Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Q1 2010 Earnings Presentation
27 slides from Fortum Oyj's earnings presentation, Apr 27, 2010
Slide 1: Fortum Corporation Interim report January-March 2010
Fortum Corporation Interim report January-March 2010 27 April 2010
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: Business environment improving
Business environment improving • Nordic power consumption up by 7% • Tight supply demand balance in the Nordic area resulted in price peaks – Cold winter; exceptional low temperature periods – Availability of Nuclear in Sweden still affected by modernisations – Average Nord Pool system spot price up
Slide 4: A strong start for the year
A strong start for the year • Comparable operating profit, EUR 651 (602) million – Higher achieved Nordic sales price in Power – Improvement in Russia – SEK translation effect EUR +33 million • Earnings per share EUR 0.63 (0.46) – Sales gains from Swedegas, Karlskoga Energi & Miljö, Kurgan and Feder
Slide 5: Better performance, except Electricity Sales
Better performance, except Electricity Sales Comparable operating profit EUR million 21 -11 10 2 651 18 602 9 Q1/2009 Power Heat Distribution Electricity Russia Other Q1/2010 Sales 5
Slide 6: Key events and highlights
Key events and highlights • Performance development in Russia on track – Russian power reform proceeded as planned – OAO Fortum’s productivity improved – Rules and price parameters for capacity market approved • Suomenoja CHP plant in full operation • Work continuing to improve efficiency, accountab
Slide 7: Nordic water reservoirs below normal
Nordic water reservoirs below normal 120 100 reservoir content (TWh) 80 60 40 20 2003 2008 2009 2010 reference level 0 Q1 Q2 Q3 Q4 Source: Nord Pool 7
Slide 8: Commodity prices
Commodity prices Crude oil price (ICE Brent) CO2 price (NP EUA) 160 35 140 Q1 average: 30 Q1 average: 120 77 (46) 25 13 (12) EUR / tCO2 USD / bbl 100 20 80 15 60 40 10 20 5 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Coal price (ICE Rotterdam) Gas price (ICE NBP) 240 100 Q1 average: Q1 ave
Slide 9: Price development in the Nordic region and Russia
Price development in the Nordic region and Russia Spot price for power in NordPool power exchange, Spot price for power (market price), Urals hub, eur/MWh RUB/MWh 59.5 900 60 817 +56% +53% 800 700 693 50 700 603 38.2 36.6 600 535 40 34.0 31.3 500 30 400 20 300 200 10 100 0 0 Q1/2009 Q2/2009 Q3/2009
Slide 10: Financials
Financials
Slide 11: Power
Power Power • Higher achieved price supported by higher spot prices • Lower hydro and nuclear volumes • Increased thermal generation • Stronger SEK MEUR I/2010 I/2009 LTM Sales 769 688 2 612 Comparable operating profit 424 415 1 463 Net Assets 5 591 5 351 Comparable RONA, % 26.3 Gross Investments 33
Slide 12: Heat
Heat Heat • Suomenoja CHP plant in operation • Higher heat volumes due to cold weather • Higher power volumes and higher Nord Pool spot price MEUR I/2010 I/2009 LTM Sales 651 514 1 536 Comparable operating profit 132 114 249 Net Assets 3 955 3 482 Comparable RONA, % 8.0 Gross Investments 62 70 351 1
Slide 13: Distribution
Distribution Distribution • Higher volumes • Stronger SEK • Automatic meter rollout in Finland to start in 2010 MEUR I/2010 I/2009 LTM Sales 280 229 851 Comparable operating profit 102 81 283 Net Assets 3 419 3 090 Comparable RONA, % 9.1 Gross Investments 29 36 186 13
Slide 14: Electricity Sales
Electricity Sales Markets • Higher purchase price of power; Nord Pool price peaks • Restructuring provision for the Business Market segment MEUR I/2010 I/2009 LTM Sales 637 469 1 617 Comparable operating profit -13 -2 11 Net Assets 163 90 Comparable RONA, % 7.3 Gross Investments 0 1 0 14
Slide 15: Russia
Russia Russia • Efficiency improvement programme on track • Slightly higher electricity and heat sales margins • The price parameters for the capacity market approved in April 2010 MEUR I/2010 I/2009 LTM Sales 244 186 690 Comparable operating profit 16 6 -10 Net Assets 2 489 2 018 Comparable RONA, %
Slide 16: Income statement
Income statement MEUR I/2010 I/2009 2009 LTM Sales 1 947 1 632 5 435 5 750 Expenses -1 223 -1 033 -3 653 -3 843 Operating profit 724 599 1 782 1 907 Share of profit of associates and jv's 16 -33 21 70 Financial expenses, net -27 -32 -167 -162 Profit before taxes 713 534 1 636 1 815 Income tax expens
Slide 17: Comparable and reported operating profit
Comparable and reported operating profit Operating profit I/2010 Operating profit I/2009 Operating profit 2009 Comparable Reported Comparable Reported Comparable Reported Power 424 467 415 432 1 454 1 363 Heat 132 159 114 115 231 252 Distribution 102 113 81 81 262 263 Electricity Sales -13 -29 -2 -2
Slide 18: Cash flow statement
Cash flow statement MEUR I/2010 I/2009 2009 LTM Operating profit before depreciations 861 721 2 292 2 432 Non-cash flow items and divesting activities -67 1 46 -22 Financial items and fx gains/losses -177 139 146 -170 Taxes -82 -14 -239 -307 Funds from operations (FFO) 535 847 2 245 1 933 Change in
Slide 19: Key ratios
Key ratios Key ratios MEUR LTM 2009 2008 in Q1 ‘10 EBITDA 2 432 2 292 2 478 Net cash flow from operations 1 963 2 264 2 002 Interest-bearing net debt 5 679 5 969 6 179 Equity 8 465 8 491 8 411 Balance sheet total 21 318 19 841 20 278 Net debt/EBITDA 2.3 2.6 2.5 Return on capital employed (%) 12.3 12
Slide 20: Debt maturity profile
Debt maturity profile 1250 MEUR 2010 980 1000 2011 645 2012 525 750 2013 560 2014 1,172 500 2015 322 2016 858 2017 220 250 2018 78 2019 799 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+ 2020+ 1,018 Bonds Financial institutions Other long-term debt CPs Other short-term debt per 31 March,
Slide 21: Outlook
Outlook
Slide 22: Fuel and CO2 allowance prices
Fuel and CO2 allowance prices Crude oil price (ICE Brent) CO2 price (NP EUA) 160 35 140 30 120 25 EUR / tCO2 USD / bbl 100 20 80 60 15 40 10 20 5 0 2006 2007 2008 2009 2010 2011 0 2006 2007 2008 2009 2010 2011 Coal price (ICE Rotterdam) Gas price (ICE NBP) 240 100 200 80 GBp / therm 160 60 USD / t 1
Slide 23: Nord Pool year forwards
Nord Pool year forwards €/MWh Year 07 Year 08 Year 09 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 22 April 2010 75 70 65 60 55 50 45 40 35 30 Forwards in late April 2010: 25 20 • rest of 2010 ~ 46 EUR/MWh 15 • 2011 ~ 44 EUR/MWh 10 • 2012 ~ 43 EUR/MWh 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 24: Hedging of Power division's Nordic sales
Hedging of Power division's Nordic sales Status at the end of March 2010 (Status at the end of Dec 2009) Hedge ratio Hedge price rest of 2010 ~ 75% ~ EUR 44 per MWh (~70%) (~ EUR 44 per MWh) 2011 ~ 45% ~ EUR 43 per MWh (~40%) (~ EUR 42 per MWh) 24
Slide 25: New capacity to be commissioned in 2010
Fortum New capacity in a strong to beposition commissioned in 2010 Capacity Capacity Type electricity, MW heat, MW Available Heat Częstochowa, Poland CHP bio, coal 65 120 Q3/2010 Pärnu, Estonia CHP bio, peat 20 45 end of 2010 Power Hydro refurbishment Hydropower 20-30 2010 Russia Tyumen 1 CCGT, gas
Slide 26: Fortum in a strong position
Fortum in a strong position • A strong start for the year • Flexible, cost-efficient and climate-benign generation portfolio • Russian power reform proceeding and the results of OAO Fortum improving as planned • Nordic power demand recovering – back to 2008 level by 2012-2014 • Strong financial posi
Slide 27: @Fortum
@Fortum