Fortum in brief

Fortum is a leading clean-energy company that provides its customers with electricity, heating and cooling as well as smart solutions to improve resource efficiency. We want to engage our customers and society to join the change for a cleaner world. We employ some 9,000 professionals in the Nordic and Baltic countries, Russia, Poland and India. Fortum's share is listed on Nasdaq Helsinki.

Fortum 18/01/2019
Currency EUR Volume 1,376,040
Previous Close 19.35 Number of shares (million) 888.29
Change (%) 1.18 Market Cap (million) 17,184.06

Megatrends

Climate change and resource efficiency

Urbanisation

Active Customers

Digitalisation, new technologies

Mission

We engage our customers and society to drive the change towards a cleaner world. Our role is to acelerate this change by reshaping the energy system, improving resource efficiency and providing smart solutions. This way we deliver excellent shareholder value.

Strategy

Drive productivity and industry transformation Grow in solar and wind
Create solutions for sustainable cities Build new energy ventures

Megatrends

Climate change and resource efficiency

Urbanisation

Active Customers

Digitalisation, new technologies

Mission

We engage our customers and society to drive the change towards a cleaner world. Our role is to acelerate this change by reshaping the energy system, improving resource efficiency and providing smart solutions. This way we deliver excellent shareholder value.

Strategy

Drive productivity and industry transformation Grow in solar and wind
Create solutions for sustainable cities Build new energy ventures

Key figures

2015 2016 2017
Sales 3,459 3,632 4,520
Operating profit -150 633 1,158
Profit before income tax -305 595 1,111
Capital employed 19,870 18,649 18,172
Interest-bearing net debt -2,195 -48 988
Capital expenditure and gross investments in shares 625 1,435 1,815
Return on capital employed (%)  22.7 4.0 7.1
Return on shareholders’ equity (%)  33.4 3.7 6.6
Gearing (%) -16 0 7
Equity-to-assets ratio (%) 61 62 61
Net cash from operating activities 1,381 621 993
Dividend 977 977 977

Financial targets

Fortum's long-term over the cycle financial targets give guidance on our value creation potential, growth strategy and business activities.

ROCE

Comparable net debt/EBITDA

ROCE

Comparable net debt/EBITDA

Dividend

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

Dividend history (EUR/share)

Dividend history (EUR/share)

Debt maturity profile 31 December 2017

Total interest-bearing debt EUR 4,885 million

Debt maturity profile 31 December 2017

Total interest-bearing debt EUR 4,885 million

Shares and votes

Shares and votes

Fortum’s business operations Generation City Solutions Consumer Solutions Russia Other
Business description The Generation segment comprises power production in the Nordics including nuclear, hydro and thermal power production, power portfolio optimisation, trading and industrial intelligence, and nuclear services globally. City Solutions develops sustainable solutions for urban areas into a growing business for Fortum. The segment comprises heating and cooling, waste-to-energy, biomass and other circular economy solutions. The business operations are located in the Nordics, the Baltic countries and Poland. Consumer Solutions comprises electricity and gas retail businesses in the Nordics and Poland, including the customer service, invoicing and debt collection business. Fortum is the largest electricity retail business in the Nordics, with approximately 2.5 million customers across different brands in Finland, Sweden, Norway and Poland. The Russia segment comprises power and heat generation and sales in Russia. The segment also includes Fortum’s over 29% holding in TGC-1, which is an associated company and is accounted for using the equity method. Technology and New Ventures
- to speed up innovation and new business development. This unit is responsible for Fortum's research and development.
M&A and Solar and Wind Development
- Fortum strives to create value by driving utility industry consolidation and restructuring through transformational mergers and acquisitions in its current home markets and in the integrating European market. The company also targets a gigawatt-scale solar and wind portfolio.
Drivers Nordic power price, generation volumes, availability Fuel mix, heat and power price, gate fees Electricity sales, competition, customer base New capacity and capacity price, electricity and heat price, availability
Comparable operating profit EUR 478 million EUR 98 million EUR 41 million EUR 296 million
Comparable net assets EUR 5,672 million EUR 3,728 million EUR 638 million EUR 3,161 million
Volume Nordic generation 44.2 TWh Power sales 2.6 TWh, Heat sales 10.0 TWh Electricity sales 20.5 TWh, Gas sales 4.0 TWh Power generation 30.5 TWh, Heat sales 19.8 TWh
Generation City Solutions
Business description Business description
The Generation segment comprises power production in the Nordics including nuclear, hydro and thermal power production, power portfolio optimisation, trading and industrial intelligence, and nuclear services globally. City Solutions develops sustainable solutions for urban areas into a growing business for Fortum. The segment comprises heating and cooling, waste-to-energy, biomass and other circular economy solutions. The business operations are located in the Nordics, the Baltic countries and Poland.
Drivers Drivers
Nordic power price, generation volumes, availability Fuel mix, heat and power price, gate fees
Comparable operating profit Comparable operating profit
EUR 478 million EUR 98 million
Comparable net assets Comparable net assets
EUR 5,672 million EUR 3,728 million
Volume Volume
Nordic generation 44.2 TWh Power sales 2.6 TWh, Heat sales 10.0 TWh
Consumer Solutions Russia
Business description Business description
Consumer Solutions comprises electricity and gas retail businesses in the Nordics and Poland, including the customer service, invoicing and debt collection business. Fortum is the largest electricity retail business in the Nordics, with approximately 2.5 million customers across different brands in Finland, Sweden, Norway and Poland. The Russia segment comprises power and heat generation and sales in Russia. The segment also includes Fortum’s over 29% holding in TGC-1, which is an associated company and is accounted for using the equity method.
Drivers Drivers
Electricity sales, competition, customer base New capacity and capacity price, electricity and heat price, availability
Comparable operating profit Comparable operating profit
EUR 41 million EUR 296 million
Comparable net assets Comparable net assets
EUR 638 million EUR 3,161 million
Volume Volume
Electricity sales 20.5, TWh Gas sales 4.0 TWh Powe generation 30.5, TWh Heat sales 19.8 TWh
Other
Business description
Technology and New Ventures
- to speed up innovation and new business development. This unit is responsible for Fortum's research and development.
M&A and Solar and Wind Development
- Fortum strives to create value by driving utility industry consolidation and restructuring through transformational mergers and acquisitions in its current home markets and in the integrating European market. The company also targets a gigawatt-scale solar and wind portfolio.

Business drivers and risks

  • One of the key factors influencing Fortum's business performance is the wholesale price of electricity in the Nordic region
  • Fortum expects the annual electricity demand growth to be approximately 0.5% on average in the coming years
  • Electricity is expected to continue to gain share of total energy consumption
  • Generation sensitivity: achieved price +/- EUR 1/MWh = ~EUR 45 million in annual comparable operating profit
  • Hedging at the end of 2017 for 2018 approximately 70% hedged at EUR 28/MWh and for 2019 approximately 40% hedged at EUR 25/MWh
  • Annual CAPEX estimate excluding acquisitions in 2018 in the range of EUR 600-700 million (maintenance CAPEX at approximately EUR 300 million, well below the level of depreciation)
  • The effective tax rate estimate for 2018 is 19-21%

Fortum is a forerunner in sustainability

We engage our customers and society to drive the change towards a cleaner world. Our role is to accelerate this change by reshaping the energy system, improving resource efficiency and providing smart solutions. This way we deliver excellent shareholder value.

2017

61% of Fortum's total power generation CO2-free

96% of Fortum’s power generation in the EU CO2-free

2017

61% of Fortum's total power generation CO2-free

96% of Fortum’s power generation in the EU CO2-free

Fortum's power generation in 2017

Total generation 73.2 TWh

Fortum's power generation in 2017

Total generation 73.2 TWh

Fortum's heat production in 2017

Total production 28.6 TWh

Fortum's heat production in 2017

Total production 28.6 TWh

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