Good morning, everyone, and welcome to Kemira's Q2 2021 results webcast. My name is Mikko Pohjala from Kemira's investor relations, and with me here today I have our President and CEO, Jari Rosendal, as well as our CFO, Petri Castrén. Earlier today, we published our Q2 results and reported strong revenue growth. Today, as is the tradition, we'll start with a brief overview of the quarter by Jari, followed by Petri, after which you'll have the chance to ask questions either via the audio line or then via the webcast tool. Without much further ado, I'll hand it over to Jari. Thanks, Mikko. Welcome on my behalf also. Second quarter was a continuation to a good start in Q1. Despite the challenging raw material and logistics environment, Kemira organization has performed really well. Market demand for our products and services has been good and improving, which shows in our strong revenue growth. Input costs are going up, so are the sales prices, which are starting to show in the numbers. Sales price increases are going through nicely as customers are more worried about getting the products availability and the impact on great price increases come with a lag, but we do have some evidence in the numbers that price increases are starting to show. Added sales volume and sales price increases compensated more than the increase of the input costs. Let's look at the summary of Q2. Strong demand continued and growth was strong, but not only year-over-year, but also compared to sequentially to Q1. As said, raw materials are up and availability is easing, but still some bottlenecks, especially in North America. Sales prices are going through and compensating more than the variable cost increase. Production line in U.S. and South Korea is ramping up. Outlook for the year is unchanged. Looking at the figures for Q1, main figures, revenue EUR 658 million, up from EUR 606 in Q1 and clearly up organically 16% year-over-year. Operative EBIT EUR 107 million and 16.3% margin, which is a good achievement. All market segments grew. Oil and gas recovery is strong, but others areas grew also. We did settle a legacy legal dispute, which I'm very pleased about. It did affect our net profit in this quarter. It is a historic event, and I'm glad that we have it now out of the way. Event is before Kemira time from the '90s. Pulp & Paper. A good quarter. Pulp, board, and tissue demand continue as strong, and therefore the chemicals from us for those applications. Printing and writing continue to improve sequentially. Sales price increases going through in pulp and paper, and we have been able, despite a challenging raw material situation, keep the customers running and no disruptions there. APAC growth, really strong, and that's actually a comparable number or close to comparable number year-on-year. The South Korean polymer investment comes at a good time now and is starting up as we speak and starting to ramp up. We're also considering adding ASA sizing product capacity to our Chinese plant in Nanjing. Pulp & Paper revenue was EUR 378 million with EUR 58 million of operative EBITDA. A good result from the team. As said, price increases come with a lag. Industry & Water, very good quarter. Oil and gas clearly recovered. Water business is very strong. I'd like to emphasize that the water business is very strong and has been very strong. Municipal water market solid and industrial market gradually recovering. Shale market continuing recovery. Margins still not even close to where we want it to be, so more work is needed in that, but the volume start to be there. Raw material availability for the polymers has been an issue in North America, but gradually improving. Oil and gas sales prices are going through, but also in water treatment prices are being corrected to the right level. It takes a bit of time for oil and gas to get their margins up. I&W revenue EUR 279 million with a 17.7% margin, which is an excellent outcome in these circumstances. As said, polymer raw material prices especially under pressure, added volumes and sales prices more than compensated for the input cost increases in I&W. Strong continued performance from I&W. A bit more on oil and gas. I also already mentioned that shale is coming back. WTI oil price is a bit over $70 at the moment. Volume is back, pricing not satisfactory yet. The team is working on that on daily basis. CEOR market, really good and then steady. There we have mostly formula pricing, so input cost goes into the formula. Oil sands tailings in Alberta, Canada started in April. Volumes are back in a more normal level. They were curtailing last year. Here we also, in polymers, have formula pricing. That's correcting itself as it grows. As you can see from the bar chart, EUR 66 million of revenue in Q2. When you think of effects of US dollar, Canadian dollar, we start to be close to pre-COVID levels from a volume and revenue point of view, not from a profitability point of view. Added EPM capacity in U.S. coming online really at the perfect time with the best cost point and efficiency as it's a new line and that's ramping up, a bit hampered of raw material availability. Everything is looking good. A bit more of a long-term look and strategic look of where we are and what we intend to do. We have made systematic work last years to fix the fundamentals, and we are fundamentally stronger and more agile to react to the changes in the marketplace. We want to continue to grow in pulp, packaging, and tissue, which is in high demand today and will be also in the future. Megatrends, consumer behavior, and regulations are also supporting growth in those areas. We also want to grow in water treatment, especially in APAC. Bio-based products support recyclability. Biodegradability is an area of development for us. Plastics will be there and will always be there, but the trend in packaging will go more to recyclable bio-based packaging. Plastic recycling, by the way, is going to increase a lot, especially in Europe, due to the regulation changes. But when you circulate plastics, it needs a lot of washing. There's a lot of impurities there. That's going to be more water treatment needed in that process in the future. In our CMD, we announced also our ambition to grow more sustainability and focus even more to sustainability than Kemira has today. One area is the bio-based product line where we want to increase our offering. The progress has been good, and we have now first test runs in a sort of a pilot level in big machines with PHA, which is the Danimer partnership, and that's looking promising. We will focus on four tracks of development in the bio-based arena. First, we obviously sell the products and push the products that we already have in our portfolio. As a reminder, our recent investment in China for the AKD wax for added capacity and then backward integration in the manufacturing process is a bio-based thing and sort of supporting this. Obviously, it was a product that was already in our portfolio. We just increased the capacity, and we are undisputed number one in world capacity in AKD wax. Second track is to develop our products from a fossil feedstock to more bio-based feedstock as a drop-in product, meaning that we can produce those mainly polymer type of products in our own today's assets, and the customers can also, with testing, drop it into their machines right away. Third track is to go through R&D, which is a longer track, and develop new chemistries from new feedstocks. The Danimer example is one of those. A fourth track is longer term. We monitor the market, what's happening in early research or in other application areas than our areas, and look at what we can adapt from there, and again, develop new ways of developing bio-based products. We have a good start into the bio-based, and we are very much on track, but it does take time, especially Track 3, not to talk about 4. Here is a busy slide. I am not going to read it for you, but you can look at it later. It gives you a sort of a timeline and a roadmap on how we envision how the growth story is going to go. On the top, the green dots, you can see the expansion investments that we have announced and are ongoing, and there will be more. On the bottom side, on the gray dots, you can see the bio-based roadmap and how that goes in steps and what timelines you can expect for us to drive to develop that side of business and grow our bio-based revenue and portfolio. As a final slide from me, a summary of what we're focusing in this year. Obviously mitigate COVID-19. Situation is not getting easier, actually going to the worst direction in many countries. We need to keep our people and stakeholders safe, secure our operations and deliveries to our customers. We continue to mitigate the impacts of the higher input costs. We have increased focus on profitable growth, we maintain good cost control. Biobased I talked about, that's high focus on our agenda at the moment. We want to drive our plants efficiently and ready to meet the increased demand out there and be agile so that we can capture the business that is out there and get it into our revenue. We continue to complete our strategic investment projects and ramp them up when they're in that phase. I'll conclude my portion here and ask Petri to give more color on the financials for Q2. Thank you very much, Jari. Typically, I like to open these sessions with what I believe are the key points in each report. Today, I believe they are the raw material increase. This was quite strong, but this should not have come as a surprise to anyone. I think the second key point is really that our sales prices increases, which Jari talked about, and combination with the volume increase, actually more than offset the quite significant raw material inflationary pressure that we experienced. Third one, which I like to point out, is that while the operating cash flow was somewhat on the weak side, there are very good reasons behind that, logical explanations. The growth and the inflationary pressure is actually tying up temporarily more capital into net working capital, into inventory and into receivables. I'll talk more about that in a minute. Quite a dramatic recovery in revenue and volumes now in Q2. Reported revenue was up by 13%, actually behind that is the organic growth of 16%, and that was mostly volume. Sales increase impact was 2%, actually there was a little bit of the negative impact from traded caustic soda. If we were sort of excluding that, the price impact would have been about 3%. Oil and Gas, biggest recovery in volumes and revenue, Jari talked about that. I think equally important is that the recovery in volumes was widespread. It actually impacted all businesses globally. On the profitability bridge here, the EUR 43 million significant number from the inflationary pressures, from higher cost of raw materials, and to a lesser extent, transport costs or logistics cost in broader sense. Again, as I said, equally significant, if not more, is that we were able to more than offset this with the combination of price impact and the sales volume increases. Talking about the price impact for comparison purposes, in Q1, this price was still negative EUR 13 million, and now it reverted to positive EUR 12 million. Volume impact and the raw material price impact hide a little bit of the smaller items in this bridge. I'm quite happy and pleased about the fixed cost management. Only EUR 2 million increase from prior year, that's clearly below the rate of inflation that we are seeing. We are managing the fixed costs quite well. Travel costs are one contributor to that. They continue at a very low rate as business travel is very limited. FX currency impact was a negative EUR 3 million on the profitability bridge. Again, this is pretty much in line with the EUR 10 million guidance that we gave at the beginning of the year for the prevailing rates, and the prevailing rates are roughly where we were at the beginning of the year. We announced in July 8 that we had reached a settlement with CDC for the last of the three old infringement claims dating more than 20 years ago. The total settlement value was EUR 22.75 million, and we booked an increase of EUR 11.25 million to an existing provision in Q2. This whole amount, EUR 23 million, will be paid now in Q3. As Jari said, this claim precedes Kemira's time as owner of Finnish Chemicals. Originally, there were three claims, two covering hydrogen peroxide, and now this one claim covering sodium chlorate. Anyway, as I said, this was the last of the three claims, and while particularly I'm not happy about paying this amount, we can be pleased that we are setting this uncertainty behind us and getting over it. The previous two claims were settled in 2014 and 2017 for a total sum of EUR 31 million approximately. We also booked another roughly EUR 4 million provision for site closure where cleanup activity is progressing. The chart on the right here shows the sort of a quick turnaround in raw material prices, again, EUR 43 million increase year-on-year. The speed of the rise is perhaps better understood when one compares it to the chart on the left, and the left is looking at the last 12 months when the chart on the right is comparing the last quarter versus the previous quarter or the year ago quarter. The average prices, both sales prices and the raw material costs, are still below of the preceding 12-month period of time. That's actually visible from the fact that both of these dots, endpoints on the left curve are still below the horizontal zero line. Just demonstrating the suddenness and the quickness of the inflationary pressures that have come about or surfaced now during 2021. one word of caution when one reads this chart. This chart is always done with constant volumes. Ignores the volume impact. This quarter, we were able to offset the inflationary pressures with the volume increase. Conversely, last year, 2020, when we were in a COVID-related downturn, we saw some benefit from the raw material costs. That did not all come through to the P&L because the volumes declined at the same time. As a reminder, it is sort of quite evident from these charts that the sales prices tend to follow with a one to two quarter lag the changes in price curves, in raw material and price curves, that is. Moving to cash flow comments. Because of this market turnaround, both the quantity and the value of our inventories continued to increase during the quarter. The total value of the inventory is EUR 38 million higher than it was in December 2020. It's also important to note that well over half of that is caused by FX, currency changes, and the value of that inventory. To much smaller extent from the volume of inventories. In fact, we have actually improved inventory efficiency by reducing the days inventory outstanding by more than 10 days from a year ago period, and a further four days during 2021. In that sense, our inventory efficiency is actually in good level. We can even argue that inventory levels are quite low because of the raw material availability issues. Similarly, our receivables are up about EUR 40 million from December, again reflecting higher sales volumes. Receivable turnover has remained good and at a stable rate. Not worried about the receivable quality and not really worried about the temporary net working build during the first half. Particularly as we know that once this sort of accelerated period will be over, this net working capital buildup will sort of stop and possibly even revert itself once we come to a deflationary environment, which will eventually will be there. Regarding CapEx, so far we have been sort of spending relatively modestly on CapEx, only about EUR 60 million versus our EUR 200 million guidance for the year. However, we still expect that the CapEx spend rate will accelerate during the second half, and we will land approximately EUR 200 million CapEx spend for the full year. Gearing, capital efficiency, as we look at it from operating return and capital employed, ROCE, remained at 11.9%, which is very close to what I see as a very good or good 12% level. Pulp & Paper efficiency continues to improve towards the target rate, whereas in I&W, we have now significant assets under construction, particularly the Mobile expansion plant, which dilutes the return on capital efficiency ratio. As noted by Jari, that facility is now coming online, and with the ramping up production in the next quarters, it will start to contribute to this ratio and to the profitability over the next quarters. Balance sheet, really no news during the quarter. Leverage well within our financial target range. Outlook, like Jari noted, we have kept outlook unchanged. The assumptions that are behind the outlook, they are the same. I think the only change is the tense of the verb. Now we can see that the markets are recovering. We don't anymore need to see that we expect the markets to recover. This has been visible during Q2. Importantly, we expect that this recovery will continue through the year, even as the COVID and the Delta variants cause some tail risk to macro environment. We still are quite optimistic about the overall market, as we see. With that, I'm done with my remarks, and we're ready to move to the Q&A session. Operator, please. Thank you, ladies and gentlemen. If you have questions, please press zero one on your telephone keypad. We have a first question from Martin Roediger from Kepler Cheuvreux. Sir, please go ahead. Hello, good morning. Thanks for your presentation. I have a few questions. First of all, as the worst of the pandemic is almost over, and you see that volumes are strongly recovering and selling prices gets traction, what is holding you back to lift your guidance for 2021? That is my first question. My second question is on, for modeling purposes, I understood that volumes in Q2 were up by 14% and selling prices up by 2%. Can you indicate, if so, which one of that was having a higher selling price increase of 2%? Finally, on chart 14 regarding this drag between-- Final question. Thank you. I'll start, and I'm not sure if I captured all the questions. First of all, I think as a policy, we don't speculate why we don't do something. We explain if we do a reason. If we change guidance, we explain why we change guidance. I don't think we should be speculating why we don't. I referred to some of the uncertainties in the market, and we will sort of overall see that the volumes are increasing. We see that the prices are increasing. We don't know exactly what will happen to the raw material costs. They are still on an inflationary rate, possibly peaking, but it's a word with a possibility, so we don't know yet. That's perhaps a bit on the comment regarding the business today. Regarding the sales prices, we are getting them through across the board. It's equally, perhaps we have a higher share of annual contracts in pulp and paper, perhaps the relatively bigger impact on price increases is in industry and w ater. Remember, Industry & Water, particularly oil and gas, is predominantly polymers, where the cost pressures are perhaps the more significant. There's perhaps has been even a more need for higher raw material, I'm sorry, price increases in I&W and particularly in polymer business. It's really across the board, I would say. Sorry, Martin, I forgot the third one. There was on the chart on page 14, where you show the drag between the rival costs and the selling prices. Here, I just wanted to understand. This is, of course, calculated based on stable volume. Was this drag primarily in pulp and paper, or was there also a drag in industry and water? More in pulp and paper, which is a slower ship to turn. As Petri said, in oil and gas, we're sort of in shale, we're sort of almost market-to-market, sort of spot type of pricing with agreed volumes. We have formula pricing in oil sands and CEOR, so they correct themselves automatically. In pulp and paper, the contracts might have been negotiated already, but they haven't kicked in. That's why in my talk, I said that they will be coming, but they're not there yet in their full force. New negotiations are ongoing all the time. Martin, if you take a look at the material that we have in appendix, we actually detail what's the share of long-term contract and fixed price contract. I think that pretty much explains why there is a lag. We have a lot of 1-year fixed price contracts. Basically, from a banking terms, we have a sort of a variable cost environment that has a shorter duration than the duration of our sales contracts. Okay. Thank you. Thank you. Next question from Robin Santavirta from Carnegie. Sir, please go ahead. Thank you very much, and hello to everybody. Related to the pulp and paper division, you have very strong organic growth of 9%. If I sort of would exclude the graphic paper segment, it seems as basically the pulp and the paper board business is growing double-digit. Which is, I know demand for those segments is good, but is this really now reflecting end product demand or is there some inventory sort of fill-up situation in the pulp and paper division? I would say for the customers, and I can't speak for them, they know it better, but what I hear is that this is sort of genuine demand at the moment. Obviously the pipeline is short, so probably some of the distributors are trying to build up some inventory also for any disruptions. As we have seen, transportation disruptions can easily happen. At the moment it's just the recovery demand from the market in packaging. A lot of it is food and normal grocery store and electronics packaging that is really on a high demand. Also, industries are coming back and components are packed and so on. Obviously our pulp is driven quite a bit by China because of the Green Fence rule kicked in, and they can't bring in recycled paper and board, so they're more now demanding virgin pulp. Chinese consumer sort of rebound is huge and that's also driving this. I don't see that there's a lot of stocking in the value chain yet. Can be that it starts to happen at some point to even out availability issues. Thank you, Jari. That is clear. The second question I have is related to the Industry & Water division. A good quarter for all of that division. When I look at the EBITDA margin, it's also good that the operative at 17.7%, actually better than you had in 2019. I think I heard you say, Jari, that you're not totally happy with the oil and gas business profitability. There again, you have the formula pricing sort of set up. What should we expect margin-wise from the Industry & Water division going forward? Well, last year, the demand on all of the three sort of main categories of oil and gas business was down, and therefore the oil and gas business was making very poor revenue and profitability. Now the revenue is back and the profitability is up modestly, and not killing value anymore, but it's far where we want it to be in shale. That needs to recover. This only indicates how strong our water business in North America and EMEA is, and now a small water business in APAC also. That has been compensating for this. Also last year, second quarter, the Industry & W ater segment was down, and now that's back and has been. Thank you. That is clear. Then a final question related to input costs or variable costs. Now, I know it's anybody's guess exactly what happens with many of those items going forward. If we would sort of remain at the today's level in terms of prices, am I right expecting that still Q3 on variable costs would be then up quarter on quarter? Obviously, you probably will have higher sales prices as well. In terms of variable costs. We expect a couple of percentage points sequentially in Q3. Then are estimating, but as you said, it's an estimate and a guess that it then starts to flatten out and ease in Q4. We might be seeing in some products like petrochemical products as we speak these couple of next months a peak coming through and then an easing off as more capacities are coming online. I'm not that concerned of the small inflation that is coming in. I'm more concerned that we get the availability back that we need because we're missing out on a bit of business that could be adding to these numbers that we saw from Q2. That's all. Thank you very much. Thank you. Next question from Anssi Kiviniemi from SEB. Sir, please go ahead. Hi guys, thanks for taking my questions. I have three of them. I will take them one by one if that's okay. Starting with the pulp and paper, could you talk a little bit more about the earnings dynamics in the division? I mean, strong organic growth, still earnings declined. Is there anything else particular in the Q2 result than lacking sales price increases and higher input costs? Are those the main drivers behind the, let's say, little bit lower margins and earnings? Yeah. You read it the correct way. Demand on all fronts is good. In pulp chemicals, in packaging board tissue, and also printing and writing is recovering very nicely, especially for us, not necessarily for the whole market, but we have quite strong customers that we serve. It's basically just the input cost going up faster than we can react in increasing the sales prices. Basically, it's that lag that is going there. The team is doing a good job in fixing the prices. Obviously, always a tough negotiation with the customers, but we've been able to serve them very well during the difficult 18 months that we have behind us. That also supports that we've been keeping them running. For them to get a discount from us or having a day or a week shutdown because of no chemicals is much more expensive for them. It's just the lag between the rapidly increased input cost, like Petri said, and then the lag in going to the sales prices, but that's going well on the sales side. Okay, thanks. The second one is on industry and w ater. We are talking about the earnings growth quarter. Could you clarify a bit how much of the earnings growth came from oil and gas and how much from the water treatment business, just to understand the dynamics better? We are currently seeing a nice uptick in oil and gas activity, and still you have quite low volumes. Could you give us some kind of indications? What's the earnings potential in oil and gas business? What's the upside after you have reached full capacity in your recent U.S. investment? Not really quantifying those, but we're far from the profitability and margins where we were in 2019. Revenue starts to be there, but not the profitability yet, so in oil and gas. Some improvement there sequentially, but water business is strong. As there also volumes grow, I think the water business is a bigger contributor than the oil and gas, but oil and gas is starting to contribute also nicely. Great, thanks. The third question is a little bit more strategic. Given your capacity additions in Asia in water treatment, could you talk a little bit on your ambitions? I understand that you are investing in pulp and paper water treatment, but now you are also investing in wastewater treatment. Could you talk a little bit about the opportunity in the coming years? Yeah. Asia Pacific water treatment is growing roughly 6% - 10% a year for chemicals, and we've been sort of having our foot in the door the last years and fixing the fundamentals in the Western world, and now we have those in place. Now it's time to sort of look at that, how can we increase the water business also in Asia Pacific? The South Korea dry PAM plant will be mostly retention polymers for packaging board and paper, but there will be volumes going to water treatment. The first time we have a local capacity there for both segments. Up till now, we have been bringing in the dry PAM from Europe, and with these transportation costs, especially today, we start from behind. Some comes from there. You also saw an announcement from us that we are adding water treatment chemicals capacity to our AKD site in China, the new one. Some volumes from there. Basically, it's just getting our hand on volumes of product. The market is there, and we have a good reputation for the water treatment. It's a question of how do we partner? How do we do what? Even M&A is in our mind, but not imminent. If I remember correctly, in history, you have talked about the wastewater treatment potential in Asia, but due to lack of profitability capability- A profitability issue, then we got the profitability in the APAC water treatment to a very good level. Now then this raw material and transportation cost has, I would say, short-term impacted it. We look at the water treatment segments and customers where we can capture accepted amount of value. Okay, that's clear. Thank you very much. Thank you. Thank you. There is no more question for the moment, ladies and gentlemen. Just a reminder, if you wish to ask a question, please press zero one on your telephone keypad. Here in between, while the participants digest more questions from the webcast tool, this is also related to raw materials. A bit of a continuation of what we discussed previously. Could you comment on how material were the raw material supply issues? What is the outlook on that side? What was the impact of buying raw materials on spot prices? I mentioned North America. The Texas winter storm in February still is impacting. Some refineries, for instance, in that space are still in force majeure. The allocation of volumes to us is improving, but it's not up to where we want it to be yet. Sometimes you can get your hands on the raw material, but then you can't get your hands on the logistics. Just a lack of truck drivers, for instance, is a big thing. We had similar things on our maintenance backlog in Europe, but Europe is now getting much better in getting volumes to us. We had to buy on spot versus our contracted prices, which also are many times formula prices, significantly more expensive. We have in the EUR 42 million-EUR 43 million bridge of increased input cost. As we have been selling higher volumes than our contracted raw material deliveries, we've been always also buying on spot, not just because of lack of raw materials, but because they are over our contracted volumes. We get good orders from the customers. We buy on spot a bit less margin, but still a good business because it leverages our fixed costs. Good. Many thanks, Jari. I believe there's one more question on the audio line, so we turn back to the operator. Yes, thank you. Next question from Harri Taittonen from Nordea. Sir, please go ahead. Yes. Hello, good morning. Harri Taittonen, Nordea. Just following up on the sort of 14% increase in volumes and can you give a flavor on how big is the gap to say this theoretical maximum? You suggest that there are some sort of concrete availability issues which are kind of preventing from getting the full volume potential. But just in terms of the technical availability of capacity, how far roughly are you from that maximum level? Actually don't have a number for that, Harri. As you know we do have batch processes, so it depends on what the product mix is. Sometimes a certain product can take several days for a batch and then another product a day. The theoretical capacity is hard to calculate, but we still have capacity. It's more been on the raw material side and it's not always the raw material, but transportation times have significantly increased. Product and raw material in transit takes longer. That's also hindering making the deliveries as fast, even if we have taken the orders in. There's this time lag and availability lag and then the transport also to the customer from our side. Then it goes to revenue recognition and these type of things. So far I'm not worried about production capacity, but as I said, we're planning, for instance, ASA capacity increase, so that indicates that we can see something coming and the ASA and AKD demand is on a really high level because of packaging. Okay. Yeah, I understand it's not straightforward, but thanks. That clarifies a lot. Thanks. Thank you. There is no more question by audio. All right. Many thanks. This concludes our webcast. We thank you for participating and thank you for the questions. Should there be any further questions after this, do reach out to me. We're happy to help. With this, we wish you and all the participants a very happy summer. Thank you. Thank you. Thank you. Thank you very much.