Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Q3 2009 Earnings Presentation
28 slides from Fortum Oyj's earnings presentation, Oct 22, 2009
Slide 1: Interim Report January - September 2009
Interim Report January - September 2009 22 October 2009
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. 2
Slide 3: Consistent performance in a challenging environment
Consistent performance in a challenging environment • Challenging environment – Nordic power consumption 7% below last year in January-September – Key currencies significantly weaker than last year • Comparable operating profit still very close to last year’s level – Stable achieved Nordic sales pri
Slide 4: Results
Results • Comparable operating profit EUR 1,318 (1,337) million, -1% – SEK translation effect EUR -91 million • Earnings per share EUR 1.02 (1.10) – Lower contribution from associates • Strong cash flow: net cash from operating activities increased to EUR 1,868 (1,440) million Comparison: I-III/2008
Slide 5: Improvement in Markets and Russia
Improvement in Markets and Russia Comparable operating profit EUR million 1337 -75 39 -7 1318 -17 44 -3 Power Generation - lower generation volumes, weaker SEK Heat – weaker SEK and PLN, higher fuel costs Markets – Strong improvement from turnaround programme Operational improvement in Russia Power
Slide 6: Key events and highlights
Key events and highlights • Progress in Russia according to plan • Markets’ turnaround programme led to a strong improvement in results • Fortum is investigating alternatives for the sale of the Fingrid shares • 92% (92%) of the generated power CO2-free in the EU • Good hedging positions – no major
Slide 7: Loviisa 3 meets all the requirements of the Nuclear Act
Loviisa 3 meets all the requirements of the Nuclear Act and is in line with the overall good of society • Loviisa 3 ensures that high-level nuclear power know-how and decision-making will remain in Finland – The Finnish State owns more than 50% of Fortum - Finns own 65% of the company’s share capita
Slide 8: Electricity demand development
Electricity demand development Chelyabinsk Urals area Denmark Russia Tyumen Sweden Norway Finland Russia Nordic 5% 5% 0% 0% -1% -5 % -5 % -10 % -10 % -8% -8% -10% -12% -15 % -15 % -20 % -20 % Q1 2009 vs Q1 2008 Q1 2009 vs Q1 2008 -25 % Q2 2009 vs Q2 2008 -25 % Q2 2009 vs Q2 2008 Q3 2009 vs Q3 2008 Q
Slide 9: Nordic water reservoirs
Nordic water reservoirs 120 100 reservoir content (TWh) 80 60 40 20 2003 2007 2008 2009 reference level 0 Q1 Q2 Q3 Q4 Source: Nord Pool 9
Slide 10: Commodity prices
Commodity prices Crude oil price (ICE Brent) CO2 price (NP EUA) 160 35 140 Q1-Q3 average: 30 Q1-Q3 average: 120 58 (112) 13 (25) 25 EUR / tCO2 USD / bbl 100 80 20 60 15 40 10 20 5 0 2006 2007 2008 2009 0 2006 2007 2008 2009 Coal price (ICE Rotterdam) Gas price (ICE NBP) 240 100 Q1-Q3 average: Q1-Q3
Slide 11: Price development in the Nordic region and Russia
Price development in the Nordic region and Russia • Nord Pool wholesale price in: – Q3: decreased 44% to 31.3 (55.4) EUR/MWh – Q1-Q3: decreased 19% to 34.5 (42.7) EUR/MWh • Power Generation's achieved Nordic power price in: – Q3: decreased 12% to 50.2 (57.0) EUR/MWh – Q1-Q3: decreased to 49.2 (49.3)
Slide 12: Financials
FINANCIALS 12
Slide 13: Power Generation
Power Generation • Succesfull hedging • Lower nuclear volume • Weaker SEK MEUR I-III/2009 I-III/2008 LTM Sales 1 917 2 156 2 653 Comparable operating profit 1 075 1 150 1 453 Net Assets 5 527 5 396 Comparable RONA, % 27.2 Gross Investments 120 85 169 13
Slide 14: Heat
Heat • Lover volumes and weaker SEK • Ongoing CHP investments: Suomenoja, Finland (2009); Częstochowa, Poland (2010); Pärnu, Estonia (2010) MEUR I-III/2009 I-III/2008 LTM Sales 937 1 003 1 400 Comparable operating profit 124 141 233 Net Assets 3 655 3 595 Comparable RONA, % 7.2 Gross Investments 258
Slide 15: Distribution
Distribution • Stable results • Sweden; automatic meter rollout completed, a contract for meters in Finland MEUR I-III/2009 I-III/2008 LTM Sales 573 583 779 Comparable operating profit 182 185 245 Net Assets 3 248 3 265 Comparable RONA, % 8.1 Gross Investments 130 203 223 15
Slide 16: Markets
Markets • Improved results from the turnaround programme • Lower volumes MEUR I-III/2009 I-III/2008 LTM Sales 1 039 1 391 1 570 Comparable operating profit 11 -33 11 Net Assets 85 229 Comparable RONA, % 9.3 Gross Investments 1 3 1 16
Slide 17: Russia
Russia • Efficiency improvement programme proceeding • Clearly better comparable operating profit in Q3 compared to last year (EUR +17 million) MEUR I-III/2009 I-III/2008* LTM Sales 429 292 626 Comparable operating profit -33 -72 -53 Net Assets 2 098 2 420 Comparable RONA, % -2.1 Gross Investments 1
Slide 18: Comparable and reported operating profit
Comparable and reported operating profit Operating profit III/2009 Operating profit III/2008 Operating profit I-III/2009 Operating profit I-III/2008 Comparable Reported Comparable Reported Comparable Reported Comparable Reported Power Generation 310 278 371 438 1 075 1 005 1 150 1 129 Heat -14 -12 -
Slide 19: Income statement
Income statement MEUR III/2009 III/2008 I-III/2009 I-III/2008 2008 LTM Sales 1 046 1 272 3 872 4 034 5 636 5 474 Expenses -760 -877 -2 612 -2 682 -3 673 -3 603 Operating profit 286 395 1 260 1 352 1 963 1 871 Share of profit of associates and jv's 3 8 -1 78 126 47 Financial expenses, net -47 -66 -12
Slide 20: Cash flow statement
Cash flow statement MEUR III/2009 III/2008 I-III/2009 I-III/2008 2008 LTM Operating profit before depreciations 414 532 1 634 1 735 2 478 2 377 Non-cash flow items and divesting activities 31 -56 50 -38 -275 -187 Financial items and fx gains/losses -51 -13 248 -93 233 574 Taxes -74 -79 -205 -279 -33
Slide 21: Key ratios
Key ratios MEUR LTM 2008 2007 in Q3 '09 EBITDA 2 377 2 478 2 298 Net cash flow from operations 2 430 2 002 1 670 Interest-bearing net debt 6 041 6 179 4 466 Equity 8 328 8 411 8 651 Balance sheet total 19 559 20 278 17 674 Net debt/EBITDA* 2.5 2.5 2.2 Return on capital employed (%)* 13.2 15.0 14.0 R
Slide 22: Debt maturity profile
Debt maturity profile MEUR MEUR 2009: 193 2000 2010: 650 2011: 625 1500 2012: 500 1000 2013: 558 2014: 1.145 500 2015: 310 2016: 844 0 2017: 210 Y2009 2011 2013 2015 2017 2019+ 2018: 75 Bonds Financial institutions Other long-term debt CPs Other short-term debt 2019+: 1.746 30 September, 2009 31 Dec
Slide 23: Outlook
OUTLOOK 23
Slide 24: Commodity prices
Commodity prices Crude oil price (ICE Brent) CO2 price (NP EUA) 160 35 140 30 120 25 EUR / tCO2 USD / bbl 100 20 80 60 15 40 10 20 5 0 2006 2007 2008 2009 2010 2011 0 2006 2007 2008 2009 2010 2011 Coal price (ICE Rotterdam) Gas price (ICE NBP) 240 100 200 80 GBp / therm 160 60 USD / t 120 40 80 40 2
Slide 25: Nord Pool year forwards
Nord Pool year forwards €/MWh Year 06 Year 07 Year 08 Year 09 Year 10 Year 11 Year 12 Year 13 Year 14 75 70 65 60 55 50 45 40 35 30 Forwards in mid-October 2009: 25 20 • rest of 2009 ~ 34-36 EUR/MWh 15 • 2010 ~ 35-36 EUR/MWh 10 • 2011 ~ 39 EUR/MWh 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 26: Hedging of Power Generation's Nordic sales
Hedging of Power Generation's Nordic sales Status at the end of September 2009 (Status at the end of June 2009) Hedge ratio Hedge price rest of 2009 ~ 75% ~ EUR 50 per MWh (~80%) (~ EUR 50 per MWh) 2010 ~ 65% ~ EUR 44 per MWh (~65%) (~ EUR 43 per MWh) 2011 ~ 35% ~ EUR 42 per MWh (~30%) (~ EUR 42 per
Slide 27: Fortum in a strong position
Fortum in a strong position • Flexible, low cost and climate-benign generation portfolio • Russian power reform and the integration of OAO Fortum proceeding as planned • Good hedging positions • Strong financial position and liquidity • Investments for the future 27
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