Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — Q2 2013 Earnings Presentation
27 slides from Fortum Oyj's earnings presentation, Jul 19, 2013
Slide 1: Fortum Corporation Interim Report January–June 2013
Fortum Corporation Interim Report January – June 2013 19 July 2013
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 2013 Result
Q2 2013 Result Key figures (EUR) II/2013 II/2012 I-II/2013 I-II/2012 2012 LTM Sales, million 1,327 1,284 3,318 3,185 6,159 6,292 Comparable EBITDA, million 467 447 1,286 1,259 2,416 2,443 Operating profit, million 438 286 1,041 1,025 1,874 1,890 Comparable operating profit, million 298 284 948 938 1
Slide 4: Highlights of the second quarter in 2013
Highlights of the second quarter in 2013 • Good operational performance • Good availability - Nuclear performance improved - Lower hydro volumes • Two efficient CHP plants inaugurated in Lithuania and Finland, solar investment in India and district heating investment in Estonia • The future of the I
Slide 5: Market conditions in the second quarter
Market conditions in the second quarter Nordic countries • Power consumption in the Nordic countries on last years level (86TWh) • Normalisation of Nordic water reservoir levels • Nordic system spot prices approx. 35% higher compared to Q2/2012 • Volatility around CO2-emission allowance prices conti
Slide 6: Nordic water reservoirs – normalisation from last years highs
Nordic water reservoirs – normalisation from last years highs 120 100 reservoir content (TWh) 80 60 40 20 2000 2003 2010 2011 2012 2013 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 110 100 90 80 70 60 50 40 30 20 10 16 July 2013 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: Price development in the Nordic region and Russia
Price development in the Nordic region and Russia +9% +36% +3% +6% Includes capacity income 8
Slide 9: Q2: Comparable operating profit increased YoY
Q2: Comparable operating profit increased YoY Comparable operating profit, EUR million 9
Slide 10: January-June: Efficiency programme gives additional support
January-June: Efficiency programme gives additional support 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) 160 35 140 30 120 25 EUR / tCO2 100 USD / bbl 20 80 60 15 40 10 20 5 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2006 2007 2008 2009 2010 2011 2012 2013 2014 Coal price (ICE Rotterdam) Gas price (ICE NBP) 240 100
Slide 12: Financials
« Financials s : Z ‘ We MA AY 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 II/2013 II/2012 II/2013 II/2012 I-II/2013 I-II/2012 I-II/2013 I-II/2012 Power 210 222 337 214 513 564 600 582 Heat 11 24 8 21 181 186 183 235 Russ
Slide 14: Power
Power Q2 2013 H1 2013 • Slight decline in comparable operating profit • Lower water reservoir levels and inflow ‒ increased nuclear and thermal volumes decreased hydro generation significantly ‒ higher achieved power price ‒ lower hydro volumes • Higher operating costs – partly offset by savings of
Slide 15: Heat
Heat Q2 2013 H1 2013 • Lower comparable operating profit • Comparable operating profit impacted by lower ‒ change in fuel inventories power sales price and change in fuel ‒ lower heat volumes in Sweden inventories. ‒ less income from electricity certificates sales • On-going investments proceeding w
Slide 16: Russia
Russia Q2 2013 H1 2013 • Increased comparable operating profit • Increased comparable operating profit ‒ the positive effect from CSA capacity ‒ lower heat volumes due to exceptionally warm totalled EUR 34 (17) million winter in Chelyabinsk and the divested heat ‒ includes a CSA provision reversal o
Slide 17: Distribution
Distribution Q2 2013 H1 2013 • Increased comparable operating profit • Strong comparable profit ‒ increased amount of relocation of cables ‒ higher volumes and parts of network ‒ stronger SEK ‒ cost savings ‒ increased amount of relocation of cables and ‒ stronger SEK parts of network ‒ storm costs
Slide 18: Electricity Sales
Electricity Sales Q2 2013 H1 2013 • Good comparable operating profit • Increased comparable operating profit ‒ increased customer base ‒ cold weather in Q1 ‒ favourable wholesale market conditions ‒ increased customer base ‒ Sales Trading ‒ favourable wholesale market conditions ‒ Sales Trading MEUR
Slide 19: Income statement
Income statement MEUR II/2013 II/2012 I-II/2013 I-II/2012 2012 LTM Sales 1,327 1,284 3,318 3,185 6,159 6,292 Expenses -1,029 -1,000 -2,370 -2,247 -4,407 -4,530 Comparable operating profit 298 284 948 938 1,752 1,762 Items affecting comparability 140 2 93 87 122 128 Operating profit 438 286 1,041 1,0
Slide 20: Cash flow statement
Cash flow statement MEUR II/2013 II/2012 I-II/2013 I-II/2012 2012 LTM Operating profit before depreciations 617 449 1 389 1 346 2 538 2 581 Non-cash flow items and divesting activities -188 -18 -161 -119 -192 -234 Financial items and fx gains/losses -131 -132 -347 -274 -522 -595 Taxes -58 -89 -82 -1
Slide 21: Key ratios
Key ratios MEUR LTM 2012 2011 EBITDA 2,581 2,538 3,008 Comparable EBITDA 2,443 2,416 2,374 Interest-bearing net debt *8,035 7,814 7,023 Comparable net debt/EBITDA 3.3 3.2 3.0 *30.6.2013 Return on capital employed, ROCE (%) 10.5 10.2 14.8 Return on shareholders’ equity, ROE (%) 15.4 14.6 19.7 Good li
Slide 22: Fortum's efficiency programme 2013-2014
Fortum's efficiency programme 2013-2014 • Efficiency programme proceeding well according to plan • Cost savings • Divestments WHEN WHY WHAT 2013-2014 SPEED - Cash flow improved by EUR 1 billion - FLEXIBILITY CAPEX DIVESTMENTS EUR 250-350 million EUR 500 million WORKING CAPITAL FIXED COSTS Reduction
Slide 23: Debt Maturity Profile
Debt Maturity Profile 1500 MEUR 2013 760 1250 2014 1.274 2015 1.095 1000 2016 881 750 2017 584 2018 667 500 2019 841 2020 74 250 2021 576 2022 971 0 2023+ 1.340 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023+ TOTAL 9.063 Bonds Financial institutions Other long-term debt CPs Other short-term
Slide 24: Outlook
Outlook Next generation energy company
Slide 25: Outlook
Outlook Nordic markets ‒ Annual electricity demand growth estimated to be on average 0.5% ‒ 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- rate in its Russia Division during 2015 Key
Slide 26: Outlook
Outlook Annual capex estimate excluding potential acquisitions – 2013 EUR 1.1 to 1.4 billion – 2014 EUR 0.9 to 1.1 billion Hedging – Rest of 2013 approximately 75% hedge ratio at approximately EUR 45/MWh (Q1: 80% at EUR 45/MWh) – 2014 approximately 50% hedge ratio at approximately EUR 42/MWh (Q1: 45
Slide 27: For more information www.fortum.com/investors
For more information www.fortum.com/investors