Annual Report 2013 | Suomeksi |

Group business structure

(on 31 December 2013)

Reporting segment Power Heat Russia Distribution Electricity Sales
Division Power Heat Russia Electricity Solutions and Distribution (ESD)
  power.png  heat.png  russia.png  esd.png
Business

The Division consists of Fortum's power generation, power trading and power capacity development as well as expert services for power and heat producers.

The Division consists of combined heat and power (CHP) generation, district heating activities and business-to-business heating solutions in the Nordic countries and other parts of the Baltic Rim.

The Division consists of power and heat generation and sales in Russia. It includes OAO Fortum and Fortum's over 25% holding in TGC-1.

The Division is responsible for Fortum's electricity sales and distribution activities. The division consists of two business areas: Distribution and Electricity Sales.

Reporting segment Power Heat Russia Distribution Electricity Sales
Geographic presence, production and distribution assets and/or customer base
Geographic presence, production and distribution assets and/or customer base Production in Finland, Sweden and Great Britain.

Expert services worldwide.

In Finland and Sweden full or co-ownership in 159 hydropower plants, one co-owned and two fully-owned condensing power plants and ownership in three  wind power companies. Two fully-owned nuclear reactors and eight co-owned nuclear power plant units. One CHP plant in Great Britain.

Finland, Sweden, Norway, Poland, Lithuania, Latvia, Estonia, India

18 CHP plants and hundreds of heat boilers. A solar power plant in India.

Heat supply to one million homes in the Nordic and Baltic countries and Poland.

Russia

Eight CHP plants, one condensing power plant and several heat boilers.

 ~500 km trunk networks as well as heat supply to two million residents. 

Includes >25% share (giving blocking minority) in TGC-1 in north-western Russia.

Finland, Sweden and Norway

160,000 km of distribution lines, 53,500 substations, three operation centres, and 1.6 million customers and meters.
Finland, Sweden and Norway

1.2 million customers.
Market position Third largest power producer in the Nordic countries, among the 15 largest in Europe and Russia. Leading heat supplier in the Nordic and Baltic countries and Poland.  Sizable power and heat utility in Western Siberia and the Urals in Russia. Largest electricity distribution operator in the Nordic countries. Second largest electricity sales operator and a leading seller of eco-labelled and CO2-free electricity in the Nordic countries.
Production capacity 

Power 9,475 MW

Heat 250 MW

Power 1,398 MW

Heat 7,943 MW

Power 4,250 MW

Heat 13,466 MW

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Volumes
Volumes Total power generation
44.7 TWh/a

Nordic power generation
43.7 TWh/a
Power sales
4.8 TWh/a

Heat sales
19.0 TWh/a
Power sales
25.6 TWh/a

Heat sales
24.1 TWh/a
Distribution network
26.1 TWh/a

Regional network
16.3 TWh/a
Electricity sales
13.6 TWh/a
Sales EUR 2,248 million EUR 1,565 million EUR 1,119 million EUR 1,075 million EUR 744 million
Share of Fortum's sales 33% 23% 16% 16% 11%
Comparable operating profit EUR 858 million EUR 273 million EUR 156 million EUR 331 million EUR 48 million
Comparable EBITDA EUR 1,003 million EUR 489 million EUR 258 million EUR 550 million EUR 50 million
Net assets EUR 6,329 million EUR 4,283 million EUR 3,846 million EUR 3,770 million EUR 39 million
Comparable return on net assets 13.8% 6.8% 5.2% 8.8% 137.9%
Capital expenditures EUR 178 million EUR 397 million EUR 435 million EUR 260 million EUR 1 million
Employees 1,709 2,102 4,162  852 496
Business and result drivers
Business and result drivers - Nordic power supply-demand balance, volatility and price; stability through hedging

- About 90% of production is hydro and nuclear power: hydrological situation, nuclear power availability, and prices of fuels and emission allowances important

- Maintenance and asset lifetime management practices and costs

- Investments into new or existing generation
- Steady growth through investments; newly commissioned CHP plants bring earnings

- Fuel and CO2 emissions allowance prices and fuel availability, flexibility and efficiency play a key role

- Production primarily in CHP plants with power as an important earnings source: power supply/demand balance, volatility and price affect profitability; stability through hedging

- Heat and auxiliary product prices

- Heat demand: weather conditions as well as macro and local economy have an impact

- Maintenance and asset lifetime management practices and costs
- Investment programme: earnings growth through new capacity and new volume

- Power generation capacity prices, power supply-demand balance, price and volatility

- Production mainly CHP with power as the primary earnings source: Power supply-demand balance as well as price level and volatility in the Urals/Western Siberia

- Plant availability, production optimisation and efficiency upgrades

- Fuel prices and availability as well as gas and electricity price ratio

- Development of heat market in the long term as well as heat demand and tariffs in the short term

- Maintenance and asset lifetime management practices and costs
- Growth through investments

- Long-term optimised levels of investment and maintenance

- Distribution volumes: weather conditions as well as macro and local economy have an impact

- Stable earnings with regulated tariffs

- Cost-efficiency and quality of service

- Grid availability and service level; liability to compensate for distribution interruptions

- Maintenance and asset lifetime management practices and costs
- Growth in customer base through new offerings and innovative solutions

- Margin between Nord Pool wholesale purchase and retail sales price levels; stability through efficient hedging
Strategy drivers
Strategy drivers - Existing CO2-free, flexible and market-driven production portfolio

- Solid position and competence in hydro and nuclear production in the Nordic power market

- Liberalisation and integration of European power market
- Need for increased resource-efficiency will increase CHP's competitiveness

- Potential for increased usage of local biofuels and waste

- Solid position and competence in flexible multi-fuel CHP production 
- Liberalised and privatised power and heat market

- Economic and power demand growth

- Boosting efficiency of existing operations and bringing the ongoing investment programme to completion

- Development of heat market

- Potential for improved operations on the basis of current assets modernisation
- Cost efficiency through economies of scale and lean processes

- Technical development utilised for a more efficient, reliable and smarter network enabling sustainable and energy-efficient solutions for customers

- Unbundling and harmonisation of Nordic/European electricity distribution sector
- Cost efficiency through economies of scale and lean processes

- Potential for new businesses related to smart grid/system development

-Solid position and competence in the downstream part of the Nordic power value chain

- Liberalisation, integration and harmonisation of Nordic/European retail electricity markets

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