Kemira Oyj

Annual Report (ESEF) • Feb 17, 2023

74370031Y7RK5H88CQ48-2022-12-31-en 74370031Y7RK5H88CQ482022-01-012022-12-31iso4217:EUR74370031Y7RK5H88CQ482021-01-012021-12-31iso4217:EURxbrli:shares74370031Y7RK5H88CQ482022-12-3174370031Y7RK5H88CQ482021-12-3174370031Y7RK5H88CQ482020-12-3174370031Y7RK5H88CQ482021-12-31ifrs-full:IssuedCapitalMember74370031Y7RK5H88CQ482021-12-31ifrs-full:SharePremiumMember74370031Y7RK5H88CQ482021-12-31ifrs-full:ReserveOfChangeInFairValueOfFinancialLiabilityAttributableToChangeInCreditRiskOfLiabilityMember74370031Y7RK5H88CQ482021-12-31kemira:UnrestrictedEquityReserveMember74370031Y7RK5H88CQ482021-12-31ifrs-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:ReserveOfChangeInFairValueOfFinancialLiabilityAttributableToChangeInCreditRiskOfLiabilityMember74370031Y7RK5H88CQ482022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482022-01-012022-12-31ifrs-full:TreasurySharesMember74370031Y7RK5H88CQ482022-12-31ifrs-full:IssuedCapitalMember74370031Y7RK5H88CQ482022-12-31ifrs-full:SharePremiumMember74370031Y7RK5H88CQ482022-12-31ifrs-full:ReserveOfChangeInFairValueOfFinancialLiabilityAttributableToChangeInCreditRiskOfLiabilityMember74370031Y7RK5H88CQ482022-12-31kemira:UnrestrictedEquityReserveMember74370031Y7RK5H88CQ482022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482022-12-31ifrs-full:TreasurySharesMember74370031Y7RK5H88CQ482022-12-31ifrs-full:RetainedEarningsMember74370031Y7RK5H88CQ482022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember74370031Y7RK5H88CQ482022-12-31ifrs-full:NoncontrollingInterestsMember74370031Y7RK5H88CQ482020-12-31ifrs-full:IssuedCapitalMember74370031Y7RK5H88CQ482020-12-31ifrs-full:SharePremiumMember74370031Y7RK5H88CQ482020-12-31ifrs-full:ReserveOfChangeInFairValueOfFinancialLiabilityAttributableToChangeInCreditRiskOfLiabilityMember74370031Y7RK5H88CQ482020-12-31kemira:UnrestrictedEquityReserveMember74370031Y7RK5H88CQ482020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482020-12-31ifrs-full:TreasurySharesMember74370031Y7RK5H88CQ482020-12-31ifrs-full:RetainedEarningsMember74370031Y7RK5H88CQ482020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember74370031Y7RK5H88CQ482020-12-31ifrs-full:NoncontrollingInterestsMember74370031Y7RK5H88CQ482021-01-012021-12-31ifrs-full:RetainedEarningsMember74370031Y7RK5H88CQ482021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember74370031Y7RK5H88CQ482021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember74370031Y7RK5H88CQ482021-01-012021-12-31ifrs-full:ReserveOfChangeInFairValueOfFinancialLiabilityAttributableToChangeInCreditRiskOfLiabilityMember74370031Y7RK5H88CQ482021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember74370031Y7RK5H88CQ482021-01-012021-12-31ifrs-full:TreasurySharesMember Kemira Oyj Financial Statements 2022 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 2022 Table of contents BOARD OF DIRECTORS' REVIEW 2022 ........................................ 3 3. Capital expenditures, acquisitions and divestments ..................................................................... 49 5.5. Management of financial risks .................................... 78 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) ) .............. 28 3.1. Goodwill ............................................................................ 49 5.6. Derivative instruments .................................................. 82 Consolidated Income Statement ........................................... 28 3.2. Other intangible assets ................................................. 51 6. Group structure .............................................................. 84 Consolidated Statement of Comprehensive 3.3. Property, plant and equipment ................................... 53 6.1. Related parties ................................................................ 84 Income ......................................................................................... 28 3.4. Leases ............................................................................... 55 6.2. The Group's subsidiaries and investments in 86 Consolidated Balance Sheet .................................................. 29 3.5. Other shares .................................................................... 57 associates ........................................................................ Consolidated Statement of Cash Flow ................................ 30 3.6. Assets classified as held-for-sale ............................... 59 7. Off-balance sheet items ............................................... 88 Consolidated Statement of Changes in Equity .................. 31 4. Working capital and other balance sheet items ..... 60 7.1. Commitments and contingent liabilities ................... 88 Notes to the Consolidated Financial Statements ............. 33 4.1. Inventories ........................................................................ 60 7.2. Events after the balance sheet date .......................... 88 1. The Group's accounting policies for the 33 4.2. Trade receivables and other current receivables ... 60 Consolidated Financial Statements .......................... 4.3. Trade payables and other current liabilities ............ 61 KEMIRA OYJ'S FINANCIAL STATEMENTS (FAS) ) ................... 89 2. Financial performance .................................................. 37 4.4. Deferred tax liabilities and assets .............................. 62 BOARD OF DIRECTORS' PROPOSAL FOR 105 2.1. Segment information ..................................................... 37 4.5. Defined benefit pension plans and employee 65 PROFIT DISTRIBUTION AND SIGNATURES ) ............................ 2.2. Other operating income and expenses ...................... 41 benefits ............................................................................. AUDITOR'S REPORT ........................................................................ 106 2.3. Share-based payments ................................................. 43 4.6. Provisions ......................................................................... 69 ESEF FINANCIAL STATEMENT REPORT ..................................... 110 2.4. Depreciation, amortization and impairments .......... 45 5. Capital structure and financial risks ......................... 70 OTHER FINANCIAL INFORMATION .............................................. 2.5. Finance income and expenses ..................................... 46 5.1. Capital structure ............................................................. 70 Group key figures ...................................................................... 2.6. Income taxes .................................................................... 47 5.2. Shareholders' equity ...................................................... 72 Definition of key figures .......................................................... 2.7. Earnings per share .......................................................... 48 5.3. Interest-bearing liabilities ............................................ 73 Reconciliation to IFRS figures ................................................ 2.8. Other comprehensive income ...................................... 48 5.4. Financial assets and liabilities by measurement 74 Quarterly earnings performance ........................................... categories ......................................................................... SHARES AND SHAREHOLDERS .................................................... INFORMATION FOR INVESTORS .................................................. ) Part of the audited Financial Statements 2022 This is a translation of the Finnish original Financial Statements and Board of Directors' Review 2022. KEMIRA 2022 | FINANCIAL STATEMENTS | 2 Board of Directors’ Review 2022 In 2022, Kemira Group’s revenue increased by 33% to a record-high: EUR 3,569.6 million (2,674.4). Revenue in local currencies, excluding acquisitions and divestments, increased by 27% due to higher sales prices, particularly in energy-intensive pulp and bleaching chemicals, including caustic soda. Operative EBITDA increased by 34% to a record-high: EUR 571.6 million (425.5) following improvement in both segments. The operative EBITDA margin increased to 16.0% (15.9%) following actions to mitigate impacts from strong inflation. EBITDA increased by 50% to EUR 558.8 million (373.2). The differences between operative and reported figures are explained by items affecting comparability, which were mainly related to an expected loss from the divestment of most of our colorants business, Kemira's exit from Russia and a manufacturing unit sale to a customer. Operative EBIT increased by 60% to EUR 361.6 million (225.4). EBIT increased by 104% to EUR 347.6 million (170.1). Cash flow from operating activities was EUR 400.3 million (220.2). EPS, diluted increased by 114% to EUR 1.50 (0.70). The Board of Directors proposes to the Annual General Meeting 2023 a cash dividend of EUR 0.62 per share (0.58), totaling EUR 95 million (89). It is proposed that the dividend be paid in two installments. KEY FIGURES AND RATIOS EUR million 2022 2021 2020 EUR million 2022 2021 2020 Revenue 3,569.6 2,674.4 2,427.2 Capital employed 2,238.0 1,995.0 1,964.9 Operative EBITDA 571.6 425.5 435.1 Operative ROCE, % 16.2 11.3 12.1 Operative EBITDA, % 16.0 15.9 17.9 ROCE, % 15.5 8.5 11.0 EBITDA 558.8 373.2 413.2 Cash flow from operating activities 400.3 220.2 374.7 EBITDA, % 15.7 14.0 17.0 Capital expenditure excl. acquisition 197.9 168.8 195.6 Operative EBIT 361.6 225.4 237.7 Capital expenditure 197.9 169.8 198.2 Operative EBIT, % 10.1 8.4 9.8 Cash flow after investing activities 222.3 57.3 173.3 EBIT 347.6 170.1 215.9 Equity ratio, % at period-end 46.2 42.8 43.2 EBIT, % 9.7 6.4 8.9 Equity per share, EUR 10.89 8.68 7.80 Net profit for the period 239.7 115.2 138.0 Gearing, % at period-end 45.8 63.3 63.0 Earnings per share, diluted, EUR 1.50 0.70 0.86 Personnel (average) 4,936 4,947 5,038 12-month rolling average (ROCE, % based on the EBIT) Unless otherwise stated, all comparisons in this report are made to the corresponding period in 2021. 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 2022 | FINANCIAL STATEMENTS | 3 FINANCIAL PERFORMANCE IN 2022 Revenue increased by 33%. Revenue in local currencies, excluding acquisitions and divestments, increased by 27% This was due to higher sales prices in both segments and across geographic regions, particularly in energy-intensive pulp and bleaching chemicals. Sales volumes decreased following a decline in sales volumes in Pulp & Paper. In Industry & Water, sales volumes increased. Revenue 2022 2021 ∆% Organic growth, % Currency impact, % Acq. & div. impact, % EUR, million EUR, million Pulp & Paper 2,027.7 1,559.6 +30 +24 +6 0 Industry & Water 1,541.9 1,114.8 +38 +31 +8 0 Total 3,569.6 2,674.4 +33 +27 +7 0 Revenue growth in local currencies, excluding acquisitions and divestments Geographically, the revenue split was as follows: EMEA (Europe, Middle East, Africa) 51% (51%), the Americas 40% (38%), and Asia Pacific 9% (11%). Operative EBITDA increased by 34% to EUR 571.6 million (425.5). Operative EBITDA improved in both segments, particularly in Pulp & Paper driven by higher market prices for energy-intensive pulp and bleaching chemicals, including caustic soda. The operative EBITDA margin improved to 16.0%. Variance analysis, EUR million Jan-Dec Operative EBITDA, 2021 425.5 Sales volumes -48.9 Sales prices +851.1 Variable costs -611.8 Fixed costs -72.1 Currency exchange +25.3 Others +2.5 Operative EBITDA, 2022 571.6 Operative EBITDA 2022 2021 ∆% 2022 2021 EUR, million EUR, million %-margin %-margin Pulp & Paper 348.0 244.7 +42 17.2 15.7 Industry & Water 223.7 180.8 +24 14.5 16.2 Total 571.6 425.5 +34 16.0 15.9 EBITDA increased by 50% to EUR 558.8 million (373.2). The difference between it and operative EBITDA is explained by items affecting comparability. Items affecting comparability were 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 in the comparison period mainly consisted of a provision caused by the expected underutilization of a single-asset energy company in Pori, Finland majority owned by Kemira via Pohjolan Voima, a damage claim settlement with CDC, provisions related to site closures, and restructuring. Items affecting comparability, EUR million 2022 2021 Within EBITDA -12.8 -52.4 Pulp & Paper -11.4 -46.5 Industry & Water -1.4 -5.9 Within depreciation, amortization and impairments -1.2 -3.0 Pulp & Paper -1.2 -0.1 Industry & Water 0.0 -2.9 Total items affecting comparability in EBIT -14.0 -55.4 Depreciation, amortization, and impairments increased to EUR 211.2 million (203.1), including the EUR 9.4 million (12.1) amortization of purchase price allocation. Operative EBIT increased by 60% compared to the previous year. EBIT increased by 104%, and the difference between the two is explained by items affecting comparability, which were mainly related to an 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 in the comparison period are described above in the EBITDA section. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 4 Net finance costs totaled EUR -39.4 million (-26.7). The comparison period included a gain of EUR 5.6 million arising from bond liability management. Income taxes were EUR -68.5 million (-28.2), with the reported tax rate being 22% (20%). Net profit for the period increased by 108% mainly due to higher EBIT. FINANCIAL POSITION AND CASH FLOW Cash flow from operating activities in January-December 2022 increased to EUR 400.3 million (220.2) mainly due to higher net profit for the period. Net working capital increased compared to the previous year due to higher inventories and receivables following higher raw material prices and strong revenue growth. However, during Q4 2022, net working capital decreased significantly. During Q1 2022, Kemira's supplementary pension fund in Finland, Neliapila, returned excess capital totaling EUR 10 million to Kemira. Cash flow after investing activities was EUR 222.3 million (57.3). At the end of the period, interest-bearing liabilities totaled EUR 1,021.8 million (992.2), including lease liabilities of EUR 148.9 million (136.8). The average interest rate of the Group’s interest-bearing loan portfolio (excluding leases) was 2.4% (1.7%), and the duration was 22 months (29). Fixed-rate loans accounted for 83% (80%) of net interest-bearing liabilities, including lease liabilities. Short-term liabilities maturing in the next 12 months amounted to EUR 183.7 million. On December 31, 2022, cash and cash equivalents totaled EUR 250.6 million (142.4). The Group has a EUR 400 million undrawn committed credit facility maturing in 2026. During the last quarter, Kemira signed bilateral loan agreements of EUR 180 million replacing bilateral loan agreements of EUR 150 million that would have otherwise matured in 2023. New loan agreements mature in 2025 and 2027. At the end of the period, Kemira Group’s net debt was EUR 771.2 million (849.8), including lease liabilities. The equity ratio was 46% (43%), while gearing was 46% (63%). The value of Kemira's shares in Pohjolan Voima and Teollisuuden Voima were increased by EUR 123 million during 2022 mainly due to higher electricity prices. The value of electricity derivatives increased by EUR 47 million during 2022. Kemira is exposed to transaction and translation currency risks. The Group's most significant transaction currency risks arise from the Chinese renminbi, the Canadian dollar, the US dollar and the Swedish krona. At the end of the year, the Chinese renmimbi denominated exchange rate risk against the euro had an equivalent value of approximately EUR 86 million, of which 68% was hedged on an average basis. The Canadian dollar's denominated exchange rate risk against the euro had an equivalent value of approximately EUR 56 million, of which 52% was hedged on an average basis. The US dollar denominated exchange change risk against EUR was approximately EUR 54 million, of which 68% was hedged on an average basis. The Swedish krona denominated exchange rate risk against EUR had an equivalent value of approximately EUR 36 million, of which 64% was hedged on an average basis. In addition, Kemira is exposed to smaller transaction risks against EUR mainly in relation to the Korean won, Polish zloty, Norwegian krona, and the Danish krona; and against the US dollar mainly in relation to the Canadian dollar and the Brazilian real with the annual exposure in those currencies being approximately EUR 131 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 the euro area are reported in a currency other than the euro. The most significant translation exposures derive 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 2022, capital expenditure excluding acquisitions increased by 17% to EUR 197.9 million (168.8). Capital expenditure (capex) can be broken down as follows: expansion capex 22% (15%), improvement capex 29% (29%), and maintenance capex 49% (55%). RESEARCH AND DEVELOPMENT In January-December 2022, total research and development expenses were EUR 33.4 million (28.3), representing 0.9% (1.1%) of the Group’s revenue. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 5 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 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 differentiated products and applications. At the end of 2022, Kemira had 401 (382) patent families, including 2,101 (1,972) granted patents, and 1,026 (996) pending applications. During 2022, Kemira applied for 34 (36) new patents and started 14 new product development projects, 86% of them aiming to improve customers' resource efficiency. At the same time, Kemira started commercialization of nine new product development projects all contributing to improve resource efficiency in customer processes. HUMAN RESOURCES At the end of the period, Kemira Group had 4,902 employees (4,926). Kemira had 756 (766) employees in Finland, 1,690 (1,750) employees elsewhere in EMEA, 1,525 (1,487) in the Americas, and 931 (923) in APAC.. NON-FINANCIAL INFORMATION DISCLOSURE OF NON-FINANCIAL INFORMATION Kemira discloses key non-financial information in this section according to the requirements in the EU Directive and Finnish Accounting Act. More information on the non-financial and sustainability matters is provided in the Annual Review’s Overview section and in the Sustainability Report. The non-financial disclosures are based on the latest Global Reporting Initiative 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 20. 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, process and resource efficiency. Kemira has two business areas: Pulp & Paper and Industry & Water. Kemira has operations in around 40 countries and had 62 manufacturing facilities at the end of 2022. In Pulp & Paper, Kemira offers chemical solutions for bleaching, packaging and printing and writing products. 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 as well as the energy industry. Main product categories in Industry & Water are coagulants and polymers. Profitable sustainable growth is Kemira’s strategic priority. Sustainability is a key driver for 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 to improve the resource efficiency of the customers’ operations. In 2022, 53% of Kemira’s revenue came from products that improve customer resource efficiency. Biodegradability and recyclability are increasingly important themes for Kemira’s customers. As a result, renewable (e.g. biobased) products are expected to be a key component for Kemira’s growth. Kemira’s biobased 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, BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 6 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. The latest materiality analysis was conducted in 2021. The results and process are described in more detail on pages 7-9 of Kemira's sustainability report. MANAGEMENT OF CORPORATE SUSTAINABILITY Sustainability is a key element of Kemira’s strategy. Work on sustainability is led by Director Sustainability, who reports to EVP, Operational Excellence and Sustainability. The sustainability work is governed by a Sustainability Steering Team, which develops Kemira’s ambition level in sustainability and steers the work of 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 decided to include sustainability-related targets, reduction of Scope 1 and Scope 2 emissions and development of Kemira’s biobased revenue, as key performance indicators in the new performance period 2023-2025 of Kemira’s long-term incentive plan. MATERIAL TOPICS More information on sustainability at Kemira and the outcome of Kemira’s sustainability targets in 2022 can be found on page 13. Environmental and climate-related matters Kemira's latest materiality assessment was conducted in 2021. 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. 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 criteria 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 early 2024 at the latest. Kemira is working actively with its suppliers 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 a key strategic theme for Kemira as Kemira wants to grow in water treatment in the coming years. In terms of Kemira’s operations, Kemira aims to continuously improve its 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. Our sustainability target is to reduce disposed production waste intensity by 15% by 2030 from 2019 baseline level. In 2020, we introduced a new group-level KPI to increase our revenue from biobased products and solutions from EUR 100 million to 500 EUR million by 2030. In conjunction with revenue target, Kemira is working to increase the share of renewable ja recycled raw materials of its used raw materials. 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 & 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 BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 7 detail. Kemira’s Code of Conduct for Business Partners (CoC-BP), supported by Kemira Sustainability and EHSQ Policy, set out principles for responsible business conduct, respect for human rights and provision of appropriate working conditions, and 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 2022. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | 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 it does not include all six environmental objectives nor cover all economic activities. The taxonomy’s first two objectives, climate change mitigation and adaptation, cover economic activities that are the most emission-intensive and / or have the largest ability to contribute to climate change mitigation and adaptation. In 2022, companies are required to disclose what proportion of their turnover, capital expenditure (CapEx) and operating expenditure (OpEx) are eligible and aligned according to the EU taxonomy’s first two environmental objectives: climate change mitigation and climate change adaptation. * 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 chemical sector, Kemira included, is expected to be more broadly included in objectives 3-6. 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’S TAXONOMY-ELIGIBLE AND TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (PLEASE SEE TABLES ON FOLLOWING PAGES FOR A MORE DETAILED BREAKDOWN) Key Performance Indicator Total turnover (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 3569.6 0 100 0 100 Capital expenditure (CapEx) as per definition of the EU Taxonomy 243.5 0 100 0 100 Operating expenditure (OpEx) as per definition of the EU Taxonomy 106.3 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 1.2 million CapEx in electric vehicles in 2022. 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. Based on Kemira's analysis, individually sustainable OpEx was not material in 2022. 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 •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 2022, 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. 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 2022 | FINANCIAL STATEMENTS | 9 TURNOVER Substantial contribution criteria DNSH criteria ('Does Not Significantly Harm') Absolute turnover (3) Proportion of turnover (4) Climate change mitigation (5) Climate change adaptation (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy-aligned proportion of turnover, year 2022 (18) Taxonomy- aligned proportion of turnover, year 2021 (19) Category (enabling activity or) (20) Category '(transitional activity)' (21) Economic activities (1) Code(s) (2) MEUR % % % % % % % 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) 4.25 Production of heat/cool from waste heat D35.30 8.1 0.2% 100% 0% Y Y Y Y Y Y 0.2% Turnover of environmentally sustainable activities (Taxonomy Aligned (A.1) 8.1 0.2% 100% 0% 0.2% A.2. Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 3.10 Manufacture of hydrogen C20.11 4.8 0.1% Turnover of taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)(A.2) 4.8 0.1% Total (A.1 + A.2) 12.9 0.4% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy-non-eligible activities (B) 3,556.7 99.6% Total (A + B) 3,569.6 100.0% BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 10 CAPEX Substantial contribution criteria DNSH criteria ('Does Not Significantly Harm') Absolute CapEx (3) Proportion of CapEx (4) Climate change mitigation (5) Climate change adaptation (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy-aligned proportion of CapEx, year 2022 (18) Taxonomy- aligned proportion of CapEx, year 2021 (19) Category (enabling activity or) (20) Category '(transitional activity)' (21) Economic activities (1) Code(s) (2) MEUR % % % % % % % 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) 4.25 Production of heat/cool from waste heat D35.30 0.0 0.0% 100% 0% Y Y Y Y Y Y 0.0% CapEx of environmentally sustainable activities (Taxonomy Aligned (A.1) 0.0 0.0% 100% 0% 0.0% A.2. Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 3.10 Manufacture of hydrogen C20.11 0.0 0.0% 6.5 Transport by motorbikes, passenger cars and light commercial vehicles N77.1.1 1.2 0.5% CapEx of taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)(A.2) 1.2 0.5% Total (A.1 + A.2) 1.2 0.5% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities (B) 242.3 99.5% Total (A + B) 243.5 100.0% BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 11 OPEX Substantial contribution criteria DNSH criteria ('Does Not Significantly Harm') Absolute OpEx (3) Proportion of OpEx (4) Climate change mitigation (5) Climate change adaptation (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaptation (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy-aligned proportion of OpEx, year 2022 (18) Taxonomy- aligned proportion of OpEx, year 2021 (19) Category (enabling activity or) (20) Category '(transitional activity)' (21) Economic activities (1) Code(s) (2) MEUR % % % % % % % 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) 4.25 Production of heat/cool from waste heat D35.30 0.0 0.0% 100% 0% Y Y Y Y Y Y 0.0% OpEx of environmentally sustainable activities (Taxonomy Aligned (A.1) 0.0 0.0% 100% 0% 0.0% A.2. Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) 3.10 Manufacture of hydrogen C20.11 0.0 0.0% 6.5. Transport by motorbikes, passenger cars and light commercial vehicles N77.1.1 0.0 0.0% OpEx of taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)(A.2) 0.0 0.0% Total (A.1 + A.2) 0.0 0.0% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities (B) 106.3 100.0% Total (A + B) 106.3 100.0% BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 12 SUSTAINABILITY PERFORMANCE Kemira's sustainability work covers economical, environmental, and social topics and is guided by the UN 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 Sustainability report 2022. SUSTAINABILITY PERFORMANCE IN 2022 SAFETY In 2022 systematic work was done to reinforce a culture where people actively promote safety and recognize and correct unsafe behaviors. Kemira’s safety performance in 2022 improved slightly compared to 2021 and the TRIF rate was 2.6. Safety performance improved clearly towards the year-end and the Q4 TRIF rate was 1.7. PEOPLE Kemira's long-term goal is to reach the top 10% cross industry benchmark for Diversity & Inclusion by 2025. In 2022, Kemira D&I index score improved by 2 points and Kemira was able to slightly close the gap to the target group. Kemira ended slightly below the top 25% cross industry benchmark. In order to promote a diverse and inclusive work environment, Kemira had several initiatives during the year, such as diversity & inclusion training for people leaders and new employee resource groups, Women's Network and KemPride. CIRCULARITY Kemira continued to make progress in its biobased strategy and launched a new Growth Accelerator unit during 2022 in order to accelerate the commercialization of new biobased products. In addition, Kemira signed a multi-year extension to its partnership with Danimer Scientific to develop and commercialize biobased coatings. In terms of waste, Kemira continued site-specific work to identify opportunities for waste reduction during the year. Waste intensity in 2022 increased slightly compared to 2021. WATER In Q1 2022, Kemira updated its sustainability target for water and aims to reach the highest, Leadership-level (A), in water management by the end of 2025 as measured by CDP Water Security. In 2022 Kemira was rated B by CDP's Water Security scoring methodology. Based on the scoring report Kemira's overall water management improved compared to 2021. CLIMATE During Q2 2022, Kemira committed to the Science Based Targets initiative (SBTi) and set a new ambitious climate target to reduce Scope 1 and Scope 2 emissions by 50% by 2030. In H2 2022 Kemira worked to develop a quantified near-term Scope 3 emission reduction target to be validated by the SBTi. In 2022, Kemira's Scope 1 and 2 emissions declined by around 5% compared to 2021, which is slightly above the level expected to meet the updated 2030 climate target. However, Kemira has ongoing near-term projects which are expected to further reduce our emissions in line with the more ambitious target. SDG KPI UNIT 2022 2021 SAFETY 2.6 2.7 TRIF 1.5 by 2025 and 1.1 by 2030 TRIF = total recordable injury frequency per million hours, Kemira + contractors PEOPLE Slightly below top 25% Slightly below top 25% Reach top 10% cross industry norm for Diversity & Inclusion by 2025 CIRCULARITY t/1000t 4.4 4.3 Reduce waste intensity by 15% by 2030 from a 2019 baseline of 4.6 Biobased products > EUR 500 million revenue by 2030 metric tonnes of routine disposed production waste per thousand metric tonnes of production WATER Rate scale A-D B B Reach the Leadership level (A) in water management by 2025 measured by CDP Water Security scoring methodology. CLIMATE ktCO2e 816 856 Scopes 1 & 2 emissions -50% by 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 BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 13 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 need 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 is leveraging 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 2022 2021 Revenue 2,027.7 1,559.6 Operative EBITDA 348.0 244.7 Operative EBITDA, % 17.2 15.7 EBITDA 336.6 198.3 EBITDA, % 16.6 12.7 Operative EBIT 225.7 124.3 Operative EBIT, % 11.1 8.0 EBIT 213.1 77.7 EBIT, % 10.5 5.0 Capital employed 1,337.7 1,226.9 Operative ROCE, % 16.9 10.1 ROCE, % 15.9 6.3 Capital expenditure excl. M&A 122.5 88.5 Capital expenditure incl. M&A 122.5 89.5 Cash flow after investing activities 207.2 94.6 12-month rolling average The segment’s revenue increased by 30%. Revenue in local currencies (excluding divestments and acquisitions) increased by 24% driven by higher sales prices in all product groups, particularly in energy-intensive pulp and bleaching chemicals, including caustic soda. Sales volumes declined following softer demand towards the end of the year and Kemira's exit from Russia. In EMEA, revenue increased by 33% to EUR 1,088.6 million (816.8) due to higher sales prices across product groups, particularly in energy-intensive pulp and bleaching chemicals, including caustic soda. Sales volumes declined. In the Americas, revenue increased by 34% to EUR 647.1 million (481.6). Revenue in local currencies, excluding acquisitions and divestments, increased by 20% due to higher sales prices across product groups. Sales volumes declined. In APAC, revenue increased by 12% to EUR 292.0 million (261.2). Revenue in local currencies, excluding acquisitions and divestments, increased by 5% due to higher sales prices, particularly in sizing chemicals. Sales volumes declined. Operative EBITDA increased by 42% following higher revenue and, in particular, due to high market prices for energy-intensive pulp and bleaching chemicals, including caustic soda. The operative EBITDA margin increased to 17.2% due to higher sales prices. EBITDA increased by 70%. The difference between it and operative EBITDA is explained by items affecting comparability, which were 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 in the comparison period mainly consisted of a provision caused by the expected underutilization of a single-asset energy company in Pori, Finland majority owned by Kemira via Pohjolan Voima, a damage claim settlement with CDC, a provision related to a site closure and organizational restructuring costs. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 14 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. In oil and gas applications, our chemistries enable improved yield from existing reserves, reduced water and energy use, as well as efficiency of oil sands tailings treatment. EUR million 2022 2021 Revenue 1,541.9 1,114.8 Operative EBITDA 223.7 180.8 Operative EBITDA, % 14.5 16.2 EBITDA 222.2 174.9 EBITDA, % 14.4 15.7 Operative EBIT 135.9 101.2 Operative EBIT, % 8.8 9.1 EBIT 134.5 92.4 EBIT, % 8.7 8.3 Capital employed 900.3 767.6 Operative ROCE, % 15.1 13.2 ROCE, % 14.9 12.0 Capital expenditure excl. M&A 75.4 80.3 Capital expenditure incl. M&A 75.4 80.3 Cash flow after investing activities 100.9 50.9 12-month rolling average The segment’s revenue increased by 38%. Revenue in local currencies, excluding acquisitions and divestments, increased by 31%. The increase was driven mainly by higher sales prices. Also sales volumes increased. Currencies had a positive impact. In the water treatment business, revenue increased by 34% due to higher sales prices. Sales volumes were rather stable. Revenue in the Oil & Gas business increased by 54% to EUR 377.5 million (245.9) mainly due to higher sales prices, particularly in shale. In addition, sales volumes increased. In EMEA, revenue increased by 34% to EUR 746.4 million (558.9) mainly due to higher sales prices in water treatment. Sales volumes increased following higher volumes in the Oil & Gas business. Water treatment sales volumes were stable. Currencies had a positive impact. In the Americas, revenue increased by 45% to EUR 767.1 million (528.6). Revenue in local currencies, excluding acquisitions and divestments, increased by 30% following higher sales prices in both water treatment and in the Oil and Gas business. Sales volumes also increased driven by the Oil and Gas business, shale in particular. In APAC, revenue increased by 4% to EUR 28.4 million (27.3). Operative EBITDA increased by 24% due to higher revenue following higher sales prices. High market prices for caustic soda also had a positive impact. The operative EBITDA margin declined to 14.5% due to continued strong inflationary pressures. EBITDA increased by 27% and the difference from operative EBITDA is explained by items affecting comparability. Items affecting comparability in the comparison period mainly consisted of organizational restructuring costs and a provision related to a site closure. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 15 PARENT COMPANY’S FINANCIAL PERFORMANCE Kemira Oyj’s revenue increased to EUR 2,206.7 million (1,572.5) in 2022. EBITDA was EUR 220.4 million (70.8). The parent company’s financing income and expenses were EUR 172.7 million (26.5) following higher dividend income from group companies. The net result for the financial year increased to EUR 314.7 million (-2.9) following higher revenue and financing income. The total capital expenditure was EUR 23.2 million (42.9), excluding investments in subsidiaries. Kemira Oyj had 502 (2021: 502, 2020: 501) employees on average during 2022. KEMIRA OYJ'S SHARES AND SHAREHOLDERS On December 31, 2022, 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 2021, Kemira Oyj had 48,403 registered shareholders (49,484 on December 31, 2021). Non-Finnish shareholders held 31.5% of the shares (28.4% on December 31, 2021), including nominee-registered holdings. Households owned 19.3% of the shares (19.8% on December 31, 2021). Kemira held 1,990,197 treasury shares (2,215,073 on December 31, 2021), representing 1.3% (1.4% on December 31, 2021) of all company shares. Kemira Oyj’s share price increased by 8% during the year and closed at EUR 14.33 on the Nasdaq Helsinki at the end of December 2022 (13.33 on December 31, 2021). The shares registered a high of EUR 14.94 and a low of EUR 10.36 in January-December 2022, and the average share price was EUR 12.57. The company’s market capitalization, excluding treasury shares, was EUR 2,198 million at the end of December 2022 (2,041 December 31, 2021). In January-December 2022, Kemira Oyj’s share trading turnover on the Nasdaq Helsinki was EUR 462 million (EUR 787 million in January-December 2021). The average daily trading volume was 146,311 shares (228,087 in January-December 2021). The total volume of Kemira Oyj’s share trading in January-December 2022 was 49 million shares (72 million shares in January- December 2021), 25% (20% in January-December 2021) of which was executed on other trading platforms (e.g. Turquoise, CBOE DXE). Source: Nasdaq and Kemira.com. Flagging notifications During January–December 2022, Impax Management Group plc made a notification in accordance with the Finnish Securities Market Act Chapter 9, Section 5. Kemira received the notification on March 25, 2022 and it was published as a stock exchange release and is available on Kemira's internet pages at kemira.com/investors. According to the notification, the total number of Kemira Oyj shares owned by Impax Asset Management Group plc and its funds increased to five (5) per cent of the share capital of Kemira on March 24, 2022. MANAGEMENT SHAREHOLDING The members of the Board of Directors as well as the President and CEO and his Deputy held 330,988 (518,636) Kemira Oyj shares on December 31, 2022 or 0.21% (0.33%) of all outstanding shares and voting rights (including treasury shares and shares held by the related parties and controlled corporations). Jari Rosendal, President and CEO, held 169,069 shares (140,800) on December 31, 2022. Members of the Management Board, excluding the President and CEO and his Deputy, held a total of 237,515 shares on December 31, 2022 (223,111), representing 0.15% (0.14%) 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, 2022 Dec 31, 2021 Dec 31, 2022 Dec 31, 2021 Board of Directors 66,932 289,471 0.04 0.19 President and CEO 169,069 140,800 0.11 0.09 Deputy CEO 94,987 88,365 0.06 0.06 Members of the Management Board (excl. CEO and Deputy CEO) 237,515 223,111 0.15 0.14 BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 16 OWNERSHIP DECEMBER 31, 2022 % of shares and votes Owners 2022 2021 Corporations 25.1 25.4 Financial and insurance corporations 3.7 4.6 General government 17.6 18.7 Households 19.3 19.8 Non-profit institutions 2.9 3.0 Non-Finnish shareholders incl. nominee registered 31.5 28.4 SHAREHOLDING BY NUMBER OF SHARES HELD DECEMBER 31, 2022 Number of shares Number of shareholders % of shareholders Shares total % of shares and votes 1 - 100 17,665 36.5% 882,162 0.6 101 - 500 18,186 37.6% 4,841,457 3.1 501 - 1,000 5,993 12.4% 4,608,730 3.0 1,001 - 5,000 5,511 11.4% 11,476,086 7.4 5,001 - 10,000 601 1.2% 4,313,601 2.8 10,001 - 50,000 361 0.7% 6,869,670 4.4 50,001 - 100,000 39 0.1% 2,854,485 1.8 100,001 - 500,000 31 0.1% 5,749,926 3.7 500,001 - 1,000,000 7 0.0% 5,262,078 3.4 1,000,001 - 9 0.0% 108,484,362 69.8 Total 48,403 100.0% 155,342,557 100.0 LARGEST SHAREHOLDERS DECEMBER 31, 2022 Shareholder Number of shares % of shares and votes 1 Oras Invest Ltd 32,000,000 20.6 2 Solidium Oy 15,782,765 10.2 3 Ilmarinen Mutual Pension Insurance Company 3,750,000 2.4 4 Varma Mutual Pension Insurance Company 3,522,678 2.3 5 Nordea Funds 3,497,587 2.3 6 Elo Mutual Pension Insurance Company 1,949,000 1.3 7 Etola Group Oy 1,000,000 0.6 8 Veritas Pension Insurance Company Ltd. 951,757 0.6 9 Laakkonen Mikko Kalervo 770,000 0.5 10 Nordea Life Assurance Finland Ltd. 734,810 0.5 11 The State Pension Funds 560,000 0.4 12 Paasikivi Pekka Johannes 462,000 0.3 13 Valio Pension Fund 379,450 0.2 14 OP-Henkivakuutus Ltd. 359,022 0.2 15 Jenny and Antti Wihuri Foundation 311,250 0.2 Kemira Oyj 1,990,197 1.3 Nominee registered and foreign shareholders 48,885,051 31.5 Others, Total 40,940,089 26.4 Total 155,342,557 100.0 BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 17 SHARE KEY FIGURES 2022 2021 2020 2019 2018 PER SHARE FIGURES Earnings per share (EPS), basic, EUR ¹⁾ 1.51 0.71 0.86 0.72 0.58 Earnings per share (EPS), diluted, EUR ¹⁾ 1.50 0.70 0.86 0.72 0.58 Net cash generated from operating activities per share, EUR ¹⁾ 2.61 1.44 2.45 2.53 1.38 Dividend per share, EUR ¹⁾ ²⁾ 0.62 0.58 0.58 0.56 0.53 Dividend payout ratio, % ¹⁾ ²⁾ 41.0 82.2 67.5 77.6 90.7 Dividend yield, % ¹⁾ ²⁾ 4.3 4.4 4.5 4.2 5.4 Equity per share, EUR ¹⁾ 10.89 8.68 7.80 7.98 7.80 Price per earnings per share (P/E ratio) ¹⁾ 9.48 18.88 15.07 18.37 16.85 Price per equity per share ¹⁾ 1.32 1.54 1.66 1.66 1.26 Price per cash flow from operations per share ¹⁾ 5.49 9.27 5.28 5.24 7.14 Dividend paid, EUR million ²⁾ 95.1 88.8 88.7 85.5 80.8 SHARE PRICE AND TRADING Share price, high, EUR 14.94 14.66 14.24 14.99 12.03 Share price, low, EUR 10.36 12.64 8.02 9.77 9.34 Share price, average, EUR 12.57 13.67 11.55 12.56 11.00 Share price on Dec 31, EUR 14.33 13.33 12.94 13.26 9.85 Number of shares traded (1,000) ³⁾ 37,017 57,478 75,885 53,048 43,837 % on number of shares 24 38 50 35 29 Market capitalization on Dec 31, EUR million ¹⁾ 2,198 2,041 1,979 2,024 1,502 NUMBER OF SHARES AND SHARE CAPITAL Average number of shares, basic (1,000) ¹⁾ 153,320 153,092 152,879 152,630 152,484 Average number of shares, diluted (1,000) ¹⁾ 154,261 153,785 153,373 153,071 152,768 Number of shares on Dec 31, basic (1,000) ¹⁾ 153,352 153,127 152,924 152,649 152,510 Number of shares on Dec 31, diluted (1,000) ¹⁾ 154,894 154,068 153,744 153,385 152,927 Increase (+) / decrease (-) in number of shares outstanding (1,000) 225 203 275 139 156 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 2022 is the Board of Directors' proposal to the Annual General Meeting. 3) Shares traded on Nasdaq Helsinki only Definitions of the key figures is disclosed in the section on the Definitions of key figures. AGM DECISIONS ANNUAL GENERAL MEETING Kemira Oyj's Annual General Meeting, held on March 24, 2022, approved the Board of Directors' proposal for a dividend of EUR 0.58 per share for the financial year 2021. The dividend was paid in two installments. The first installment of EUR 0.29 per share was paid on April 7, 2022. 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 0.29 at its meeting on October 24, 2022. The payment date of the second installment of the dividend was November 3, 2022. Kemira announced the resolution of the Board of Directors with a separate stock exchange release and confirmed the record and payment dates. The AGM 2022 authorized the Board of Directors to decide upon the repurchase of a maximum of 5,800,000 of the company’s own shares. This corresponds to approximately 3.7% 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 BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 18 authorization is valid until the end of the next Annual General Meeting. The authorization was not used by 31 December 2022. 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 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 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, 2023. 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 the remuneration. 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 24, 2022, the Annual General Meeting elected eight members to the Board of Directors. The Annual General Meeting re-elected Wolfgang Büchele, Shirley Cunningham, Werner Fuhrmann, Timo Lappalainen, Matti Kähkönen and Kristian Pullola and elected Annika Paasikivi and Tina Sejersgård Fanø 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 2022, Kemira’s Board of Directors met nine times, with a 96% 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 Wolfgang Büchele, Shirley Cunningham and Timo Lappalainen as members. In 2022, the Personnel and Remuneration Committee met six times, with a 96% attendance rate. The Audit Committee is chaired by Timo Lappalainen and has Werner Fuhrmann, Annika Paasikivi and Kristian Pullola as members. In 2022, the Audit Committee met five times, with a 95% attendance rate. STRUCTURE There have been no significant acquisitions or divestments during the year that would have impacted the company structure. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 19 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 2022, raw material and commodity prices increased significantly mainly following the war in Ukraine. Energy and electricity prices also increased significantly, particularly in Europe following the war in Ukraine. The war in Ukraine also led to concerns about sufficient energy availability to Europe. In 2023 variable costs are expected to stay at a high level although cost increases are expected to moderate. Electricity prices are expected to stay above long-term average levels. 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 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, 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 2022, Kemira witnessed some raw material availability issues following the war in Ukraine and due to COVID-19 restrictions in China. Before the war in Ukraine, 1% of Kemira's total direct purchases and logistics costs were related to purchases from Russia and Belarus. Kemira did not purchase raw materials from Ukraine. In 2022, Kemira worked to find long-term alternatives to Russian and Belarussian suppliers. Continued supply chain disruptions are possible in 2023 depending on the development of the war in Ukraine. Also the relaxation of COVID-19 restrictions in China could have an impact on global supply chains. Following the war in Ukraine, the energy market in Europe has been disrupted. This has led to temporary shutdowns in industrial production in Europe due to high energy prices, particularly for natural gas. The unaffordability of energy for industrial operations could lead to extended or permanent shutdowns of chemical manufacturing in Europe, which could have an adverse impact on Kemira’s supply chain. Kemira is monitoring 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 single source. In the event of a sudden and significant loss or interruption in 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, and 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 on Kemira’s manufacturing operations in 2022. However, there were disruptions in the availability of certain raw materials that Kemira purchases. Kemira was able to handle the situation and the impact on Kemira’s revenue was not material. Disruptions to energy availability or changes in energy pricing could also increase counterparty risk in energy hedging. Kemira is monitoring the energy counterparty risk actively. Kemira sources a large share of its electricity in Finland at production cost (Mankala principle) through its partial ownership in the electricity producing hydro and nuclear assets of Teollisuuden Voima and Pohjolan Voima. Significant long-term disruptions to the production levels in these assets could have an adverse financial impact for Kemira. 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 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 of the chemical industry, risk management and mitigation in this area is of continuous 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, BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 20 and environmental incidents – and the consequent possible liabilities, as well as the risks to employee health and safety. These risk events could derive from several factors, also including (but not limited to) unauthorized IT system access by a malicious intruder or other cyber security issues causing possible damage to the systems, which in turn could lead to financial losses. 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 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 also actively trains and educates its personnel on 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 is renewing its group-wide enterprise resource planning system with an estimated completion during 2023. Issues with existing IT systems or significant problems with the ERP transition could have an 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, increased awareness of and concern about climate change and more sustainable products may change customer demands, for instance, in favor of water treatment technologies with lower chemical consumption. On the other hand, possible capacity expansions by customers could increase the chemical consumption and 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. 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 geographic and customer industry diversity 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 biobased products. Kemira has also started several external partnerships in order to innovate and commercialize new biobased products to its customers. Biobased products are expected to play a significant role in Kemira’s growth ambitions. ECONOMIC CONDITIONS AND GEOPOLITICAL CHANGES Uncertainties in the global economic and geopolitical development are considered to include direct or 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. The ongoing war in Ukraine and sanctions against Russia have increased uncertainty in the global economy and also created concerns about sufficient energy availability in Europe. Possible trade or supply chain disruptions following geopolitical tensions in eastern Asia could also have an impact on Kemira’s operations as Kemira sources materials from the region and has manufacturing facilities and derives around 10% of its revenue from the APAC region. Weak economic development may result in customer closures or consolidations, resulting in a diminishing customer base. The liquidity of Kemira’s customers could become weaker, resulting in increased credit losses for Kemira. Despite the increased economic uncertainty in 2022, Kemira did not see materially higher credit losses. 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 these risks. Kemira continuously monitors geopolitical movements and changes and aims to adjust its business accordingly. Trade war-related risks are 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 the market dynamics, and 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 biobased products. In the long term, completely BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 21 new types of technology may considerably change the current competitive situation. This risk is managed at both Group and segment levels through continuous monitoring of the competition. The company aims to respond to its competition through the active management of customer relationships and continuous development of its products and services to further differentiate itself from the 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 geographic 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 established Group-level dedicated resources to actively manage merger and acquisition activities and to support the execution of its business transactions. In addition, external advisory services are being used to screen potential merger and acquisition targets. INNOVATION AND R&D 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 or its customers’ processes, as well as to the 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, in close collaboration between R&D and the two business segments. There is close coordination and cooperation between the Business Development, R&D, Sales, and Marketing units in order to better understand the future needs and expectations of Kemira's customers. With the continuous development of innovation processes, Kemira is aiming for more stringent project execution. Kemira maintains an 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. 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. Laws and regulations can generally be considered as an opportunity for Kemira, as regulation drives the treatment of water, for example. 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 bring further requirements to Kemira, where failure to obtain the relevant authorization could impact Kemira’s business. In addition, the changes in import/export and customs-related regulations create needs 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 of those laws and regulations that may have an impact, for instance, on its sales, production, and product development needs. Kemira has established an internal process to manage substances of potential concern and to create management plans for them. These plans cover the possibilities to replace 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. 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, currently there are many regulatory BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 22 discussions ongoing in the EU, as the EU is undergoing 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, as part of its Green Deal initiative, launched several initiatives, such as the EU Chemicals Strategy for Sustainability (CSS) and Fit-for-55 programs. Kemira is closely following these initiatives and their potential implications for the chemical sector and Kemira. TALENT MANAGEMENT To secure competitiveness and profitable growth, as well as to improve operational efficiency, it is essential to attract and retain personnel with the right skills and competences. Kemira is continuously identifying people with high potential and 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 continuity of skilled personnel also in the future. CLIMATE-RELATED RISKS Kemira has identified certain climate-related risks that could have an impact on Kemira’s operations or customer demand. Increased awareness of and concern about climate change and more sustainable products may, for example, change customer demands 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 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 active plans to increase the share of renewable raw materials in its portfolio and reduce the 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 on Kemira and the chemicals used in the customers' processes. Also extreme weather patterns related to climate change, such as hurricanes and floods, could 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 is being done. In 2022, Kemira conducted an initial climate risk scenario analysis in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) framework. The analysis evaluated Kemira's climate risk from a global company perspective. The results of the scenario analysis are described in more detail in Kemira’s sustainability report. RISKS AND IMPACTS OF THE WAR IN UKRAINE ON KEMIRA Following the war in Ukraine and subsequent sanctions against Russia and Belarus, Kemira announced its decision to discontinue deliveries to Russia and Belarus on March 1, 2022. Russia accounted for around 3% of Kemira's sales in 2021. Revenue from Belarus and Ukraine was not material in 2021. The fifth EU sanctions list published on April 9, 2022 included the majority of Kemira’s products. Kemira announced on May 6, 2022 that it will exit the Russian market. At the end of 2022, Kemira had no business operations or personnel left in Russia. The direct impacts of the war on Kemira have been and are expected to be limited. Before the war, 1% of Kemira's total direct purchases and logistics costs were related to purchases from Russia and Belarus. Kemira does not purchase raw materials from Ukraine. In 2022, Kemira was able to manage the situation without operational disruptions and has worked to find long- term alternatives to Russian and Belarussian suppliers. In 2022, the main risk from the war in Ukraine was accelerated inflation. The war in Ukraine and the sanctions against Russia and Belarus have created concerns about sufficient energy availability to Europe, particularly in natural gas. Kemira is a significant user of energy. The majority of Kemira's energy purchases is electricity, but some of Kemira's production facilities use natural gas in Europe. The energy crisis also increased energy prices significantly during 2022 and prices are expected to stay above long-term average prices also in 2023. Kemira's annual energy purchases globally increased from around EUR 200 million in 2021 to around EUR 300 million in 2022. Kemira is monitoring the energy market situation and its impacts on Kemira closely. The energy crisis did not have a material impact on Kemira's operations during 2022. Kemira is also exposed to indirect impacts via Kemira's customers and suppliers. In particular, high energy prices or disruptions in energy availability could reduce or temporarily stop production at Kemira's customers and/or suppliers, which could affect Kemira's end market demand or supply chain. During 2022 some of Kemira's customers in the EMEA region, particularly in the Pulp & Paper segment, curtailed or temporarily closed production due to high energy prices, particularly during Q3 and Q4 2022. In 2022, Kemira recorded EUR 4.8 million of losses related to its exit from Russia. At the end of 2022, net assets in Russian amounted to around EUR 8 million and consisted mainly of cash and cash equivalents denominated in Russian roubles. Kemira is looking at options to BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 23 repatriate funds from Russia. Kemira had no assets or personnel in Belarus or Ukraine at the end of December 2022. For Kemira's 2023 outlook, including assumptions behind the outlook, please refer to the section "Outlook" on page 27. A detailed description of Kemira’s risk management principles is available on the company’s website at www.kemira.com. Financial risks are described in the Notes to the Financial Statements for the year 2022. DIVIDEND AND DIVIDEND POLICY On December 31, 2022, Kemira Oyj’s distributable funds totaled EUR 702,802,752 of which net profit for the period was EUR 314,734,444. 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 22, 2023 that a dividend of EUR 0.62 per share, totaling EUR 95 million, be paid on the basis of the adopted balance sheet for the financial year that ended on December 31, 2022. The dividend will be paid in two installments. The first installment, of EUR 0.31 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 24, 2023. The Board of Directors proposes that the first installment of the dividend be paid out on April 5, 2023.The second installment, of EUR 0.31 per share, will be paid in November 2023. 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 2023. The record date is planned to be October 26, 2023, and the dividend payment date November 2, 2023 at the earliest. Kemira’s dividend policy is to pay a competitive dividend that increases over time. CHANGES IN KEMIRA'S MANAGEMENT BOARD On May 18, 2022 Kemira announced that President, Segment Pulp & Paper, Kim Poulsen is leaving Kemira. On August 8, 2022 Kemira announced that Antti Salminen (1971) had been appointed to lead Kemira’s Pulp & Paper segment as of August 15, 2022. He has had several prior leadership positions in Kemira, latest as President, Industry & Water segment, and has been a member of Kemira’s Management Board since 2011. On August 30, 2022 Kemira announced that Wido Waelput (1959) has been appointed Interim President of Kemira’s Industry & Water segment and a member of Kemira’s Management Board as of September 1, 2022 until the ongoing search process for the permanent segment president has been concluded. OTHER EVENTS DURING THE REVIEW PERIOD On September 12,2022 Kemira announced an agreement to divest most of its colorants business to ChromaScape LLC. The transaction is expected to close in Q1 2023. The revenue of the business was approximately EUR 50 million in 2021. EVENTS AFTER THE REVIEW PERIOD PROPOSALS OF THE NOMINATION BOARD TO THE ANNUAL GENERAL MEETING 2023 On January 9, 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, Annika Paasikivi and Kristian Pullola be re-elected as members of the Board of Directors. Nomination Board proposes that Fernanda Lopes Larsen and Mikael Staffas be elected as new 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 Annika Paasikivi be re-elected as the Vice Chair. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 24 All the nominees have given their consent to the position and are independent of the company’s significant shareholders except for Annika Paasikivi. Annika Paasikivi is the President & CEO of Oras Invest Oy and Oras Invest Oy owns over 10% of Kemira Oyj’s shares. Of the current members of the Board of Directors Wolfgang Büchele, who has served on the company's Board of Directors first from 2009 until 2012, then as President and CEO of Kemira Oyj from 2012 until 2014, and then again in the Board of Directors since 2014, and Shirley Cunningham, who has served on the Board of Directors since 2017, have informed that they will no longer be available for re-election to the next term of the Board of Directors. The Nomination Board wishes to thank Wolfgang Büchele and Shirley Cunningham for their long service and significant contribution to Kemira Oyj. Ms. Fernanda Lopes Larsen, M.Sc. (Engineering), b. 1974, has been Executive Vice President Africa & Asia in Yara International since 2020. In 2012-2018 she served in multiple executive and managerial positions in Yara International. In 2001-2012 she held managerial positions in GlaxoSmithKline and in Procter & Gamble. Fernanda Lopes Larsen is a dual Brazilian and British citizen. Mr. Mikael Staffas, M.Sc. (Engineering), MBA, b. 1965, is the President & CEO of Boliden AB since 2018. In 2015-2018 he served as the President of Boliden Mines, and in 2011-2015 as the CFO of Boliden. In 2005-2011 he was the CFO of Södra Skogsägarna. He was a Partner at McKinsey & Company in 1999-2004 and held various positions there in 1990-1999. Mikael Staffas is a Swedish citizen. 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 for the company and that the diversity principles of the company will be met, and that the composition of the Board of Directors meets 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 118,000 per year (EUR 110,000), for the Vice Chair and the Chair of the Audit Committee EUR 67,000 per year (EUR 65,000) and for the other members EUR 52,000 per year (EUR 50,000). The Nomination Board proposes that a fee payable for each meeting of the Board of Directors and the Board Committees will be paid based on the method of participation and place of the meeting as follows: participating remotely or in a meeting arranged in the member’s country of residence EUR 600, participating in a meeting arranged on the same continent as the member’s country of residence EUR 1,200 and participating in a meeting arranged in a different continent than the member’s country of residence EUR 2,400. Travel expenses are proposed to be paid according to 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 behalf of the members of the Board of Directors within two weeks from the release of Kemira's interim report January 1 - March 31, 2023. 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, Executive Director, Impax Asset Management plc and Annika Ekman, Head of Direct Equity Investments, Ilmarinen Mutual Pension Insurance Company as members of the Nomination Board and Matti Kähkönen, Chair of Kemira's Board of Directors as an expert member. On January 17, 2023 Kemira announced that the shareholding of Impax Asset Management Group plc in Kemira has decreased to 4.99 per cent On January 25, 2023 Kemira announced that Kemira is strengthening its services offering by acquiring the advanced process optimization start-up SimAnalytics. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 25 Kemira announced in August 2021 its investment in SimAnalytics and has now acquired the rest of the business. With the acquisition, Kemira strengthens its capability to support its customers’ business with data-driven predictive services and machine learning solutions. On February 1, 2023 Kemira announced that Linus Hildebrandt has been appointed as Executive Vice President, Strategy and member of Kemira's Management Board. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 26 OUTLOOK FOR 2023 Revenue Kemira's revenue is expected to be between EUR 3,200 million and EUR 3,700 million in 2023 (2022: EUR 3,569.6 million). Operative EBITDA Kemira's operative EBITDA is expected to be between EUR 500 and EUR 600 million in 2023 (2022: EUR 571.6 million). Assumptions behind outlook We expect demand in Kemira's end-markets to be resilient despite the significant uncertainty related to the global macroeconomic environment, energy prices, and the development of the war in Ukraine. Overall, Kemira’s end-market demand (in volumes) is expected to decline somewhat. Demand in the oil & gas market is expected to grow. Variable costs are expected to decline but with variation by raw material. Electricity prices are expected to remain above long-term average in Europe, but with uncertainty related to the level of pricing. Market prices for caustic soda are expected to moderate during 2023 from the current very high level. The outlook assumes no major disruptions to Kemira’s manufacturing operations, supply chain, or Kemira’s energy-generating assets in Finland. Foreign exchange rates are expected to remain at approximately current levels. 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 9, 2023 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, and actual results may differ materially from the expectations and beliefs such statements contain. BOARD OF DIRECTORS' REVIEW KEMIRA 2022 | FINANCIAL STATEMENTS | 27 Consolidated Income Statement Year ended 31 December EUR million Note 2022 2021 Revenue 2.1. 3,569.6 2,674.4 Other operating income 2.2. 18.2 5.9 Operating expenses 2.2. -3,029.3 -2,306.7 Share of the results of associates 6.2. 0.3 -0.5 EBITDA 558.8 373.2 Depreciation, amortization and impairments 2.4. -211.2 -203.1 Operating profit (EBIT) 347.6 170.1 Finance income 2.5. 4.8 6.8 Finance expenses 2.5. -42.3 -34.1 Exchange differences 2.5. -1.9 0.6 Finance costs, net 2.5. -39.4 -26.7 Profit before tax 308.2 143.3 Income taxes 2.6. -68.5 -28.2 Net profit for the period 239.7 115.2 Net profit attributable to Equity owners of the parent company 231.7 108.1 Non-controlling interests 6.2. 8.0 7.1 Net profit for the period 239.7 115.2 Earnings per share for net profit attributable to the equity owners of the parent company, EUR Basic 2.7. 1.51 0.71 Diluted 2.7. 1.50 0.70 The above Consolidated Income Statement should be read in conjunction with the accompanying notes. Consolidated Comprehensive Income Year ended 31 December EUR million Note 2022 2021 Net profit for the period 239.7 115.2 Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences in translating foreign operations 17.5 32.2 Cash flow hedges 39.2 19.3 Items that will not be reclassified subsequently to profit or loss Other shares 98.6 40.2 Remeasurements of defined benefit plans 31.8 21.5 Other comprehensive income for the period, net of tax 2.8. 187.1 113.3 Total comprehensive income for the period 426.7 228.4 Total comprehensive income attributable to Equity owners of the parent company 418.9 221.2 Non-controlling interests 6.2. 7.8 7.2 Total comprehensive income for the period 426.7 228.4 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 28 Consolidated Balance Sheet As at 31 December EUR million Note 2022 2021 ASSETS NON-CURRENT ASSETS Goodwill 3.1. 510.5 514.0 Other intangible assets 3.2. 61.2 66.7 Property, plant and equipment 3.3. 1,080.2 1,063.0 Right-of-use assets 3.4. 146.0 135.8 Investments in associates 6.2. 5.1 4.8 Other shares 3.5. 383.3 260.0 Deferred tax assets 4.4. 27.1 30.5 Other financial assets 5.4. 31.0 7.3 Receivables of defined benefit plans 4.5. 78.4 73.2 Total non-current assets 2,322.8 2,155.4 CURRENT ASSETS Inventories 4.1. 433.7 352.1 Interest-bearing receivables 5.4. 0.3 0.3 Trade receivables and other receivables 4.2. 603.7 475.2 Current income tax assets 18.7 13.9 Cash and cash equivalents 5.4. 250.6 142.4 Total current assets 1,307.0 983.9 Assets classified as held-for-sale 3.6. 21.3 — Total assets 3,651.1 3,139.3 The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes. As at 31 December EUR million Note 2022 2021 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 278.8 140.9 Unrestricted equity reserve 196.3 196.3 Translation differences -36.0 -53.7 Treasury shares -13.4 -14.9 Retained earnings 764.5 580.5 Total equity attributable to equity owners of the parent company 5.2. 1,669.9 1,328.8 Non-controlling interests 6.2. 14.7 13.9 Total equity 1,684.6 1,342.7 NON-CURRENT LIABILITIES Interest-bearing liabilities 5.3. 838.1 776.9 Other financial liabilities 5.4. 9.4 9.4 Deferred tax liabilities 4.4. 118.2 77.1 Liabilities of defined benefit plans 4.5. 66.9 94.1 Provisions 4.6. 38.4 48.0 Total non-current liabilities 1,070.9 1,005.5 CURRENT LIABILITIES Interest-bearing liabilities 5.3. 183.7 215.3 Trade payables and other liabilities 4.3. 635.2 538.3 Current income tax liabilities 57.2 14.3 Provisions 4.6. 18.8 23.1 Total current liabilities 894.9 791.0 Total liabilities 1,965.8 1,796.5 Liabilities classified as held-for-sale 3.6. 0.7 — Total equity and liabilities 3,651.1 3,139.3 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 29 Consolidated Statement of Cash Flow EUR million Note 2022 2021 CASH FLOW FROM OPERATING ACTIVITIES Net profit for the period 239.7 115.2 Adjustments for Depreciation, amortization and impairments 2.4. 211.2 203.1 Income taxes 2.6. 68.5 28.2 Finance costs, net 2.5. 39.4 26.7 Share of the results of associates 6.2. -0.3 0.5 Other non-cash items 3.6. 29.3 14.9 Cash flow before change in net working capital 587.8 388.5 Change in net working capital Increase (-) / decrease (+) in inventories -100.3 -100.5 Increase (-) / decrease (+) in trade and other receivables -95.1 -77.8 Increase (+) / decrease (-) in trade payables and other liabilities 93.7 98.1 Change in net working capital -101.8 -80.2 Cash flow from operations before financing items and taxes 486.0 308.3 Interests paid -35.1 -31.9 Interests received 5.0 0.9 Other finance items, net -22.1 -13.2 Dividends received 0.0 0.0 Income taxes paid -33.5 -44.0 Net cash generated from operating activities 400.3 220.2 The above Consolidated Statement of Cash Flow should be read in conjunction with the accompanying notes. EUR million Note 2022 2021 CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure in associated company 0.0 0.0 Capital expenditure in other shares 0.0 -1.0 Capital expenditure in property, plant and equipment and intangible assets -197.9 -168.8 Decrease (+) / increase (-) in loan receivables 0.8 0.2 Capital repayments from other shares 0.0 3.5 Proceeds from sale of property, plant and equipment, and intangible assets 19.1 3.2 Net cash used in investing activities -178.0 -162.9 CASH FLOW FROM FINANCING ACTIVITIES Proceeds from non-current interest-bearing liabilities (+) 5.1. 195.9 200.0 Repayments of non-current interest-bearing liabilities (-) 5.1. -202.8 -97.3 Repayments of non-current non-interest-bearing liabilities (-) 0.0 0.0 Short-term financing, net increase (+) / decrease (-) 5.1. 21.4 -53.9 Repayments of lease liabilities -35.1 -33.1 Dividends paid -95.9 -95.3 Net cash used in financing activities -116.4 -79.5 Net increase (+) / decrease (-) in cash and cash equivalents 105.9 -22.2 Cash and cash equivalents on Dec 31 250.6 142.4 Exchange gains (+) / losses (-) in cash and cash equivalents 2.3 5.1 Cash and cash equivalents on Jan 1 142.4 159.5 Net increase (+) / decrease (-) in cash and cash equivalents 105.9 -22.2 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 30 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, 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 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 31 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, 2021 221.8 257.9 81.1 196.3 -85.8 -16.3 537.1 1,192.1 13.2 1,205.3 Net profit for the period — — — — — — 108.1 108.1 7.1 115.2 Other shares — — 40.2 — — — — 40.2 — 40.2 Exchange differences in translating foreign operations — — — — 32.1 — — 32.1 0.1 32.2 Cash flow hedges — — 19.3 — — — — 19.3 — 19.3 Remeasurements of defined benefit plans — — — — — — 21.5 21.5 — 21.5 Total other comprehensive income — — 59.5 — 32.1 — 21.5 113.2 0.1 113.3 Total comprehensive income — — 59.5 — 32.1 — 129.6 221.2 7.2 228.4 Transactions with owners Dividends paid — — — — — — -88.8 -88.8 -6.5 -95.3 Treasury shares issued to the target group of a share- based incentive plan — — — — — 1.3 — 1.3 — 1.3 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 — — — — — — 3.3 3.3 — 3.3 Transfers in equity — — 0.3 — — — -0.3 0.0 — 0.0 Other items — — — — — — -0.4 -0.4 — -0.4 Total transactions with owners — — 0.3 — — 1.4 -86.2 -84.5 -6.5 -91.0 Equity on December 31, 2021 221.8 257.9 140.9 196.3 -53.7 -14.9 580.5 1,328.8 13.9 1,342.7 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 32 Notes to the Consolidated Financial Statements 1. THE GROUP'S 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. Kemira 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 9, 2023. 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 its 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, 2022. 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 2022 The Group has applied the following standards and amendments for the first time to its annual reporting period commencing January 1, 2022: •Annual improvements to IFRS standards 2018–2020: IFRS 9, Financial instruments, the improvement in the standard specifies that when assessing whether a change in a financial debt leads to a change in an existing debt instrument or the recognizing of a new debt instrument, the entity should prepare a present value of the cash flows related to the financial debt before and after the change, including the lender and the recipient fees paid and received. •Amendments to the standard IAS 16, Property, plant and equipment: Revenue before intended use, the standard amendment clarifies how sales revenue is recognized from unfinished PPE during their manufacturing phase or otherwise before they have been made to operate as intended by management. According to the clarification, the income in question should be reported as revenue, and not as a reduction of costs. •Amendments to the standard IAS 37, Loss-making contracts – the cost of fulfilling the contract, the standard amendment clarifies that the cost of fulfilling the contract includes costs directly related to the contract, including other costs such as labor and material costs, as well as other costs directly related to fulfilling the contract, such as depreciation of PPE used to fulfill the contract. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 33 The amendments listed above did not have any significant impact on the amounts recognized in the financial period January 1 – December 31, 2022 and are not expected to significantly affect the next financial period January 1 – December 31, 2023. 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 the standard IAS 12, Income taxes: Deferred taxes related to assets and liabilities arising from a single transaction. •Amendments to the standard IAS 1, Presentation of financial statements: Disclosure of accounting policies. The amendment clarifies in which situations a change in the accounting policy is material and it must be disclosed. •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. New IFRS standards, amendments to standards and IFRIC interpretations effective on or after January 1, 2023 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. 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. 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. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 34 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 At the end of December 2022, Kemira had no operative business or personnel left in Russia. In 2022, Kemira recorded EUR 4.8 million of losses related to its exit from Russia, which were mostly related to PP&E write-downs (Note 2.4. Depreciation, amortization, and impairments), credit losses (Note 4.2. Trade receivables and other current receivables), and other liabilities. At the end of December 2022, Kemira had approximately EUR 8 million net assets, mainly in cash and cash equivalents, in Russia in Russian roubles. Kemira is looking at options to repatriate funds from Russia. 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 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 35 (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 program for years 2023-2025 also includes climate-related targets in the KPIs measured. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 36 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 organic growth, EBITDA, operative EBITDA, operative EBIT, cash flow after investing activities as well as 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. * Revenue growth in local currencies, excluding acquisitions and divestments. 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 on Reconciliation of IFRS figures. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | 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 1) 12-month rolling average INCOME STATEMENT ITEMS 2021, EUR million Pulp & Paper Industry & Water Group Revenue ¹⁾ 1,559.6 1,114.8 2,674.4 EBITDA ²⁾ 198.3 174.9 373.2 Depreciation, amortization and impairments -120.6 -82.5 -203.1 Share of the results of associates -0.5 0.0 -0.5 Operating profit (EBIT) ²⁾ 77.7 92.4 170.1 Finance costs, net -26.7 Profit before tax 143.3 Income taxes -28.2 Net profit for the period 115.2 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 2021, EUR million Pulp & Paper Industry & Water Group Operative EBITDA 244.7 180.8 425.5 Restructuring and streamlining programs -12.3 Transaction and integration expenses in acquisitions -0.1 Divestment of businesses and other disposals -28.3 Other items -11.6 Total items affecting comparability -46.5 -5.9 -52.4 EBITDA 198.3 174.9 373.2 Operative EBIT 124.3 101.2 225.4 Items affecting comparability in EBITDA -46.5 -5.9 -52.4 Items affecting comparability in depreciation, amortization and impairments -0.1 -2.9 -3.0 Operating profit (EBIT) 77.7 92.4 170.1 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 38 BALANCE SHEET ITEMS 2021, EUR million Pulp & Paper Industry & Water Group Segment assets 1,568.0 1,008.3 2,576.2 Reconciliation to total assets as reported in the Group balance sheet: Other shares 260.0 Deferred income tax assets 30.5 Other investments 7.3 Defined benefit pension receivables 73.2 Other assets 49.6 Cash and cash equivalents 142.4 Total assets 3,139.3 Segment liabilities 308.2 196.5 504.8 Reconciliation to total liabilities as reported in the Group balance sheet: Interest-bearing non-current financial liabilities 776.9 Interest-bearing current financial liabilities 215.3 Other liabilities 299.6 Total liabilities 1,796.5 OTHER ITEMS 2021, EUR million Pulp & Paper Industry & Water Group Capital employed by segments on Dec 31 1,259.7 811.8 2,071.5 Capital employed by segments ¹⁾ 1,227.4 767.6 1,995.0 Operative ROCE, % 10.1 13.2 11.3 Capital expenditure 89.5 80.3 169.8 1) 12-month rolling average INFORMATION ABOUT GEOGRAPHICAL AREAS: REVENUE BY GEOGRAPHICAL AREA BASED ON CUSTOMER LOCATION EUR million 2022 2021 Finland, domicile of the parent company 546.5 360.1 Other Europe, Middle East and Africa 1,286.0 1,014.5 Americas 1,413.6 1,010.0 Asia Pacific 323.5 289.8 Total 3,569.6 2,674.4 NON-CURRENT ASSETS BY GEOGRAPHICAL AREA EUR million 2022 2021 Finland, domicile of the parent company 918.9 772.8 Other Europe, Middle East and Africa 499.0 526.7 Americas 619.7 551.3 Asia Pacific 179.7 200.8 Total 2,217.3 2,051.6 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 2022 or 2021. 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 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 39 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). 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 2022 and 2021, 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 40 2.2 OTHER OPERATING INCOME AND EXPENSES OTHER OPERATING INCOME EUR million 2022 2021 Gains on the sale of non-current assets ¹⁾ 10.8 3.0 Rental income 0.6 0.5 Services 2.0 2.3 Other income from operations ²⁾ 4.8 0.2 Total 18.2 5.9 1) In 2022, gains on the sale of non-current assets relate mainly to sold assets in Uruguay. In 2021, 35,000 tons of allowances were sold and the income from them was EUR 2.9 million. 2) In 2022, other income from operations consists mainly of indirect tax credits in Brazil. OPERATING EXPENSES EUR million 2022 2021 Materials and supplies ³⁾ 2,033.0 1,440.1 Employee benefit expenses 428.9 370.5 External services and other expenses ⁴⁾ ⁵⁾ 332.0 307.9 Freights and delivery expenses 235.4 188.3 Total 3,029.3 2,306.7 3) In 2022, materials and supplies included EUR 5.7 million (7.8) Government grants for energy intensive industry in several European countries. 4) Includes equipment costs, travel expenses, leases, office related expenses, insurances, consulting and other operational expenses. 5) In 2022, other operating expenses included research and development expenses of EUR 32.8 million (28.3) including government grants received. Government grants received for R&D were EUR 0.6 million (0.5). The extent of the grants received reduces the research and development expenses. EMPLOYEE BENEFIT EXPENSES EUR million Note 2022 2021 Wages, salaries and emoluments Wages and salaries ⁶⁾ 323.2 279.3 Share-based payments 2.3. 16.0 8.4 Total 339.2 287.7 Indirect employee benefit expenses Expenses for defined benefit pension plans and employee benefits 4.5. 2.3 2.9 Pension expenses for defined contribution plans 29.8 29.2 Other employee benefit costs 57.6 50.7 Total 89.7 82.8 Total employee benefit expenses 428.9 370.5 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 41 NUMBER OF PERSONNEL 2022 2021 Average number of personnel by geographical area Europe, Middle East and Africa 2,497 2,545 Americas 1,513 1,475 Asia Pacific 925 927 Total 4,936 4,947 Personnel in Finland, average 780 784 Personnel outside Finland, average 4,156 4,163 Total 4,936 4,947 Number of personnel on Dec 31 4,902 4,926 AUDITOR'S FEES AND SERVICES EUR million 2022 2021 Audit fees 1.6 1.4 Tax services 0.3 0.1 Other services 0.1 0.1 Total 1.9 1.6 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 and certain other grants are recognized in 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 42 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 participants employment or service ends before the reward payment. Share incentive plan 2019-2021 2020 2020-2022 2021-2023 2022-2024 Performance period (calendar year) 2019-2021 2020 2020-2022 2021-2023 2022-2024 Restriction period of shares ¹⁾ 2 years ¹⁾ ¹⁾ ¹⁾ Issue year of shares 2022 2021 2023 2024 2025 Share price at the grant date 9.90 13.41 13.41 12.57 13.32 Number of transferred shares from the plans 221,128 194,097 — — — Estimated number of shares on December 31, 2022 — — 256,025 543,232 458,783 Number of participants on December 31, 2022 — 80 78 84 87 Performance criteria Intrinsic value ²⁾ Intrinsic value ²⁾ Intrinsic value ²⁾ and organic growth-% Intrinsic value ²⁾ and organic growth-% Intrinsic value ²⁾ and organic growth-% 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. Share incentive plan 2023–2025 Participation in the long-term share incentive plan’s performance period 2023–2025 is directed to approximately 90 people. The reward to be paid from the 2023–2025 performance period, if the criteria are fulfilled, will amount up to a maximum of 643,500 Kemira Oyj shares. In addition, a cash proportion covers the taxes and tax-related costs arising from the reward is included. THE EFFECT OF SHARE-BASED PAYMENTS ON OPERATING PROFIT EUR million Note 2022 2021 Rewards provided in shares 7.4 3.9 Rewards provided in cash 8.6 4.5 Total 2.2. 16.0 8.4 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 43 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 and less 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 vest 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 44 2.4 DEPRECIATION, AMORTIZATION AND IMPAIRMENTS EUR million 2022 2021 Amortization of intangible assets and depreciation of property, plant and equipment Other intangible assets ¹⁾ 21.0 24.1 Buildings and constructions 23.3 21.5 Machinery and equipment 123.0 114.9 Other tangible assets 6.3 5.6 Total 173.6 166.2 Depreciations of right-of-use assets Land 1.7 1.6 Buildings and constructions 10.2 10.1 Machinery and equipment 24.0 21.8 Other tangible assets 0.8 0.6 Total 36.7 34.1 Impairments of intangible assets and property, plant and equipment ²⁾ Goodwill 0.0 1.1 Buildings and constructions 0.1 0.4 Machinery and equipment 0.9 1.0 Other tangible assets 0.0 0.4 Total 1.0 2.9 Total depreciation, amortization and impairments 211.2 203.1 1) Amortization of intangible assets related to business acquisitions amounted to EUR 9.4 million (12.1) during the financial year 2022. 2) In 2022, the impairment losses are related to Kemira's exit from the Russian market due to the war in Ukraine. In 2021, impairment losses were related to plant closure in France. 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 45 2.5 FINANCE INCOME AND EXPENSES EUR million 2022 2021 Finance income Dividend income 0.0 0.0 Interest income Interest income from loans and receivables ¹⁾ 3.5 6.1 Interest income from financial assets at fair value through profit or loss 1.1 0.7 Other finance income 0.2 0.0 Total 4.8 6.8 Finance expense Interest expenses Interest expenses from other liabilities -23.5 -19.4 Interest expenses from financial liabilities at fair value through profit or loss -6.6 -3.6 Interest expenses from lease liabilities -7.1 -6.2 Other finance expenses ²⁾ -5.1 -4.8 Total -42.3 -34.1 Exchange differences Exchange differences from financial assets and liabilities at fair value through profit or loss -22.2 9.2 Exchange differences, other 20.2 -8.6 Total -1.9 0.6 Total finance income and expenses -39.4 -26.7 Net finance expenses as a percentage of revenue, % 1.1 1.0 Net interest as a percentage of revenue, % 0.9 0.8 EUR million 2022 2021 Change in Consolidated Statement of Comprehensive Income from hedge accounting instruments Cash flow hedge accounting: amount recognized in the Consolidated Statement of Comprehensive Income ³⁾ 39.2 19.3 Total 39.2 19.3 Exchange differences Realized 20.0 -10.2 Unrealized -21.9 10.8 Total -1.9 0.6 1) In 2021, interest income from loans and receivables includes a gain of EUR 5.6 million arising from bond liability management. 2) Includes EUR 1.8 million (1.8) of arrangement fees relating to loans in 2022. 3) Consists mostly from changes in fair value of derivatives under hedge accounting treatment. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 46 2.6 INCOME TAXES EUR million 2022 2021 Current taxes -72.6 -30.5 Taxes for prior years -2.0 -1.9 Change in deferred taxes 6.1 4.3 Total -68.5 -28.2 RECONCILIATION BETWEEN TAX EXPENSE AND TAX CALCULATED AT DOMESTIC TAX RATE EUR million 2022 2021 Profit before tax 308.2 143.3 Tax at parent company's tax rate 20% -61.6 -28.7 Foreign subsidiaries' different tax rate -4.5 -3.3 Non-deductible expenses and tax-exempt profits 1.6 -1.8 Share of profit or loss of associates -0.1 -0.1 Tax losses during the period without deferred tax -1.8 -0.9 Tax for prior years -2.0 -1.9 Effect of change in tax rates 0.0 0.0 Utilization of prior years' tax losses with no deferred tax 1.2 3.5 Changes in deferred taxes related to prior years -1.3 5.1 Income taxes in the Income Statement -68.5 -28.2 In 2022, the effective tax rate of the Group was 22.2% (19.6%). TAX LOSSES AND RELATED DEFERRED TAXES Tax losses carried forward Recognized deferred taxes Unrecognized deferred taxes EUR million 2022 2021 2022 2021 2022 2021 Expiry within 5 years 67.6 70.2 9.1 8.9 7.3 7.8 Expiry after 5 years 3.7 2.8 0.2 0.7 0.8 0.0 No expiry 119.0 73.0 12.0 1.6 24.4 16.7 Total 190.3 146.0 21.3 11.2 32.4 24.5 At the end of 2022, the subsidiaries had EUR 105.4 million (98.1) tax losses, of which no deferred tax benefits have been recognized. The subsidiaries' tax losses are incurred in different currencies and born mainly in Brazil and China. The Group's accounting policies Income taxes The Group’s tax expense for the period comprises current tax, adjustments 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 are recognized of uncertain tax positions based on estimated outcome and probability. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 47 2.7 EARNINGS PER SHARE 2022 2021 Earnings per share, basic Net profit attributable to equity owners of the parent company, EUR million 231.7 108.1 Weighted average number of shares ¹⁾ 153,319,710 153,092,232 Basic earnings per share, EUR 1.51 0.71 Earnings per share, diluted Net profit attributable to equity owners of the parent company, EUR million 231.7 108.1 Weighted average number of shares ¹⁾ 153,319,710 153,092,232 Adjustments: Average number of treasury shares it is possible to be issued on the basis of the share-based payments 941,054 692,789 Weighted average number of shares for diluted earnings per share 154,260,764 153,785,021 Diluted earnings per share, EUR 1.50 0.70 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 2022 2021 Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations 19.7 35.7 Cash flow hedges 50.4 24.2 Items that will not be reclassified subsequently to profit or loss Other shares 123.2 50.2 Remeasurements of defined benefit plans 40.8 26.8 Other comprehensive income for the period before taxes 234.1 136.9 Tax effects relating to components of other comprehensive income -47.1 -23.8 Other comprehensive income for the period, net of tax 187.1 113.3 THE TAX RELATING TO COMPONENTS OF OTHER COMPREHENSIVE INCOME 2022 2021 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 19.7 -2.2 17.5 35.7 -3.5 32.2 Cash flow hedges 50.4 -11.2 39.2 24.2 -4.9 19.3 Items that will not be reclassified subsequently to profit or loss Other shares 123.2 -24.7 98.6 50.2 -10.0 40.2 Remeasurements of defined benefit plans 40.8 -9.0 31.8 26.8 -5.4 21.5 Total other comprehensive income 234.1 -47.1 187.1 136.9 -23.8 113.3 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 48 3. CAPITAL EXPENDITURES AND ACQUISITIONS 3.1 GOODWILL EUR Million Note 2022 2021 Net book value on Jan 1 514.0 504.1 Acquisition of subsidiaries and business acquisitions 0.0 0.0 Impairments ¹⁾ 0.0 -1.1 Transferred to assets classified as held-for-sale ²⁾ 3.6. -11.3 0.0 Exchange differences 7.7 11.1 Net book value on Dec 31 510.5 514.0 1) Impairments related to plant closure in France in 2021. 2) In 2022, goodwill is reclassified as held-for-sale assets which is related to the sale of the colorant business within the Pulp & Paper segment. See Note 3.6. 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. 2022 2021 EUR Million Net book value of which goodwill Net book value of which goodwill Pulp & Paper 1,275 350 1,260 357 Industry & Water 891 160 812 157 Total 2,165 510 2,071 514 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% (2021: 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. % 2022 2021 Pulp & Paper 8.5 7.5 Industry & Water 8.5 7.5 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 2022 and 2021, impairment tests have not indicated any impairment, and no impairment loss has been recognized in the income statement. Sensitivity analysis In 2022, 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 49 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 50 3.2 OTHER INTANGIBLE ASSETS 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 ¹⁾ -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 ¹⁾ 2.3 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 1) In 2022, other intangible assets amounting EUR 1.8 million are reclassified as held-for-sale assets. These assets are used by the colorant business within the Pulp & Paper segment. See Note 3.6. 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 87,862 tons of carbon dioxide in 2022 (a surplus of 35,386 tons). Items affecting the income statement related to emission rights are disclosed in Note 2.2. Other operating income and expenses. Other intangible assets 2021, EUR million Prepayments Total Acquisition cost on Jan 1 317.7 3.5 321.2 Additions 9.3 0.6 9.9 Purchases of subsidiaries and business acquisitions 0.0 0.0 0.0 Decreases -3.2 0.0 -3.2 Reclassifications 0.0 -0.1 -0.1 Exchange rate differences and other changes 6.7 0.1 6.8 Acquisition cost on Dec 31 330.5 4.1 334.6 Accumulated amortization on Jan 1 -243.2 -243.2 Accumulated amortization relating to decreases and transfers 3.2 3.2 Amortization during the financial year -24.1 -24.1 Impairments 0.0 0.0 Exchange rate differences -3.8 -3.8 Accumulated amortization on Dec 31 -267.9 -267.9 Net book value on Dec 31 62.6 4.1 66.7 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 amortization and any impairment losses. The Group has no intangible assets that have an indefinite useful life other than goodwill. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 51 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 52 3.3 PROPERTY, PLANT AND EQUIPMENT 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 Acquisitions of subsidiaries and business acquisitions — — — — — — Decreases -1.7 -34.4 -105.5 -1.9 -0.6 -143.9 Disposed of subsidiaries — — — — — — Transferred to assets classified as held-for-sale ²⁾ — -1.6 -10.2 -0.3 — -12.0 Reclassifications — — 2.5 — -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 — -23.3 -123.0 -6.3 -152.7 Impairments — -0.1 -0.9 — -1.0 Transferred to assets classified as held-for-sale ²⁾ — 0.8 6.2 0.2 7.2 Exchange rate differences — -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 comprised of plant investments. 2) In 2022, property, plant and equipment amounting EUR 4.8 million are reclassified as held-for-sale assets. These assets are used by the colorant business within the Pulp & Paper segment. See Note 3.6. for further details regarding the held-for- sale assets. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 53 2021, 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 49.8 499.2 1,709.5 82.5 100.8 2,441.8 Additions 0.1 43.1 99.4 7.5 8.8 158.8 Acquisitions of subsidiaries and business acquisitions ¹⁾ 0.0 0.0 0.0 0.0 0.0 0.0 Decreases 0.0 -7.8 -47.9 -1.4 0.0 -57.1 Disposed of subsidiaries 0.0 0.0 0.0 0.0 0.0 0.0 Reclassifications 0.0 0.2 6.5 0.0 -6.5 0.1 Exchange rate differences and other changes 0.3 17.1 59.7 4.2 3.6 84.9 Acquisition cost on Dec 31 50.1 551.8 1,827.1 92.7 106.7 2,628.5 Accumulated depreciation on Jan 1 -9.9 -256.2 -1,117.0 -47.3 -1,430.4 Accumulated depreciation related to decreases and transfers 0.0 7.8 47.7 1.4 57.0 Depreciation during the financial year 0.0 -21.5 -114.9 -5.6 -142.1 Impairments 0.0 -0.4 -1.0 -0.4 -1.8 Exchange rate differences 0.0 -6.6 -38.2 -3.2 -48.1 Accumulated depreciation on Dec 31 -10.0 -277.0 -1,223.4 -55.0 -1,565.4 Net book value on Dec 31 40.2 274.8 603.7 37.7 106.7 1,063.0 1) Prepayment and non-current assets under construction are mainly comprised of plant investments. 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 54 3.4 LEASES CHANGE IN RIGHT-OF-USE 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 ¹⁾ 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 2021, EUR million Land Buildings and constructions Machinery and equipment Other property, plant and equipment Total Net book value Jan 1 32.5 27.7 59.4 1.5 121.0 Additions 1.0 11.0 29.3 1.3 42.5 Depreciation and impairments -1.6 -10.1 -21.8 -0.6 -34.1 Reclassifications 0.0 0.0 0.0 0.0 0.0 Exchange rate differences and other changes 1.2 0.9 4.3 0.0 6.4 Net book value Dec 31 33.1 29.5 71.1 2.1 135.8 1) In 2022, right-of-use assets amounting EUR 0.4 million are reclassified as held-for-sale assets. These assets are used by the colorant business within the Pulp & Paper segment. See Note 3.6. 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 2022, the amount of lease expenses recognized in the income statement for leases of short-term or low-value assets is EUR 4 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. 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. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 55 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 56 3.5 OTHER SHARES 2022, EUR million The shares of Pohjolan Voima Group Other non-listed shares Total 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 2021, EUR million Net book value on Jan 1 210.6 1.7 212.3 Additions ¹⁾ — 1.0 1.0 Decreases ²⁾ -3.5 — -3.5 Change in fair value 50.2 — 50.2 Net book value on Dec 31 257.3 2.7 260.0 1) Kemira acquired a minority interest in SimAnalytics Oy. 2) Capital repayment of PVO's G5 series shares. SHARES IN THE POHJOLAN VOIMA GROUP EUR million Class of shares Holding, % Class of assets 2022 2021 Pohjolan Voima Oyj A 5 hydro power 126.3 108.4 Pohjolan Voima Oyj B 2 nuclear power 79.3 43.3 Pohjolan Voima Oyj ¹⁾ B2 7 nuclear power 21.3 21.3 Teollisuuden Voima Oyj A 2 nuclear power 152.8 83.4 Other Pohjolan Voima Oyj C2, G5, G6, M several several 0.8 0.8 Total 380.6 257.3 1) The plant supplier (AREVA-Siemens consortium) is constructing the Olkiluoto 3 nuclear power plant (OL 3) in Finland with fixed-price turnkey contracts. In spring 2005, the plant supplier started construction work with a contractual obligation to start the electricity production in OL 3 in spring 2009. However, OL 3 has been delayed several times from its original start-up schedule. TVO's release on 21 December 2022 states that the nuclear power plant at the OL3 regular electricity production is to start on March 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 2022 2021 Short-term discount rate 5.1% 3.6% Long-term discount rate 5.1% 3.7% Electricity price estimate EUR/MWh 57.62 - 85.80 42.63 - 48.60 Forward electricity prices EUR/MWh 68.60 - 158.10 37.20 - 82.49 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 +/- 47 million (+/- 37). 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 -38 million (-38) or approximately EUR 53 million (63). CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 57 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. TVO operates two nuclear power plant units in Olkiluoto in the municipality of Eurajoki, and TVO is also constructing a new nuclear plant unit in Olkiluoto. 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, 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 to electricity from 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. In Olkiluoto 3, nuclear power unit belonging to the PVO B2 share series, regular electricity production had not started by 31 December 2022.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 prices 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 58 3.6 ASSETS CLASSIFIED AS HELD-FOR-SALE ASSETS CLASSIFIED AS HELD-FOR-SALE EUR million Note 2022 2021 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 2022 2021 Liabilities of defined benefit plans 4.5. 0.3 — Liabilities related to right-of-use assets 0.4 — Total 0.7 — In Q3 2022, Kemira signed an agreement to sell its colorants business to US based ChromaScape, LLC. Revenue of the business in 2021 was approximately EUR 50 million and 67 employees will be transferred to ChromaScape as part of transaction which is expected to be closed in the first quarter of 2023. The scope includes also one Kemira manufacturing site at Goose Creek, Bushy Park in South Carolina. Kemira will keep its APAC related colorants business. The assets and liabilities related to a sale of the colorants business has been 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 are presented in the consolidated balance sheet on separate lines. The reclassification had an effect on the reported values of balance sheet items and the expected loss from the sale of the colorants business was EUR 15 million. The colorants business is part of Kemira's Pulp & Paper segment. In the Consolidated Statement of Cash Flow, the line Other non-cash items contains the loss of sale of EUR 15 million, a non-monetary item caused by the sale of the colorants business. 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 59 4. WORKING CAPITAL AND OTHER BALANCE SHEET ITEMS NET WORKING CAPITAL EUR million Note 2022 2021 Inventories 4.1. 433.7 352.1 Trade receivables and other receivables 4.2. 603.7 475.2 Excluding financing items in other receivables ¹⁾ -71.1 -35.4 Trade payables and other liabilities 4.3. 635.2 538.3 Excluding financing items in other liabilities ¹⁾ -31.4 -33.5 Total 362.4 287.2 1) Includes mainly interest income and expenses, exchange gains and losses and hedging related items. Quarterly information on net working capital is disclosed in the section on Reconciliation to IFRS figures. 4.1 INVENTORIES EUR million 2022 2021 Materials and supplies 147.8 111.3 Finished goods 264.7 208.8 Prepayments 21.2 32.0 Total 433.7 352.1 In 2022, EUR 9.2 million (2.6) 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 the sales costs. 4.2 TRADE RECEIVABLES AND OTHER CURRENT RECEIVABLES EUR million 2022 2021 Trade and other receivables Trade receivables 449.6 373.0 Prepayments 7.1 6.9 Prepaid expenses and accrued income 110.5 62.3 Other current receivables 36.4 32.9 Total 603.7 475.2 AGING OF OUTSTANDING TRADE RECEIVABLES 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 2021 EUR million Receivables, gross amount Expected credit losses Receivables, net amount Not due trade receivables 334.6 -0.3 334.3 Trade receivables 1-90 days overdue 38.1 -0.1 38.0 Trade receivables more than 91 days overdue 3.7 -3.0 0.7 Total 376.4 -3.3 373.0 In 2022, the impairment loss (+) /gain(-) of trade receivables amounted to EUR 2.2 million (-0.7) of which EUR 1.6 million related to the closure of Russian operations. In 2022, items that were due in a time period longer than one year included trade receivables of EUR 0.7 million (0.3), prepaid expenses and an accrued income of EUR 0.5 (10.3), other receivables of EUR 0.3 (0.4) and prepayments of EUR 1.7 (0.4) CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 60 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 2022 2021 Trade payables and other liabilities Prepayments received 2.5 2.5 Trade payables 292.8 285.5 Accrued expenses 277.0 208.8 Other non-interest-bearing current liabilities 63.0 41.4 Total 635.2 538.3 Accrued expenses Employee benefits 94.2 73.9 Items related to revenue and purchases 149.8 104.0 Interest 7.2 7.2 Exchange rate differences 2.8 0.8 Other 22.9 22.9 Total 277.0 208.8 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 61 4.4 DEFERRED TAX LIABILITIES AND ASSETS EUR million Jan 1, 2022 Recognized in the income statement Recognized in other comprehensive income Recognized in equity Acquired and disposed subsidiaries Exchange differences and reclassifications Dec 31, 2022 Deferred tax liabilities Depreciations and untaxed reserves 57.3 14.6 0.0 0.0 0.0 1.2 73.2 Other shares 28.0 0.0 24.7 0.0 0.0 0.0 52.7 Defined benefit pensions 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 11.4 -6.2 13.3 2.2 0.0 0.0 20.8 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 Provisions 20.3 -1.6 0.0 0.0 0.0 1.9 20.7 Tax losses 11.2 -0.1 0.0 0.0 0.0 10.2 21.3 Defined benefit pensions 10.9 0.1 -6.0 0.0 0.0 -2.4 2.6 Other accruals 23.3 14.0 -0.3 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 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 62 EUR million Jan 1, 2021 Recognized in the income statement Recognized in other comprehensive income Recognized in equity Acquired and disposed subsidiaries Exchange differences and reclassifications Dec 31, 2021 Deferred tax liabilities Depreciations and untaxed reserves 51.6 3.1 0.0 0.0 0.0 2.6 57.3 Other shares 18.0 0.0 10.0 0.0 0.0 0.0 28.0 Defined benefit pensions 10.2 -0.7 5.1 0.0 0.0 0.0 14.6 Fair value adjustments of net assets acquired 1.7 -0.6 0.0 0.0 0.0 0.0 1.1 Other accruals 5.1 -3.2 8.6 0.7 0.0 0.2 11.4 Total 86.5 -1.4 23.8 0.7 0.0 2.7 112.4 Deducted from deferred tax assets -34.6 -35.3 Deferred tax liabilities in the balance sheet 52.0 77.1 Deferred tax assets Provisions 17.9 2.6 0.0 0.0 0.0 -0.1 20.3 Tax losses 13.6 -2.9 0.0 0.0 0.0 0.5 11.2 Defined benefit pensions 11.6 -0.3 -0.4 0.0 0.0 -0.1 10.9 Other accruals 19.0 3.4 0.3 0.0 0.0 0.6 23.3 Total 62.1 2.9 -0.1 0.0 0.0 0.9 65.8 Deducted from deferred tax liabilities -34.6 -35.3 Deferred tax assets in the balance sheet 27.6 30.5 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. 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 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 63 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 2022 KEMIRA 2022 | 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 2022, the obligations of Pension Fund Neliapila totaled EUR 156.9 million (203.9) and assets of the plan totaled EUR 235.3 million (277.1). 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. 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 2022, the defined benefit obligations in Sweden totaled EUR 38.3 million (53.7). ASSETS AND LIABILITIES OF DEFINED BENEFIT PLANS RECOGNIZED IN THE BALANCE SHEET EUR million 2022 2021 Present value of defined benefit obligations 231.5 312.0 Fair value of plans' assets -244.4 -292.0 Surplus (-) / Deficit (+) -12.8 20.0 The effect of asset ceiling 1.4 0.8 Net receivables (-) / liabilities (+) of defined benefit plans recognized in the Balance Sheet -11.4 20.9 Liabilities of defined benefit plans 66.9 94.1 Receivables of defined benefit plans -78.4 -73.2 Net receivables (-) / liabilities (+) of defined benefit plans recognized in the Balance Sheet -11.4 20.9 AMOUNTS OF DEFINED BENEFIT PLANS RECOGNISED IN THE INCOME STATEMENT Service costs 2.3 2.9 Net interest cost ¹⁾ 0.7 0.7 Defined benefit plans' expenses (+) / income (-) in the Income Statement 3.0 3.6 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 65 DEFINED BENEFIT PLANS RECOGNIZED IN THE OTHER COMPREHENSIVE INCOME EUR million 2022 2021 Items resulting from remeasurements of defined benefit plans ²⁾ Actuarial gains (-) / losses (+) in defined benefit obligations arising from changes in demographic assumptions -0.4 0.0 Actuarial gains (-) / losses (+) in defined benefit obligations arising from changes in financial assumptions ³⁾ -70.3 1.2 Actuarial gains (-) / losses (+) in defined benefit obligations arising from experience based assumptions 9.7 1.6 Actuarial gains (-) / losses (+) in plan assets ³⁾ 23.3 -30.3 Effect from asset ceiling 0.8 0.8 Defined benefit plans' expenses (+) / income (-) in the other comprehensive income -37.0 -26.8 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 2022 and 2021, 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 2022 2021 Defined benefit obligation on Jan 1 312.0 321.6 Current service costs 2.3 2.8 Interest costs 3.6 1.7 Actuarial losses (+) / gains (-) -61.1 2.8 Exchange differences on foreign plans -4.7 -0.2 Benefits paid -16.2 -16.7 Curtailments and settlements ⁴⁾ -3.4 -0.3 Transferred to liabilities classified as held-for-sale -0.4 — Other items -0.6 0.4 Present value of defined benefit obligations on Dec 31 231.5 312.0 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 2022 2021 Fair value on Jan 1 292.0 276.4 Interest income 2.9 0.9 Contributions 0.2 0.3 Return of surplus assets ⁵⁾ -10.0 -3.0 Actuarial losses (-) / gains (+) -23.3 30.3 Exchange differences on foreign plans -0.6 0.6 Benefits paid -12.8 -13.4 Curtailments and settlements ⁴⁾ -3.5 — Transferred to assets classified as held-for-sale -0.1 — Other items -0.4 -0.2 Fair value of plan assets on Dec 31 244.4 292.0 5) In 2022, Pension Fund Neliapila paid to a surplus return of EUR 10 million (3) to Kemira Group companies. PLAN ASSETS BY ASSET CATEGORY IN DEFINED BENEFIT PLANS EUR million 2022 2021 Interest rate investments and other assets 124.2 176.1 Shares and share funds 75.8 90.0 Properties occupied by the Group 42.8 24.3 Kemira Oyj's shares 1.6 1.5 Total assets 244.4 292.0 The Finnish Pension Fund Neliapila has most of the defined benefit plan’s assets. At the end of 2022, the Pension Fund Neliapila's assets amounted to EUR 235.3 million (277.1), which consisted of interest rate investments and other assets of EUR 115.7 million (163.9), shares and share funds of EUR 75.1 million (87.3), properties of EUR 42.8 million (24.3), and Kemira Oyj's shares of EUR 1.6 million (1.5). 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 66 The income (+) / expense (-) of the actual returns on the plan assets of the Group's defined benefit plan were EUR -20.5 million (31.3). SIGNIFICANT ACTUARIAL ASSUMPTIONS % 2022 2021 Discount rate 3.7 - 4.7 1.0 - 1.8 Inflation rate 2.0 - 3.2 1.5 - 3.3 Future salary increases 2.5 - 3.2 2.0 - 2.7 Future pension increases 2.1 - 2.8 1.8 - 2.3 The significant assumptions used in calculating the obligations of the Finnish Pension Fund Neliapila were as follows: discount rate 3.8% (1.0%), inflation rate 2.6% (2.0%), future salary increases 2.6% (2.0%), and future pension increases 2.8% (2.3%). 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 10.5 million (4.5%), if all other assumptions were held constant. SENSITIVITY ANALYSIS - PENSION FUND NELIAPILA IN FINLAND Defined benefit obligation Impact on defined benefit obligation EUR million 2022 2021 2022 2021 Discount rate 3.8% (1.0%) 156.9 203.9 Discount rate +0.5% 149.8 192.6 -4.5% -5.6% Discount rate -0.5% 164.6 216.5 4.9% 6.1% Future pension increases 2.8% (2.3%) 156.9 203.9 Future pension increases +0.5% 163.8 215.1 4.4% 5.5% Future pension increases -0.5% 150.5 193.7 -4.1% -5.0% A change in the mortality assumption where life expectancy is increased by one year will increase the defined benefit obligation by EUR 6.7 million (4.3%). SENSITIVITY ANALYSIS - ITP 2 PENSION PLAN IN SWEDEN Defined benefit obligation Impact on defined benefit obligation EUR million 2022 2021 2022 2021 Discount rate 3.65% (1.7%) 38.3 53.7 Discount rate +0.5% 36.0 49.7 -6.0% -7.4% Discount rate -0.5% 40.8 58.1 6.7% 8.2% Future salary increases 2.5% (2.7%) 38.3 53.7 Future salary increases +0.5% 39.0 55.0 1.8% 2.4% Future salary increases -0.5% 37.6 52.5 -1.7% -2.2% 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 (4.0%). Expected contributions to the defined benefit plans for the year ending on December 31, 2023, are EUR 3.6 million. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | 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 2022 KEMIRA 2022 | 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, 2022 0.4 0.0 19.2 28.4 48.0 Exchange rate differences 0.0 0.0 0.0 0.0 0.1 Additional provisions and increases in existing provisions 0.0 0.0 3.6 0.0 3.6 Used during the financial year -0.2 0.0 -0.3 -0.3 -0.9 Unused provisions reversed -0.1 0.0 -0.3 0.0 -0.4 Reclassification 0.0 0.0 -4.9 -7.2 -12.1 On December 31, 2022 0.1 0.0 17.3 20.9 38.4 Current provisions On January 1, 2022 2.7 0.4 15.2 4.9 23.1 Exchange rate differences 0.0 0.0 -0.1 0.0 -0.1 Additional provisions and increases in existing provisions 0.5 0.0 0.2 1.3 2.0 Used during the financial year -2.2 -0.3 -9.5 -6.0 -18.0 Unused provisions reversed -0.1 -0.1 -0.1 0.0 -0.3 Reclassification -0.6 0.0 4.6 8.1 12.1 On December 31, 2022 0.4 0.0 10.1 8.3 18.8 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 2022, provisions for environmental remediation totaled EUR 27.4 million (34.4). The biggest provisions relate to site closures and reconditioning of the sediment of a lake in Vaasa, Finland. 2) Other provisions totaled EUR 29.2 million (33.3). In 2022, Kemira recognized a liability related to the obligation to return emission rights of EUR 1.3 million regarding the site in Bradford, UK. The biggest provisions relate to expected liabilities for energy company producing steam in Pori, Finland, owned via Pohjolan Voima. EUR million 2022 2021 Breakdown of the total amount of provisions Non-current provisions 38.4 48.0 Current provisions 18.8 23.1 Total 57.2 71.1 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 69 5. CAPITAL STRUCTURE AND FINANCIAL RISKS 5.1 CAPITAL STRUCTURE EUR million 2022 2021 Equity 1,684.6 1,342.7 Total assets 3,651.1 3,139.3 Gearing, % ¹⁾ 46 63 Equity ratio, % ²⁾ 46 43 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 2022 2021 Non-current interest-bearing liabilities 5.3. 838.1 776.9 Current interest-bearing liabilities 5.3. 183.7 215.3 Interest-bearing liabilities 1,021.8 992.2 Cash and cash equivalents 5.4. 250.6 142.4 Interest-bearing net liabilities 771.2 849.8 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 0.62 for 2022 (0.58), corresponding to a dividend payout ratio of 41% (82%). 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 2022 KEMIRA 2022 | 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, 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 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, 2021 751.1 167.7 918.8 159.5 759.3 Change in net liabilities with cash flows Proceeds from non-current liabilities (+) 200.0 200.0 200.0 Payments of non-current liabilities (-) -97.3 -97.3 -97.3 Payments of lease liabilities (-) -33.1 -33.1 -33.1 Proceeds from current liabilities (+) and payments (-) -53.9 -53.9 -53.9 Change in cash and cash equivalents -22.2 22.2 Change in net liabilities without cash flows Increases in lease liabilities (+) 42.1 42.1 42.1 Effect on change in exchange gains and losses 10.1 13.2 23.3 5.1 18.2 Other changes without cash flows -8.0 0.1 -7.9 — -7.9 Net book value on Dec 31, 2021 865.0 127.1 992.2 142.4 849.8 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | 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, 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 January 1, 2021 152,924 2,418 155,343 221.8 16.3 Treasury shares issued to the participants in the share incentive plan 2020 195 -195 — — -1.3 Treasury shares issued to the Board of Directors 11 -11 — — -0.1 The shares returned by the participants from the share incentive plans -3 3 — — 0.0 December 31, 2021 153,127 2,215 155,343 221.8 14.9 Kemira Oyj has one class of shares. Each share entitles its holder to one vote at the Annual General Meeting. On December 31, 2022, the share capital was EUR 221.8 million and the number of shares was 155,342,557 including 1,990,197 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 1,990,197 (2,215,073) treasury shares on December 31, 2022. The average share price of the treasury shares was EUR 6.73, and they represented 1.3% (1.4%) of the share capital, and the aggregate number of votes conferred by all shares. The aggregate par value of the treasury shares is EUR 2.8 million (3.2). 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, 2022, other reserves were EUR 4.0 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 72 5.3. INTEREST-BEARING LIABILITIES MATURITY OF INTEREST-BEARING LIABILITIES 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 15.9 0.8 — — — — 16.7 Other current liabilities 152.8 — — — — — 152.8 Total amortizations of interest- bearing liabilities 199.6 225.2 210.2 13.8 128.7 244.2 1,021.8 2021, EUR million 2022 2023 2024 2025 2026 2027- Book value, total Loans from financial institutions — 149.3 — 129.8 — — 279.1 Bonds 52.8 — 197.3 — — 191.3 441.4 Lease liabilities 28.7 24.4 17.8 11.8 9.0 45.1 136.8 Other non-current liabilities — 1.0 — — — — 1.0 Other current liabilities 133.8 — — — — — 133.8 Total amortizations of interest- bearing liabilities 215.3 174.7 215.1 141.6 9.0 236.4 992.2 At year-end 2022, the Group's interest-bearing net liabilities were EUR 771.2 million (849.8). For more information, see Note 5.1. Capital structure. MATURITY OF NON-CURRENT INTEREST-BEARING LIABILITIES BY CURRENCIES 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 2021 Book value, total Currency, EUR million 2022 2023 2024 2025 2026 2027- EUR 60.5 156.0 201.6 92.2 1.9 208.1 720.3 USD 14.6 13.8 9.3 46.7 5.6 13.8 103.8 GBP 0.5 0.5 0.5 0.4 0.1 10.7 12.7 Other 12.6 4.3 3.8 2.4 1.4 3.7 28.2 Total 88.2 174.7 215.1 141.6 9.0 236.4 865.0 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 73 5.4. FINANCIAL ASSETS AND LIABILITIES BY MEASUREMENT CATEGORIES FINANCIAL ASSETS 2022 2021 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 13.3 — 13.3 — 13.3 1.3 — 1.3 — 1.3 Fair value through other comprehensive income 5.6. Derivatives qualifying for hedge accounting Cash flow hedges ¹⁾ 81.7 — 81.7 — 81.7 32.7 — 32.7 — 32.7 Other shares 3.5. The shares of Pohjolan Voima Group 380.6 — — 380.6 380.6 257.3 — — 257.3 257.3 Other non-listed shares 2.7 — — 2.7 2.7 2.7 — — 2.7 2.7 Amortized cost Other non-current assets ²⁾ 6.6 — 6.6 — 6.6 7.3 — 7.3 — 7.3 Other current receivables ²⁾ 0.3 — 0.3 — 0.3 0.3 — 0.3 — 0.3 Trade receivables ²⁾ 4.2. 449.6 — 449.6 — 449.6 373.0 — 373.0 — 373.0 Cash and cash equivalents Cash in hand and at bank accounts 245.3 — 245.3 — 245.3 138.7 — 138.7 — 138.7 Deposits and money market investments ³⁾ 5.3 — 5.3 — 5.3 3.7 — 3.7 — 3.7 Total financial assets 1,185.4 — 802.1 383.3 1,185.4 817.0 — 557.0 260.0 817.0 1) Includes derivative contracts of EUR 24.4 million (7.7) maturing after the year 2023. 2) In 2022, other non-current assets and Other current receivables include expected credit losses of EUR 0.4 million (0.4) in accordance with the IFRS 9 standard. Trade receivables include expected credit losses of EUR 5.3 million (3.3). 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. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 74 FINANCIAL LIABILITIES 2022 2021 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 2.3 — 2.3 — 2.3 6.9 — 6.9 — 6.9 Fair value through other comprehensive income 5.6. Derivatives qualifying for hedge accounting Cash flow hedges 1.6 — 1.6 — 1.6 1.6 — 1.6 — 1.6 Amortized cost Interest-bearing liabilities 5.3. Non-current loans from financial institutions 312.4 — 312.2 — 312.2 279.1 — 290.5 — 290.5 Bonds 391.1 — 379.2 — 379.2 388.6 — 415.2 — 415.2 Current portion — — — — — 52.8 — 54.7 — 54.7 Non-current leasing liabilities 118.0 — 118.0 — 118.0 108.1 — 108.1 — 108.1 Current portion 30.9 — 30.9 — 30.9 28.7 — 28.7 — 28.7 Other non-current liabilities 16.7 — 16.6 — 16.6 1.0 — 1.0 — 1.0 Current portion 6.5 — 6.8 — 6.8 6.7 — 6.9 — 6.9 Current loans from financial institutions 146.3 — 146.1 — 146.1 127.1 — 131.9 — 131.9 Non-interest-bearing liabilities Other non-current liabilities 9.3 — 9.3 — 9.3 9.4 — 9.4 — 9.4 Other current liabilities 45.5 — 45.5 — 45.5 23.5 — 23.5 — 23.5 Trade payables 4.3. 292.8 — 292.8 — 292.8 285.5 — 285.5 — 285.5 Total financial liabilities 1,373.2 — 1,361.2 — 1,361.2 1,319.1 — 1,364.1 — 1,364.1 1) Includes derivative contracts of EUR -0.0 million (-0.0) maturing after the year 2023. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 75 There were no transfers between levels 1–3 during the financial year. Level 3 specification, financial assets EUR million 2022 2021 Net book value on Jan 1 260.0 212.3 Effect on other comprehensive income 123.2 50.2 Increases — 1.0 Decreases — -3.5 Net book value on Dec 31 383.3 260.0 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 forwards, electricity futures, electricity options, 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 2022 KEMIRA 2022 | 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 forwards, electricity futures and electricity options 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 2022 KEMIRA 2022 | 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 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 Chinese renminbi, the Canadian dollar, the U.S. dollar and Swedish krona. At the end of the year, the Chinese renminbi's denominated exchange rate risk against the euro had an equivalent value of approximately EUR 86 million (67), the average hedging rate and hedging ratio being 7.28 and 68% (36%), respectively. The Canadian dollar denominated exchange rate risk was approximately EUR 56 million (26), the average hedging rate and hedging ratio being 1.41 and 52% (51%), respectively. The U.S. dollar denominated exchange rate risk was approximately EUR 54 million (64), the average hedging rate and hedging ratio being 1.04 and 68% (53%), respectively. The denominated exchange rate risk of the Swedish krona against the euro had an equivalent value of approximately EUR 36 million (31), the average hedging rate and hedging ratio being 10.79 and 64% (62%), respectively. In addition, Kemira is exposed to smaller transaction risks against the euro mainly in relation to the Korean won, Polish zloty, the Norwegian krona and the Danish krona and against US dollar mainly in relation to the Canadian dollar and the Brazilian real with the annual exposure in those currencies being approximately EUR 131 million. 2022 2021 Transaction exposure, the most significant currencies, EUR million CNY against EUR CAD against EUR USD against EUR SEK against EUR CNY against EUR CAD against EUR USD against EUR SEK against EUR Operative cash flow forecast, net ¹⁾ -86.4 55.7 54.2 -35.8 -67.0 26.4 64.3 -30.9 Loans, net 59.9 13.6 411.9 -15.8 1.0 8.3 370.0 -10.7 Derivatives, operative cash flow hedging, net 63.6 -29.5 -31.0 26.2 40.1 -13.5 -40.6 19.0 Derivatives, hedging of loans, net -59.2 -13.5 -170.6 16.6 -2.7 -8.3 -142.2 10.7 Total -22.1 26.3 264.4 -8.8 -28.6 12.9 251.6 -11.8 1) Based on a 12-month foreign currency operative cash flow forecast. At the end of 2022, the foreign currency operative cash flow forecast for 2023 was EUR 416 million of which 58% was hedged (54%). The hedge ratio is monitored daily. A minimum of 40% and a maximum of 100% of the forecast flow must always be hedged according to the treasury policy. A 10 percent strengthening of the euro against the Swedish krona, based on the exchange rates as of December 31, 2021 and without hedging, would increase EBITDA approximately EUR 4 million, and a 10 percent strengthening of the euro against the Chinese renmimbi without hedging would increase EBITDA approximately EUR 9 million. On the other hand, a 10 percent strengthening of the euro against the Canadian Dollar and the US Dollar without hedging would cause EUR 6 and 5 million negative impact to 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 0.3 million (-1.4). Cash flow hedge accounting deals have been done to hedge highly probable currency flows. In 2022, no ineffectiveness in derivatives under hedge accounting was recognized in the Income statement (-). CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 78 The most significant translation risk currencies are the US dollar, the Canadian dollar, the Swedish krona 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 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 83% (80%) of the Group’s entire net debt portfolio including lease liabilities was fixed at the end of 2022. The net financing cost of the Group was 4.2% (3.4%). 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. The duration of the Group’s interest-bearing loan portfolio excluding lease liabilities was 22 months at the end of 2022 (29). The table below shows the time for interest rate fixing of the loan portfolio. 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 2021 1–5 years Time to interest rate fixing, EUR million <1 year > 5 years Total Floating net liabilities 170.2 — — 170.2 Fixed net liabilities ¹⁾ 52.8 290.0 200.0 542.8 Total 222.9 290.0 200.0 712.9 1) Excluding lease liabilities On the balance sheet date, the average interest rate of the loan portfolio was approximately 2.4% (1.7%). If interest rates rose by one percentage point on January 1, 2023, the resulting interest expenses before taxes incurred by the Group over the next 12 months would increase by approximately EUR 0.3 million (0.7). Consequently, a decrease of one percentage point would decrease interest expenses by EUR 0.3 million. During 2023, Kemira will reprice 21% (32%) of the Group's net debt portfolio. On the balance sheet date, the Group had no outstanding interest rate derivatives. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 79 Electricity price risk The price of electricity varies greatly according to the market situation. Kemira Group takes hedging measures with respect to its electricity 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. 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 +/- 11.9 million (+/- 7.7). 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 shares ownership can be found in Note 3.5. 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 followed 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 342.5 million (174.9). 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 Group's credit risk were associated with financing transactions in the year 2022 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 95.5% 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 60.3 million (48.2) on December 31, 2022. The amounts recognized in the balance sheet are EUR 4.3 million (2.1) in assets and EUR 1.4 million (0.1) in liabilities. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | 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 2022, the Group’s cash and cash equivalents stood at EUR 250.6 million (142.4), of which cash in bank accounts accounted for EUR 245.3 million (138.7) and bank deposits EUR 5.3 million (3.7). 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 2021/2022, 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 2022, the Group had EUR 30 million of commercial papers outstanding on the market (-). 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 148.9 million (136.8) 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 2022 was 3.2 years (3.0). LOAN REPAYMENTS 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 2021 Total drawn Loan type, EUR million ¹⁾ Undrawn 2022 2023 2024 2025 2026 2027- Loans from financial institutions — — 150.0 — 129.8 — — 279.8 Bonds — 52.8 — 200.0 — — 200.0 452.8 Revolving credit facility 400.0 — — — — — — — Lease liabilities — 35.9 28.9 21.3 14.6 10.9 73.7 185.3 Commercial paper program 600.0 — — — — — — — Other interest-bearing non-current liabilities — — 1.0 — — — — 1.0 Other interest-bearing current liabilities — 133.8 — — — — — 133.8 Total interest-bearing liabilities 1,000.0 222.4 179.9 221.3 144.4 10.9 273.7 1,052.6 1) Loan structure presented by type and maturity using contractual undiscounted payments. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 81 5.6 DERIVATIVE INSTRUMENTS Nominal values, EUR million Maturity structure 2022 2021 2023 2024 2025 2026 2027 Total Total Currency derivatives Forward contracts 619.9 — — — — 619.9 496.3 Inflow 350.5 — — — — 350.5 288.8 of which cash flow hedges 32.4 — — — — 32.4 19.7 Outflow 269.4 — — — — 269.4 207.5 of which cash flow hedges 39.2 — — — — 39.2 42.4 Other derivatives Electricity contracts, bought (GWh) 594.0 316.2 170.8 48.2 — 1,129.3 1,626.1 Electricity forward contracts 594.0 316.2 170.8 48.2 — 1,129.3 1,626.1 of which cash flow hedges 594.0 316.2 170.8 48.2 — 1,129.3 1,626.1 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 2022 2021 Positive Negative Net Positive Negative Net Currency derivatives Forward contracts 15.0 -3.6 11.3 1.4 -8.5 -7.1 of which cash flow hedges 1.7 -1.4 0.3 0.1 -1.6 -1.4 Other derivatives Electricity forward contracts, bought ¹⁾ 80.0 -0.2 79.8 32.5 — 32.5 of which cash flow hedges 80.0 -0.2 79.8 32.5 — 32.5 1) Includes fair value of electricity forward contracts of EUR 24.4 million (7.7) and EUR -0.0 million (-0.0) maturing after the year 2023. 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 91.9 million (32.5) to Kemira and EUR 0.8 million (7.1) to counterparties. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | 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 2022 KEMIRA 2022 | 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, DEPUTY CEO AND MEMBERS OF THE MANAGEMENT BOARD EUR Salaries and other benefits Bonuses Share- based payments ¹⁾ 2022 Total 2021 Total CEO Jari Rosendal 738,620 ⁴⁾ 199,528 515,424 1,453,573 1,537,148 Deputy CEO Jukka Hakkila ²⁾ 190,930 53,374 180,398 424,703 443,943 Other members of Management Board ³⁾ 1,792,452 458,627 1,371,415 3,622,495 3,571,893 Total 2,722,003 711,529 2,067,238 5,500,771 5,552,984 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) No remuneration was paid to the Deputy CEO based on CEO substitution. 3) Other members of the Management Board on December 31, 2022 are CFO Petri Castrén, CTO Matthew R. Pixton, President Pulp & Paper Antti Salminen, EVP Operational Excellence Esa-Matti Puputti, President Industry & Water Wido Waelput 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 in their local countries. The Kemira policy is that all new supplementary pension arrangements are defined contribution plans. 4) Includes supplementary defined contribution pension. Employment terms and conditions of the CEO Remuneration of the CEO comprises a monthly salary including a car benefit and a mobile phone benefit as well as supplementary defined contribution pension 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% (70%) of the annual base salary. The long-term share incentive plan is based on the terms of the plan. The maximum reward 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 retirement age of the CEO is 63 years. The 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. The CEO is also entitled to a supplementary defined contribution pension plan. The supplementary pension is defined as 20% of annual base salary. A mutual termination notice period of six months applies to the CEO. The CEO is entitled to an additional severance pay of 12 months' salary, if the company terminates his service. The Board of Directors' emoluments On March 24, 2022, 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 the 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, 2022 the 16,464 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 short-term bonus plans, long-term share incentive plans or supplementary pension plans of Kemira Oyj. 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 84 MEMBERS OF THE BOARD OF DIRECTORS Number of shares Share value, EUR Cash compensation, EUR ⁵⁾ 2022 Total, EUR 2021 Total, EUR Matti Kähkönen, Chairman 3,696 44,248 75,352 119,600 61,600 Annika Paasikivi, Vice Chairman (since March 24, 2022) 2,184 26,146 45,454 71,600 — Wolfgang Büchele 1,680 20,113 39,487 59,600 56,000 Shirley Cunningham 1,680 20,113 42,487 62,600 68,000 Werner Fuhrmann 1,680 20,113 39,487 59,600 56,000 Timo Lappalainen 2,184 26,146 51,454 77,600 67,000 Kristian Pullola 1,680 20,113 38,887 59,000 50,600 Tina Sejersgård Fanø (since March 24, 2022) 1,680 20,113 34,087 54,200 — Jari Paasikivi, Chairman (since March 24, 2022) — — 3,600 3,600 104,000 Kaisa Hietala (until March 24, 2021) — — — — 2,400 Kerttu Tuomas (until March 24, 2021) — — — — 2,400 Total 16,464 197,104 370,296 567,400 468,000 5) Includes both annual fees and meeting fees. TRANSACTIONS CARRIED OUT WITH RELATED PARTIES EUR million 2022 2021 Revenue Associated companies 0.1 0.0 Leases, purchases of goods and services Associated companies 25.3 8.2 Pension Fund Neliapila 0.7 1.2 Total 25.9 9.4 Receivables Associated companies 0.0 0.0 Liabilities Associated companies 4.4 7.3 Pension Fund Neliapila 1.4 1.9 Real estates owned by Pension Fund Neliapila are 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 the key persons of the management at the year-end of 2022 or 2021, nor were there contingency items or commitments on behalf of key management personnel. Persons close to key management personnel with the related parties do not have any significant business relationship with the Group. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | 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 JSC "Kemira HIM" St. Petersburg Russia 100.0 0.0 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 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 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 (Jining) Environmental Engineering Co., Ltd. Jining China 100.0 0.0 0.0 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 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 City Country Kemira Group's holding, % Kemira Oyj's holding, % Non- controlling interest's holding, % 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, Inc. Atlanta, GA United States 100.0 0.0 0.0 Kemira Chemie Ges.mbH 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 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 0.0 0.0 Kemira Rotterdam B.V. Rotterdam Netherlands 100.0 0.0 0.0 CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 86 City Country Kemira Group's holding, % Kemira Oyj's holding, % Non- controlling interest's holding, % 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 (Thailand) Co., Ltd. Bangkok Thailand 100.0 0.0 0.0 Kemira Uruguay S.A. Fray Bentos Uruguay 100.0 0.0 0.0 Kemira (Vietnam) Company Limited Long Thanh Vietnam 100.0 0.0 0.0 Kemira Water Danmark A/S Copenhagen Denmark 100.0 100.0 0.0 Kemira Water Solutions Brasil - Produtos para Tratamento de Água Ltda. São Paulo Brazil 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 Brasil Ltda. Camaçari Brazil 100.0 0.0 0.0 Kemwater ProChemie s.r.o. Bradlec Czech Republic 95.1 0.0 4.9 PT Kemira Indonesia Surabaya Indonesia 100.0 74.8 0.0 PT Kemira Chemicals Indonesia Pasuruan Indonesia 99.8 99.8 0.2 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 2022 2021 Net book value on Jan 1 4.8 5.3 Additions 0.0 0.0 Decreases 0.0 0.0 Share of the profit/loss for the period 0.3 -0.5 Exchange rate differences 0.0 0.0 Net book value on Dec 31 5.1 4.8 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 2022 2021 Assets 59.0 57.5 Liabilities 44.8 44.2 Revenue 25.3 8.1 Profit (+) / loss (-) for the period 0.8 -1.3 Related party transactions carried out with associates are disclosed in Note 6.1. Related parties. NON-CONTROLLING INTERESTS EUR million 2022 2021 Net book value on Jan 1 13.9 13.2 Dividends -6.9 -6.5 Share of the profit for the period 8.0 7.1 Exchange rate differences -0.3 0.1 Net book value on Dec 31 14.7 13.9 CHANGES IN THE GROUP STRUCTURE •Skandinavian Tanking System A/S was voluntarily liquidated on June 30, 2022. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 87 7. OFF-BALANCE SHEET ITEMS 7.1 COMMITMENTS AND CONTINGENT LIABILITIES COMMITMENTS EUR million 2022 2021 Guarantees On behalf of own commitments 108.4 95.1 On behalf of associates 12.5 12.5 On behalf of others 2.5 1.8 Other obligations On behalf of own commitments 0.7 0.9 On behalf of others 16.3 16.3 The most significant off-balance sheet investments commitments On December 31, 2022, major amounts of contractual commitments for the acquisition of property, plant, and equipment were EUR 42.8 million (22.1) 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 The Group has no significant events after the balance sheet date. CONSOLIDATED FINANCIAL STATEMENTS (IFRS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 88 Kemira Oyj's income statement Thousand EUR Note 1.1.-31.12.2022 1.1.-31.12.2021 Revenue 2 2,206,658 1,572,450 Change in inventory of finished goods and in work in progress +/- 4 64,334 23,328 Other operating income 3 3,435 1,003 Materials and services 4 -1,413,093 -902,075 Personnel expenses 5 -48,372 -50,947 Depreciation, amortization and impairments 6 -22,273 -25,568 Other operating expenses 4 -592,545 -572,917 Operating profit 198,144 45,275 Financial income and expenses 7 172,737 26,455 Profit before appropriations and taxes 370,881 71,730 Appropriations 8 -12,303 -74,702 Income taxes 9 -43,844 121 Profit (loss) for the financial year 314,734 -2,851 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 89 Kemira Oyj's balance sheet Thousand EUR Note 31.12.2022 31.12.2021 ASSETS NON-CURRENT ASSETS Intangible assets 10 58,208 59,266 Tangible assets 11 35,277 33,471 Investments 12 Holdings in Group undertakings 1,049,503 1,049,503 Receivables from Group companies 552,996 396,546 Other shares and holdings 99,609 99,608 Other investments 6,127 6,127 Total investments 1,708,236 1,551,785 Total non-current assets 1,801,721 1,644,521 CURRENT ASSETS Inventories 13 213,498 140,004 Non-current receivables 14 Deferred tax assets 15,446 16,814 Loan receivables 400 400 Other receivables 21,107 6,088 Total non-current receivables 36,952 23,302 Current receivables 14 570,083 623,719 Cash and cash equivalents 194,464 74,107 Total current assets 1,014,997 861,131 Total assets 2,816,718 2,505,653 Thousand EUR Note 31.12.2022 31.12.2021 EQUITY AND LIABILITIES CAPITAL AND RESERVES 15 Share capital 221,762 221,762 Share premium account 257,878 257,878 Fair value reserve 56,764 19,387 Unrestricted equity reserve 199,964 199,964 Retained earnings 188,104 278,295 Profit (loss) for the financial year 314,734 -2,851 Total equity 1,239,207 974,433 APPROPRIATIONS 16 13,098 9,795 PROVISIONS 17 52,230 57,066 LIABILITIES Non-current liabilities 18 Deferred tax liabilities 14,191 5,151 Other non-current liabilities 726,122 677,148 Total Non-current liabilities 740,313 682,299 Current liabilities 19 771,871 782,059 Total liabilities 1,512,184 1,464,358 Total equity and liabilities 2,816,718 2,505,653 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 90 Kemira Oyj's cash flow statement Thousand EUR 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net profit for the period 314,734 -2,851 Adjustments for Depreciation according to plan 22,273 25,568 Unrealized exchange differences (net) -20,748 27,300 Financial income and expenses (+/-) -172,737 -26,455 Income taxes 43,844 -121 Other adjustments (+/-) 8,627 98,687 Operating profit before change in working capital 195,993 122,128 Change in working capital Increase (-) / decrease (+) in non-interest-bearing current receivables -99,503 -58,724 Increase (-) / decrease (+) in inventories -73,494 -40,378 Increase (+) / decrease (-) in short-term interest-free debts 27,598 227,187 Change in working capital -145,399 128,085 Cash generated from operations before financial items and taxes 50,595 250,213 Interest and other finance costs paid -24,113 -21,491 Interest and other finance income received 35,083 22,884 Realized exchange differences (net) 22,184 -9,972 Dividends received 137,389 5,876 Income taxes paid -4,929 -2,154 Net cash from operating activities 216,208 245,356 Thousand EUR 2022 2021 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of other investments -1 -1,000 Purchases of intangible assets -14,330 -34,459 Purchases of tangible assets -8,858 -7,447 Proceeds from sale of investments 0 3,500 Proceeds from sale of tangible and intangible assets 2,489 227 Increase (-) / decrease (+) in loan receivables 51,637 -94,814 Net cash used in investing activities 30,937 -133,993 Cash flows before financing 247,145 111,363 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from non-current liabilities (+) 195,910 200,000 Repayment of non-current liabilities (-) -150,000 -97,500 Short-term financing, net increase (+) / decrease (-) -14,456 -53,436 Dividends paid -88,942 -88,809 Group contribution paid -70,500 -94,500 Net cash used in financing activities -127,988 -134,245 Net increase (+) / decrease (-) in cash and cash equivalents 119,157 -22,883 Cash and cash equivalents on Dec 31 194,464 74,107 Exchange gains (+) / losses (-) on cash and cash equivalents 1,201 -220 Cash and cash equivalents on Jan 1 74,107 97,209 Net increase (+) / decrease (-) in cash and cash equivalents 119,157 -22,883 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 91 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 implemented a new business model in its APAC companies on January 1, 2022. This has an effect on the comparability of the figures. In the new business model Kemira Oyj acts as a principal company which means that a part of sales of products and the external purchase of raw materials are done in the name of Kemira Oyj. The subsidiaries act as contact manufacturer/toll manufacturer and/or Limited Risk Distributor companies and they receive CMA/tolling and/or sales compensation from these activities. In connection to the business conversion Kemira Oyj agreed to pay a compensation related to the transferred business according to the business conversion agreement with Kemira Asia Ltd and Kemira Hong Kong. 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 constructions 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 or 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 financial risk management of Kemira Group is concentrated in Kemira Oyj, which enters into currency, interest rate and electricity 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 items are with group companies) are entered in to the profit and loss statement. 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. The fair value of Electricity Derivatives hedging the parent company's electricity 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. KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 92 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. 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 2.6 million (2.7), 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 93 2. REVENUE Thousand EUR 2022 2021 Revenue by segments Pulp & Paper 1,033,704 716,079 Industry & Water 579,102 416,308 Intercompany revenue 593,852 440,062 Total 2,206,658 1,572,450 Distribution of revenue by geographical area as a percentage of total revenue Finland, domicile of the parent company 28 27 Other Europe, Middle East and Africa 54 59 Americas 10 10 Asia Pacific 9 4 Total 100 100 3. OTHER OPERATING INCOME Thousand EUR 2022 2021 Gains on the sale of property, plant and equipment 2,402 77 Rent income 5 11 Insurance compensation received 603 11 Other income from operations 425 904 Total 3,435 1,003 4. EXPENSES Thousand EUR 2022 2021 Change in stocks of finished goods and in work in progress -64,334 -23,328 Materials and services Materials and supplies Purchases during the financial year 1,423,051 903,268 Change in inventories (increase - / decrease +) -19,281 -9,112 External services 9,323 7,918 Total 1,413,093 902,075 Other operating expenses Rents 9,290 10,710 Intercompany tolling manufacturing charges 235,759 226,190 Other intercompany charges 145,253 140,066 Freights and delivery expenses 135,599 115,580 External services 18,502 16,111 Other operating expenses ¹⁾ 48,142 64,261 Total 592,545 572,917 Total expenses 1,941,304 1,451,664 1) 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). In 2021, the operating expenses included a net increase of EUR 18,948 thousand in the obligatory provisions (an increase of EUR 3,293 in environmental expenses and EUR 15,655 thousand in restructuring expenses). AUDIT FEES AND SERVICES Thousand EUR 2022 2021 Audit fees 499 455 Tax services 278 129 Other services 50 51 Total 827 635 Ernst & Young Oy acts as the principal auditor for Kemira Oyj. KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 94 5. PERSONNEL EXPENSES AND NUMBER OF PERSONNEL Thousand EUR 2022 2021 Personnel costs Wages and salaries 49,228 46,148 Pension expenses ¹⁾ -2,767 3,637 Other personnel expenses 1,911 1,161 Total 48,372 50,947 Thousand EUR 2022 2021 Management wages and salaries ²⁾ CEO 1,454 1,537 Deputy CEO 425 444 Board of Directors 567 468 Total 2,446 2,449 Thousand EUR 2022 2021 Salaries and fees include bonuses and share-based payments CEO 715 813 Deputy CEO 234 257 Total 949 1,070 In 2020, salaries and wages totaled EUR 45,334 thousand. 1) In 2022, the pension expenses includes a return of EUR 10.0 million (3.0) from Pension Fund Neliapila. 2) The salary paid to Kemira Oyj's CEO and Deputy CEO 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 2022 2021 Pulp & Paper segment 102 104 Industry & Water segment 38 36 Other, of which 353 364 R&D and Technology 167 172 Total 493 504 Average number of personnel 502 502 6. DEPRECIATION, AMORTIZATION AND IMPAIRMENTS Thousand EUR 2022 2021 Depreciation according to plan and impairment Intangible rights 11,114 15,466 Depreciation of goodwill 3,586 6 Other intangible assets 687 2,062 Buildings and constructions 665 539 Machinery and equipment 6,220 7,493 Total 22,273 25,568 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 95 7. FINANCE INCOME AND EXPENSES Thousand EUR 2022 2021 Dividend income From Group companies 137,389 5,876 Total 137,389 5,876 Other interest and finance income Interest income from Group companies 38,188 21,349 Interest income from others 1,579 736 Other finance income from Group companies 607 638 Other finance income from others 0 6 Exchange gains from Group companies (net) 24,276 37,152 Total 64,650 59,880 Total finance income 202,038 65,756 Interest expenses and other finance expenses Interest expenses to Group companies -1,274 -217 Interest expenses to others -19,612 -16,768 Other finance expenses to others -2,623 -2,493 Exchange losses from others (net) -5,791 -19,823 Total -29,301 -39,301 Total finance expenses -29,301 -39,301 Total finance income and expenses 172,737 26,455 Thousand EUR 2022 2021 Exchange gains and losses Realized -3,699 -9,972 Unrealized 22,184 27,300 Total 18,485 17,329 8. APPROPRIATIONS Thousand EUR 2022 2021 Change in accumulated depreciation difference (increase - / decrease +) Intangible rights -420 384 Other intangible assets 231 -456 Goodwill 0 -2 Buildings and structures -351 -612 Machinery and equipment -2,760 -3,512 Other tangible assets -3 -3 Total -3,303 -4,202 Group contribution Group contributions given -9,000 -70,500 Total -9,000 -70,500 Total appropriations -12,303 -74,702 9. INCOME TAXES Thousand EUR 2022 2021 Income taxes on ordinary activities -42,205 -1,866 Income taxes for prior years -29 -476 Change in deferred taxes -1,065 3,634 Other taxes and parafiscal charges -546 -1,171 Total -43,844 121 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 96 10. INTANGIBLE ASSETS 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 2021, Thousand EUR Intangible rights Goodwill Advance payments and construction in progress Other intangible assets Total Acquisition cost on Jan 1 266,555 7,263 2,274 39,878 315,970 Additions 6,484 25,100 2,874 0 34,459 Decreases -96 0 0 0 -96 Transfers 2,088 0 -2,088 0 0 Acquisition cost on Dec 31 275,030 32,364 3,061 39,878 350,333 Accumulated amortization on Jan 1 -229,237 -7,263 0 -37,128 -273,628 Accumulated amortization relating to decreases 29 0 0 0 29 Amortization during the financial year -11,821 -3,584 0 -2,062 -17,467 Accumulated amortization on Dec 31 -241,030 -10,847 0 -39,191 -291,067 Net book value on Dec 31 34,000 21,517 3,061 687 59,266 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 97 11. TANGIBLE ASSETS 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 at 31 Dec 1,153 8,761 20,636 2 4,725 35,277 2021, 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 9,959 87,750 343 11,415 110,539 Additions 0 739 5,122 0 1,586 7,447 Decreases 0 -332 -640 0 0 -973 Transfers 0 5,144 5,897 0 -11,041 0 Acquisition cost on Dec 31 1,071 15,509 98,130 343 1,960 117,014 Accumulated depreciation on Jan 1 -110 -6,726 -69,156 -340 0 -76,332 Accumulated depreciation relating to decreases 0 282 298 0 0 580 Depreciation during the financial year 0 -489 -7,301 0 0 -7,790 Accumulated depreciation on Dec 31 -110 -6,933 -76,159 -341 0 -83,543 Net book value on Dec 31 962 8,576 21,970 3 1,960 33,471 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 98 12. INVESTMENTS 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 2021, Thousand EUR Holdings in Group companies Receivables from Group companies Other shares and holdings Other receivables Total Net book value on Jan 1 1,228,799 618,587 102,108 6,127 1,955,622 Additions 0 69,106 1,000 0 70,106 Decreases -179,296 -291,146 -3,500 0 -473,943 Net book value on Dec 31 1,049,503 396,546 99,608 6,127 1,551,785 13. INVENTORIES Thousand EUR 2022 2021 Raw materials and consumables 56,854 37,573 Finished goods 148,604 90,731 Advance payments 8,040 11,700 Total 213,498 140,004 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 99 14. RECEIVABLES Thousand EUR 2022 2021 Non-current receivables Receivables from others Loan receivables 400 400 Other receivables 21,107 6,088 Total 21,507 6,488 Deferred tax assets From appropriations 376 473 From reservations 9,691 10,685 From foreign currency and electricity hedging 0 304 From revaluations 4,285 4,285 From other deferred tax receivables 1,094 1,068 Total 15,446 16,814 Total non-current receivables 36,952 23,302 Current receivables Receivables from Group companies Trade receivables 108,075 68,501 Loan receivables 160,638 368,724 Advances paid 18,836 18,836 Other current receivables 0 42 Prepayments and accrued income 16,555 12,060 Total 304,104 468,164 Thousand EUR 2022 2021 Receivables from others Trade receivables 180,297 116,386 Advances paid 72 41 Other current receivables 4,097 7,078 Prepayments and accrued income 81,513 32,050 Total 265,978 155,555 Total current receivables 570,083 623,719 Total receivables 607,035 647,021 Accrued income from others Taxes 2,561 73 Hedging accruals 65,845 21,149 Prepaid expenses 3,831 3,629 Accrued income 8,048 5,986 Other 1,228 1,213 Total 81,513 32,050 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 100 15. CAPITAL AND RESERVES Thousand EUR 2022 2021 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 19,387 5,216 Cash flow hedges 37,378 14,170 Fair value reserve on Dec 31 56,764 19,387 Total restricted equity on Dec 31 536,404 499,026 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 1 275,443 365,658 Dividend distributions -88,942 -88,809 Share-based incentive plan Shares given 1,689 1,465 Shares returned -86 -19 Retained earnings on Dec 31 188,104 278,295 Profit (loss) for the financial period 314,734 -2,851 Total unrestricted equity on Dec 31 702,803 475,407 Total capital and reserves on Dec 31 1,239,207 974,433 Total distributable funds on Dec 31 702,803 475,407 Change in treasury shares Thousand EUR Number of shares Acquisition value / number on Jan 1, 2022 14,911 2,215 Change -1,514 -225 Acquisition value/number on Dec 31, 2022 13,397 1,990 16. ACCUMULATED APPROPRIATIONS Thousand EUR 2022 2021 Appropriations Accumulated depreciation difference 13,098 9,795 Deferred tax liabilities on accumulated appropriations 2,620 1,959 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 101 17. OBLIGATORY PROVISIONS Thousand EUR 2022 2021 Non-current provisions Pension provisions 5,469 5,338 Environmental provisions 14,185 15,414 Restructuring 19,544 26,700 Total non-current provisions 39,197 47,452 Current provisions Environmental provisions 6,116 5,462 Restructuring 6,916 4,153 Total current provisions 13,032 9,615 Total provisions 52,230 57,066 Change in obligatory provisions Obligatory provisions on Jan 1 57,066 38,213 Utilised during the year -8,338 -12,982 Cancellation of unused reservations 0 -998 Increase during the year 3,501 32,833 Obligatory provisions on Dec 31 52,230 57,066 Environmental risks and liabilities are disclosed in Note 4.6 in the Notes to the Consolidated Financial Statements. 18. NON-CURRENT LIABILITIES Thousand EUR 2022 2021 Loans from financial institutions 312,359 279,891 Corporate bonds 397,853 397,258 Other liabilities 15,910 0 Total 726,122 677,148 Maturity later than five years Corporate bonds 200,000 200,000 Total 200,000 200,000 Deferred tax liabilities From foreign currency and electricity hedging 14,191 5,151 Total 14,191 5,151 Total non-current liabilities 740,313 682,299 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 102 19. CURRENT LIABILITIES Thousand EUR 2022 2021 Liabilities to Group companies Loan liabilities 14,323 5,843 Trade payables 176,401 137,067 Other liabilities 250,316 395,643 Accrued expenses 1,130 40 Total 442,169 538,594 Liabilities to others Corporate Bonds 0 52,750 Commercial papers 29,815 0 Prepayments received 1,308 1,536 Trade payables 145,428 121,156 Other liabilities 24,330 7,528 Accrued expenses 128,822 60,495 Total 329,702 243,465 Total current liabilities 771,871 782,059 Accrued expenses and deferred income Personnel expenses 20,241 16,565 Interest expenses and exchange rate differences 10,563 13,690 Cost accruals 53,671 26,658 Income tax accruals 42,205 1,866 Other 2,142 1,716 Total 128,822 60,495 20. DERIVATIVES 2022 2021 Nominal values, thousand EUR Total Total Currency derivatives Forward contracts 645,600 520,161 of which cash flow hedges 71,572 62,044 Other derivatives Electricity contracts, bought (MWh) 1,034,472 1,518,286 Electricity forward contracts 1,034,472 1,518,286 of which cash flow hedges 1,034,472 1,518,286 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 Other derivatives Electricity forward contracts, bought 1) 70,771 — 70,771 of which cash flow hedges 70,771 — 70,771 1) Includes fair value of electricity forward contracts of EUR 21,107 thousand maturing after the year 2023 (6,088) 2021 Fair values, thousand EUR Positive Negative Net Currency derivatives Forward contracts 2,752 8,554 -5,802 of which cash flow hedges 144 1,577 -1,434 Other derivatives Electricity forward contracts, bought 25,753 — 25,753 of which cash flow hedges 25,753 — 25,753 KEMIRA OYJ FINANCIAL STATEMENTS (FAS) | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 103 21. COLLATERAL AND CONTINGENT LIABILITIES Thousand EUR 2022 2021 Given guarantees On behalf of own commitments Business related delivery-, environmental and other guarantees 18,106 15,545 On behalf of companies belonging to the same Group Business and financing guarantees 535,479 522,446 On behalf of associated companies Business and financing guarantees 12,499 12,467 On behalf of others Guarantees 2,296 1,543 Other obligations Loan commitments 16,339 16,339 Rent liabilities Maturity within one year 2,714 2,221 Maturity after one year 6,693 7,511 Total 9,407 9,732 Leasing liabilities Maturity within one year 2,088 2,052 Maturity after one year 3,968 3,354 Total 6,056 5,407 Pledges given On behalf of own commitments 482 359 22. SHARES AND HOLDINGS OWNED BY KEMIRA OYJ SHARES IN GROUP COMPANIES 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 (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 Brasil Ltda 100.00 99.87 Kemira Chemicals Canada Inc. 100.00 100.00 Kemira Chemicals Korea Corporation 100.00 100.00 Kemira Chemie Ges.mbH 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 Kemira Water Solutions Brasil 100.00 100.00 PT Kemira Indonesia 100.00 74.80 PT Kemira Chemicals Indonesia 99.77 99.77 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 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 104 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, 2022, Kemira Oyj’s distributable funds are EUR 702,802,752 of which the net profit for the period amounts to EUR 314,734,444. The Board of Directors proposes to the Annual General Meeting to be held on March 22, 2023 that a dividend of EUR 0.62 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 153,352,360 shares are held outside the company, the total dividends paid would amount to EUR 95,078,463. The distributable funds of EUR 607,724,289 to be retained as equity. There have been no material changes in the company’s financial position since December 31, 2022. The liquidity of the company remains good, and the proposed dividend payment does not risk the solvency of the company. Helsinki, February 9, 2023 Matti Kähkönen Annika Paasikivi Wolfgang Büchele Chairman Vice Chairman Shirley Cunningham Werner Fuhrmann Timo Lappalainen Kristian Pullola Tina Sejersgård Fanø Jari Rosendal CEO BOARD'S PROPOSAL FOR PROFIT DISTRIBUTION AND SIGNATURES | PART OF THE AUDITED FINANCIAL STATEMENTS 2022 KEMIRA 2022 | FINANCIAL STATEMENTS | 105 Auditor's report (Translation of the Finnish original) To the Annual General Meeting of Kemira Oyj Ernst & Young Oy Alvar Aallon katu 5 C FI- 00100 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 2022. 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 a summary of significant accounting policies, 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 as well as its financial performance and its cash flows in accordance with International Financial Reporting Standards (IFRS) 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 2022 | FINANCIAL STATEMENTS | 106 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 2022, the value of goodwill amounted to 511 million euro representing 14 % of the total assets and 30 % 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 2022, the value of PVO / TVO shares included in other shares amounted to 381 million euro representing 10 % of the total assets and 23 % 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 2022 | FINANCIAL STATEMENTS | 107 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 International Financial Reporting Standards (IFRS) 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. 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 AUDITOR'S REPORT KEMIRA 2022 | FINANCIAL STATEMENTS | 108 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 four 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, 9 February 2023 Ernst & Young Oy Authorized Public Accountant Firm Mikko Rytilahti Authorized Public Accountant AUDITOR'S REPORT KEMIRA 2022 | FINANCIAL STATEMENTS | 109 ESEF Financial Statement Report Ernst & Young Oy Alvar Aallon katu 5 C FI- 00100 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 74370031Y7RK5H88CQ48-2022-12-31-fi.zip of Kemira Oyj for the financial year 1.1.-31.12.2022 to ensure that the financial statements are marked up 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 ESEF RTS. This responsibility includes: •preparation of ESEF-financial statements in accordance with Article 3 of ESEF RTS •tagging the consolidated financial statements included within the ESEF- financial statements by using the iXBRL marks 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 auditor applies International Standard on Quality Control (ISQC) 1 and therefore maintains a comprehensive quality control system including documented policies and 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 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 2022 | FINANCIAL STATEMENTS | 110 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 consolidated financial statement included in the ESEF financial statement of Kemira Oyj for the year ended 31.12.2022 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 31.12.2022 is included in our Independent Auditor’s Report dated 9.2.2023. In this report, we do not express an audit opinion any other assurance on the consolidated financial statements. Helsinki 16.2.2023 Ernst & Young Oy Authorized Public Accountant Firm Mikko Rytilahti Authorized Public Accountant ESEF FINANCIAL STATEMENT REPORT KEMIRA 2022 | FINANCIAL STATEMENTS | 111 Group key figures Kemira provides certain financial performance measures (alternative performance measures), which are not defined by IFRS. Kemira believes that alternative performance measures followed by capital markets and Kemira management, such as organic growth*, EBITDA, operative EBITDA, cash flow after investing activities as well as gearing, provide useful information about Kemira’s comparable business performance and financial position. Selected alternative performance measures are also used as performance criteria concerning remuneration. Kemira’s alternative performance measures should not be viewed in isolation to the equivalent IFRS measures and alternative performance measures should be read in conjunction with the most directly comparable IFRS measures. Definitions of the alternative performance measures can be found in the Definitions of the key figures in these Financial Statements, as well as at www.kemira.com > Investors > Financial information. Kemira adopted the IFRS 16 Leases standard on January 1, 2019. The comparative figures were not restated on the date of transition to IFRS 16. In 2019, the key figures (except revenue and capital expenditure) of the Income Statements, Balance Sheet and cash flow have been impacted by the adoption of IFRS 16. * Revenue growth in local currencies, excluding acquisitions and divestments. 2022 2021 2020 2019 2018 INCOME STATEMENT AND PROFITABILITY Revenue, EUR million 3,570 2,674 2,427 2,659 2,593 Operative EBITDA, EUR million 572 426 435 410 323 Operative EBITDA, % 16.0 15.9 17.9 15.4 12.5 EBITDA, EUR million 559 373 413 382 315 EBITDA, % 15.7 14.0 17.0 14.4 12.1 Operative EBIT, EUR million 362 225 238 224 174 Operative EBIT, % 10.1 8.4 9.8 8.4 6.7 Operating profit (EBIT), EUR million 348 170 216 194 148 Operating profit (EBIT), % 9.7 6.4 8.9 7.3 5.7 Finance costs (net), EUR million 39 27 35 40 25 % of revenue 1.1 1.0 1.4 1.5 1.0 Profit before tax, EUR million 308 143 181 155 123 % of revenue 8.6 5.4 7.5 5.8 4.8 Net profit for the period (attributable to equity owners of the parent company), EUR million 232 108 131 110 89 % of revenue 6.5 4.0 5.4 4.1 3.4 Return on investment (ROI), % 12.5 7.2 9.1 8.4 7.0 Return of equity (ROE), % 15.4 8.6 10.9 9.2 7.6 Capital employed, EUR million ¹⁾ 2,238 1,995 1,965 1,998 1,781 Operative return on capital employed (ROCE), % ¹⁾ 16.2 11.3 12.1 11.2 9.8 Return on capital employed (ROCE), % ¹⁾ 15.5 8.5 11.0 9.7 8.3 Research and development expenses, EUR million 33 28 29 30 30 % of revenue 0.9 1.1 1.2 1.1 1.2 Organic growth, % 27 11 -7 0 7 GROUP KEY FIGURES KEMIRA 2022 | FINANCIAL STATEMENTS | 112 2022 2021 2020 2019 2018 CASH FLOW Net cash generated from operating activities, EUR million 400 220 375 386 210 Proceeds from sale of subsidiaries and property, plant and equipment and intangible assets, EUR million 19 7 2 8 7 Capital expenditure, EUR million 198 170 198 204 194 % of revenue 5.5 6.3 8.2 7.7 7.5 Capital expenditure excl. acquisitions, EUR million 198 169 196 201 150 % of revenue 5.5 6.3 8.1 7.6 5.8 Cash flow after investing activities, EUR million 222 57 173 190 29 BALANCE SHEET AND SOLVENCY Non-current assets, EUR million 2,323 2,155 2,018 2,090 1,901 Shareholders' equity (Equity attributable to equity owners of the parent company), EUR million 1,670 1,329 1,192 1,218 1,190 Total equity including non-controlling interests, EUR million 1,685 1,343 1,205 1,231 1,203 Total liabilities, EUR million 1,966 1,797 1,590 1,660 1,561 Total assets, EUR million 3,651 3,139 2,796 2,891 2,764 Net working capital 362 287 197 211 260 Interest-bearing net liabilities, EUR million 771 850 759 811 741 Equity ratio, % 46 43 43 43 44 Gearing, % 46 63 63 66 62 Interest-bearing net liabilities per EBITDA 1.4 2.3 1.8 2.1 2.4 2022 2021 2020 2019 2018 PERSONNEL Personnel at period-end 4,902 4,926 4,921 5,062 4,915 Personnel (average) 4,936 4,947 5,038 5,020 4,810 of whom in Finland 780 784 790 812 821 Wages and salaries, EUR million 339 288 303 304 278 EXCHANGE RATES Key exchange rates on Dec 31 USD 1.067 1.133 1.227 1.123 1.145 CAD 1.444 1.439 1.563 1.460 1.561 SEK 11.122 10.250 10.034 10.447 10.255 CNY 7.358 7.195 8.023 7.821 7.875 BRL 5.639 6.310 6.374 4.516 4.444 PER SHARE FIGURES Earnings per share (EPS), basic, EUR ²⁾ 1.51 0.71 0.86 0.72 0.58 Earnings per share (EPS), diluted, EUR ²⁾ 1.50 0.70 0.86 0.72 0.58 Net cash generated from operating activities per share, EUR ²⁾ 2.61 1.44 2.45 2.53 1.38 Dividend per share, EUR ²⁾ ³⁾ 0.62 0.58 0.58 0.56 0.53 Dividend payout ratio, % ²⁾ ³⁾ 41.0 82.2 67.5 77.6 90.7 Dividend yield, % ²⁾ ³⁾ 4.3 4.4 4.5 4.2 5.4 Equity per share, EUR ²⁾ 10.89 8.68 7.80 7.98 7.80 Price per earnings per share (P/E ratio) ²⁾ 9.48 18.88 15.07 18.37 16.85 Price per equity per share ²⁾ 1.32 1.54 1.66 1.66 1.26 Price per cash flow from operations per share ²⁾ 5.49 9.27 5.28 5.24 7.14 Dividend paid, EUR million ³⁾ 95.1 88.8 88.7 85.5 80.8 GROUP KEY FIGURES KEMIRA 2022 | FINANCIAL STATEMENTS | 113 2022 2021 2020 2019 2018 SHARE PRICE AND TRADING Share price, high, EUR 14.94 14.66 14.24 14.99 12.03 Share price, low, EUR 10.36 12.64 8.02 9.77 9.34 Share price, average, EUR 12.57 13.67 11.55 12.56 11.00 Share price on Dec 31, EUR 14.33 13.33 12.94 13.26 9.85 Number of shares traded (1,000) 4) 37,017 57,478 75,885 53,048 43,837 % on number of shares 24 38 50 35 29 Market capitalization on Dec 31, EUR million ²⁾ 2,198 2,041 1,979 2,024 1,502 NUMBER OF SHARES AND SHARE CAPITAL Average number of shares, basic (1,000) ²⁾ 153,320 153,092 152,879 152,630 152,484 Average number of shares, diluted (1,000) ²⁾ 154,261 153,785 153,373 153,071 152,768 Number of shares on Dec 31, basic (1,000) ²⁾ 153,352 153,127 152,924 152,649 152,510 Number of shares on Dec 31, diluted (1,000) ²⁾ 154,894 154,068 153,744 153,385 152,927 Increase (+) / decrease (-) in number of shares outstanding (1,000) 225 203 275 139 156 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 2022 is the Board of Directors' proposal to the Annual General Meeting. 4) Shares traded in Nasdaq Helsinki only GROUP KEY FIGURES KEMIRA 2022 | FINANCIAL STATEMENTS | 114 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 2022 | FINANCIAL STATEMENTS | 115 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 2022 | FINANCIAL STATEMENTS | 116 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 2022 | FINANCIAL STATEMENTS | 117 Reconciliation to IFRS figures 2022 2021 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 71.3 73.6 92.3 110.9 348.0 62.9 57.8 63.5 60.5 244.7 Industry & Water 48.8 48.5 60.3 66.1 223.7 41.7 49.5 52.3 37.3 180.8 Total 120.0 122.1 152.5 177.0 571.6 104.6 107.3 115.9 97.8 425.5 Total items affecting comparability -6.5 1.2 -15.3 7.8 -12.8 -1.6 -16.2 -6.3 -28.3 -52.4 EBITDA 113.5 123.2 137.3 184.8 558.8 103.0 91.1 109.5 69.5 373.2 Operative EBIT Pulp & Paper 40.7 42.8 61.8 80.3 225.7 33.2 28.1 32.5 30.4 124.3 Industry & Water 28.2 26.9 37.7 43.1 135.9 22.5 30.1 31.9 16.6 101.2 Total 68.9 69.7 99.5 123.4 361.6 55.7 58.2 64.5 47.0 225.4 Total items affecting comparability -6.7 -0.7 -15.0 8.4 -14.0 -1.6 -16.3 -8.0 -29.5 -55.4 EBIT 62.2 69.1 84.5 131.8 347.6 54.2 41.9 56.4 17.5 170.1 Operative EBITDA 120.0 122.1 152.5 177.0 571.6 104.6 107.3 115.9 97.8 425.5 Restructuring and streamlining programs -3.1 0.1 0.1 -1.6 -4.5 -1.4 -4.7 -6.2 -0.1 -12.3 Transaction and integration expenses in acquisition 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 -0.1 Divestment of businesses and other disposals 0.0 2.0 -15.6 8.9 -4.6 -0.2 0.0 0.0 -28.1 -28.3 Other items -3.5 -0.9 0.3 0.5 -3.6 0.0 -11.5 -0.1 0.0 -11.6 Total items affecting comparability -6.5 1.2 -15.3 7.8 -12.8 -1.6 -16.2 -6.3 -28.3 -52.4 EBITDA 113.5 123.2 137.3 184.8 558.8 103.0 91.1 109.5 69.5 373.2 Operative EBIT 68.9 69.7 99.5 123.4 361.6 55.7 58.2 64.5 47.0 225.4 Total items affecting comparability in EBITDA -6.5 1.2 -15.3 7.8 -12.8 -1.6 -16.2 -6.3 -28.3 -52.4 Items affecting comparability in depreciation, amortization and impairments -0.1 -1.9 0.3 0.6 -1.2 0.0 -0.1 -1.7 -1.2 -3.0 Operating profit (EBIT) 62.2 69.1 84.5 131.8 347.6 54.2 41.9 56.4 17.5 170.1 RECONCILIATION OF IFRS FIGURES KEMIRA 2022 | FINANCIAL STATEMENTS | 118 2022 2021 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 68.9 69.7 99.5 123.4 361.6 55.7 58.2 64.5 47.0 225.4 Operating profit (EBIT) 62.2 69.1 84.5 131.8 347.6 54.2 41.9 56.4 17.5 170.1 Capital employed ¹⁾ 2,045.4 2,113.6 2,194.9 2,238.0 2,238.0 1,958.8 1,956.1 1,966.7 1,995.0 1,995.0 Operative ROCE, % 11.7 11.8 13.0 16.2 16.2 11.9 11.9 12.0 11.3 11.3 ROCE, % 8.7 9.7 10.6 15.5 15.5 10.7 10.0 9.8 8.5 8.5 NET WORKING CAPITAL Inventories 408.0 490.6 474.1 433.7 433.7 268.8 280.6 324.3 352.1 352.1 Trade receivables and other receivables 530.5 620.4 701.4 603.7 603.7 378.0 406.8 430.7 475.2 475.2 Excluding financing items in other receivables -30.4 -78.6 -105.9 -71.1 -71.1 -9.9 -13.6 -29.1 -35.4 -35.4 Trade payables and other liabilities 624.5 647.5 684.8 635.2 635.2 505.0 451.8 510.4 538.3 538.3 Excluding financing items in other liabilities -123.1 -82.7 -82.1 -31.4 -31.4 -121.9 -70.0 -72.3 -33.5 -33.5 Net working capital 406.7 467.6 466.9 362.4 362.4 253.8 292.0 287.8 287.2 287.2 INTEREST-BEARING NET LIABILITIES Non-current interest-bearing liabilities 795.5 811.2 814.3 838.1 838.1 819.1 773.4 778.3 776.9 776.9 Current interest-bearing liabilities 258.8 295.1 266.1 183.7 183.7 160.8 203.1 206.2 215.3 215.3 Interest-bearing liabilities 1,054.4 1,106.3 1,080.4 1,021.8 1,021.8 979.9 976.6 984.5 992.2 992.2 Cash and cash equivalents 154.5 147.3 173.9 250.6 250.6 203.0 145.3 184.4 142.4 142.4 Interest-bearing net liabilities 899.8 959.0 906.4 771.2 771.2 776.9 831.3 800.1 849.8 849.8 1) 12-month rolling average RECONCILIATION OF IFRS FIGURES KEMIRA 2022 | FINANCIAL STATEMENTS | 119 Quarterly Earning Performance 2022 2021 EUR million 1-3 4-6 7-9 10-12 Total 1-3 4-6 7-9 10-12 Total Revenue Pulp & Paper 446.5 487.6 537.3 556.2 2,027.7 369.5 378.4 391.3 420.4 1,559.6 Industry & Water 321.5 373.8 434.6 412.0 1,541.9 236.6 279.1 301.4 297.8 1,114.8 Total 768.1 861.4 971.9 968.2 3,569.6 606.1 657.5 692.7 718.2 2,674.4 EBITDA ¹⁾ Pulp & Paper 66.4 74.9 77.2 118.1 336.6 62.2 42.2 62.3 31.6 198.3 Industry & Water 47.1 48.4 60.1 66.7 222.2 40.8 48.9 47.3 37.9 174.9 Total 113.5 123.2 137.3 184.8 558.8 103.0 91.1 109.5 69.5 373.2 EBIT ¹⁾ Pulp & Paper 35.7 42.3 47.0 88.1 213.1 32.4 12.4 31.2 1.6 77.7 Industry & Water 26.5 26.8 37.5 43.7 134.5 21.7 29.5 25.2 16.0 92.4 Total 62.2 69.1 84.5 131.8 347.6 54.2 41.9 56.4 17.5 170.1 Finance costs, net -7.9 -8.9 -7.4 -15.3 -39.4 -1.6 -8.5 -7.8 -8.9 -26.7 Profit before tax 54.4 60.2 77.1 116.5 308.2 52.6 33.4 48.7 8.7 143.3 Income taxes -12.1 -13.3 -16.9 -26.3 -68.5 -11.8 -8.5 -9.1 1.2 -28.2 Net profit for the period 42.2 46.9 60.3 90.3 239.7 40.8 24.9 39.6 9.8 115.2 Net profit attributable to Equity owners of the parent 40.6 45.0 57.9 88.2 231.7 39.0 23.0 37.7 8.3 108.1 Non-controlling interests 1.7 2.0 2.4 2.1 8.0 1.8 1.9 1.9 1.5 7.1 Net profit for the period 42.2 46.9 60.3 90.3 239.7 40.8 24.9 39.6 9.8 115.2 Earning per share, basic, EUR 0.26 0.29 0.38 0.58 1.51 0.25 0.15 0.25 0.05 0.71 Earning per share, diluted, EUR 0.26 0.29 0.38 0.57 1.50 0.25 0.15 0.25 0.05 0.70 1) Includes items affecting comparability. QUARTERLY EARNING PERFORMANCE KEMIRA 2022 | FINANCIAL STATEMENTS | 120 Shares and shareholders SHARES AND SHARE CAPITAL On December 31, 2022, 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 2022, Kemira Oyj had 48,403 registered shareholders (49,484 on December 31, 2021). Non-Finnish shareholders held 31.5% of the shares (28.4% on December 31, 2021), including nominee-registered holdings. Households owned 19.3% of the shares (19.8% on December 31, 2021). Kemira held 1,990,197 treasury shares (2,215,073 on December 31, 2021), representing 1.3% (1.4% on December 31, 2021) 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 8% during the year and closed at EUR 14.33 on the Nasdaq Helsinki at the end of December 2022 (13.33 on December 31, 2021). The shares registered a high of EUR 14.94 and a low of EUR 10.36 in January-December 2022, and the average share price was EUR 12.57. The company’s market capitalization, excluding treasury shares, was EUR 2,198 million at the end of December 2022 (2,041 December 31, 2021). In January-December 2022, Kemira Oyj’s share trading turnover on the Nasdaq Helsinki was EUR 462 million (EUR 787 million in January-December 2021). The average daily trading volume was 146,311 shares (228,087 in January-December 2021). The total volume of Kemira Oyj’s share trading in January-December 2022 was 49 million shares (72 million shares in January-December 2021), 25% (20% in January-December 2021) 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, 2022, Kemira Oyj’s distributable funds totaled EUR 702,802,752 of which net profit for the period was EUR 314,734,444. 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 22, 2023 that a dividend of EUR 0.62 per share, totaling EUR 95 million, be paid on the basis of the adopted balance sheet for the financial year that ended on December 31, 2022. The dividend will be paid in two installments. The first installment, of EUR 0.31 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 24, 2023. The Board of Directors proposes that the first installment of the dividend be paid out on April 5, 2023.The second installment, of EUR 0.31 per share, will be paid in November 2023. 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 2023. The record date is planned to be October 26, 2023, and the dividend payment date November 2, 2023 at the earliest. Kemira’s dividend policy is to pay a competitive dividend that increases over time. SHARES AND SHAREHOLDERS KEMIRA 2022 | FINANCIAL STATEMENTS | 121 BOARD AUTHORIZATIONS The Annual General Meeting on March 24, 2022 authorized the Board of Directors to decide upon repurchase of a maximum of 5,800,000 company's own shares (“Share repurchases authorization”). This corresponds to approximately 3.7% of all shares and votes in the company. 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 than 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 the 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 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 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 upon other terms related to share repurchases. The share repurchase authorization is valid until the end of the next Annual General Meeting. The Board had not exercised its authorization by December 31, 2022. The AGM authorized the Board of Directors to decide to issue a maximum of 15,600,000 new shares (corresponding to approximately 10% of company's all shares and votes) and/ or transfer a maximum of 7,800,000 company's own shares (corresponding to approximately 5% of company's all shares and votes) held by the company (“Share issue authorization”). 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 displaying 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 this 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 plan. The subscription price of new shares shall be recorded to the invested unrestricted equity reserves. The consideration payable for company's own shares shall be recorded to the invested unrestricted equity reserves. The Board of Directors will decide upon other terms related to the share issues. The share issue authorization is valid until May 31, 2023. 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 the remuneration. MANAGEMENT SHAREHOLDING The members of the Board of Directors as well as the President and CEO and his Deputy held 330,988 (518,636) Kemira Oyj shares on December 31, 2022 or 0.21% (0.33%) of all outstanding shares and voting rights (including treasury shares and shares held by the related parties and controlled corporations). Jari Rosendal, President and CEO, held 169,069 shares (140,800) on December 31, 2022. Members of the Management Board, excluding the President and CEO and his Deputy, held a total of 237,515 shares on December 31, 2022 (223,111), representing 0.15% (0.14%) 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 2022 | FINANCIAL STATEMENTS | 122 LARGEST SHAREHOLDERS DEC 31, 2022 Shareholder Number of shares % of shares and votes 1 Oras Invest Ltd 32,000,000 20.6 2 Solidium Oy 15,782,765 10.2 3 Ilmarinen Mutual Pension Insurance Company 3,750,000 2.4 4 Varma Mutual Pension Insurance Company 3,522,678 2.3 5 Nordea Funds 3,497,587 2.3 6 Elo Mutual Pension Insurance Company 1,949,000 1.3 7 Etola Group Oy 1,000,000 0.6 8 Veritas Pension Insurance Company Ltd. 951,757 0.6 9 Laakkonen Mikko Kalervo 770,000 0.5 10 Nordea Life Assurance Finland Ltd. 734,810 0.5 11 The State Pension Funds 560,000 0.4 12 Paasikivi Pekka Johannes 462,000 0.3 13 Valio Pension Fund 379,450 0.2 14 OP-Henkivakuutus Ltd. 359,022 0.2 15 Jenny and Antti Wihuri Foundation 311,250 0.2 Kemira Oyj 1,990,197 1.3 Nominee registered and foreign shareholders 48,885,051 31.5 Others, Total 40,940,089 26.4 Total 155,342,557 100.0 SHAREHOLDINGS BY NUMBER OF SHARES HELD ON DEC 31, 2022 Number of shares Number of shareholders % of shareholders Shares total % of shares and votes 1 - 100 17,665 36.5 882,162 0.6 101 - 500 18,186 37.6 4,841,457 3.1 501 - 1,000 5,993 12.4 4,608,730 3.0 1,001 - 5,000 5,511 11.4 11,476,086 7.4 5,001 - 10,000 601 1.2 4,313,601 2.8 10,001 - 50,000 361 0.7 6,869,670 4.4 50,001 - 100,000 39 0.1 2,854,485 1.8 100,001 - 500,000 31 0.1 5,749,926 3.7 500,001 - 1,000,000 7 0.0 5,262,078 3.4 1,000,001 - 9 0.0 108,484,362 69.8 Total 48,403 100.0 155,342,557 100.0 SHARES AND SHAREHOLDERS KEMIRA 2022 | FINANCIAL STATEMENTS | 123 Information for investors FINANCIAL REPORTS IN 2023 Kemira will publish three financial reports in 2023. April 25, 2023: Interim report for January–March July 18, 2023: Half-year financial report for January–June October 24, 2023: 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 22, 2023 at 1.00 p.m. EET at Marina Congress Center, Katajanokanlaituri 6, Helsinki, Finland. Shareholders who on the record date of the Annual General Meeting, March 10, 2023, 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 21, 2023 and invitation and registration instructions have been published on February 10, 2023 as a stock exchange release and at Kemira’s web site at kemira.com/agm2023. 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 105. INFORMATION FOR INVESTORS KEMIRA 2022 | FINANCIAL STATEMENTS | 124 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. 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 2022 | FINANCIAL STATEMENTS | 125