Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Fortum Oyj Corp Ord — Q3 2020 Earnings Presentation
21 slides from Fortum Oyj's earnings presentation, Nov 17, 2020
Slide 1: Interim Report January-September 2020
Interim Report January-September 2020 Fortum Corporation 17 November 2020
Slide 2: Seasonally weak Uniper quarter burdened Fortum's results – Generation segment stable on good hedges
Seasonally weak Uniper quarter burdened Fortum’s results – Generation segment stable on good hedges • Stable power and heat consumption in the Nordics – Nordic spot price down 74% – Generation segment achieved power price up 4% – Wet hydrology continued in Q3 • Comparable EBITDA at EUR 132 (295) mil
Slide 3: Power demand has recovered close to 2019 level in most areas
3 GW GW 60 65 40 45 50 55 30 35 40 45 50 55 60 65 01/01 01/01 01/16 01/31 01/20 02/15 02/08 03/01 02/27 03/16 03/17 03/31 04/15 04/05 04/30 04/24 05/15 05/13 05/30 06/01 06/14 06/29 06/20 07/14 07/09 Nordics 07/29 07/28 Germany 08/13 08/16 08/28 -2% -1% 09/12 09/04 09/27 09/23 10/12 10/12 10/27 10/3
Slide 4: Nordic hydro reservoirs at exceptionally high levels in Q3
Nordic hydro reservoirs at exceptionally high levels in Q3 Reservoir content (TWh) 120 • Rainy and mild winter led to a 100 rapid fill-up of the Nordic water reservoirs in Q1. 80 • Spring was cold, inflow period was very late, and melting 60 significantly delayed • Nordic water reservoirs at the 40
Slide 5: Coal and gas sustained recovery trajectories in Q3
Coal and gas sustained recovery trajectories in Q3 USD / t Coal price p (ICE API2 2021) 100 • Weakness in coal prices is persistent this year. Coal demand 80 is negatively affected by lower general energy demand 60 associated with Covid-19 as well as competition from cheaper gas and renewables. 40 •
Slide 6: CO2 price gained in Q3 despite high volatility
CO2 price gained in Q3 despite high volatility EUR / tCO2 CO2 price (EUA DEC 2020) 35 • CO2 price recovered and averaged 27.4 EUR/t in Q3 hitting a 28 historical high of 30.5 EUR/t on positive sentiment around the 21 new 55% 2030 emissions reduction target proposed by the EU Commission. 14 • Support
Slide 7: High water reservoirs kept the Nordic system price low during Q3
High water reservoirs kept the Nordic system price low during Q3 EUR/MWh Nordic spot and forward prices 70 Realised system price • During Q3, the average Nord Pool system spot Futures 14 August 2020 60 price was exceptionally low at 8.9 EUR/MWh Futures 12 November 2020 (34.7) 50 • Sharp decline duri
Slide 8: Nordic system and area prices highly decoupled in Q3 2020
Nordic system and area prices highly decoupled in Q3 2020 EUR/MWh Nordic system and area prices (FI, SE2, SE3) in Q3 2020 High hydrology kept the system price depressed, in 50 FI FI and SE3 low nuclear production and transmission 45 SE3 capacity limitations with Southern Norway as well 40 SE2 as hig
Slide 9: Hedging supported Fortum's achieved power price in the Nordics, Russian achieved price in roubles increased
Hedging supported Fortum’s achieved power price in the Nordics, Russian achieved price in roubles increased Spot price for power in Nord Pool power exchange Spot price for power (market price), Urals hub EUR/MWh RUB/MWh 42 38,6 1 500 34,7 35 1 250 1 107 1 109 1 081 1 068 1 021 28 1 000 21 750 15,4 +
Slide 10: Generation
Generation Q3 2020 Q1-Q3 2020 • Lower power generation • Higher power generation – Nuclear -0.7 TWh, – Hydro +1.5 TWh – Hydro +0.2 TWh – Nuclear -1.0 TWh – Wind -0.1 TWh – Wind unchanged • Higher achieved power price, +4% • Lower achieved power price, -5% (+1.4 EUR/MWh), good (-1.7 EUR/MWh) supporte
Slide 11: Russia
Russia Q3 2020 Q1-Q3 2020 • FX effect of EUR -11 million • Lower power generation and heat • Lower power generation and heat production production • Lower power margins and higher heat tariffs • Lower CSA payments • Lower CSA payments • Lower bad debt provisions • FX effect of EUR -16 million • 300
Slide 12: City Solutions
City Solutions Q3 2020 Q1-Q3 2020 • Improved result in district heating • Q1 impacted negatively business in Finland and Norway – Lower heat sales volumes – Lower results in the Baltic countries – Lower power sales prices • In district heating in Norway, change – Lower Norwegian heat sales prices in
Slide 13: Consumer Solutions
Consumer Solutions Q3 2020 Q1-Q3 2020 Uusi kuva tulossa CoS:ilta • 12th consecutive quarter of comparable • Higher sales margins as a result of EBITDA improvement active development of the service • Competition continued to be intense in offering following the Hafslund the Nordics integration and su
Slide 14: Uniper
Uniper Q3 2020 Q1-Q3 2020 • Uniper’s Q1 2020 were exceptionally • In Q1, Fortum’s share of Uniper’s profits strong, shift between quarters; at the as Uniper recorded as an associated expense of the Q3 2020 company in Other Operations • Russia contributed positively • Uniper contribution to Fortum’s
Slide 15: Q3 2020 – Seasonality in Uniper segment burdened Fortum's results, Uniper's full year guidance unchanged
Q3 2020 – Seasonality in Uniper segment burdened Fortum’s results, Uniper’s full year guidance unchanged Comparable operating profit EUR million • 0.4 TWh lower • Lower CSAs volumes • Lower bad debt • 1.4 EUR/MWh provisions higher • FX- effect achieved price EUR -11 million • Uniper consolidated as
Slide 16: Highlights in income statement
Highlights in income statement MEUR III/2020 III/2019 I-III/2020 I-III/2019 2019 LTM Uniper: • In 2019 as an associated company Comparable operating profit -176 153 424 793 1,191 822 • From Q2 2020 onwards as a Items affecting comparability 236 -29 763 -127 -81 809 subsidiary Operating profit 60 124
Slide 17: Cash flow and change in financial net debt Q1-Q3 2020
Cash flow and change in financial net debt Q1-Q3 2020 CF from operating activities 17 before net margin liab
Slide 18: Focus remains on optimising of cash flow and maintaining of financial flexibility
Focus remains on optimising of cash flow and maintaining of financial flexibility • Fortum’s objective is to have a solid investment grade rating of at least BBB to maintain its financial strength, preserve financial flexibility and good access to capital. • Focus is on profitability, optimizing of
Slide 19: Outlook
Outlook Hedging 2020 Estimated annual capital Income taxation Generation Nordic hedges: expenditure, including maintenance For the remainder of 2020: 85% hedged at In 2020, the comparable effective and excluding acquisitions, of EUR 34 per MWh corporate income tax rate for For 2021: 75% hedged at EU
Slide 20: LE “ay @fortum
LE “ay @fortum
Slide 21: Fortum Investor Relations and Financial Communications
For more information, please visit www.fortum.com/investors Fortum Investor Relations and Financial Communications Ingela Ulfves Rauno Tiihonen Måns Holmberg Pirjo Lifländer Vice President, Manager Manager IR Specialist Investor Relations and Financial Communication +358 (0)40 515 1531 +358 (0)10 45