Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — FY2009 Earnings Presentation
28 slides from Fortum Oyj's earnings presentation, Feb 3, 2010
Slide 1: Fortum Corporation Financial year 2009
Fortum Corporation Financial year 2009 3 February 2010 1
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: Environment improving towards the end of the year
Environment improving towards the end of the year • Nordic power consumption 5% down – Signs of power demand picking up in Q4 • Nordic and Russian Urals power market prices lower than a year ago – The trough in the early part of 2009, followed by improvement from quarter to quarter during the year •
Slide 4: Stable results
Stable results • Comparable operating profit, EUR 1,888 (1,845) million, higher than in 2008 – Thanks to hedging stable achieved Nordic sales price in Power – Strong improvement in Markets and Russia – SEK translation effect approximately EUR -100 million • Earnings per share EUR 1.48 (1.74) – Large
Slide 5: Better performance in Markets and Russia
Better performance in Markets and Russia Comparable operating profit EUR million 1888 66 -10 1845 -59 55 -23 14 2008 Power Heat Distribution Markets Russia Other 2009 5
Slide 6: Key events and highlights
Key events and highlights • Work ongoing to improve efficiency, accountability and simplicity • 91% (92%) of the generated power CO2-free in the EU – still the corner stone of Fortum’s strategy • Intensive work for Loviisa 3 nuclear application and the nuclear-CHP option • Russia has met expectation
Slide 7: Signs of demand picking up towards the end of 2009
Signs of demand picking up towards the end of 2009 Chelyabinsk Urals area Denmark Tyumen Sweden Norway Finland Russia Russia Nordic 10 % 10 % 5% 5% 0% 0% -5 % -5 % -10 % -10 % -15 % -15 % Q1 2009 vs Q1 2008 Q1 2009 vs Q1 2008 Q2 2009 vs Q2 2008 Q2 2009 vs Q2 2008 -20 % -20 % Q3 2009 vs Q3 2008 Q3 20
Slide 8: Nordic water reservoirs below normal
Nordic water reservoirs below normal 120 100 reservoir content (TWh) 80 60 40 20 2003 2008 2009 2010 reference level 0 Q1 Q2 Q3 Q4 Source: Nord Pool 8
Slide 9: Commodity prices
Commodity prices Crude oil price (ICE Brent) CO2 price (NP EUA) 160 35 140 2009 average: 30 2009 average: 120 63 (98) 25 13 (23) EUR / tCO2 USD / bbl 100 20 80 60 15 40 10 20 5 0 0 2006 2007 2008 2009 2006 2007 2008 2009 Coal price (ICE Rotterdam) Gas price (ICE NBP) 240 100 2009 average: 2009 avera
Slide 10: Price development in the Nordic region and Russia
Price development in the Nordic region and Russia • Nord Pool wholesale price in: – Q4: decreased 28% to 36.6 (50.8) EUR/MWh – 2009: decreased 22% to 35.0 (44.7) EUR/MWh • Power's achieved Nordic power price in: – Q4: increased 5% to 51.5 (49.1) EUR/MWh – 2009: increased 1% to 49.8 (49.3) EUR/MWh •
Slide 11: Financials
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Slide 12: Power
Power Power • Successful hedging • Lower hydro volumes • Lower nuclear volumes, but more capacity through upgrades MEUR 2009 2008 Sales 2 596 2 892 Comparable operating profit 1 469 1 528 Net Assets 5 512 5 331 Comparable RONA, % 26.6 28.0 Gross Investments 154 134 12
Slide 13: Heat
Heat Heat • Lower volumes and weaker SEK • CHP investments: Tartu and Suomenoja commissioned in 2009 • Częstochowa, Poland and Pärnu, Estonia in 2010 MEUR 2009 2008 Sales 1 394 1 466 Comparable operating profit 227 250 Net Assets 3 786 3 468 Comparable RONA, % 7.2 7.3 Gross Investments 359 431 13
Slide 14: Distribution
Distribution Distribution • Stable results • Automatic meter rollout completed in Sweden; in Finland by 2014 MEUR 2009 2008 Sales 800 789 Comparable operating profit 262 248 Net Assets 3 299 3 032 Comparable RONA, % 8.6 8.2 Gross Investments 193 296 14
Slide 15: Markets
Markets Markets • Improved results from the turnaround programme • Lower volumes, focus in profitability MEUR 2009 2008 Sales 1 449 1 922 Comparable operating profit 22 -33 Net Assets 147 188 Comparable RONA, % 18.6 -15.3 Gross Investments 1 3 15
Slide 16: Russia
Russia Russia • Efficiency improvement programme on track • Clearly higher comparable operating profit in Q4 compared to previous year (EUR +27 million) MEUR 2009 2008* Sales 623 489 Comparable operating profit -26 -92 Net Assets 2 248 2 205 Comparable RONA, % -0.3 -3.8 Gross Investments 218 1 748 *
Slide 17: Income statement
Income statement MEUR IV/2009 IV/2008 2009 2008 Sales 1 563 1 602 5 435 5 636 Expenses -1 041 -991 -3 653 -3 673 Operating profit 522 611 1 782 1 963 Share of profit of associates and jv's 22 48 21 126 Financial expenses, net -39 -54 -167 -239 Profit before taxes 505 605 1 636 1 850 Income tax expen
Slide 18: Comparable and reported operating profit
Comparable and reported operating profit Operating profit IV/2009 Operating profit IV/2008 Operating profit 2009 Operating profit 2008 Comparable Reported Comparable Reported Comparable Reported Comparable Reported Power 394 330 378 470 1 469 1 335 1 528 1 599 Heat 103 108 109 155 227 248 250 307 Di
Slide 19: Cash flow statement
Cash flow statement MEUR IV/2009 IV/2008 2009 2008 Operating profit before depreciations 658 743 2 292 2 478 Non-cash flow items and divesting activities -4 -237 46 -275 Financial items and fx gains/losses -102 326 146 233 Taxes -34 -53 -239 -332 Funds from operations (FFO) 518 779 2 245 2 104 Chang
Slide 20: Key ratios
Key ratios Key ratios MEUR 2009 2008 2007 EBITDA 2 292 2 478 2 298 Net cash flow from operations 2 264 2 002 1 670 Interest-bearing net debt 5 969 6 179 4 466 Equity 8 491 8 411 8 651 Balance sheet total 19 841 20 278 17 674 Net debt/EBITDA* 2.6 2.5 2.2 Return on capital employed (%)* 12.1 15.0 14.0
Slide 21: Debt maturity profile
Debt maturity profile 1250 MEUR 2010 857 1000 2011 626 2012 499 750 2013 558 2014 1,146 500 2015 310 2016 846 2017 211 250 2018 75 2019 779 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+ 2020+ 952 Bonds Financial institutions Other long-term debt CPs Other short-term debt per 31 December,
Slide 22: Outlook
Outlook 22
Slide 23: Commodity prices
Commodity prices Crude oil price (ICE Brent) CO2 price (NP EUA) 160 35 140 30 120 25 EUR / tCO2 USD / bbl 100 20 80 60 15 40 10 20 5 0 2006 2007 2008 2009 2010 2011 0 2006 2007 2008 2009 2010 2011 Coal price (ICE Rotterdam) Gas price (ICE NBP) 240 100 200 80 GBp / therm 160 60 USD / t 120 40 80 40 2
Slide 24: Nord Pool year forwards
Nord Pool year forwards €/MWh Year 07 Year 08 Year 09 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 1 February 2010 75 70 65 60 55 50 45 40 35 30 Forwards in late January 2010: 25 20 • rest of 2010 ~ 44 EUR/MWh 15 • 2011 ~ 42 EUR/MWh 10 • 2012 ~ 41 EUR/MWh 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q
Slide 25: Hedging of Power division's Nordic sales
Hedging of Power division's Nordic sales Status at the end of December 2009 (Status at the end of Sep 2009) Hedge ratio Hedge price 2010 ~ 70% ~ EUR 44 per MWh (~65%) (~ EUR 44 per MWh) 2011 ~ 40% ~ EUR 42 per MWh (~35%) (~ EUR 42 per MWh) 25
Slide 26: New capacity to be commissioned during 2010
Nordic power Fortum in a strong demand position back to 2008 level in 2012-2014 New capacity to be commissioned during 2010 Capacity Capacity Type electricity, MW heat, MW Available Heat Częstochowa, Poland CHP bio, coal 65 120 Q3/2010 Pärnu, Estonia CHP bio, peat 20 45 end of 2010 Power Hydro refur
Slide 27: Fortum in a strong position
Fortum in a strong position • Flexible, low-cost and climate-benign generation portfolio • Russian power reform proceeding and the results of OAO Fortum improving as planned • Nordic power demand recovering • Good hedging positions • Strong financial position and liquidity 27
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