Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Q2 2014 Earnings Presentation
26 slides from Fortum Oyj's earnings presentation, Jul 18, 2014
Slide 1: Fortum Corporation Interim report January–June 2014
Fortum Corporation Interim report January–June 2014 18 July 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: Q2 2014 Results
Q2 2014 Results Key figures (EUR) II/14 II/13 I-II/14 I-II/13 2013 LTM Sales, million 1,016 1,205 2,489 2,858 5,309 4,940 Comparable EBITDA, million 382 429 1,009 1,093 1,975 1,892 Operating profit, million 295 429 2,629 905 1,508 3,232 Comparable operating profit, million 255 289 732 813 1,403 1,32
Slide 4: Summary of the second quarter of 2014
Summary of the second quarter of 2014 • Good results despite seasonality, low spot prices and rouble • Strong cash flow from operations • Norwegian electricity distribution business sale completed • The target for the Russia Segment in Russian roubles (RUB 18.2 billion) to be reached during 2015 is
Slide 5: Market conditions in the second quarter 2014
Market conditions in the second quarter 2014 Nordic countries • Power consumption in the Nordic countries declined marginally compared to the same period in 2013 • Hydro reservoirs at long-term average • Nordic system spot prices EUR 13 per MWh lower compared to 2013, while Finnish and Swedish area
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 Spot System Price Forwards 110 100 90 80 70 60 50 40 30 20 10 15 July 2014 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Source: Nord Pool Spot, NASDAQ OMX Commodities Europe 7
Slide 8: 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 9: Price development in the Nordic region and Russia
Price development in the Nordic region and Russia -34% +17% -10% +2% Includes capacity income 9
Slide 10: Q2: Low spot prices burdened Power and Technology - Russia improved
Q2: Low spot prices burdened Power and Technology - Russia improved Comparable operating profit, EUR million * * The divested distribution operations are included in the segment information until the closing of the transactions 10
Slide 11: January-June: Good results despite seasonality, low spot prices and weak rouble
January- June: Good results despite seasonality, low spot prices and weak rouble Comparable operating profit, EUR million * * The divested distribution operations are included in the segment information until the closing of the transactions 11
Slide 12: Financials
ation company
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 II/2014 II/2013 II/2014 II/2013 I-II/2014 I-II/2013 I-II/2014 I-II/2013 Power and Technology 183 210 151 338 434 513 413 600 Heat, Electricity Sal
Slide 14: Power and Technology
Power and Technology Q2 2014 H1 2014 • Lower achieved power price – average • Lower achieved power price – average spot price EUR 13 per MWh lower, area spot price EUR 12.5 per MWh lower, area prices EUR 5-7 per MWh lower prices EUR 6-10 per MWh lower • Higher hydro production • Higher hydro product
Slide 15: Heat, Electricity Sales and Solutions
Heat, Electricity Sales and Solutions Q2 2014 H1 2014 • Divestments made in Finland in 2013 • Exceptionally warm weather, and burdened CHP volumes (despite new divestments made in Finland in 2013 capacity) burdened both CHP volumes (despite new • Divestment of the Norwegian heat capacity) and retail
Slide 16: Russia
Russia Q2 2014 H1 2014 • Comparable operating profit improved • Positive effect from CSA capacity due to CSA capacity payments, better payments, better electricity and heat electricity and heat spreads and spreads, improved bad debt collections increased efficiency and increased efficiency • Reversa
Slide 17: Distribution
Distribution Q2 2014 H1 2014 • Norwegian electricity networks sale • Finnish and Norwegian electricity finalised networks sale finalised • Volumes in Sweden in line with last year • Fortum continues evaluating the possible future divestment opportunity of the Swedish electricity distribution busines
Slide 18: Income statement
Income statement MEUR II/2014 II/2013 I-II/2014 I-II/2013 2013 LTM Sales 1,016 1,205 2,489 2,858 5,309 4,940 Other income and expenses 761 916 1,758 2,046 3,906 3,618 Comparable operating profit 255 289 732 813 1,403 1,322 Items affecting comparability 41 140 1,897 93 106 1,910 Operating profit 295
Slide 19: Cash flow statement
Cash flow statement MEUR II/2014 II/2013 I-II/2014 I-II/2013 2013 LTM Operating profit before depreciations 427 579 2,909 1,196 2,129 3,842 Non-cash flow items and divesting activities -58 -189 -1,921 -163 -262 -2,020 Financial items and fx gains/losses 29 -100 4 -309 -188 125 Taxes -67 -51 -95 -81
Slide 20: Key ratios
Key ratios MEUR LTM 2013 EBITDA 3,843 2,129 Comparable EBITDA 1,892 1,975 Interest-bearing net debt 5,008 7,793 Comparable net debt/EBITDA 2.6 3.9 Return on capital employed, ROCE (%) 18.4 9.0 Return on shareholders’ equity, ROE (%) 28.2 12.0 Good liquidity – committed credit lines total EUR 2.2 bil
Slide 21: Debt Maturity Profile
Debt Maturity Profile 1500 MEUR 2014 286 1250 2015 1,014 2016 862 1000 2017 544 750 2018 628 2019 821 500 2020 76 2021 545 250 2022 1,033 2023 112 0 2024+ 1,245 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024+ TOTAL 7,166 Bonds Financial institutions Other long-term debt CPs Other short-term
Slide 22: Fortum's efficiency programme 2013-2014
Fortum's efficiency programme 2013-2014 • Efficiency programme proceeding according to plan • Total annual cost savings visible in all divisions • Improved working capital efficiency • Divestments of non-core assets totalling approximately EUR 400 million WHEN WHY WHAT 2013-2014 SPEED - Cash flow im
Slide 23: Outlook
Outlook
Slide 24: Outlook
Outlook Nordic markets • Fortum continues to expect that the annual electricity demand growth will average 0.5% in the coming years • Electricity is expected to continue to gain share of total energy consumption Russia • The target for the Russia Segment in Russian roubles (RUB 18.2 billion) to be r
Slide 25: Outlook
Outlook Annual capex estimate excluding potential acquisitions • 2014 EUR 0.9 to 1.1 billion (incl. Finnish distribution Q1/2014, Norway 1H/2014, excluding Fortum Värme) Hedging • Rest of the year 2014 approx. 55% hedge ratio at approx. EUR 45/MWh • 2015 approx. 30% hedge ratio at approx. EUR 41/MWh
Slide 26: For more information www.fortum.com/investors
For more information www.fortum.com/investors