Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — FY2013 Earnings Presentation
32 slides from Fortum Oyj's earnings presentation, Feb 4, 2014
Slide 1: Fortum Corporation Financial Year 2013
Fortum Corporation Financial Year 2013 4 February 2014
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: 2013 Results
2013 Results Key figures (EUR) IV/2013 IV/2012 2013 2012 Sales, million 1,590 1,834 6,056 6,159 Comparable EBITDA, million 649 766 2,299 2,416 Operating profit, million 574 623 1,712 1,874 Comparable operating profit, million 493 591 1,607 1,752 Profit before taxes, million 529 543 1,499 1,586 Earni
Slide 4: Summary of the year 2013
Summary of the year 2013 • A satisfactory result - Strong cash flow • All-time low hydropower production for Fortum – Nuclear performing better with record-high production in Olkiluoto and Forsmark • A year of inaugurations – Heat Division completed 5 new production facilities – In Russia, first two
Slide 5: Market conditions in 2013
Market conditions in 2013 Nordic countries • Power consumption in the Nordic countries slightly lower than in 2012 • Water reservoir levels have normalised • Nordic system spot prices approx. EUR 7 per MWh higher compared to 2012 European business environment and carbon market • The revision of the
Slide 6: Nordic water reservoirs
Nordic water reservoirs 120 100 reservoir content (TWh) 80 60 40 20 2000 2003 2012 2013 2014 reference level 0 Q1 Q2 Q3 Q4 Source: Nord Pool Spot 6
Slide 7: Wholesale price for electricity
Wholesale price for electricity EUR/MWh Nord Pool System Price Forwards 100 90 80 70 60 50 40 30 20 10 30 January 2014 0 2005 2007 2009 2011 2013 2015 2017 Source: Nord Pool Spot, NASDAQ OMX Commodities Europe 7
Slide 8: Price development in the Nordic region and Russia
Price development in the Nordic region and Russia +7% +1% +3% +5% Includes capacity income 8
Slide 9: Q4: All-time low hydro production
Q4: All-time low hydro production Comparable operating profit, EUR million 9
Slide 10: 2013: 30% lower inflow in Fortum's hydropower production areas
2013: 30% lower inflow in Fortum’s hydropower production areas compared to 2012 clearly impacted the result negatively Comparable operating profit, EUR million 10
Slide 11: Fuel and CO2 allowance prices
Fuel and CO2 allowance prices Crude oil price (ICE Brent) CO2 price (ICE ECX EUA) 150 35 120 28 EUR / tCO2 USD / bbl 90 21 60 14 30 7 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Coal price (ICE Rotterdam) Gas price (ICE NBP) 250 100 200 80
Slide 12: Financials
Financials soz | @Fortum
Slide 13: Comparable and reported operating profit
Comparable and reported operating profit Comparable Reported Comparable Reported MEUR operating profit operating profit operating profit operating profit IV/2013 IV/2012 IV/2013 IV/2012 2013 2012 2013 2012 Power 207 381 278 388 858 1,146 921 1,175 Heat 106 94 108 119 273 271 288 344 Russia 110 28 11
Slide 14: Power
Power Q4 2013 2013 • Power production decreased by 26% • Comparable operating profit impacted by • All-time low hydro production – Low significantly lower hydro volumes, increased inflow and reservoir levels hydrotax in Sweden and the Inkoo write- • Temporary restrictions and outages down impacted o
Slide 15: Q4 deficit turned to surplus
Q4 deficit turned to surplus Higher than normal precipitation and lower than normal demand during Q4 refilled reservoirs Reservoir deficit compared to normal 15 55 Fortum Q4/2012 Fortum Q4/2013 Hydro production Hydro production 7.1 TWh 3.9 TWh 10 50 5 45 TWh from normal EUR/MWh 0 40 -5 35 -10 30 -15
Slide 16: Cumulative precipitation has been 10TWh higher than normal
Cumulative precipitation has been 10TWh higher than normal so far during this winter Cumulative precipitation vs. normal from week 46 40 30 Cumulative precipitation vs. normal (TWh) 20 10 0 -10 -20 -30 -40 46 47 48 49 50 51 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Week 2000/2001 2001/20
Slide 17: Heat
Heat Q4 2013 2013 • Warm weather burdened heat sales • Somewhat increased profit mainly due to lower fuel costs • Better availability and new CHP-capacity increased power sales • Income from sales of CO2 allowances decreased • Brista (CHP) and Joensuu (CHP+) inaugurated in November • Altogether five
Slide 18: Russia
Russia Q4 2013 2013 • Positive result effect from CSA capacity • Positive effect from CSA capacity totalled EUR 79 (26) million and from a construction EUR 163 (87) million delay compensation of EUR 40 million • The result was burdened by EUR 16 million • Unplanned outages and the Russian rouble in
Slide 19: Distribution
Distribution The strategic assessment concluded – Divestment seen as the best solution • Finnish networks to be sold to Suomi Power Networks Oy for EUR 2.55 billion • Expected to be completed in Q1 2014 Q4 2013 2013 • Q4 affected negatively by warmer • Stable comparable operating profit weather and
Slide 20: Electricity Sales
Electricity Sales Q4 2013 2013 • Lower volumes impacted result • Increased comparable operating profit due to favourable wholesale market conditions, an increased customer base and Sales Trading MEUR IV/2013 IV/2012 2013 2012 Sales 196 221 744 722 Comparable operating profit 7 10 48 39 Net assets 39
Slide 21: Income statement
Income statement MEUR IV/2013 IV/2012 2013 2012 Sales 1,590 1,834 6,056 6,159 Other income and expenses -1,097 -1,243 -4,449 -4,407 Comparable operating profit 493 591 1,607 1,752 Items affecting comparability 81 32 105 122 Operating profit 574 623 1,712 1,874 Share of profit of associates and jv’s
Slide 22: Cash flow statement
Cash flow statement MEUR IV/2013 IV/2012 2013 2012 Operating profit before depreciations 768 799 2,452 2,538 Non-cash flow items and divesting activities -156 -36 -260 -192 Financial items and fx gains/losses 33 -87 -250 -522 Taxes -71 -17 -229 -269 Funds from operations (FFO) 574 659 1,713 1,555 Ch
Slide 23: Key ratios
Key ratios MEUR 2013 2012 EBITDA 2,452 2,538 Comparable EBITDA 2,299 2,416 Interest-bearing net debt 7,849 7,814 Comparable net debt/EBITDA 3.4 3.2 Return on capital employed, ROCE (%) 9.2 10.2 Return on shareholders’ equity, ROE (%) 12.0 14.6 Good liquidity – committed credit lines total EUR 2.2 bi
Slide 24: Debt Maturity Profile
Debt Maturity Profile 2250 MEUR 2000 2014 2,142 1750 2015 1,088 2016 884 1500 2017 580 1250 2018 668 1000 2019 833 750 2020 77 2021 551 500 2022 971 250 2023 116 0 2024+ 1,208 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024+ TOTAL 9,118 Bonds Financial institutions Other long-term debt CPs Ot
Slide 25: Fortum's efficiency programme 2013-2014
Fortum's efficiency programme 2013-2014 • Efficiency programme half way through • proceeding according to plan • Total annual cost savings visible in all divisions • Improved working capital efficiency • Divestments of non-core assets totalling approximately EUR 300 million WHEN WHY WHAT 2013-2014 S
Slide 26: Outlook
Outlook Järvenpää CHP 26
Slide 27: Outlook
Outlook • Nordic markets ‒ Fortum continues to expect that the annual electricity demand growth will average 0.5% in the coming years ‒ Electricity continues to gain share of total energy consumption • Russia ‒ Fortum’s goal is to achieve an operating profit level (EBIT) of about EUR 500 million run
Slide 28: Outlook
Outlook • Annual capex estimate excluding potential acquisitions – 2014 EUR 0.9 to 1.1 billion (incl. Finnish distribution Q1/2014, excluding Värme) • Hedging – Rest of 2014 approximately 60% hedge ratio at approximately EUR 43/MWh (Q3: 65% at EUR 42/MWh) – 2015 approximately 20% hedge ratio at appr
Slide 29: Fortum Executive Management as of 1 March 2014
Fortum Executive Management as of 1st March 2014 Business Divisions President and CEO Corporate Functions Tapio Kuula Finance Human Resources and IT CFO Senior Vice President Timo Karttinen Mikael Frisk Strategy and M&A Communications Senior Vice President Senior Vice President Kari Kautinen Helena
Slide 30: New organisational structure as of 1 March 2014
New organisational structure as of 1st March 2014 – Reporting segments Power and Heat, Russia Distribution Technology Electricity Hydro Power Sales and and Solutions Technology Nuclear and • The first quarter of 2014 will already be reported Thermal according to the new organisational structure Powe
Slide 31: Annual General Meeting 2014 and dividend distribution proposal
Annual General Meeting 2014 and dividend distribution proposal • Fortum’s Annual General Meeting will be held at 14:00 on Tuesday, 8 April 2014, at the Finlandia Hall, Mannerheimintie 13, in Helsinki, Finland • The Board of Directors proposes to the Annual General Meeting that Fortum Corporation pay
Slide 32: For more information
For more information www.fortum.com/investors 32