Financial position and cash flow
Cash flow from operating activities in 2012 was EUR 176.3 million (177.7). Cash flow after investing activities and after severance payments decreased 38% to EUR 71.8 million (115.3) mainly due to higher expansion investments related capital expenditure. Cash flow after investing activities included EUR 27 million paid-in-capital from JV Sachtleben. The comparable period in 2011 included a cash flow of EUR 97 million from the sale of Kemira’s remaining Tikkurila shares. Net working capital (ratio) was 12.8% of revenue (13.4% on December 31, 2011).
At the end of the period, Kemira Group’s net debt was EUR 532.0 million (515.8). Net debt increased due to the dividend payment of EUR 81 million in March 2012 and was largely offset by a positive cash flow.
At the end of the period, interest-bearing liabilities totaled EUR 664.7 million (701.6). Fixed-rate loans accounted for 56% of the net interest-bearing liabilities (58%). The average interest rate of the Group’s interest-bearing liabilities was 1.6% (2.0%). The duration of the Group’s interest-bearing loan portfolio was 16 months (17 months).
Short-term liabilities maturing in the next 12 months amounted to EUR 277.2 million, of which commercial papers issued on the Finnish market represented EUR 193.6 million and repayments on the long-term loans represented EUR 52.8 million. Cash and cash equivalents totaled EUR 132.7 million on December 31, 2012 (185.8).
At the end of the period, the equity ratio was 53% (51%), while the gearing was 40% (38%). Shareholder’s equity decreased to EUR 1,314.8 million (1,370.8).
The Group's most significant transaction currency risk arises from the Swedish krona and the Canadian dollar. At the end of the year, the denominated 12-month exchange rate risk of Swedish krona had an equivalent value of approximately EUR 43 million, 45% of which was hedged on an average basis. Correspondingly, the CAD denominated exchange rate risk was approximately EUR 26 million, 50% of which was hedged on an average basis. In addition, Kemira is exposed to smaller transaction risks in relation to the U.S. dollar, the British pound and the Norwegian krona with the total annual exposure in these currencies being approximately EUR 50 million, 60% of which was hedged on an average basis.
Because Kemira’s consolidated financial statements are compiled in euros, Kemira is also a subject to currency translation risk to the extent that the income statement and balance sheet items of subsidiaries located outside Finland are reported in a currency other than euro. The most significant translation exposure derives from the US dollar, the Swedish krona, the Canadian dollar and the Brazilian real. A weakening of the above mentioned currencies against the euro would decrease Kemira’s revenue and EBIT through a translation risk. 10% depreciation of the above mentioned currencies against the euro would decrease Kemira’s EBIT by some EUR 10 million (10) on an annual basis through a translation risk.