Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Fortum Oyj Corp Ord — H1 2022 Earnings Presentation
23 slides from Fortum Oyj's earnings presentation, Aug 25, 2022
Slide 1: Half-year Financial Report January-June 2022
Half-year Financial Report January-June 2022 Fortum Corporation 25 August 2022
Slide 2: Markus Rauramo, President and CEO
Markus Rauramo President and CEO 2
Slide 3: The operating environment substantially impacts Fortum Group
The operating environment substantially impacts EUR / MWh 300 Realised Gas price (TTF) Fortum Group 250 200 Futures 22 Aug 2022 Futures 9 May 2022 150 100 50 • Russia is waging a full-scale energy war against Europe, trying to sow 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 internal division a
Slide 4: Uniper's liquidity crisis also turned into a supply crisis
Uniper’s liquidity crisis also turned into a supply crisis Fortum’s current situation is the result of events that began last summer Commodity Uniper’s Uniper in liquidity Russia starts Russia starts to Agreement on prices start to collateral needs crisis – Fortum war on Ukraine reduce gas flows sta
Slide 5: Comprehensive stabilisation package agreed to provide financial relief to Uniper
Comprehensive stabilisation package agreed to provide financial relief to Uniper Support measures from Fortum Rationale for Fortum • EUR 4 billion shareholder loan • EUR 4 billion parent guarantees for margin requirements Immediate stabilisation of Uniper Support measures from German government No r
Slide 6: Substantial curtailments of Russian gas imports have caused dire financial difficulties
Substantial curtailments of Russian gas imports have caused dire financial difficulties H1 Comparable operating profit • Excluding Uniper, Fortum’s result is driven by strong increase in achieved power -570 prices in the Generation segment following the substantial uplift in Nordic power 706 spot pr
Slide 7: Exchange traded futures markets not fit for today
Exchange traded futures markets not fit for today - significant consequences The situation on Nasdaq Commodities is • Fortum follows a prudent hedging approach to reduce price risks and securing challenging for all market participants: predictable future cashflows and earnings • Possibility to hedge
Slide 8: Priorities ahead for the Group
Priorities ahead for the Group Stop the leakage Get traction Recalibrate Secure further financial Finalisation of controlled exit Strategy review in light flexibility to weather the from Russian market of the changed commodity price storm operating environment Safe and efficient Nordic operations to
Slide 9: Bernhard Günther, CFO
Bernhard Giinther CFO @fortum For a cleaner world
Slide 10: Key financials
Key financials H1 comparable OP affected by MEUR EUR 403m of Russian gas curtailment II/2022 II/2021 I-II/2022 I-II/2021 2021 LTM losses in Uniper Sales 38,237 17,128 81,860 38,621 112,400 155,639 • In coming quarters, gas curtailment Comparable EBITDA 920 348 816 1,827 3,817 2,807 losses will burde
Slide 11: H1 consolidated figures dominated by Uniper's gas business
H1 consolidated figures dominated by Uniper’s gas business Reconciliation of comparable operating profit (EUR million) Generation Higher achieved power price with strong Fortum excl. Uniper physical optimisation but lower volumes 112 -19 1 11 Russia -70 One-off effect in 2021 and declining CSAs (Nya
Slide 12: Reported income statement dominated by changes in fair values
Reported income statement dominated by changes in fair values with gas curtailment losses of EUR 6.5bn EUR million I-II 2022 Comparable operating profit 136 Russia related impairment charges Impairment charges and reversals -976 Divestment of Fortum Items affecting comparability Capital gains and ot
Slide 13: Balance sheet driven by increased commodity prices
Balance sheet driven by increased commodity prices MEUR 30-Jun-22 31-Dec-21 MEUR 30-Jun-22 31-Dec-21 Equity down by EUR 12 bn due to Property, plant and Uniper reported losses and paid equipment and right-of-use 18,336 19,049 Total equity 1,311 13,665 Fortum dividend assets Derivative financial Deri
Slide 14: Operating cash flow turned negative in H1
Operating cash flow turned negative in H1 MEUR II/2022 II/2021 I-II/2022 I-II/2021 2021 LTM Comparable EBITDA 920 348 816 1,827 3,817 2,807 Non-cash and other items -1,600 -97 -1,214 181 1,506 112 Non-cash and other items impacted by Paid net financial costs, income taxes and dividends CO2 emission
Slide 15: Leverage below target, gross debt down
Leverage below target, gross debt down (status on 30 of June 2022) th Solid credit metrics debt 24 36 'BBB' long-term issuer credit rating, debt Negative outlook netnet 'BBB' long-term issuer credit rating, Financial Negative outlook Financial Target ratio: CF from Dividends Financial net debt / Com
Slide 16: Outlook
Outlook Hedging Generation Nordic hedges: On 17 August 2022, Uniper announced that the company expects to record negative For rest of 2022: 80% hedged at EUR 38 per MWh earnings for 2022 and in its IFRS net result (EUR -12.3 billion) the company recorded For 2023: 60% hedged at EUR 37 per MWh losses
Slide 17: For a cleaner world
world cleaner Fora
Slide 18: Generation: Higher achieved power prices
Generation: Q2 Higher achieved power prices Volumes (TWh) 5.5 5.6 Q2'22 5.4 Q2'21 4.7 Q2 2022 vs. Q2 2021 Hydro Nuclear • Comparable operating profit increased by 51% mainly due to H1 H1'22 H1'21 Volumes – Higher achieved power prices of EUR 52.3 (+EUR 14.2 per MWh) (TWh) 12.2 11.8 11.8 10.1 – Lower
Slide 19: Water reservoirs
Nord Pool system price driven to new price record Reservoir content (TWh) 120 • Compared to long-term average, Nordic water reservoirs were Water reservoirs 100 filling up from -6 TWh to -2 TWh during Q2. 80 • Spring inflow realised above normal while hydro generation 60 was at normal level in the s
Slide 20: Russia: Solid underlying performance
Russia: Q2 Q2'22 Q2'21 Solid underlying performance Volumes (TWh) 6.5 6.1 2.1 2.4 Q2 2022 vs. Q2 2021 Power Heat • Comparable operating profit increased by 54%, or by EUR 20 million. H1 H1'22 H1'21 Volumes The positive effects from the EUR 12 million change in the Russian (TWh) 14.7 14.6 rouble exch
Slide 21: City Solutions: Structural changes and lower volumes
City Solutions: Q2 Q2'22 Q2'21 Structural changes and lower volumes Volumes (TWh) 1.3 1.8 0.3 0.8 Q2 2022 vs. Q2 2021 Power Heat • Comparable operating profit decreased by EUR 32 million, due to H1 H1'22 H1'21 Volumes – clearly higher fossil fuel and CO2 emission allowance prices as well as a (TWh)
Slide 22: Consumer Solutions: Challenging market environment
Consumer Solutions: Number of Challenging market environment customers (‘000) JUN 2022 2,190 DEC 2021 2,230 Q2 2022 vs. Q2 2021 • Comparable operating profit increased by 11%, mainly due to MEUR II/ II/ I-II/ I-II/ FY 2022 2021 2022 2021 2021 LTM improved electricity and gas sales margins. • In the
Slide 23: Uniper: Suffering from gas curtailment losses
Uniper: Q2 Q2'22 Q2'21 Suffering from gas curtailment losses Volumes (TWh) 7.5 8.4 11.5 9.5 3.3 3.2 2.6 2.9 Q2 2022 vs. Q2 2021 Hydro Nuclear Thermal CE Thermal RUS • Comparable operating profit increased to EUR 263 (-177) million. The H1 H1'22 H1'21 25.6 21.9 Volumes 19.0 19.1* result improvement w