Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Debt Investor Presentation (October 2002)
19 slides from Fortum Oyj's debt investor presentation, Oct 24, 2002
Slide 1: Presentation to Fixed Income Investors
Presentation to Fixed Income Investors 24 October 2002
Slide 2: Agenda
Agenda 1 - Group Overview and Strategy 2 - Financial Overview • Mr. Juha Laaksonen, Chief Financial Officer • Mr. Seppo Viitanen, Group Treasurer • Mr. Jan Seveborg, Head of Treasury Management 1
Slide 3: Fortum Corporate Structure
Fortum Corporate Structure • Fortum has undergone a substantial restructuring CEO Corporate program which has streamlined Functions the organization from 30 Corporate Functions Supporting Performance Units in 2000 to 12 the CEO Business Units today • The restructuring has resulted in a more efficien
Slide 4: Fortum Business Overview
Fortum Business Overview • One of the leading Nordic energy companies Fortum Oyj – Market capitalisation of €5.1 Bn – 2nd largest Nordic power generator / supplier Fortum Power & Heat Group Fortum Oil & Gas Group – The leading district heating provider in • 12.6 GW electricity generation • Refining
Slide 5: Fortum Strategy
Fortum Strategy Fortum focuses on the Nordic energy market creating a platform for long-term profitable growth Create the leading power Become the most Strengthen position as a and heat company attractive energy supplier leading clean fuels refining company Excel in Business Performance 4
Slide 6: Integration Strategy of Birka on Track
Integration Strategy of Birka on Track • Synergies increased to Integration Strategy of Birka on Track more than €100 MM from an initial estimate of €60 MM Integrated generation Joint purchasing dispatch Sharing of best One pan-nordic practices in O&M, organisation administrative functions Annual sy
Slide 7: Key Achievements and Events
Key Achievements and Events • Powerful strategic steps • Integration of Birka Energi progressed well, synergy benefits will exceed the target • Weak market conditions for most of the period • Improved results, strong cash flow from operations 6
Slide 8: Powerful Strategic Steps
Powerful Strategic Steps • Birka Energi transaction completed, good progress in transformation process • Strengthened market position in Finland – Purchase of a Finnish electricity distributor and sales company • Major divestments – Interests in oil fields in Oman – Stake in Espoon Sähkö – Power and
Slide 9: Weak Market Conditions
Weak Market Conditions Improvement towards the end of the period • Warmer than normal weather and bigger than normal hydro reservoirs during the first half of the year • The price of electricity on the Nordic electricity exchange was about 19% lower than the corresponding figure in 2001, averaging E
Slide 10: Improved Results
Improved Results • Operating profit up by 21%: EUR 898 (743) million • Earnings per share up by 16%: EUR 0.57 (0.49) • Strong net cash from operating activities: EUR 977 (889) million • Net debt decreased during Q2 and Q3 by EUR 929 million and EUR 150 million respectively. At the end of September t
Slide 11: Income Statement
Income Statement MEUR I-III/02 I-III/01 2001 Net Sales 7,858 7,874 10,410 Expenses (6,960) (7,131) (9,496) Operating profit 898 743 914 Financial expenses, net (208) (160) (212) Profit before extraordinary items 690 583 702 Extraordinary items - - - Profit before taxes 690 583 702 Income taxes total
Slide 12: Operating Profit
Operating Profit MEUR MEUR I-III/02 I-III/01 2001 Power, Heat and Gas 319 253 367 1,000 Electricity Distribution 219 105 135 800 Energy Solutions 18 8 13 600 Refining & Marketing 221 227 242 400 Oil & Gas Upstream 157 163 196 Other Operations (37) (16) (40) 200 Eliminations 1 3 1 0 1998 1999 2000 20
Slide 13: Short-term Outlook
Short-term Outlook • Positive trend in the most important market drivers • Transformation process will continue, the target for annual synergy benefits of EUR 100 million will be exceeded • Decision on the strategic review regarding Norwegian E&P business will be announced shortly • Good near future
Slide 14: Financial Strategy & Policy - Overview
Financial Strategy & Policy - Overview • Fortum will continue to Policies manage the group’s financial profile in a • Gearing (debt/equity) target of 60-70% conservative way • ROCE and ROE targets of 12% • Committed to a financial profile consistent with a strong ‘BBB’ credit rating Near-term Financ
Slide 15: Fortum's Credit Ratings
Fortum’s Credit Ratings Company S&P Moody’s Fortum Oyj BBB+ (Stable)/A-2 Baa2 (Positive)/P-2 Fortum Power & Heat AB (Birka BBB+ (Stable)/A-2 Baa1 (Stable)/P-2 Energi AB) 14
Slide 16: Current Location of External Debt
Current Location of External Debt As of September 30, 2002 Current Location of External Debt Loans €992 MM Fortum Oyj 100% 100% Fortum Oil and Fortum Power Bonds €170 MM Gas Oy Group and Heat Oy Group(1) Loans €1,094 MM Bonds €74 MM 100% Loans €274 MM Fortum Power & Bonds €2,016 MM Heat AB Group Loa
Slide 17: Maturity Profile of Current Financing Sources
Maturity Profile of Current Financing Sources As of September 30, 2002 Current Debt Maturity Profile € MM 1,200 1,000 800 600 400 200 0 2002 2003 2004 2005 2006 2007 2008 2009 2010- Bonds Syndicated Bank Debt Other(1) Short Term (2) Note 1. Includes bilateral loans, nuclear reborrowings and borrowin
Slide 18: Near-Term Liquidity
Near-Term Liquidity • Fortum has ample • Strong and stable cash flow generation access to liquidity • As September 30, 2002 Fortum had €2,487 MM of committed bank facilities, under which there was €1,551 MM of availability – In addition, as of September 30, 2002 Fortum had a €1,046 MM CP program wit
Slide 19: Appendix - Fortum Summary Financials
Appendix - Fortum Summary Financials Summary Financials(1) € MM 1998 1999 2000 2001(2) 1-9/2002 Revenues 8,494 8,232 10,614 10,410 7,858 EBITDA 1,091 1,228 1,477 1,537 1,386 % Margin 12.8 14.9 13.9 14.8 17.6 FFO 698 546 919 1,057 1,152 Capex & Acquisitions(3) 1,702 1,059 3,131 713 4,121 Dividends 99