, or concerns a present obligation which will most probably not require an outflow of resources embodying economic benefits to settle the obligation; or when the amount of the obligation cannot be measured with sufficient reliability. Contingent liability is disclosed in the notes. 7.2 EVENTS AFTER THE BALANCE SHEET DATE On February 2, 2024, Kemira announced that it had closed the divestment of its Oil & Gas related portfolio. Approximately 250 employees will transfer to the buyer as part of the transaction, which includes Kemira’s manufacturing facilities in Mobile, Columbus and Aberdeen in the United States and the novel liquid polymer (NLP) manufacturing assets in Botlek, the Netherlands. The closing of the Teesport manufacturing facility in the United Kingdom is expected to happen later, subject to site-specific closing conditions. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 89 Kemira Oyj's income statement Thousand EUR Note 1.1.-31.12.2023 1.1.-31.12.2022 Revenue 2 2,030,416 2,206,658 Change in inventory of finished goods and in work in progress +/- 4 -60,079 64,334 Other operating income 3 3,262 3,435 Materials and services 4 -1,077,936 -1,413,093 Personnel expenses 5 -68,544 -48,372 Depreciation, amortization and impairments 6 -23,738 -22,273 Other operating expenses 7 -631,371 -592,545 Operating profit 172,010 198,144 Financial income and expenses 8 -24,926 172,737 Profit before appropriations and taxes 147,084 370,881 Appropriations 9 -2,739 -12,303 Income taxes 10 -40,154 -43,844 Profit for the financial year 104,191 314,734 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 90 Kemira Oyj's balance sheet Thousand EUR Note 31.12.2023 31.12.2022 ASSETS NON-CURRENT ASSETS Intangible assets 11 51,537 58,208 Tangible assets 12 36,383 35,277 Investments 13 Holdings in Group undertakings 1,090,711 1,049,503 Receivables from Group companies 445,180 552,996 Other shares and holdings 98,339 99,609 Other investments 6,127 6,127 Total investments 1,640,357 1,708,236 Total non-current assets 1,728,277 1,801,721 CURRENT ASSETS Inventories 14 141,366 213,498 Non-current receivables 15 Deferred tax assets 15,595 15,446 Loan receivables 400 400 Other receivables 1,608 21,107 Total non-current receivables 17,603 36,952 Current receivables 15 460,922 570,083 Money market investments 16 119,822 0 Cash and cash equivalents 215,787 194,464 Total current assets 955,499 1,014,997 Total assets 2,683,777 2,816,718 Thousand EUR Note 31.12.2023 31.12.2022 EQUITY AND LIABILITIES CAPITAL AND RESERVES 17 Share capital 221,762 221,762 Share premium account 257,878 257,878 Fair value reserve 9,961 56,764 Unrestricted equity reserve 199,964 199,964 Retained earnings 409,525 188,104 Profit for the financial year 104,191 314,734 Total equity 1,203,281 1,239,207 APPROPRIATIONS 18 15,837 13,098 PROVISIONS 19 52,957 52,230 LIABILITIES Non-current liabilities 20 Deferred tax liabilities 2,581 14,191 Other non-current liabilities 525,786 726,122 Total Non-current liabilities 528,367 740,313 Current liabilities 21 883,335 771,871 Total liabilities 1,411,702 1,512,184 Total equity and liabilities 2,683,777 2,816,718 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 91 Kemira Oyj's cash flow statement Thousand EUR 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net profit for the period 104,191 314,734 Adjustments for Depreciation according to plan 23,738 22,273 Unrealized exchange differences (net) 8,733 -20,748 Financial income and expenses (+/-) 24,926 -172,737 Income taxes 40,154 43,844 Other adjustments (+/-) 4,070 8,627 Operating profit before change in working capital 205,814 195,993 Change in working capital Increase (-) / decrease (+) in non-interest-bearing current receivables 18,283 -99,503 Increase (-) / decrease (+) in inventories 70,237 -73,494 Increase (+) / decrease (-) in short-term interest-free debts -46,073 27,598 Change in working capital 42,448 -145,399 Cash generated from operations before financial items and taxes 248,261 50,595 Interest and other finance costs paid -33,531 -24,113 Interest and other finance income received 78,136 35,083 Realized exchange differences (net) 11,591 22,184 Dividends received 39,621 137,389 Income taxes paid -59,530 -4,929 Net cash from operating activities 284,549 216,208 Thousand EUR 2023 2022 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of subsidiary shares -6,476 0 Acquisitions of other investments 0 -1 Purchases of intangible assets -10,244 -14,330 Purchases of tangible assets -7,987 -8,858 Proceeds from sale of subsidiary shares 28,259 0 Proceeds from sale of investments 400 0 Proceeds from sale of tangible and intangible assets 0 2,489 Increase (-) / decrease (+) in loan receivables -9,131 51,637 Net cash used in investing activities -5,178 30,937 Cash flows before financing 279,371 247,145 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from non-current liabilities (+) 127 195,910 Repayment of non-current liabilities (-) 0 -150,000 Short-term financing, net increase (+) / decrease (-) -35,730 -14,456 Dividends paid -95,236 -88,942 Group contribution paid -9,000 -70,500 Net cash used in financing activities -139,839 -127,988 Net increase (+) / decrease (-) in cash and cash equivalents 139,532 119,157 Cash and cash equivalents on Dec 31 335,609 194,464 Exchange gains (+) / losses (-) on cash and cash equivalents 1,612 1,201 Cash and cash equivalents on Jan 1 194,464 74,107 Net increase (+) / decrease (-) in cash and cash equivalents 139,532 119,157 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 92 Notes to the parent company financial statements 1. The parent company's accounting policies for the financial statements BASIS OF PREPARATION The parent company’s financial statements have been prepared in compliance with the relevant acts and regulations in force in Finland (FAS). Kemira Group’s financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), and the parent company applies the Group’s accounting policies whenever it has been possible according to FAS. COMPARABILITY OF FINANCIAL STATEMENTS Kemira Oyj divested the colorant business on May 4, 2023, which affects the comparability of the revenue and related expenses between financial periods. Revenue of the colorant business totaled EUR 5.6 million (EUR 18.4 million) during the financial year. VALUATION AND ALLOCATION PRINCIPLES VALUATION OF NON-CURRENT ASSETS Planned depreciation and any impairment losses have been deducted from the acquisition cost of the intangible and tangible assets entered in the balance sheet. The acquisition cost includes the variable costs of acquisition and manufacturing. Government grants received are recognized as a deduction from the carrying amount of property, plant, and equipment. Planned depreciation is calculated on a straight-line basis over the estimated intangible and tangible asset's useful life. Depreciation starts from the month of commencement of use. Depreciation periods: Other intangible assets 5–10 years Buildings and structures 20–40 years Machinery and equipment 3–15 years Shares of non-current assets are valued at their acquisition cost or less impairment. VALUATION OF INVENTORY Inventories are stated at cost, at the lower of replacement cost, or probable selling price. In addition to variable costs, the cost of inventories includes a portion of the fixed costs of acquisition and manufacturing. The acquisition cost of the raw material inventory are determined using a weighted average cost formula. The acquisition cost of finished goods and work in progress include the proportion of production overheads at normal capacity. VALUATION OF FINANCIAL INSTRUMENTS The hedging of financial risk of Kemira Group is concentrated in Kemira Oyj, which enters into currency, interest rate, and commodity derivatives with third parties. Changes in the fair value of currency derivatives that are applicable for hedge accounting in the Group, but not in the parent company (as underlying hedged item are with group companies) are entered in the profit and loss. Also, changes in the fair value of other currency derivatives not qualifying for hedge accounting in the Group, hedging commercial purchases, or sales or financial items in foreign currencies are entered in the profit and loss. Changes in the fair value of interest rate derivatives are recorded as financial items in both hedge accounting and non-hedge accounting. Commodity derivatives consist of electricity and natural gas derivative contracts. The fair value of commodity derivatives hedging the parent company's commodity purchases and qualifying for hedge accounting is posted to the hedging reserve under equity as well as the change in the fair value of currency derivatives that qualify for hedge accounting in the parent company. These currency derivatives are hedging estimated currency flows in Kemira Oyj for the next 12-month period. When the hedging instrument is maturing or the hedging relationship is discontinued due to inefficiency, the hedging reserve is adjusted by the value of the derivative by booking the value in the Income Statement. The valuation of Fair value derivative instruments is done according to the Finnish Accounting Act Chapter 5 Section 2a. The valuation methods of derivative instruments are described in Notes 5.4 and 5.6 in the Consolidated Financial Statements. Defining the fair value of financial assets and liabilities is described in Group Note 5.4. Financial Risk management principles is illustrated in Group note 5.5. Hedge accounting principles and valuation of derivative instrument are described in Group note 5.6. KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 93 Reductions in the capital of other non-current loans as well as loan transaction costs have been capitalized in a manner allowed by the Finnish Accounting Act in the parent company's financial statement. The non-expensed portion of these expenses, EUR 1.6 million (2.6), is included in the balance sheet. OBLIGATORY PROVISIONS Obligatory provisions are recognized from pensions, personnel-related costs, environmental, and restructuring obligations. REVENUE Kemira Oyj's revenue consists mainly of revenues from the sale of goods and services. Revenue also includes intercompany service charges on a gross basis. PENSION ARRANGEMENTS The company’s statutory pensions are handled by pension insurance companies and supplemental pensions mainly by Kemira’s own pension fund. Pension costs consist of payments to pension insurance companies and possible contributions to the pension fund and are recognized in the income statement. SHARE-BASED INCENTIVE PLANS The treatment of share-based plans is described in the Group’s accounting policies. In the parent company, the cash proportion of share-based incentive plans is recognized as an expense in the performance year, and the share proportion is recognized in the year the shares are given using the average share price. FOREIGN CURRENCY TRANSLATION In day-to-day bookkeeping, foreign currency transactions are translated into their functional currency at the exchange rates quoted on the transaction date. In the Financial Statements, foreign currency denominated receivables and liabilities are measured at the exchange rates quoted on the balance sheet date. Business-related exchange rate differences and business related foreign currency exchange rate hedges are treated as sales and purchase adjustments. Any foreign exchange gains and losses related to financial items and respective hedging instruments are booked into financial income and expenses. DEFERRED TAXES Deferred tax liabilities or assets are recognized for temporary differences between tax and financial statements using the tax rate for the year following as determined on the balance sheet date. The balance sheet includes the deferred tax liability in its entirety and the deferred tax asset at the estimated probable amount as assessed by the management. The efficient part of changes in the value of the electricity and currency derivatives qualifying for hedge accounting is recorded as a fair value reserve less deferred taxes. LEASE Lease payments are treated as rental expenses. CASH FLOW STATEMENT The parent company’s cash flow statement has been prepared in accordance with the general guidelines on cash flow by the Finnish Board of Accounting. KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 94 2. Revenue Thousand EUR 2023 2022 Revenue by segments Pulp & Paper 887,894 1,033,704 Industry & Water 524,291 579,102 Intercompany revenue 618,231 593,852 Total 2,030,416 2,206,658 Distribution of revenue by geographical area as a percentage of total revenue Finland, domicile of the parent company 25 28 Other Europe, Middle East and Africa 53 54 Americas 12 10 Asia Pacific 9 9 Total 100 100 3. Other operating income Thousand EUR 2023 2022 Gains on the sale of property, plant and equipment 143 2,402 Insurance compensation received 2,481 603 Other income from operations 638 430 Total 3,262 3,435 4. Material and services Thousand EUR 2023 2022 Change in stocks of finished goods and in work in progress 60,079 -64,334 Materials and services Materials and supplies Purchases during the financial year 1,055,338 1,423,051 Change in inventories (increase - / decrease +) 13,628 -19,281 External services 8,970 9,323 Total 1,077,936 1,413,093 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 95 5. Personnel expenses and number of personnel Thousand EUR 2023 2022 Personnel costs Wages and salaries 58,900 49,228 Pension expenses ¹⁾ 8,101 -2,767 Other personnel expenses 1,544 1,911 Total 68,544 48,372 Thousand EUR 2023 2022 Management wages and salaries ²⁾ CEO 4,604 1,454 CEO's Deputy 609 425 Board of Directors 606 567 Total 5,819 2,446 Thousand EUR 2023 2022 Salaries and fees include bonuses and share-based payments CEO 3,815 715 CEO's Deputy 411 234 Total 4,226 949 In 2021, salaries and wages totaled EUR 46,027 thousand. 1) In 2022, the pension expenses included a return of surplus of EUR 10.0 million from the Neliapila Pension Fund. 2) The salary paid to Kemira Oyj's CEO and CEO's Deputy include fringe benefits. Other transactions between related parties are presented in Note 6.1 in the Notes to the Consolidated Financial Statements. Number of personnel on Dec 31 2023 2022 Pulp & Paper segment 101 102 Industry & Water segment 39 38 Other, of which 357 353 R&D and Technology 164 167 Total 497 493 Average number of personnel 500 502 6. Depreciation, amortization and impairments Thousand EUR 2023 2022 Depreciation according to plan and impairment Intangible rights 13,219 11,114 Impairment of intangible rights 55 0 Goodwill 3,626 3,586 Other intangible assets 0 687 Buildings and constructions 666 665 Machinery and equipment 6,154 6,220 Impairment of machinery and equipment 17 0 Total 23,738 22,273 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 96 7. Other operating expenses Thousand EUR 2023 2022 Rents 9,363 9,290 Intercompany tolling manufacturing charges 241,571 235,759 Other intercompany charges 166,582 145,253 Freights and delivery expenses 125,373 135,599 External services 22,082 18,502 Other operating expenses ¹⁾ 66,399 48,142 Total 631,371 592,545 1) In 2023, the other operating expenses included a net icrease of EUR 660 thousand in the obligatory provisions (a decrease of EUR 5,243 thousand in environmental expenses and an increase of EUR 5,903 thousand in restructuring expenses). In 2022, the operating expenses included a net decrease of EUR 4,968 thousand in the obligatory provisions (a decrease of EUR 574 thousand in environmental expenses and EUR 4,394 thousand in restructuring expenses). AUDITOR'S FEES AND SERVICES Thousand EUR 2023 2022 Audit fees 612 499 Tax services 37 278 Other services 116 50 Total 765 827 Ernst & Young Oy acts as the principal auditor for Kemira Oyj. 8. Finance income and expenses Thousand EUR 2023 2022 Dividend income From Group companies 39,621 137,389 Total 39,621 137,389 Other interest and finance income Interest income from Group companies 63,275 38,188 Interest income from others 7,953 1,579 Other finance income from Group companies 572 607 Exchange gains from Group companies (net) 0 24,276 Exchange gains from others (net) 10,059 0 Total 81,859 64,650 Total finance income 121,481 202,038 Change in value on non-current assets Group companies ¹⁾ -97,024 0 Total -97,024 0 Interest expenses and other finance expenses Interest expenses to Group companies -6,767 -1,274 Interest expenses to others -25,604 -19,612 Other finance expenses to others -2,121 -2,623 Exchange losses from Group companies (net) -14,889 0 Exchange losses from others (net) 0 -5,791 Total -49,382 -29,301 Total finance expenses -146,406 -29,301 Total finance income and expenses -24,926 172,737 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 97 Thousand EUR 2023 2022 Exchange gains and losses Realized 11,591 22,184 Unrealized -16,422 -3,699 Total -4,830 18,485 1) Changes in the value of non-current assets in Group companies mainly consist of write-down of Kemira Chemicals Inc. subsidiary shares related to the sale of the Oil & Gas business. Kemira has completed the divestment in February 2024. 9. Appropriations Thousand EUR 2023 2022 Change in accumulated depreciation difference (increase - / decrease +) Intangible rights 382 -420 Other intangible assets -457 231 Goodwill -6 0 Buildings and structures -268 -351 Machinery and equipment -2,386 -2,760 Other tangible assets -3 -3 Total -2,739 -3,303 Group contribution Group contributions received 7,000 0 Group contributions given -7,000 -9,000 Total 0 -9,000 Total appropriations -2,739 -12,303 10. Income taxes Thousand EUR 2023 2022 Income taxes on ordinary activities -38,578 -42,205 Income taxes for prior years 69 -29 Change in deferred taxes 59 -1,065 Other taxes and parafiscal charges -1,704 -546 Total -40,154 -43,844 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 98 11. Intangible assets 2023, Thousand EUR Intangible rights Goodwill Advance payments and construction in progress Other intangible assets Total Acquisition cost on Jan 1 279,833 32,364 9,334 39,878 361,408 Additions 9,100 234 910 0 10,244 Decreases -4,648 0 0 0 -4,648 Transfers 8,552 0 -8,552 0 0 Acquisition cost on Dec 31 292,837 32,597 1,692 39,878 367,005 Accumulated amortization on Jan 1 -248,890 -14,433 0 -39,878 -303,200 Accumulated amortization relating to decreases 4,578 0 0 0 4,578 Amortization during the financial year -13,219 -3,626 0 0 -16,845 Accumulated amortization on Dec 31 -257,531 -18,059 0 -39,878 -315,468 Net book value on Dec 31 35,306 14,539 1,692 0 51,537 2022, Thousand EUR Intangible rights Goodwill Advance payments and construction in progress Other intangible assets Total Acquisition cost on Jan 1 275,030 32,364 3,061 39,878 350,333 Additions 5,521 0 8,809 0 14,330 Decreases -3,254 0 0 0 -3,254 Transfers 2,536 0 -2,536 0 0 Acquisition cost on Dec 31 279,833 32,364 9,334 39,878 361,408 Accumulated amortization on Jan 1 -241,030 -10,847 0 -39,191 -291,067 Accumulated amortization relating to decreases 3,201 0 0 0 3,201 Amortization during the financial year -11,061 -3,586 0 -687 -15,334 Accumulated amortization on Dec 31 -248,890 -14,433 0 -39,878 -303,200 Net book value on Dec 31 30,943 17,931 9,334 0 58,208 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 99 12. Tangible assets 2023, Thousand EUR Land and water areas Buildings and constructions Machinery and equipment Other tangible assets Advance payments and construction in progress Total Acquisition cost on Jan 1 1,263 16,261 102,080 343 4,725 124,671 Additions 59 311 4,268 0 3,349 7,987 Decreases 0 0 -327 0 0 -327 Transfers 297 1,047 2,853 0 -4,196 0 Acquisition cost on Dec 31 1,618 17,619 108,873 343 3,877 132,330 Accumulated depreciation on Jan 1 -110 -7,499 -81,443 -341 0 -89,393 Accumulated depreciation relating to decreases 0 0 268 0 0 268 Depreciation during the financial year 0 -666 -6,154 0 0 -6,821 Accumulated depreciation on Dec 31 -110 -8,165 -87,330 -341 0 -95,947 Net book value at 31 Dec 1,509 9,453 21,543 2 3,877 36,383 2022, Thousand EUR Land and water areas Buildings and constructions Machinery and equipment Other tangible assets Advance payments and construction in progress Total Acquisition cost on Jan 1 1,071 15,509 98,130 343 1,960 117,014 Additions 208 533 3,698 0 4,419 8,858 Decreases -17 -99 -1,085 0 0 -1,201 Transfers 0 316 1,338 0 -1,654 0 Acquisition cost on Dec 31 1,263 16,261 102,080 343 4,725 124,671 Accumulated depreciation on Jan 1 -110 -6,933 -76,159 -341 0 -83,543 Accumulated depreciation relating to decreases 0 83 881 0 0 964 Depreciation during the financial year 0 -649 -6,165 0 0 -6,814 Accumulated depreciation on Dec 31 -110 -7,499 -81,443 -341 0 -89,393 Net book value on Dec 31 1,153 8,761 20,636 2 4,725 35,277 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 100 13. Investments 2023, Thousand EUR Holdings in Group companies Receivables from Group companies Other shares and holdings Other receivables Total Net book value on Jan 1 1,049,503 552,996 99,609 6,127 1,708,236 Additions 165,492 0 0 0 165,492 Decreases -31,767 -107,817 -270 0 -139,854 Impairments -93,516 0 0 0 -93,516 Transfers 1,000 0 -1,000 0 0 Net book value on Dec 31 1,090,711 445,180 98,339 6,127 1,640,357 2022, Thousand EUR Holdings in Group companies Receivables from Group companies Other shares and holdings Other receivables Total Net book value on Jan 1 1,049,503 396,546 99,608 6,127 1,551,785 Additions 0 255,661 1 0 255,662 Decreases 0 -99,211 0 0 -99,211 Net book value on Dec 31 1,049,503 552,996 99,609 6,127 1,708,236 14. Inventories Thousand EUR 2023 2022 Raw materials and consumables 43,225 56,854 Finished goods 88,525 148,604 Advance payments 9,615 8,040 Total 141,366 213,498 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 101 15. Receivables Thousand EUR 2023 2022 Non-current receivables Receivables from others Loan receivables 400 400 Other receivables 1,608 21,107 Total 2,008 21,507 Deferred tax assets From appropriations 289 376 From reservations 9,823 9,691 From foreign currency and electricity hedging 91 0 From revaluations 4,285 4,285 From other deferred tax receivables 1,107 1,094 Total 15,595 15,446 Total non-current receivables 17,603 36,952 Current receivables Receivables from Associated companies Trade receivables 40 0 Total 40 0 Thousand EUR 2023 2022 Receivables from Group companies Trade receivables 131,920 108,075 Loan receivables 93,415 160,638 Advances paid 18,836 18,836 Other current receivables 7,018 0 Prepayments and accrued income 25,604 16,555 Total 276,793 304,104 Receivables from others Trade receivables 137,406 180,297 Advances paid 133 72 Other current receivables 3,626 4,097 Prepayments and accrued income 42,924 81,513 Total 184,088 265,978 Total current receivables 460,922 570,083 Total receivables 478,525 607,035 Accrued income from others Taxes 18,251 2,561 Hedging accruals 18,060 65,845 Prepaid expenses 4,285 3,831 Accrued income 1,486 8,048 Other 841 1,228 Total 42,924 81,513 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 102 16. Money market investments Thousand EUR 2023 2022 Money market investments Book value 119,822 0 Fair value 120,000 0 Difference -178 0 Money market investments include deposits and commercial paper investments with maturity less than three months. KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 103 17. Capital and reserves Thousand EUR 2023 2022 Restricted equity Share capital on Jan 1 221,762 221,762 Share capital on Dec 31 221,762 221,762 Share premium account on Jan 1 257,878 257,878 Share premium account on Dec 31 257,878 257,878 Fair value reserve on Jan 1 56,764 19,387 Cash flow hedges -46,803 37,378 Fair value reserve on Dec 31 9,961 56,764 Total restricted equity on Dec 31 489,600 536,404 Unrestricted equity Unrestricted equity reserve on Jan 1 199,964 199,964 Unrestricted equity reserve on Dec 31 199,964 199,964 Retained earnings on Jan 1 502,839 275,443 Dividend distributions -95,236 -88,942 Share-based incentive plan Shares given 1,922 1,689 Shares returned 0 -86 Retained earnings on Dec 31 409,525 188,104 Profit for the financial period 104,191 314,734 Total unrestricted equity on Dec 31 713,680 702,803 Total capital and reserves on Dec 31 1,203,281 1,239,207 Total distributable funds on Dec 31 713,680 702,803 CHANGE IN TREASURY SHARES Thousand EUR Number of shares Acquisition value/number on Jan 1, 2023 13,397 1,990 Change -1,800 -267 Acquisition value/number on Dec 31, 2023 11,596 1,723 18. Accumulated appropriations Thousand EUR 2023 2022 Appropriations Accumulated depreciation difference 15,837 13,098 Deferred tax liabilities on accumulated appropriations 3,167 2,620 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 104 19. Obligatory provisions Thousand EUR 2023 2022 Non-current provisions Pension provisions 5,536 5,469 Environmental provisions 9,835 14,185 Restructuring 24,390 19,544 Total non-current provisions 39,762 39,197 Current provisions Environmental provisions 4,890 6,116 Restructuring 8,305 6,916 Total current provisions 13,195 13,032 Total provisions 52,957 52,230 Change in obligatory provisions Obligatory provisions on Jan 1 52,230 57,066 Utilised during the year -12,031 -8,338 Increase during the year 12,758 3,501 Obligatory provisions on Dec 31 52,957 52,230 Environmental risks and liabilities are disclosed in Note 4.6 in the Notes to the Consolidated Financial Statements. 20. Non-current liabilities Thousand EUR 2023 2022 Loans from financial institutions 310,887 312,359 Corporate bonds 198,850 397,853 Other non-current liabilities 16,049 15,910 Total 525,786 726,122 Maturity later than five years Corporate bonds 0 200,000 Other liabilities 16,037 0 Total 16,037 200,000 Deferred tax liabilities From foreign currency and electricity hedging 2,581 14,191 Total 2,581 14,191 Total non-current liabilities 528,367 740,313 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 105 21. Current liabilities Thousand EUR 2023 2022 Liabilities to Group companies Loan liabilities 8,438 14,323 Trade payables 155,944 176,401 Other liabilities 285,937 250,316 Accrued expenses 7,663 1,130 Total 457,981 442,169 Liabilities to others Corporate Bonds 199,597 0 Commercial papers 0 29,815 Prepayments received 1,064 1,308 Trade payables 95,134 145,428 Other liabilities 9,235 24,330 Accrued expenses 120,323 128,822 Total 425,354 329,702 Total current liabilities 883,335 771,871 Accrued expenses and deferred income Personnel expenses 22,727 20,241 Interest expenses and exchange rate differences 10,958 10,563 Cost accruals 44,827 53,671 Income tax accruals 38,578 42,205 Other 3,233 2,142 Total 120,323 128,822 22. Derivatives 2023 2022 Nominal values, thousand EUR Total Total Currency derivatives Forward contracts 812,819 645,600 of which cash flow hedges 110,463 71,572 Commodity derivatives Commodity forward contracts (MWh) ¹⁾ 525,989 1,034,472 of which cash flow hedges 525,989 1,034,472 1) Mainly electricity forward contracts 2023 Fair values, thousand EUR Positive Negative Net Currency derivatives Forward contracts 8,571 4,258 4,313 of which cash flow hedges 2,190 136 2,054 Commodity derivatives Commodity forward contracts ¹⁾ 10,836 533 10,303 of which cash flow hedges 10,836 533 10,303 1) Includes fair value of commodity forward contracts of EUR 1,597 thousand maturing after the year 2024 (21,107). 2022 Fair values, thousand EUR Positive Negative Net Currency derivatives Forward contracts 14,971 4,740 10,232 of which cash flow hedges 1,652 1,386 266 Commodity derivatives Commodity forward contracts 70,771 — 70,771 of which cash flow hedges 70,771 — 70,771 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 106 23. Collateral and contingent liabilities Thousand EUR 2023 2022 Given guarantees On behalf of own commitments Business related delivery-, environmental and other guarantees 35,482 18,106 On behalf of companies belonging to the same Group Business and financing guarantees 527,802 535,479 On behalf of associated companies Business and financing guarantees 11,718 12,499 On behalf of others Guarantees 2,436 2,296 Other obligations Loan commitments 0 16,339 Rent liabilities Maturity within one year 2,767 2,714 Maturity after one year 3,765 6,693 Total 6,532 9,407 Leasing liabilities Maturity within one year 1,870 2,088 Maturity after one year 3,551 3,968 Total 5,421 6,056 Pledges given On behalf of own commitments 0 482 24. Related party transactions Thousand EUR 2023 2022 Related party notes required by the Finnish Companies Act The most significant Group companies with which the company has loans Kemira Water Solutions Inc. 162,690 20,579 Kemira Chemicals Oy 77,400 77,400 Kemira Uruguay S.A. 51,131 47,333 Other Group companies 247,373 568,322 Total 538,594 713,634 The parent company finances the subsidiaries through intra-group loan arrangements. For the most part, the loan is issued in the accounting currency of the subsidiary, while the parent company hedges the currency risk. The margins added to loan reference rates are market- based. The Group uses consolidated bank account systems as a cash management tool. When involved, the parent company acts as the holder of the consolidated accounts. Subsidiaries are always entitled to the assets in their consolidated assets account, and consolidated account operations do not adversely affect the continuity of subsidiaries' operations. KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 107 25. Subsidiaries Group holding, % Kemira Oyj holding, % AS Kemivesi 100.00 100.00 Kemira Argentina S.A. 100.00 15.80 Kemira Cell Sp. z.o.o. 55.00 55.00 Kemira Chemicals, Inc. 100.00 60.80 Kemira Chemicals (Nanjing) Co., Ltd. 100.00 100.00 Kemira Chemicals (Shanghai) Co., Ltd. 100.00 100.00 Kemira Chemicals (UK) Ltd. 100.00 100.00 Kemira Chemicals (Yanzhou) Co., Ltd. 100.00 100.00 Kemira Chemicals Canada Inc. 100.00 100.00 Kemira Chemicals Korea Corporation 100.00 100.00 Kemira Chemie GesmbH 100.00 100.00 Kemira Chile Comercial Limitada 100.00 99.00 Kemira Europe Oy 100.00 100.00 Kemira Germany GmbH 100.00 100.00 Kemira Hong Kong Company Limited 100.00 100.00 Kemira International Finance B.V. 100.00 100.00 Kemira KTM d.o.o. 100.00 100.00 Kemira Świecie Sp. z o.o. 100.00 100.00 Kemira Water Danmark A/S 100.00 100.00 PT Kemira Indonesia 100.00 76.23 PT Kemira Chemicals Indonesia 99.77 99.77 SimAnalytics Oy 100.00 100.00 Kemira Oyj acquired the remaining 90% of the shares of SimAnalytics Oy. 60.80% of the shares of Kemira Chemicals Inc. was acquired by converting loans to shares in 2023. Kemira Oyj sold the shares of Kemira Chemicals Brasil Ltda to Kemira Europe Oy in 2023. The Group's subsidiaries and investment in associates are presented in Note 6.2. in the Consolidated Financial Statements. KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 108 Kemira Oyj’s Board of Directors’ proposal to the Annual General Meeting for the distribution of distributable funds and signing of the Financial Statements and Board of Directors’ Review On December 31, 2023, Kemira Oyj’s distributable funds are EUR 713,680,177 of which the net profit for the period amounts to EUR 104,191,302. The Board of Directors proposes to the Annual General Meeting to be held on March 20 , 2024 that a dividend of EUR 0.68 per share be distributed. No dividend will be paid on own shares held by the company as treasury shares on the dividend record date. On the date of this proposal for the distribution of profits, a total of 153,619,832 shares are held outside the company, the total dividends paid would amount to EUR 104,461,486. The distributable funds of EUR 609,218,691 to be retained as equity. There have been no material changes in the company’s financial position since December 31, 2023. The liquidity of the company remains good, and the proposed dividend payment does not risk the solvency of the company. Helsinki, February 8, 2024 Matti Kähkönen Annika Paasikivi Tina Sejersgård Fanø Chair Vice Chair Werner Fuhrmann Timo Lappalainen Fernanda Lopes Larsen Kristian Pullola Mikael Staffas Petri Castrén CEO BOARD'S PROPOSAL FOR PROFIT DISTRIBUTION AND SIGNATURES | PART OF THE AUDITED FINANCIAL STATEMENTS 2023 KEMIRA 2023 | FINANCIAL STATEMENTS | 109 Auditor's report (Translation of the Finnish original) To the Annual General Meeting of Kemira Oyj Ernst & Young Oy Korkeavuorenkatu 32-34 FI- 00130 Helsinki Finland Tel. +358 207 280 190 www.ey.com/fi Business ID 2204039-6 domicile Helsinki Report on the audit of financial statement OPINION We have audited the financial statements of Kemira Oyj (business identity code 0109823-0) for the year ended 31 December 2023. The financial statements comprise the consolidated balance sheet, income statement, statement of comprehensive income, statement of changes in equity, statement of cash flows and notes, including material accounting policy information, as well as the parent company’s balance sheet, income statement, statement of cash flows and notes. In our opinion • the consolidated financial statements give a true and fair view of the group’s financial position, financial performance and cash flows in accordance with IFRS Accounting Standards as adopted by the EU. • the financial statements give a true and fair view of the parent company’s financial performance and financial position in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. Our opinion is consistent with the additional report submitted to the Audit Committee. BASIS FOR OPINION We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor’s Responsibilities for the Audit of Financial Statements section of our report. We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements. In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group companies are in compliance with laws and regulations applicable in Finland regarding these services, and we have not provided any prohibited non-audit services referred to in Article 5 (1) of regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in note 2.2 to the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements. We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence of management bias that represented a risk of material misstatement due to fraud. AUDITOR'S REPORT KEMIRA 2023 | FINANCIAL STATEMENTS | 110 Key audit matter How our audit addressed the Key Audit Matter Valuation of goodwill The accounting principles and disclosures concerning goodwill are disclosed in Note 3.1. Valuation of goodwill was a key audit matter because • the assessment process is judgmental, • it is based on assumptions relating to market or economic conditions extending to the future, and • because of the significance of the goodwill to the financial statements. As of balance sheet date 31 December 2023, the value of goodwill amounted to 481 million euro representing 14 % of the total assets and 29 % of the total equity. The valuation of goodwill is based on management’s estimate about the value-in-use calculations of the cash generating units. There are number of underlying assumptions used to determine the value-in-use, including the revenue growth, EBITDA and discount rate applied on net cash-flows. Estimated value-in-use may vary significantly when the underlying assumptions are changed and the changes in above-mentioned individual assumptions may result in an impairment of goodwill. Our audit procedures regarding the valuation of goodwill included involving EY valuation specialists to assist us in evaluating methodologies, impairment calculations and underlying assumptions applied by the management in the impairment testing. In evaluation of methodologies, we compared the principles applied by the management in the impairment tests to the requirements set in IAS 36 Impairment of assets standard and ensured the mathematical accuracy of the impairment calculations. The key assumptions applied by the management in impairment tests were compared to • approved budgets and long-term forecasts, • information available in external sources, as well as • our independently calculated industry averages such as weighted average cost of capital used in discounting the cashflows. In addition, we compared the sum of discounted cash flows in impairment tests to Kemira’s market capitalization. We also assessed the sufficiency and appropriateness of the disclosures given in respect of goodwill and its sensitivity. Key audit matter How our audit addressed the Key Audit Matter Fair value measurement of other shares The accounting principles and disclosures concerning other shares are disclosed in Note 3.5. Fair value measurement of other shares was a key audit matter because • the value of other shares is material to the financial statements, and because • the fair value assessment process requires significant management judgment. As of balance sheet date 31 December 2023, the value of PVO / TVO shares included in other shares amounted to 304 million euro representing 9 % of the total assets and 18 % of the total equity. PVO / TVO shares represent majority of the balance sheet value of other shares. In determining the fair value of PVO / TVO shares, the management must make among other things an assessment regarding • future electricity production cost for PVO and TVO, • future electricity market prices applicable for Finland, and • discount rate applied on discounting the cashflows. Fair values of PVO and TVO shares may vary significantly when above-mentioned assumptions are changed. Fair value measurement of other shares was determined to be a key audit matter and a significant risk of material misstatement referred to in EU Regulation No 537/2014, point (c) of Article 10 (2). Our audit procedures regarding the fair values of other shares to address the risk of material misstatement included involving EY valuation specialists to assist us in evaluating appropriateness of methodologies, fair value calculations and underlying assumptions applied by the management. The key assumptions made by the management were compared to • estimates of future electricity production costs available on external sources, • estimates of future electricity market prices in Finland available on external sources, and • our independently calculated discount rate applicable for discounting of expected cashflows. In addition, we assessed the overall reasonableness of management’s judgments. We also assessed the sufficiency and appropriateness of the disclosures regarding the other shares. AUDITOR'S REPORT KEMIRA 2023 | FINANCIAL STATEMENTS | 111 RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND THE MANAGING DIRECTOR FOR THE FINANCIAL STATEMENTS The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do so. AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company’s or the group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so that the financial statements give a true and fair view. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. AUDITOR'S REPORT KEMIRA 2023 | FINANCIAL STATEMENTS | 112 From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other reporting requirements INFORMATION ON OUR AUDIT ENGAGEMENT We were first appointed as auditors by the Annual General Meeting on 21 March 2019 and our appointment represents a total period of uninterrupted engagement of five years. OTHER INFORMATION The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report, but does not include the financial statements and our auditor’s report thereon. We have obtained the report of the Board of Directors prior to the date of this auditor’s report, and the Annual Report is expected to be made available to us after that date. Our opinion on the financial statements does not cover the other information. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations. In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. OTHER OPINIONS ON ASSIGNMENT OF THE BOARD OF DIRECTORS We support that the financial statements should be adopted. The proposal by the Board of Directors regarding the use of the profit shown on the balance sheet is in compliance with the Limited Liability Companies Act. We support that the Board of Directors of the parent company and the Chief Executive Officer should be discharged from liability for the financial period audited by us. Helsinki, 8 February 2024 Ernst & Young Oy Authorized Public Accountant Firm Mikko Rytilahti Authorized Public Accountant AUDITOR'S REPORT KEMIRA 2023 | FINANCIAL STATEMENTS | 113 ESEF Financial Statement Report Ernst & Young Oy Korkeavuorenkatu 32-34 FI- 00130 Helsinki Finland Tel. +358 207 280 190 www.ey.com/fi Business ID 2204039-6, domicile Helsinki (Translation of the Finnish original) Independent auditor's report on Kemira Oyj's ESEF- Consolidated Financial Statements TO THE BOARD OF DIRECTORS OF KEMIRA OYJ We have performed a reasonable assurance engagement on the iXBRL tagging of the consolidated financial statements included in the digital files 74370031Y7RK5H88CQ48-2023-12-31-fi.zip of Kemira Oyj (business identity code: 0109823-0) for the financial year 1.1.-31.12.2023 to ensure that the financial statements are marked/ tagged with iXBRL in accordance with the requirements of Article 4 of EU Commission Delegated Regulation (EU) 2018/815 (ESEF RTS). Responsibilities of the Board of Directors and Managing Director The Board of Directors and Managing Director are responsible for the preparation of the Report of Board of Directors and financial statements (ESEF financial statements) that comply with the ESESF RTS. This responsibility includes: • preparation of ESEF-financial statements in accordance with Article 3 of ESEF RTS • Tagging the primary financial statements, notes to the financial statements and the entity identifier information in the consolidated financial statements included within the ESEF- financial statements by using the iXBRL mark ups in accordance with Article 4 of ESEF RTS • Ensuring consistency between ESEF financial statements and audited financial statements. The Board of Directors and Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of ESEF financial statements in accordance the requirements of ESEF RTS. Auditor’s Independence and Quality Control We are independent of the company in accordance with the ethical requirements that are applicable in Finland and are relevant to the engagement we have performed, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The firm applies International Standard on Quality Management (ISQM) 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Auditor’s Responsibilities In accordance with the Engagement Letter we will express an opinion on whether the electronic tagging of the consolidated financial statements complies in all material respects with the Article 4 of ESEF RTS. We have conducted a reasonable assurance engagement in accordance with International Standard on Assurance Engagements ISAE 3000. The engagement includes procedures to obtain evidence on: • whether the tagging of the primary financial statements in the consolidated financial statements complies in all material respects with Article 4 of the ESEF RTS • whether the tagging of the notes to the financial statements and the entity identifier information in the consolidated financial statements complies in all material respects with Article 4 of the ESEF RTS • whether the ESEF-financial statements are consistent with the audited financial statements. ESEF FINANCIAL STATEMENT REPORT KEMIRA 2023 | FINANCIAL STATEMENTS | 114 The nature, timing and extent of the procedures selected depend on the auditor’s judgement including the assessment of risk of material departures from requirements sets out in the ESEF RTS, whether due to fraud or error. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our statement. Opinion In our opinion the tagging of the primary financial statements, notes to the financial statements and the entity identifier information in the consolidated financial statements included in the ESEF financial statements 74370031Y7RK5H88CQ48-2023-12-31-fi.zip of Kemira Oyj for the year ended 31.12.2023 complies in all material respects with the requirements of ESEF RTS. Our audit opinion on the consolidated financial statements of Kemira Oyj for the year ended 31.12.2023 is included in our Independent Auditor’s Report dated 8.2.2024. In this report, we do not express an audit opinion any other assurance on the consolidated financial statements. Helsinki 14.2.2024 Ernst & Young Oy Authorized Public Accountant Firm Mikko Rytilahti Authorized Public Accountant ESEF FINANCIAL STATEMENT REPORT KEMIRA 2023 | FINANCIAL STATEMENTS | 115 Group key figures Kemira provides certain financial performance measures (alternative performance measures) that are not defined by IFRS. Kemira believes that alternative performance measures followed by capital markets and Kemira management, such as revenue growth in local currencies, excluding acquisitions and divestments (=organic growth), EBITDA, operative EBITDA, operative EBIT, cash flow after investing activities and gearing provide useful information about Kemira’s 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 instead 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 these Financial Statements, as well as at www.kemira.com > Investors > Financial information. 2023 2022 2021 2020 2019 INCOME STATEMENT AND PROFITABILITY Revenue, EUR million 3,384 3,570 2,674 2,427 2,659 Operative EBITDA, EUR million 667 572 426 435 410 Operative EBITDA, % 19.7 16.0 15.9 17.9 15.4 EBITDA, EUR million 540 559 373 413 382 EBITDA, % 16.0 15.7 14.0 17.0 14.4 Operative EBIT, EUR million 463 362 225 238 224 Operative EBIT, % 13.7 10.1 8.4 9.8 8.4 Operating profit (EBIT), EUR million 336 348 170 216 194 Operating profit (EBIT), % 9.9 9.7 6.4 8.9 7.3 Finance costs (net), EUR million 44 39 27 35 40 % of revenue 1.3 1.1 1.0 1.4 1.5 Profit before tax, EUR million 292 308 143 181 155 % of revenue 8.6 8.6 5.4 7.5 5.8 Net profit for the period (attributable to equity owners of the parent company), EUR million 199 232 108 131 110 % of revenue 5.9 6.5 4.0 5.4 4.1 Return on investment (ROI), % 11.6 12.7 7.2 9.1 8.4 Return of equity (ROE), % 11.9 15.4 8.6 10.9 9.2 Capital employed, EUR million ¹⁾ 2,156 2,238 1,995 1,965 1,998 Operative return on capital employed (ROCE), % ¹⁾ 21.5 16.2 11.3 12.1 11.2 Return on capital employed (ROCE), % ¹⁾ 15.6 15.5 8.5 11.0 9.7 Research and development expenses, EUR million 34 33 28 29 30 % of revenue 1.0 0.9 1.1 1.2 1.1 Organic growth, % -2 27 11 -7 0 GROUP KEY FIGURES KEMIRA 2023 | FINANCIAL STATEMENTS | 116 2023 2022 2021 2020 2019 CASH FLOW Net cash generated from operating activities, EUR million 546 400 220 375 386 Proceeds from sale of subsidiaries and property, plant and equipment and intangible assets, EUR million 10 19 7 2 8 Capital expenditure, EUR million 207 198 170 198 204 % of revenue 6.1 5.5 6.3 8.2 7.7 Capital expenditure excl. acquisitions, EUR million 205 198 169 196 201 % of revenue 6.1 5.5 6.3 8.1 7.6 Cash flow after investing activities, EUR million 349 222 57 173 190 BALANCE SHEET AND SOLVENCY Non-current assets, EUR million 2,051 2,323 2,155 2,018 2,090 Shareholders' equity (Equity attributable to equity owners of the parent company), EUR million 1,665 1,670 1,329 1,192 1,218 Total equity including non-controlling interests, EUR million 1,684 1,685 1,343 1,205 1,231 Total liabilities, EUR million 1,700 1,966 1,797 1,590 1,660 Total assets, EUR million 3,489 3,651 3,139 2,796 2,891 Net working capital 279 362 287 197 211 Interest-bearing net liabilities, EUR million 535 771 850 759 811 Equity ratio, % 48 46 43 43 43 Gearing, % 32 46 63 63 66 Interest-bearing net liabilities per EBITDA 1.0 1.4 2.3 1.8 2.1 2023 2022 2021 2020 2019 PERSONNEL Personnel at period-end 4,915 4,902 4,926 4,921 5,062 Personnel (average) 4,946 4,936 4,947 5,038 5,020 of whom in Finland 806 780 784 790 812 Wages and salaries, EUR million 343 339 288 303 304 EXCHANGE RATES Key exchange rates on Dec 31 USD 1.105 1.067 1.133 1.227 1.123 CAD 1.464 1.444 1.439 1.563 1.460 SEK 11.096 11.122 10.250 10.034 10.447 CNY 7.851 7.358 7.195 8.023 7.821 BRL 5.362 5.639 6.310 6.374 4.516 PER SHARE FIGURES Earnings per share (EPS), basic, EUR ²⁾ 1.30 1.51 0.71 0.86 0.72 Earnings per share (EPS), diluted, EUR ²⁾ 1.28 1.50 0.70 0.86 0.72 Net cash generated from operating activities per share, EUR ²⁾ 3.56 2.61 1.44 2.45 2.53 Dividend per share, EUR ²⁾ ³⁾ 0.68 0.62 0.58 0.58 0.56 Dividend payout ratio, % ²⁾ ³⁾ 52.4 41.0 82.2 67.5 77.6 Dividend yield, % ²⁾ ³⁾ 4.1 4.3 4.4 4.5 4.2 Equity per share, EUR ²⁾ 10.84 10.89 8.68 7.80 7.98 Price per earnings per share (P/E ratio) ²⁾ 12.95 9.48 18.88 15.07 18.37 Price per equity per share ²⁾ 1.55 1.32 1.54 1.66 1.66 Price per cash flow from operations per share ²⁾ 4.72 5.49 9.27 5.28 5.24 Dividend paid, EUR million ³⁾ 104.5 95.1 88.8 88.7 85.5 GROUP KEY FIGURES KEMIRA 2023 | FINANCIAL STATEMENTS | 117 2023 2022 2021 2020 2019 SHARE PRICE AND TRADING Share price, high, EUR 18.22 14.94 14.66 14.24 14.99 Share price, low, EUR 13.51 10.36 12.64 8.02 9.77 Share price, average, EUR 15.36 12.57 13.67 11.55 12.56 Share price on Dec 31, EUR 16.79 14.33 13.33 12.94 13.26 Number of shares traded (1,000) 4) 43,852 37,017 57,478 75,885 53,048 % on number of shares 29 24 38 50 35 Market capitalization on Dec 31, EUR million ²⁾ 2,579 2,198 2,041 1,979 2,024 NUMBER OF SHARES AND SHARE CAPITAL Average number of shares, basic (1,000) ²⁾ 153,573 153,320 153,092 152,879 152,630 Average number of shares, diluted (1,000) ²⁾ 155,051 154,261 153,785 153,373 153,071 Number of shares on Dec 31, basic (1,000) ²⁾ 153,620 153,352 153,127 152,924 152,649 Number of shares on Dec 31, diluted (1,000) ²⁾ 155,303 154,894 154,068 153,744 153,385 Increase (+) / decrease (-) in number of shares outstanding (1,000) 267 225 203 275 139 Share capital, EUR million 221.8 221.8 221.8 221.8 221.8 1) 12-month rolling average. 2) Number of shares outstanding, excluding the number of treasury shares. 3) The dividend for 2023 is the Board of Directors' proposal to the Annual General Meeting. 4) Shares traded on Nasdaq Helsinki only. GROUP KEY FIGURES KEMIRA 2023 | FINANCIAL STATEMENTS | 118 Definition of key figures Financial figures KEY FIGURES DEFINITION OF KEY FIGURES PURPOSE OF KEY FIGURES EBITDA = Operating profit (EBIT) + depreciation and amortization + impairments EBITDA describes the profitability of a business when depreciation, amortization and impairments are added to EBIT. The key figure is used to monitor the development of business results. OPERATIVE EBITDA = Operating profit (EBIT) + depreciation and amortization + impairments +/- items affecting comparability Operative EBITDA describes the profitability of a business when depreciation, amortization and impairments are added to EBIT. The key figure is used to monitor the development of business results. The key figure is calculated by adjusting the items affecting from EBITDA, which improves the comparability of operating profitability between different periods. ITEMS AFFECTING COMPARABILITY ¹⁾ = Restructuring and streamlining programs + transaction and integration expenses in acquisitions + divestment of businesses and other disposals + other items Used as a component in the calculation of operative EBITDA and operative EBIT. EBIT = Revenue + other operating income - operating expenses - depreciation and amortization - impairments + share of the results of associates EBIT is used to monitor the development of business results. The key figure describes the profitability of the business before financial items and taxes. OPERATIVE EBIT = Operating profit (EBIT) +/- items affecting comparability Operative EBIT is used to monitor the development of business results. The key figure describes the profitability of the business before financial items and taxes. The key figure is calculated by adjusting the items affecting operating comparability from operating profit, which improves the comparability of operating profitability between different periods. INTEREST-BEARING NET LIABILITIES = Interest-bearing liabilities - cash and cash equivalents Interest-bearing liabilities is used to monitor the Group's gearing. EQUITY RATIO (%) = 100 x Total equity Equity ratio (%) indicates what proportion of the assets is covered by equity. Total assets - prepayments received GEARING (%) = 100 x Interest-bearing net liabilities Gearing (%) measures the ratio of interest-bearing net liabilities to equity. Total equity RETURN ON INVESTMENTS (ROI) (%) = 100 x Profit before tax + interest expenses + other financial expenses Return on investment (%) measures how efficiently invested capital is used. Total assets - non-interest-bearing liabilities ²⁾ DEFINITION OF KEY FIGURES KEMIRA 2023 | FINANCIAL STATEMENTS | 119 KEY FIGURES DEFINITION OF KEY FIGURES PURPOSE OF KEY FIGURES RETURN ON EQUITY (ROE) (%) = 100 x Net profit attributable to equity owners of the parent company Return on equity (%) is used to measure how effectively the equity owned by the owners of the parent company is used. Equity attributable to equity owners of the parent company ²⁾ RETURN ON CAPITAL EMPLOYED (ROCE) (%) = 100 x Operating profit (EBIT) ³⁾ Return on capital employed (%) is used to measure how efficiently capital is employed. Capital employed ⁴⁾ OPERATIVE RETURN ON CAPITAL EMPLOYED (OPERATIVE ROCE) (%) = 100 x Operating profit (EBIT) ³⁾ Operative return on capital employed (%) is used to measure how efficiently capital is employed. Capital employed ⁴⁾ CASH FLOW AFTER INVESTING ACTIVITIES = Net cash generated from operating activities + net cash used in investing activities Cash flow after investments is a key figure that describes the cash flow from operating activities after investments. This is free cash flow that remains, for example, in the payment of dividends and liabilities. INTEREST-BEARING NET LIABILITIES / EBITDA = Interest-bearing net liabilities Interest-bearing net liabilities / EBITDA ratio measures the Group's capital structure. The key figure describes how long it would take to pay interest-bearing net liabilities at the current level of profitability if the EBITDA in its entirety were used to repay the debt. Operating profit (EBIT) + depreciation and amortization + impairments NET FINANCIAL COST (%) = 100 x Finance costs, net - dividend income +/- exchange rate differences Net financial cost (%) describes the financial expense structure and the key figure can be compared to the existing average interest rate level. Interest-bearing net liabilities ²⁾ NET WORKING CAPITAL = Inventories + trade receivables + other receivables, excluding derivatives, accrued interest income and other financing items - trade payables - other liabilities, excluding derivatives, accrued interest expenses and other financing items Net working capital is the amount of capital tied up in business operations. It describes the amount of cash needed to run the Group's day-to-day operations. CAPITAL EMPLOYED = Property, plant and equipment + right-of-use assets + intangible assets + net working capital + investments in associates Capital employed describes the capital committed to the Group's operations (e.g. production facilities), which is a premise for the manufacture of the Group's products for sale. Restricted capital is used as a component in calculating the return on capital employed. CAPITAL EXPENDITURE = Property, plant and equipment + intangible assets + other shares + investments in associates Investments excluding acquisitions are cash used on the acquisition of non-current assets. The key figure is part of the cash flow statement. CAPITAL EXPENDITURE EXCL. ACQUISITIONS = Property, plant and equipment + intangible assets + other shares + investments in associates - acquisitions Investments excluding acquisitions are cash used on the acquisition of non-current assets, excluding acquisitions. The key figure is part of the cash flow statement. DEFINITION OF KEY FIGURES KEMIRA 2023 | FINANCIAL STATEMENTS | 120 KEY FIGURES DEFINITION OF KEY FIGURES PURPOSE OF KEY FIGURES ORGANIC GROWTH (%) = Revenue growth in local currencies, excluding acquisitions and divestments Organic growth describes revenue growth in local currencies excluding acquisitions and divestments. INTRINSIC VALUE = Operative EBITDA x 8 - interest-bearing net liabilities Intrinsic value is used as a remuneration criteria in the Group's share-based payments incentive plans. 1) Financial performance measures which are not defined by IFRS may include items of income and expenses that affect the comparability of the financial reporting of Kemira Group. Restructuring and streamlining programs, transaction and integration expenses in acquisitions, divestments of businesses and other disposals are considered the most common items affecting comparability. 2) Average. 3) Operating profit (EBIT) taken into account for 12-month rolling figure at the end of the review period. 4) 12-month rolling average. Per share figures KEY FIGURES DEFINITION OF KEY FIGURES KEY FIGURES DEFINITION OF KEY FIGURES EARNINGS PER SHARE (EPS) = Net profit attributable to equity owners of the parent company SHARE PRICE, YEAR AVERAGE = Shares traded (EUR) Average number of shares Shares traded (volume) NET CASH GENERATED FROM OPERATING ACTIVITIES PER SHARE = Net cash generated from operating activities PRICE PER EARNINGS PER SHARE (P/E) = Share price on Dec 31 Average number of shares Earnings per share (EPS), basic DIVIDEND PER SHARE = Dividend paid PRICE PER EQUITY PER SHARE = Share price on Dec 31 Number of shares on Dec 31 Equity per share attributable to equity owners of the parent company DIVIDEND PAYOUT RATIO (%) = 100 x Dividend per share PRICE PER NET CASH GENERATED FROM OPERATING ACTIVITIES PER SHARE = Share price on Dec 31 Earnings per share (EPS), basic Net cash generated from operating activities per share DIVIDEND YIELD (%) = 100 x Dividend per share SHARE TURNOVER (%) = 100 x Number of shares traded in main stock exchange Share price on Dec 31 Average number of shares EQUITY PER SHARE = Equity attributable to equity owners of the parent company on Dec 31 Number of shares on Dec 31 DEFINITION OF KEY FIGURES KEMIRA 2023 | FINANCIAL STATEMENTS | 121 Reconciliation to IFRS figures 2023 2022 EUR million 1-3 4-6 7-9 10-12 Total 1-3 4-6 7-9 10-12 Total ITEMS AFFECTING COMPARABILITY IN EBITDA AND EBIT Operative EBITDA Pulp & Paper 109.4 65.2 68.9 87.5 330.9 71.3 73.6 92.3 110.9 348.0 Industry & Water 83.3 85.8 91.5 75.2 335.8 48.8 48.5 60.3 66.1 223.7 Total 192.6 151.0 160.3 162.7 666.7 120.0 122.1 152.5 177.0 571.6 Total items affecting comparability -8.5 -3.7 -3.1 -111.4 -126.7 -6.5 1.2 -15.3 7.8 -12.8 EBITDA 184.1 147.4 157.2 51.3 540.0 113.5 123.2 137.3 184.8 558.8 Operative EBIT Pulp & Paper 80.4 37.6 39.8 58.6 216.3 40.7 42.8 61.8 80.3 225.7 Industry & Water 61.5 63.3 67.8 54.1 246.7 28.2 26.9 37.7 43.1 135.9 Total 141.9 100.9 107.6 112.6 463.0 68.9 69.7 99.5 123.4 361.6 Total items affecting comparability -8.5 -3.7 -3.1 -111.4 -126.7 -6.7 -0.7 -15.0 8.4 -14.0 EBIT 133.4 97.2 104.5 1.3 336.4 62.2 69.1 84.5 131.8 347.6 Operative EBITDA 192.6 151.0 160.3 162.7 666.7 120.0 122.1 152.5 177.0 571.6 Restructuring and streamlining programs 0.0 -1.0 0.0 0.1 -0.9 -3.1 0.1 0.1 -1.6 -4.5 Transaction and integration expenses in acquisition -0.1 0.0 0.0 -0.1 -0.2 0.0 0.0 0.0 0.0 0.0 Divestment of businesses and other disposals -8.9 -2.6 -3.1 -111.3 -125.9 0.0 2.0 -15.6 8.9 -4.6 Other items 0.4 0.0 0.0 0.0 0.4 -3.5 -0.9 0.3 0.5 -3.6 Total items affecting comparability -8.5 -3.7 -3.1 -111.4 -126.7 -6.5 1.2 -15.3 7.8 -12.8 EBITDA 184.1 147.4 157.2 51.3 540.0 113.5 123.2 137.3 184.8 558.8 Operative EBIT 141.9 100.9 107.6 112.6 463.0 68.9 69.7 99.5 123.4 361.6 Total items affecting comparability in EBITDA -8.5 -3.7 -3.1 -111.4 -126.7 -6.5 1.2 -15.3 7.8 -12.8 Items affecting comparability in depreciation, amortization and impairments 0.0 0.0 0.0 0.0 0.0 -0.1 -1.9 0.3 0.6 -1.2 Operating profit (EBIT) 133.4 97.2 104.5 1.3 336.4 62.2 69.1 84.5 131.8 347.6 RECONCILIATION OF IFRS FIGURES KEMIRA 2023 | FINANCIAL STATEMENTS | 122 2023 2022 EUR million 1-3 4-6 7-9 10-12 Total 1-3 4-6 7-9 10-12 Total ROCE AND OPERATIVE ROCE Operative EBIT 141.9 100.9 107.6 112.6 463.0 68.9 69.7 99.5 123.4 361.6 Operating profit (EBIT) 133.4 97.2 104.5 1.3 336.4 62.2 69.1 84.5 131.8 347.6 Capital employed ¹⁾ 2,244.5 2,221.5 2,188.9 2,155.5 2,155.5 2,045.4 2,113.6 2,194.9 2,238.0 2,238.0 Operative ROCE, % 19.4 21.0 21.6 21.5 21.5 11.7 11.8 13.0 16.2 16.2 ROCE, % 18.7 20.1 21.3 15.6 15.6 8.7 9.7 10.6 15.5 15.5 NET WORKING CAPITAL Inventories 421.5 383.9 347.5 281.8 281.8 408.0 490.6 474.1 433.7 433.7 Trade receivables and other receivables 517.6 494.4 496.8 468.2 468.2 530.5 620.4 701.4 603.7 603.7 Excluding financing items in other receivables -23.7 -21.9 -10.0 -18.6 -18.6 -30.4 -78.6 -105.9 -71.1 -71.1 Trade payables and other liabilities 633.2 552.6 569.4 489.4 489.4 624.5 647.5 684.8 635.2 635.2 Excluding financing items in other liabilities -127.7 -78.2 -83.1 -37.0 -37.0 -123.1 -82.7 -82.1 -31.4 -31.4 Net working capital 409.9 382.0 347.9 278.9 278.9 406.7 467.6 466.9 362.4 362.4 INTEREST-BEARING NET LIABILITIES Non-current interest-bearing liabilities 832.6 639.6 641.8 615.7 615.7 795.5 811.2 814.3 838.1 838.1 Current interest-bearing liabilities 148.8 325.5 327.8 322.1 322.1 258.8 295.1 266.1 183.7 183.7 Interest-bearing liabilities 981.4 965.1 969.6 937.8 937.8 1,054.4 1,106.3 1,080.4 1,021.8 1,021.8 Cash and cash equivalents 273.2 299.5 403.1 402.5 402.5 154.5 147.3 173.9 250.6 250.6 Interest-bearing net liabilities 708.2 665.5 566.5 535.2 535.2 899.8 959.0 906.4 771.2 771.2 1) 12-month rolling average. RECONCILIATION OF IFRS FIGURES KEMIRA 2023 | FINANCIAL STATEMENTS | 123 Quarterly Earnings Performance 2023 2022 EUR million 1-3 4-6 7-9 10-12 Total 1-3 4-6 7-9 10-12 Total Revenue Pulp & Paper 504.6 421.2 403.6 418.8 1,748.2 446.5 487.6 537.3 556.2 2,027.7 Industry & Water 401.5 418.9 425.1 390.0 1,635.5 321.5 373.8 434.6 412.0 1,541.9 Total 906.0 840.1 828.7 808.8 3,383.7 768.1 861.4 971.9 968.2 3,569.6 EBITDA ¹⁾ Pulp & Paper 100.9 63.9 68.7 74.5 308.0 66.4 74.9 77.2 118.1 336.6 Industry & Water 83.3 83.5 88.5 -23.2 232.0 47.1 48.4 60.1 66.7 222.2 Total 184.1 147.4 157.2 51.3 540.0 113.5 123.2 137.3 184.8 558.8 EBIT ¹⁾ Pulp & Paper 71.9 36.3 39.7 45.5 193.4 35.7 42.3 47.0 88.1 213.1 Industry & Water 61.5 61.0 64.8 -44.3 143.0 26.5 26.8 37.5 43.7 134.5 Total 133.4 97.2 104.5 1.3 336.4 62.2 69.1 84.5 131.8 347.6 Finance costs, net -10.7 -12.1 -9.9 -11.6 -44.4 -7.9 -8.9 -7.4 -15.3 -39.4 Profit before tax 122.7 85.1 94.6 -10.3 292.0 54.4 60.2 77.1 116.5 308.2 Income taxes -27.2 -17.4 -19.3 -16.7 -80.7 -12.1 -13.3 -16.9 -26.3 -68.5 Net profit for the period 95.4 67.7 75.2 -27.1 211.3 42.2 46.9 60.3 90.3 239.7 Net profit attributable to Equity owners of the parent 92.9 64.7 71.7 -30.2 199.1 40.6 45.0 57.9 88.2 231.7 Non-controlling interests 2.5 3.0 3.5 3.1 12.2 1.7 2.0 2.4 2.1 8.0 Net profit for the period 95.4 67.7 75.2 -27.1 211.3 42.2 46.9 60.3 90.3 239.7 Earning per share, basic, EUR 0.61 0.42 0.47 -0.20 1.30 0.26 0.29 0.38 0.58 1.51 Earning per share, diluted, EUR 0.60 0.42 0.46 -0.20 1.28 0.26 0.29 0.38 0.57 1.50 1) Includes items affecting comparability. QUARTERLY EARNINGS PERFORMANCE KEMIRA 2023 | FINANCIAL STATEMENTS | 124 Shares and shareholders Shares and share capital On December 31, 2023, Kemira Oyj’s share capital amounted to EUR 221.8 million and the number of shares was 155,342,557. Each share entitles the holder to one vote at the Annual General Meeting. Shareholders At the end of December 2023, Kemira Oyj had 49,659 registered shareholders (48,403 on December 31, 2022). Non-Finnish shareholders held 34.7% of the shares (31.5% on December 31, 2022), including nominee-registered holdings. Households owned 19.0% of the shares (19.3% on December 31, 2022). Kemira held 1,722,725 treasury shares (1,990,197 on December 31, 2022), representing 1.1% (1.3% on December 31, 2022) of all company shares. A list of Kemira’s largest shareholders is updated monthly and can be found on the company website at kemira.com/investors. Listing and trading Kemira Oyj’s shares are listed on Nasdaq Helsinki. The trading code for the shares is KEMIRA and the ISIN code is FI0009004824. Kemira Oyj’s share price increased by 17% during the reporting period and closed at EUR 16.79 on the Nasdaq Helsinki at the end of December 2023 (14.33 on December 31, 2022). The shares registered a high of EUR 18.22 and a low of EUR 13.51 in January-December 2023, and the average share price was EUR 15.36. The company’s market capitalization, excluding treasury shares, was EUR 2,579 million at the end of December 2023 (2,198 on December 31, 2022). In January-December 2023, Kemira Oyj’s share trading turnover on the Nasdaq Helsinki was EUR 688 million (EUR 462 million in January-December 2022). The average daily trading volume was 174,707 shares (146,311 in January-December 2022). The total volume of Kemira Oyj’s share trading in January-December 2023 was 57 million shares (49 million shares in January-December 2022), 23% (25% in January-December 2022) of which was executed on other trading platforms (e.g. Turquoise, CBOE DXE). Source: Nasdaq and Kemira.com. Up-to-date information on Kemira’s share price is available on the company’s website at kemira.com/investors. Dividend policy and dividend distribution On December 31, 2023, Kemira Oyj’s distributable funds totaled EUR 713,680,177 of which net profit for the period was EUR 104,191,302. No material changes have taken place in the company’s financial position after the balance sheet statement date. Kemira Oyj’s Board of Directors proposes to the Annual General Meeting to be held on March 20, 2024 that a dividend of EUR 0.68 per share, totaling EUR 104 million, be paid on the basis of the adopted balance sheet for the financial year that ended on December 31, 2023. The dividend will be paid in two installments. The first installment, EUR 0.34 per share, will be paid to shareholders who are registered in the company’s shareholder register maintained by Euroclear Finland Oy on the record date for the dividend payment: March 22, 2024. The Board of Directors proposes that the first installment of the dividend be paid out on April 4, 2024.The second installment, of EUR 0.34 per share, will be paid in November 2024. The second installment will be paid to shareholders who are registered in the company’s shareholder register maintained by Euroclear Finland Oy on the record date for the dividend payment. The Board of Directors will decide the record date and the payment date for the second installment at its meeting in October 2024. The record date is planned for October 29, 2024, and the dividend payment date for November 5, 2024 at the earliest. Kemira’s dividend policy is to pay a competitive dividend that increases over time. SHARES AND SHAREHOLDERS KEMIRA 2023 | FINANCIAL STATEMENTS | 125 Board authorizations The Annual General Meeting on March 22, 2023 authorized the Board of Directors to decide upon the repurchase of a maximum of 6,000,000 of the company’s own shares. This corresponds to approximately 3.9% of all shares and votes in the company. The shares will be repurchased by using unrestricted equity, either through a tender offer with equal terms to all shareholders at a price determined by the Board of Directors or otherwise in proportion to the existing shareholdings of the company’s shareholders in public trading on the Nasdaq Helsinki Ltd. (the “Helsinki Stock Exchange”) at the market price quoted at the time of repurchase. The price paid for the shares repurchased through a tender offer under the authorization shall be based on the market price of the company’s shares in public trading. The minimum price to be paid would be the lowest market price of the share quoted in public trading during the authorization period and the maximum price would be the highest market price quoted during the authorization period. Shares shall be acquired and paid for in accordance with the rules of the Helsinki Stock Exchange and those of Euroclear Finland Ltd. Shares may be repurchased to be used in implementing or financing mergers and acquisitions, developing the company’s capital structure, improving the liquidity of the company’s shares, or to be used for the payment of the annual fee payable to the members of the Board of Directors or implementing the company’s share-based incentive plans. In order to realize the aforementioned purposes, the shares acquired may be retained, transferred further or cancelled by the company. The Board of Directors will decide on other terms related to the share repurchase. The Share repurchase authorization is valid until the end of the next Annual General Meeting. The authorization was not used by December 31, 2023. The Annual General Meeting authorized the Board of Directors to decide to issue a maximum of 15,600,000 new shares (corresponding to approximately 10% of all company shares and votes) and/or transfer a maximum of 7,800,000 of the company’s own shares (corresponding to approximately 5% of all company shares and votes) held by the company (“Share issue”). The new shares may be issued and the company’s own shares held by the company may be transferred either for consideration or without consideration. The new shares may be issued and the company's own shares held by the company may be transferred to the company’s shareholders in proportion to their current shareholdings in the company, or by disapplying the shareholders’ pre-emption right, through a directed share issue, if the company has a weighty financial reason to do so, such as financing or implementing mergers and acquisitions, developing the capital structure of the company, improving the liquidity of the company’s shares or, if it is justified, for the payment of the annual fee payable to the members of the Board of Directors or implementing the company’s share-based incentive plans. The directed share issue may be carried out without consideration only in connection with the implementation of the company’s share-based incentive plans. The subscription price of new shares shall be recorded to the invested unrestricted equity reserves. The consideration payable for the company's own shares shall be recorded to the invested unrestricted equity reserves. The Board of Directors shall decide upon other terms related to the share issues. The share issue authorization is valid until May 31, 2024. The share issue authorization has been used and shares owned by the Group were conveyed to members of the Board and key employees in connection with remuneration. Management shareholding The members of the Board of Directors as well as the Interim President and CEO and his Deputy held 214,529 (330,988) Kemira Oyj shares on December 31, 2023 or 0.14% (0.21%) of all outstanding shares and voting rights (including treasury shares and shares held by the related parties and controlled corporations). Petri Castrén, Interim President and CEO, held 56,140 shares on December 31, 2023. Members of the Management Board, excluding the Interim President and CEO and his Deputy, held a total of 245,128 shares on December 31, 2023 (237,515), representing 0.16% (0.15%) of all outstanding shares and voting rights (including treasury shares and shares held by the related parties and controlled corporations). Up-to- date information regarding the shareholdings of the Board of Directors and Management is available on Kemira’s website at kemira.com/investors. SHARES AND SHAREHOLDERS KEMIRA 2023 | FINANCIAL STATEMENTS | 126 LARGEST SHAREHOLDERS DEC 31, 2023 Shareholder Number of shares % of shares and votes 1 Oras Invest Ltd 33,553,000 21.6 2 Solidium Oy 7,782,765 5.0 3 Varma Mutual Pension Insurance Company 5,332,678 3.4 4 Nordea Funds 3,896,196 2.5 5 Ilmarinen Mutual Pension Insurance Company 3,700,000 2.4 6 Elo Mutual Pension Insurance Company 2,277,000 1.5 7 Etola Group Oy 1,000,000 0.6 8 Veritas Pension Insurance Company Ltd. 861,372 0.6 9 Laakkonen Mikko Kalervo 770,000 0.5 10 Nordea Life Assurance Finland Ltd. 738,047 0.5 11 The State Pension Funds 560,000 0.4 12 Paasikivi Pekka Johannes 462,200 0.3 13 Säästöpankki Funds 392,194 0.3 14 Valio Pension Fund 379,450 0.2 15 OP-Henkivakuutus Ltd. 340,902 0.2 Kemira Oyj 1,722,725 1.1 Nominee registered and foreign shareholders 53,835,387 34.7 Others, Total 37,738,641 24.2 Total 155,342,557 100.0 SHAREHOLDINGS BY NUMBER OF SHARES HELD ON DEC 31, 2023 Number of shares Number of shareholders % of shareholders Shares total % of shares and votes 1 - 100 19,087 38.4 919,462 0.6 101 - 500 18,297 36.8 4,839,778 3.1 501 - 1,000 5,882 11.8 4,503,491 2.9 1,001 - 5,000 5,381 10.8 11,238,360 7.2 5,001 - 10,000 574 1.2 4,126,138 2.7 10,001 - 50,000 351 0.7 6,560,370 4.2 50,001 - 100,000 38 0.1 2,666,853 1.7 100,001 - 500,000 33 0.1 6,160,766 4.0 500,001 - 1,000,000 7 0.0 5,296,157 3.4 1,000,001 - 9 0.0 109,031,182 70.2 Total 49,659 100.0 155,342,557 100.0 SHARES AND SHAREHOLDERS KEMIRA 2023 | FINANCIAL STATEMENTS | 127 Information for investors Financial reports in 2024 Kemira will publish three financial reports in 2024. April 26, 2024: Interim report for January–March July 17, 2024: Half-year financial report for January–June October 25, 2024: Interim report for January–September The financial reports and related presentation material are available on Kemira’s website at kemira.com/investors. Furthermore, Kemira's stock exchange and press releases, Annual Reports (incl. Corporate Responsibility Report and Financial Statements) and other investor information are also available on the website. On the site, visitors can register to receive releases by e-mail and order the company’s Financial Statements. Investor communications The purpose of Kemira's investor communications is to provide capital markets with open and reliable information on the company and its operating environment in order to give market participants a factual overview of Kemira as an investment. Kemira's investor communications aims to ensure that everyone operating in the markets has equal access to sufficient and correct information concerning the company, and to ensure that information is disclosed consistently and without delay. Kemira Oyj is domiciled in Helsinki, Finland, and the company's shares are listed on Nasdaq Helsinki. Kemira Oyj complies with the laws of Finland and the regulations of Nasdaq Helsinki and Finland's Financial Supervisory Authority. Silent period Kemira observes a silent period before issuing financial statements or interim reports. During the period, Kemira’s representatives do not comment on Kemira’s financial statements or interim reports for the ongoing reporting period the specific silent period relates to. The schedule for the silent period and publication of financial information and closed periods is displayed on Kemira’s website under Investors > Investor Calendar. Kemira’s Investor Relations function is responsible for keeping the calendar up-to-date. Annual General Meeting Kemira's Annual General Meeting will be held on Wednesday, March 20, 2024 at 1.00 p.m. EET at Pikku-Finlandia, Karamzininranta 4, Helsinki, Finland. Shareholders who on the record date of the Annual General Meeting, March 8, 2024, are registered in the company’s shareholders’ register maintained by Euroclear Finland Ltd, are entitled to attend in the Annual General Meeting and exercise their rights as shareholders by voting in advance. Registered shareholders who are not attending the meeting in person, have the possibility to follow the Annual General Meeting via a live webcast, which is not deemed as official participation. Registration for the Annual General Meeting will begin on February 20, 2024 and invitation and registration instructions have been published on February 9, 2024 as a stock exchange release and at Kemira’s web site at kemira.com/agm2024. Kemira will release a stock exchange release on the Annual General Meeting’s decisions immediately after the meeting. Dividend distribution For dividend proposal, please see page 109. Change of address Kemira’s shareholders are kindly requested to report any change of address to the bank or brokerage firm in which they have their book-entry account. This will also update information in registers, maintained by Euroclear Finland Ltd, which Kemira uses to send mail to its shareholders. INFORMATION FOR INVESTORS KEMIRA 2023 | FINANCIAL STATEMENTS | 128 Investor relations Mikko Pohjala, Vice President, Investor Relations +358 40 838 0709 mikko.pohjala@kemira.com Basic share information Listed on: Nasdaq Helsinki Ltd Trading code: KEMIRA ISIN code: FI0009004824 Industry group: Materials Industry: Chemicals Number of shares on December 31, 2022: 155,342,557 Listing date: November 10, 1994 INFORMATION FOR INVESTORS KEMIRA 2023 | FINANCIAL STATEMENTS | 129