Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Investor Day (December 2020)
16 slides from Fortum Oyj's investor day presentation, Dec 3, 2020
Slide 1: Strategy execution to deliver strong financials
Strategy execution to deliver strong financials Timo Karttinen Acting CFO 3 December 2020
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. • No decisions have b
Slide 3: Transformation
Transformation 52 Fortum CMD 2020
Slide 4: Fortum is transforming to a leading power and gas company
Confidential Fortum is transforming to a leading power and gas company Fortum is well positioned for the energy transition: Major provider and trader of gas for 1 Third largest CO2-free power generator in Europe 2 Significant provider of flexible gas- fired power generation 3 Europe’s energy and ind
Slide 5: Growing EBITDA from transformation and consolidation of Uniper
Confidential Growing EBITDA from transformation and consolidation of Uniper Fortum Group EBITDA development MEUR Sell-side consensus Growth investments of 3,500 Nov 2020 EUR 11 billion 3,000 EV/EBITDA multiple of ~7x 2,500 2,000 1,500 Divestments of 1,000 EUR 12 billion EV/EBITDA multiple of ~17x 50
Slide 6: Fortum key profitability drivers
Confidential Fortum key profitability drivers Key market drivers: Fortum profitability drivers: Fortum Group’s indicative EBITDA by business and market exposure Power market European power generation Indicative EBITDA split • EU coal/nuclear capacity closures • CO2-free generation: prices and volume
Slide 7: Financial targets
Financial targets 56 Fortum CMD 2020
Slide 8: Fortum's updated financial targets
Confidential Fortum’s updated financial targets Leverage target: Return targets for new Dividend policy: investments: Financial net debt/comparable WACC+ hurdle rate: “Fortum’s EBITDA ratio dividend policy is to pay a +100 bps for green investments stable, sustainable, and <2x +200 bps for other inv
Slide 9: Strong commitment to maintain rating of at least BBB
Confidential Strong commitment to maintain rating of at least BBB Ambition is to preserve financial flexibility and good Long term leverage target: access to capital markets. Financial net debt/comparable EBITDA Fortum will carefully manage its balance sheet going forward focusing on <2x • Profitabi
Slide 10: Focus to maintain good access to capital markets and financial flexibility
Confidential Focus to maintain good access to capital markets and financial flexibility • Solid financial position with liquid funds of EUR 2.5 Fortum debt maturity profile billion 30 Sept 2020 • Available credit facilities of EUR 5.1 billion 3,250 3,000 • Group loans of EUR 9.2 billion 2,750 2,500
Slide 11: Return targets for new investments
Confidential Return targets for new investments Return targets for new investments: Group 2021 capital expenditure, including maintenance and WACC+ hurdle rate: excluding acquisitions, +100 bps for green investments is estimated to be EUR 1.4 billion +200 bps for other investments • Maintenance of E
Slide 12: Fortum and Uniper cooperation estimated to deliver significant financial benefits
Confidential Fortum and Uniper cooperation estimated to deliver significant financial benefits Cooperation benefits focus on monetary, safety, and environmental actions • Positive cash impact on a consolidated group basis is estimated to be ~EUR 100 million annually • > EUR 50 million of these annua
Slide 13: Revised dividend policy aiming at increasing dividend
Confidential Revised dividend policy aiming at increasing dividend Dividend policy: Fortum dividends EUR/share “Fortum’s dividend policy is to pay a stable, 1.2 1.10 1.10 1.10 1.10 1.10 sustainable, and over time increasing dividend.” 1.0 0.8 Fortum’s Board of Directors aims to propose a dividend fo
Slide 14: Conclusions
Conclusions 63 Fortum CMD 2020
Slide 15: Conclusions
Confidential Conclusions • Increasing EBITDA from transformation and cooperation benefits • Reducing risk profile through decarbonisation and clean investments • Updated financial targets • Strong commitment to maintain rating, focus on cash flow • Target to increase dividend over time 64 Fortum CMD
Slide 16: Thank you
Thank you