Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Fortum Oyj Corp Ord — Q3 2023 Earnings Presentation
22 slides from Fortum Oyj's earnings presentation, Nov 2, 2023
Slide 1: Interim Report January-September 2023
Interim Report January-September 2023 Fortum Corporation 2 November 2023
Slide 2: Markus Rauramo, President and CEO
Markus Rauramo President and CEO
Slide 3: Resilient performance amid lower Nordic power prices
Resilient performance amid lower Nordic power prices – good hedging resulted in solid achieved power price • Challenging market environment • Fortum’s results at good level • Strong financial position • SBTi commitment • Implementation of our two-phased strategy responds well to current market situa
Slide 4: Two-phased strategy execution responds to current uncertainty
Two-phased strategy execution responds to current uncertainty Short-term Mid-term ‘Manage the uncertainty’ ‘Electrify and grow’ Optimise the operation of the generation Grow in clean energy and partner with portfolio and manage the business risk industrial customers Refinance debt portfolio and
Slide 5: Efficiency improvements and revised capital expenditure
Efficiency improvements and revised capital expenditure to enhance earnings, cash flow and competitiveness Reduced growth capex 2023-2025 €200 m uncommitted €800 m committed Decarbonisation of district heating Fixed cost reduction Reduced capital Up to € 100 m expenditure Circular € 1 bn*) S
Slide 6: Determined strategy execution
Determined strategy execution Deliver reliable clean energy Drive decarbonisation in industries Transform and develop Ensuring long term productivity Partnering with strategic customers and Restructuring organisation to fit the and security of supply developing projects to enable growth current stru
Slide 7: Declined power prices in Q3 2023
Declined power prices in Q3 2023 Wet weather pushed down Nordic power futures . • Security of supply in the European gas market became a concern again in late Q2 and intensified during Q3. • European gas storages filled > 90% ahead of winter. • Nordic spot prices declined notably during Q3. Signific
Slide 8: Solid financial performance year-to-date
Solid financial performance year-to-date I-III / 2023 Key financial indicators for continuing operations Operating profit Comp. OP Comp. EPS OCF Leverage Improvement was driven by the higher achieved power price in 0.79 0.93 1,561 2-2.5 the Generation segment 1,186 1,266 942 Cash flow 0.2 Increased
Slide 9: Tiina Tuomela, CFO
Tiina Tuomela CFO @fortum Powe thy
Slide 10: Group earnings declined due to lower Nordic power prices in Q3
Group earnings declined due to lower Nordic power prices in Q3 Higher hedge price – Key financials reflected on the cumulative result MEUR III/2023 III/2022 I-III/2023 I-III/2022 2022 LTM • Strong comparable operating Sales 1,220 1,890 4,853 5,637 7,774 7,260 profit at EUR 1,186 m Comparable EBITDA
Slide 11: Result impacted by lower spot prices
Result impacted by lower spot prices Q3/2023 Comparable operating profit (EUR million) Generation Lower achieved power price partly offset by higher hydro volumes Consumer Solutions Lower electricity sales margins, the impact of which was somewhat offset by higher gas sales margins Other Operations
Slide 12: Earnings improvement driven by Generation
Earnings improvement driven by Generation Q1-Q3/2023 Comparable operating profit (EUR million) Generation Higher achieved power price, higher hydro volumes and lower depreciations due to the lifetime extension of the Loviisa nuclear power plant in the power generation business Consumer Solutions Low
Slide 13: Generation fleet benefits 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 14: Balance sheet – further strengthened financial position
Balance sheet – further strengthened financial position MEUR 30-Sep-23 31-Dec-22 MEUR 30-Sep-23 31-Dec-22 Property, plant and 6,366 7,266 Total equity 8,501 7,737 Equity affected by positive change equipment and right-of- in hedging reserve. Total 2022 use assets dividend of EUR 0.8 bn recorded in D
Slide 15: Balanced maturity profile and strong liquidity position
Balanced maturity profile and Solid credit metrics strong liquidity position Financial net debt 'BBB' long-term issuer credit rating, 745 Stable outlook 429 474 'BBB' long-term issuer credit rating, 39 53 Stable outlook 172 Fortum’s objective: Maintain solid investment grade rating of at least BBB t
Slide 16: Outlook
Outlook Generation’s Nordic outright hedges: UPDATED Capital expenditure guidance: • For the remainder of 2023: 75% at EUR 50 /MWh Capital expenditure, including maintenance capex, (excluding potential acquisitions) is expected to be • For 2024: 65% hedged at EUR 47 /MWh (Previously reported 50% at
Slide 17: Powering a thriving world
@fortum Powering a thriving world
Slide 18: Appendix
Appendix @fortum Powering a thriving world
Slide 19: Nord Pool SYS price plummeted on high precipitation
Nord Pool SYS price plummeted on high precipitation amounts resulting in high hydro reservoir levels during September Hydro reservoirs Reservoir content (TWh) 120 • Compared to the long-term average, Nordic hydro reservoir levels increased 100 from -2 TWh to +5 TWh during Q3. Inflow was clearly abov
Slide 20: Generation: result down due to lower power prices
Generation: result down due to III/2023 Volumes, TWh III/2023 III/2022 lower power prices 5.4 Hydro 4.2 5.6 Nuclear 5.5 Q3 2023 vs. Q3 2022 I-III/2023 Volumes. TWh I-III/2023 I-III/2022 15.0 14.3 17.9 17.3 • Comparable operating profit down by 27% Hydro Nuclear • Mainly due to lower achieved power p
Slide 21: Consumer Solutions: result down due to lower electricity sales margins
Consumer Solutions: result Number of customers (‘000) down due to lower electricity 2 420 2 240 sales margins Q3 / 2023 vs. Q3 / 2022 • Comparable operating profit down to EUR 10 million mainly due SEP 23 DEC 22 to lower electricity sales margins, the impact of which was somewhat offset by higher ga
Slide 22: Other operations: result decreased significantly
Other operations: result decreased significantly Q3 / 2023 vs. Q3 / 2022 • Comparable operating profit decreased by EUR 26 million to EUR -46 million • Mainly due to lower results in Circular Solutions, especially the Recycling & Waste business, write-downs of certain IT projects, development costs