Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Q3 2014 Earnings Presentation
26 slides from Fortum Oyj's earnings presentation, Oct 23, 2014
Slide 1: Fortum Corporation Interim report January–September 2014
Fortum Corporation Interim report January–September 2014 23 October 2014
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Fortum shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser. 2
Slide 3: Q3 2014 Results
Q3 2014 Results Key figures (EUR) III/14 III/13 I-III/14 I-III/13 2013 LTM Sales, million 976 1,060 3,466 3,918 5,309 4,857 Comparable EBITDA, million 309 336 1,317 1,429 1,975 1,863 Operating profit, million 149 96 2,778 1,002 1,508 3,284 Comparable operating profit, million 183 167 915 979 1,403 1
Slide 4: Summary of the third quarter of 2014
Summary of the third quarter of 2014 • Good results in continuously demanding market environment • Flexible hydro production partly offset weak electricity price • Strong cash flow from operations • The evaluation and preparation of the possible future divestment of the Swedish electricity distribut
Slide 5: Market conditions in the third quarter 2014
Market conditions in the third quarter 2014 Nordic countries • Power consumption in the Nordic countries flattish compared to the same period in 2013 • Hydro reservoirs 10 TWh below long-term average, but at the level of comparison period • Nordic system spot prices EUR 4 per MWh lower compared to t
Slide 6: Nordic water reservoirs
Nordic water reservoirs 120 100 reservoir content (TWh) 80 60 40 20 2000 2003 2012 2013 2014 reference level 0 Q1 Q2 Q3 Q4 Source: Nord Pool Spot 6
Slide 7: Wholesale price for electricity
Wholesale price for electricity EUR/MWh Nord Pool Spot System Price Forwards 110 100 90 80 70 60 50 40 30 20 10 20 October 2014 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Source: Nord Pool Spot, NASDAQ OMX Commodities Europe 7
Slide 8: Fuel and CO2 allowance prices
Fuel and CO2 allowance prices Crude oil price (ICE Brent) CO2 price (ICE ECX EUA) 150 35 120 28 EUR / tCO2 USD / bbl 90 21 60 14 30 7 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Coal price (ICE Rotterdam) Gas price (ICE NBP) 250 100 200 80
Slide 9: Price development in the Nordic region and Russia
Price development in the Nordic region and Russia -11% +2% -7% -14% Includes capacity income 9
Slide 10: Q3: New capacity driving improvement in Russia segment
Q3: New capacity driving improvement in Russia segment Comparable operating profit, EUR million * * The divested distribution operations are included in the segment information for 2013 10
Slide 11: January-September: Good results despite warm weather, low spot prices and weak rouble
January- September: Good results despite warm weather, low spot prices and weak rouble Comparable operating profit, EUR million * * The divested distribution operations are included in the segment information until the closing of the transactions 11
Slide 12: Financials
. * 7 Financials — iS =) a 5 Lt g
Slide 13: Comparable and reported operating profit
Comparable and reported operating profit Comparable Reported Comparable Reported MEUR operating profit operating profit operating profit operating profit III/2014 III/2013 III/2014 III/2013 I-III/2014 I-III/2013 I-III/2014 I-III/2013 Power and Technology 167 139 124 44 601 652 537 644 Heat, Electric
Slide 14: Power and Technology
Power and Technology Q3 2014 I-III/2014 • Lower achieved power price – average spot • Lower achieved power price – average spot price EUR 4 per MWh lower, area prices EUR price EUR 9.6 per MWh lower, area prices 5-6 per MWh lower EUR 6-8 per MWh lower • Higher hydro and nuclear production volumes •
Slide 15: Heat, Electricity Sales and Solutions
Heat, Electricity Sales and Solutions Q3 2014 I-III/2014 • Heat sales volumes lower due to warm • Warm weather during first and third quarter, and weather, and divestments made in 2013 divestments made in 2013 and 2014 burdened and 2014 CHP volumes (despite new capacity) • Retail sales also burdened
Slide 16: Russia
Russia Q3 2014 I-III/2014 • Comparable operating profit improved due to • Positive impact from CSA capacity of CSA capacity payments, better electricity and EUR 122 (84) million heat spreads • Overall, Russian results was negatively • CCS (old capacity) auction held – majority of affected by weakene
Slide 17: Distribution
Distribution Q3 2014 I-III/2014 • Volumes in Sweden in line with last year • Divestments of Finnish and Norwegian electricity distribution businesses closed • Fortum continues to evaluate and prepare the possible future divestment opportunity of the Swedish electricity distribution business MEUR III
Slide 18: Income statement
Income statement MEUR III/2014 III/2013 I-III/2014 I-III/2013 2013 LTM Sales 976 1,060 3,466 3,918 5,309 4,857 Other income and expenses -793 -893 -2,551 -2,939 -3,906 -3,518 Comparable operating profit 183 167 915 979 1,403 1,339 Capital gains and other items affecting -34 -70 1,863 22 106 1,947 co
Slide 19: Cash flow statement
Cash flow statement MEUR III/2014 III/2013 I-III/2014 I-III/2013 2013 LTM Operating profit before depreciations 276 265 3,185 1,461 2,129 3,853 Non-cash flow items and divesting activities 18 59 -1,903 -104 -262 -2,061 Financial items and fx gains/losses 47 68 52 -242 -188 106 Taxes -68 -68 -164 -14
Slide 20: Key ratios
Key ratios MEUR LTM 2013 Comparable EBITDA 1,864 1,975 Interest-bearing net debt 4,790 7,793 Comparable net debt/EBITDA 2.6 3.9 excluding Värme financing 2.2 3.4 Return on capital employed, ROCE (%) 18.9 9.0 Return on shareholders’ equity, ROE (%) 29.0 12.0 Good liquidity – committed credit lines to
Slide 21: Debt Maturity Profile
Debt Maturity Profile 1500 MEUR 2014 32 1250 2015 1,035 2016 863 1000 2017 548 750 2018 629 2019 821 500 2020 76 2021 547 250 2022 1,057 2023 112 0 2024+ 1,249 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024+ TOTAL 6,969 Bonds Financial institutions Other long-term debt CPs Other short-term d
Slide 22: Fortum's efficiency programme 2013-2014
Fortum's efficiency programme 2013-2014 • The efficiency programme is close to completion and is estimated to be successfully finalised during 2014 • Total annual cost savings visible in all divisions • Improved working capital efficiency • Divestments of non-core assets totalling approximately EUR
Slide 23: Outlook
Buttock’ @Fortum
Slide 24: Outlook
Outlook Nordic markets • Fortum continues to expect that the average annual electricity demand growth will be 0.5% in the coming years • Electricity is expected to continue to gain share of total energy consumption Russia • The target for the Russia Segment in Russian roubles, RUB 18.2 billion, to b
Slide 25: Outlook
Outlook Annual capex estimate, excluding potential acquisitions • 2014 EUR 0.9 to 1.1 billion Hedging • The remaining 2014 approx. 70% hedge ratio at approx. EUR 43/MWh • 2015 approx. 40% hedge ratio at approx. EUR 41/MWh • 2016 approx. 10% hedge ratio at approx. EUR 39/MWh The efficiency programme
Slide 26: For more information www.fortum.com/investors
For more information www.fortum.com/investors