CEO s review. Timo Karttinen Interim President and CEO, Chief Financial Officer

Transcription

1 CEO s review Timo Karttinen Interim President and CEO, Chief Financial Officer

2 CEO s review Fortum today Strategy and divestment of electricity distribution business Fortum s development and operating environment Russia as Fortum s home market Key financial figures for 2014 and future outlook

3 Fortum s operations in 2014 Sweden Electricity and heat Electricity sales Electricity distribution, divested 3/2015 Norway Electricity and heat Electricity sales Electricity distribution, divested 5/2014 Great Britain Operations divested in 2014 Poland Electricity and heat Finland Electricity and heat Electricity sales Electricity distribution, divested 3/2014 Russia Electricity and heat Baltic countries Electricity and heat Expert services globally India Solar power

4 Fortum personnel by country, 31 December 2014 Other countries 329 Russia 4,213 Finland 2,040 Sweden 1,201 Poland 603 Estonia 206

5 Fortum has about 110,000 shareholders Among the most traded shares on Nasdaq Helsinki Market capitalisation approx. EUR 16 billion Finnish State 50.8% Households 8.2% Financial and insurance institutions 1.6% Other Finnish shareholders 7.1% Foreign shareholders 32.3% 31 Dec 2014

6 Biggest electricity seller in the Nordic countries 1.3 million customers Charging solutions Solar power Open district heat Fortum Fiksu Fortum Valpas

7 Sustainability an integral part of operations Reduced specific CO 2 emissions Improved efficiency in fuel use Fewer electricity and heat outages Satisfied customers, good reputation Fewer occupational injuries Ensuring responsible ways of operating

8 Investments in CO 2 -free and energy-efficient production Loviisa Suomenoja Imatra Chelyabinsk Höljes Nyagan India Värtaverket TSE Turun Seudun Energiatuotanto Oy

9 Fortum s strategy is more relevant than ever Mission Fortum s purpose is to create energy that improves life for present and future generations. We provide sustainable solutions for society and deliver excellent value to our shareholders. Strategy Build on the strong Nordic core Create solid earnings growth in Russia Build a platform for future growth values Strong competence in CO 2 -free hydro and nuclear, efficient CHP production and energy markets ACCOUNTABILITY CREATIVITY RESPECT HONESTY

10 Divestment of electricity distribution business Assessment of future alternatives 2013 Finnish distribution business divested 3/2014 Norwegian distribution business divested 5/2014 Swedish distribution business divestment announced Total consideration about EUR 9.3 billion Sales gain of EUR 6.3 billion booked during 2014 and 2015

11 Fortum s development and operating environment Tapio Kuula President and CEO until 31 January 2015

12 Fortum s strategic development Skandinaviska Elverk Gullspång Länsivoima 45 % 65 % Birka Energi 50 % Fortum 50 % Stockholm Merger of Gullspång and Stockholm Energi Lenenergo share Stora Kraft Länsivoima 100 % Birka Energi 50 % 100 % Elnova 50 % 100 % Østfold Hafslund share Lenenergo share District heat in Poland TGC-1 established Separation of oil businesses IVO Neste Fortum E.ON Finland Lenenergo shares sold TGC-10 Fingrid shares sold Sale of heat business operations outside Stockholm Small-scale hydropower sold Non-strategic heat operations sold Electricity distribution business sold shareholding sold Electricity distribution and heat businesses sold Grangemouth power plant sold Electricity distribution business sold Gasum

13 Changing operating environment Financial crisis Increased uncertainty Growth in renewable energy Climate change Climate and energy policy Customers changing expectations

14 Fortum has increased its total shareholder value Fortum EDF EON RWE VER

15 Russia as Fortum s home market area OAO Fortum s investment programme: 8 new production units Original target intact: RUB 18.2 billion operating profit run-rate Restructuring process of TGC-1 ownership under way

16 Fortum s strengths in changing markets CO 2 -free hydro and nuclear power Efficient combined heat and power production Electricity sales and customer solutions the Nordic countries biggest seller of electricity

17 Fortum s financial results and outlook Timo Karttinen

18 Good results in a challenging operating environment Key financial figures Sales, MEUR 4,751 5,309 Comparable EBITDA, MEUR 1,873 1,975 Operating profit, MEUR 3,428 1,508 Comparable operating profit, MEUR 1,351 1,403 Profit before taxes, MEUR 3,360 1,398 Earnings per share, EUR Items affecting comparability Cash flow from operating activities, MEUR 1,762 1,548

19 Hydro and nuclear power production increased Comparable operating profit, MEUR Power and Technology Heat, Electricity Sales and Solutions Russia Distribution* Others 2014 The figures of the divested electricity distribution businesses were included in the segment data until the closing of the divestment transactions.

20 Successful efficiency programme secures competitiveness Efficiency programme successfully finalised in 2014 Reduction of annual expenditure level is visible in all divisions Improved working capital efficiency Non-core assets totalling EUR 800 million divested + WHY WHAT WHEN SPEED Cash flow improved by more than a million euros FLEXIBILITY INVESTMENTS IN CAPITAL EXPENDITURES DIVESTMENTS REDUCTION IN WORKING CAPITAL FIXED COSTS

21 Strong cash flow from operating activities MEUR Operating profit before depreciation 3,954 2,129 Non-cash flow items and divesting activities -2, Financial items and realised foreign exchange gains/losses Taxes Funds from operations 1,808 1,469 Change in working capital Total net cash from operating activities 1,762 1,548 Paid capital expenditure ,004 Divestments of shares* 3, Other investment activities Cash flow before financing activities 4, * Includes proceeds from interest-bearing receivables related to divestments

22 Fortum s strong balance sheet MEUR EBITDA, MEUR 3,954 2,129 Comparable EBITDA, MEUR 1,873 1,975 Interest-bearing net debt, MEUR 4,217 7,793 Comparable net debt/ebitda Return on capital employed (%) Return on shareholders equity (%) Good liquidity and strong cash reserves EUR 21.4 billion balance sheet at year-end 2014

23 Updated financial targets Group finanical targets Target Return on capital employed (ROCE) 12% Comparable net debt/ebitda About 2.5 No change in dividend policy Fortum s target is to pay a stable, sustainable and over time increasing dividend of 50-80% of earnings per share excluding one-off items.

24 Taxation is part of successful business operations Taxes borne 525 M Taxes collected 527 M

25 Executive Management Team Matti Ruotsala Chief Operating Officer Tiina Tuomela Executive Vice President, Nuclear and Thermal Power Division

26 Executive Management Team

27 We will continue the strategy implementation Mission Fortum s purpose is to create energy that improves life for present and future generations. We provide sustainable solutions for society while delivering excellent value to our shareholders. Strategy Build on the strong Nordic core Create solid earnings growth in Russia Build a platform for future growth Strong competence in CO2-free hydro and nuclear, efficient CHP production and energy markets

28