Fortum Oyj · OMXHEX:FORTUM
Fortum Oyj — FY2000 Earnings Presentation
29 slides from Fortum Oyj's earnings presentation, Feb 22, 2001
Slide 1: Financial results 2000
Financial results 2000 22 February 2001
Slide 2: Fortum business structure
Fortum business structure Sectors Segments (financial reporting) Oil and gas Oil and gas upstream Oil refining and marketing Power and Heat Power and heat generation & sales Electricity distribution Service Service Engineering Engineering Fortum Corporation/RNR 22 February 2001 2
Slide 3: Fortum in the year 2000
Fortum in the year 2000 • Comparable operating profit up by 50 %, earnings per share improved by 34%. • Good results in oil production and refining. The low price of electricity reduced profit of electricity generation and sales. • As a result of acquisitions - Stora Enso, Wesertal - electricity gen
Slide 4: Crude Oil Price Performance
Crude Oil Price Performance USD/barrel 36 32 28 24 20 16 12 8 1996 1997 1998 1999 2000 Brent Dated monthly average Fortum Corporation/RNR 22 February 2001 4
Slide 5: Nord Pool System Price 1996 - 2000
Nord Pool System Price 1996 - 2000 40 36 32 Monthly Average EUR / MWh 28 24 20 16 12 8 4 1996 1997 1998 1999 2000 0 Fortum Corporation/RNR 22 February 2001 5
Slide 6: Key ratios
Key ratios IV/00 IV/99 2000 1999 Net sales, MEUR 3,294 2,344 11,026 8,232 Operating profit, MEUR 283 183 906 705 Profit before extraordinary items, MEUR 219 127 633 494 Earnings per share, EUR 0.16 0.11 0.55 0.41 Interest-bearing net debt, MEUR 4,626 3,818 Return on capital employed, % 9.4 8.4 Geari
Slide 7: Net sales
Net sales MEUR Disc MEUR 2000 1999 12 000 Other Oil and Gas Upstream 945 366 Eng 10 000 Serv Refining & Marketing 7 759 5 064 Elect Power Generation 1 760 1 443 P&H 8 000 Electricity Distribution 467 347 R&M O&G Service 356 290 6 000 Engineering 585 479 Other Operations 94 137 4 000 Eliminations -94
Slide 8: Operating profit
Operating profit MEUR 2000 1999 Disc MEUR Other Oil and Gas Upstream *) 218 82 Eng Refining & Marketing 382 182 1 000 Serv Power Generation 211 236 Elect P&H Electricity Distribution 127 115 800 R&M Service 12 12 O&G Engineering -21 12 600 Other Operations -9 -24 Eliminations -14 -17 400 Total 906 5
Slide 9: Oil and Gas Upstream
Oil and Gas Upstream • Production mainly in Norway, some in Oman • Joint ventures in Russia • Oil and gas reserves totalled some 35 million tonnes at the end of 2000 • Natural gas pipeline projects and interests in gas companies Fortum Corporation/RNR 22 February 2001 9
Slide 10: Oil and Gas Upstream: major events in 2000
Oil and Gas Upstream Major events in the year 2000 • Oil and gas reserves at the end of the year some 250 million barrels • Oil and gas production an average of 34,200 oil-equivalent barrels a day (32,700) • The average price of oil sold by Fortum was USD 27.6 per barrel (17.9) • Gas production was
Slide 11: Oil Refining and Marketing Today
Oil Refining and Marketing Today Fortum is number one in the Refining capacity of middle refining and marketing of high-quality, distillates 1997-2001 pro-environmental petroleum kt/a 6000 products in the Baltic Rim 5000 1,200 kt/a Citydiesel • Refining capacity 14 million tonnes other exports a yea
Slide 12: Oil Refining and Marketing: major events in 2000
Oil Refining and Marketing Major events in the year 2000 • The average north-western European refining margin was 3.4 USD/bbl (0.9). Fortum´s refining margin continued to be clearly higher. • Fortum refined a total of 12.7 (12.9) million tonnes of crude oil and other feedstock. • There were no signi
Slide 13: Refining margin in north-western Europe
Refining margin in north-western Europe USD/barrel Weekly averages 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 1998 1999 2000 2001 Average NWE Complex Brent Refinery Product prices: cargoes NWE FOB Fortum Corporation/RNR 22 February 2001 13
Slide 14: Power and Heat Generation and Sales Today
Power and Heat Generation and Sales Today In power generation and sales Fortum is the second largest company in the Nordic market. In heat generation Fortum is number one. • Power generation capacity nearly 10,000 MW*, mostly CO2-free hydro-electric and nuclear power and combined power and heat gene
Slide 15: Power and Heat Generation and Sales: major events in 2000
Power and Heat Generation and Sales Major events in the year 2000 • The average price of electricity in the Nordic electricity exchange was EUR 12.8 per MWh (13.5). • Fortum´s electricity sales were 51.4 TWh (43.8), heat sales 16.3 TWh (15.7). • Acquisition of German Wesertal (some 550 MW, 180 000 c
Slide 16: Electricity Distribution Today
Electricity Distribution Today • A total of 900,000* customers in Sweden, Finland, Germany, and Estonia. • The operations include regional transmission and electricity distribution. • In Sweden, Fortum operates via Birka Energi * includes 50% of Birka Energi´s distribution customers Fortum Corporati
Slide 17: Electricity Distribution: major events in 2000
Electricity Distribution Major events in the year 2000 • The distribution of electricity in distribution networks amounted to a total of 15.0 TWh (12.7). • The increase is mainly attributable to the acquisition of Wesertal. • Länsivoima merged with Fortum. The electricity distribution operations in
Slide 18: Service Today
Service Today Operation-time energy availability of Fortum’s power plants in Finland in • Operation and maintenance services for 2000 power plants and industry Coal-fired power plants 93.8 • Responsible for the operation of Peat- and wood-fired power plants 88.4 – 11,000 MW of power generating capac
Slide 19: Service: major events in 2000
Service Major events in the year 2000 • The operation-time energy availability of power plants operated by Fortum Service continued to be excellent. The five-year average was 97.2% (97.1%). • The profit development reflects normal annual seasonal variation. RONA, % 32.9 Net sales Operating Identifia
Slide 20: Engineering Today
Engineering Today • Turnkey contracts for energy generation and transmission systems • Plant deliveries for oil refining and chemical industries • Railway electrification and the supply of communications applications Fortum Corporation/RNR 22 February 2001 20
Slide 21: Engineering: major events in 2000
Engineering Major events in the year 2000 • At the end of September, the volume of outstanding contracts totalled EUR 473 million (EUR 675 million at the end of 1999). • The reason for the poor result of Engineering were certain projects of Power Plant Engineering. • Fortum has decided to sell its T
Slide 22: Income statement
Income statement MEUR 2000 1999 Net sales 11 026 8 232 Expenses -10 120 -7 527 Operating profit 906 705 Financial expenses, net -273 -211 Profit before extraordinary items 633 494 Extraordinary items -10 460 Profit before taxes 623 954 Income taxes total -154 -229 Minority interests -46 -22 Net prof
Slide 23: Balance sheet
Balance sheet Dec 31, Dec 31, MEUR 2000 1999 Fixed assets and other long-term investments 11 712 9 724 Current assets 3 116 2 815 Assets 14 828 12 539 Shareholders' equity 5 022 4 705 Minority interests 1 281 126 Interest-bearing liabilities 5 063 4 593 Interest-free liabilities 3 462 3 115 Equity a
Slide 24: Crude oil price
Crude oil price Brent Dated monthly prices and futures USD/bbl 35 30 25 20 15 10 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May 1999 2000 2001 Fortum Corporation/RNR 22 February 2001 24
Slide 25: Nordic Power Market Prices
Nordic Power Market Prices Futures Prices 01-11-2000 Actual System Price 25 Weekly Average Price EUR/MWh 20 15 10 5 0 9 9 9 9 0 0 0 1 99 00 01 99 99 99 99 00 00 00 00 19 20 20 /1 /1 /1 /1 /2 /2 /2 /2 1/ 9/ 5/ 13 25 37 49 21 33 45 17 Fortum Corporation/RNR 22 February 2001 25
Slide 26: Near-term outlook
Near-term outlook significant drivers • market price of crude oil and electricity • refining margin and USD exchange rate • The Opec target price is 22-28 USD/bbl, February futures 26-28 USD/bbl. Fortum´s production of oil and gas is increasing. • The refining margin during 2000 was exceptionally hi
Slide 27: Performance improvement actions
Performance improvement actions Geographical focus in power production Withdrawal from UK, Ireland, and Hungary Streamlining Engineering Transmission Engineering exit Restructuring Power Plant Engineering R & D restructuring Corporate performance improvement program Increased productivity by 5-10%/a
Slide 28: Business development
Business development • We focus on the Nordic countries and the Baltic Rim • We build our growth on current strengths and active participation in the industry restructuring • acquisition of 100% share of Birka Energi AB • strong niche position in Refining and Marketing • leveraging our customer base
Slide 29: New Sectors
New Sectors Fortum Markets to develop customerships – energy products for industrial customers – versatile offerings to SMEs and private consumers – next step to the work started in Energy House Fortum Energy Solutions to offer new service concepts – significant growth potential – consists of the cu