Consistent performance in a challenging environment
Fortum Corporation
Interim Report January-September 2009
22 October 2009 at 9:00 EET
Consistent performance in a challenging environment
- Comparable operating profit EUR 1,318 (1,337) million, -1%; includes a EUR -91
million translation effect from weaker SEK
- Earnings per share EUR 1.02 (EUR 1.10)
- Net cash from operating activities EUR 1,868 (1,440) million
- 92% (92%) of power generated in the EU was CO2-free
- Progress in Russia according to plan
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| Key figures | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Sales, EUR million | 1,046 | 1,272 | 3,872 | 4,034 | 5,636 | 5,474 |
--------------------------------------------------------------------------------
| Operating profit, EUR | 286 | 395 | 1,260 | 1,352 | 1,963 | 1,871 |
| million | | | | | | |
--------------------------------------------------------------------------------
| Comparable operating | 316 | 353 | 1,318 | 1,337 | 1,845 | 1,826 |
| profit, EUR million | | | | | | |
--------------------------------------------------------------------------------
| Profit before taxes, | 242 | 337 | 1,131 | 1,245 | 1,850 | 1,736 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.24 | 0.32 | 1.02 | 1.10 | 1.74 | 1.65 |
| EUR | | | | | | |
--------------------------------------------------------------------------------
| Net cash from | 342 | 401 | 1,868 | 1,440 | 2,002 | 2,430 |
| operating activities, | | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | | | 8.89 | 8.49 | 8.96 | N/A |
| per share, EUR | | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing net | | | 6,041 | 6,520 | 6,179 | N/A |
| debt | | | | | | |
| (at end of | | | | | | |
| period), EUR million | | | | | | |
--------------------------------------------------------------------------------
| Average number of | | | 888,23 | 887,24 | 887,25 | 888,026 |
| shares, 1,000s | | | 0 | 1 | 6 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key financial ratios | 2008 | LTM |
--------------------------------------------------------------------------------
| Return on capital employed, % | 15.0 | 13.2 |
--------------------------------------------------------------------------------
| Return on shareholders' equity, % | 18.7 | 18.6 |
--------------------------------------------------------------------------------
| Net debt/EBITDA | 2.5 | 2.5 |
--------------------------------------------------------------------------------
Fortum's January-September comparable operating profit was EUR 1,318 (1,337)
million. The decline in operating profit is mainly due to lower results in the
Power Generation and Heat segments. Both were negatively affected by lower power
sales prices especially in the third quarter. The comparable operating profit in
the Markets and Russia segments improved from January-September a year ago.
Nordic power consumption was about 20 terawatt-hours (TWh), or 7%, lower in
January-September 2009 compared to the previous year. 2009 is expected to be the
trough in Nordic electricity demand.
The Nord Pool average system price of electricity was EUR 34.5 (42.7) per
megawatt-hour (MWh). In the same period, Power Generation's achieved power price
was EUR 49.2 (49.3) per MWh, i.e. approximately the same level as last year,
mainly thanks to hedging.
The average SEK rate in the first three quarters of 2009 decreased by
approximately 13% compared to the first three quarters of 2008. The translation
effect caused by the lower average SEK rate was approximately EUR -91 million in
Fortum's January-September comparable operating profit compared to the same
period last year.
Fortum's net debt to EBITDA for the last twelve months was 2.5 (2.5 at year-end
2008).
The integration of OAO Fortum (former TGC-10) proceeded according to plans.
Fortum is well on track to reach the targeted annual efficiency improvements of
approximately EUR 100 million by 2011.
Power sector reform in Russia has progressed as planned: The share of produced
wholesale power sold on the competitive market in Russia was increased from 30%
to 50% at the beginning of July 2009. The share is expected to increase further
to 60% from the beginning of 2010.
Financial results
July-September
Group sales were EUR 1,046 (1,272) million. Group operating profit totalled EUR
286 (395) million. Comparable operating profit totalled EUR 316 (353) million.
The third-quarter net profit declined EUR 65 million from a year ago. Earnings
per share were EUR 0.24 (0.32), 25% lower than in the third quarter of last
year. The decline stems from lower reported operating profit. The third-quarter
reported operating profit was affected by mark-to-market accounting effects (IAS
39) from the decrease in the value of the currency derivatives used for hedging
Fortum's power derivatives portfolio.
Sales by segment
--------------------------------------------------------------------------------
| EUR million | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Power Generation | 587 | 718 | 1,917 | 2,156 | 2,892 | 2,653 |
--------------------------------------------------------------------------------
| Heat | 176 | 226 | 937 | 1,003 | 1,466 | 1,400 |
--------------------------------------------------------------------------------
| Distribution | 168 | 171 | 573 | 583 | 789 | 779 |
--------------------------------------------------------------------------------
| Markets | 272 | 461 | 1,039 | 1,391 | 1,922 | 1,570 |
--------------------------------------------------------------------------------
| Russia | 109 | 140 | 429 | 292 | 489 | 626 |
--------------------------------------------------------------------------------
| Other | 18 | 21 | 55 | 62 | 83 | 76 |
--------------------------------------------------------------------------------
| Netting of Nord Pool | -200 | -465 | -770 | -1,260 | -1,736 | -1,246 |
| transactions | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -84 | 0 | -308 | -193 | -269 | -384 |
--------------------------------------------------------------------------------
| Total | 1,046 | 1,272 | 3,872 | 4,034 | 5,636 | 5,474 |
--------------------------------------------------------------------------------
Comparable operating profit by segment
--------------------------------------------------------------------------------
| EUR million | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Power Generation | 310 | 371 | 1,075 | 1,150 | 1,528 | 1,453 |
--------------------------------------------------------------------------------
| Heat | -14 | -7 | 124 | 141 | 250 | 233 |
--------------------------------------------------------------------------------
| Distribution | 47 | 49 | 182 | 185 | 248 | 245 |
--------------------------------------------------------------------------------
| Markets | 7 | -8 | 11 | -33 | -33 | 11 |
--------------------------------------------------------------------------------
| Russia | -22 | -39 | -33 | -72 | -92 | -53 |
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| Other | -12 | -13 | -41 | -34 | -56 | -63 |
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| Total | 316 | 353 | 1,318 | 1,337 | 1,845 | 1,826 |
--------------------------------------------------------------------------------
Operating profit by segment
--------------------------------------------------------------------------------
| EUR million | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Power Generation | 278 | 438 | 1,005 | 1,129 | 1,599 | 1,475 |
--------------------------------------------------------------------------------
| Heat | -12 | -15 | 140 | 152 | 307 | 295 |
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| Distribution | 47 | 50 | 182 | 187 | 248 | 243 |
--------------------------------------------------------------------------------
| Markets | 7 | -17 | 3 | -6 | -35 | -26 |
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| Russia | -22 | -39 | -33 | -72 | -91 | -52 |
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| Other | -12 | -22 | -37 | -38 | -65 | -64 |
--------------------------------------------------------------------------------
| Total | 286 | 395 | 1,260 | 1,352 | 1,963 | 1,871 |
--------------------------------------------------------------------------------
January-September
Group sales were EUR 3,872 (4,034) million. Group operating profit totalled EUR
1,260 (1,352) million. Comparable operating profit totalled EUR 1,318 (1,337)
million.
The share of profits/losses of associates and joint ventures was EUR -1 million,
EUR 79 million lower than in the previous year. This was mainly due to the lower
contribution from Hafslund ASA's fourth-quarter 2008 earnings. Hafslund's effect
is EUR 60 million of the decrease.
The Group's net financial expenses decreased to EUR 128 (185) million. The
decrease is attributable to lower interest expenses. The change in fair value of
derivatives was
EUR 5 (5) million.
Profit before taxes was EUR 1,131 (1,245) million.
Taxes for the period totalled EUR 211 (256) million. The tax rate according to
the income statement was 18.7% (20.6%).
The profit for the period was EUR 920 (989) million. Fortum's earnings per share
were EUR 1.02 (1.10).
Non-controlling (minority) interests accounted for EUR 14 (10) million. These
are mainly attributable to Fortum Värme Holding AB, in which the city of
Stockholm has a 50% economic interest.
Return on capital employed was 13.2% for the last twelve months (15.0% at
year-end 2008), and return on shareholders' equity was 18.6% for the last twelve
months (18.7% at year-end 2008).
Market conditions
NORDIC COUNTRIES
According to preliminary statistics, the Nordic countries consumed 75 (83) TWh
of electricity in the third quarter of 2009, about 10% less than in the previous
year. During the first three quarters, the Nordic countries consumed about 268
(288) TWh. The decrease is mainly due to the drop in industrial consumption as a
result of the recession. According to Fortum's estimate, the Nordic industrial
consumption decreased close to 20% compared to the first three quarters of 2008.
The price of coal remained relatively stable during the third quarter of 2009,
continuing on a clearly lower level compared to one year before. The average
market price of coal (ICE Rotterdam) during the third quarter was USD 68 (191)
per tonne. After a strong second quarter of 2009, the market price for oil (ICE
Brent) stabilised to an average of USD 69 (117) per barrel for the third
quarter. During the third quarter, the average market price of CO2 emission
allowances (EUA) for 2009 was EUR 14.3 per tonne CO2. The corresponding price
for CO2 emission allowances for 2008 was EUR 24.5 per tonne CO2.
2009 started with the Nordic water reservoirs 5 TWh below the long-term average.
At the end of the third quarter, the Nordic water reservoirs were at the
long-term average and 6 TWh above the corresponding level last year.
During the third quarter, the average system spot price for power in Nord Pool
was EUR 31.3 (55.4) per MWh. The Finnish and Swedish area prices were above the
system price level, at EUR 35.6 (65.8) per MWh in Finland and at EUR 35.4 (65.9)
per MWh in Sweden.
In January-September, the average system spot price for power in Nord Pool was
EUR 34.5 (42.7) per MWh. The average Finnish and Swedish area prices were EUR
36.0 (50.6) per MWh.
In Germany, the average spot price for the third quarter of 2009 was EUR 37.0
(73.2) per MWh, being higher than in the Nordic area. This resulted in net
export from the Nordic area to Germany.
RUSSIA
According to preliminary statistics, electricity demand in January-September
2009 decreased by approximately 8% compared to the corresponding period in 2008.
Russia's overall electricity demand in the third quarter of 2009 decreased by
approximately 8% compared to the corresponding period of the previous year. OAO
Fortum operates in the Tuymen and Chelyabinsk areas, which belong to the Urals
price zone. Electricity consumption in the Urals region decreased by about 8%
compared to the previous year. In the Tyumen area, where industrial production
is dominated by oil and gas industries, electricity demand decreased by
approximately 1%. Electricity demand in the Chealyabinsk area, which is
dominated by the metals industry, is showing some signs of picking up: the
year-on-year decrease in the third quarter was approximately 12% while it was
over 25% in the second quarter.
The average electricity spot price, excluding capacity price, in the European
and Urals part of Russia increased to RUB 715 per MWh from the previous quarter
RUB 640 per MWh. However, the spot price decreased from RUB 831 per MWh in the
third quarter 2008. The regulated electricity prices increased from a year ago.
The capacity prices are still mainly regulated and were, on average, higher than
a year ago.
The share of power sold on the liberalised market was increased from 30% to 50%
in the beginning of July 2009. The rules for the long-term capacity market are
currently under consideration by the Russian government and are expected to be
finalised by the end of the year.
In August 2009, a major breakdown occurred at the Sayano-Shushenskaya hydro
power plant in Russia. The event has affected power prices only in the Siberian
price zone of the Russian power market. The European and Urals zone, where OAO
Fortum operates, has not been affected.
Total power and heat generation figures
Fortum's total power generation during January-September 2009 was 47.9 (46.7)
TWh, of which 35.3 (38.7) TWh was in the Nordic countries, representing 13%
(13%) of the total Nordic electricity consumption. Fortum's total heat
production during January-September 2009 was 33.0 (24.8) TWh, of which 13.2
(14.7) TWh was in the Nordic countries.
The increase in the total power and heat generation volumes is due to the
inclusion of OAO Fortum, which has been consolidated from the beginning of April
2008.
The decrease in Nordic hydropower generation was mainly due to lower
precipitation and inflows into Nordic water reservoirs. 2008 was an
exceptionally good hydro year. The decrease in Nordic nuclear power generation
is mainly due to the long upgrade outage in Oskarshamn 3.
Fortum's total power and heat generation figures are presented below. In
addition, the respective figures by segment are presented in the segment
reviews.
--------------------------------------------------------------------------------
| Fortum's total power | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| and heat generation in | 9 | | 09 | 08 | | |
| the EU and Norway, TWh | | | | | | |
--------------------------------------------------------------------------------
| Power generation | 10.4 | 10.9 | 36.2 | 39.5 | 52.6 | 49.3 |
--------------------------------------------------------------------------------
| Heat generation | 2.5 | 3.7 | 15.8 | 17.6 | 25.0 | 23.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum's total power | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| and heat generation in | 9 | | 09 | 08 | | |
| Russia, TWh *) | | | | | | |
--------------------------------------------------------------------------------
| Power generation | 3.4 | 3.4 | 11.7 | 7.2 | 11.6 | 16.1 |
--------------------------------------------------------------------------------
| Heat generation | 2.8 | 2.8 | 17.2 | 7.2 | 15.3 | 25.3 |
--------------------------------------------------------------------------------
*) Power and heat generation numbers for Q1/09 have been revised
--------------------------------------------------------------------------------
| Fortum's own power | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| generation by source, | 9 | | 09 | 08 | | |
| TWh, | | | | | | |
| total in the | | | | | | |
| Nordic countries | | | | | | |
--------------------------------------------------------------------------------
| Hydropower | 5.3 | 4.5 | 16.2 | 16.9 | 22.9 | 22.2 |
--------------------------------------------------------------------------------
| Nuclear power | 4.3 | 5.4 | 16.3 | 18.4 | 23.7 | 21.6 |
--------------------------------------------------------------------------------
| Thermal power | 0.4 | 0.8 | 2.8 | 3.4 | 5.0 | 4.4 |
--------------------------------------------------------------------------------
| Total | 10.0 | 10.7 | 35.3 | 38.7 | 51.6 | 48.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum's own power | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| generation by source, | 9 | | 09 | 08 | | |
| %, total in the Nordic | | | | | | |
| countries | | | | | | |
--------------------------------------------------------------------------------
| Hydropower | 53 | 42 | 46 | 44 | 44 | 46 |
--------------------------------------------------------------------------------
| Nuclear power | 43 | 50 | 46 | 47 | 46 | 45 |
--------------------------------------------------------------------------------
| Thermal power | 4 | 8 | 8 | 9 | 10 | 9 |
--------------------------------------------------------------------------------
| Total | 100 | 100 | 100 | 100 | 100 | 100 |
--------------------------------------------------------------------------------
Total power and heat sales figures
Fortum's total power sales during January-September 2009 were 55.5 (54.2) TWh,
of which 40.4 (44.2) TWh were in the Nordic countries. This represents
approximately 15% (15%) of the estimated Nordic electricity consumption during
January-September 2009. Fortum's total heat sales during January-September 2009
were 33.4 (25.2) TWh, of which 12.0 (13.9) TWh were in the Nordic countries.
--------------------------------------------------------------------------------
| Fortum's total | III/0 | III/0 | I-III/ | I-III/ | 2008 | LTM |
| electricity* and heat | 9 | 8 | 09 | 08 | | |
| sales in the EU and | | | | | | |
| Norway, EUR million | | | | | | |
--------------------------------------------------------------------------------
| Electricity sales | 630 | 725 | 2,034 | 2,188 | 2,959 | 2,805 |
--------------------------------------------------------------------------------
| Heat sales | 142 | 173 | 744 | 792 | 1,157 | 1,109 |
--------------------------------------------------------------------------------
* Nord Pool transactions are calculated as a net amount of hourly sales and
purchases at the Group level.
--------------------------------------------------------------------------------
| Fortum's total | III/0 | III/0 | I-III/ | I-III/ | 2008 | LTM |
| electricity and heat | 9 | 8 | 09 | 08 | | |
| sales in Russia, EUR | | | | | | |
| million | | | | | | |
--------------------------------------------------------------------------------
| Electricity sales | 87 | 112 | 281 | 217 | 332 | 396 |
--------------------------------------------------------------------------------
| Heat sales | 18 | 23 | 143 | 66 | 141 | 218 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum's total | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| electricity | 9 | | 09 | 08 | | |
| sales* by area, TWh | | | | | | |
--------------------------------------------------------------------------------
| Finland | 5.3 | 6.0 | 19.0 | 21.0 | 28.7 | 26.7 |
--------------------------------------------------------------------------------
| Sweden | 6.0 | 6.1 | 20.1 | 21.8 | 28.5 | 26.8 |
--------------------------------------------------------------------------------
| Russia | 4.0 | 4.4 | 14.2 | 9.2 | 14.8 | 19.8 |
--------------------------------------------------------------------------------
| Other countries | 0.6 | 0.7 | 2.2 | 2.2 | 3.0 | 3.0 |
--------------------------------------------------------------------------------
| Total | 15.9 | 17.2 | 55.5 | 54.2 | 75.0 | 76.3 |
--------------------------------------------------------------------------------
* Nord Pool transactions are calculated as a net amount of hourly sales and
purchases at the Group level.
--------------------------------------------------------------------------------
| Fortum's total heat | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| sales by area, TWh | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Russia | 2.3 | 2.4 | 16.7 | 6.7 | 15.3 | 25.3 |
--------------------------------------------------------------------------------
| Finland | 0.8 | 1.7 | 5.3 | 7.7 | 10.8 | 8.4 |
--------------------------------------------------------------------------------
| Sweden | 0.9 | 1.1 | 6.6 | 6.1 | 9.1 | 9.6 |
--------------------------------------------------------------------------------
| Poland | 0.1 | 0.2 | 2.3 | 2.3 | 3.6 | 3.6 |
--------------------------------------------------------------------------------
| Other countries** | 0.7 | 0.6 | 2.5 | 2.4 | 3.4 | 3.5 |
--------------------------------------------------------------------------------
| Total | 4.8 | 6.0 | 33.4 | 25.2 | 42.2 | 50.4 |
--------------------------------------------------------------------------------
** Including the UK, which is reported in the Power Generation segment, other
sales.
Fortum's emissions subject to the EU's trading scheme
During the first nine months of 2009, approximately 92% (92%) of the power
generated by Fortum within the EU countries was CO2-free.
Fortum's total CO2 emissions subject to the EU's emissions trading scheme (ETS)
in the first three quarters amounted to 5.0 (4.5) million tonnes of CO2.
Fortum's total annual CO2 allowance allocation for its power and heat plants is
approximately 5.9 million tonnes per year during 2008-2012. In Finland, Fortum's
CO2 allocation is approximately 4.1 million tonnes of CO2 per annum,
representing 11% of the Finnish national allocation. In Sweden, Fortum's free
CO2 allocation is approximately 0.2 million tonnes of CO2 per annum,
representing 0.7% of the Swedish national allocation.
--------------------------------------------------------------------------------
| Total CO2 emissions | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| (million tonnes) | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Total emissions | 3.9 | 4.1 | 15.4 | 10.8 | 17.6 | 22.2 |
--------------------------------------------------------------------------------
| Emissions subject to | 1.2 | 1.1 | 5.0 | 4.5 | 7.2 | 7.7 |
| ETS | | | | | | |
--------------------------------------------------------------------------------
| Free emissions | - | - | - | - | 5.9 | - |
| allocation | | | | | | |
--------------------------------------------------------------------------------
| Emissions in Russia | 2.7 | 2.8 | 9.9 | 5.8 | 9.8 | 13.9 |
--------------------------------------------------------------------------------
SEGMENT REVIEWS
Power Generation
The business area comprises power generation and sales in the Nordic countries
and the provision of operation and maintenance services in the Nordic area and
selected international markets. The Power Generation segment sells its
production to Nord Pool.
--------------------------------------------------------------------------------
| EUR million | III/0 | III/0 | I-III/ | I-III/ | 2008 | LTM |
| | 9 | 8 | 09 | 08 | | |
--------------------------------------------------------------------------------
| Sales | 587 | 718 | 1,917 | 2,156 | 2,892 | 2,653 |
--------------------------------------------------------------------------------
| - power sales | 541 | 644 | 1,777 | 1,928 | 2,566 | 2,415 |
--------------------------------------------------------------------------------
| - other sales | 46 | 74 | 140 | 228 | 326 | 238 |
--------------------------------------------------------------------------------
| Operating profit | 278 | 438 | 1,005 | 1,129 | 1,599 | 1,475 |
--------------------------------------------------------------------------------
| Comparable operating | 310 | 371 | 1,075 | 1,150 | 1,528 | 1,453 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at | | | 5,527 | 5,396 | 5,331 | |
| period-end) | | | | | | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | 29.6 | 27.6 |
--------------------------------------------------------------------------------
| Comparable return on net | | | | | 28.0 | 27.2 |
| assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 20 | 35 | 120 | 85 | 134 | 169 |
--------------------------------------------------------------------------------
| Number of employees | | | 3,285 | 3,564 | 3,520 | |
--------------------------------------------------------------------------------
The segment's power generation during the third quarter of 2009 amounted to 9.7
(10.0) TWh in the Nordic countries.
In January-September, the segment's power generation in the Nordic countries was
32.6 (35.5) TWh. Approximately 97% (98%) of the segment's power generation was
CO2-free.
The decrease in Nordic hydropower generation is mainly due to lower
precipitation and inflows into Nordic water reservoirs. The decrease in Nordic
nuclear power generation is mainly due to the extensive power increase and
safety modernisation outage in Oskarshamn 3, which started at the beginning of
March and is expected to continue until late October. Oskarshamn 3's capacity
will increase by ~250 megawatts (MW) of which Fortum's share is approximately
110 MW.
--------------------------------------------------------------------------------
| Power generation by | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| source, TWh | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Hydropower, Nordic | 5.3 | 4.5 | 16.2 | 16.9 | 22.9 | 22.2 |
--------------------------------------------------------------------------------
| Nuclear power, Nordic | 4.3 | 5.4 | 16.3 | 18.4 | 23.7 | 21.6 |
--------------------------------------------------------------------------------
| Thermal power, Nordic | 0.1 | 0.1 | 0.1 | 0.2 | 0.3 | 0.2 |
--------------------------------------------------------------------------------
| Total in the Nordic | 9.7 | 10.0 | 32.6 | 35.5 | 46.9 | 44.0 |
| countries | | | | | | |
--------------------------------------------------------------------------------
| Thermal in other | 0.3 | 0.2 | 0.9 | 0.7 | 1.0 | 1.2 |
| countries | | | | | | |
--------------------------------------------------------------------------------
| Total | 10.0 | 10.2 | 33.5 | 36.2 | 47.9 | 45.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nordic sales volume, | 10.9 | 11.4 | 36.4 | 39.3 | 52.1 | 49.2 |
| TWh | | | | | | |
--------------------------------------------------------------------------------
| of which pass-through | 0.8 | 0.8 | 2.6 | 2.9 | 3.7 | 3.4 |
| sales | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales price, EUR/MWh | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Generation's Nordic | 50.2 | 57.0 | 49.2 | 49.3 | 49.3 | 49.2 |
| power price* | | | | | | |
--------------------------------------------------------------------------------
* For the Power Generation segment in the Nordic countries, excluding
pass-through sales.
During the third quarter of 2009, the average system spot price in Nord Pool was
EUR 31.3 per MWh, while Finnish and Swedish area prices were above the system
price level, at EUR 35.6 per MWh in Finland and EUR 35.4 per MWh in Sweden.
During the same period, Generation's achieved Nordic power price was EUR 50.2
per MWh, thanks to hedging. The segment's Nordic sales volume without
pass-through items was EUR 10.1 (10.6) TWh.
During January-September 2009, the average system spot price in Nord Pool was
EUR 34.5 per MWh, while the Finnish and Swedish area prices were EUR 36.0 per
MWh. Generation's achieved Nordic power price was EUR 49.2 per MWh, at
approximately the same level as last year.
In the third quarter, the Power Generation segment's comparable operating profit
was lower than in the corresponding period last year, mainly due to the lower
achieved sales price. Increased hydro production contributed positively to the
third quarter earnings while the decreased nuclear production had a clear
negative effect.
In January-September 2009, the Power Generation segment's comparable operating
profit was lower than in the corresponding period last year. This was mainly due
to the lower hydropower and nuclear generation volumes. The translation effect
from the lower SEK was EUR -67 million in the segment's January-September
comparable operating profit.
In February, Fortum submitted to the Government of Finland an application for a
decision-in-principle concerning the construction of a new nuclear power plant
unit in Loviisa. Fortum is one of three applicants applying for the
decision-in-principle. The Government is expected to make its proposal to the
Parliament during the early part of 2010.
In September, Fortum and Metsähallitus announced a joint development project of
a wind power park in the Kuolavaara-Keulakkopää area, located in the Kittilä and
Sodankylä municipalities in northern Finland. According to initial estimates,
approximately 18 wind power stations of 2-3 MW each can be built in the area,
producing between 100 and 120 gigawatt-hours (GWh) of electricity annually.
Fortum is a shareholder in Teollisuuden Voima Oyj (TVO), a nuclear generation
company operating two nuclear power units in Olkiluoto, Finland. TVO is in the
process of building a third unit, Olkiluoto 3. Based on the latest progress
report submitted by the plant supplier, AREVA-Siemens, TVO now estimates that
the start-up of the plant may be postponed beyond June 2012, which is the
current schedule confirmed by the supplier.
In late March, TVO's shareholders committed to providing a EUR 300 million
subordinated shareholder's loan to TVO. Fortum's share of this commitment is at
maximum EUR 75 million.
Heat
The business area comprises heat generation and sales in the Nordic countries
and other parts of the Baltic Rim. Fortum is a leading heat producer in the
Nordic region. The segment also generates power in combined heat and power
plants (CHP) and sells it to end customers mainly through long-term contracts as
well as to Nord Pool. The segment includes the business unit Värme, operating in
Sweden, and Heat, operating mainly in other markets.
--------------------------------------------------------------------------------
| EUR million | III/ | III/0 | I-III/ | I-III/ | 2008 | LTM |
| | 09 | 8 | 09 | 08 | | |
--------------------------------------------------------------------------------
| Sales | 176 | 226 | 937 | 1,003 | 1,466 | 1,400 |
--------------------------------------------------------------------------------
| - heat sales | 132 | 165 | 714 | 766 | 1,120 | 1,068 |
--------------------------------------------------------------------------------
| - power sales | 19 | 33 | 140 | 152 | 228 | 216 |
--------------------------------------------------------------------------------
| - other sales | 25 | 28 | 83 | 85 | 118 | 116 |
--------------------------------------------------------------------------------
| Operating profit | -12 | -15 | 140 | 152 | 307 | 295 |
--------------------------------------------------------------------------------
| Comparable operating | -14 | -7 | 124 | 141 | 250 | 233 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at | | | 3,655 | 3,595 | 3,468 | |
| period-end) | | | | | | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | 8.9 | 8.9 |
--------------------------------------------------------------------------------
| Comparable return on net | | | | | 7.3 | 7.2 |
| assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 91 | 96 | 258 | 287 | 431 | 402 |
--------------------------------------------------------------------------------
| Number of employees | | | 2,121 | 2,486 | 2,318 | |
--------------------------------------------------------------------------------
The segment's heat sales during January-September 2009 amounted to 15.1 (17.0)
TWh, most of which was generated in the Nordic countries. During the same
period, power sales from CHP production totalled 2.8 (3.3) TWh.
The decline in the sales volume is mainly due to the sale of a CHP company in
Jyväskylä, Finland, at the end of 2008, and lower industrial customer demand.
The Heat segment's third-quarter comparable operating profit was EUR -14
million, EUR 7 million less than last year. The decrease was mainly due to lower
power and heat volumes, and lower power price.
In January-September 2009, the segment's comparable operating profit was EUR 124
million, EUR 17 million lower than the year before. The decline was mainly due
to the EUR -12 million translation effect from a weak SEK and PLN, mainly in the
first half of the year, and higher fuel costs.
In May, Fortum sold its peat production in central Finland to Vapo Oy. In
August, Fortum sold its CHP plant in Kokkola, Finland, to the city of Kokkola.
The construction of three new CHP plants in Espoo, Finland, in Czestochowa,
Poland, and in Pärnu, Estonia, proceeded. The trial runs of the new Suomenoja
CHP plant were started in September.
--------------------------------------------------------------------------------
| Heat sales by area, | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| TWh | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Finland | 0.8 | 1.7 | 5.3 | 7.7 | 10.8 | 8.4 |
--------------------------------------------------------------------------------
| Sweden | 0.9 | 1.1 | 6.6 | 6.1 | 9.1 | 9.6 |
--------------------------------------------------------------------------------
| Poland | 0.1 | 0.2 | 2.3 | 2.3 | 3.6 | 3.6 |
--------------------------------------------------------------------------------
| Other countries | 0.2 | 0.1 | 0.9 | 0.9 | 1.4 | 1.4 |
--------------------------------------------------------------------------------
| Total | 2.0 | 3.1 | 15.1 | 17.0 | 24.9 | 23.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Power sales, TWh | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| | 9 | | 09 | 08 | | |
--------------------------------------------------------------------------------
| Total | 0.4 | 0.7 | 2.8 | 3.3 | 4.7 | 4.2 |
--------------------------------------------------------------------------------
Distribution
Fortum owns and operates distribution and regional networks and distributes
electricity to a total of 1.6 million customers in Sweden, Finland, Norway and
Estonia.
--------------------------------------------------------------------------------
| EUR million | III/0 | III/0 | I-III/ | I-III/ | 2008 | LTM |
| | 9 | 8 | 09 | 08 | | |
--------------------------------------------------------------------------------
| Sales | 168 | 171 | 573 | 583 | 789 | 779 |
--------------------------------------------------------------------------------
| - distribution network | 142 | 144 | 493 | 494 | 669 | 668 |
| transmission | | | | | | |
--------------------------------------------------------------------------------
| - regional network | 15 | 18 | 54 | 59 | 77 | 72 |
| transmission | | | | | | |
--------------------------------------------------------------------------------
| - other sales | 11 | 9 | 26 | 30 | 43 | 39 |
--------------------------------------------------------------------------------
| Operating profit | 47 | 50 | 182 | 187 | 248 | 243 |
--------------------------------------------------------------------------------
| Comparable operating | 47 | 49 | 182 | 185 | 248 | 245 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at | | | 3,248 | 3,265 | 3,032 | |
| period-end) | | | | | | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | 8.1 | 8.1 |
--------------------------------------------------------------------------------
| Comparable return on net | | | | | 8.2 | 8.1 |
| assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 51 | 70 | 130 | 203 | 296 | 223 |
--------------------------------------------------------------------------------
| Number of employees | | | 1,154 | 1,336 | 1,336 | |
--------------------------------------------------------------------------------
The volume of distribution and regional network transmission during the third
quarter of 2009 totalled 4.8 (5.1) TWh and 3.5 (4.2) TWh, respectively.
In the first three quarters of 2009, the volume of distribution and regional
network transmission totalled 18.4 (18.6) TWh and 12.0 (13.2) TWh, respectively.
Electricity transmission via the regional distribution network totalled 10.0
(11.0) TWh in Sweden and 2.0 (2.2) TWh in Finland.
The comparable operating profit of the Distribution segment was EUR 47 million
in the third quarter, EUR 2 million lower than in the previous year.
In January-September 2009, the Distribution segment's comparable operating
profit was EUR 3 million lower than in the previous year. The decline was due to
the weaker average SEK that led to a translation effect of approximately EUR -13
million, mainly in the first half of the year.
The new Swedish legislation on monthly meter reading came into effect on 1 July
2009. In order to meet the new requirements, Fortum has replaced 844,000
electricity meters with new smart meters. With the rollout completed, the
project entered into a new phase. Discussions on how to structure this new
operations phase are ongoing with the AMM service provider.
In August 2009, a contract for the automatic meter management in Finland was
signed with service provider Telvent. The total value of the investment is
approximately EUR 170 million over a period of nine years. The investment
includes the purchase of the smart meters, installation, operation and
development the system as well as the related services. The new Finnish
legislation on meter reading requirements will be effective on 1 January 2014.
--------------------------------------------------------------------------------
| Volume of distributed | III/0 | III/08 | I-III/ | I-III/ | 2008 | LTM |
| electricity in | 9 | | 09 | 08 | | |
| distribution network, | | | | | | |
| TWh | | | | | | |
--------------------------------------------------------------------------------
| Sweden | 2.7 | 2.8 | 10.1 | 10.2 | 14.0 | 13.9 |
--------------------------------------------------------------------------------
| Finland | 1.7 | 1.9 | 6.6 | 6.7 | 9.3 | 9.2 |
--------------------------------------------------------------------------------
| Norway | 0.4 | 0.4 | 1.6 | 1.6 | 2.3 | 2.3 |
--------------------------------------------------------------------------------
| Estonia | 0.0 | 0.0 | 0.1 | 0.1 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Total | 4.8 | 5.1 | 18.4 | 18.6 | 25.8 | 25.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of electricity | 30 Sep 2009 | 30 Sep 2008 | 31 Dec 2008 |
| distribution customers by | | | |
| area, thousands | | | |
--------------------------------------------------------------------------------
| Sweden | 888 | 874 | 877 |
--------------------------------------------------------------------------------
| Finland | 609 | 604 | 606 |
--------------------------------------------------------------------------------
| Other countries | 123 | 123 | 123 |
--------------------------------------------------------------------------------
| Total | 1,620 | 1,601 | 1,606 |
--------------------------------------------------------------------------------
Markets
Markets is responsible for retail sales of electricity to a total of 1.3 million
private and business customers as well as to other electricity retailers in
Sweden, Finland and Norway. Markets buys its electricity through Nord Pool.
Markets sells approximately 70% of its volumes to business customers and 30% to
retail consumers.
--------------------------------------------------------------------------------
| EUR million | III/0 | III/0 | I-III | I-III | 2008 | LTM |
| | 9 | 8 | /09 | /08 | | |
--------------------------------------------------------------------------------
| Sales | 272 | 461 | 1,039 | 1,391 | 1,922 | 1,570 |
--------------------------------------------------------------------------------
| - power sales | 266 | 448 | 1,017 | 1,346 | 1,865 | 1,536 |
--------------------------------------------------------------------------------
| - other sales | 6 | 13 | 22 | 45 | 57 | 34 |
--------------------------------------------------------------------------------
| Operating profit | 7 | -17 | 3 | -6 | -35 | -26 |
--------------------------------------------------------------------------------
| Comparable operating | 7 | -8 | 11 | -33 | -33 | 11 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at period-end) | | | 85 | 229 | 188 | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | -14.0 | -17.0 |
--------------------------------------------------------------------------------
| Comparable return on net | | | | | -15.3 | 9.3 |
| assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 0 | 0 | 1 | 3 | 3 | 1 |
--------------------------------------------------------------------------------
| Number of employees | | | 638 | 629 | 635 | |
--------------------------------------------------------------------------------
Markets' third quarter comparable operating profit continued to improve compared
to the year before. The main drivers behind the better performance were the
higher sales margin in Markets' Consumer Markets customer segment and tighter
cost controls.
The improvement in Markets' performance in January-September is based on
Markets' successful turnaround programme, including the launch of the new
pricing model in Finland (the "Kesto" product), renegotiated sales agreements,
renewed hedging operations and cost saving actions.
In the third quarter of 2009, Markets' electricity sales totalled 5.7 (7.5) TWh.
For the first three quarters, Markets' sales volume was 21.7 (27.0) TWh.
The decrease in the sales volume continued mainly due to the lower consumption
by business customers and discontinued contracts with some business customers.
Russia
The segment comprises power and heat generation and sales in Russia. The segment
includes OAO Fortum and Fortum's holding in TGC-1. OAO Fortum is accounted for
as a subsidiary and fully consolidated from 1 April 2008. TGC-1 is an associated
company and accounted for using the equity method.
--------------------------------------------------------------------------------
| EUR million | III/0 | III/0 | I-III | I-III | 2008 | LTM |
| | 9 | 8 | /09 | /08 | | |
--------------------------------------------------------------------------------
| Sales | 109 | 140 | 429 | 292 | 489 | 626 |
--------------------------------------------------------------------------------
| - power sales | 87 | 112 | 281 | 217 | 332 | 396 |
--------------------------------------------------------------------------------
| - heat sales | 18 | 23 | 143 | 66 | 141 | 218 |
--------------------------------------------------------------------------------
| - other sales | 4 | 5 | 5 | 9 | 16 | 12 |
--------------------------------------------------------------------------------
| EBITDA | -4 | -16 | 22 | -27 | -24 | 25 |
--------------------------------------------------------------------------------
| Operating profit | -22 | -39 | -33 | -72 | -91 | -52 |
--------------------------------------------------------------------------------
| Comparable operating | -22 | -39 | -33 | -72 | -92 | -53 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at period-end) | | | 2,098 | 2,420 | 2,205 | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | -3.7 | -2.1 |
--------------------------------------------------------------------------------
| Comparable return on net | | | | | -3.8 | -2.1 |
| assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 58 | 548 | 120 | 1,622 | 1,748 | 246 |
--------------------------------------------------------------------------------
| Number of employees* | | | 4,333 | 7,254 | 7,262 | |
--------------------------------------------------------------------------------
* In January 2009 around 1,100 persons working at OAO Fortum were transferred
internally from the Russia segment to the Power Generation segment's Service
Business Unit.
OAO Fortum operates in the well-developed industrial regions of the Urals and in
oil-producing western Siberia.
The segment's power sales during the third quarter of 2009 amounted to 4.0 (4.4)
TWh. During the same period, heat sales totalled 2.3 (2.4) TWh. The segment sold
approximately 2/3 of its power in Tuymen and other oil- and gas-producing areas
in the OAO Fortum region. The remaining 1/3 of its volumes were sold in the
Chelyabinsk region, where the metals industry dominates wholesale electricity
demand.
In the third quarter of 2009, the average electricity spot price in the Urals
hub was 13% lower than a year ago, RUB 700 (809) per MWh, but clearly higher
than in the second quarter of 2009, when it was RUB 603 per MWh. During the
third quarter of 2009, OAO Fortum sold 44% of its electricity production at the
liberalised electricity price.
OAO Fortum's average regulated electricity price was 12% higher than a year ago
at RUB 529 (473) per MWh. The average regulated capacity price in the third
quarter of 2009 was 3% higher than a year ago at RUB 186,470 per MW per month.
In the corresponding period of 2008, the price was RUB 181,510 per MW per month.
During the third quarter of 2009, the average limit gas price in the Urals
region was RUB 1,837 per 1000 m3, 18% higher than in the corresponding period of
2008.
--------------------------------------------------------------------------------
| Key electricity, | III/09 | III/08 | Change% | I-III/09 | I-III/08 |
| capacity and gas prices | | | | | |
| for OAO Fortum | | | | | |
--------------------------------------------------------------------------------
| Electricity spot price | 700 | 809 | -13 | 613 | 716 |
| (market price), | | | | | |
| Urals hub, RUB/MWh | | | | | |
--------------------------------------------------------------------------------
| Average regulated | 529 | 473 | 12 | 533 | 474 |
| electricity price | | | | | |
| for | | | | | |
| OAO FORTUM, RUB/MWh | | | | | |
--------------------------------------------------------------------------------
| Average regulated | 186,47 | 181 510 | 3 | 187,620 | 165,402 |
| capacity price, | 0 | | | | |
| RUB/MW/month | | | | | |
--------------------------------------------------------------------------------
| Average limit gas price | 1,837 | 1,560 | 18 | 1,731 | 1,560 |
| in | | | | | |
| Urals region, | | | | | |
| RUB/1000 m3 | | | | | |
--------------------------------------------------------------------------------
The segment booked a comparable operating profit of EUR -22 (-39) million in the
third quarter of 2009. The improvement is mainly due to OAO Fortum's efficiency
improvement programme and a higher electricity sales margin. OAO Fortum figures
have been consolidated starting from the beginning of April 2008.
In January-September 2009, the Russia segment's comparable operating profit, EUR
-33 million, was EUR 39 million better than in the previous year. The
improvement mainly stems from OAO Fortum's efficiency improvement programme and
a higher electricity sales margin.
OAO Fortum's business is typically very seasonal: Its results usually are
strongest during the first and last quarters of the year.
The Russian power sector reform is proceeding. Starting 1 January 2009, 30% of
all produced power in Russia was sold on the competitive market. The share
increased to 50% at the beginning of July 2009 and is expected to increase
further to 60% from the beginning of 2010. The wholesale power market is
expected to be fully liberalised from the beginning of 2011. The rules for the
long-term capacity market are currently under consideration by the Russian
government and are expected to be agreed by the end of the year.
OAO Fortum's efficiency improvement programme is proceeding according to plans.
The annual efficiency improvements are expected to be approximately EUR 100
million by 2011.
Capital expenditures, divestments and investments in shares
Capital expenditures and investments in shares in January-September 2009
totalled EUR 634 (2,210) million. Investments, excluding acquisitions, were EUR
571 (716) million.
HEAT
A new CHP plant in Tartu, Estonia, was taken into commercial use in late March.
The construction of the new CHP plants in Espoo, Finland, in Czestochowa, Poland
and in Pärnu, Estonia, proceeded.
In August Fortum sold its CHP plant in Kokkola, Finland, to the city of Kokkola.
The transaction price was around EUR 24 million.
DISTRIBUTION
The EU's third energy market package entered into force in early September 2009.
One of the consequences is that Fortum will have to divest its 25% ownership in
the Finnish electricity transmission system operator Fingrid Oyj by early 2012.
Consequently, Fortum is investigating alternatives for the sale of the Fingrid
shares. Currently Fortum expects the sales process of Fingrid shares to take
place during 2010.
RUSSIA
OAO Fortum's ongoing investment programme will increase its power capacity from
the current ~3,000 MW to 5,300 MW. The value for the remaining part of the
programme, calculated at year-end 2008 exchange rates, is estimated to be EUR
2.0 billion from January 2009 onwards.
The Russian Government is currently reviewing the investment programmes of the
generating companies in light of the decreased power demand. Fortum has
confirmed its commitment to fulfil OAO Fortum's investment programme. However,
the potential postponement of some projects by 1-3 years is currently under
review with a favourable outlook.
Financing
During the third quarter of 2009 net debt increased by EUR 37 million to EUR
6,041 million (year-end 2008: EUR 6,179 million). The liquidity position
continued to be strong, and, at the end of September 2009, the Groups liquid
funds totalled EUR 815 million (year-end 2008: EUR 1,321 million). The liquid
funds include cash and bank deposits held by OAO Fortum amounting to EUR 703
million (year-end 2008: EUR 1,020 million). In addition, Fortum had access to
approximately EUR 2.9 billion in undrawn committed credit facilities.
In January-September 2009, the Group's net financial expenses were EUR 128 (185)
million. The decrease is mainly attributable to lower average interest rates in
2009 compared to the corresponding period last year. Net financial expenses
include fair value gains on financial instruments amounting to EUR 5 (5)
million.
Net debt to EBITDA for the last twelve months was 2.5 (2.5 at year-end 2008).
On 21 September 2009, Standard and Poor's upgraded Fortum's long-term credit
rating from A- to A (stable) due to a change in their methodology for rating of
“government-related entities”.
Fortum Corporation's long-term credit rating from Moody's was A2 (stable).
Shares and share capital
In January-September 2009, a total of 453.0 (466.5) million Fortum Corporation
shares, totalling EUR 7,055 million, were traded. Fortum's market
capitalisation, calculated using the closing quotation of the last trading day
of the quarter, was EUR 15,564 million. The highest quotation of Fortum
Corporation shares on the NASDAQ OMX Helsinki in the first three quarters of
2009 was EUR 19.20, the lowest EUR 12.60, and the volume-weighted average
quotation EUR 15.61. The closing quotation on the last trading day of the period
was EUR 17.52 (23.58).
At the end of the third quarter of 2009, Fortum Corporation did not own its own
shares.
At the end of the third quarter of 2009, Fortum Corporation's share capital was
EUR 3,046,185,953 and the total number of registered shares was 888,367,045.
The subscription period for the last remaining option scheme ended on 1 May 2009
and thus no further shares can be subscribed for and registered under the share
option schemes.
At the end of September 2009, the Finnish state's holding in Fortum was 50.8%.
The proportion of nominee registrations and direct foreign shareholders was
32.4%.
The Board of Directors has no unused authorisations from the Annual General
Meeting of Shareholders to issue convertible loans or bonds with warrants or to
issue new shares.
Group personnel
The number of employees at the end of the third quarter of 2009 was 12,054
(15,785).
The outsourcing of certain infrastructure service functions to Infratek ASA in
January 2009 reduced the number of people in the Power Generation and
Distribution segments.
In the first quarter of 2009, around 1,100 persons working at OAO Fortum were
transferred internally from the Russia segment to the Power Generation segment's
Service business unit.
OAO Fortum discontinued its operation and maintenance contract with the city of
Tyumen for the operation of municipal heat networks as of 1 July 2009. This has
reduced the number of OAO Fortum employees by approximately 750.
Fortum's new business structure
Fortum has restructured its organisation into four business divisions and four
staff functions in order to increase the organisation's efficiency, performance
accountability and simplicity. The change took effect on 1 October 2009. The
reorganisation will not lead to a change in Fortum's external financial
reporting structure.
The new business divisions are Power, Heat, Russia, and Electricity Solutions
and Distribution. The Power Division consists of Fortum's power generation,
physical operation and spot trading, operation, maintenance and development of
power plants, as well as expert services for power producers. The Heat Division
consists of combined heat and power production, district heating activities and
business-to-business heating solutions. The Electricity Solutions and
Distribution Division is responsible for Fortum's electricity sales, solutions
and distribution activities in regional and distribution networks. The Russia
Division consists of power and heat generation and sales in Russia. It includes
OAO Fortum, Fortum's over 25% holding in TGC-1 and some other minority
shareholdings.
The staff functions are Finance, Corporate Relations and Sustainability,
Corporate Human Resources, and Corporate Strategy and R&D.
Fortum Management Team sets the strategic targets, prepares the Group's annual
business plans, follows up on the results, and plans and decides on investments,
mergers, acquisitions and divestments within authorisation. Each member of the
Management Team is responsible for the key day-to-day operations and the
implementation of operational decisions in their respective organisations.
Fortum Management Team consists of the following members:
Tapio Kuula, President and CEO.
Matti Ruotsala, Executive Vice President, Power Division.
Per Langer, Executive Vice President, Heat Division. Country responsible for
Sweden, Poland and Baltics.
Alexander Chuvaev, Executive Vice President, Russia Division. General Director,
OAO Fortum. Country responsible for Russia.
Timo Karttinen, Executive Vice President, Electricity Solutions and Distribution
Division. Country responsible for Finland and Norway.
Juha Laaksonen, Executive Vice President and Chief Financial Officer.
Anne Brunila, Executive Vice President, Corporate Relations and Sustainability.
Mikael Frisk, Senior Vice President, Corporate Human Resources.
Maria Paatero-Kaarnakari, Senior Vice President, Corporate Strategy and R&D.
Matti Ruotsala, Per Langer, Alexander Chuvaev and Anne Brunila are new
Management Team members.
Outlook
KEY DRIVERS AND RISKS
The key factor influencing Fortum's business performance is the wholesale price
of electricity. Key drivers behind wholesale price development are the
supply-demand balance, fuel and CO2 emissions allowance prices as well as the
hydrological situation. The exchange rates of the Swedish krona and Russian
rouble also affect Fortum's financials. The balance sheet translation effects
from potential changes in currency exchange rates are booked in Fortum's equity.
Fortum's financial results are exposed to a number of strategic, financial and
operational risks. For further details on Fortum's risks and risk management,
see Fortum's Operating and Financial Review and Financial Statements for 2008.
MARKET DEMAND
The recession impacts the markets in which Fortum operates. This may increase
Fortum's counterparty risk. The recession may continue to depress electricity
consumption in the Nordic countries and Russia.
2009 is expected to be the trough in Nordic electricity demand. Electricity will
continue to gain a higher share of the total energy consumption.
RUSSIA
In Russia, one of the key assumptions in the OAO Fortum acquisition is the
continuation of the Russian power sector reform. As planned, the share of power
sold at a competitive price was increased from 30% to 50% on 1 July 2009. The
share is planned to be increased from 50% to 60% at the beginning of January
2010. The wholesale power market is expected to be fully liberalised by 2011.
The rules for the long-term capacity market are currently under consideration by
the Russian government and are expected to be agreed on by the end of the year.
The average limit gas price (regulated gas price) for the fourth quarter of 2009
will increase by 5.5%. The regulated electricity price is indexed to the
regulated gas price and inflation on an annual basis.
OAO Fortum is committed and contractually obligated to a significant investment
programme, amounting to approximately EUR 2.0 billion for 2009 and onwards. The
Russian Government is currently reviewing the investment programmes of the
generating companies in light of the decreased power demand stemming from the
current recession. Fortum has confirmed its commitment to fulfil OAO Fortum's
investment programme. However, the potential postponement of some projects by
1-3 years is currently under review with a favourable outlook.
The acquisition of OAO Fortum is expected to marginally dilute Fortum's EPS
during 2009. Annual efficiency improvements are expected to be approximately EUR
100 million by 2011.
CAPITAL EXPENDITURE
Fortum expects its annual capital expenditure in the next 4-5 years to be within
a range of EUR 0.8-1.2 billion.
HEDGING
In mid-October, the electricity forward price in Nord Pool for the rest of 2009
was around EUR 34-36 per MWh. The electricity forward price for 2010 was around
EUR 35-36 per MWh and for 2011 around EUR 39 per MWh. At the same time, the
future quotations for coal (ICE Rotterdam) for the rest of 2009 were around USD
74 per tonne and the market price for emissions allowances (EUA) for 2009 was
about EUR 14 per tonne CO2.
In mid-October, Nordic water reservoirs were about 1 TWh below the long-term
average, and 5 TWh above the corresponding level of 2008.
Fortum Power Generation's achieved Nordic power price typically depends on e.g.
the hedge ratio, hedge price, spot prices, availability and utilisation of
Fortum's flexible production portfolio and currency fluctuations. Excluding the
potential effects from the changes in the power generation mix, a 1 EUR/MWh
change in Power Generation's achieved Nordic sales price results in an
approximately EUR 50 million change in Fortum's annual operating profit.
At the end of September 2009, Fortum had hedged approximately 75% of the Power
Generation segment's estimated Nordic electricity sales volume for the rest of
2009 at approximately EUR 50 per MWh. For the calendar year 2010, approximately
65% of the segment's estimated Nordic electricity sales volume was hedged at
approximately EUR 44 per MWh and for the calendar year 2011, approximately 35%
was hedged at approximately EUR 42 per MWh.
The reported hedge ratios may vary significantly, depending on Fortum's actions
on the electricity derivatives markets. Hedges are mainly financial contracts,
most of them Nord Pool forwards or standardised futures, consisting of several
types of products and maturities.
The first and last quarters of the year are usually the strongest quarters for
the power and heat businesses.
Fortum's results in the first three quarters were good despite the challenging
economic environment. A flexible, low-cost and climate-benign generation
portfolio accompanied by a strong financial position and liquidity enable Fortum
to meet current challenges and to be ready for new opportunities.
Espoo, 21 October 2009
Fortum Corporation
Board of Directors
Further information:
Tapio Kuula, President and CEO, tel. +358 10 452 4112
Juha Laaksonen, CFO, tel.
+358 10 452 4519
Fortum's Investor Relations, tel. +358 10 452 4138 / investors@fortum.com
The condensed interim financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34, Interim Financial Reporting, as
adopted by the EU. The interim financials have not been audited.
Fortum's Annual General Meeting is planned to take place on 25 March 2010 and
the planned dividend related dates for 2010 are:
- Ex-dividend date 26 March 2010
- Record date for dividend payment 30 March 2010
- Dividend payment date 8 April 2010
The annual report for 2009 will be published before the end of week 9.
Publication of results in 2010:
- Financial statements bulletin for January-December 2009 will be published on
3
- February 2010 at approximately 09.00 EET.
- Interim Report January-March will be published on 27 April 2010 at approx.
09.00
EET.
- Interim Report January-June will be published on 16 July 2010 at approx.
09.00 EET.
- Interim Report January-September will be published on 21 October 2010 at
approx.
09.00 EET.
Distribution:
NASDAQ OMX Helsinki
Key media
www.fortum.com
Information on the full-year report, including detailed quarterly information,
is available on Fortum's website at www.fortum.com/investors.
--------------------------------------------------------------------------------
| FORTUM GROUP |
--------------------------------------------------------------------------------
| JANUARY-SEPTEMBER 2009 |
--------------------------------------------------------------------------------
| Interim Financial Statements are unaudited |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONDENSED CONSOLIDATED INCOME STATEMENT |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Note | Q3 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| | | | 2009 | 2008 | 2009 | 2008 | | twelv |
| | | | | | | | | e |
| | | | | | | | | month |
| | | | | | | | | s |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | | 4 | 1 | 1 272 | 3 872 | 4 034 | 5 636 | 5 474 |
| | | | 046 | | | | | |
--------------------------------------------------------------------------------
| Other income | | | -10 | 56 | 21 | 75 | 230 | 176 |
--------------------------------------------------------------------------------
| Materials and | | | -352 | -479 | -1 419 | -1 465 | -2 117 | -2 |
| services | | | | | | | | 071 |
--------------------------------------------------------------------------------
| Employee | | | -113 | -156 | -368 | -429 | -587 | -526 |
| benefit costs | | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation, | 4, | -128 | -137 | -374 | -383 | -515 | -506 |
| 20mortization and | 12 | | | | | | |
| impairment charges | | | | | | | |
--------------------------------------------------------------------------------
| Other expenses | | | -157 | -161 | -472 | -480 | -684 | -676 |
--------------------------------------------------------------------------------
| Operating | | | 286 | 395 | 1 260 | 1 352 | 1 963 | 1 871 |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 4, | 3 | 8 | -1 | 78 | 126 | 47 |
| profit/loss of | 13 | | | | | | |
| associates and | | | | | | | |
| joint ventures | | | | | | | |
--------------------------------------------------------------------------------
| Interest | | | -56 | -100 | -188 | -255 | -351 | -284 |
| expense | | | | | | | | |
--------------------------------------------------------------------------------
| Interest | | | 23 | 33 | 76 | 77 | 143 | 142 |
| income | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value gains and | -8 | 8 | 5 | 5 | -11 | -11 |
| losses on financial | | | | | | |
| instruments | | | | | | |
--------------------------------------------------------------------------------
| Other | | | -6 | -7 | -21 | -12 | -20 | -29 |
| financial | | | | | | | | |
| expenses - net | | | | | | | | |
--------------------------------------------------------------------------------
| Finance costs | | | -47 | -66 | -128 | -185 | -239 | -182 |
| - net | | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | | | 242 | 337 | 1 131 | 1 245 | 1 850 | 1 736 |
| income tax | | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | | 9 | -39 | -69 | -211 | -256 | -254 | -209 |
| expense | | | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | | 203 | 268 | 920 | 989 | 1 596 | 1 527 |
| period | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable | | | | | | | | |
| to: | | | | | | | | |
--------------------------------------------------------------------------------
| Owners of the | | | 211 | 284 | 906 | 979 | 1 542 | 1 469 |
| parent company | | | | | | | | |
--------------------------------------------------------------------------------
| Non-controllin | | | -8 | -16 | 14 | 10 | 54 | 58 |
| g interests | | | | | | | | |
--------------------------------------------------------------------------------
| | | | 203 | 268 | 920 | 989 | 1 596 | 1 527 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | | 10 | | | | | | |
| share (in € | | | | | | | | |
| per share) | | | | | | | | |
--------------------------------------------------------------------------------
| Basic | | | 0.24 | 0.32 | 1.02 | 1.10 | 1.74 | 1.65 |
--------------------------------------------------------------------------------
| Diluted | | | 0.24 | 0.32 | 1.02 | 1.10 | 1.74 | 1.65 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Condensed consolidated statement of comprehensive income |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | | Q3 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | 2007 |
| | | | 2009 | 2008 | 2009 | 2008 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the | | | 203 | 268 | 920 | 989 | 1 596 | 1 608 |
| period | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other | | | | | | | | |
| comprehensive | | | | | | | | |
| income: | | | | | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | | | | | | |
| hedges | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | 221 | 265 | 131 | -89 | 453 | -167 |
| gains/losses in | | | | | | | | |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| Transfers to | | | -71 | 23 | -154 | 89 | 160 | -69 |
| income | | | | | | | | |
| statement | | | | | | | | |
--------------------------------------------------------------------------------
| Transfers to | | | -1 | -1 | -2 | 0 | -4 | - |
| inventory/fixed | | | | | | | | |
| assets | | | | | | | | |
--------------------------------------------------------------------------------
| Tax effect | | | -39 | -76 | 8 | 0 | -168 | 64 |
--------------------------------------------------------------------------------
| Net investment | | | | | | | | |
| hedges | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | -6 | - | -8 | - | - | 2 |
| gains/losses in | | | | | | | | |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| Tax effect | | | 2 | | | | | |
--------------------------------------------------------------------------------
| Available for | | | | | 2 | | | |
| sale financial | | | | | | | | |
| assets | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | - | - | - | - | -1 | - |
| losses in the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Exchange differences on | 75 | 3 | -52 | -53 | -621 | -36 |
| translating foreign | | | | | | |
| operations | | | | | | |
--------------------------------------------------------------------------------
| Share of other | 40 | -89 | 1 | -518 | -628 | 366 |
| comprehensive income of | | | | | | |
| associates 1) | | | | | | |
--------------------------------------------------------------------------------
| Other changes | | | 1 | - | -6 | - | 1 | 6 |
--------------------------------------------------------------------------------
| Other comprehensive income | 222 | 125 | -80 | -571 | -808 | 166 |
| for the period, net of tax | | | | | | |
--------------------------------------------------------------------------------
| Total | | | 425 | 393 | 840 | 418 | 788 | 1 774 |
| comprehensive | | | | | | | | |
| income for the | | | | | | | | |
| year | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive | | | | | | | |
| income attributable | | | | | | | |
| to: | | | | | | | |
--------------------------------------------------------------------------------
| Owners of the | | | 420 | 422 | 832 | 422 | 797 | 1 731 |
| parent | | | | | | | | |
--------------------------------------------------------------------------------
| Non-controlling | | | 5 | -29 | 8 | -4 | -9 | 43 |
| interests | | | | | | | | |
--------------------------------------------------------------------------------
| | | | 425 | 393 | 840 | 418 | 788 | 1 774 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Of which fair | | 32 | -90 | 4 | -527 | -667 | 353 |
| value change in | | | | | | | |
| Hafslund ASAs | | | | | | | |
| shareholding in REC | | | | | | | |
| incl. translation | | | | | | | |
| differences | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONDENSED CONSOLIDATED BALANCE SHEET |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Note | Sept 30 | Sept 30 | Dec 31 |
| | | | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | | |
--------------------------------------------------------------------------------
| Intangible assets | | 12 | 365 | 427 | 395 |
--------------------------------------------------------------------------------
| Property, plant and | | 12 | 12 683 | 13 037 | 12 138 |
| equipment | | | | | |
--------------------------------------------------------------------------------
| Participations in associates | 4, 13 | 2 194 | 2 331 | 2 112 |
| and joint ventures | | | | |
--------------------------------------------------------------------------------
| Share in State Nuclear Waste | 16 | 588 | 561 | 566 |
| Management Fund | | | | |
--------------------------------------------------------------------------------
| Other non-current | | | 125 | 72 | 117 |
| assets | | | | | |
--------------------------------------------------------------------------------
| Deferred tax assets | | | 7 | 0 | 2 |
--------------------------------------------------------------------------------
| Derivative financial | | 6 | 319 | 242 | 445 |
| instruments | | | | | |
--------------------------------------------------------------------------------
| Long-term | | | 908 | 827 | 742 |
| interest-bearing | | | | | |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Total non-current | | | 17 189 | 17 497 | 16 517 |
| assets | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | | |
--------------------------------------------------------------------------------
| Inventories | | | 463 | 358 | 444 |
--------------------------------------------------------------------------------
| Derivative financial | | 6 | 380 | 368 | 761 |
| instruments | | | | | |
--------------------------------------------------------------------------------
| Trade and other | | | 712 | 1 144 | 1 235 |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Bank deposits | | | 395 | 516 | 588 |
--------------------------------------------------------------------------------
| Cash and cash | | | 420 | 663 | 733 |
| equivalents | | | | | |
--------------------------------------------------------------------------------
| Liquid funds | | 15 | 815 | 1 179 | 1 321 |
--------------------------------------------------------------------------------
| Total current assets | | | 2 370 | 3 049 | 3 761 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | | 19 559 | 20 546 | 20 278 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY | | | | | |
--------------------------------------------------------------------------------
| Equity attributable to | | | | | |
| owners of the parent | | | | | |
--------------------------------------------------------------------------------
| Share capital | | 14 | 3 046 | 3 043 | 3 044 |
--------------------------------------------------------------------------------
| Share premium | | | 73 | 73 | 73 |
--------------------------------------------------------------------------------
| Retained earnings | | | 4 281 | 4 263 | 4 312 |
--------------------------------------------------------------------------------
| Other equity components | | | 496 | 200 | 525 |
--------------------------------------------------------------------------------
| Total | | | 7 896 | 7 579 | 7 954 |
--------------------------------------------------------------------------------
| Non-controlling | | | 432 | 478 | 457 |
| interests | | | | | |
--------------------------------------------------------------------------------
| Total equity | | | 8 328 | 8 057 | 8 411 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | 15 | 6 531 | 6 776 | 6 520 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Derivative financial | | 6 | 173 | 177 | 120 |
| instruments | | | | | |
--------------------------------------------------------------------------------
| Deferred tax | | | 1 810 | 1 810 | 1 851 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Nuclear provisions | | 16 | 588 | 561 | 566 |
--------------------------------------------------------------------------------
| Pension and other | | | 262 | 290 | 250 |
| provisions | | | | | |
--------------------------------------------------------------------------------
| Other non-current | | | 461 | 464 | 470 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Total non-current | | | 9 825 | 10 078 | 9 777 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | 15 | 325 | 923 | 980 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Derivative financial | | 6 | 266 | 331 | 126 |
| instruments | | | | | |
--------------------------------------------------------------------------------
| Trade and other | | | 815 | 1 157 | 984 |
| payables | | | | | |
--------------------------------------------------------------------------------
| Total current | | | 1 406 | 2 411 | 2 090 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | | 11 231 | 12 489 | 11 867 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and | | | 19 559 | 20 546 | 20 278 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Sha | Sha | Retained | Other equity | Owners | Non- | Tota |
| | re | re | earnings | components | of | cont | l |
| | cap | pre | | | parent | roll | equi |
| | ita | miu | | | company | ing | ty |
| | l | m | | | | inte | |
| | | | | | | rest | |
| | | | | | | s | |
--------------------------------------------------------------------------------
| MEUR | | | Reta | Tra | Cas | Oth | OCI | | | |
| | | | ined | nsl | h | er | ite | | | |
| | | | earn | ati | flo | OCI | ms | | | |
| | | | ings | on | w | ite | ass | | | |
| | | | and | of | hed | ms | oci | | | |
| | | | othe | for | ges | | ate | | | |
| | | | r | eig | | | d | | | |
| | | | fund | n | | | com | | | |
| | | | s | ope | | | pan | | | |
| | | | | rat | | | ies | | | |
| | | | | ion | | | | | | |
| | | | | s | | | | | | |
--------------------------------------------------------------------------------
| Total | 3 | 73 | 4 | -57 | 321 | 36 | 168 | 7 954 | 457 | 8 |
| equity | 044 | | 888 | 6 | | | | | | 411 |
| at | | | | | | | | | | |
| 31.12.20 | | | | | | | | | | |
| 08 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | 906 | | | | | 906 | 14 | 920 |
| profit | | | | | | | | | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translat | | | | -59 | -5 | | 25 | -39 | 7 | -32 |
| ion | | | | | | | | | | |
| differen | | | | | | | | | | |
| ces | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | -2 | | -3 | -6 | -24 | -35 | -13 | -48 |
| comprehe | | | | | | | | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | 904 | -59 | -8 | -6 | 1 | 832 | 8 | 840 |
| comprehe | | | | | | | | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | -888 | | | | | -888 | | -888 |
| dividend | | | | | | | | | | |
| 1) | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | | 0 | -19 | -19 |
| s to | | | | | | | | | | |
| non-cont | | | | | | | | | | |
| rolling | | | | | | | | | | |
| interest | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Changes | | | -4 | | | | | -4 | -14 | -18 |
| due to | | | | | | | | | | |
| business | | | | | | | | | | |
| combinat | | | | | | | | | | |
| ions | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | 2 | | 16 | | | -16 | | 2 | | 2 |
| options | | | | | | | | | | |
| exercise | | | | | | | | | | |
| d 2) | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 3 | 73 | 4 | -63 | 313 | 14 | 169 | 7 896 | 432 | 8 |
| equity | 046 | | 916 | 5 | | | | | | 328 |
| at | | | | | | | | | | |
| 30.09.20 | | | | | | | | | | |
| 09 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 3 | 73 | 4 | -21 | -12 | 35 | 800 | 8 359 | 292 | 8 |
| equity | 040 | | 552 | | 0 | | | | | 651 |
| at | | | | | | | | | | |
| 31.12.20 | | | | | | | | | | |
| 07 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | 979 | | | | | 979 | 10 | 989 |
| profit | | | | | | | | | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translat | | | | -40 | -2 | | -36 | -78 | -13 | -91 |
| ion | | | | | | | | | | |
| differen | | | | | | | | | | |
| ces | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | 3 | | -48 | -479 | -1 | -480 |
| comprehe | | | | | | | 2 | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | 979 | -40 | 1 | 0 | -51 | 422 | -4 | 418 |
| comprehe | | | | | | | 8 | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | -1 | | | | | -1 198 | | -1 |
| dividend | | | 198 | | | | | | | 198 |
| 1) | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | | 0 | -20 | -20 |
| s to | | | | | | | | | | |
| non-cont | | | | | | | | | | |
| rolling | | | | | | | | | | |
| interest | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Changes | | | -9 | | | 2 | | -7 | 210 | 203 |
| due to | | | | | | | | | | |
| business | | | | | | | | | | |
| combinat | | | | | | | | | | |
| ions | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | 3 | | | | | | | 3 | | 3 |
| options | | | | | | | | | | |
| exercise | | | | | | | | | | |
| d | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 3 | 73 | 4 | -61 | -11 | 37 | 282 | 7 579 | 478 | 8 |
| equity | 043 | | 324 | | 9 | | | | | 057 |
| at | | | | | | | | | | |
| 30.09.20 | | | | | | | | | | |
| 08 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 3 | 73 | 4 | -21 | -12 | 35 | 800 | 8 359 | 292 | 8 |
| equity | 040 | | 552 | | 0 | | | | | 651 |
| at | | | | | | | | | | |
| 31.12.20 | | | | | | | | | | |
| 07 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | 1 | | | | | 1 542 | 54 | 1 |
| profit | | | 542 | | | | | | | 596 |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translat | | | | -55 | | | -14 | -703 | -66 | -769 |
| ion | | | | 5 | | | 8 | | | |
| differen | | | | | | | | | | |
| ces | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | 441 | 1 | -48 | -42 | 3 | -39 |
| comprehe | | | | | | | 4 | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | 1 | -55 | 441 | 1 | -63 | 797 | -9 | 788 |
| comprehe | | | 542 | 5 | | | 2 | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | -1 | | | | | -1 198 | | -1 |
| dividend | | | 198 | | | | | | | 198 |
| 1) | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | | 0 | -18 | -18 |
| s to | | | | | | | | | | |
| non-cont | | | | | | | | | | |
| rolling | | | | | | | | | | |
| interest | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Changes | | | -8 | | | | | -8 | 192 | 184 |
| due to | | | | | | | | | | |
| business | | | | | | | | | | |
| combinat | | | | | | | | | | |
| ions | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | 4 | | | | | | | 4 | | 4 |
| options | | | | | | | | | | |
| exercise | | | | | | | | | | |
| d | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 3 | 73 | 4 | -57 | 321 | 36 | 168 | 7 954 | 457 | 8 |
| equity | 044 | | 888 | 6 | | | | | | 411 |
| at | | | | | | | | | | |
| 31.12.20 | | | | | | | | | | |
| 08 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) See Note 11 Dividend per share. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2) Accounting effect of the last stock option program (2002B) upon ending of |
| the subscription period on 1 May 2009. |
--------------------------------------------------------------------------------
Starting from Q1 2009 Fortum has implemented IAS 1 (revised) Presentation of
financial statements, see Note 2 Accounting policies. The consolidated statement
of changes in total equity has changed format. Comparison numbers have been
reclassified to be in line with the new format.
Translation differences*)
Translation differences impacted equity attributable to owners of the parent
company with EUR -39 million in Q1-Q3 2009, mainly due to the weakening RUB.
Part of the translation differences is arising from the NOK effect in fair
valuation of Hafslund's REC shares, EUR 19 million, which is shown together with
the change in fair value in OCI items associated companies.
Cash flow hedges
The impact on equity attributable to owners of the parent company from fair
valuation of cash flow hedges, EUR -8 million in Q1-Q3 2009, mainly relates to
cash flow hedges hedging electricity price for future transactions. When
electricity price is higher than the hedging price, the impact on equity is
negative.
*) Translation of financial information from subsidiaries in foreign currency is
done using average rate for the income statement and end rate for the balance
sheet. The exchange rate differences occurring from translation to EUR are
booked to equity. For information regarding exchange rates used, see Note 8
Exchange rates.
--------------------------------------------------------------------------------
| CONDENSED CONSOLIDATED CASH FLOW STATEMENT |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Note | Q3 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| | | | 2009 | 2008 | 2009 | 2008 | | twelve |
| | | | | | | | | months |
--------------------------------------------------------------------------------
| Cash flow | | | | | | | | |
| from | | | | | | | | |
| operating | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
| Operating | | | 414 | 532 | 1 634 | 1 735 | 2 478 | 2 377 |
| profit before | | | | | | | | |
| depreciations | | | | | | | | |
| (EBITDA) | | | | | | | | |
--------------------------------------------------------------------------------
| Non-cash flow | | | 31 | -56 | 50 | -38 | -275 | -187 |
| items and | | | | | | | | |
| divesting | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
| Financial items and | -51 | -13 | 248 | -93 | 233 | 574 |
| realised foreign | | | | | | |
| exchange gains and | | | | | | |
| losses | | | | | | |
--------------------------------------------------------------------------------
| Taxes | | | -74 | -79 | -205 | -279 | -332 | -258 |
--------------------------------------------------------------------------------
| Funds from | | | 320 | 384 | 1 727 | 1 325 | 2 104 | 2 506 |
| operations | | | | | | | | |
--------------------------------------------------------------------------------
| Change in | | | 22 | 17 | 141 | 115 | -102 | -76 |
| working | | | | | | | | |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| Total net | | | 342 | 401 | 1 868 | 1 440 | 2 002 | 2 430 |
| cash from | | | | | | | | |
| operating | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow | | | | | | | | |
| from | | | | | | | | |
| investing | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
| Capital | | 4, | -228 | -301 | -579 | -680 | -1 018 | -917 |
| expenditures | | 12 | | | | | | |
| 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisition of | 7 | -3 | -442 | -25 | -1 206 | -1 210 | -29 |
| subsidiaries, net | | | | | | | |
| of cash acquired | | | | | | | |
--------------------------------------------------------------------------------
| Acquisition | | 13 | -1 | 0 | -32 | -8 | -32 | -56 |
| of associates | | | | | | | | |
| 2) | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisition | | | -1 | 0 | -2 | -1 | -1 | -2 |
| of other | | | | | | | | |
| long-term | | | | | | | | |
| investments | | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds from | | | 27 | 4 | 38 | 9 | 37 | 66 |
| sales of | | | | | | | | |
| fixed assets | | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds from | 7 | -1 | 1 | 10 | 1 | 44 | 53 |
| sales of | | | | | | | |
| subsidiaries, net | | | | | | | |
| of cash disposed | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds from | | 13 | 1 | 24 | 1 | 24 | 34 | 11 |
| sales of | | | | | | | | |
| associates | | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds from | | 0 | 0 | 1 | 0 | 0 | 1 |
| sales of other | | | | | | | |
| non-current | | | | | | | |
| assets | | | | | | | |
--------------------------------------------------------------------------------
| Change in | | | -33 | -28 | -65 | -78 | -136 | -123 |
| interest-bear | | | | | | | | |
| ing | | | | | | | | |
| receivables | | | | | | | | |
--------------------------------------------------------------------------------
| Total net | | | -239 | -742 | -653 | -1 939 | -2 282 | -996 |
| cash used in | | | | | | | | |
| investing | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow | | | 103 | -341 | 1 215 | -499 | -280 | 1 434 |
| before | | | | | | | | |
| financing | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow | | | | | | | | |
| from | | | | | | | | |
| financing | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
| Net change in | | | -722 | 257 | -757 | 2 578 | 2 621 | -714 |
| loans | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid to | | - | 0 | -888 | -1 198 | -1 198 | -888 |
| the Company's | | | | | | | |
| equity holders | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | -4 | -10 | -12 | -134 | -103 | 19 |
| financing | | | | | | | | |
| items | | | | | | | | |
--------------------------------------------------------------------------------
| Total net | | | -726 | 247 | -1 657 | 1 246 | 1 320 | -1 583 |
| cash used in | | | | | | | | |
| financing | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
| Total net | | | | | | | | |
| increase | | | | | | | | |
| (+)/decrease | | | | | | | | |
| (-) in | | | | | | | | |
--------------------------------------------------------------------------------
| liquid funds | | | -623 | -94 | -442 | 747 | 1 040 | -149 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liquid funds | | | 1 440 | 1 247 | 1 321 | 427 | 427 | 1 179 |
| at the | | | | | | | | |
| beginning of | | | | | | | | |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| Foreign | | | -2 | 26 | -64 | 5 | -146 | -215 |
| exchange | | | | | | | | |
| differences | | | | | | | | |
| in liquid | | | | | | | | |
| funds | | | | | | | | |
--------------------------------------------------------------------------------
| Liquid funds | | | 815 | 1 179 | 815 | 1 179 | 1 321 | 815 |
| at the end of | | | | | | | | |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Capital expenditures in cash flow do not include investments not yet |
| paid. Capitalised borrowing costs are included in interest costs paid. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2) Acquisition of associates include share issues. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in net | | | Q3 2009 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| debt | | | | 2008 | 2009 | 2008 | | twelv |
| | | | | | | | | e |
| | | | | | | | | month |
| | | | | | | | | s |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net debt | | | 6 004 | 6 254 | 6 179 | 4 466 | 4 466 | 6 520 |
| beginning of | | | | | | | | |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| Foreign | | | 107 | -92 | 151 | -94 | -203 | 42 |
| exchange rate | | | | | | | | |
| differences | | | | | | | | |
--------------------------------------------------------------------------------
| EBITDA | | | 414 | 532 | 1 634 | 1 735 | 2 478 | 2 377 |
--------------------------------------------------------------------------------
| Paid net | | | | | | | | |
| financial | | | | | | | | |
| costs, taxes | | | | | | | | |
--------------------------------------------------------------------------------
| and adjustments for | -94 | -148 | 93 | -410 | -374 | 129 |
| non-cash and | | | | | | |
| divestment items | | | | | | |
--------------------------------------------------------------------------------
| Change in | | | 22 | 17 | 141 | 115 | -102 | -76 |
| working | | | | | | | | |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| Capital | | | -228 | -301 | -579 | -680 | -1 018 | -917 |
| expenditures | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisitions | | | -5 | -442 | -59 | -1 215 | -1 243 | -87 |
--------------------------------------------------------------------------------
| Divestments | | | 27 | 29 | 50 | 34 | 115 | 131 |
--------------------------------------------------------------------------------
| Change in | | | -33 | -28 | -65 | -78 | -136 | -123 |
| interest-beari | | | | | | | | |
| ng receivables | | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | - | - | -888 | -1 198 | -1 198 | -888 |
--------------------------------------------------------------------------------
| Other | | | -4 | -10 | -12 | -134 | -103 | 19 |
| financing | | | | | | | | |
| activities | | | | | | | | |
--------------------------------------------------------------------------------
| Net cash flow | | | 99 | -351 | 315 | -1 831 | -1 581 | 565 |
| (- increase in | | | | | | | | |
| net debt) | | | | | | | | |
--------------------------------------------------------------------------------
| Loans in | | | - | - | - | 272 | 272 | - |
| acquired | | | | | | | | |
| companies | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value change of | 29 | 7 | 26 | 45 | 63 | 44 |
| bonds and amortised | | | | | | |
| cost valuation | | | | | | |
--------------------------------------------------------------------------------
| Net debt end | | | 6 041 | 6 520 | 6 041 | 6 520 | 6 179 | 6 041 |
| of period | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY RATIOS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | Sept | June | Marc | Dec 31 | Sept | June | March | Last |
| | 30 | 30 | h 31 | 2008 | 30 | 30 | 31 | twelv |
| | 2009 | 2009 | 2009 | | 2008 | 2008 | 2008 | e |
| | | | | | | | | month |
| | | | | | | | | s |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA, | 1 634 | 1 | 721 | 2 478 | 1 735 | 1 203 | 720 | 2 377 |
| MEUR | | 220 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings | 1.02 | 0.78 | 0.46 | 1.74 | 1.10 | 0.78 | 0.51 | 1.65 |
| per share | | | | | | | | |
| (basic), | | | | | | | | |
| EUR | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | 15 | 15 | 17 | 15 911 | 15 756 | 15 593 | 16 868 | 15 |
| employed, | 184 | 347 | 404 | | | | | 184 |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Interest-b | 6 041 | 6 | 5 | 6 179 | 6 520 | 6 254 | 5 228 | N/A |
| earing net | | 004 | 634 | | | | | |
| debt, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | 634 | 412 | 181 | 2 624 | 2 210 | 1 459 | 1 227 | 1 048 |
| expenditur | | | | | | | | |
| e and | | | | | | | | |
| gross | | | | | | | | |
| investment | | | | | | | | |
| s in | | | | | | | | |
| shares, | | | | | | | | |
| MEUR | | | | | | | | |
--------------------------------------------------------------------------------
| Capital | 571 | 352 | 150 | 1 108 | 716 | 408 | 175 | 963 |
| expenditur | | | | | | | | |
| e, MEUR | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | 11.4 | 13.1 | 14.5 | 15.0 | 13.7 | 14.6 | 17.3 | 13.2 |
| capital | | | | | | | | |
| employed, | | | | | | | | |
| % 1) | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | 14.6 | 17.4 | 19.6 | 18.7 | 15.7 | 17.2 | 21.0 | 18.6 |
| shareholde | | | | | | | | |
| rs' | | | | | | | | |
| equity, % | | | | | | | | |
| 1) | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net debt / | 2.8 | 2.5 | 2.0 | 2.5 | 2.8 | 2.6 | 1.8 | 2.5 |
| EBITDA 1) | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest | 11.3 | 12.3 | 16.0 | 9.4 | 7.6 | 8.6 | 14.1 | 13.1 |
| coverage | | | | | | | | |
--------------------------------------------------------------------------------
| Interest | 9.5 | 10.5 | 12.9 | 8.6 | 7.1 | 8.1 | 13.8 | 10.9 |
| coverage | | | | | | | | |
| including | | | | | | | | |
| capitalise | | | | | | | | |
| d | | | | | | | | |
| borrowing | | | | | | | | |
| costs | | | | | | | | |
--------------------------------------------------------------------------------
| Funds from | 35.7 | 38.9 | 45.1 | 34.1 | 27.1 | 30.1 | 42.9 | 41.5 |
| operations | | | | | | | | |
| /interest- | | | | | | | | |
| bearing | | | | | | | | |
| net debt, | | | | | | | | |
| % 1) | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gearing, % | 73 | 76 | 65 | 73 | 81 | 77 | 56 | N/A |
--------------------------------------------------------------------------------
| Equity per | 8.89 | 8.42 | 9.34 | 8.96 | 8.49 | 8.08 | 9.53 | N/A |
| share, EUR | | | | | | | | |
--------------------------------------------------------------------------------
| Equity-to- | 43 | 41 | 40 | 41 | 39 | 39 | 44 | N/A |
| assets | | | | | | | | |
| ratio, % | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of | 12 | 13 | 14 | 15 579 | 15 785 | 16 069 | 15 689 | N/A |
| employees | 054 | 586 | 267 | | | | | |
--------------------------------------------------------------------------------
| Average | 13 | 14 | 14 | 14 077 | 13 585 | 12 603 | 8 356 | N/A |
| number of | 737 | 310 | 644 | | | | | |
| employees | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | 888 | 888 | 888 | 887 | 887 | 887 | 887 | 888 |
| number of | 230 | 230 | 095 | 256 | 241 | 131 | 085 | 026 |
| shares, 1 | | | | | | | | |
| 000 shares | | | | | | | | |
--------------------------------------------------------------------------------
| Diluted | 888 | 888 | 888 | 887 | 887 | 888 | 888 | 888 |
| adjusted | 230 | 230 | 250 | 839 | 986 | 165 | 177 | 026 |
| average | | | | | | | | |
| number of | | | | | | | | |
| shares, 1 | | | | | | | | |
| 000 shares | | | | | | | | |
--------------------------------------------------------------------------------
| Number of | 888 | 888 | 888 | 887 | 887 | 887 | 887 | N/A |
| registered | 367 | 367 | 166 | 638 | 517 | 191 | 123 | |
| shares, 1 | | | | | | | | |
| 000 shares | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Quarterly figures are annualised. |
--------------------------------------------------------------------------------
| For definitions, see Note 24. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1. BASIS OF PREPARATION |
--------------------------------------------------------------------------------
The condensed interim financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34, Interim Financial Reporting, as
adopted by the EU. The condensed interim financial report should be read in
conjunction with the consolidated financial statements as at and for the year
ended 31 December 2008. The interim financials have not been audited.
--------------------------------------------------------------------------------
| 2. ACCOUNTING POLICIES |
--------------------------------------------------------------------------------
The same accounting policies and presentation have been followed in these
condensed interim financial statements as were applied in the preparation of the
consolidated financial statements as at and for the year ended 31 December 2008,
except for the effects of the adoption of the standards described below:
• IAS 23 (amendment) Borrowing costs
The revised standard requires an entity to capitalise borrowing costs directly
attributable to the acquisition, construction or production of a qualifying
asset as part of the cost of that asset. The option of immediately expensing
those borrowing costs is removed. The adoption of the revised IAS 23 changed
slightly Fortum's accounting policy for capitalising borrowing costs as
previously only borrowings costs meeting determined criteria were capitalised.
Fortum has applied the revised IAS 23 to qualifying assets for which
capitalisation of borrowing costs commences on or after 1 January 2009. The
change did not have a material effect on the reported results or financial
position.
• IAS 1 (revised) Presentation of financial statements
IAS 1 (revised) changed the terminology and presentation of the income
statement and the statement of changes in equity. The standard requires to
separate changes in equity of an entity arising from transactions with owners
from other changes in equity. The adoption of the standard had no impact on
Fortum's reported results or financial position.
--------------------------------------------------------------------------------
| 3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS |
--------------------------------------------------------------------------------
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts of assets
and liabilities, income and expense. Annual results may differ from these
estimates.
In preparing these interim financial statements, the significant judgements made
by management in applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the consolidated
financial statements as at and for the year ended 31 December 2008.
--------------------------------------------------------------------------------
| 4. SEGMENT INFORMATION |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SALES | Q3 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| MEUR | 2009 | 2008 | 2009 | 2008 | | twelve |
| | | | | | | months |
--------------------------------------------------------------------------------
| Power sales excluding | 717 | 837 | 2 315 | 2 405 | 3 291 | 3 201 |
| indirect taxes | | | | | | |
--------------------------------------------------------------------------------
| Heating sales | 160 | 196 | 887 | 858 | 1 298 | 1 327 |
--------------------------------------------------------------------------------
| Network transmissions | 157 | 162 | 547 | 553 | 746 | 740 |
--------------------------------------------------------------------------------
| Other sales | 12 | 77 | 123 | 218 | 301 | 206 |
--------------------------------------------------------------------------------
| Total | 1 046 | 1 272 | 3 872 | 4 034 | 5 636 | 5 474 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SALES BY SEGMENT | Q3 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| MEUR | 2009 | 2008 | 2009 | 2008 | | twelve |
| | | | | | | months |
--------------------------------------------------------------------------------
| Power Generation | 587 | 718 | 1 917 | 2 156 | 2 892 | 2 653 |
--------------------------------------------------------------------------------
| - of which internal | 53 | -79 | 196 | -5 | 0 | 201 |
--------------------------------------------------------------------------------
| Heat | 176 | 226 | 937 | 1 003 | 1 466 | 1 400 |
--------------------------------------------------------------------------------
| - of which internal | 2 | -4 | 14 | 3 | 0 | 11 |
--------------------------------------------------------------------------------
| Distribution | 168 | 171 | 573 | 583 | 789 | 779 |
--------------------------------------------------------------------------------
| - of which internal | 2 | 2 | 6 | 7 | 10 | 9 |
--------------------------------------------------------------------------------
| Markets | 272 | 461 | 1 039 | 1 391 | 1 922 | 1 570 |
--------------------------------------------------------------------------------
| - of which internal | 9 | 61 | 39 | 127 | 177 | 89 |
--------------------------------------------------------------------------------
| Russia | 109 | 140 | 429 | 292 | 489 | 626 |
--------------------------------------------------------------------------------
| - of which internal | 0 | - | 0 | - | 0 | 0 |
--------------------------------------------------------------------------------
| Other | 18 | 21 | 55 | 62 | 83 | 76 |
--------------------------------------------------------------------------------
| - of which internal | 18 | 20 | 53 | 61 | 82 | 74 |
--------------------------------------------------------------------------------
| Netting of Nord Pool | -200 | -465 | -770 | -1 260 | -1 736 | -1 246 |
| transactions 1) | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -84 | 0 | -308 | -193 | -269 | -384 |
--------------------------------------------------------------------------------
| Total | 1 046 | 1 272 | 3 872 | 4 034 | 5 636 | 5 474 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Sales and purchases with Nord Pool is netted on Group level on an hourly |
| basis and posted either as revenue or cost depending on if Fortum is a net |
| seller or net buyer during any particular hour. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT BY | Q3 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| SEGMENT | 2009 | 2008 | 2009 | 2008 | | twelve |
| MEUR | | | | | | months |
--------------------------------------------------------------------------------
| Power Generation | 278 | 438 | 1 005 | 1 129 | 1 599 | 1 475 |
--------------------------------------------------------------------------------
| Heat | -12 | -15 | 140 | 152 | 307 | 295 |
--------------------------------------------------------------------------------
| Distribution | 47 | 50 | 182 | 187 | 248 | 243 |
--------------------------------------------------------------------------------
| Markets | 7 | -17 | 3 | -6 | -35 | -26 |
--------------------------------------------------------------------------------
| Russia | -22 | -39 | -33 | -72 | -91 | -52 |
--------------------------------------------------------------------------------
| Other | -12 | -22 | -37 | -38 | -65 | -64 |
--------------------------------------------------------------------------------
| Total | 286 | 395 | 1 260 | 1 352 | 1 963 | 1 871 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMPARABLE | Q3 2009 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| OPERATING PROFIT BY | | 2008 | 2009 | 2008 | | twelv |
| SEGMENT | | | | | | e |
| MEUR | | | | | | month |
| | | | | | | s |
--------------------------------------------------------------------------------
| Power Generation | | | 310 | 371 | 1 075 | 1 150 | 1 528 | 1 453 |
--------------------------------------------------------------------------------
| Heat | | | -14 | -7 | 124 | 141 | 250 | 233 |
--------------------------------------------------------------------------------
| Distribution | | | 47 | 49 | 182 | 185 | 248 | 245 |
--------------------------------------------------------------------------------
| Markets | | | 7 | -8 | 11 | -33 | -33 | 11 |
--------------------------------------------------------------------------------
| Russia | | | -22 | -39 | -33 | -72 | -92 | -53 |
--------------------------------------------------------------------------------
| Other | | | -12 | -13 | -41 | -34 | -56 | -63 |
--------------------------------------------------------------------------------
| Comparable | | | 316 | 353 | 1 318 | 1 337 | 1 845 | 1 826 |
| operating profit | | | | | | | | |
--------------------------------------------------------------------------------
| Non-recurring | | | 7 | 15 | 21 | 17 | 85 | 89 |
| items | | | | | | | | |
--------------------------------------------------------------------------------
| Other items | | | -37 | 27 | -79 | -2 | 33 | -44 |
| effecting | | | | | | | | |
| comparability | | | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | | | 286 | 395 | 1 260 | 1 352 | 1 963 | 1 871 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-RECURRING ITEMS | | Q3 2009 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| BY SEGMENT | | | 2008 | 2009 | 2008 | | twelv |
| MEUR | | | | | | | e |
| | | | | | | | month |
| | | | | | | | s |
--------------------------------------------------------------------------------
| Power | | | 1 | 11 | 6 | 11 | 18 | 13 |
| Generation | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | | 6 | 2 | 15 | 4 | 64 | 75 |
--------------------------------------------------------------------------------
| Distribution | | | 0 | 2 | 0 | 2 | 2 | 0 |
--------------------------------------------------------------------------------
| Markets | | | 0 | 0 | 0 | - | 0 | 0 |
--------------------------------------------------------------------------------
| Russia | | | 0 | 0 | 0 | 0 | 1 | 1 |
--------------------------------------------------------------------------------
| Other | | | 0 | 0 | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Total | | | 7 | 15 | 21 | 17 | 85 | 89 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OTHER ITEMS | Q3 2009 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| EFFECTING | | 2008 | 2009 | 2008 | | twelve |
| COMPARABILITY BY | | | | | | months |
| SEGMENT | | | | | | |
| MEUR | | | | | | |
--------------------------------------------------------------------------------
| Power | | | -33 | 56 | -76 | -32 | 53 | 9 |
| Generation 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | | -4 | -10 | 1 | 7 | -7 | -13 |
--------------------------------------------------------------------------------
| Distribution | | | 0 | -1 | 0 | 0 | -2 | -2 |
--------------------------------------------------------------------------------
| Markets | | | 0 | -9 | -8 | 27 | -2 | -37 |
--------------------------------------------------------------------------------
| Russia | | | 0 | - | 0 | - | 0 | 0 |
--------------------------------------------------------------------------------
| Other | | | 0 | -9 | 4 | -4 | -9 | -1 |
--------------------------------------------------------------------------------
| Total | | | -37 | 27 | -79 | -2 | 33 | -44 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Including effects | -5 | 10 | -26 | -7 | -19 | -38 |
| from the accounting | | | | | | |
| of Fortum's part of | | | | | | |
| the Finnish State | | | | | | |
| Nuclear Waste | | | | | | |
| Management Fund with | | | | | | |
| (EUR million): | | | | | | |
--------------------------------------------------------------------------------
Other items effecting comparability mainly include effects from financial
derivatives hedging future cash-flows where hedge accounting is not applied
according to IAS 39. In Power Generation segment there are also effects from the
accounting of Fortum's part of the Finnish State Nuclear Waste Management Fund
where the asset in the balance sheet cannot exceed the related liabilities
according to IFRIC interpretation 5.
--------------------------------------------------------------------------------
| DEPRECIATION, | Q3 2009 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| AMORTISATION AND | | 2008 | 2009 | 2008 | | twelve |
| IMPAIRMENT CHARGES BY | | | | | | months |
| SEGMENT | | | | | | |
| MEUR | | | | | | |
--------------------------------------------------------------------------------
| Power | | | 24 | 24 | 69 | 73 | 97 | 93 |
| Generation | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | | 41 | 45 | 117 | 128 | 169 | 158 |
--------------------------------------------------------------------------------
| Distribution | | | 42 | 41 | 122 | 124 | 165 | 163 |
--------------------------------------------------------------------------------
| Markets | | | 1 | 2 | 4 | 6 | 7 | 5 |
--------------------------------------------------------------------------------
| Russia | | | 18 | 23 | 55 | 45 | 67 | 77 |
--------------------------------------------------------------------------------
| Other | | | 2 | 2 | 7 | 7 | 10 | 10 |
--------------------------------------------------------------------------------
| Total | | | 128 | 137 | 374 | 383 | 515 | 506 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHARE OF PROFIT/LOSS | Q3 2009 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| IN ASSOCIATES AND | | 2008 | 2009 | 2008 | | twelve |
| JOINT VENTURES BY | | | | | | months |
| SEGMENT | | | | | | |
| MEUR | | | | | | |
--------------------------------------------------------------------------------
| Power | | | -9 | -6 | -20 | -13 | 26 | 19 |
| Generation | | | | | | | | |
| 1), 2) | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | | 6 | 0 | 18 | 8 | 12 | 22 |
--------------------------------------------------------------------------------
| Distribution | | | -1 | 2 | 8 | 13 | 16 | 11 |
--------------------------------------------------------------------------------
| Markets | | | 0 | 4 | 1 | 5 | 5 | 1 |
--------------------------------------------------------------------------------
| Russia | | | 1 | 1 | 6 | 19 | 19 | 6 |
--------------------------------------------------------------------------------
| Other | | | 6 | 7 | -14 | 46 | 48 | -12 |
--------------------------------------------------------------------------------
| Total | | | 3 | 8 | -1 | 78 | 126 | 47 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Including effects | 1 | 2 | -5 | -5 | 9 | 9 |
| from the accounting | | | | | | |
| of Fortum's | | | | | | |
| associates part of | | | | | | |
| Finnish and Swedish | | | | | | |
| Nuclear Waste | | | | | | |
| Management Funds with | | | | | | |
| (EUR million): | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2) The main part of the associated companies in Power Generation are power |
| production companies from which Fortum purchases produced electricity at |
| production costs including interest costs and income taxes. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PARTICIPATIONS IN ASSOCIATES AND JOINT | Sept 30 | Sept 30 | Dec 31 |
| VENTURES BY SEGMENT | 2009 | 2008 | 2008 |
| MEUR | | | |
--------------------------------------------------------------------------------
| Power Generation | | | | | 878 | 775 | 818 |
--------------------------------------------------------------------------------
| Heat | | | | | 173 | 155 | 160 |
--------------------------------------------------------------------------------
| Distribution | | | | | 226 | 232 | 210 |
--------------------------------------------------------------------------------
| Markets | | | | | 12 | 12 | 12 |
--------------------------------------------------------------------------------
| Russia | | | | | 404 | 477 | 429 |
--------------------------------------------------------------------------------
| Other | | | | | 501 | 680 | 483 |
--------------------------------------------------------------------------------
| Total | | | | | 2 194 | 2 331 | 2 112 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CAPITAL | Q3 2009 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| EXPENDITURE BY | | 2008 | 2009 | 2008 | | twelve |
| SEGMENT | | | | | | months |
| MEUR | | | | | | |
--------------------------------------------------------------------------------
| Power | | 20 | 35 | 64 | 85 | 134 | 113 |
| Generation | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | 91 | 95 | 258 | 264 | 408 | 402 |
--------------------------------------------------------------------------------
| Distribution | | 48 | 70 | 127 | 203 | 296 | 220 |
| 1) | | | | | | | |
--------------------------------------------------------------------------------
| Markets | | 0 | 0 | 1 | 3 | 3 | 1 |
--------------------------------------------------------------------------------
| Russia | | 58 | 107 | 117 | 152 | 256 | 221 |
--------------------------------------------------------------------------------
| Other | | 2 | 1 | 4 | 9 | 11 | 6 |
--------------------------------------------------------------------------------
| Total | | 219 | 308 | 571 | 716 | 1 108 | 963 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Of which | | 7 | 7 | 21 | 14 | 21 | 28 |
| capitalised | | | | | | | |
| borrowing | | | | | | | |
| costs | | | | | | | |
--------------------------------------------------------------------------------
1) Decrease is mainly due to the finalisation of installation of new meters in
Fortum's network areas in Sweden (Automatic Meter Management, AMM).
--------------------------------------------------------------------------------
| GROSS INVESTMENTS IN | Q3 | Q3 | Q1-Q3 | Q1-Q3 | 2008 | Last |
| SHARES BY SEGMENT | 2009 | 2008 | 2009 | 2008 | | twelve |
| MEUR | | | | | | months |
--------------------------------------------------------------------------------
| Power | | | 0 | 0 | 56 | 0 | 0 | 56 |
| Generation | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | | 0 | 1 | 0 | 23 | 23 | 0 |
--------------------------------------------------------------------------------
| Distribution | | | 3 | 0 | 3 | 0 | 0 | 3 |
--------------------------------------------------------------------------------
| Markets | | | 0 | 0 | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Russia | | | 0 | 441 | 3 | 1 470 | 1 492 | 25 |
--------------------------------------------------------------------------------
| Other | | | 0 | 1 | 1 | 1 | 1 | 1 |
--------------------------------------------------------------------------------
| Total | | | 3 | 443 | 63 | 1 494 | 1 516 | 85 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross investments in shares in Q1-Q3 2009 comprise mainly of Hafslund |
| Infratek ASA shares acquired in January 2009 and additional share capital to |
| be paid to Teollisuuden Voima Oyj. See Note 13. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET ASSETS BY SEGMENT | Sept 30 | Sept 30 | Dec 31 |
| MEUR | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Power Generation | 5 527 | 5 396 | 5 331 |
--------------------------------------------------------------------------------
| Heat | 3 655 | 3 595 | 3 468 |
--------------------------------------------------------------------------------
| Distribution | 3 248 | 3 265 | 3 032 |
--------------------------------------------------------------------------------
| Markets | 85 | 229 | 188 |
--------------------------------------------------------------------------------
| Russia | 2 098 | 2 420 | 2 205 |
--------------------------------------------------------------------------------
| Other | 338 | 823 | 796 |
--------------------------------------------------------------------------------
| Total | 14 951 | 15 728 | 15 020 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RETURN ON NET ASSETS BY SEGMENT | Last | Dec 31 |
| % | twelve | 2008 |
| | months | |
--------------------------------------------------------------------------------
| Power Generation | | 27.6 | 29.6 |
--------------------------------------------------------------------------------
| Heat | | 8.9 | 8.9 |
--------------------------------------------------------------------------------
| Distribution | | 8.1 | 8.1 |
--------------------------------------------------------------------------------
| Markets | | -17.0 | -14.0 |
--------------------------------------------------------------------------------
| Russia | | -2.1 | -3.7 |
--------------------------------------------------------------------------------
| Other | | -12.3 | -1.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMPARABLE RETURN ON NET ASSETS BY | Last | Dec 31 |
| SEGMENT | twelve | 2008 |
| % | months | |
--------------------------------------------------------------------------------
| Power Generation | | | | 27.2 | 28.0 |
--------------------------------------------------------------------------------
| Heat | | | | 7.2 | 7.3 |
--------------------------------------------------------------------------------
| Distribution | | | | 8.1 | 8.2 |
--------------------------------------------------------------------------------
| Markets | | | | 9.3 | -15.3 |
--------------------------------------------------------------------------------
| Russia | | | | -2.1 | -3.8 |
--------------------------------------------------------------------------------
| Other | | | | -19.7 | -1.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on net assets is calculated by dividing the sum of operating profit |
| and share of profit of associated companies and joint ventures with average |
| net assets. Average net assets are calculated using the opening balance and |
| end of each quarter values. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS BY SEGMENTS | Sept 30 | Sept 30 | Dec 31 |
| MEUR | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Power Generation | 6 018 | 6 032 | 5 732 |
--------------------------------------------------------------------------------
| Heat | 4 000 | 3 949 | 3 923 |
--------------------------------------------------------------------------------
| Distribution | 3 692 | 3 766 | 3 546 |
--------------------------------------------------------------------------------
| Markets | 521 | 631 | 663 |
--------------------------------------------------------------------------------
| Russia | 2 356 | 2 691 | 2 476 |
--------------------------------------------------------------------------------
| Other | 625 | 927 | 997 |
--------------------------------------------------------------------------------
| Assets included in Net assets | 17 212 | 17 996 | 17 337 |
--------------------------------------------------------------------------------
| Interest-bearing receivables | 913 | 826 | 799 |
--------------------------------------------------------------------------------
| Deferred taxes | 7 | 0 | 2 |
--------------------------------------------------------------------------------
| Other assets | 612 | 545 | 819 |
--------------------------------------------------------------------------------
| Liquid funds | 815 | 1 179 | 1 321 |
--------------------------------------------------------------------------------
| Total assets | 19 559 | 20 546 | 20 278 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES BY SEGMENTS | Sept 30 | Sept 30 | Dec 31 |
| MEUR | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Power Generation | 491 | 636 | 401 |
--------------------------------------------------------------------------------
| Heat | 345 | 354 | 455 |
--------------------------------------------------------------------------------
| Distribution | 444 | 501 | 514 |
--------------------------------------------------------------------------------
| Markets | 436 | 402 | 475 |
--------------------------------------------------------------------------------
| Russia | 258 | 271 | 271 |
--------------------------------------------------------------------------------
| Other | 287 | 104 | 201 |
--------------------------------------------------------------------------------
| Liabilities included in Net | 2 261 | 2 268 | 2 317 |
| assets | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 1 810 | 1 810 | 1 851 |
--------------------------------------------------------------------------------
| Other liabilities | 304 | 712 | 199 |
--------------------------------------------------------------------------------
| Total liabilities included in | 4 375 | 4 790 | 4 367 |
| Capital employed | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 6 856 | 7 699 | 7 500 |
--------------------------------------------------------------------------------
| Total equity | 8 328 | 8 057 | 8 411 |
--------------------------------------------------------------------------------
| Total equity and liabilities | 19 559 | 20 546 | 20 278 |
--------------------------------------------------------------------------------
Other assets and Other liabilities not included in segment's Net assets consists
mainly of income tax receivables and liabilities, accrued interest expenses,
derivative receivables and liabilities qualifying as hedges and receivables and
liabilities for interest rate derivatives.
--------------------------------------------------------------------------------
| NUMBER OF EMPLOYEES | Sept 30 | Sept 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Power Generation | 3 285 | 3 564 | 3 520 |
--------------------------------------------------------------------------------
| Heat | 2 121 | 2 486 | 2 318 |
--------------------------------------------------------------------------------
| Distribution | 1 154 | 1 336 | 1 336 |
--------------------------------------------------------------------------------
| Markets | 638 | 629 | 635 |
--------------------------------------------------------------------------------
| Russia | 4 333 | 7 254 | 7 262 |
--------------------------------------------------------------------------------
| Other | 523 | 516 | 508 |
--------------------------------------------------------------------------------
| Total | 12 054 | 15 785 | 15 579 |
--------------------------------------------------------------------------------
Number of employees in Fortum decreased during Q1-Q3 2009 mainly due to
outsourcing of certain infrastructure functions from Power Generation's Service
Business unit and Distribution segment to Hafslund Infratek ASA in Q1 2009 as
well as restructuring in Russia segment. Within the Group, a number of people
working in OAO Fortum (former TGC-10) were transferred to Power Generation's
Service Business unit in Q1 2009.
--------------------------------------------------------------------------------
| AVERAGE NUMBER OF EMPLOYEES | Q1-Q3 | Q1-Q3 | 2008 |
| | 2009 | 2008 | |
--------------------------------------------------------------------------------
| Power Generation | 3 442 | 3 606 | 3 591 |
--------------------------------------------------------------------------------
| Heat | 2 210 | 2 423 | 2 422 |
--------------------------------------------------------------------------------
| Distribution | 1 188 | 1 189 | 1 222 |
--------------------------------------------------------------------------------
| Markets | 633 | 804 | 766 |
--------------------------------------------------------------------------------
| Russia | 5 740 | 5 052 | 5 566 |
--------------------------------------------------------------------------------
| Other | 524 | 511 | 510 |
--------------------------------------------------------------------------------
| Total | 13 737 | 13 585 | 14 077 |
--------------------------------------------------------------------------------
Average number of employees is based on a monthly average for the whole period
in question.
--------------------------------------------------------------------------------
| 5. QUARTERLY SEGMENT INFORMATION |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Extended quarterly information is available on Fortum's website |
| www.fortum.com (about Fortum/investors/financial information). |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| QUARTERLY SALES BY | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| SEGMENTS | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 |
| MEUR | | | | | | | |
--------------------------------------------------------------------------------
| Power | | 587 | 625 | 705 | 736 | 718 | 721 | 717 |
| Generation | | | | | | | | |
--------------------------------------------------------------------------------
| - of which | | 53 | 64 | 79 | 5 | -79 | 21 | 53 |
| internal | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | 176 | 248 | 513 | 463 | 226 | 284 | 493 |
--------------------------------------------------------------------------------
| - of which | | 2 | 3 | 9 | -3 | -4 | - | 7 |
| internal | | | | | | | | |
--------------------------------------------------------------------------------
| Distribution | | 168 | 176 | 229 | 206 | 171 | 180 | 232 |
--------------------------------------------------------------------------------
| - of which | | 2 | 3 | 1 | 3 | 2 | 2 | 3 |
| internal | | | | | | | | |
--------------------------------------------------------------------------------
| Markets | | 272 | 298 | 469 | 531 | 461 | 411 | 519 |
--------------------------------------------------------------------------------
| - of which | | 9 | 8 | 22 | 50 | 61 | 34 | 32 |
| internal | | | | | | | | |
--------------------------------------------------------------------------------
| Russia | | 109 | 136 | 184 | 197 | 140 | 152 | - |
--------------------------------------------------------------------------------
| - of which | | 0 | 0 | 0 | - | - | - | - |
| internal | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | 18 | 19 | 18 | 21 | 21 | 21 | 20 |
--------------------------------------------------------------------------------
| - of which | | 18 | 18 | 17 | 21 | 20 | 21 | 20 |
| internal | | | | | | | | |
--------------------------------------------------------------------------------
| Netting of | | -200 | -212 | -358 | -476 | -465 | -369 | -426 |
| Nord Pool | | | | | | | | |
| transactions | | | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | | -84 | -96 | -128 | -76 | 0 | -78 | -115 |
--------------------------------------------------------------------------------
| Total | | 1 046 | 1 194 | 1 632 | 1 602 | 1 272 | 1 322 | 1 440 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| QUARTERLY | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| OPERATING PROFIT | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 |
| BY SEGMENTS | | | | | | | |
| MEUR | | | | | | | |
--------------------------------------------------------------------------------
| Power | | 278 | 304 | 423 | 470 | 438 | 260 | 431 |
| Generation | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | -12 | 39 | 113 | 155 | -15 | 37 | 130 |
--------------------------------------------------------------------------------
| Distributio | | 47 | 54 | 81 | 61 | 50 | 51 | 86 |
| n | | | | | | | | |
--------------------------------------------------------------------------------
| Markets | | 7 | 7 | -11 | -29 | -17 | 31 | -20 |
--------------------------------------------------------------------------------
| Russia | | -22 | -16 | 5 | -19 | -39 | -33 | - |
--------------------------------------------------------------------------------
| Other | | -12 | -13 | -12 | -27 | -22 | 2 | -18 |
--------------------------------------------------------------------------------
| Total | | 286 | 375 | 599 | 611 | 395 | 348 | 609 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| QUARTERLY | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| COMPARABLE | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 |
| OPERATING PROFIT | | | | | | | |
| BY SEGMENTS | | | | | | | |
| MEUR | | | | | | | |
--------------------------------------------------------------------------------
| Power | | 310 | 346 | 419 | 378 | 371 | 384 | 395 |
| Generation | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | -14 | 26 | 112 | 109 | -7 | 27 | 121 |
--------------------------------------------------------------------------------
| Distributio | | 47 | 54 | 81 | 63 | 49 | 49 | 87 |
| n | | | | | | | | |
--------------------------------------------------------------------------------
| Markets | | 7 | 6 | -2 | 0 | -8 | -15 | -10 |
--------------------------------------------------------------------------------
| Russia | | -22 | -16 | 5 | -20 | -39 | -33 | - |
--------------------------------------------------------------------------------
| Other | | -12 | -16 | -13 | -22 | -13 | -9 | -12 |
--------------------------------------------------------------------------------
| Total | | 316 | 400 | 602 | 508 | 353 | 403 | 581 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| QUARTERLY | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| NON-RECURRING | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 |
| ITEMS BY SEGMENT | | | | | | | |
| MEUR | | | | | | | |
--------------------------------------------------------------------------------
| Power | | 1 | 1 | 4 | 7 | 11 | 0 | 0 |
| Generation | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | 6 | 9 | 0 | 60 | 2 | 0 | 2 |
--------------------------------------------------------------------------------
| Distributio | | 0 | 0 | 0 | 0 | 2 | 0 | 0 |
| n | | | | | | | | |
--------------------------------------------------------------------------------
| Markets | | 0 | 0 | 0 | - | 0 | 0 | - |
--------------------------------------------------------------------------------
| Russia | | 0 | 0 | 0 | 1 | 0 | - | - |
--------------------------------------------------------------------------------
| Other | | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Total | | 7 | 10 | 4 | 68 | 15 | 0 | 2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| QUARTERLY OTHER | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| ITEMS EFFECTING | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 |
| COMPARABILITY | | | | | | | |
| MEUR | | | | | | | |
--------------------------------------------------------------------------------
| Power | | -33 | -43 | 0 | 85 | 56 | -124 | 36 |
| Generation 1) | | | | | | | | |
--------------------------------------------------------------------------------
| Heat | | -4 | 4 | 1 | -14 | -10 | 10 | 7 |
--------------------------------------------------------------------------------
| Distribution | | 0 | 0 | 0 | -2 | -1 | 2 | -1 |
--------------------------------------------------------------------------------
| Markets | | 0 | 1 | -9 | -29 | -9 | 46 | -10 |
--------------------------------------------------------------------------------
| Russia | | 0 | 0 | - | - | - | - | - |
--------------------------------------------------------------------------------
| Other | | 0 | 3 | 1 | -5 | -9 | 11 | -6 |
--------------------------------------------------------------------------------
| Total | | -37 | -35 | -7 | 35 | 27 | -55 | 26 |
--------------------------------------------------------------------------------
| 1) Including | -5 | -10 | -11 | -12 | 10 | -8 | -9 |
| effects from the | | | | | | | |
| accounting of | | | | | | | |
| Fortum's part of | | | | | | | |
| the Finnish State | | | | | | | |
| Nuclear Waste | | | | | | | |
| Management Fund | | | | | | | |
| with (EUR | | | | | | | |
| million): | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 6. FINANCIAL RISK MANAGEMENT |
--------------------------------------------------------------------------------
The Group has not made any significant change in policies regarding risk
management during the period. Aspects of the Group's financial risk management
objectives and policies are consistent with those disclosed in the consolidated
financial statements as at and for the year ended 31 December 2008.
The tables below disclose the notional values or volumes and net fair values for
the Group's derivatives used in different areas mainly for hedging purposes.
--------------------------------------------------------------------------------
| DERIVATIVES |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Sept 30 | | Sept | | Dec |
| | | 2009 | | 30 | | 31 |
| | | | | 2008 | | 2008 |
--------------------------------------------------------------------------------
| Interest and | Notional | Net | Notional | Net | Notion | Net |
| currency | value | fair | value | fair | al | fair |
| derivatives | | value | | value | value | value |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR | MEUR | MEUR | MEUR |
--------------------------------------------------------------------------------
| Interest rate | 3 437 | 41 | 3 049 | -6 | 2 993 | -12 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Forward foreign | 5 621 | -166 | 4 898 | 157 | 4 521 | 370 |
| exchange contracts | | | | | | |
--------------------------------------------------------------------------------
| Forward rate | 49 | 0 | 357 | 0 | 230 | 0 |
| agreements | | | | | | |
--------------------------------------------------------------------------------
| Interest rate and | 1 452 | 62 | 2 740 | 150 | 2 240 | 218 |
| currency swaps | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Electricity | Volume | Net | Volume | Net | Volume | Net |
| derivatives | | fair | | fair | | fair |
| | | value | | value | | value |
--------------------------------------------------------------------------------
| | TWh | MEUR | TWh | MEUR | TWh | MEUR |
--------------------------------------------------------------------------------
| Sales swaps | 165 | 1 554 | 147 | -850 | 165 | 2 102 |
--------------------------------------------------------------------------------
| Purchase swaps | 109 | -1 | 118 | 649 | 123 | -1 |
| | | 205 | | | | 692 |
--------------------------------------------------------------------------------
| Purchased options | 11 | -21 | 5 | 3 | 2 | 0 |
--------------------------------------------------------------------------------
| Written options | 13 | 4 | 9 | -8 | 4 | -14 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Oil derivatives | Volume | Net | Volume | Net | Volume | Net |
| | | fair | | fair | | fair |
| | | value | | value | | value |
--------------------------------------------------------------------------------
| | 1000 bbl | MEUR | 1000 bbl | MEUR | 1000 | MEUR |
| | | | | | bbl | |
--------------------------------------------------------------------------------
| Sales swaps and | 730 | 2 | 852 | -8 | 1 047 | -14 |
| futures | | | | | | |
--------------------------------------------------------------------------------
| Purchase swaps and | 952 | -3 | 882 | 10 | 1 230 | 11 |
| futures | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Coal derivatives | Volume | Net | Volume | Net | Volume | Net |
| | | fair | | fair | | fair |
| | | value | | value | | value |
--------------------------------------------------------------------------------
| | kt | MEUR | kt | MEUR | kt | MEUR |
--------------------------------------------------------------------------------
| Sold | 825 | 2 | 345 | -3 | 276 | 7 |
--------------------------------------------------------------------------------
| Bought | 1 329 | -11 | 740 | 8 | 641 | -16 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CO2 emission | Volume | Net | Volume | Net | Volume | Net |
| allowance | | fair | | fair | | fair |
| derivatives | | value | | value | | value |
--------------------------------------------------------------------------------
| | ktCO2 | MEUR | ktCO2 | MEUR | ktCO2 | MEUR |
--------------------------------------------------------------------------------
| Sold | 2 269 | 5 | 5 099 | -12 | 592 | 4 |
--------------------------------------------------------------------------------
| Bought | 2 250 | -5 | 5 119 | 13 | 592 | -4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share derivatives | Notional | Net | Notional | Net | Notion | Net |
| | value | fair | value | fair | al | fair |
| | | value | | value | value | value |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR | MEUR | MEUR | MEUR |
--------------------------------------------------------------------------------
| Share forwards 1) | 24 | 19 | 35 | 38 | 35 | 24 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Cash-settled share forwards are used as a hedging instrument for Fortum |
| Group's performance share arrangement. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 7. ACQUISITIONS AND DISPOSALS |
--------------------------------------------------------------------------------
Gross investments in subsidiary shares during Q1-Q3 2009 amounted to EUR 5
million (Q1-Q3 2008: 1,485). During June 2009 OAO Fortum has redeemed additional
shares, approximately 0.2 %. At the end of September 2009, Fortum's ownership
in OAO Fortum was 94.4% including treasury shares and shares held by OAO
Fortum's 100% owned subsidiary.
Final purchase price allocation for the acquisition of OAO Fortum
The initial purchase price allocation as of 31 March 2008 has been finalised
during Q1 2009 as permitted by International Financial Reporting Standards. No
material changes have been made compared to the information disclosed in the
Consolidated Financial statements for 2008. The initial purchase price
allocation calculated in roubles have been translated into euros by using the
exchange rate from the acquisition date. The redeemed shares in 2009 are not
included in the purchase consideration disclosed in the table below.
--------------------------------------------------------------------------------
| MEUR | | | | OAO Fortum |
--------------------------------------------------------------------------------
| Purchase consideration | | | | |
--------------------------------------------------------------------------------
| Cash paid | | | | 2 533 |
--------------------------------------------------------------------------------
| Direct costs relating to | | | | 8 |
| the acquisition | | | | |
--------------------------------------------------------------------------------
| Total purchase | | | | 2 541 |
| consideration | | | | |
--------------------------------------------------------------------------------
| Fair value of the acquired | | | | 2 211 |
| assets | | | | |
--------------------------------------------------------------------------------
| Translation differences | | | | -9 |
--------------------------------------------------------------------------------
| Goodwill | | | | 339 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | Acquired | Allocated | Total |
--------------------------------------------------------------------------------
| Fair value of the acquired net | Book | Fair Values | Value |
| identifiable assets: | Values | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 1 321 | | 1 321 |
--------------------------------------------------------------------------------
| Property, plant and | | 625 | 1 005 | 1 630 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Other assets | | 182 | | 182 |
--------------------------------------------------------------------------------
| Non-interest-bearing | | -107 | -388 | -495 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | -272 | | -272 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Net identifiable assets | | 1 749 | 617 | 2 366 |
--------------------------------------------------------------------------------
| Minority interests | | -117 | -38 | -155 |
--------------------------------------------------------------------------------
| Total | | 1 632 | 579 | 2 211 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross investment in OAO | | | | |
| Fortum: | | | | |
--------------------------------------------------------------------------------
| Purchase consideration | | | | 2 541 |
| settled in cash | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents in | | | 1 321 |
| subsidiaries acquired | | | |
--------------------------------------------------------------------------------
| Cash outflow on | | | | 1 220 |
| acquisition | | | | |
--------------------------------------------------------------------------------
| Interest-bearing debt in | | | 272 |
| subsidiaries acquired | | | |
--------------------------------------------------------------------------------
| Total | | | | 1 492 |
--------------------------------------------------------------------------------
Disposals
In January 2009 Fortum and (Norwegian) Hafslund Infratek ASA combined their
businesses of construction and operating of infrastructure in Sweden, Finland
and Norway. In the transaction Fortum received 33% ownership in the new combined
company. For more information see Note 13.
--------------------------------------------------------------------------------
| 8. EXCHANGE RATES |
--------------------------------------------------------------------------------
The balance sheet date rate is based on exchange rate published by the European
Central Bank for the closing date. The average exchange rate is calculated as an
average of each months ending rate from the European Central Bank during the
year and ending rate previous year.
Key exchange rates for Fortum Group applied in the accounts:
--------------------------------------------------------------------------------
| Average | Jan-Sep | Jan-Jun | Jan-Mar | Jan-De | Jan-Se | Jan-Jun | Jan-Mar |
| rate | t | e | ch | c | pt | e | ch |
| | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Sweden | 10.6830 | 10.8633 | 10.9679 | 9.6647 | 9.4559 | 9.4088 | 9.4265 |
| (SEK) | | | | | | | |
--------------------------------------------------------------------------------
| Norway | 8.8817 | 9.0049 | 9.1034 | 8.2605 | 8.0187 | 7.9843 | 7.9998 |
| (NOK) | | | | | | | |
--------------------------------------------------------------------------------
| Poland | 4.3827 | 4.4764 | 4.5018 | 3.5328 | 3.4402 | 3.4926 | 3.5676 |
| (PLN) | | | | | | | |
--------------------------------------------------------------------------------
| Russia | 44.2745 | 44.1087 | 44.3928 | 36.690 | 36.567 | 36.6348 | 36.4660 |
| (RUB) | | | | 5 | 0 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance | Sept 30 | June 30 | March | Dec 31 | Sept | June 30 | March |
| sheet | 2009 | 2009 | 31 | 2008 | 30 | 2008 | 31 |
| date | | | 2009 | | 2008 | | 2008 |
| rate | | | | | | | |
--------------------------------------------------------------------------------
| Sweden | 10.2320 | 10.8125 | 10.9400 | 10.870 | 9.7943 | 9.4703 | 9.3970 |
| (SEK) | | | | 0 | | | |
--------------------------------------------------------------------------------
| Norway | 8.4600 | 9.0180 | 8.8900 | 9.7500 | 8.3330 | 8.0090 | 8.0510 |
| (NOK) | | | | | | | |
--------------------------------------------------------------------------------
| Poland | 4.2295 | 4.4520 | 4.6885 | 4.1535 | 3.3967 | 3.3513 | 3.5220 |
| (PLN) | | | | | | | |
--------------------------------------------------------------------------------
| Russia | 43.9800 | 43.8810 | 45.0320 | 41.283 | 36.409 | 36.9477 | 37.1130 |
| (RUB) | | | | 0 | 5 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9. INCOME TAX EXPENSE |
--------------------------------------------------------------------------------
Tax rate according to the income statement for the period January to September
2009 was 18.7% (20.6%). The tax rate for the period is lower than in the
comparable period 2008 mainly due to the impact of the lower tax rates in Sweden
and Russia.
Taxes on income in the interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings.
The tax rate used in the income statement is always impacted by the fact that
share of profits of associates and joint ventures is recorded based on Fortums
share of profits after tax. The tax rate for the period calculated excluding the
share of profits from associates and joint ventures was 18.6% (22.0%). The tax
rate is impacted by the lowering of corporate tax rates in Sweden and Russia.
The tax rate for the full year 2008, excluding the impact of tax rate changes,
non taxable capital gains and share of profits of associated companies was
22.1%.
--------------------------------------------------------------------------------
| 10. EARNINGS PER SHARE |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The calculation of basic and diluted earnings per share is based on the |
| following data: |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | Q1-Q3 | Q1-Q3 | 2008 |
| | | | 2009 | 2008 | |
--------------------------------------------------------------------------------
| Earnings (MEUR): | | | | | |
--------------------------------------------------------------------------------
| Profit attributable to | | 906 | 979 | 1 542 |
| the owners of the parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of shares | | | | | |
| (thousands): | | | | | |
--------------------------------------------------------------------------------
| Weighted average number of | | | |
| shares for the purpose of | | | |
--------------------------------------------------------------------------------
| basic earnings per | | | 888 230 | 887 241 | 887 256 |
| share | | | | | |
--------------------------------------------------------------------------------
| Effect of dilutive | | | - | 745 | 583 |
| share options | | | | | |
--------------------------------------------------------------------------------
| Weighted average number of | | | |
| shares for the purpose of | | | |
--------------------------------------------------------------------------------
| diluted earnings | | | 888 230 | 887 986 | 887 839 |
| per share | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 11. DIVIDEND PER SHARE |
--------------------------------------------------------------------------------
A dividend in respect of 2008 of EUR 1.00 per share, amounting to EUR 888
million based on the number of shares registered as of 14 April 2009, was
decided at the Annual General Meeting on 7 April 2009. The dividend was paid on
21 April 2009.
The Annual General Meeting on 1 April 2008 decided to distribute a dividend in
respect of 2007 of EUR 1.35 per share to the shareholders of which EUR 0.77 per
share was paid from Fortum's recurring earnings and EUR 0.58 per share as
additional dividend in order to steer the company's capital structure towards
the target. The total dividend was EUR 1,198 million based on the amount of
shares registered as of 4 April 2008. The dividend was paid out 11 April 2008.
--------------------------------------------------------------------------------
| 12. CHANGES IN INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | | | Sept 30 | Sept 30 | Dec 31 |
| | | | | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Opening balance | | | | 12 533 | 11 428 | 11 428 |
--------------------------------------------------------------------------------
| Increase through | | | 1 | 1 999 | 1 980 |
| acquisition of subsidiary | | | | | |
| companies | | | | | |
--------------------------------------------------------------------------------
| Capital expenditures | | | | 571 | 716 | 1 108 |
--------------------------------------------------------------------------------
| Changes of nuclear | | | | 2 | 21 | 22 |
| asset retirement cost | | | | | | |
--------------------------------------------------------------------------------
| Changes of emission | | | | -12 | - | 14 |
| rights | | | | | | |
--------------------------------------------------------------------------------
| Disposals | | | | -23 | -4 | -14 |
--------------------------------------------------------------------------------
| Depreciation, | | | | -374 | -383 | -515 |
| amortisation and | | | | | | |
| impairment | | | | | | |
--------------------------------------------------------------------------------
| Sale of subsidiary | | | | -5 | - | -31 |
| companies | | | | | | |
--------------------------------------------------------------------------------
| Translation differences and | | | 355 | -313 | -1 459 |
| other adjustments | | | | | |
--------------------------------------------------------------------------------
| Closing balance | | | | 13 048 | 13 464 | 12 533 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill included in | | | | 280 | 338 | 298 |
| Closing balance | | | | | | |
--------------------------------------------------------------------------------
| Change in goodwill during the period | -18 | -4 | -43 |
| due to translation differences | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 13. CHANGES IN PARTICIPATIONS IN ASSOCIATES AND JOINT VENTURES |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Sept 30 | Sept 30 | Dec 31 |
| | | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Opening balance | | 2 112 | 2 853 | 2 853 |
--------------------------------------------------------------------------------
| Share of profits of associates | -1 | 78 | 126 |
| and joint ventures | | | |
--------------------------------------------------------------------------------
| Investments | | 32 | 7 | 7 |
--------------------------------------------------------------------------------
| Share issues and shareholders' | 25 | 1 | 1 |
| contributions | | | |
--------------------------------------------------------------------------------
| Increase through acquisition of | - | 27 | 36 |
| subsidiary companies | | | |
--------------------------------------------------------------------------------
| Reclassifications | | -6 | -1 | -3 |
--------------------------------------------------------------------------------
| Divestments | | 0 | -12 | -13 |
--------------------------------------------------------------------------------
| Dividend income received | | -23 | -50 | -51 |
--------------------------------------------------------------------------------
| OCI items associated | | 1 | -518 | -628 |
| companies | | | | |
--------------------------------------------------------------------------------
| Translation differences | | 54 | -54 | -216 |
--------------------------------------------------------------------------------
| Closing balance | | 2 194 | 2 331 | 2 112 |
--------------------------------------------------------------------------------
Share of profits from associates and joint ventures
Share of profits from associates in Q3 2009 was EUR 3 million (2008: 8) of which
Fortum's share of profits in Hafslund ASA was EUR 6 million (2008: 7). For the
period from January to September 2009 Fortum's share of profits from associates
was -1 million (2008: 78). Fortum's share of profits for the full year 2008
amounted to EUR 126 million, of which Hafslund represented EUR 48 million.
According to Fortum Group accounting policies the share of profits from Hafslund
has been included in Fortum Group figures based on the previous quarter
information since updated interim information is not normally available.
Share of profits in Q3 includes EUR 5 million (2008: 18) regarding TGC-1. Fortum
accounts for the share of profits once a year in Q2 based on the published IFRS
Financial Statements for the previous year.
Investments and share issues
Fortum and (Norwegian) Hafslund Infratek ASA combined their businesses of
construction and operating of infrastructure in Sweden, Finland and Norway at
the beginning of 2009. Fortum received newly issued shares in Hafslund Infratek
ASA and 33% ownership in the new combined company.
Teollisuuden Voima Oyj's (TVO) Annual General meeting decided to raise company's
share capital by EUR 100 million of which Fortum's share is EUR 25 million.
Increase in Fortum's participation in TVO was booked in Q2 2009.
Dividends received
Until Q3 2009 Fortum has received EUR 23 million (2008: 50) in dividends from
associates of which EUR 17 million (2008: 25) was received from Hafslund.
OCI items in associated companies
OCI items in associated companies mainly represents the fair value change in
Hafslund's shareholding in REC. In Q3 the fair value change of the REC shares
was EUR 32 million (2008: -90) and the fair value change since year-end was EUR
4 million (2008: -527). The cumulative fair value change in Fortum's equity,
based on the remaining number of shares reported by Hafslund, was EUR 130
million at 30 September 2009 which represents an increase with EUR 32 million
during Q3 2009.
--------------------------------------------------------------------------------
| 14. SHARE CAPITAL |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | | Number | Share | Number of | Share | Number | Share |
| | | | of | capita | shares | capit | of | capit |
| | | | shares | l | Sept 30 | al | shares | al |
| | | | Sept 30 | Sept | 2008 | Sept | Dec 31 | Dec |
| | | | 2009 | 30 | | 30 | 2008 | 31 |
| | | | | 2009 | | 2008 | | 2008 |
--------------------------------------------------------------------------------
| Registere | | | 887 638 | 3 044 | 886 683 | 3 040 | 886 683 | 3 040 |
| d shares | | | 080 | | 058 | | 058 | |
| at 1 | | | | | | | | |
| January | | | | | | | | |
--------------------------------------------------------------------------------
| Shares subscribed | 728 965 | 2 | 834 372 | 3 | 955 022 | 4 |
| with options and | | | | | | |
| registered at the | | | | | | |
| end of the period | | | | | | |
--------------------------------------------------------------------------------
| Registere | | | 888 367 | 3 046 | 887 517 | 3 043 | 887 638 | 3 044 |
| d shares | | | 045 | | 430 | | 080 | |
| at the | | | | | | | | |
| end of | | | | | | | | |
| the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Unregiste | | | - | | 3 000 | | 56 000 | |
| red | | | | | | | | |
| shares | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| There are no unexercised stock options remaining on September 30 2009. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 15. INTEREST-BEARING LIABILITIES |
--------------------------------------------------------------------------------
During the first quarter Fortum Oyj issued a dual-tranche Euro Bond of EUR 750
million due 2014 and EUR 750 million due 2019 under Fortum's Euro Medium-Term
Note Program. The amount of re-borrowing from the Finnish nuclear waste fund
was increased by EUR 66 million to EUR 774 million. During the first quarter EUR
300 million under the EUR 1.5 billion 5 year revolving Credit Facility and a OAO
Fortum (former TGC-10) RUB 5,000 million bond (EUR 112 million) were repaid.
During the second quarter Fortum completed three major long term financing
transactions, a dual-tranche Private Placement of NOK 500 million due 2014 and
NOK 500 million due 2017 (totally EUR 110 million) as well as two bilateral loan
transactions; a 10 year loan of EUR 240 million from Varma Mutual Insurance
Company and a 10 year loan of EUR 250 million from the European Investment Bank.
The proceeds for these new financing arrangements will be used for financing of
Fortum's investment program as well as for general corporate purposes.
During the second quarter Fortum Oyj repaid maturing bonds issued in 2006 of SEK
2,500 million (EUR 231 million) as well as amortized EUR 1,000 million of a 3
year EUR 2,000 million Term-loan and all drawn amounts (EUR 300 million) under
the EUR 1,500 million 5 year Revolving Credit Facility. Both facilities raised
in March 2008 in connection with the acquisition of OAO Fortum (TGC-10). In June
OAO Fortum repaid RUB 2,937 million (EUR 67 million) of local bond financing.
During the third quarter Fortum Oyj amortised twice on the 3 year EUR 2,000
million Term-loan. Amortisations were EUR 400 million and EUR 250 million. The
outstanding amount on the Term loan after all amortisations is 350 million. No
major new financing transactions were made in the Group during the third
quarter.
Fortum Oyj also uses short term financing by issuing Commercial Papers (CPs) in
the Finnish and Swedish markets. At 30 September 2009 the amount of short term
CPs outstanding was EUR 235 million.
The reported interest-bearing debt decreased during the third quarter by EUR 588
million from EUR 7,444 million to EUR 6,856 million. Total liquid funds
decreased by EUR 625 million from EUR 1,440 million to EUR 815 million. Liquid
funds included deposits and cash held by OAO Fortum amounting to EUR 703
million.
Fortum is a shareholder in Teollisuuden Voima Oyj (TVO), a nuclear generation
company operating two reactors in Olkiluoto, Finland. TVO is in the process of
building a third reactor, Olkiluoto 3, which is planned to start operating in
2012. In late March, TVO's shareholders signed a EUR 300 million subordinated
shareholder's loan commitment to TVO. The facility will be available until the
end of 2013. Fortum's share of this commitment is maximum EUR 75 million.
Dividends both in 2009, EUR 888 million, and in 2008, EUR 1,198 million, were
paid in Q2 the respective year.
--------------------------------------------------------------------------------
| 16. NUCLEAR RELATED ASSETS AND LIABILITIES |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | | | | Sept 30 | Sept 30 | Dec 31 |
| | | | | | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Carrying values in the | | | | | | | |
| balance sheet: | | | | | | | |
--------------------------------------------------------------------------------
| Nuclear provisions | | | | | 588 | 561 | 566 |
--------------------------------------------------------------------------------
| Share in the State Nuclear | | | | 588 | 561 | 566 |
| Waste Management Fund | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Legal liability and actual share of the State | | | |
| Nuclear Waste Management Fund: | | | |
--------------------------------------------------------------------------------
| Liability for nuclear waste management | | 895 | 816 | 895 |
| according to the Nuclear Energy Act | | | | |
--------------------------------------------------------------------------------
| Funding obligation | | | | | 767 | 698 | 767 |
| target | | | | | | | |
--------------------------------------------------------------------------------
| Fortum's share of the State Nuclear | | | 767 | 698 | 728 |
| Waste Management Fund | | | | | |
--------------------------------------------------------------------------------
Nuclear related provisions
Fortum has submitted the yearly proposal for the nuclear waste management
liability regarding the Loviisa nuclear power plant to the Ministry of
Employment and the Economy. The liability regarding the Loviisa nuclear power
plant is calculated according to the Nuclear Energy Act and will be decided by
Ministry of Employment and the Economy by the end of January 2010. The liability
is based on an updated cost estimate, which is done every year, and on a
technical plan, which is made every third year and was updated last time in
2007. The legal liability at 30 September 2009, based on the decision by the
Ministry of Employment and the Economy in January 2009 amounted to EUR 895
million. The legal liability at the end of 2009, based on the proposal to the
Ministry of Employment and the Economy is EUR 913 million.
The provision in the balance sheet related to nuclear waste management is based
on cash flows for future costs which uses the same basis as the legal liability.
The carrying value of the nuclear provision, calculated according to IAS37, has
increased by EUR 27 million compared to 31 December 2008, totalling EUR 588
million as of 30 September 2009. The main reason for the difference between the
carrying value of the provision and the legal liability is the fact that the
legal liability is not discounted to net present value.
Fortum's share in the State Nuclear Waste Management Fund
Fortum contributes funds to the State Nuclear Waste Management Fund based on the
yearly funding obligation target decided by the governmental authorities in
January each year in connection with the decision of size of the legal
liability. The funding obligation target based on the decided legal liability
and approved periodising of the payments to the Fund is EUR 767 million. The
Fund is from an IFRS perspective overfunded with EUR 179 million, since Fortum's
share of the Fund as of 30 September 2009 is EUR 767 million and the carrying
value in the balance sheet is EUR 588 million.
Effects to comparable operating profit and operating profit
Operating profit in Power Generation segment is affected by the accounting
principle for Fortum's share of the Finnish Nuclear Waste Management Fund, since
the carrying value of the Fund in Fortum's balance sheet can in maximum be equal
to the amount of the provisions according to IFRS. As long as the Fund is
overfunded from an IFRS perspective, the effects to operating profit from this
adjustment will be positive if the provisions increase more than the Fund and
negative if actual value of the fund increases more than the provisions. This
accounting effect is not included in Comparable operating profit in Fortum
financial reporting, see Other items effecting comparability in Note 4. Fortum
had an effect from this adjustment in Q3 2009 of EUR -5 million, compared to EUR
+10 million in Q3 2008 . The cumulative effect 2009 was EUR -26 million compared
to EUR -7 million in 2008.
Associated companies
Fortum has minority shareholdings in associated Finnish and Swedish nuclear
production companies. Fortum has for these companies accounted for its share of
the effects from nuclear related assets and provisions according to Fortum
accounting principles.
--------------------------------------------------------------------------------
| 17. PLEDGED ASSETS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Sept 30 | Sept 30 | Dec 31 |
| | | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| On own behalf | | | | |
--------------------------------------------------------------------------------
| For debt | | | | |
--------------------------------------------------------------------------------
| Pledges | | 286 | 231 | 229 |
--------------------------------------------------------------------------------
| Real estate mortgages | | 137 | 138 | 137 |
--------------------------------------------------------------------------------
| For other commitments | | | | |
--------------------------------------------------------------------------------
| Real estate mortgages | | 220 | 206 | 206 |
--------------------------------------------------------------------------------
| On behalf of associated companies | | | |
| and joint ventures | | | |
--------------------------------------------------------------------------------
| Pledges and real estate | | 2 | 3 | 2 |
| mortgages | | | | |
--------------------------------------------------------------------------------
Pledged assets for debt
Finnish participants in the State Nuclear Waste Management Fund are allowed to
borrow from the Fund. During Q1 2009 Fortum increased its borrowing from the
Fund (see Note 15) and has therefore pledged additional Kemijoki shares as
security. The carrying value of the pledged shares amount to EUR 263 million
(208 million) as of 30 September 2009 (and 31 December 2008 respectively).
Pledged assets for other commitments
Fortum has given real estate mortgages in Naantali and Inkoo power plants in
Finland, total value of EUR 220 million, as a security to the State Nuclear
Waste Management Fund for the uncovered part of the legal liability and
unexpected events relating to future costs.
--------------------------------------------------------------------------------
| 18. OPERATING LEASE COMMITMENTS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | Sept 30 | Sept 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Due within a year | 22 | 24 | 28 |
--------------------------------------------------------------------------------
| Due after one year and | 41 | 41 | 47 |
| within five years | | | |
--------------------------------------------------------------------------------
| Due after five years | 83 | 90 | 86 |
--------------------------------------------------------------------------------
| Total | 146 | 155 | 161 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The decrease in operating lease commitments from the end of 2008 is mainly |
| due to the sale of infrastructure companies and exchange rate differences. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 19. CAPITAL COMMITMENTS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | Sept 30 | Sept 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Property, plant and | 1 359 | 1 403 | 1 321 |
| equipment | | | |
--------------------------------------------------------------------------------
| Intangible assets | 5 | 15 | 7 |
--------------------------------------------------------------------------------
| Total | 1 364 | 1 418 | 1 328 |
--------------------------------------------------------------------------------
The capital commitments have increased from 31 December 2008 due to the
automatic meter reading investments in Distribution Finland as well as the
progressing of OAO Fortum's investment program. On the other hand finalisation
of the automatic meter reading investment in Distribution Sweden, decline of the
Russian rouble and progressing of the CHP plant investments in the Heat business
in Finland, Estonia and Poland have decreased the capital commitments since 31
December 2008.
--------------------------------------------------------------------------------
| 20. CONTINGENT LIABILITIES |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Sept 30 | Sept 30 | Dec 31 |
| | | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| On own behalf | | | | |
--------------------------------------------------------------------------------
| Other contingent | | 319 | 858 | 362 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| On behalf of associated companies | | | |
| and joint ventures | | | |
--------------------------------------------------------------------------------
| Guarantees | | 593 | 620 | 565 |
--------------------------------------------------------------------------------
| Other contingent | | 125 | 125 | 125 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| On behalf of others | | | | |
--------------------------------------------------------------------------------
| Guarantees | | 10 | 10 | 10 |
--------------------------------------------------------------------------------
| Other contingent | | 1 | 1 | 1 |
| liabilities | | | | |
--------------------------------------------------------------------------------
Guarantees on own behalf
Other contingent liabilities on own behalf amounts to EUR 319 million. The
decrease of EUR 43 million from 31 December 2008 refers mainly to changes in
contractual obligations relating to Russia and Fortum's Service business in the
UK and exchange rate changes.
Guarantees on behalf of associated companies
According to law, nuclear companies operating in Finland and Sweden shall give
securities to the Finnish State Nuclear Waste Management Fund and the Swedish
Nuclear Waste Fund respectively, to guarantee that sufficient funds exist to
cover future expenses of decommissioning of power plant and disposal of spent
fuel.
The guarantee given on behalf of Teollisuuden Voima Oyj (TVO) to the Finnish
fund has decreased from EUR 70 million at year-end 2008 to EUR 68 million at 30
September 2009. The size of the guarantee is updated yearly in Q2, based on the
decisions regarding legal liability and the funding target which takes place
around year-end.
--------------------------------------------------------------------------------
| 21. LEGAL ACTIONS AND OFFICIAL PROCEEDINGS |
--------------------------------------------------------------------------------
Group companies
No material changes in legal actions and official proceedings has occurred
during the reporting period.
Associated companies
In Finland, Fortum is participating in the country's fifth nuclear power plant
unit, Olkiluoto 3, through the shareholding in Teollisuuden Voima Oyj (TVO) with
an approximately 25% share representing some 400 MW in capacity. In January 2009
the constructor TVO disclosed information, confirmed by the plant supplier,
consortium AREVA-Siemens that the construction of the unit is delayed and the
unit is estimated to start up in June 2012. In October 2009 TVO informed that
the start-up of the plant may be postponed even beyond June 2012. TVO has
requested a re-analysis of the time schedule from AREVA-Siemens. In June 2009,
TVO informed that the arbitration filed in December by AREVA-Siemens, concerning
Olkiluoto 3 delay and related costs amounted to EUR 1.0 billion. In response,
TVO has filed in April 2009 a counter-claim for costs and losses that TVO is
incurring due to the delay and other defaults on the part of the supplier. The
value of TVO's counterclaim is currently approximately EUR 1.4 billion.
--------------------------------------------------------------------------------
| 22. RELATED PARTY TRANSACTIONS |
--------------------------------------------------------------------------------
Related party transactions are described in the annual financial statements as
of the year ended 31 December 2008. No material changes have occurred during the
period.
The Finnish State owned 50.80% of the shares in Fortum 31 December 2008. After
the changes in amount of shares during 2009 due to the share subscriptions under
the last option scheme 2002B, the Finnish state owned 50.76% of the Company's
shares at 30 September 2009.
--------------------------------------------------------------------------------
| ASSOCIATED COMPANY TRANSACTIONS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | Q1-Q3 2009 | Q1-Q3 2008 | 2008 |
--------------------------------------------------------------------------------
| Sales to associated | | 61 | 84 | 113 |
| companies | | | | |
--------------------------------------------------------------------------------
| Interest on associated company | 27 | 26 | 34 |
| loan receivables | | | |
--------------------------------------------------------------------------------
| Purchases from | | 397 | 405 | 563 |
| associated companies | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSOCIATED COMPANY BALANCES |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | Sept 30 | Sept 30 | Dec 31 |
| | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Long-term interest-bearing | 827 | 681 | 659 |
| loan receivables | | | |
--------------------------------------------------------------------------------
| Trade receivables | 7 | 16 | 24 |
--------------------------------------------------------------------------------
| Other receivables | 15 | 8 | 5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Long-term loan payables | 199 | 184 | 184 |
--------------------------------------------------------------------------------
| Trade payables | 6 | 11 | 26 |
--------------------------------------------------------------------------------
| Other payables | 34 | 33 | 18 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TRANSACTIONS AND BALANCES WITH JOINT VENTURES |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transactions and balances with joint ventures as at and for the period ended |
| 30 September 2009 are not material for the Group. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 23. EVENTS AFTER THE BALANCE SHEET DATE |
--------------------------------------------------------------------------------
No material events have taken place after balance sheet date.
--------------------------------------------------------------------------------
| 24. DEFINITION OF KEY FIGURES |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA | = | Operating profit + | | | |
| (Earnings | | Depreciation, amortisation | | | |
| before | | | | | |
| interest, | | | | | |
| taxes, | | | | | |
| depreciation | | | | | |
--------------------------------------------------------------------------------
| and | | and impairment | | | | |
| amortisation) | | charges | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Comparable | = | Operating profit - non-recurring items - other items |
| operating | | effecting comparability |
| profit | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-recurring | = | Mainly capital gains | | | | |
| items | | and losses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other items | = | Includes effects from financial derivatives hedging |
| effecting | | future cash-flows where hedge accounting is |
| comparability | | |
--------------------------------------------------------------------------------
| | | not applied according to IAS 39 and effects from the |
| | | accounting of Fortum´s part of the Finnish |
--------------------------------------------------------------------------------
| | | Nuclear Waste Fund where the asset in the balance |
| | | sheet cannot exceed the related liabilities |
--------------------------------------------------------------------------------
| | | according to IFRIC | | | |
| | | interpretation 5. | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Funds from | = | Net cash from operating activities before | |
| operations | | change in working capital | |
| (FFO) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | = | Capitalised investments in property, plant and |
| expenditure | | equipment and intangible assets |
--------------------------------------------------------------------------------
| | | including maintenance, productivity, growth | |
| | | and investments required by legislation | |
--------------------------------------------------------------------------------
| | | including borrowing costs capitalised during | |
| | | construction period. Maintenance | |
--------------------------------------------------------------------------------
| | | investments expand lifetime of an existing | |
| | | asset, maintain useage/availability and/or | |
--------------------------------------------------------------------------------
| | | maintains reliability. Productivity improves | |
| | | productivity in an existing asset. Growth | |
--------------------------------------------------------------------------------
| | | investments' purpose is to build new assets | |
| | | and/or to increase customer base within | |
--------------------------------------------------------------------------------
| | | existing businesses. Legislation investments | |
| | | are done at certain point of time due to | |
--------------------------------------------------------------------------------
| | | legal | | | | | |
| | | requirements. | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross | = | Investments in subsidiary shares, shares in |
| investments in | | associated companies and other shares in available |
| shares | | for |
--------------------------------------------------------------------------------
| | | sale financial assets. Investments in subsidiary |
| | | shares are net of cash and grossed with |
--------------------------------------------------------------------------------
| | | interest-bearing liabilities in the | | |
| | | acquired company. | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | = | Profit for | | | | | x 100 |
| shareholders' | | the year | | | | | |
| equity, % | | | | | | | |
--------------------------------------------------------------------------------
| | | Total equity | | | | | |
| | | average | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | = | Profit before taxes + interest and other | x 100 |
| capital | | financial expenses | |
| employed, % | | | |
--------------------------------------------------------------------------------
| | | Capital employed | | | | |
| | | average | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on net | = | Operating profit + Share of profit (loss) in | x 100 |
| assets, % | | associated companies and joint ventures | |
--------------------------------------------------------------------------------
| | | Net assets | | | | | |
| | | average | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Comparable | = | Comparable operating profit + Share of | x 100 |
| return on net | | profit (loss) in associated companies | |
| assets, % | | | |
--------------------------------------------------------------------------------
| | | and joint ventures (adjusted for IAS 39 effects and |
| | | major sales gains or losses) |
--------------------------------------------------------------------------------
| | | Comparable net assets | | | |
| | | average | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | = | Total assets - non-interest bearing liabilities - |
| employed | | deferred tax liabilities - provisions |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | = | Non-interest bearing assets + interest-bearing assets |
| | | related to the Nuclear Waste Fund - |
--------------------------------------------------------------------------------
| | | non-interest bearing liabilities - provisions |
| | | (non-interest bearing assets and liabilities do not |
| | | include |
--------------------------------------------------------------------------------
| | | finance related items, tax and deferred tax and |
| | | assets and liabilities from fair valuations of |
--------------------------------------------------------------------------------
| | | derivatives where hedge accounting | | |
| | | is applied) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Comparable net | = | Net assets adjusted for non-interest bearing assets |
| assets | | and liabilities arising from financial derivatives |
--------------------------------------------------------------------------------
| | | hedging future cash-flows where hedge accounting is |
| | | not applied according to IAS 39 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest-bearin | = | Interest-bearing | | | |
| g net debt | | liabilities - liquid funds | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gearing, % | = | Interest-bearing net | | | | x 100 |
| | | debt | | | | |
--------------------------------------------------------------------------------
| | | Total equity | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity-to-asset | = | Total equity including | | | x 100 |
| s ratio, % | | minority interest | | | |
--------------------------------------------------------------------------------
| | | Total assets | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net debt / | = | Interest-bearing net | | | | |
| EBITDA | | debt | | | | |
--------------------------------------------------------------------------------
| | | Operating profit + Depreciation, amortisation and |
| | | impairment charges |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest | = | Operating | | | | | |
| coverage | | profit | | | | | |
--------------------------------------------------------------------------------
| | | Net interest | | | | |
| | | expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest | = | Operating | | | | | |
| coverage | | profit | | | | | |
| including | | | | | | | |
| capitalised | | | | | | | |
| borrowing costs | | | | | | | |
--------------------------------------------------------------------------------
| | | Net interest expenses-capitalised | | |
| | | borrowing costs | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | = | Profit for the period - | | | |
| share (EPS) | | minority interest | | | |
--------------------------------------------------------------------------------
| | | Average number of shares | | | |
| | | during the period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per | = | Shareholder's | | | | | |
| share | | equity | | | | | |
--------------------------------------------------------------------------------
| | | Number of shares excluding treasury shares at the end |
| | | of the period |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Last twelve | = | Twelve months preceding the | | | |
| months | | reporting date | | | |
--------------------------------------------------------------------------------
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