FORTUM Power and heat company in the Nordic area, Russia and the Baltics Investor / Analyst material June 2015
Content Fortum today pages 4 16 European and Nordic power markets pages 17 27 Fortums nuclear fleet pages 28 31 Russia pages 32 34 Fortums investment programme page 34 Historical achieved prices page 35 Q1 2015 pages 36 55…
Appr. 114,000 shareholders Power and heat company in the Nordic countries, Russia, Poland and the Baltics Listed at the Helsinki Stock Exchange since 1998 Among the most traded shares on the Nasdaq Helsinki stock exchange Market cap…
Capital returns: 2014 EUR 1.30 per share EUR 1.2 billion Fortums dividend policy is based on the following preconditions: The dividend policy ensures that shareholders receive a fair remuneration for their entrusted capital, supported…
Our strategic route stfold Skandinaviska Birka Energi Stora Kraft Birka Energi Shares in TGC-1 Elverk 50% Fortum 50% 100% Hafslund established 50% Stockholm Shares in Gullspng merged Lenenergo Gullspng with Stockholm Energi…
Fortums Mission and Strategy Mission Fortums 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.…
Fortums reporting segments and divisions Power and Technology Heat, Electricity Sales Russia and Solutions Hydro, nuclear and thermal Combined heat and power Power and heat generation power generation (CHP) production and sales in…
Our current geographical presence Nordic countries Key figures 2014 Sales EUR 4.1 bn Power Comparable operating profit EUR 1.1 bn generation Power generation 48.0 TWh Balance sheet EUR 21 bn Personnel 8,200 Heat Heat sales 3.3…
Fortum mid-sized European power generation player; major producer in global heat Power generation Heat production Customers Largest producers in Europe and Russia, 2013 Largest global producers, 2013 Electricity customers in EU,…
Fortum in the Nordic electricity value chain Large customers Nordic wholesale market Retail customers Power generation Power exchange and bilateral agreements Private customers, small businesses 12
Fortum's power and heat production by source Fortum's power generation Fortum's heat production in 2014 in 2014 Nuclear power Natural gas 33% Natural gas 77% 31% Biomass 1% Waste 1% Peat 1% Coal 5% Biomass 6% Hydro power…
Fortum's European power and heat production Fortum's European Fortum's European power generation in 2014 heat production in 2014 Nuclear power Coal 38% 48% Natural gas Oil 1% 29% Biomass 2% Heat pumps, electricity 1% Natural…
Fortum a forerunner in sustainability Emissions-free production is Fortums strategic choice We are highly committed to sustainability. Our purpose is to create energy that improves life for present and future generations. We provide…
Fortum's carbon exposure among the lowest in Europe g CO2/kWh electricity, 2013 1 200 2014 1 000 64% of Fortum's total power generation CO2-free 94% of Fortums power generation in the EU CO2-free 800 Close to 100% of the ongoing…
Carbon market gradually tightening Political decisions strengthening the EU Emissions Trading System Decision on the 2030 greenhouse gas reduction target Backloading decision, implementation started in 2014 Market Stability Reserve…
Market coupling milestones - cross-border power flows optimised by power exchanges Market coupling between NL, BE and FR since 2006 Germany Nord Pool Spot coupling started 11/2009 Market coupling for Central Western Europe (DE, FR, NL,…
Current transmission capacity from Nordic area is over 5,000 MW Countries Transmission capacity MW From Nordics To Nordics Denmark - Germany 2,225 2,100 Sweden - Germany 615 600 Sweden - Poland 600 600 Norway - Netherlands 700 700…
Nordic, Baltic, Continental and UK markets are integrating interconnection capacity will double by 2021 The Northern Seas Offshore Grid and the Baltic New interconnections will Energy Market Integration Plan are included as double the…
Nordic water reservoirs 120 100 reservoir content (TWh) 80 60 40 20 2000 2003 2013 2014 2015 reference level 0 Q1 Q2 Q3 Q4 Source: Nord Pool Spot 21
Nordic power generation dominated by hydro, but fossil needed 160 Total Nordic generation 390 TWh in 2014 140 TWh % 120 Fossil fuels 39 10 100 TWh/a Nuclear 85 22 80 Biomass 23 6 60 Solar 1 0 40 Wind 28 7 20 Hydro * 214…
Wholesale electricity price too low to attract investments EUR/MWh EUR/MWh 110 110 Average levelised costs of new electricity generation 100 100 90 90 80 80 70 70 60 60 50 Futures 50 1 June 2015 40 40 30 30 20 20 10 10 0 0…
Overview of Fortums nuclear fleet LOVIISA OLKILUOTO OSKARSHAMN FORSMARK Unit 1: 1978 Unit 1: 1972 Unit 1: 1980 Commercial operation Unit 1: 1977 started Unit 2: 1980 Unit 2: 1974 Unit 2: 1981 Unit 2: 1981 Unit 3: (Under…
Variety of technologies and ages Unit MWe (Net) Share (%) Share (MWe) Commercial Age Type/ Supplier operation Generation * Loviisa 1 496 100,0 496 1977-05-09 36 PWR / 1 AEE (Atomenergoexport) Loviisa 2 496 100,0 496 1981-01-05 33 PWR…
Third party nuclear liability in case of severe accident In force since 1.1.2012. Law approved by Parliament in 2010, requires separate Unlimited decision from Government to company come into force. responsibility Convention 300…
Fortum - a major player in Russia OAO Fortum (former TGC-10) Operates in the heart of Russias oil and gas producing region, fleet mainly gas-fired CHP capacity 23 TWh power generation, 26 TWh heat production in 2014 Investment…
Day ahead wholesale market prices in Russia Key electricity, capacity and gas prices in the OAO Fortum area Day ahead power market prices for Urals 40 35 I/15 I/14 2014 LTM 30 Electricity spot price (market 25 / MWh price),…
85% increase in power generation capacity in Russia by 2015 through the investment programme Year Supply Power plant Fuel type Existing New Production type Total starts capacity investments capacity 2,785 MW 2,388 MW 5,173 MW < 2011…
Hedging improves stability and predictability 2009 onwards thermal and import from Russia excluded 35
Interim report JanuaryMarch 2015 Fortum Corporation 29 April 2015
IFRS restatement relating to discontinued operations Distribution segment has been reclassified as discontinued operations in Q1/2015. As a result, continuing operations and discontinued operations are presented separately for Fortum…
Summary of the first quarter of 2015 Strong cash flow from operations Hydro production impacted by later spring floods and inflow; nuclear volumes impacted by unplanned outages in co-owned plants Binding agreement to sell the…
Market conditions in the first quarter of 2015 Nordic countries Power consumption in the Nordic countries at the same level as in Q1 2014 Hydro reservoirs at long-term average level Nordic system spot prices approximately EUR 2 per MWh…
Price development in the Nordic region and Russia -7% +3% -5% -15% Includes capacity income 41
Q1: Fortums market environment remained weak Comparable operating profit, EUR million 42
Financials
Comparable and reported operating profit Comparable Reported MEUR operating profit operating profit I/2015 I/2014 I/2015 I/2014 Power and Technology 203 251 203 262 Heat, Electricity Sales and Solutions 58 48 64 45 Russia 97 73 98…
Power and Technology Q1 2015 Lower achieved power price, hydro and nuclear volumes Later spring floods Several small unplanned outages in co-owned nuclear power plants MEUR I/2015 I/2014 2014 LTM Sales 500 586 2,156 2,070…
Heat, Electricity Sales and Solutions Q1 2015 Comparable operating profit improved mainly due to lower fuel costs and higher heat prices during the period. In addition, the customer base in retail electricity continued to grow and…
Russia Q1 2015 Lower heat production volumes, due to warm weather, and bad debt provisions for heat trade receivables impacted the result negatively Russian rouble affected the result negatively by EUR 47 million Result includes CSA…
Discontinued operations (Distribution) Q1 2015 Binding agreement signed to divest the Swedish electricity distribution business Volumes in Sweden in line with last year Table below includes January-March 2014 results for the…
Income statement MEUR I/2015 I/2014 2014 LTM Sales 1,040 1,208 4,088 3,920 Other income and expenses -697 -850 -3,003 -2,850 Comparable operating profit 343 358 1,085 1,070 Items affecting comparability 7 8 211 210 Operating profit…
Cash flow statement MEUR I/2015 I/2014 2014 LTM Cash from operating activities: Realised FX gains/losses 168 74 352 446 Other funds from operations (FFO) 314 371 1,096 1,039 Change in working capital 34 -40 -42 32 Cash from…
Key ratios MEUR LTM 2014 Comparable EBITDA, continuing operations 1,397 1,457 Comparable EBITDA, total Fortum 1,754 1,873 Interest-bearing net debt, total Fortum 3,714 4,217 Comparable net debt/EBITDA, total Fortum 2.1 2.3…
Outlook Nordic markets Fortum continues to expect that the average annual electricity demand growth will be on average approximately 0.5% in the coming years Electricity is expected to continue to gain share of total energy…
Outlook Annual capex estimate, excluding potential acquisitions 2015 approximately EUR 0.8 billion Hedging Rest of 2015 approx. 50% hedge ratio at approx. EUR 41/MWh 2016 approx. 20% hedge ratio at approx. EUR 37/MWh Taxation…
Fortum Investor Relations For more information, please visit www.fortum.com/investors Sophie Jolly Vice President Next result publication: +358 (0)10 453 2552 Q2/2015 on 17 July 2015 sophie.jollyfortum.com Rauno Tiihonen…
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