Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Investor Day (June 2004)
21 slides from Fortum Oyj's investor day presentation, Jun 17, 2004
Slide 1: Financials
Financials Juha Laaksonen Chief Financial Officer Capital Markets Day June 17, 2004
Slide 2: Good Start of the Year 2004 (Q1)
Good Start of the Year 2004 (Q1) Weaker market drivers… …But well performing businesses z Slight increase in Nordic electricity z Operating profit EUR 562 (475) million consumption z Earnings per share EUR 0.38 (0.32) z Decrease of 46% in Nord Pool price of z Net cash from operating activities EUR e
Slide 3: New reporting structure
New reporting structure Fortum
Slide 4: Operating profit by current segment structure
Operating profit by current segment structure MEUR Q1/04 Q1/03 2003 LTM Power, Heat and Gas 335 291 776 820 Distribution 87 81 247 253 Markets 12 -5 47 64 Oil Refining and Marketing 140 125 396 411 Other -12 -17 -46 -41 Fortum Group 562 475 1 420 1 507 4
Slide 5: Current segment structure
Current segment structure Segments Business Units Power, Heat and Gas Generation, PMT, Heat (incl. Gas), Värme, Service Distribution Distribution Markets Markets Oil Refining and Marketing Oil Refining (incl. SeverTEK), Retail, Shipping, Components Other 5
Slide 6: Changes in the segment structure
Changes in the segment structure • Power, Heat and Gas will be split in two Power Generation Heat • Oil Refining and Marketing will be split in three Oil Refining Oil Retail Shipping and Oil other (incl. SeverTEK) • Markets will be split Markets will include electricity sales Oil sales will be inclu
Slide 7: New segment structure
New segment structure New segments Business Units Power Generation Generation, PMT, Service Heat Heat, Värme Distribution Distribution Markets Markets Oil Refining Oil Refining, Components Oil Retail Retail Shipping and Oil other Shipping, other Other 7
Slide 8: Net sales by segment
Net sales by segment MEUR Q1/04 Q1/03 2003 LTM Power Generation 564 960 2 681 2 285 Heat 361 358 964 967 Distribution 206 198 688 696 Markets 419 558 1 634 1 495 Oil Refining 1 303 1 697 5 693 5 299 Oil Retail 531 586 2 203 2 148 Shipping and Oil other 101 94 308 315 Other 20 22 93 91 Eliminations -
Slide 9: Operating profit by segment
Operating profit by segment MEUR Q1/04 Q1/03 2003 LTM Power Generation 228 212 603 619 Heat 107 77 173 203 Distribution 87 81 247 253 Markets 10 -7 35 52 Oil Refining 93 84 281 290 Oil Retail 6 15 44 35 Shipping and Oil other 44 27 79 96 Other -13 -14 -42 -41 Fortum Group 562 475 1 420 1 507 9
Slide 10: Quarterly operating profit by segment
Quarterly operating profit by segment MEUR Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Power Generation 228 193 82 116 212 Heat 107 80 -6 22 77 Distribution 87 58 47 61 81 Markets 10 17 13 12 -7 Oil Refining 93 57 89 51 84 Oil Retail 6 -2 21 10 15 Shipping and Oil other 44 24 9 19 27 Other -13 -7 -16 -5 -14 Fortu
Slide 11: Net assets by segment
Net assets by segment MEUR Q1/04 Q1/03 2003 Power Generation 6 166 6 380 6 391 Heat 2 445 2 359 2 466 Distribution 3 095 3 179 3 129 Markets 157 71 23 Oil Refining 1 105 1 154 1 003 Oil Retail 280 321 329 Shipping and Oil other 152 114 133 Other 65 29 37 Fortum Group 13 465 13 607 13 511 11
Slide 12: Return on net assets by segment
Return on net assets by segment - including non-recurring items % Q1/04 Q1/03 2003 LTM Power Generation 14.5 13.3 9.5 9.8 Heat 17.4 13.1 7.3 8.5 Distribution 11.2 10.2 7.9 8.1 Markets 44.4 -49.6 55.2 60.2 Oil Refining 35.3 30.1 26.2 26.9 Oil Retail 7.9 18.4 13.8 11.3 Shipping and Oil other 123.5 78.
Slide 13: Transition to IFRS
Transition to IFRS 13 Fortum
Slide 14: Transition to IFRS: financial instruments, leases
Transition to IFRS Fortum will start reporting under IFRS in Q1, 2005. Most of the significant changes identified: • Financial instruments – According to IAS 39 all derivatives at fair value in the balance sheet – Fair value changes on derivatives to be recognised in income statement if hedge accoun
Slide 15: Transition to IFRS, cont'd: revenue recognition, pensions
Transition to IFRS, cont'd • Revenue recognition – Revenue from connection fees should be referred and recognised as revenue over the expected customer relationship period • Pensions – Actuarial calculations and extensive disclosures are required for defined benefit pension plans • Nuclear-related o
Slide 16: Transition to IFRS, cont'd: asset retirement, overhaul costs
Transition to IFRS, cont'd • Other asset retirement obligations – Evaluation of IFRS effects is in progress • Major overhaul costs – Under current accounting principles included in provisions – Under IFRS expenses incurred as a result of the overhauls will be capitalised and depreciated as a separat
Slide 17: Financial strategy and targets
Financial strategy and targets 17
Slide 18: Funding strategy
Funding strategy • Funding centralized to Group Treasury • Transparent loan portfolio • Access to all relevant debt markets • Smooth maturity profile and liquidity reserve to cover next 12 months need • Centralized treasury risk management aims to minimize the effect of volatility in currency and in
Slide 19: Maturity profile and funding sources
Maturity profile and funding sources as of 31 March 2004 M€ Other l-t CP 1,500 debt Other s-t 12 % 22 % 1% 1,000 Bank loans 14 % 500 Bonds 51 % 0 Total 5,479 M€ 2004 2005 2006 2007 2008 2009 2010 2011+ Long-term Short-term 19
Slide 20: Financial targets and credit ratings
Financial targets and credit ratings Targets • Gearing (net debt/equity) target of ≤100% (80%, 31 March 2004) • ROCE and ROE targets of 12% (12.9% and 12.5 %, LTM 31 March 2004) • Capex ≤ depreciation • Committed to a financial profile consistent with a strong 'BBB' credit rating Current credit rati
Slide 21: 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. 21