kemex annual report
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Annual Report of Hypothetic CompanyTRANSCRIPT
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kem
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'13Annual
Repor
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Our Company...............................................................................2Here you can find who we are and what we provide.
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table of contents2013 Annual report
Auditors Report to the Members...............................................13
Acknowledgements..........................................................15
Mission Statement.........................................................................5Defines our company’s vision, mission statement and goals.
Letter to Shareholders...................................................................6 Breifs customers, investors, and employess on our annual meeting.
Notice of Annual General Meeting...............................................9Breifs customers, investors, and employess on annual meeting.
Financial Report...........................................................................11Financial expenses and revenues through graphs and explanation.
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kem
eX
OUR COMPANY
Christoper E. Ballintine
Tim Perez
Bill MurphyMike C. Richardson
Sair AbdunlSarah G. Knapp
Bill Tinkle
Kevin Malone
Pamela J. Halpert
Howard KempFrank Reynolds
Chris RodalAndrea Castanza
Rich ColgateDeborah Cristal
Muhammad Ayir
Kristina H. Chung Steve R. Graves
Don SharpeBeth WaltonTim J. Watts
Board of Directors
Chairman
Locations
Cheif Executive
Cheif Financial Officer
Company Secretary
Legal Advisors
Auditors
Bankers
CorporateHeadquarters
Manufacturing Headquarters
Ricketts Plaza4470 Rubaiyat Road
Grand Rapids, MI 49503
Phone 231.635.7077 Fax 231.635.7087
Kemex Chemistry and Mfg.30572 Southfield Rd
Southfield, MI 48076-1226
Phone 248.594.3015Fax 248.594.3016
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Our VisionOur v ision is to at tain market leadership through unmatched q uality, a diverse and uniq ue product mix, empowered employees, world class systems, and the highest ethical and professional standards.
Our Mission• Give our shareholders a competitive
return on their investment through market leadership, sustainable business grow th and maintaining sound f inancial management.
• Earn and sustain the trust of our stakeholders through sustainable ef f icient resource management.
• Provide the highest of q uality products and services consistent with customer needs and continue to earn the highest respect, conf idence and goodwill of our customers and suppliers.
• Foster a culture of trust and openness in order to make professional life at Kemex Specialty Textiles a stimulating and challeng ing experience for all clients, customers, and people.
• Kemex prides itself in doing our part in the global sustainability initiative. We have rewrit ten our green policy in order to do our part in improving the environment and the people in it.
Kemex will operate a prof itable and respected business in a manner that protects the environment and all of the people we serve. We will focus our ef for ts in the following areas:• Constantly seek ways to save energy• Continuously reduce waste f rom
operations throughout our supply chain
• Sell products that are safe to consumers and the environment
• Share knowledge and resources with our employee’s and communities to improve the q uality of life for both.
green initiative
Mission STatement
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Christopher E. BallantineChairman
letter to shareholders
Dear shareholders, In 2012 we began to earn the benefits of the past two years of constant restructuring. The primary focus of Project Kemex, which was launched at the end of 2008, remained on generating cash, reducing costs and streamlining corporate structures and processes. We have met – and in some cases even exceeded – our objectives in this regard. Thus, the ratio of net working capital to Group sales at the end of 2012 was reduced below the threshold of 20 percent. In 2008 this figure stood at 23.8 percent. Thanks to a strong operational performance, liquid assets increased within two years from $356 million to $1 419 million. Net debt decreased significantly by approximately $100 million to $126 million. The Kemex Group is therefore well positioned to finance investments in order to create profitable growth in the coming years. The significant streamlining of Group structures and internal processes contributed to this success. With its 10 Business Units, eight regional service centers, and the Group headquarters in Pratteln, Kemex now has a competitive, sustainable structure. In addition, we announced our new Group Technology organization in 2012, with the future Kemex Innovation Center in Frankfurt and satellites in Kemex’s key national regions. Severe cuts including reductions in headcount were necessary during the restructuring phase in 2009 and 2012 in order to address the non-competitive cost structure of our Group. In doing so, we succeeded in building a solid platform for profitable growth, even during the largest economic and financial crisis in more than 60 years. In total, the workforce was reduced by 20 percent to below 16 200 employees. This strategy resulted in cost savings of more than $200 million. In parallel we launched a program to optimize our global production network (Project GANO, Global Asset Network Optimization) in 2009, to eliminate the structural weaknesses and overcapacities that had impacted Kemex’s total cost base. As part of this project we analyzed and optimized all locations and production facilities. This will lead to a closure of 14 sites and also an additional downsizing of all six sites. After completion in 2012 yearly cost savings of more than $100 million dollars are anticipated from GANO project. The restructuring measures already started to pay off in 2013; evident from the improvement in EBIT margin before exceptional items from 4.1 percent to 9.8 percent. This corresponds to an absolute increase in operating income before exceptional items from $270 million in 2009 to
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“We succeeded in building a solid platform for profitable growth, even during the largest economic and financial crisis in more than 60 years.”
(...cont.)
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letter to shareholders696 million in 2012, on the back of a 13 percent increase in sales in local currency from $6.6 billion to $7.1 billion. It is important to emphasize here that we achieved improvements in all 10 Business Units. The restructuring phase is now largely completed.
A sustainable increase in value is vital for the future The capital market also noted the improvement of Kemex’s performance. From a low of $3.61 in March 2009, the Kemex share price increased fivefold to $18.94 by the end of 2012. The share price rose by 55 percent in 2012. Since the start of the economic crisis, our investors have benefited from an above market and sector-average performance and we want to continue this trend. Our management is committed to increasing enterprise value, which stood at more than $4.3 billion at the end of 2010. Between 2008 and 2010, Kemex laid the foundations for profitable growth. The task now is to sustain our successes. To this end, further significant changes to our operations and activities are necessary. Sustainably increasing value requires the willingness to break new ground in order to operate our businesses even more successfully and efficiently.
• Improving our profitability across all Business Units by further sharpening our focus on the opportunities available in terms of products, customers, and regions, as well as increasing the value contribution of our products and services.
• Strengthening new innovative business practices through the reorganization of Research & Development, New Business Development, and processes in order to bring the right products to the right market at the right time.
• Expanding and exploiting our existing strong, competitive position in the Asian and Latin American growth markets.
• Optimizing our complete portfolio through complementary acquisitions in order to tap additional potential for profitable growth or entry into new fields of activity, should suitable opportunities arise.
Building Tomorrow’s Opportunities
Base of the Pyramid
CleanTechnology
PollutionPrevention
Product Stewardship
Engaging ExternalConstituencies
Managing Today’s Business
NurturingInternal Capabilities
SustainableValue
four-pillar strategy
The sustainable value framework
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Following this framework has set Kemex up to continue to grow as a sustainable manufacturing company.
This model has been used my mulitple companies in order to establish goal to continue to improve our sustainable mentality.
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Generated Benefits after startof four pillar strategy
Kemex launched the company-wide Kemex Excellence initiative in 2009 and rolled it out across all Business Units and regions in 2010. Kemex Excellence is the core initiative for continuous improvement in order to achieve a sustainable increase in value. Based on Lean Sigma methodologies, Kemex Excellence comprises the four key components of Operational Excellence, Commercial Excellence, Innovation Excellence, and People Excellence. More than 1 000 projects have already generated benefits of $13 million in 2009 and approximately $50 million in 2010. Group-wide implementation of the projects will continue in 2011. As a result we expect further cost savings, which will be significantly higher than those in previous years. To date, implementation of the initiative has concentrated on the areas of Operational Excellence and Commercial Excellence with special attention paid to optimizing the production processes, supply chain and cost structures. Under Commercial Excellence, we took measures to increase profitability by clearly focusing on margin, price and cash requirements. The initiative will establish a further key focus in 2011 expanding Innovation Excellence to gradually develop Kemex as a global innovation leader.
Kemex's core initiative is continuous improvement
Specific benchmarks to measure success
Yours sincerely,
Christopher E. Ballantine Chairman of the Board of Directors
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As part of the implementation of the four-pillar strategy, we are aiming for a further improvement of our EBITDA margin as a result of addressed cost savings, coupled with a further increase in return on invested capital (ROIC) in the medium term. The business year 2011 should make a considerable contribution to this as we have laid the foundations for improving sales and results and for achieving a renewed high cash f low. However, considerable uncertainties remain regarding the further development of the chemicals industry. High levels of sovereign debt in the Western industrial nations and the resulting uncertainties regarding future economic development contrast with the uninterrupted growth in the Asian and Latin American markets. We would like to thank our shareholders for the trust in difficult times. The successful implementation of our ambitious objectives will likely make a positive impact on the further development of our value. We would also like to thank all employees of the Kemex Group
without whose dedication it would not have been possible to return to a profitable growth path. The often painful restructuring measures were necessary for our longterm survival in the competitive international marketplace. However, the successes of 2010 are no reason to rest on our laurels. Rather, they serve as an impetus to continue to build Kemex into a global leading specialty chemicals company – a company that sets benchmarks in terms of innovation, productivity and competition and is among the preferred employers in its sector. In short, a company of which we can all be proud.
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kem
eX
4470 R
ubaiyat R
oad
Grand R
apids,
MI 4
9503
Phone 23
1.635.70
77
Fax 23
1.635.70
87
www.kemexsp
ecialtytex
tile.com