Kemira Oyj

Quarterly Report • Feb 11, 2016

Financial Statements Bulletin 2015

REVENUE GROWTH WITH INCREASED OPERATIVE EBITDA IN 2015

Fourth quarter

• Revenue increased 10% to EUR 600.2 million (547.1) driven by acquisitions and favorable currencies.
• Operative EBITDA increased 4% to EUR 68.0 million (65.3) with a margin of 11.3% (11.9%).

Full year

• Revenue increased 11% to EUR 2,373.1 million (2,136.7). Revenue in local currencies, excluding acquisitions and divestments, decreased 1%.
• Operative EBITDA increased 14% to EUR 287.3 million (252.9) with a margin of 12.1% (11.8%).
• Earnings per share decreased to EUR 0.47 (0.59) partly due to higher depreciation and amortization resulting from acquisitions, and non-recurring items. Operative earnings per share were EUR 0.63 (0.63).
• The Board of Directors proposes a cash dividend of EUR 0.53 per share (0.53) to the Annual General Meeting 2016, totaling EUR 81 million (81) equivalent to 84% (84%) of the operative net profit.
• Outlook: Kemira continues to focus on profitable growth. Kemira expects its revenue and operative EBITDA to increase in 2016 compared to 2015.

Kemira's President and CEO Jari Rosendal:

"Our fourth quarter revenue growth was driven by acquisitions. The integration of acquired businesses is proceeding very well. In the Pulp & Paper segment, operative EBITDA margin increased sequentially throughout the year. Solid performance in the Municipal & Industrial segment continued. The drastic drop in oil price continued to negatively impact the revenue and profitability of the Oil & Mining segment.

In 2015, our revenue grew by 11% and operative EBITDA by 14% leading to an improved margin of 12.1%, supported by acquisitions and favorable currency exchange rates. I am pleased with the development of the net working capital during the last quarters which contributed to the improvement in operating cash flow.

In the Pulp & Paper segment, revenue in local currencies, excluding acquisitions and divestments, grew by 2%. Good demand for pulp chemicals is expected to continue resulting in capacity increases, such as our new chlorate plant in Brazil, which is expected to start in the first half of the year. We are planning to add bleaching chemical capacity also in the Nordics. In addition, we have signed several new Total Chemistry Management deals, which will bring additional revenue in 2016.

In the Municipal & Industrial segment revenue, growth continued and profitability improved substantially, the operative EBITDA margin reaching nearly 14% for the year. After the restructuring period in the previous years, the segment is delivering well on its strategic objectives of steady growth and cash flow generation.

The Oil & Mining segment continues to be twofold. The activity in the U.S. shale operations remains slow negatively impacting the segment's financials. On the other hand, the mining business remains steadier and the progress of new applications in the field of Chemical Enhanced Oil Recovery (CEOR) is encouraging.

I consider Kemira to be well-positioned to continue profitable growth with clear strategic objectives. Despite substantial changes in the operating environment in 2015, our strategy execution is on track and we continue to focus on profitable growth in 2016."

KEY FIGURES AND RATIOS

	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
EUR million	2015	2014	2015	2014
Revenue	600.2	547.1	2,373.1	2,136.7
Operative EBITDA	68.0	65.3	287.3	252.9
Operative EBITDA, %	11.3	11.9	12.1	11.8
EBITDA	57.7	73.2	263.8	252.9
EBITDA, %	9.6	13.4	11.1	11.8
Operative EBIT	33.1	39.5	163.1	158.3
Operative EBIT, %	5.5	7.2	6.9	7.4
EBIT	17.8	45.4	132.6	152.6
EBIT, %	3.0	8.3	5.6	7.1
Financing income and expenses	-5.8	-10.3	-30.8	-30.7
Profit before tax	12.0	35.3	102.1	122.1
Net profit	4.4	23.9	77.2	95.8
Earnings per share, EUR	0.02	0.15	0.47	0.59
Operative earnings per share, EUR	0.13	0.16	0.63	0.63
Capital employed*	1,659.5	1,427.7	1,659.5	1,427.7
Operative ROCE*, %	9.8	11.1	9.8	11.1
ROCE*, %	8.0	10.7	8.0	10.7
Cash flow from operating activities	112.6	25.0	247.6	74.2
Capital expenditure excl. M&A	61.2	55.5	181.7	145.7
Capital expenditure incl. M&A	63.2	54.9	305.1	145.1
Cash flow after investing activities	49.8	-22.4	-53.8	75.2
Equity ratio, % at period-end	46	51	46	51
Equity per share, EUR	7.76	7.57	7.76	7.57
Gearing, % at period-end	54	42	54	42
Personnel at period-end	4,685	4,248	4,685	4,248

*12-month rolling average (ROCE, % based on the EBIT)

Definitions of key figures are available at www.kemira.com > Investors > Financial information. Comparative 2014 figures are provided in parentheses for some financial results, where appropriate. Operative EBITDA, operative EBIT, operative earnings per share and operative ROCE do not include non-recurring items.

FINANCIAL PERFORMANCE IN Q4 2015

Revenue increased 10% to EUR 600.2 million (547.1) due to acquisitions and favorable currency exchange rates. Revenue in local currencies, excluding acquisitions and divestments, decreased 4% as a result of continued low activity in the U.S. shale gas and oil business. Revenue in local currencies, excluding acquisitions and divestments, in the Municipal & Industrial segment increased 2%.

Revenue,	Oct-Dec	Oct-Dec		Organic	Currency	Acq. & div.
EUR million	2015	2014	∆%	growth*, %	impact, %	impact, %
Pulp & Paper	372.3	307.0	+21	0	+3	+18
Oil & Mining	76.4	96.7	-21	-25	+4	0
Municipal & Industrial	151.5	143.4	+6	+2	+4	0
Total	600.2	547.1	+10	-4	+4	+10

* Revenue in local currencies, excluding acquisitions and divestments

The operative EBITDA increased 4% to EUR 68.0 million (65.3). Lower variable costs and favorable currency exchange rates, especially U.S. dollar, continued to have a positive impact. The operative EBITDA margin was 11.3% (11.9%).

Variance analysis, EUR million	Oct-Dec
Operative EBITDA, 2014	65.3
Sales volumes	-5.3
Sales prices	-10.9
Variable costs	+17.2
Fixed costs	-7.5
Currency exchange	+5.0
Others	+4.2
Operative EBITDA, 2015	68.0

	Oct-Dec 2015	Oct-Dec 2014		Oct-Dec 2015	Oct-Dec 2014
Operative EBITDA	EUR, million	EUR, million	∆%	%-margin	%-margin
Pulp & Paper	46.9	36.3	+29	12.6	11.8
Oil & Mining	3.6	12.2	-70	4.7	12.6
Municipal & Industrial	17.5	16.8	+4	11.6	11.7
Total	68.0	65.3	+4	11.3	11.9

The EBITDA decreased 21% to EUR 57.7 million (73.2), mainly due to non-recurring items. Non-recurring items affecting the EBITDA were EUR -10.3 million (7.9), including EUR -4 million from restructuring related to acquisitions and EUR -3 million from site closures of manufacturing plants. In the comparable period non-recurring items were related mainly to a pension benefit income.

Depreciation, amortization and impairments increased to EUR 39.9 million (27.7) due to acquisitions and increased investments, including EUR 4.6 million (1.3) amortization of PPA (purchase price allocation). Nonrecurring items within depreciation, amortization and impairments were EUR -5.0 million (-2.0) and related mainly to write-downs due to site closures.

Non-recurring items, EUR million	Oct-Dec 2015	Oct-Dec 2014
Within EBITDA	-10.3	7.9
Pulp & Paper	-4.1	1.4
Oil & Mining	-0.3	2.2
Municipal & Industrial	-5.9	4.3
Within depreciation, amortization and impairments	-5.0	-2.0
Pulp & Paper	-0.2	-0.9
Oil & Mining	-3.8	-0.1
Municipal & Industrial	-1.0	-1.0

The operative EBIT decreased to EUR 33.1 million (39.5) due to higher depreciation and amortization resulting from acquisitions. The operative EBIT margin decreased to 5.5% (7.2%).

Financing income and expenses totaled EUR -5.8 million (-10.3) including EUR -0.4 million (-0.6) changes in fair values of electricity derivatives and currency exchange differences of EUR 0.9 million (0.5). In the previous year, the overdue interest of approximately EUR 3 million on the old appealed tax verdict had a negative impact on financing expenses.

Net profit attributable to the owners of the parent company decreased to EUR 2.9 million (22.5), mainly due to higher depreciation and amortization, partly related to acquisitions, as well as non-recurring items. Earnings per share were EUR 0.02 (0.15) and operative earnings per share decreased to EUR 0.13 (0.16).

FINANCIAL PERFORMANCE, FULL YEAR 2015

Revenue increased 11% to EUR 2,373.1 million (2,136.7) due to acquisitions and favorable currency exchange rates; especially, the strengthened U.S. dollar is beneficial for Kemira. Revenue in local currencies, excluding acquisitions and divestments, decreased 1% due to the slowdown of horizontal drilling and fracking activity in the U.S. shale gas and oil business.

Revenue,	Jan-Dec	Jan-Dec		Organic	Currency	Acq. & div.
EUR million	2015	2014	∆%	growth*, %	impact, %	impact, %
Pulp & Paper	1,417.3	1,170.0	+21	+2	+6	+13
Oil & Mining	350.1	382.2	-8	-18	+9	0
Municipal & Industrial	605.7	564.7	+7	+1	+6	0
ChemSolutions	-	19.8	-	-	-	-
Total	2,373.1	2,136.7	+11	-1	+6	+6

* Revenue in local currencies, excluding acquisitions and divestments

Geographically, the revenue split was as follows: EMEA (Europe, Middle East, Africa) 52% (55%), the Americas 40% (39%), and Asia Pacific 8% (6%). According to Kemira's strategy, mature markets are important to all Kemira segments, whereas the focus in the emerging markets is on selective expansion.

The operative EBITDA increased 14% to EUR 287.3 million (252.9), mainly due to the lower variable costs and positive currency exchange rate impact, as well as a contribution from the acquisitions. The operative EBITDA margin improved to 12.1% (11.8%).

Variance analysis, EUR million	Jan-Dec
Operative EBITDA, 2014	252.9
Sales volumes	-1.8
Sales prices	-20.1
Variable costs	+41.3
Fixed costs	-21.8
Currency exchange	+26.2
Others	+10.6
Operative EBITDA, 2015	287.3

	Jan-Dec 2015	Jan-Dec 2014		Jan-Dec 2015	Jan-Dec 2014
Operative EBITDA	EUR, million	EUR, million	∆%	%-margin	%-margin
Pulp & Paper	171.0	137.2	+25	12.1	11.7
Oil & Mining	33.5	48.4	-31	9.6	12.7
Municipal & Industrial	82.8	68.1	+22	13.7	12.1
ChemSolutions	-	-0.8	-	-	-4.0
Total	287.3	252.9	+14	12.1	11.8

The EBITDA increased 4% to EUR 263.8 million (252.9). Non-recurring items affecting the EBITDA were EUR -23.5 million (0.0) including EUR -13 million from restructuring costs related to acquisitions and EUR -6 million from site closures of manufacturing plants. The comparable period included a capital gain of EUR 37 million related to the divestment of formic acid business and capital gains of EUR 7 million related to other disposals. In addition, non-recurring items in 2014 included approximately a EUR 20 million settlement related to an old alleged infringement of competition law. Provisions and restructuring charges related to streamlining Kemira's operations amounted to approximately EUR 30 million in 2014.

Depreciation, amortization and impairments increased to EUR 131.2 million (100.3) due to acquisitions and increased investments, including EUR 12.6 million (4.9) amortization of PPA (purchase price allocation). Non-recurring items within depreciation, amortization and impairments were EUR -7.0 million (-5.7) and related mainly to write-downs due to site closures.

Non-recurring items, EUR million	Jan-Dec 2015	Jan-Dec 2014
Within EBITDA	-23.5	0.0
Pulp & Paper	-13.9	-27.3
Oil & Mining	-2.7	-2.2
Municipal & Industrial	-6.9	-6.8
Other	0.0	36.3
Within depreciation, amortization and impairments	-7.0	-5.7
Pulp & Paper	-0.3	-0.9
Oil & Mining	-5.5	0.0
Municipal & Industrial	-1.2	-4.8
Total	-30.5	-5.7

The operative EBIT increased to EUR 163.1 million (158.3). The operative EBIT margin decreased to 6.9% (7.4%).

Financing income and expenses totaled EUR -30.8 million (-30.7) including changes of EUR -0.8 million (-1.0) in fair values of electricity derivatives and EUR 2.3 million write down of a shareholder's loan related to Kemira's ownership in TVO (Teollisuuden Voima Oyj), a Finnish power company. The currency exchange differences, mainly related to the U.S. dollar, had EUR -2.0 million (-1.3) impact on the financing income and expenses.

Total taxes decreased to EUR 24.9 million (26.3), mainly due to lower profit before taxes. The tax rate, excluding non-recurring items was 22.0% (22.6%).

Net profit attributable to the owners of the parent company was EUR 71.0 million (89.9) and earnings per share were EUR 0.47 (0.59). Operative earnings per share were EUR 0.63 (0.63).

FINANCIAL POSITION AND CASH FLOW

Cash flow from the operating activities in January-December 2015 increased to EUR 247.6 million (74.2), mainly due to lower net working capital, lower realized exchange losses and lower taxes paid. Cash flow after investing activities decreased to EUR -53.8 million (75.2) as a result of acquisitions. At the end of the period, Kemira Group's net debt was EUR 642 million (486). Net debt increased due to acquisitions, higher capital expenditure, and dividend payment. The biggest individual project impacting capital expenditure (excl. acquisitions) in 2015 was a construction of a sodium chlorate plant in Brazil.

At the end of the period, interest-bearing liabilities totaled EUR 794 million (605). Fixed-rate loans accounted for 80% of the net interest-bearing liabilities (82%). The average interest rate of the Group's interest-bearing liabilities was 2.0% (2.1%). The duration of the Group's interest-bearing loan portfolio was 31 months (23). Kemira issued a senior unsecured bond of EUR 150 million on May 13, 2015. The seven-year bond will mature on May 13, 2022 and it carries a fixed annual interest of 2.250 percent.

Short-term liabilities maturing in the next 12 months amounted to EUR 123 million, the short-term part of the long-term loans represented EUR 37 million. On December 31, 2015, cash and cash equivalents totaled EUR 152 million. The Group has an undrawn EUR 400 million revolving credit facility and an undrawn EUR 50 million term loan.

At the end of the period, the equity ratio was 46% (51%), while the gearing was 54% (42%). Shareholders' equity was EUR 1,193.2 million (1,163.3).

The Group's most significant transaction currency risks arise from the Swedish krona, Brazilian real and Canadian dollar. At the end of the year, the denominated 12-month exchange rate risk of the Swedish krona had an equivalent value of approximately EUR 60 million, 58% of which was hedged on an average basis. The Brazilian real's denominated exchange rate risk was approximately EUR 43 million without being hedged. The Canadian dollar's denominated exchange rate risk was approximately EUR 39 million, 54% of which was hedged on an average basis. In addition, Kemira is exposed to smaller transaction risks in relation to the Chinese renminbi, the U.S. dollar and Norwegian krona with the total annual exposure in these currencies at approximately EUR 50 million, 33% of which was hedged on an average basis.

As Kemira's consolidated financial statements are compiled in euros, Kemira is also subject to a currency translation risk to the extent that the income statement and balance sheet items of subsidiaries located outside Finland are reported in a currency other than euro. The most significant translation exposure derives from the U.S. dollar, the Swedish krona, the Canadian dollar, the Chinese renminbi, and the Brazilian real. A strengthening of these currencies against the euro would increase Kemira's revenue and EBITDA through a translation effect. A 10% appreciation of main currencies against the euro would increase Kemira's EBITDA by approximately EUR 15 million on an annual basis through the translation effect. In 2015, favorable currency rates had an EUR 26 million positive impact on the operative EBITDA.

CAPITAL EXPENDITURE

In 2015, capital expenditure increased to EUR 305.1 million (145.1) including the impact of acquisitions. Capital expenditure, excluding the impact of acquisitions increased to EUR 181.7 (145.7) and can be broken down as follows: expansion capex 43% (43%), improvement capex 29% (27%) and maintenance capex 28% (30%). The biggest individual project impacting capital expenditure (excl. acquisitions) in 2015 was the construction of the sodium chlorate plant in Brazil.

In January-December 2015, the Group's depreciation, amortization and impairments, excluding nonrecurring items, increased to EUR 124.2 million (94.6), mainly as a result of acquisitions and investments in new capacity.

RESEARCH AND DEVELOPMENT

Research and Development expenses totaled EUR 31.9 million (28.0) in 2015, representing 1.3% (1.3%) of the Kemira Group's revenue.

Kemira's Research and Development is a critical enabler of growth and further differentiation. New product launches contribute to the efficiency and sustainability of customer processes and 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, and on its ability to innovate new differentiated products and applications. Revenue from differentiated products increased 17% to EUR 1,200 million (1,029) in 2015 representing 51% (48%) of Kemira Group's revenue.

Kemira Group's target is to increase the revenue from new products and products for new applications. In 2015, the share of innovation revenue (revenue from new products or from products to new applications launched within the past five years) in the Group revenue was 8% (8%).

At the end of 2015, Kemira had 345 (292) patent families, 1,034 (730) granted patents, and 819 (635) pending applications. A patent family covers one invention and has a number of patents or applications in various countries. The numbers increased due to acquisitions and by 38 own patent filings protected in 2015.

HUMAN RESOURCES

At the end of the period, Kemira Group had 4,685 employees (4,248). Kemira employed 785 people in Finland (759), 1,786 people elsewhere in EMEA (1,654), 1,578 in the Americas (1,483), and 536 in APAC (352).

CORPORATE RESPONSIBILITY

Responsibility focus areas	KPI's and KPI target values	if possible)		Status FY 2015 (target shown on green
Sustainable products and solutions
Innovation sales	Share of innovation revenue of total revenue  10% by the end of 2016	10% 5% 0%	5% 2012	8% 7% 2013 2014	8% 2015	10% 2016
Responsibility toward employees
Leadership development	People managers participated in global leadership programs at least once in period 2013–2015, cumulative %  > 95% by the end of 2015	100% 50% 0%	39% 2013	46% 2014	71% 2015	95% 2015
Employee engagement	Employee Engagement Index  Index at or above the external industry norm (68%) by the end of 2015 Participation rate in Voices@Kemira  75–85% by the end of 2015	100% 50% 0%	87% 69% 2009	84% 70% 2011 Engagement	75% 58% 2013 Participation	85% 67% 2015
Occupational health and safety	Number of Total Recordable Injuries (TRI) (per million hours, Kemira + contractor, 1 year rolling average)  Achieve zero injuries	10 5 0	8.5 2012	7.1 2013	5.8 2014	7.2 2015
Responsible supply chain
	Supplier contracts with signed CoC SDA as attachments  90% by the end of 2015	100% 50% 0%	36% 2013	93% 2014	93% 2015	90% 2015

Responsible manufacturing

Climate change	Kemira Carbon Index performance  Index ≤ 80 by end of 2020 (baseline year 2012 = 100)	110 105 102 100 91 91 88 80
		2009 2010 2011 2012 2013 2014 2015 2020 Kemira Carbon index is calculated and reported on annual basis. The figures for 2013-2014 are restated due to more accurate information available in 2015.

Responsibility toward the communities where we operate

Participation in local community involvement activities

Kemira sites with over 50 employees participated in local community involvement initiatives at least once in period 2013–2015, cumulative % 100% by the end of 2015

SEGMENTS

PULP & PAPER

Pulp & Paper has unique expertise in applying chemicals and supporting pulp & paper producers in innovating and constantly improving their operational efficiency. The segment develops and commercializes new products to fulfill customer needs, ensuring the leading portfolio of products and services for paper wet-end, focusing on packaging and board, as well as tissue. Pulp & Paper leverages its strong application portfolio in North America and EMEA and builds a strong position in the emerging Asian and South American markets.

	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
EUR million	2015	2014	2015	2014
Revenue	372.3	307.0	1,417.3	1,170.0
Operative EBITDA	46.9	36.3	171.0	137.2
Operative EBITDA, %	12.6	11.8	12.1	11.7
EBITDA	42.8	37.7	157.1	109.9
EBITDA, %	11.5	12.3	11.1	9.4
Operative EBIT	25.9	21.9	96.8	85.8
Operative EBIT, %	7.0	7.1	6.8	7.3
EBIT	21.6	22.4	82.6	57.6
EBIT, %	5.8	7.3	5.8	4.9
Capital employed*	1,068.6	881.2	1,068.6	881.2
Operative ROCE*, %	9.1	9.7	9.1	9.7
ROCE*, %	7.7	6.5	7.7	6.5
Capital expenditure excl. M&A	37.2	30.7	118.9	83.0
Capital expenditure incl. M&A	37.2	30.7	240.1	83.0
Cash flow after investing activities	43.7	-2.1	-63.2	-10.1

*12-month rolling average

Fourth quarter

The Pulp & Paper segment's revenue increased 21% to EUR 372.3 million (307.0) as a result of the impact of acquisitions (AkzoNobel's paper chemical business and Soto Industries) of 18% and the impact of the currency exchange rate fluctuations of 3%. Positive revenue growth in local currencies, excluding acquisitions and divestments, in EMEA and APAC was offset by slower growth in the Americas.

In EMEA, revenue increased 16% partly due to acquisitions. Revenue in local currencies, excluding acquisitions and divestments, continued on growth path. Especially demand for pulping and bleaching, sizing and strength chemicals increased in the fourth quarter.

In the Americas, revenue growth continued and was 16% due to acquisitions and favorable currency exchange rates.

In APAC, revenue increased 85% due to acquisitions and impact of favorable currency exchange rates. Also

higher sales volumes improved the revenue due to the increased capacity utilization of Nanjing site in China and cross-sales synergies from the acquisition.

The operative EBITDA increased 29% to EUR 46.9 million (36.3), mainly due to acquisitions as well as favorable currencies, and raw materials. The operative EBITDA margin improved to 12.6% (11.8%) driven mainly by lower variable costs.

Full year

The Pulp & Paper segment's revenue increased 21% to EUR 1,417.3 million (1,170.0). The revenues in local currencies, excluding divestments and acquisitions, grew 2% due to sales volume growth in EMEA and APAC regions. Sales prices were approximately at the previous year's level. Currency exchange rates had a 6% impact and the acquisitions had an impact of 13% on the revenue.

In EMEA, revenue increased 11% to EUR 753.0 million (675.9), mainly due to acquisitions and sales volume growth. Sales volumes of differentiated products continued to grow, especially in packaging board and tissue paper markets. In addition, stable demand for sodium chlorate and other pulping and bleaching chemicals contributed to the sales volume growth.

In the Americas, revenue increased 26% to EUR 501.5 million (397.1). Growth was supported by currencies and acquisitions, as well as pulp chemical deliveries to the Montes del Plata pulp mill in Uruguay.

In APAC, revenue increased 68% to EUR 162.8 million (97.0), mainly due to acquisitions, currencies and sales volume growth. Raw material shortages for ASA sizing agent were resolved during the second half of the year, improving the capacity utilization rate of the Nanjing site in China.

The operative EBITDA increased 25% to EUR 171.0 million (137.2) due to contribution from acquisitions, sales volumes growth, as well as favorable currencies and raw material prices. Operative EBITDA margin improved to 12.1% (11.7%). The operative EBIT margin declined to 6.8% (7.3%) due to higher depreciation as a result of acquisitions and investments in new capacity.

OIL & MINING

O&M provides a unique combination of innovative chemicals and application knowledge that improves process efficiency and yield in oil, gas and metals recovery. The segment uses its in-depth understanding of extraction processes to tailor solutions for water management and re-use. Expanding from its position in North America and EMEA, Oil & Mining continues to build a strong base for growth in South America, Middle East, and Africa.

	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
EUR million	2015	2014	2015	2014
Revenue	76.4	96.7	350.1	382.2
Operative EBITDA	3.6	12.2	33.5	48.4
Operative EBITDA, %	4.7	12.6	9.6	12.7
EBITDA	3.3	14.4	30.8	46.2
EBITDA, %	4.3	14.9	8.8	12.1
Operative EBIT	-2.4	7.2	11.1	29.9
Operative EBIT, %	-3.1	7.4	3.2	7.8
EBIT	-6.5	9.3	2.9	27.7
EBIT, %	-8.5	9.6	0.8	7.2
Capital employed*	271.4	239.5	271.4	239.5
Operative ROCE*, %	4.1	12.5	4.1	12.5
ROCE*, %	1.1	11.5	1.1	11.5
Capital expenditure excl. M&A	9.0	11.5	28.5	26.9
Capital expenditure incl. M&A	11.2	10.9	30.7	26.3
Cash flow after investing activities	7.2	3.0	10.7	20.6

*12-month rolling average

Fourth quarter

The Oil & Mining segment's revenue decreased 21% to EUR 76.4 million (96.7). Favorable currency exchange rate fluctuations had an impact of 4% on the revenue. Sales volumes and prices declined. Revenue in local currencies decreased 25%, mainly due to continued slowdown of horizontal drilling and fracking activity in the US. Revenue decline from mining and business derived from other vertical industries was more modest. On the other hand, revenue growth from polyacrylamides used in Chemical Enhanced Oil Recovery had a positive impact.

In the Americas, revenue decreased 33%, mainly due to the slowdown of horizontal drilling and fracking activity. In addition, lower sales prices had a negative impact. Kemira continued to gain business in the Canadian oil sands market with accelerating but currently modest revenue impact.

In EMEA, revenue increased 17% as a result of polyacrylamide deliveries into a conventional oil field in India, using new polyacrylamide based Chemical Enhanced Oil Recovery technology.

The operative EBITDA decreased to EUR 3.6 million (12.2) and the margin to 4.7% (12.6%), mainly due to lower revenue. Variable costs were lower mainly due to decreased oil price that is used as a basis for most

of the raw materials in the segment. Currency exchange rate fluctuations had a minor positive impact on the operative EBITDA.

Full year

The Oil & Mining segment's revenue decreased 8% to EUR 350.1 million (382.2). The revenue in local currencies, excluding acquisitions and divestments, decreased 18% as a result of low volumes of friction reducers used in shale fracking in the U.S. Sales price changes had a negative impact on revenue. Revenue decline from business derived from other verticals was more modest. However, the revenue from Mining business grew despite difficult market conditions. Currency exchange rates had a 9% positive impact.

In the Americas, revenue decreased 14% to EUR 245.9 million (287.1), mainly due to lower sales in shale oil and gas business. Currency exchange had a positive impact on revenue in the region.

In EMEA, revenue increased 10% to EUR 104.3 million (95.1) as a result of new product sales in the field of Chemical Enhanced Oil Recovery. The region started polyacrylamide deliveries to India in the second quarter of 2015.

The operative EBITDA declined to EUR 33.5 million (48.4) as a result of lower sales. Lower variable costs and favorable currencies were not able to offset the decline in revenue. The operative EBITDA margin was 9.6% (12.7%). The operative EBIT margin was 3.2% (7.8%).

MUNICIPAL & INDUSTRIAL

M&I is a leading water chemicals supplier for raw and wastewater applications in EMEA and North America, and aims to capture selected growth opportunities in emerging markets. The segment enables its municipal and industrial customers to improve their water treatment efficiency by supplying them with competitive, high-performing products and value adding application support.

	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
EUR million	2015	2014	2015	2014
Revenue	151.5	143.4	605.7	564.7
Operative EBITDA	17.5	16.8	82.8	68.1
Operative EBITDA, %	11.6	11.7	13.7	12.1
EBITDA	11.6	21.1	75.9	61.3
EBITDA, %	7.7	14.7	12.5	10.9
Operative EBIT	9.6	10.4	55.2	43.3
Operative EBIT, %	6.3	7.3	9.1	7.7
EBIT	2.7	13.7	47.1	31.7
EBIT, %	1.8	9.6	7.8	5.6
Capital employed*	320.2	309.4	320.2	309.4
Operative ROCE*, %	17.2	14.0	17.2	14.0
ROCE*, %	14.7	10.2	14.7	10.2
Capital expenditure excl. M&A	14.8	13.4	34.2	35.2
Capital expenditure incl. M&A	14.8	13.4	34.2	35.2
Cash flow after investing activities	8.0	8.8	38.2	34.3

*12-month rolling average

Fourth quarter

The Municipal & Industrial segment's revenue increased 6% to EUR 151.5 million (143.4). Revenue in local currencies, excluding acquisitions and divestments, increased 2% and favorable currency impact of 4%. Sales prices were almost at the previous year's level.

In EMEA, revenue growth reached 5% due to higher demand in key water treatment chemicals. Sales prices of coagulants and polymers continued to be impacted by tight competition.

In the Americas, revenue growth continued and was 10% as a result favorable currency fluctuations. The revenue excluding currency impact was nearly at the previous year's level.

In APAC, revenue decreased by 8% due to focus on profitable product lines despite positive impact from currency fluctuations.

The operative EBITDA increased 4% to EUR 17.5 million (16.8) with a margin of 11.6% (11.7%). Variable costs continued to decrease, but the profitability was impacted by product mix and temporary cost increases. In addition, currency exchange rate fluctuations contributed positively to the operative EBITDA.

Full year

The Municipal & Industrial segment's revenue increased 7% to EUR 605.7 million (564.7). The revenues in local currencies, excluding acquisitions and divestments, increased 1% due to higher sales volumes, especially in EMEA and the Americas. Currency exchange rates had a positive impact of 6%.

In EMEA, revenue increased 2% to EUR 393.2 million (383.9), mainly due to higher volumes of coagulants and polymers while sales prices declined.

In the Americas, revenue increased 18% to EUR 187.7 million (159.2), mainly due to favorable currency exchange rates and volume growth of coagulants.

In APAC, revenue increased by 15% to EUR 24.9 million (21.6) due to favorable currency effect. During the year, M&I APAC has increased focus on product lines with better profitability.

The operative EBITDA increased 22% to EUR 82.8 million (68.1) as a result of lower variable costs and favorable currency fluctuations. The operative EBITDA margin improved to 13.7% (12.1%) and the operative EBIT margin was 9.1% (7.7%).

PARENT COMPANY'S FINANCIAL PERFORMANCE

Kemira Oyj's revenue increased to EUR 1,337.5 million (1,228.1) in 2015. EBITDA was EUR 109.4 million (34.0). EBITDA increased mainly due to growth in revenue. In addition, in the previous year EBITDA included a EUR 20 million settlement related to an old alleged infringement of competition law. The parent company's financing income and expenses were EUR 104.7 million (-9.3). Financing income and expenses increased mainly due to dividends from group companies. Net profit totaled EUR 165.2 million (-1.3). Capital expenditure totaled EUR 60.9 million (25.7), excluding investments in subsidiaries.

KEMIRA OYJ'S SHARES AND SHAREHOLDERS

On December 31, 2015, Kemira Oyj's share capital amounted to EUR 221.8 million and the number of shares was 155,342,557. Each share entitles to one vote at the Annual General Meeting.

At the end of December, Kemira Oyj had 32,601 registered shareholders (33,164). Non-Finnish shareholders held 21.4% of the shares (18.9%) including nominee registered holdings. Households owned 16.1% of the shares (16.1%). Kemira held 3,280,602 treasury shares (3,291,185) representing 2.1% (2.1%) of all company shares.

Kemira Oyj's share price closed at EUR 10.88 on the Nasdaq Helsinki at the end of December 2015 (9.89). Shares registered a high of EUR 12.27 (12.27) and a low of EUR 9.14 (9.11) in January-December 2015. The average share price was EUR 10.86 (10.87). The share price increased 10% during the year, while OMX Helsinki Cap index increased 11%. STOXX Chemicals (Europe), chemical sector benchmark index for Kemira increased 2% in 2015 (5%). The company's market capitalization, excluding treasury shares, was EUR 1,654 million (1,504) at the end of December 2015. In January-December 2015, Kemira Oyj's share trading volume on Nasdaq Helsinki was EUR 75 million (75). The average daily trading volume was 298,313

Share-based incentive plan for management and key employees

On December 15, 2014, the Board of Directors of Kemira Oyj decided to establish a long-term share-based incentive plan (the "Performance Share Plan") directed to a group of key employees in Kemira. The aim of the plan is to combine the objectives of the shareholders and the persons participating in the plan in order to increase the value of Kemira, to commit the participants to Kemira, and to offer them a competitive reward plan based on earning Kemira's shares. This plan replaces the share-based incentive plan targeted to the strategic management 2012–2014 as well as the share-based incentive plan targeted to the key personnel.

The Performance Share Plan includes three performance periods: calendar years 2015, 2016 and 2017. The Board of Directors of Kemira decides on the plan's performance criteria and on the required performance levels for each criterion at the beginning of each performance period. The potential reward of the plan from the performance period 2015 was based on the Kemira Group's revenue and on the Group's operative EBITDA margin.

The reward from the performance period 2015 will be paid partly in Kemira's shares and partly in cash in 2016. The cash proportion covers the 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 disbursement of reward. The shares paid as a reward may not be transferred during the restriction period, which will end two years after the end of the performance period. If the participant's employment or service ends during the restriction period, he or she must, as a rule, gratuitously return the shares given as a reward.

The Performance Share Plan is directed to approximately 90 people. The maximum rewards on the basis of the 2015 earning period of the Performance Share Plan would have corresponded to the value of an approximate total of 479,700 Kemira Oyj shares and additionally, the cash proportion intended to cover taxes and tax-related costs. At the date of the Financial Statements Bulletin the estimated number of shares to be paid is 287,800.

The Board of Directors recommends that a member of the Management Board owns such number of Kemira's shares that the total value of his or her shareholding would correspond to the value of his or her annual gross salary as long as the membership continues. If this recommendation is not yet fulfilled, the Board of Directors recommends that a member of the Management Board holds 50 percent of the net number of shares given on the basis of this plan also after the end of the restriction period, as long as his or her total shareholding corresponds to the value of his or her annual gross salary.

AGM DECISIONS

Annual General Meeting

Kemira Oyj's Annual General Meeting held on March 23, 2015 confirmed the dividend of EUR 0.53. The dividend was paid out on April 4, 2015.

The AGM 2015 authorized the Board of Directors to decide on the repurchase of a maximum of 4,500,000 company's own shares ("Share repurchase authorization"). The Share repurchase authorization is valid until the end of the next Annual General Meeting. The Board has not exercised its authority by December 31, 2015.

The AGM 2015 also authorized the Board of Directors to decide to issue a maximum of 15,600,000 new shares and/or transfer a maximum of 7,800,000 of the company's own shares held by the company ("Share issue authorization"). The Share issue authorization is valid until May 31, 2016. The share issue authorization has been used in connection with the Board of Directors remuneration.

The AGM elected Deloitte & Touche Oy to serve as the company's auditor, with Jukka Vattulainen, Authorized Public Accountant, acting as the principal auditor.

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 23, 2015, the Annual General Meeting elected six members to the Board of Directors. Annual General Meeting reelected Wolfgang Büchele, Winnie Fok, Juha Laaksonen, Timo Lappalainen, Jari Paasikivi and Kerttu Tuomas to the Board of Directors. Jari Paasikivi was elected as the Board's Chairman and Kerttu Tuomas was elected as the Vice Chairman. In 2015, Kemira's Board of Directors met 12 times with a 98.6% 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 Jari Paasikivi and has Juha Laaksonen and Kerttu Tuomas as members. In 2015, the Compensation Committee met 3 times with a 100% attendance rate. The Audit Committee is chaired by Juha Laaksonen and has Timo Lappalainen and Jari Paasikivi as members. In 2015, the Audit Committee met five times with a 100% attendance rate.

Changes to company management

Petri Helsky, Kemira's President of Paper segment and APAC region left his position on March 31, 2015. Mats Rönnbäck served as Interim President of the renamed Pulp & Paper segment and APAC region

between April 1 – October 31, 2015. On November 1, 2015, Kim Poulsen started as President of Pulp & Paper segment and APAC region and a member of the Management Board.

On May 18, 2015, Esa-Matti Puputti started as Executive Vice President, Operational Excellence and a member of the Management Board.

Structure

The acquisitions and divestments made during the year:

On May 4, 2015, Kemira completed the acquisition of AkzoNobel paper chemicals business announced on July 8, 2014. The value of the transaction was EUR 153 million and it became cash-effective in the second quarter of 2015. The acquired business is expected to increase revenue by more than EUR 200 million on an annualized basis as of the completion date.

On September 2, 2015, Kemira acquired certain assets of Soto Industries, LLC, a privately owned company, headquartered in Charlotte, North Carolina. Soto specializes in the application of scale control products, defoamers, and settling agents for the pulp and paper industry. The acquisition has no material impact on Kemira's financials.

On December 8, 2015, Kemira acquired certain assets of Polymer Services, LLC, a privately owned company, headquartered in Plainville, Kansas. Polymer Services, LLC is a highly specialized company focusing on the field application of polymer gel treatments for enhanced or improved oil recovery. The acquisition has no material impact on Kemira's financials.

SHORT-TERM RISKS AND UNCERTAINTIES

At Kemira, a risk is defined as an event or circumstance, which, if it materializes, may affect Kemira's ability to meet its strategic, operational, and financial goals. Kemira's risk management policy and principles proactively protect and help Kemira to reach the desired aggregate risk level and ensure the continuity of Kemira's operations.

Changes in customer demand

Significant and rapid decline in the use of certain chemicals (e.g. chemicals for packaging and board production) or in the demand for customers' products or activity could have a negative impact on Kemira's business. Significant decline in oil, gas and metal prices may shift customers' activities in areas that can be exploited with fewer chemicals. Also, increased awareness of and concern towards climate change and more sustainable products may change customers' demands, for instance, for water treatment technologies with lower chemical consumption, and this may have a negative impact, especially on the Kemira Municipal & Industrial segment's ability to compete. On the other hand, customer's possible capacity expansions could increase the chemical consumption and challenge Kemira's current production capacity. Failure from Kemira's side to be prepared to meet and manage these changed expectations could result in loss of market share.

In order to manage and mitigate this risk, Kemira systematically monitors leading indicators 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 Business Development, R&D and Sales units in order to better understand the future needs and expectations of its customers. Timely capital investments, as well as continuous discussions, and follow-ups with customers ensure Kemira's ability to respond to possible increase in demands. Kemira's geographic and customerindustry diversity also provides partial protection against the risk of changed customer demands.

Changes in laws and regulations

Kemira's business is subject to various laws and regulations, which have relevance in the development and implementation of Kemira's strategy. Although laws and regulations can generally be considered as an opportunity for Kemira, certain new legislative initiatives supporting, for example, the use of biodegradable raw materials or biological water treatment, limiting the use of aluminium or phosphates, or relating to recovery or recycling of phosphorus, may also have a negative impact on Kemira's business. Significant changes, for instance, in chemical, environmental or transportation laws and regulations may impact on Kemira's profitability through the increase in production and transportation costs. At the same time, such changes may also create new business opportunities for Kemira. Inclusion of new substances into the REACH authorization process may also bring further requirements to Kemira, where failure to obtain the relevant authorization could impact Kemira's business.

Kemira continuously follows regulatory developments in order to maintain the awareness of proposed and upcoming changes of those laws and regulations, which may have impact, for instance, on its sales, production and product development needs. Kemira has established an internal process to manage the substances of potential concern and to create management plans for them that consider, for example, possibilities to replace certain substances if they would be subject to stricter regulation. Regulatory effects are systematically considered in strategic decision making. Kemira takes an active role in regulatory discussions whenever justified from the industry or business perspective.

Competition

Kemira operates in a rapidly changing and competitive business environment, which 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 that could affect Kemira's financial results. Major competitor or customer consolidations could change the market dynamics and possibly change also Kemira's market position.

Kemira is seeking growth in segments that are less familiar and where new competitive situations will prevail. In the long-term, completely new types of technology may considerably change the current competitive situation. This risk is managed both at the Group and segment levels through continuous monitoring of the competition. The company aims at responding to its competition with active management of customer relationships and continuous development of its products and services to further differentiate itself from the competitors.

Economic conditions and geopolitical changes

Uncertainties in the global economic and geopolitical development are considered to include direct or indirect risks, such as a continuation of low-growth period in the global GDP and negative development in Ukraine (including continuation and possible extension of international sanctions against Russia), which could both have unfavorable impacts on the demand for Kemira's products. Certain political actions or changes, especially in the countries that are important to Kemira, could cause business interference or other adverse consequences. Weak economic development may result in customer closures or consolidations diminishing customer base. Also, the liquidity of Kemira's customers could become weaker, resulting in increased credit losses for Kemira. Unfavorable market conditions may also increase the availability and price risk of certain raw materials. Kemira's geographical and customer industry diversity provides only partial protection against this risk. Kemira continuously monitors geopolitical movements and changes, and aims to adjust its business accordingly, if reasonable.

Hazard risks

Kemira's production activities involve many hazard risks, such as fires and explosions, machinery breakdowns, natural catastrophes, environmental incidents and possible resulting liabilities, as well as employee health and safety risks. These risk events could derive from several factors, including but not limited to unauthorized IT system access by malicious intruder causing potential damage to the systems and consequent financial losses. Systematic focus on achieving set targets, certified management systems, efficient hazard prevention programs, and competent personnel play a central role in managing these hazard risks. In addition, Kemira has several insurance programs that protect the company against financial impacts of hazard risks.

Innovation and R&D

Kemira's Research and Development is a critical enabler for growth and further differentiation. New product launches contribute both to the efficiency and sustainability of Kemira's or its customers' processes as well as to improved profitability. Both 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. Failure to innovate or focus on new disruptive technologies and products may result in non-achievement of growth and profitability targets.

Innovation and R&D related risks are being managed through efficient R&D portfolio management in close collaboration between R&D and business segments. Kemira has further improved the coordination and cooperation between Business Development, R&D and Sales units in order to better understand the future needs and expectations of its customers. Kemira maintains increased focus towards the development of more differentiated and sustainable products and processes and is also continuously monitoring sales of its new products and applications (launched to the market within the last 5 years).

Acquisitions

Acquisitions can be considered as an important driver in accomplishment of corporate goals and strategies. Consolidations are driven by, for instance, chemical manufacturers' interests in realizing synergies and establishing footholds in new markets.

Kemira's market position may deteriorate if it is unable to find and take advantage of future acquisition opportunities. Growth through acquisitions also involves risks, such as the ability to integrate acquired operations and personnel successfully. If realized, this risk may result in a shortage in the set financial targets for such acquisitions.

Kemira has Group level dedicated resources to actively manage merger and acquisition activities. In addition, external advisory services are being used to screen potential mergers and acquisitions and help execute transactions and post-merger integration. Kemira has also developed its M&A procedures to better support and improve the execution of its business transactions in the future.

Price and availability of raw materials and commodities

Continuous improvement of profitability is a crucial part of Kemira's strategy. Significant and sudden increase in raw material, commodity or logistic costs could place Kemira's profitability targets at risk if Kemira is not able to pass on such increase to product prices without delay. For instance, remarkable changes in oil and electricity prices could materially impact Kemira's profitability.

Changes in the raw material supplier field, such as consolidation or decreasing capacity, may increase raw material prices. Also, material demand changes in industries that are the main users of certain raw materials may lead to significant raw material price fluctuations. Poor availability of certain raw materials may affect Kemira's production if Kemira fails to prepare for this by mapping out alternative suppliers or opportunities for process changes. Raw material and commodity risks can be effectively monitored and managed with 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, strategic investment in energy-generating companies, and hedging a portion of the energy and electricity spent.

Suppliers

The continuity of Kemira's business operations is dependent on the accurate and high-quality supply of products and services. Currently, Kemira has numerous partnerships and other agreements in place with a 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 single source. In the event of a sudden and significant loss or interruption of such raw material supply, Kemira's operations could be impacted, and this could have further effects on Kemira's ability to accomplish its profitability targets. Ineffective procurement planning, supply source selection, and contract administration, as well as inadequate supplier relationship management, create a risk of Kemira not being able to fulfill its promises to the customers.

Kemira continuously aims to identify, analyze, and engage third-party suppliers in a way that ensures security of supply and competitive pricing of the end products and services. Collaborative relationships with key suppliers are being developed in order to uncover and realize new value and reduce risk. Supplier performance is also regularly monitored as a part of the supplier performance management process.

Talent management

To secure competitiveness and growth, as well as to improve operative efficiency, it is essential to attract and retain personnel with the right skills and competences. Kemira is continuously identifying high potentials and key competencies for the future needs. By systematical development and improvement of compensation schemes, learning programs, and career development programs, Kemira aims to ensure the continuity of skilled personnel also in the future.

A detailed account of Kemira's risk management principles is available on the company's website at http://www.kemira.com. Financial risks are also described in the Notes to the Financial Statements for the year 2015.

OTHER EVENTS DURING THE REVIEW PERIOD

On May 6, 2015 Kemira issued a senior unsecured bond of EUR 150 million. The seven-year bond matures on May 13, 2022.

On July 22, 2015 Kemira announced the closure of the production at its site in Longview, WA, United States.

On October 12, 2015 Kemira started to plan for closing the production at its site in Soave, Italy.

EVENTS AFTER THE REVIEW PERIOD

Proposals of the Nomination Board to the Annual General Meeting 2016

Kemira Nomination Board proposed to the Annual General Meeting of Kemira Oyj that seven (previously six) members be elected to the Board of Directors and that the present members Wolfgang Büchele, Winnie Fok, Juha Laaksonen, Timo Lappalainen, Jari Paasikivi and Kerttu Tuomas be re-elected as members of the Board of Directors. Nomination Board proposes that Kaisa Hietala be elected as a new member of the Board of Directors. In addition, the Nomination Board proposes Jari Paasikivi to be elected as the Chairman of the Board of Directors and Kerttu Tuomas to be elected as the Vice Chairman.

The Nomination Board proposed to the Annual General Meeting that the remuneration paid to the members of the Board of Directors will remain unchanged. The remuneration paid to the members of the Board of Directors would thus be as follows: for the Chairman EUR 80,000 per year, for the Vice Chairman and the Chairman of the Audit Committee EUR 49,000 per year and for the other members EUR 39,000 per year. A fee payable for each meeting of the Board of Directors and the Board Committees would be for the members residing in Finland EUR 600, for the members residing in rest of Europe EUR 1,200 and for the members residing outside Europe EUR 2,400. Travel expenses are proposed to be paid according to Kemira's travel policy.

In addition, the Nomination Board proposed 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 behalf of the members of the Board of Directors within two weeks from the release of Kemira's interim report January 1 - March 31, 2016. The meeting fees are proposed to be paid in cash.

The Nomination Board has consisted of the following representatives: Pekka Paasikivi, Chairman of the Board of Oras Invest Oy as the Chairman of the Nomination Board; Kari Järvinen, Managing Director of Solidium Oy; Risto Murto, President and CEO, Varma Mutual Pension Insurance Company and Timo Ritakallio, President and CEO, Ilmarinen Mutual Pension Insurance Company as members of the Nomination Board and Jari Paasikivi, Chairman of Kemira's Board of Directors as an expert member.

DIVIDEND AND DIVIDEND POLICY

On December 31, 2015, Kemira Oyj's distributable funds totaled EUR 684,913,318 of which net profit for the period was EUR 165,155,958. No material changes have taken place in the company's financial position after the balance sheet date.

Kemira Oyj's Board of Directors proposes to the Annual General Meeting to be held on March 21, 2016 that a dividend of EUR 0.53 per share totaling EUR 81 million shall be paid on the basis of the adopted balance sheet for the financial year ended December 31, 2015.

Kemira's dividend policy aims to pay a stable and competitive dividend.

KEMIRA'S FINANCIAL TARGETS 2017 AND OUTLOOK FOR 2016

Kemira will continue to focus on improving its profitability and cash flow. The company will also continue to invest in order to secure future growth to serve selected water-intensive industries.

The company's financial targets for 2017 are:

• Revenue EUR 2.7 billion
• Operative EBITDA-% of revenue 15%
• Gearing level <60%.

The basis for growth is the expanding market for chemicals and Kemira's expertise that helps customers in water-intensive industries to increase their water, energy and raw material efficiency. The need to increase operational efficiency in our customer industries creates opportunities for Kemira to develop new products and services for both current and new customers. Research and Development is a critical enabler of growth for Kemira, providing differentiation capabilities in its relevant markets.

Outlook for 2016

Kemira continues to focus on profitable growth. Kemira expects its revenue and operative EBITDA to increase in 2016 compared to 2015.

Kemira expects its capital expenditure, excluding acquisitions, to be around EUR 200 million 2016.

Helsinki, February 10, 2016

Kemira Oyj Board of Directors

FINANCIAL CALENDAR 2016

Interim Report January-March 2016	April 26, 2016
Interim Report January-June 2016	July 21, 2016
Interim Report January-September 2016	October 25, 2016

Kemira Oyj's Annual Report 2015 will be published during the week starting on February 22, 2016. The Annual General Meeting is scheduled for Monday, March 21, 2016 at 1.00 pm (CET+1). The Board of Directors of the company will convene the meeting.

Kemira's Capital Markets Day will be held on September 15, 2016 in London.

All forward-looking statements in this review are based on the management's current expectations and beliefs about future events, and actual results may differ materially from the expectations and beliefs such statements contain.

KEMIRA GROUP

CONSOLIDATED INCOME STATEMENT

	10-12/2015	10-12/2014	2015	2014
EUR million
Revenue	600.2	547.1	2,373.1	2,136.7
Other operating income	1.9	4.9	7.1	55.2
Operating expenses	-544.4	-478.9	-2,116.4	-1,939.0
Depreciation, amortization and impairments	-39.9	-27.7	-131.2	-100.3
Operating profit (EBIT)	17.8	45.4	132.6	152.6
Finance costs, net	-5.8	-10.3	-30.8	-30.7
Share of profit or loss of associates	0.0	0.2	0.3	0.2
Profit before tax	12.0	35.3	102.1	122.1
Income tax expense	-7.6	-11.4	-24.9	-26.3
Net profit for the period	4.4	23.9	77.2	95.8
Net profit attributable to:
Equity owners of the parent	2.9	22.5	71.0	89.9
Non-controlling interests	1.5	1.4	6.2	5.9
Net profit for the period	4.4	23.9	77.2	95.8
Earnings per share, basic and diluted, EUR	0.02	0.15	0.47	0.59

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	10-12/2015	10-12/2014	2015	2014
EUR million
Net profit for the period	4.4	23.9	77.2	95.8
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Available-for-sale financial assets	-21.0	50.0	-21.0	50.0
Exchange differences on translating foreign operations	12.2	-1.5	26.2	1.2
Cash flow hedges	2.0	-1.0	-2.5	3.4
Items that will not be reclassified subsequently to profit or loss:
Remeasurements on defined benefit pensions	35.9	-26.6	35.9	-26.6
Other comprehensive income for the period, net of tax	29.1	20.9	38.6	28.0
Total comprehensive income for the period	33.5	44.8	115.8	123.8
Total comprehensive income attributable to:
Equity owners of the parent	32.0	43.7	109.6	118.3
Non-controlling interests	1.5	1.1	6.2	5.5
Total comprehensive income for the period	33.5	44.8	115.8	123.8

CONSOLIDATED BALANCE SHEET

	12/31/2015	12/31/2014
EUR million

ASSETS

Non-current assets
Goodwill	518.3	485.6
Other intangible assets	134.7	76.3
Property, plant and equipment	815.3	706.2
Investments in associates	1.2	0.9
Available-for-sale financial assets	271.6	293.7
Deferred tax assets	29.5	33.7
Other investments	5.8	9.2
Defined benefit pension receivables	48.9	7.5
Total non-current assets	1,825.3	1,613.1

Current assets
Inventories	207.0	197.3
Interest-bearing receivables	0.2	0.1
Trade and other receivables	389.8	343.7
Current income tax assets	21.4	22.4
Cash and cash equivalents	151.5	119.1
Total current assets	769.9	682.6
Total assets	2,595.2	2,295.7

EQUITY AND LIABILITIES

Equity
Equity attributable to equity owners of the parent	1,180.3	1,150.7
Non-controlling interests	12.9	12.6
Total equity	1,193.2	1,163.3
Non-current liabilities
Interest-bearing liabilities	670.9	448.3
Other liabilities	21.4	21.4
Deferred tax liabilities	55.9	46.4
Defined benefit pension liabilities	77.3	73.1
Provisions	28.1	23.6
Total non-current liabilities	853.6	612.8
Current liabilities
Interest-bearing current liabilities	122.7	156.9
Trade payables and other liabilities	388.7	327.7
Current income tax liabilities	22.1	17.9
Provisions	14.9	17.1
Total current liabilities	548.4	519.6
Total liabilities	1,402.0	1,132.4
Total equity and liabilities	2,595.2	2,295.7

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

	10-12/2015	10-12/2014	2015	2014
EUR million
Cash flow from operating activities
Net profit for the period	4.4	23.9	77.2	95.8
Total adjustments	58.7	32.0	189.1	92.8
Operating profit before change in net working capital	63.1	55.8	266.3	188.6
Change in net working capital	58.5	1.4	20.7	-19.4
Cash generated from operations before financing items and taxes	121.6	57.2	287.0	169.2
Finance expenses, net and dividends received	-7.0	-22.7	-27.1	-61.6
Income taxes paid	-2.0	-9.5	-12.3	-33.4
Net cash generated from operating activities	112.6	25.0	247.6	74.2
Cash flow from investing activities
Purchases of subsidiaries and asset acquisitions, net of cash acquired	-2.0	0.6	-123.4	0.6
Other capital expenditure	-61.3	-55.5	-181.7	-145.7
Proceeds from sale of assets	0.5	7.2	3.3	145.5
Change in long-term loan receivables decrease (+) / increase (-)	0.0	0.3	0.4	0.6
Net cash used in investing activities	-62.8	-47.4	-301.4	1.0
Cash flow from financing activities
Proceeds from non-current interest-bearing liabilities (+)	0.0	44.9	250.0	245.0
Repayments from non-current interest-bearing liabilities (-)	-13.3	-12.5	-86.0	-62.6
Short-term financing, net increase (+) / decrease (-)	-12.1	6.4	9.9	-152.9
Dividends paid	-0.1	-0.5	-86.6	-86.0
Other finance items	0.2	-0.6	0.1	0.1
Net cash used in financing activities	-25.3	37.7	87.4	-56.4
Net decrease (-) / increase (+) in cash and cash equivalents	24.5	15.3	33.6	18.8
Cash and cash equivalents at end of period	151.5	119.1	151.5	119.1
Exchange gains (+) / losses (-) on cash and cash equivalents	1.8	-4.4	-1.2	-1.7
Cash and cash equivalents at beginning of period	125.2	108.2	119.1	102.0
Net decrease (-) / increase (+) in cash and cash equivalents	24.5	15.3	33.6	18.8

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR million
					Equity attributable to equity owners of the parent
				Un
			Fair value	restricted					Non
	Share	Share	and other	equity	Exchange	Treasury	Retained		controlling	Total
	capital	premium	reserves		reserve differences	shares	earnings	Total	interests	Equity
Equity at January 1, 2014	221.8	257.9	64.0	196.3	-40.2	-22.2	434.9	1,112.5	13.0	1,125.5
Net profit for the period	-	-	-	-	-	-	89.9	89.9	5.9	95.8
Other comprehensive income, net of tax	-	-	53.4	-	1.6	-	-26.6	28.4	-0.4	28.0
Total comprehensive income	-	-	53.4	-	1.6	-	63.3	118.3	5.5	123.8
Transactions with owners
Dividends paid	-	-	-	-	-	-	1) 1 ) -80.6	-80.6	-5.4	-86.0
Treasury shares issued to the Board of Directors	-	-	-	-	-	0.1	-	0.1	-	0.1
Share-based payments	-	-	-	-	-	-	-0.1	-0.1	-	-0.1
Changes due to business combinations	-	-	-	-	-	-	0.5	0.5	-0.5	0.0
Transfers in equity	-	-	0.0	-	-	-	0.0	0.0	-	0.0
Transactions with owners	-	-	0.0	-	-	0.1	-80.2	-80.1	-5.9	-86.0
Equity at December 31, 2014	221.8	257.9	117.4	196.3	-38.6	-22.1	418.0	1,150.7	12.6	1,163.3

1) A dividend was EUR 80.6 million in total (EUR 0.53 per share) in respect of the financial year ended December 31, 2013. The annual general meeting approved EUR 0.53 dividend on March 24, 2014. The dividend record date was March 27, 2014, and the payment date April 3, 2014.

Equity at January 1, 2015	221.8	257.9	117.4	196.3	-38.6	-22.1	418.0	1,150.7	12.6	1,163.3
Net profit for the period	-	-	-	-	-	-	71.0	71.0	6.2	77.2
Other comprehensive income, net of tax	-	-	-23.5	-	26.2	-	35.9	38.6	0.0	38.6
Total comprehensive income	-	-	-23.5	-	26.2	-	106.9	109.6	6.2	115.8
Transactions with owners
Dividends paid	-	-	-	-	-	-	1 ) -80.6	-80.6	-5.9	-86.5
Treasury shares issued to the Board of Directors	-	-	-	-	-	0.1	-	0.1	-	0.1
Share-based payments	-	-	-	-	-	-	0.7	0.7	-	0.7
Transfers in equity	-	-	0.3	-	-	-	-0.3	0.0	-	0.0
Other changes	-	-	-	-	-	-	-0.2	-0.2	-	-0.2
Transactions with owners	-	-	0.3	-	-	0.1	-80.4	-80.0	-5.9	-85.9
Equity at December 31, 2015	221.8	257.9	94.2	196.3	-12.4	-22.0	444.5	1,180.3	12.9	1,193.2

1) A dividend was EUR 80,6 million in total (EUR 0.53 per share) in respect of the financial year ended December 31, 2014. The annual general meeting approved EUR 0.53 dividend on March 23, 2015. The dividend record date was March 25, 2015, and the payment date April 1, 2015.

Kemira had in its possession 3,280,602 of its treasury shares on December 31, 2015. The average share price of treasury shares was EUR 6,73 and they represented 2,1% of the share capital and the aggregate number of votes conferred by all shares. The aggregate par value of the treasury shares is EUR 4,7 million.

The share premium is a reserve accumulating through subscriptions entitled by the management stock option program 2001. This reserve based on the old Finnish Companies Act (734/1978), which does not change anymore. The fair value reserve is a reserve accumulating based on available-for-sale financial assets (shares) measured at fair value and hedge accounting. Other reserves originate from local requirements of subsidiaries. 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.

KEY FIGURES

	10-12/2015	10-12/2014	2015	2014
Earnings per share, basic and diluted, EUR 1)	0.02	0.15	0.47	0.59
Net cash generated from operating activities per share, EUR 1)	0.74	0.17	1.63	0.49
Capital expenditure, EUR million	63.3	54.9	305.1	145.1
Capital expenditure / revenue, %	10.5	10.0	12.9	6.8
Average number of shares, basic (1,000) 1)	152,062	152,051	152,059	152,048
Average number of shares, diluted (1,000) 1)	152,437	152,248	152,395	152,203
Number of shares at end of period, basic (1,000) 1)	152,062	152,051	152,062	152,051
Number of shares at end of period, diluted (1,000) 1)	152,544	152,373	152,544	152,373
Equity per share, EUR 1)			7.76	7.57
Equity ratio, %			46.0	50.7
Gearing, %			53.8	41.8
Interest-bearing net liabilities, EUR million			642.1	486.1
Personnel (average)			4,559	4,285

1) Number of shares outstanding, excluding the number of shares bought back.

REVENUE BY BUSINESS AREA

	10-12/2015	10-12/2014	2015	2014
EUR million
Pulp & Paper 2)	372.3	307.0	1,417.3	1,170.0
Oil & Mining	76.4	96.7	350.1	382.2
Municipal & Industrial	151.5	143.4	605.7	564.7
ChemSolutions 2)	-	-	-	19.8
Total	600.2	547.1	2,373.1	2,136.7

EBITDA BY BUSINESS AREA

	10-12/2015	10-12/2014	2015	2014
EUR million
Pulp & Paper 2)	42.8	37.7	157.1	109.9
Oil & Mining	3.3	14.4	30.8	46.2
Municipal & Industrial	11.6	21.1	75.9	61.3
ChemSolutions 2)	-	-	-	35.5
Total	57.7	73.2	263.8	252.9

OPERATING PROFIT (EBIT) BY BUSINESS AREA

	10-12/2015	10-12/2014	2015	2014
EUR million
Pulp & Paper 2)	21.6	22.4	82.6	57.6
Oil & Mining	-6.5	9.3	2.9	27.7
Municipal & Industrial	2.7	13.7	47.1	31.7
ChemSolutions 2)	-	-	-	35.6
Total	17.8	45.4	132.6	152.6

2) On March 2014, Kemira closed the divestment of formic acid business which had formed the major part of ChemSolutions segment. After the closure, the remaining sodium percarbonate business in ChemSolutions segment was transferred to Pulp & Paper segment and ChemSolutions segment was discontinued as of the beginning of Q2 2014.

CHANGES IN PROPERTY, PLANT AND EQUIPMENT

	2015	2014
EUR million
Net book value at beginning of year	706.2	644.5
Purchases of subsidiaries and asset acquisitions	22.6	-
Increases	166.0	124.5
Decreases	-0.8	-5.7
Depreciation and impairments	-100.9	-84.1
Exchange rate differences and other changes	22.2	27.0
Net book value at end of period	815.3	706.2

CHANGES IN GOODWILL AND OTHER INTANGIBLE ASSETS

	2015	2014
EUR million
Net book value at beginning of year	561.9	547.2
Purchases of subsidiaries and asset acquisitions	96.8	-0.1
Increases	11.4	16.0
Decreases	-	-
Depreciation and impairments	-30.3	-16.2
Exchange rate differences and other changes	13.2	15.0
Net book value at end of period	653.0	561.9

BUSINESS COMBINATIONS

Acquisition of AkzoNobel paper chemicals business

On May 4, 2015 Kemira acquired AkzoNobel paper chemicals business. As a result of the acquisition, six AkzoNobel paper chemicals production sites and about 350 employees transferred to Kemira. The transferred production sites are located in South Korea, Thailand, Indonesia, Australia, Spain and Italy. The acquisition strengthens Kemira's market position especially in the APAC region. It also enables efficiency improvements in global paper chemicals manufacturing network.

The consideration of EUR 127,3 million was paid in cash and it does not involve the contingent consideration. Kemira acquired a 100% interest in acquired business and the acquired business has been consolidated into Pulp & Paper segment. A provisional goodwill of EUR 21.3 million arises from the expected synergy in the business combination.

The calculations under IFRS 3 related to the acquisition are provisional and the presented values of assets, liabilities and goodwill may change during the 12-month period when the acquisition calculation will be finalized. Based on preliminary calculations EUR 62 million was allocated to intangible assets as customer relationships, non-compete agreements, patents and technologies. Acquired intangible assets will be amortized within an average of six years.

The following table summarizes the consideration paid for AkzoNobel paper chemicals business, and the amounts of the assets acquired and liabilities assumed recognized on the acquisition date:

EUR million

Purchase consideration, paid in cash, total	127.3
The assets and liabilities recognized as a result of the acquisition
Intangible assets	62.0
Property, plant and equipment	21.9
Inventories	14.8
Trade receivables	8.1
Other receivables	3.5
Cash and cash equivalents	13.6
Deferred tax liabilities	-3.8
Provisions, trade payables and other liabilities	-14.1
Net assets acquired in fair value	106.0
Goodwill	21.3
Total	127.3

Acquisition-related costs of EUR 7.7 million have been included in other operating expenses in the Consolidated Income Statement for the year ended 31 December 2015.

The revenue included in the Consolidated Income Statement since 4 May 2015 contributed by AkzoNobel paper chemicals business was EUR 146 million. It also contributed EBITDA of EUR 13 million over the same period.

Had AkzoNobel paper chemicals business been consolidated from 1 January 2015, the consolidated income statement would show pro forma revenue of EUR 219 million and EBITDA of EUR 19 million. The pro forma amounts are provided for comparative purposes only and do not necessarily reflect the actual result that would have occurred, nor is it necessarily indicative of future results of operations of the combined companies.

Acquisitions of Soto Industries LLC and Polymer Services LLC

On September 2, 2015, Kemira announced that it has acquired certain assets of Soto Industries, LLC, a privately owned company, headquartered in Charlotte, North Carolina. Soto specializes in the application of scale control products, defoamers, and settling agents for the pulp and paper industry. The calculations under IFRS 3 related to the acquisition are ongoing and fair value of identifiable assets are obtained when the final calculations have been completed. The acquisition is consolidated to Pulp & Paper segment.

On December 8, 2015, Kemira acquired certain assets of Polymer Services, LLC, a privately owned company, headquartered in Plainville, Kansas. Polymer Services, LLC is a highly specialized company focusing on the field application of polymer gel treatments for enhanced or improved oil recovery. The acquisition is consolidated to Oil & Mining segment.

These calculations under IFRS 3 related to the acquisition are ongoing and fair value of identifiable assets are obtained when the final calculations have been completed.

DERIVATIVE INSTRUMENTS

	12/31/2015		12/31/2014
EUR million	Nominal value	Fair value	Nominal value	Fair value
Currency instruments
Forward contracts	402.3	3.1	304.7	1.5
Currency options	-	-	65.2	0.0
Bought	-	-	32.6	0.0
Sold	-	-	32.6	0.0
Interest rate instruments
Interest rate swaps	348.8	1.6	324.5	0.5
of which cash flow hedge	248.8	-1.7	224.5	-2.5
of which fair value hedge	100.0	3.3	100.0	3.0
Other instruments	GWh	Fair value	GWh	Fair value
Electricity forward contracts, bought	1,455.7	-10.5	1,503.6	-5.9
of which cash flow hedge	1,455.7	-10.5	1,503.6	-5.9

The fair values of the instruments which are publicly traded are based on market valuation on the date of reporting. Other instruments have been valuated based on net present values of future cash flows. Valuation models have been used to estimate the fair values of options.

FAIR VALUE OF FINANCIAL ASSETS

	12/31/2015				12/31/2014
EUR million
Fair value hierarchy	Level 1	Level 2	Level 3	Total net	Level 1	Level 2	Level 3	Total net
Available-for-sale financial assets	-	-	271.6	271.6	-	-	293.7	293.7
Other investments	-	5.8	-	5.8	-	9.2	-	9.2
Currency instruments	-	5.2	-	5.2	-	2.9	-	2.9
Interest rate instruments, hedge accounting	-	3.3	-	3.3	-	3.0	-	3.0
Other receivables	-	0.2	-	0.2	-	0.9	-	0.9
Trade receivables	-	295.4	-	295.4	-	265.3	-	265.3
Total	-	309.9	271.6	581.5	-	281.3	293.7	575.0

Level 1: Fair value is determined based on quoted market prices in markets.

Level 2: Fair value is determined by using valuation techniques. The fair value refers to the value that is observable from the market value of elements of financial instrument or from the market value of corresponding financial instrument; or the value that is observable by using commonly accepted valuation models and techniques, if the market value can be measured reliably with them.

Level 3: Fair value is determined by using valuation techniques, which use inputs which have a significant effect on the recorded fair value, and inputs are not based on observable market data.

Level 3 specification	Total net 12/31/2015	Total net 12/31/2014
Instrument
Carrying value at beginning of period	293.7	227.0
Effect on the statement of comprehensive income	-26.3	62.5
Increases	4.2	4.4
Decreases	0.0	-0.2
Carrying value at end of period	271.6	293.7

FAIR VALUE OF FINANCIAL LIABILITIES

	12/31/2015				12/31/2014
EUR million
Fair value hierarchy	Level 1	Level 2	Level 3	Total net	Level 1	Level 2	Level 3	Total net
Non-current interest-bearing liabilities	-	695.1	-	695.1	-	461.7	-	461.7
Repayments from non-current interest-bearing liabilities	-	38.1	-	38.1	-	88.1	-	88.1
Non-current other liabilities	-	21.4	-	21.4	-	21.4	-	21.4
Finance lease liabilities	-	1.2	-	1.2	-	2.2	-	2.2
Loans from financial institutions	-	88.6	-	88.6	-	63.2	-	63.2
Other liabilities	-	33.6	-	33.6	-	41.0	-	41.0
Currency instruments	-	2.1	-	2.1	-	1.4	-	1.4
Interest rate instruments	-	1.7	-	1.7	-	2.5	-	2.5
Other instruments	-	10.5	-	10.5	-	5.9	-	5.9
Trade payables	-	162.4	-	162.4	-	135.2	-	135.2
Total	-	1,054.7	-	1,054.7	-	822.6	-	822.6

CONTINGENT LIABILITIES

	12/31/2015	12/31/2014
EUR million
Assets pledged
On behalf of own commitments	6.1	6.0
Guarantees
On behalf of own commitments	52.9	48.4
On behalf of others	3.0	3.3
Operating leasing liabilities
Maturity within one year	37.5	31.1
Maturity after one year	184.7	161.8
Other obligations
On behalf of own commitments	1.1	1.2
On behalf of associates	0.6	0.6

Major off-balance sheet investment commitments

Major amounts of contractual commitments for the acquisition of property, plant and equipment on December 31, 2015 were about EUR 22.6 million for plant investments.

LITIGATION

On August 19, 2009, Kemira Oyj received a summons stating that Cartel Damage Claims Hydrogen Peroxide SA had filed an action against six hydrogen peroxide manufacturers, including Kemira, for violations of competition law applicable to the hydrogen peroxide business. In its claim, Cartel Damage Claims Hydrogen Peroxide SA seeks an order from the Regional Court of Dortmund in Germany to obtain an unabridged and full copy of the decision of the European Commission, dated May 3, 2006, and demands that the defendants, including Kemira, are jointly and severally ordered to pay damages together with accrued interest on the basis of such decision.

Cartel Damage Claims Hydrogen Peroxide SA stated that it will specify the amount of the damages at a later stage after the full copy of the decision of the European Commission has been obtained by it. In order to provide initial guidance as to the amount of such damages, Cartel Damage Claims Hydrogen Peroxide SA presented in its claim a preliminary calculation of the alleged overcharge having been paid to the defendants as a result of the violation of the applicable competition rules by the parties which have assigned and sold their claim to Cartel Damage Claims Hydrogen Peroxide SA. In the original summons such alleged overcharge, together with accrued interest until December 31, 2008, was stated to be EUR 641.3 million.

Thereafter Cartel Damage Claims Hydrogen Peroxide SA delivered to the attorneys of the defendants an April 14, 2011 dated brief addressed to the court and an expert opinion. In the said brief the minimum damage including accrued interest until December 31, 2010, based on the expert opinion, was stated to be EUR 475.6 million. It is further stated in the brief that the damages analysis of the expert does not include lost profit.

The process is currently pending in the Regional Court of Dortmund, Germany. By its decision on April 29, 2013 it decided to suspend the case and to ask a preliminary ruling on jurisdiction from the Court of Justice of the European Union which has given its ruling on May 21, 2015. Thereafter, on request by Regional Court of Dortmund, the parties have filed their briefs on admissibility of the proceedings. In its brief responding to the said request of the court Cartel Damage Claims Hydrogen Peroxide SA has additionally waived seeking an order to obtain an unabridged and full copy of the decision of the European Commission, dated May 3, 2006, and demanded from Kemira and the three other defendants jointly and severally damages an amount to be decided by the court but at least EUR 196.2 million together with accrued interest calculated from August 24, 2009 at an interest rate exceeding by 5 per cent the base rate at a time, and other interest of EUR 97.6 million. Kemira defends against the claim of Cartel Damage Claims Hydrogen Peroxide SA.

Kemira Oyj has additionally been served on April 28, 2011 a summons stating that Cartel Damage Claims Hydrogen Peroxide SA had filed an application for summons in the municipal court of Helsinki for violations of competition law applicable to the hydrogen peroxide business claiming from Kemira Oyj as maximum compensation EUR 78.0 million as well as overdue interest starting from November 10, 2008 as litigation expenses with overdue interest. The referred violations of competition law are the same as those on basis of which CDC has taken legal action in Germany in Dortmund. The municipal court made on July 4, 2013 a decision which could not be appealed separately. In its decision the municipal court considered to have jurisdiction and that the claims made by the claimant were at least not totally time-barred. On May 19, 2014 Kemira announced that it had signed an agreement with Cartel Damage Claims Hydrogen Peroxide SA and CDC Holding SA (together "CDC") to settle the lawsuit in Helsinki, Finland. Based on the settlement CDC withdrew the damages claims and Kemira paid to CDC a compensation of EUR 18.5 million and compensated CDC for its legal costs. The settlement also includes significant limitations of liabilities for Kemira regarding the pending legal actions filed by CDC entities in Dortmund, Germany (mentioned above) and in Amsterdam, the Netherlands (mentioned below).

Kemira Oyj's subsidiary Kemira Chemicals Oy (former Finnish Chemicals Oy) has on June 9, 2011 received documents where it was stated that CDC Project 13 SA has filed an action against four companies in municipal court of Amsterdam, including Kemira, asking damages for violations of competition law applicable to the sodium chlorate business. The European Commission set on June 2008 a fine of EUR 10.15 million on Finnish Chemicals Oy for antitrust activity in the company's sodium chlorate business during 1994-2000. Kemira Oyj acquired Finnish Chemicals in 2005. The municipal court of Amsterdam decided on June 4, 2014 to have jurisdiction over the case. The said decision on jurisdiction was appealed by Kemira to the court of appeal of Amsterdam. According to the decision by the court of appeal on July 21, 2015, the municipal court of Amsterdam has jurisdiction over the case. The proceedings now continue at the municipal court of Amsterdam where Kemira is the only defendant after the other defendants have settled the claim with CDC Project 13 SA . CDC Project 13 SA claims from Kemira in its brief filed to the municipal court of Amsterdam EUR 61,1 million as damages and interested calculated until December 2, 2015 from which amount CDC Project 13 SA asks the court to deduct the share of the earlier other defendants for other sales than made by them directly, and statutory interest on so defined amount starting from December 2, 2015. Kemira defends against the claim of CDC Project 13 SA.

As mentioned above the settlement between Kemira and CDC relating the Helsinki litigation also includes significant limitations of liabilities for Kemira regarding the pending legal actions filed by CDC entities in Dortmund, Germany and in Amsterdam, the Netherlands. However, regardless of such limitations of liabilities, Kemira is currently not in a position to make any estimate regarding the duration or the likely outcome of the said processes. No assurance can be given as to the outcome of the processes, and unfavorable judgments against Kemira could have a material adverse effect on Kemira's business, financial condition or results of operations. Due to its extensive international operations the Group, in addition to the above referred claims, is involved in a number of other legal proceedings incidental to these operations and it does not expect the outcome of these other currently pending legal proceedings to have materially adverse effect upon its consolidated results or financial position.

RELATED PARTY

Transactions with related parties have not changed materially.

QUARTERLY INFORMATION

	2015	2015	2015	2015	2014	2014	2014	2014
	10-12	7-9	4-6	1-3	10-12	7-9	4-6	1-3
EUR million
Revenue
Pulp & Paper 1)	372.3	379.1	351.3	314.6	307.0	300.6	282.0	280.4
Oil & Mining	76.4	90.1	89.7	93.9	96.7	95.9	97.6	92.0
Municipal & Industrial	151.5	155.9	153.8	144.5	143.4	145.0	138.6	137.7
ChemSolutions 1)	-	-	-	-	-	-	-	19.8
Total	600.2	625.1	594.8	553.0	547.1	541.5	518.2	529.9
EBITDA
Pulp & Paper 1)	42.8	44.9	34.4	35.0	37.7	34.0	7.5	30.7
Oil & Mining	3.3	7.0	9.5	11.0	14.4	11.7	11.2	8.9
Municipal & Industrial	11.6	22.9	22.2	19.2	21.1	21.5	16.1	2.6
ChemSolutions 1)	-	-	-	-	-	-	-	35.5
Total	57.7	74.8	66.1	65.2	73.2	67.2	34.8	77.7
Operative EBITDA Pulp & Paper 1)	46.9	46.7	41.3	36.1	36.3	37.0	30.8	33.1
Oil & Mining	3.6	7.4	11.4	11.1	12.2	13.8	11.7	10.7
Municipal & Industrial	17.5	24.1	22.0	19.2	16.8	19.1	17.7	14.5
ChemSolutions 1)	-	-	-	-	-	-	-	-0.8
Total	68.0	78.2	74.7	66.4	65.3	69.9	60.2	57.5
Operating profit (EBIT)
Pulp & Paper 1)	21.6	25.2	16.2	19.6	22.4	20.9	-5.1	19.4
Oil & Mining	-6.5	1.3	2.4	5.7	9.3	7.2	6.7	4.5
Municipal & Industrial	2.7	16.2	15.7	12.5	13.7	14.8	8.4	-5.2
ChemSolutions 1)	-	-	-	-	-	-	-	35.6
Total	17.8	42.7	34.3	37.8	45.4	42.9	10.0	54.3
Operative EBIT
Pulp & Paper 1)	25.9	27.0	23.2	20.7	21.9	23.8	18.2	21.9
Oil & Mining	-2.4	1.7	6.0	5.8	7.2	9.3	7.1	6.3
Municipal & Industrial	9.6	17.4	15.6	12.6	10.4	12.4	11.7	8.8
ChemSolutions 1)	-	-	-	-	-	-	-	-0.7
Total	33.1	46.1	44.8	39.1	39.5	45.5	37.0	36.3

1) On March 2014, Kemira closed the divestment of formic acid business which had formed the major part of ChemSolutions segment. After the closure, the remaining sodium percarbonate business in ChemSolutions segment was transferred to Pulp & Paper segment and ChemSolutions segment was discontinued as of the beginning of Q2 2014.

DEFINITIONS OF KEY FIGURES

Earnings per share (EPS) Equity ratio, % Net profit attributable to equity owners of the parent Total equity x 100 Average number of shares Total assets - prepayments received

Net cash generated from operating activities Gearing, % Net cash generated from operating activities, after change in Interest-bearing net liabilities x 100 net working capital and before investing activities Total equity

Net cash generated from operating activities per share, EUR Interest-bearing net liabilities Net cash flow from operating activities Interest-bearing liabilities - cash and cash equivalents Average number of shares

Equity per share Return on capital employed (ROCE), % Equity attributable to equity owners of the parent Number of shares at end of period Capital employed 1) 2)

at end of period Operating profit + share of profit or loss of associates x 100

1) 12-month rolling average 2) Capital Employed = property, plant and equipment + intangible assets + net working capital + investments in associates

BASIS OF PREPARATION

This audited consolidated financial statements bulletin has been prepared in accordance with IAS 34 ´Interim financial reporting´. The same accounting policies have been applied as in the annual financial statements. The financial statements bulletin should be read in conjunction with the annual financial statements 2014.

All the figures in this financial statements bulletin have been rounded and consequently the sum of individual figures can deviate from the presented sum figure.

ACCOUNTING POLICIES

The accounting policies adopted are consistent with those of the previous financial year, except as described below.

• Kemira Group has adopted IFRIC 21 Levies . The interpretation provides guidance on when to recognize a liability for a levy imposed by a government. The application of IFRIC 21 has not had any material impact on the amounts reported on the financial statements bulletin.

• Other amendments to IFRSs have not had any material impact on the amounts reported on the financial statements bulletin.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements bulletin requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.