Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Fortum Oyj Corp Ord — Q3 2022 Earnings Presentation
22 slides from Fortum Oyj's earnings presentation, Nov 10, 2022
Slide 1: Fortum Interim Report January-September 2022
Fortum Interim Report January-September 2022 Fortum Corporation 10 November 2022
Slide 2: Markus Rauramo, President and CEO
Markus Rauramo President and CEO 2
Slide 3: Significant progress on Fortum's immediate priorities
Significant progress on Fortum’s immediate priorities Stabilise Get traction Recalibrate • Fortum to fully divest Uniper • Finalisation of controlled • Strategy review of Fortum to the German State exit from Russian market standalone considering • EU Commission approval the changed operating • Retur
Slide 4: Fortum's financial position will considerably restrengthen
Fortum’s financial position will considerably restrengthen Further financial flexibility secured Fortum to fully divest Uniper • Fortum drew the first tranche of EUR 350 million on • The German State to buy Fortum‘s shares in Uniper the liquidity facility provided by Solidium. for EUR 1.70/share, a
Slide 5: Commodity price environment eased from August highs
Commodity price environment eased from August highs Gas and power futures reached extreme levels in August under collateral squeeze Low precipitation and high exports • Nord Stream flows dropping to zero triggered a price rally that led to a record high collaterals with extreme price levels and vol
Slide 6: High energy prices have led to political market interventions
High energy prices have led to political market interventions The EU aims to tackle the energy crisis with price Implementation of energy crisis measures interventions addressing affordability for consumers must ensure sufficient supply • Temporary • non-binding 10% reduction target on gross electri
Slide 7: Clean power generation drives strong performance of continuing operations
Clean power generation drives strong performance of continuing operations Comp. OP1 Comp. EPS1,2 OCF1 Leverage3 9M 1,126 1,496 2.6 Prevailing extraordinary market 909 1.50 <2 1,032 fundamentals and strong 0.82 0.8 performance in the Generation segment 9M 2021 9M 2022 9M 2021 9M 2022 9M 2021 9M 2022
Slide 8: Bernhard Günther, CFO
Bernhard Günther CFO 8
Slide 9: Key financials, continuing operations
Key financials, continuing operations MEUR III/2022 III/2021 I-III/2022 I-III/2021 2021 LTM Strong operational performance restated restated restated driven by clean power generation Sales 2,152 1,296 6,068 4,251 6,422 8,239 • Higher price levels and achieved Comparable EBITDA 561 386 1,541 1,343 2,
Slide 10: Strong operational performance overcompensating structural effects
Strong operational performance overcompensating structural effects Reconciliation of comparable operating profit1 (EUR million) 9M 3 5 20 Generation 255 -65 Higher achieved power price with strong 1,126 physical optimisation but lower hydro volumes 909 Russia I-III/2021 Generation Russia City Soluti
Slide 11: Reported income statement for continuing operations
Reported income statement for continuing operations dominated by capital gains and fair values of derivatives EUR million I-III 2022 Comparable operating profit, continuing operations 1,126 Russia related impairment charges Impairment charges and reversals -356 Divestment of Fortum Items affecting c
Slide 12: Deconsolidation of Uniper
Deconsolidation of Uniper Uniper divestment results in a total loss of slightly below EUR 6bn from the investment in the legal Fortum entity owning the Uniper shares. • Negative impact on the parent company Fortum Oyj’s equity remains at sufficient level and does not require additional capital injec
Slide 13: Reported income statement for discontinued operations (Uniper)
Reported income statement for discontinued operations (Uniper) MEUR III/2022 I-III/2022 9M comparable operating profit of EUR -4.7bn Comparable operating profit from discontinued -4,177 -4,747 operations Deconsolidation effect 27,966 27,966 Deconsolidation effect of Uniper of EUR 28 bn mainly Items
Slide 14: Balance sheet has decreased significantly following the deconsolidation of Uniper
Balance sheet has decreased significantly following the deconsolidation of Uniper MEUR 30-Sep-22 30-Jun-22 MEUR 30-Sep-22 30-Jun-22 IFRS Equity up quarter-on-quarter as Q3 Property, plant and net profit from discontinued operations equipment and right-of-use 8,252 18,336 Total equity 6,543 1,311 att
Slide 15: Leverage decreasing significantly, gross debt down
Leverage decreasing significantly, gross debt down 5,335 Solid credit metrics debt net debt 'BBB' long-term issuer credit rating, Financialnet Negative outlook 'BBB' long-term issuer credit rating, Financial Negative outlook Target ratio: Financial net debt / Comp. EBITDA < 2x Fortum’s objective: Ma
Slide 16: Outlook
Outlook Generation segment Nordic hedges: For the remainder of 2022: 80% hedged at EUR 49 per MWh For 2023: 65% hedged at EUR 49 per MWh (Q2: 60% at EUR 37) For 2024: 40% hedged at EUR 38 per MWh (Q2: not disclosed) NEW Capital expenditure: The capex guidance for 2022 for continuing operations is EU
Slide 17: Fortum closing slide
ioe @fortum saner world
Slide 18: Generation: Higher achieved power prices
Generation: Q3 Higher achieved power prices Volumes (TWh) 5.5 Q3'22 5.5 Q3'21 4.2 5.0 Q3 2022 vs. Q3 2021 Hydro Nuclear • Comparable operating profit increased by 58% mainly due to 9M 9M'22 9M'21 Volumes – Higher achieved power prices of EUR 63.9 (+EUR 20 per MWh) mainly due (TWh) 14.3 17.2 17.3 17.
Slide 19: Water reservoirs
Nord Pool system price driven to new price record Reservoir content (TWh) Water reservoirs 120 120 • Compared to long-term average, Nordic water reservoirs 100 100 were declining from -2 TWh to -12 TWh during Q3. 80 80 • Inflow realised clearly below normal while hydro generation 60 60 remained at n
Slide 20: Russia: Solid underlying performance
Russia: Q3 Q3'22 Q3'21 Solid underlying performance Volumes (TWh) 6.3 6.4 1.5 1.7 Q3 2022 vs. Q3 2021 Power Heat • Comparable operating profit increased by 49%, or EUR 22 million. 9M 9M'22 9M'21 Volumes The positive effects from the EUR 19 million change in the (TWh) 21.0 21.0 Russian rouble exchang
Slide 21: City Solutions: Structural changes and lower volumes
City Solutions: Q3 Q3'22 Q3'21 Structural changes and lower volumes Volumes (TWh) 0.5 0.7 0.8 0.3 Power Heat Q3 2022 vs. Q3 2021 • Comparable operating profit increased by EUR 5 million 9M 9M'22 9M'21 Volumes – as a result of higher power prices, increases in heat prices and the (TWh) 7.0 5.4 divest
Slide 22: Consumer Solutions: Challenging market environment
Consumer Solutions: Number of Challenging market environment customers (‘000) SEP 2022 2,200 DEC 2021 2,230 Q3 2022 vs. Q3 2021 • Comparable operating profit increased by 31%, mainly due to MEUR III/ III/ I-III/ I-III/ FY 2022 2021 2022 2021 2021 LTM improved electricity and gas sales margins, the e