Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Investor Presentation (February 2025)
52 slides from Fortum Oyj's investor presentation, February 2025
Slide 1: Equity story of Fortum – Powering a thriving world
Equity story of FORTUM Powering a thriving world Investor / Analyst material February 2025
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. Any references to the fut
Slide 3: Content
Content FORTUM AND POWER MARKET 4 – 21 FINANCIAL STATEMENTS 2024 22 – 34 APPENDICES 35 – 47 NUCLEAR SPENT FUEL AND SERVICES 48 – 49 FORTUM’S EVOLUTION AND STRATEGIC ROUTE 50 HISTORICAL ACHIEVED PRICES 51 IR CONTACTS AND CALENDAR 52 3
Slide 4: Fortum is well positioned as a Nordic clean energy provider
Fortum is well positioned as a Nordic clean energy provider Earnings dominated Clean power generation Sustainability is part of our DNA by clean generation gCO2/kWh, electricity* 1200 Consumer solutions 10% 1000 Nuclear 52% Hydro 44% Specific emissions of 11 gCO2/kWh 800 600 Comp. Power EBITDA
Slide 5: Our purpose and strategic priorities
Our purpose is TO POWER A WORLD WHERE PEOPLE, BUSINESSES AND NATURE THRIVE TOGETHER. STRATEGIC PRIORITIES Drive Deliver reliable decarbonisation clean energy in industries Transform and develop VALUES Aim high With care Win together
Slide 6: Fortum in brief: sector disruption and opportunity
Fortum in brief The ongoing sector disruption has increased uncertainty in the short term but provides opportunities going forward NEAR TERM LONGER TERM OPPORTUNITY Structural Buildout of Continued high customer intermittent volatility in demand growth capacity global energy in the Nordics increasin
Slide 7: Nordic power market with clean power and competitive prices to accelerate demand
Nordic power market with clean power and competitive prices to accelerate demand The Nordic region is a source for extremely Nordic power demand driven by competitive and clean energy decarbonisation and electrification Market price for power TWh/a Lower Higher 7
Slide 8: Power demand growth - data centres and other sectors
Power demand growth - data centres and other sectors Nordic large-scale data centres Nordic power demand (TSOs estimate) 1 Facebook, Luleå, According to TSO information, power demand 1 Facebook, Odense growth from data centres is expected to be a 2 Amazon, Västerås 2 Amazon, Eskilstuna fraction of t
Slide 9: Large portfolio of available industrial sites for new businesses
Fortum has a large portfolio of available industrial sites for new businesses - shortens time by several years for market entry • Sites suitable for industrial purposes Kaskinen – Plot areas up to 1,100 acres Jyväskylä • Sites with strong connection to power Tahkoluoto – 60 MW to 1.3 GW Ahlainen Mer
Slide 10: Market prices are too low to attract new investments
Market prices are too low to attract new investments LCOE (EUR/MWh) 143 Achieved price (EUR/MWh) 104 59 Average forward 38 price for 2028-33: 45 ~45 EUR/MWh 39 38 33 Onshore wind Utility solar Offshore wind Nuclear Source: NVE, Kostnader for kraftproduksjon, accessed 26.9.2024. FX nok/eur 11.2. Onsh
Slide 11: Navigate the uncertainty with phased strategy execution
Navigate the uncertainty with phased strategy execution NEAR TERM LONGER TERM ‘Sharpen focus and optimise core’ ‘Electrify and grow’ Optimise the operation of the Focus on value creation from generation portfolio and manage flexibility, efficiency and cash flows business risk Decrease share of merch
Slide 12: Our business portfolio
Our business portfolio FORTUM CORE DEMAND-DRIVEN EXPLORE Strengthen and selectively grow RENEWABLES Future-shaping by studying, areas of core competence, while Prepare ready-to-build pipeline to validating, and developing future capitalising volatile markets. serve customer demand growth opportuniti
Slide 13: Strategic targets to capture long-term opportunities
Strategic targets to capture long-term opportunities, mitigate business and market risks STRATEGIC Strengthen Nordic Ensure value creation Stabilise Demand-driven TARGET leadership from flexibility income streams Renewables Rationale Focus on core competence Capitalising on volatile markets Lower co
Slide 14: Generation fleet remunerated from flexibility and environmental values
Our generation fleet benefits and is remunerated from flexibility and environmental values Components of the optimisation premium in Fortum’s achieved power price from outright generation: 1. Hydropower flexibility 2. Environmental values OPTIMISATION PREMIUM • Hourly/daily/weekly/seasonal • Guarant
Slide 15: Dividend proposal with maximum payout and a special dividend
Dividend proposal with maximum payout and a special dividend corrects the overcapitalised balance sheet in a situation with modest investments Disciplined capital expenditure Efficiency improvement and cash flow Total EUR 1.4 bn (excl. acquisitions) for 2025-2027 Fixed cost reduction of € 100 millio
Slide 16: Net zero by 2040: 1.5°C-aligned transition plan and key actions
Net zero by 2040: 1.5°C-aligned transition plan and key actions Scope 1-2 Total absolute fossil emissions (Mt CO2-eq)1) Scope 1&2 emissions Coal exit by 2027 Scope 3 emissions • Meri-Pori Planned Planned • Espoo Clean Heat (exit 2024) decarbonisation in own decarbonisation in • Poland operations val
Slide 17: Ambition for fossil scope 1 & 2 emissions
Fortum’s ambition for fossil scope 1 & 2 emissions is higher than what is required to meet the SBTi 1.5°C-aligned target level Total absolute fossil emissions (Mt CO2-eq)1) Scope 1 emissions Scope 2 emissions Planned decarbonisation in own operations 1.19 0.03 0.91 Meri-Pori coal exit 0.01 Espoo Cle
Slide 18: Climate and biodiversity targets are interlinked
Climate and biodiversity targets are interlinked • Reach net-zero GHG emissions across the • Reduce absolute Scope 3 GHG value chain by 2040 emissions from the use of sold • Reduce Scope 1 and 2 GHG emissions products for sold fossil fuels • by 85% per MWh by 2030 and • by 55% by 2033 and • by 90% p
Slide 19: Power generation capacity of Fortum
Power generation capacity of Fortum GENERATION CAPACITY MW FINLAND MW Hydro 4,669 Hydro 1,574 Nuclear 3,247 Nuclear 1,892 SE1 Wind 380 Wind 380 CHP 425 CHP 280 Other thermal 565 NO4 Other thermal 565 FI Generation capacity 4,692 SE2 Generation capacity, MW 9,286 NO3 Figures 31 December 2024 NO1 NO5
Slide 20: Interconnection capacity growing
Nordic, Baltic, Continental and UK markets are integrating – Interconnection capacity growing to over 13 GW during 2026 Several new interconnectors have started Current Nordic/Baltic 1 EU’s Connecting Europe Facility co-financed 3rd EE-LV operation, and more are under construction or transmission li
Slide 21: Fortum has what it takes to drive the transition
Fortum has what it takes to drive the transition Best-in-class operations A leader in ESG to Prudent capital with sustainable enable allocation earnings decarbonisation with selective growth We have a competitive We have a CO2-free We have regained our Nordic generation generation fleet financial po
Slide 22: Financial Statements 2024
FINANCIAL STATEMENTS 2024 Fortum Corporation 11 February 2025
Slide 23: Financial highlights 2024 – dividend yield ~10%
Financial highlights 2024 – dividend yield ~10% • Good generation optimisation – Achieved power price of 52.5 €/MWh (63.1 €/MWh) – Hydro and nuclear volume 1.2 TWh lower – Annual optimisation premium of 8.7 €/MWh • Efficiency improvement programme progressing • Divestments following the strategic re
Slide 24: Resilient performance despite warm, wet and windy weather
Resilient performance despite warm, 2024 wet and windy weather Comparable operating profit Key financial indicators for continuing operations declined due to lower achieved power price in the Comp. OP Comp. EPS OCF Leverage Generation segment 1.28 1,710 1.00 2-2.5x Cash flow 1,544 1,392 1,178 in Q4
Slide 25: Warm, wet and windy
Warm, wet and windy Weather - the main driver for Nordic power prices in 2024 EUR / MWh Nordic power prices EUR / tCO2 CO2 price (ICE EUA) 150 125 120 Realised 100 • In Q4, European gas prices increased due to Futures 6 Feb 2025 Futures 21 Oct 2024 multiple supply risks, especially uncertainty 90 75
Slide 26: Strategy execution continued in 2024
Strategy execution continued in 2024 DELIVER RELIABLE CLEAN DRIVE DECARBONISATION IN INDUSTRIES TRANSFORM AND DEVELOP ENERGY • Ensuring long-term productivity • Partnering with strategic customers • Restructuring organisation to fit the and security of supply and developing projects to enable curren
Slide 27: Net zero by 2040: 1.5°C-aligned transition plan and key actions
Net zero by 2040: 1.5°C-aligned transition plan and key actions Scope 1-2 Total absolute fossil emissions (Mt CO2-eq)1) Scope 1&2 emissions Coal exit 2027 Scope 3 emissions • Meri-Pori Planned Planned • Espoo Clean Heat (exit 2024) decarbonisation in own decarbonisation in • Poland operations value
Slide 28: Comparable net profit almost halved in the fourth quarter
Comparable net profit almost Lower power halved in the fourth quarter prices reflected in the result MEUR IV/2024 IV/2023 2024 2023 • Comparable operating profit Sales 1,435 1,858 5,800 6,711 at EUR 1,178 million 355 459 1,556 1,903 Comparable EBITDA • Excellent credit metrics with Comparable operat
Slide 29: Income statement 2024
Income statement 2024 MEUR, CONTINUING OPERATIONS IV/2024 IV/2023 2024 2023 • Fixed costs decreased below EUR Sales 1,435 1,858 5,800 6,711 1 billion despite inflation Other Income 10 10 48 32 Materials and services -821 -1,106 -3,295 -3,808 • Share of profits of associates and joint ventures was im
Slide 30: Q4 2024 results impacted by lower power prices
Q4 2024 Results impacted by lower Generation power prices Lower result mainly due to lower hydro and nuclear volumes and lower spot and hedge power prices, partly offset by positive effect from lower nuclear waste costs in co-owned nuclear production in Finland. The result contribution of Pjelax win
Slide 31: 2024 results negatively affected by lower Generation results
2024 Results negatively affected Generation by lower results in the Lower result mainly by the lower spot and hedge prices, but also lower generation volumes for both nuclear and hydro, and higher costs for Olkiluoto’s third unit. The Generation segment renewables business was positively impacted by
Slide 32: Low leverage and strong liquidity
Low leverage and strong liquidity Solid credit metrics Financial net debt 'BBB+' long-term issuer 655 credit rating, Stable outlook 167 133 'BBB' long-term issuer 18 367 credit rating, Stable outlook 758 511 Fortum’s objective: Maintain solid investment grade rating of at least BBB to maintain finan
Slide 33: Strong balance sheet and liquidity – leverage increasing with dividend
Strong balance sheet and liquidity – leverage increasing with dividend payment MEUR 2022 2023 2024 OBJECTIVE TO Gross debt 7,581 5,909 4,828 • Maintain investment grade rating of at least BBB Net margining 2,782 784 325 • Activate balance sheet and optimise liquidity Liquid funds 3,672 4,183 4,136 p
Slide 34: Outlook
Outlook Generation’s Nordic outright (47 TWh/a): Capital expenditure guidance: Hedges: 2025–2027: Capital expenditure excluding potential acquisitions of € 1.4 bn For 2025: 75% hedged at 42 €/MWh • maintenance of € 250 million per year (previously reported: 65% at 42 €/MWh) • growth of € 150–300 mil
Slide 35: Appendices
APPENDICE @fortum Powering a thriving world
Slide 36: Nordic hydro reservoirs and wholesale power price
Nordic hydro reservoirs and wholesale power price Hydro reservoirs Power price Reservoir content (TWh) EUR/MWh 120 500 Realised daily system price 100 Futures 6 Feb 2025 400 80 300 60 200 40 Norway 100 20 Sweden 2003 2020 2023 2024 2025 Average 0 Finland 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 37: Generation: Achieved power price declined
GENERATION: Achieved power price declined Power generation volumes, TWh IV/2024 IV/2023 Q4 2024 vs. Q4 2023 6.0 6.2 6.9 Comparable operating profit down by 32% to EUR 265 million, 4.6 mainly due to lower hydro and nuclear volumes and lower spot and 0,3 0,1 hedge power prices. Achieved power price de
Slide 38: Consumer Solutions: Improved and more normalised results
CONSUMER SOLUTIONS: Improved and more normalised results Q4 2024 vs. Q4 2023 Number of customers (‘000) 2 300 2 380 Comparable operating profit increased by EUR 4 million to EUR 16 million, mainly due to reduced scope of the regulated price cap for electricity end users in Poland. This was partly of
Slide 39: Other Operations: Results improved
OTHER OPERATIONS: Results improved Q4 2024 vs. Q4 2023 Comparable operating profit improved by EUR 19 million to EUR -24 million, MEUR IV/2024 IV/2023 2024 2023 mainly due to higher internal charges for services of enabling Sales 141 147 596 548 functions. The result of the Circular Solutions busine
Slide 40: Nordic power generation and heat production by source
Fortum’s Nordic power generation and heat production by source Fortum’s Nordic power generation in 2024 Fortum’s Nordic heat production in 2024 Coal 11% Nuclear power 53% Waste 26% Nordic Nordic Bio 19% power generation heat production Wind 2% 45.8 TWh 3.0 TWh Other 1% Coal 0% Natural gas 11% Oil 1%
Slide 41: Power generation and heat production by source
Fortum's power generation and heat production by source Fortum’s power generation in 2024 Fortum’s heat production in 2024 Nuclear power 52% Waste 26% Coal 23% Total Total Coal 1% power generation heat production Waste 1% Wind 2% 46.3 TWh 4.1 TWh Natural gas 8% Bio 18% Oil 1% Hydropower 44% Heat pum
Slide 42: Largest CO2 free generators in Europe
Largest CO2 free generators in Europe Power generation Other, incl. bio Wind, solar, geoth. Nuclear Hydro Source: Company information, Fortum analyses, 2022 figures pro forma. *2021 figures for Ukrainian companies. 42 Fortum continuing operations. EPH incl. LEAG. Å Energi is formed from Agder and Gl
Slide 43: Leading player in a highly fragmented Nordic power market
Fortum a leading player in a highly fragmented Nordic power market Power generation Electricity retail Vattenfall Fortum Vattenfall Others Others 49% 42% 16.5 million Andel 429 TWh Statkraft customers >350 companies ~350 companies Elmera Fortum E.ON Hafslund Helen Ørsted Uniper Norlys Eviny PVO Lumm
Slide 44: Volatility and uncertainty increases the value of flexible assets
Volatility and uncertainty in the European power market increases the value of flexible assets Intermittent renewables Coal and other fossil closures Role of gas Volatility and Supply-demand balance uncertainty Increased interconnection between Nordics and Continent Commodity and CO2 prices Weather
Slide 45: Wholesale power price
Wholesale power price EUR/MWh Nord Pool Weekly System Price Futures 350 300 250 200 150 100 50 6 Feb 2025 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 Source: Nord Pool, Nasdaq Commodities 45
Slide 46: Nordic year futures
Nordic year futures Year11 Year12 Year13 Year14 Year15 Year16 Year17 Year18 Year19 Year20 Year21 Year22 Year23 Year24 Year25 Year26 Year27 EUR/MWh 6 Feb 2025 300 Year26 Year27 250 200 Dec Jan Feb 150 100 50 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 S
Slide 47: German and Nordic spot and future prices
German and Nordic spot and future prices Nordic and German daily spot prices in 2023 – 2025 Nordic and German year 2026 futures in 2023 – 2025 Dec Jan Feb 2025 2025 2025 EUR/MWh EUR/MWh 500 200 400 150 300 100 200 50 100 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2023 2024 2025 2023 2
Slide 48: Fortum nuclear services - entire nuclear plant lifecycle
Fortum nuclear services - covering the entire nuclear power plant lifecycle Nuclear operator Proactive and strong Strong in-house Projects delivered to a global experience based on co-operation in international nuclear engineering customer base proven solutions nuclear forums Newbuild, licensing and
Slide 49: Posiva's final disposal of spent nuclear fuel in Onkalo
Posiva’s final disposal of spent nuclear fuel in Onkalo® www.posiva.fi 49
Slide 50: Fortum's evolution and strategic route
Fortum’s evolution and strategic route Skandinaviska Birka Energi Länsivoima Elnova Østfold Elverk 50% Fortum →100% 50% → 100% 50% Stockholm Gullspång merged Shares in Divestment of Divestment of with Hafslund Fingrid shares small scale hydro Gullspång Stora Kraft Birka Energi TGC-1 E.ON Divestment
Slide 51: Hedging improves stability and predictability
Hedging improves stability and predictability – principles based on risk mitigation, (Outright generation) 51 From 2009 onwards thermal and import from Russia excluded. Earlier than 2023 outright volume split (40/40/20), and from 2023 onwards (46/37/17).
Slide 52: Fortum Investor Relations and Financial Communications
FORTUM INVESTOR NEXT EVENTS Financial Calendar Fortum's AGM 2025 is planned to be held on 1 April 2025 (ex div 2 April) RELATIONS AND Dividend payment date 10 April 2025 (according to proposal) January-March Interim Report 2025 on 29 April 2025 FINANCIAL January-June Half-year Financial Report 2025