Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Fortum Oyj Corp Ord — Q3 2021 Earnings Presentation
22 slides from Fortum Oyj's earnings presentation, Nov 12, 2021
Slide 1: Interim Report January-September 2021
Interim Report January-September 2021 Fortum Corporation 12 November 2021
Slide 2: Markus Rauramo, President and CEO
Markus Rauramo President and CEO 2
Slide 3: Strong performance in an exceptional commodity market
Strong performance in an exceptional commodity market Comp. OP1 Comp. EPS2 OCF3 Leverage4 Q3 1,466 3,394 1.22 <2 Performance affected by 0.99 0.18 1,792 extraordinary market 416 0.81 0.6 fundamentals 9M 2020 9M 2021 9M 2020 9M 2021 9M 2020 9M 2021 Target LTM 9M Higher achieved power prices and highe
Slide 4: Extraordinary high energy commodities driving power prices
Extraordinary high energy commodities driving power prices Energy commodities reaching new record highs EUR/ /MWh MWh USD/ t/ t CoalCoal EUR GasGas price price (TTF Front-Month) (TTF) USD price price (ICE API2 Front-Month) (ICE Rotterdam) 125 125 300 300 • Global commodity prices have 100 100 240 24
Slide 5: Gas market driven by economic recovery and supply constraints
Gas market driven by economic recovery and supply constraints Tight market conditions drive European gas supply decreased European gas storages are global gas prices vs 2019 below average levels TTF 1M JKM 1M HH 1M Jan-Sep 2019 Jan-Sep 2020 Jan-Sep 2021 1100 100 4000 Monthly avg. prices 90 900 3500
Slide 6: Q3, normally weak - now supported by strong market fundamentals
Q3, normally weak – now supported by strong market fundamentals Reconciliation of comparable operating profit (EUR million) Generation 319 -4 260 higher volumes and higher achieved prices with successful physical optimisation Russia improved underlying performance offsetting lower contribution from
Slide 7: Q1-Q3, almost all segments improved
Q1-Q3, almost all segments improved – significant impact from Uniper results Reconciliation of comparable operating profit (EUR million) Generation higher achieved power price Russia one-off effect and higher power prices offsetting negative FX City Solutions higher power and heat sales Consumer Sol
Slide 8: Determined execution of our strategy continues
Determined execution of our strategy continues Decarbonisation progressing Renewables growth ramping Balance sheet strengthened • Discontinuing the use of coal in • Fortum and its wind JV in Russia • Closing of 3.6 billion of Fortum Russia by the end of 2022 wins wind auction with CSA divestments in
Slide 9: Fortum and Uniper cooperation gearing up
Fortum and Uniper cooperation gearing up • Cooperation is moving ahead – A joint organisation established at Fortum for the Nordic Hydro and Physical Trading Optimisation with 400 employees, operations starting in Q1 2022 – Uniper developing for renewables and hydrogen business – Cooperation in nucl
Slide 10: Bernhard Günther, CFO
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Slide 11: Key financials
Key financials MEUR III/ III/ I-III/ I-III/ FY LTM 2021 2020 2021 2020 2020 9M strong financial KPIs Sales 23,700 14,049 62,322 27,736 49,015 83,601 LTM comparable EBITDA at Comparable EBITDA 574 132 2,401 1,187 2,434 3,648 EUR 3.65 billion Comparable operating profit 260 -179 1,466 416 1,344 2,394
Slide 12: Reported income statement dominated by changes in fair values
Reported income statement dominated by changes in fair values EUR million I-III 2021 Comparable operating profit 1,466 Divestment of Impairment charges and reversals -78 Stockholm Exergi and Baltic district heating Items affecting comparability Capital gains and other related items 2,686 business Ch
Slide 13: Strong cash flow management to secure financial flexibility
Strong cash flow management to secure financial flexibility MEUR III/ III/ I-III/ I-III/ FY LTM 2021 2020 2021 2020 2020 Comparable EBITDA 574 132 2,401 1,187 2,434 3,648 Non-cash and other items 533 178 914 374 293 833 Paid net financial costs, income taxes and dividends -33 -38 -342 -267 -308 -383
Slide 14: Generation: Higher achieved power prices
Generation: Q3 Q3'21 Q3'20 Higher achieved power prices Volumes (TWh) 5.0 4.5 5.5 4.3 Q3 2021 vs. Q3 2020 Hydro Nuclear • Comparable operating profit +80% mainly due to 9M 9M'21 9M'20 Volumes – Higher achieved power prices of EUR 43.7, +6.6 per MWh (TWh) 17.2 17.2 16.2 – Increased nuclear and hydro
Slide 15: Nordic hydro reservoirs below average levels in Q3
Nordic hydro reservoirs below average levels in Q3, high spot prices influenced by Continental European power prices Reservoir content (TWh) • Low precipitation from the summer continued in Q3 Hydro reservoirs 120 120 2021 and led to a significant deficit in water reservoirs. 100 100 80 80 • At the
Slide 16: Russia: Solid underlying performance
Russia: Q3 Q3'21 Q3'20 Solid underlying performance Volumes (TWh) 6.4 5.9 1.7 1.6 Q3 2021 vs. Q3 2020 Power Heat • Comparable operating profit up by 13% to EUR 45 million 9M 9M'21 9M'20 Volumes – Slight negative effect of changes in CSA payments, lower bond yield, (TWh) 21.0 19.8 and higher power pr
Slide 17: City Solutions: Performance improved
City Solutions: Q3 Q3'21 Q3'20 Performance improved Volumes (TWh) 0.5 0.6 0.8 0.9 Power Heat Q3 2021 vs. Q3 2020 • District heating with higher power prices and higher power sales 9M 9M'21 9M'20 Volumes • Almost all business areas improved its result from the previous (TWh) 7.0 6.6 year, especially
Slide 18: Consumer Solutions: Challenging market environment
Consumer Solutions: Number of Challenging market environment customers (‘000) SEP 2021 2,270 DEC 2020 2,390 Q3 2021 vs. Q3 2020 • Both gas and electricity volumes increased MEUR III/ III/ I-III/ I-III/ FY 2021 2020 2021 2020 2020 LTM • Comparable operating profit slightly down due to negative custom
Slide 19: Uniper: Solid underlying performance
Uniper: Q3 Q3'21 Q3'20 9.4 9.5 Solid underlying performance Volumes (TWh) 2.7 3.1 2.7 1.9 8.0 8.5 Q3 2021 vs. Q3 2020 Hydro Nuclear Thermal CE Thermal RUS • Global Commodities business was significantly above previous year 9M 9M'21 9M'20 31.3 due to higher result in the gas midstream business Volume
Slide 20: Leverage below target and good access to debt capital market
Leverage below target and good access to debt capital market Solid credit metrics debt debt 'BBB' long-term issuer credit rating, netnet stable outlook 'BBB' long-term issuer credit rating, Financial stable outlook Financial Target ratio: < 2x Financial net debt / Comp. EBITDA Fortum’s objective: Ma
Slide 21: Outlook
Outlook Hedging 2021 Estimated annual capital Russia Generation Nordic hedges: expenditure, including maintenance CSA changes: For the rest of 2021: 75% hedged at EUR and excluding acquisitions, of Lower bond yield, 6.3% (7.6%) 34 per MWh For 2022: 65% hedged at EUR 32 per MWh EUR 1,400 million Chan
Slide 22: Q&A
Q&A