Fortum in 3 minutes

Fortum in 3 minutes
Fortum is a power and heat company which operates in the Nordic countries, Russia, Poland
and the Baltics. Fortum’s reporting structure consists of five segments: Power and Technology,
Heat, Electricity Sales and Solutions, Russia, and Distribution. Power and Technology segment
incorporates two business divisions; Hydro Power and Technology, and Nuclear and Thermal
Power. Fortum is listed in the Nasdaq Helsinki Stock Exchange since 1998.
Fortum’s
financial targets
RETURN ON CAPITAL EMPLOYED
%
20
15
12%
10
5
Key facts 2014:
Sales
Capex
EUR 4,751 million
Exchange:
EUR 843 million
Employees:
Nasdaq Helsinki
Comparable operating profit
8,500
EUR 1,351 million
0
ISIN:
10
FI0009007132
Industry:
Ticker:
Electric Utilities
11
12
13
14
RETURN ON SHAREHOLDER’S EQUITY
%
30
FUM1V
20
15
14%
10
Fortum’s Mission and Strategy
5
Mission
0
Fortum’s purpose is to create energy that improves life for present and future generations.
We provide sustainable solutions for society and
deliver excellent value to our shareholders.
10
11
12
13
14
COMPARABLE NET DEBT/EBITDA
3
Strategy
Build on the strong
Nordic core
Create solid earnings growth
in Russia
Build a platform for
future growth
1
Strong competence in CO2-free hydro and nuclear,
efficient CHP production and energy markets
Fortum’s
reporting structure
Power and
Technology
(2014 figures)
3.0
2
0
10
Heat, Electricity
Sales and Solutions
11
Russia
12
13
14
Distribution
Business description
Fortum’s power generation,
physical operation and
trading as well as expert
services for power producers.
Combined heat and power
generation, district heating and
cooling activities, b-to-b heating
solutions and electricity sales.
Power and heat generation
and sales in Russia.
Fortum’s distribution activities
in Sweden.
Finnish and Norwegian
businesses divested in 2014.
Comparable operating profit,
% of Group op
EUR 877 million, 64% of total
EUR 104 million, 7% of total
EUR 161 million, 11% of total
EUR 266 million, 19% of total
Net assets
EUR 6,001 million
EUR 2,112 million
EUR 2,597 million
EUR 2,615 million
Volume (TWh)
Nordic generation 48.6TWh
CHP sales 2.8TWh,
heat sales 7.9TWh,
electricity sales 13.8TWh
Power gen. 26.5TWh Heat sales 26.0TWh
17.6TWh
Drivers
Nordic power price, generation
volumes
Fuel mix, heat and power price,
electricity sales margin
New capacity and capacity price,
electricity and heat price
Distribution regulation
Power and Technology business drivers:
•Generation sold at power exchange Nord Pool - also hedged with financial contracts
•Wholesale price of electricity impacted by
nuclear availability - timing of outages, hydro water reservoirs level, CO
- Demand,
allowans prices and fuels
Sensitivity:
achieved
price 1 EUR/MWh = EUR ~45 million in annual comparable operating
•profit
•Currency exchange rate fluctuations
2
2014
64% of Fortum’s total power generation CO2-free
94% of Fortum’s power generation in
the EU CO2-free
Close to 100% of the ongoing investment
programme in the EU CO2-free
of RUB 18.2 billion
•Two markets: 1) capacity (old “CCS” and new “CSA”) and 2) energy
•New Capacity “CSA” prices are a major part of future income
•Gas price (major fuel)
•Seasonality
•Currency (Russian rouble) exchange rate fluctuations
g CO2/kWh electricity, 2013
1000
800
600
400
Average 328 g/kWh
200
200
0
64
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Fortum’s carbon exposure is among the
lowest in Europe.
•4th largest power market
completing the ongoing investment programme by mid 2015
•After
(add. 85% capacity), Fortum’s goal is to achieve an annual operating profit level (EBIT)
1200
D
EI
RW
E
DR
AX
We are a forerunner
in sustainability
Russia segment business drivers:
FORTUM’S POWER GENERATION IN 2014
IN TOTAL 73.4 TWh
FORTUM POWER GENERATION BY SOURCE
TWh
Hydro and wind power
Nuclear power
Thermal power
Total in EU and Norway
Thermal power in Russia
Total
Biomass 1%
Coal 5%
Hydro
power 30%
Natural gas 31%
Nuclear
power 33%
2014
2013
22.4
23.8
3.9
50.1
18.1
23.7
5.7
47.4
23.3
73.4
20
67.4
Nordic and continental markets
are integrating - interconnection
capacity will double by 2020
TGC-1
Nordic Power
generation totalled
378 TWh in 2014
OAO FORTUM
Nyagan
Olkiluoto
Loviisa
Forsmark
Stockholm Helsinki St. Petersburg
Tobolsk
Tyumen
Oskarshamn
Moscow
Chelyabinsk
FORTUM’S HEAT PRODUCTION IN 2014
IN TOTAL 34.6 TWh
Natural gas 77%
Waste 1%
Peat 1%
Biomass 6%
Coal 15%
Fortum’s nuclear fleet
DEBT MATURITY PROFILE
AS OF 31 DECEMBER 2014
Fortum’s CHP’s in Russia
Strong financial position
OWNERSHIP STRUCTURE
AS OF 31 DECEMBER 2014
Good liquidity – committed credit
lines total EUR 2.2 billion
Approx. 110,000 shareholders
1,500
Fortum’s combined cycle gas turbine (CCGT)
Long-term credit rating
1,250
Households 8.1%
Finnish State
50.8%
1,000
Financial and
insurance
institutions 1.6%
750
Other Finnish
investors 7.1%
500
Foreign investors
32.4%
250
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025+
Bonds
Year
2015
2016
2017
2018
Financial institutions
MEUR
1,103
860
530
614
Other long-term debt
Year
2019
2020
2021
2022
CPs
MEUR
820
75
548
1,076
Other short-term debt
Year
2023
2024
2025+
TOTAL
per 31
Dec 2014
Average interest rate
Average interest rate
(incl. swaps and forwards)
Portion of floating / fixed debt
MEUR
109
3
1,245
6,983
DIVIDEND PER SHARE (EUR)
1.30*
1.00
1.00
1.00
2010
68%
2011
50%
2012
63%
1.10
0.20**
1.10
2013
81%
2014
37%
per 31
Dec 2013
3.7%
2.4%
3.7%
3.6%
46/54%
51/49%
*Board’s proposal to the AGM.
**An extra dividend.
• Hedging of the Power and Technology’s estimated Nordic
power sales volume at end of 2014
2015: ~50% at ~EUR 40/MWh
2016:
~10% at ~EUR 39/MWh
• Hedges are disclosed quarterly
• Hedge ratios may vary significantly
DIVIDEND POLICY
Fortum’s target is to pay a stable, sustainable and over time increasing dividend of
50-80% of earnings per share excluding one-off items.
• The dividend policy ensures that shareholders receive a fair remuneration for their entrusted capital, supported by
the company’s long-term strategy that aims at increasing earnings per share and thereby the dividend.
• When proposing the dividend, the Board of Directors looks at a range of factors, including the macro environment, balance
sheet strength as well as future investment plans.
A- (negative)
A- (negative)
Fortum’s financial calendar
4 Feb 2015 Financial Statement 2014
week 10, 2015 Operating and financial review for 2014
31 Mar 2015 Annual General Meeting
1 April 2015* Ex-dividend date
2 April 2015* Record date for dividend payment
14 April 2015* Dividend payment date
29 Apr 2015 Interim Report Q1 2015
17 Jul 2015 Interim Report Q2 2015
22 Oct 2015 Interim Report Q3 2015
*Possible dividend related dates.
GUIDANCE & HEDGING
• Fortum continue to expect that the annual electricity
demand growth in the Nordics will average approx
0,5% in the coming years
• Electricity continues to gain share of total energy
consumption
• Annual capex (excl. potential acquisitions) in
2015 EUR approximately 0.9 billion
• Corporate tax rate: 19–21%
Standard & Poor’s Fitch
Investor relations
Sophie Jolly
VP, Investor Relations
Tel. +358 10 45 32552
sophie.jolly@fortum.com
​ auno Tiihonen
R
Manager, Investor Relations
Tel. +358 10 45 36150
​rauno.tiihonen@fortum.com
Marja Mäkinen
Manager, Investor Relations (SRI)
Tel. +358 10 45 23338
marja.makinen@fortum.com
Meeting request:
Arja-Tuula Tiainen
Executive Assistant
Tel. +358 10 453 4487
arja.tiainen@fortum.com