Good afternoon, everyone here in Helsinki and those following us over the webcast. Kemira has today published its Q4 and 2019 results. During this event, we'll go through the main points of the Q4 and the whole year 2019. We'll start with our President and CEO, Jari Rosendal, followed by our CFO, Petri Castrén. My name is Mikko Pohjala , I'm the new Head of Investor Relations since last December. After the presentation, we'll have the chance to ask questions here in Helsinki and also over the webcast. Without much further ado, Jari, please go ahead.
All right. Thank you, Mikko. Welcome, everyone, we have now closed and packaged 2019, and you've seen the announcement. Let's give that a bit more color. If I summarize 2019, was a good year of development and getting our profitability to the right and targeted level. We have for a number of years worked systematically on all fronts to improve our performance, and now we can see after 2019 that it's visible. We naturally intend to continue on this path and increase our Operative EBITDA also in 2020, even if the operating environment, at least short-term, looks more challenging. The 2019 good performance actually was follow-up of the second half of 2018, where the performance already started to materialize. In Q1, we had good profitability, but obviously year-on-year comparison, we had an easy comparison quarter in 2018.
Q2 and Q3, especially Q3, are seasonally strong for us. That's how it showed to be also in 2019. The Q4 is seasonally typically a bit more softer for us, some seasonal businesses and winter comes to the northern parts of Western Hemisphere. There are some destocking happening in the value chain, typically at the end of the year. This year, the destocking, especially in oil and gas shale, was probably a bit bigger than we estimated, but also demand from the customers was lower as we already alluded in Q3 announcement. We increased our operative EBITDA for the fifth year in a row. Also, our cash flow after investing activities for the year was very strong. Let's look at some highlights. Demand for the year was good in all areas and throughout most of the year.
I said, shale softened and pulp and paper softened somewhat. Value over volume strategy has worked well, and now we are more focusing on active price and volume management. Our investments are coming online. We're running slightly late. We have now completed three new production lines and are ramping or about to ramp them up. AKD and fatty acid chlorination in China, which you know about, CEOR polymer in Netherlands. There's a new one which we haven't talked about earlier for certain business reasons. We invested close to $20 million to North America and added a line to our bleaching business, which is going to be ramped up after next week. This is a new one. The AKD plant and the Netherlands plants are now running. We did have some extra costs from the startup, but those are now behind us.
All in all, if we look at our performance and operations from sales, from sourcing, from manufacturing, from supply chain and delivery, we were doing quite well last year. Our customer and employee satisfaction improved, I'll talk about that a bit more later. Looking at 2019 numbers, we did lose some volume, partially intentionally, to drive our pricing and catch up with the input cost increase that we saw in 2018 and early 2019. We have now in pricing mostly caught up, some pockets still to fix, but that's more day-to-day normal business. Our operative EBITDA last year increased clearly and was EUR 410 million and 15.4%, and we did improve in all areas and sub-segments of our business. Both segments and the regional areas improved. Biggest improvement in oil and gas to previous year and in all sub-segments, shale, CEOR, and Oil Sands.
A real clear improvement, historically challenging our water business in North America, now running at a much better profit level, and it's a big contributor to last year. As said, Q4 for shale was challenging, and then the two new plants experienced a startup cost that hit Q4. Earnings per share up by 24% to EUR 0.72 per share, and very strong cash flow for the year. We were struggling with high inventories during the year, and we were bracing for startups of the plants and potential hard Brexit, which obviously didn't come. At the end of the year, we were able to drive the inventories to the right level and driving our cash flow. Based on improved profitability and cash flow, the board of directors is proposing a dividend of EUR 0.56.
I get to say that for the first time, so after eight years, an increase of EUR 0.03 per share. A look at pulp and paper. Revenue clearly over EUR 1.5 billion and organic growth came down slightly in Q4, mainly due to our own planned actions and product mix optimization. If I exclude from the full-year figures the ECOX closure that we did end of 2018 and the price drop on the caustic soda, which we mostly trade through our books, the organic growth through 2019 was about 2%. Operative EBITDA margin improved to 14.3%, burdened by the extra startup cost in China in Q4. We improved our operations in all regions, but especially North America in pulp and paper improved last year. Some softness in the near-term markets, however, outlook remains positive.
The strike here in Finland for our customers in pulp and paper is over as of today, some impact to Q1. The two new plants, AKD and the chlorate plant in the United States, starts to now contribute from Q1 on gradually. Industry and water. The industry and water was obviously our star improver during 2019. Revenue exceeded EUR 1.1 billion, and organic growth was about 4%. Water treatment market was solid and continues as solid. Shale market strong during Q1, Q2, and Q3, but as said, slowed down during Q4. It slowed down a bit more than we expected even. There has always been seasonal slowdown, but this time was a bit stronger, and probably a bit more destocking took place at the end of the year. We already saw some recovery in January. Maybe it's some restocking then.
Operative EBITDA EUR 125 million and 16.9% from revenue, despite the Q4 startup cost in the Netherlands. Good performance for I&W. A bit more deeper dive into oil and gas. Revenue growth during the year, 23%, ended up at EUR 292 million for the year. When you look at those quarterly sort of historic revenues, you can see the seasonality from Q1 starting from a lower level, also Q1 a lower level, then Q2 and Q3 being stronger. That's pretty much the tendency that we can see. Shale I talked about, we expect shale to recover during the springtime once winter starts to be over. That is not only our own assessment. We listen to the customers and market trends and talk quite a bit, obviously remains to be seen.
CEOR in the North Sea is steadily growing. Now with the new line and in-sourced capacity, the profitability is going to be better. Also we have room to grow our deliveries, and the customers are taking added deliveries. The seasonal Oil Sands business in Canada runs from May to October, and we did improve our gain in that business year-on-year, and now the profitability is on an acceptable level. Please take into account that we have some deliveries in Q4, hardly any deliveries in Q1, and then Q2, Q3, early parts of Q4 are the weight point of the deliveries. Now that it's profitable, it also plays into the profits of the quarterly game. We are also constructing a new EPAM line in Mobile, Alabama, and that will start up in the first half of 2021. We remain optimistic of the oil and gas markets.
Taking a bit longer perspective. If we look back, and I've been always talking about the four main product lines that form 80% of our business. Bleaching chemicals for pulp mainly, does go to other industries also, but mainly to pulp industry. Coagulants for water treatment, industrial and municipal. Polymers for water treatment, paper making, board making, tissue making, and oil and gas applications, and oil and gas is the biggest consumer of polymers. Sizing and strength for paper board and tissue making. Those are the 80% and form the backbone of our business, and they are the drivers for the specialties that then form the other 20% of our business.
If you look at our strategy execution of investing into these areas, I won't read through the list you can see, but we've been quite diligent on investing to these added capacities and these regions that you can see on the list. The idea has been that that drives our organic growth, but especially our profitability as these investments need to yield more than our targeted 15%-17% operative EBITDA. Summarizing just simply our strategic focus areas. Customer excellence obviously being one thing, and pricing and volumes and all kinds of things under that. Closest customers with our expertise is one of the four focus areas.
Product and service excellence, right product mix, right service, right performance, right side services, and expertise in offering not too little, so the customers are not happy, not too much, so that it's not optimal for our profitability. Operational excellence from end to end, thinking of from sales to sourcing to manufacturing and supply chain customer support needs to be on a high level with safe and sustainable operations. Margin excellence, driving asset, not just our manufacturing assets, but all the assets we have in an optimum way, and constantly working on volume planning, pricing, sourcing, logistics, and inventories, and driving the gain that way. The first one was customer excellence. We measure customer satisfaction constantly. You can see the results from last four years. Our Net Promoter Score has steadily increased during the last years.
Meaning that we are valued and appreciated by the customers year on year more. This is quite a good result as we've been quite strongly increasing our prices the last year and a half, and still we get improved results. We get higher scores in delivery accuracy, technical knowledge and service level, ease of doing business with us. By far, we're not perfect, and we need to continuously improve, but as we measure and get individual and regional customer feedback, we also know where we can and need to improve. Obviously, that has resulted into better feedback from the customers. Also, I mentioned employee engagement, and in Q4, we measured our employee engagement again. Strong results in the engagement of our people, six points above the industry benchmark.
Clear improvement in employee safety. Our TRIF is 2.1 last year, which is a really big step forward. 2.0 actually is the chemical industry best in class benchmark. This remains to be a really big point for us going forward. It never stops, I'm a firm believer that it also drives our efficiencies, no disruptions and so on when we operate safely. If you look at our customer feedback, our employee feedback, I feel that we're fit for fight, taking on the challenges of 2020. We, in 2013, set our ongoing sustainability targets. By the end of this year, the targets are going to come to an end. Mostly we are reaching our targets. We'll be updating them this year.
During the last seven years, if I think of greenhouse gas emissions, we've taken them down by about 20% per ton product produced. We're about to reach our targets that were set in 2013. Today, we are updating our greenhouse gas targets, and we intend to work on Scope 1 and 2 from our manufacturing operations and from our energy purchases. In Scope 1 and 2, we intend to decrease emissions by 30% in the next 10 years. Our 2018 level, which is the comparison point, was 0.93 million tons. By 2045, we'll be carbon neutral. We'll obviously work on Scope 3. That's our suppliers, and there's more work to do, but we look at our product recipes and what we can do there and how we can push our suppliers.
Especially we will work with our customers to help them to drop their greenhouse gas emissions. I think this is a bigger absolute area where we can benefit the world as the 1 million tons is a rather small number, we still take it very seriously. We support the Paris Agreement targets. We have clear science-based plan how to reach these targets. They're plausible. They're also economical. We have really thought through how we will go forward with these targets. Summarizing and looking at the focus areas for 2020, continue the active pricing and volume and utilization management. As if volumes drop, our production variances go up, we need to optimize those now and look at the markets. Continue to improve our customer satisfaction with right products and right level of service, meaning improving our competitiveness where we need to improve it.
Continue to optimize our product portfolio and service offering to the right level. That's really working with our margins and with our capacity on how to get the most out of our assets. Continue to work on operational excellence. We have gotten better in our value chain, but it's a complex operation, so there are more opportunities to improve, and I believe we have good opportunities to improve. We capture the benefits of the three new assets that are coming online and get them to contribute to the bottom line. We continue the ongoing polymer investments in the United States and in South Korea. Have, obviously, prudent cost control.
There are things obviously happening in the marketplace, so we need to carefully follow what's going on and adapt as need be to the market environment. I conclude here and I'll ask Petri to come and give some more light on Q4 and 2019 figures.
Thanks, Jari. 2019 was a strong year and good cash flow, with perhaps some weakness in the Q4. The way I see the issues that we need to address or we're trying to address today is what is happening with the shale demand or what happened to the shale demand, the start-up costs for the two new plants, also the capacity utilization and the, I would call fixed cost absorption, for polymer plants in particular. Also the way I see no issue or positive should be pricing and variable cost environment, because that is really continuing in a good way. Our CapEx and our new investments, Jari talked about those. I think that's a good story. Obviously cash flow. Anyways, I'll try to address all of those points. Let's start with the traditional price cost picture.
Even if the growth was slightly negative, the continued positive sales price impact was not quite enough to offset the volume decline. Really we can say that the volume decline was mostly associated with the demand dropping in shale. If we look at the profitability picture, I think the key three points are, again, like I said in the opening, good continued momentum in the sales price development. We're still getting the benefit of some of the price increases that we have done throughout 2019. On a year-on-year comparison, we'll continue to see the good story there. Variable costs, the direction is quite positive actually, the variable costs coming down.
In fact, I believe this picture is perhaps a bit too positive because like Jari was saying, a lot of that is caused by the global price of caustic coming down, and mostly it's a pass-through product for us. That doesn't really help in the profitability in that way. Actually, we believe that the caustic is still coming down in 2020. The other thing in this chart is obviously the significant other costs. This is now where you can see the start-up costs from the two new plants. This includes some of the extra fixed costs that we really needed to incur, and this is also where we see the unabsorbed fixed costs when the production was down when we were ramping up these two plants.
If you look at this chart and compare this to previous quarters, you'll see this number is clearly bigger than it traditionally has been. I would say about EUR 5 million or so was really can be associated with those start-up costs. The good thing is that honestly, based on January results and knowing what we know, this is largely behind us. These costs are really was mostly one time, and they should not repeat themselves. The plants are running much steadier now in Q1. The other thing which I like to make here, making the point that obviously we had low capacity utilization in our North American polymer plants, one that was providing product for the shale, and obviously that's really driven by the shale demand down. Obviously we didn't produce all that much.
We also, because of the seasonality of the Canadian Oil Sands business, really in Q4, we had very low production. Again, that market situation caused really extra fixed costs because there was no production to offset the standard costs. Already now, under a long-term contract, we are already now producing full steam for the Canadian Oil Sands. That issue is really solved, I would say. Obviously shale is somewhat obviously uncertain, but like Jari was saying, we did see some more pickup already in January. There, I think it's fair to say that there's clearly uncertainty regarding how the market will develop over the full year. Final comment I'd like to make about fixed costs on this chart, I guess I'm very happy about the fixed cost management.
If we ignore or eliminate currency impact, also the fixed costs for the new plant in China, because that's not really comparable, and then higher incentive accruals, which we incurred in 2019. Eliminating those, the fixed cost increase was approximately 1% for the full year. We have about EUR 600 million or so fixed cost basket or total fixed costs. The increase was roughly EUR 7 million against that whole basket. That is clearly lower than the rate of inflation. Obviously we have been able to achieve sort of efficiency savings in many areas, and this is not headcount primarily. There may be some headcount efficiencies, but really looking at fixed cost savings in all areas. Again, this is done without any sort of major restructuring program.
There were some of that, obviously, and this is something we will continue, and it's a steady state part of the cost containment that Jari was sort of talking as one of the focus areas for us going forward. I think the main point here is that there is really no change. This picture is really very positive, continues to be, that even while we see the rate of increase for sales price is coming down, actually the rate of decrease for costs is coming down at the roughly same level. The net positive was still approximately EUR 30 million for the quarter. This is what you can see on the right-hand of the chart. Obviously, the left hand is a cumulative 12 months picture of the same, that shows the same picture. In that sense, our story is good.
The way we are looking into 2020, the raw material environment, this looks relatively benign. Overall, the whole basket that we buy is rather flat or slightly even negative. There may be some, and there are some individual items which are going up and which may actually trigger some of our own pricing moves going up. Over the basket, it's relatively flat to slightly negative. That typically is a good environment because really big changes up or down, those are the ones where the pricing is much more difficult. I have a slide on items affecting comparability. We actually took two provisions, one was new provision and one was an increase to an old provision. Anyway, these are dealing with old known liabilities. I'll take the litigation reserve first.
Those of you who have followed us longer, remember that we used to have three cases coming from this old alleged infringement of competition law coming from the 1990s. One was Helsinki, one was in Dortmund, Germany, and one was in Amsterdam. The first two ones were settled, now we took a reserve or a provision for the third one. I think we're still a ways before actually the case will be decided on its merits. Nevertheless, it was a time that we tried to estimate what the provision should be, and this is the provision that we have booked. The second thing is an increase to an existing provision. In 2013, we closed the site in Finland, actually Vaasa, and we estimated the environmental cleanup costs at that time.
Now that we actually have submitted plans how we will do the actual cleanup, we obviously updated the cost estimate and realized that we need to increase by roughly EUR 8 million, the provision for that cleanup. We are now with authorities granting a permission, we'll be starting the cleanup already this year. It has been long time waiting for the plans to be approved. Cash flow, clearly very strong, and big highlights for the quarter and for the full year. Even if one adjusts that the comparison has a EUR 28 million positive impact for the 2019 cash flow figure, but even if you eliminate that, you'll see that we improved cash flow approximately EUR 150 million versus last year. I didn't go back to Kemira's history, whether we have had a bigger operating cash flow at some point.
Nevertheless, at least the time horizon that I'm looking at this is a really great achievement and the best number there. Really the key points are how this was achieved. One, of course, improved profitability. We talked about that already. Efficient working capital management. For example, we reduced inventory by more than EUR 40 million from June or Q2 level to Q4 to end of the year. Our CapEx were right in the middle of the guided range. We have been guiding EUR 180 million-EUR 220 million. We were right in the smack in the middle of that range. Also 2019, we did have a EUR 15 million sort of one-time positive, which came from the capital return from our pension fund, which is still well-funded. Some guidance for 2020. CapEx estimated to be approximately at the same level, roughly EUR 200 million.
Again, the biggest expansion investment is the polymer new line in Mobile, Alabama, that Jari was talking about. The pension fund return will not repeat itself in 2020. Fair to note that our incentive accruals in 2019 were roughly EUR 20 million higher than 2018. That means that we will pay about EUR 20 million more during Q1 and Q2. This will be a cash outflow in the coming years. Perhaps when you think about the cash flow modeling, don't put all of this and then plus, because there are those two things which will impact to the other direction. Again, I'll remind that we do have a seasonal rhythm in our business and in our cash flow. Cash flow will be stronger in second half of the year versus first half.
By the way, that's clearly their key reason why the dividends, which we are now proposing to increase, will be paid in two installments, one in April and one in November. Obviously, assuming that the AGM so approves. Capital efficiency. Clearly a big step change to 11.2% ROCE. This was driven mostly from the I&W, industry and water, profitability improvement, obviously step change from the 9%-10% level where we have been. Also looking at the debt level and the financial flexibility. Even as we are reporting that the net debt increased by EUR 70 million, in fact, when you look at apples to apples basis and eliminate the IFRS 16 impact, there was a reduction of EUR 64 million, which obviously associates profit improvement, which then turns that the leverage ratio we report 2 x.
Again, if you compare apples to apples, we were 2.3 x in 2018, and pre-IFRS 16 numbers would show us 1.7 x. More than half turn leverage reduction in one year. Obviously that's a very good achievement. Obviously gives us also some additional flexibility should we see opportunities, whatever they are. Not that I'm hinting that we are right working on an opportunity, but nevertheless, it does give us some flexibility. Okay, Jari already mentioned the dividends. Dividend policy has been to pay a stable and competitive dividend. Regardless of the history, it does not mean that dividend is carved in stone. Now after the good year of profitability and cash flow, the board is proposing to increase the dividend to EUR 0.56 per share.
Again, I mentioned that the seasonality aspect of our cash flow, and that is obviously the logic why we are proposing two installments. Also like to note that this is only a timing issue, so our board is not withholding discretion to not pay the second half. This will be paid, and it is a timing issue. Jari was obviously talking about some of the things in the business environment, and how our investments are expected to improve and contribute in 2020. There are some risks, of course, the coronavirus, the most recent one. Fortunately, the paper industry strike got settled yesterday, but we are not fully through the strike season, if one would say that, in Finland. That's a potential risk as well. We believe that these risks are still manageable. Against that, we have given our guidance.
Also, you notice that we have dropped the mid to long term from our financial guidance. Now these are financial targets. They used to be mid to long-term financial guidance. Obviously the logic is that now we are at 15%-17% EBITDA range, so there is no point of guiding you to think of some period in the future. Future is now, in that sense. Finally, our outlook for 2020 is that Kemira expects the operating EBITDA to increase from the prior year's EUR 410 million level. With that, I'm turning to questions now.
Thanks, Petri and Jari. We can start with the questions. We start here in Helsinki, please state your name and company before asking that question. Anssi, go ahead.
Thank you. It's Anssi Kiviniemi from SEB. A couple of questions from my side. First of all, starting with shale. Some de-stocking, some weakness, some de-stocking perhaps in Q1, and some positiveness after that, perhaps. What are the customers saying? Has the shale market kind of reached a level that it's going to be flat going forward for your products, or are the customers looking for further investment opportunities to, and basically which could provide growth for you? Is it a decline, flat, or growth kind of indications you are getting from customers?
Well, they are also a bit puzzled at the moment. Especially the service companies are in a situation where their visibility is not that long out. There are several types of end customers in the shale game. The small and medium are pressured by their investors to drive their cash flow. That's what we think they were doing at the end of the year and driving then also their destocking. Couple of previous years also, us the suppliers and our peers and competitors, we have been tighter with capacity. Even if they wanted to destock at the end of the year, they didn't dare to, because they didn't know if there is the capacity to restock in the beginning of the year. I think that might have been a bit stronger thing this year change. We think and believe on the longer-term viability of the shale.
If you look at the output of U.S. oil, it's peaking at 13 million barrels per day at the moment. It's come in the last two years from 10 million barrels. All the difference is coming from shale. Now the question obviously is that WTI is at around $50, $ 51. That also drives it. Not a great visibility, but we are firm believer that the summer season will be an active season again. The difference from 2015, 2016, 2017 is that the oil majors are also now in shale where they weren't at that time. They're thinking in the shale and especially any oil openings longer term than quarterly gain.
Thanks. The question on the provision related to the infringement of competition law. Is this basically a counterparty risk or could this escalate to be in a more European Union level risk?
This is an old case which actually was EU gave its own verdict years ago, or long time before Jari and I were here. The EU level thing is in the history, and this is now a private claim about this. This is the only case which is outstanding of the original three ones that were there.
Okay, thanks. The last one. First in line focus area, I wrote it down here, it was active price management and improved capacity utilization. There's a little bit change in wording in Q3. Q3, you still was all about active price management. Does this mean that the kind of value over volume idea, you are kind of phasing it out? How should we read the change?
Well, you sort of read it correctly in the sense that we also have to look at volumes because it drives then manufacturing variance up. Utilization rate in certain products, especially now polymers and sales, is important. There we need to look at how we take business. Remember also that the North American oil and gas is mostly spot-like business. It's not contracted business except in our Oil Sands and CEOR businesses. When you think of our oil and gas business, Oil Sands and CEOR is steady as she goes with the exception that the Rotterdam line is now up and running and has a better price point for us.
Thank you.
[Martti Orjala], Handelsbanken. First of all, could I ask you about the dividend policy? Congratulations on increasing the dividend. You're still sticking with the old policy of stable dividend. What would have to happen for you to have a policy of increasing dividend?
That's a different topic than we didn't think about this time of touching that point. We just thought that it's right that we increase it and we can come back to the policy maybe later after rethinking.
You're thinking about it?
Obviously.
Good. Thank you. If I could ask about the strikes in Finland. Did these paper industry strikes have any impact on you?
Absolutely did. Pulp and paper and board mills are down for two weeks plus the shutdown days and now the ramping up days. We can look at it more as 2.5 to 3 weeks. We were able to run our plants. Äetsä, Jämsä, and Oulu, mostly bleaching and some other chemistries. We do have other customers also for those, and we can export some of the products, but we definitely will feel some millions in the first quarter. I can't even give you the number if you ask at the moment because we're still evaluating the impact. How fast and how high will they ramp up in the coming weeks.
Okay. Thank you.
Yes. [Harri Raukola], OK. Good afternoon. Can you recap the start up of the ramp up impact with these three projects? Particularly now that one of the projects was a bit sort of new information. You have talked about this before, but just to quickly.
The Chinese technology is new technology for us. We had some extra cost on starting and then noticing issues and shutting down, fixing and starting again. Pretty normal sort of things, but it's a big plant. We have 280 employees there and it's one of our biggest plants with high complexity. It was the variance side that we didn't get product out, but we had all the cost in basically. Now we're running steadily and ramping it up nicely. Even with the coronavirus, our plants have been running in China and our people are safe. We have some logistics issues on incoming raw material, outgoing products, and people getting to the site and out from the site. None of our people are sick or infected, and we are up and running.
We even sent face masks from outside of China, all 27,000 of them, to help those people. It sounds like a big number, but if you think that we have 800 people in China, you count couple a day per person, it's not that big a number. Anyway, that was it. In Botlek in the Netherlands, again, a polymer line, same type of issues, some shutdowns and so on, getting it up and running and optimizing. There we also produced some off-spec material which we had to write off. That's counted as the startup cost, which unfortunately sometimes happens. That was it. We do not expect any new cost, even with the line that should be starting up next week or the other in the U.S. That's more of a known technology for us.
May I just remind what the sort of target returns for these three altogether would be when they actually run through?
Well, as I said, much higher than the 15 to 17.
Yeah.
We're looking at, from China, EUR 50 million-EUR 60 million of revenue when we're fully ramped up. The Botlek one is more of an improvement in profitability and a very steady growth of demand. That's not month-by-month growth. That's quarter and year-by-year growth, but this is a profitability impact. The close to $20 million investment in U.S. also a [fluoride] type of a return.
Okay. One of the points about the complexity that you sort of reduced the complexity, is that sort of the name of the game that it will be with the current asset base or sort of reduce the number of the client mix or the product mix? Does it possibly also include some sort of asset restructuring?
Basically all of that. We used to run, a couple of years ago, 2,400 products in our product mix. Now we're at 1,600 plus. We took that out of the capacity and consolidated that thing. We also did sell and close some operations last year. That did impact, but small things here and there. Petri mentioned that we did some restructuring in pulp and paper related to our European business. There's a sort of care maintenance going on all the time. We deliver from 64 sites to 100 countries, so you can imagine the supply chain demands that are there. With today's modern technologies, we can optimize and analyze it much better than trial and error type of things. That's what we're doing all the time, and that's the boost project that we used to have that actually yielded these type of benefits.
We continue to look after those benefits going forward.
Okay. Well, the final question, it's a bit sort of broad in a way, and you talked about it already, but you gave the guidance for the full year. Just sort of if you could summarize or what are the kind of the main blocks that you know that are happening and well, obviously things can go differently always, but what would be the main reasons to be able to say that EBITDA will improve after pretty good improvement last year?
If we just take the anomalies out from the last quarter and look at our base run rate, look at our base pricing, Petri talked about the input cost type of thing. We have some fundamentals there. We have three new lines coming and contributing to the top line and bottom line. Our water business is steady, and we have really good line of sight on how that's growing in North America, in Europe, even in Asia Pacific. Our pulp and paper is mostly steady. We play with strong customers and the 18 customers. That's more dependent on the world development than what we see ongoing at now. We've seen, at least I believe, the pulp prices bottom out or should be bottoming out pretty soon. Unfortunately, these Finnish strikes might have even helped it a bit.
Our Oil Sands business is steady as you go. Our North Sea business is steady as you go. The real question at the moment is in the share business, and that's not that huge in the scheme of things. Obviously we want that to improve. We took the strikes into account, we took the corona into account, and so on. This is how we are confident on giving this kind of guidance for this year.
Thank you. Any further questions here? Before we go to the audio line, we have one final question for Petri, and the question is: what is inside the total adjustments in the cash flow statement?
Total adjustments. Now that's a tough one because I don't remember exactly, but maybe we'll get offline.
We'll check and get back to you later on.
Give a number.
We can go to the audio line and please, operator, go ahead. Is the operator listening?
If you'd like to ask a question, please press zero one on your telephone keypad. If you wish to withdraw a question, you may do so by pressing zero two to cancel. Our first question is from Martin Roediger from Kepler Cheuvreux. Please go ahead. Your line is open.
Yes. Hello, good afternoon, and thanks for taking my question. I will ask them one by one so that it's easier for you. I'll start with the greenhouse gas emissions. I understand your 30% reduction target for 2030, but you have a long-term ambition of carbon neutrality by 2045, and you said this is science-based. How do you want to achieve these targets for 2045?
There our Scope 1 is only 0.15, that's mostly that we burn in some of our boilers gas and such type of energy sources. Those we will gradually electrify, then we will have that type of emission out. The main point is the Scope 2 in how we buy energy, steam, and so on, there we have things ongoing. For instance, here in Finland, we're shareholder of a next nuclear plant planned to start up next year. That takes us a big step forward. We also, just last week signed up for 35 MW of wind power from Norway, testing that market also. We have a clear roadmap on what we need to do in what factories.
Our challenge is our bleaching chemistry. That's why we only have 30% by next 10 years in North America, because the North American market is not the European or Nordic market for electric power. Their power is produced to us. Basically, it's a local monopoly. You can't go to Texas and buy wind power. You can't deliver it to the Southeast. The U.S. has a seven-district power grid system. We have nuclear, we have gas, and we have coal. That's up to us driving and others driving the power companies to go towards cleaner energy. Those are the steps on how we're going to do it. Own plants, transfer those to electrified from fossils. Then talk to our power suppliers on how we can go to that direction in 10+ years.
The second question is a clarification question on your statements about the coronavirus. I know that China is rather small, only 4% of your sales, and you mentioned some logistic issues. Is it fair to say, or is it fair to understand that you do not expect any material impact for your Chinese business in Q1?
We certainly will see some impact. On revenue line, we're talking on a couple of EUR million there, depending on how things develop, and we obviously follow the situation carefully. The situation is much better than I feared when I started to look into this, beginning of last week, after we had a week of finding out what's going on. Our plants are running. We do have some logistics issues. We have a far most of our customers in China running. We don't yet know the situation, how our Chinese competition is doing and are they running? Is it giving us opportunities in China and outside China? There's pluses and minuses in this part, but I'm sure we'll suffer a loss of some EUR millions of revenue in the first quarter.
On the group level, that's not a material impact as I see it now.
Okay. Finally, about the visibility of your contracts when it comes to selling prices and raw material costs and putting caustic soda aside, because I know this is just a pass-through effect. Just keeping on basically all the rest. As you mentioned already, you're expecting flat or negative basket of raw material costs in 2019. What is your expectation for selling prices in 2019 excluding caustic soda? Maybe you can also come back to me on-
Memory, remembering me, what is the time duration of your visibility of all these contracts? I think, remember it was something between six and nine months, if not longer. Of course, excluding shale.
Most of our contracts are annual or multi-annual, and that's in pulp and paper and the water treatment. Also the Oil Sands and the CEOR, those are formula prices based on certain input costs. That's the way we do it. If it's multi-annual contracts, typically there's a price check every year. The more sort of spot type is the share market. There we obviously look at input costs, volumes and then sales prices. We're pretty confident at the moment on the input cost that they're going to be pretty neutral going in, maybe even some benefit in some pockets, but we certainly know some pockets that are going up. Sales prices are quite well now locked in. Not for the full year, but for the most part looking pretty steady. I'm not that worried about sales prices, input prices.
It's a question of what is the customer demand, what is their production, and what is their volume that they're going to need from us, because that we haven't contracted out. We promised them a certain volume, and if we can do more, we will do more, but prices are locked, so it's all about volume now.
Thanks a lot.
Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. Our next question is from Robin Santavirta from Carnegie. Please go ahead, your line's open.
Thank you very much. I was wondering about the comment on the pulp and paper business slowdown or sort of somewhat softer outlook now start of the year. Is this related to the strike in Finland? Because obviously that is, as you said, something that impacts you a bit, or is it related to what is going on in Asia or just overall a bit of softer market in that area?
Well, it's more overall, it's not related to the strike. That's sort of an unfortunate one-time incident, and the length of it couldn't be estimated easily. It's more related to how the pulp prices came down last year, and then the customers were a bit curtailing a bit more and having longer shutdowns. The trade dispute between U.S. and China, that volume has come down, affecting packages. We're talking small increments here, but we do have a billion and a half EUR business a year, watching that sentiment carefully. We also have to look at that we don't serve the world of pulp. We serve certain customers. We follow the general trend on what's happening in the markets for our customers. We follow what's happening with those individual customers. It's not everyone in this world.
I think we have really good quality customers and plants that we serve.
Sure. Thanks. Related to that, there's two to three new pulp mills that are planned in Latin America. You mentioned you have sort of a solid base of customers, and you're very strong in that area. Are any of these projects, I know you can't talk about the Finland one, but any of these sort of projects that might sort of need a chemical island and that could be of interest for you?
It might.
No more comments on that, I guess.
No more comments on ongoing negotiations, unfortunately.
All right. I understand. I was just wondering about this shale business slowdown, you obviously highlighted it already earlier in 2019. Is the concern now the volume or the price? How has the price acted? As I understand, the price actually in this area can sort of move quite rapidly in times of weaker or stronger demand. What has the price changed in that segment, and what is the outlook if the rebound is not coming?
Well, it's prices versus input cost versus volume. Mostly we're focusing now on volume and how much demand there is.
Okay. Then maybe for Petri, just briefly on the CapEx, can you, on the top of your head, split that EUR 200 basically to growth or improvement CapEx and maintenance? I guess maintenance is at a bit more than EUR 100, the rest is sort of growth or improvement CapEx.
Again, I don't remember the exact split off the top of my head, but that is directionally correct. Yes.
All right. Thank you very much.
As there are no further questions, I will hand the room back to the speakers for any final comments.
Before we conclude, there's one more question online. This is for the CEO, and it is more of a strategic question. Where do you see Kemira in five years' time?
Bigger and still in chemicals and still in serving mostly these customer segments, why not thinking of some other opportunities that are out there also? Also improving our profitability and hopefully increasing also our dividend in the future.
With this, we thank everyone and wish everyone a very happy afternoon. Thank you.