Summary of Fortum's Investor Day 2025 Company Overview - **Company**: Fortum - **Industry**: Energy (specifically Nordic power market) - **Key Executives Present**: Markus Rauramo (President and CEO), Tiina Tuomela (CFO), Simon Eerik Ollus, Mikael Rönnblad Core Points and Arguments Strategic Priorities and Growth Vision - Fortum aims to create value for shareholders through its core operations and strategic execution focused on the Nordic power market [4][5][6] - The company has a strong position in the Nordic power market with a portfolio that includes flexible hydro and baseload nuclear energy [5][6] - Fortum's nuclear fleet has a total capacity exceeding 3 gigawatts, and hydro assets amount to almost 4.7 gigawatts, contributing to a significant share of the Nordic power market [6] Market Dynamics and Demand Projections - The Nordic power demand is projected to grow to 550 terawatt-hours per year by 2030 and 975 terawatt-hours by 2050, driven by sectors like data centers [9][10] - The company sees robust underlying demand from various industrial sectors, although long-term power purchase agreements (PPAs) are currently less favored [10][11] - Data centers are identified as the most active sector, expected to increase power demand before larger industrial projects [11] Financial Performance and Targets - Fortum's EBITDA for the last 12 months was EUR 1,258 million, with a comparable operating profit of EUR 930 million [6] - The company aims for a return on net assets (RONA) target of 14% and a credit rating of at least BBB flat [18][19] - A new capital expenditure (CapEx) target of approximately EUR 2 billion is set for the next five years, with potential additional investments of up to EUR 2.5 billion [44][49] Sustainability and Decarbonization - Fortum has set ambitious sustainability targets, including net zero greenhouse gas emissions by 2040 and exiting coal by the end of 2027 [32][33] - The company emphasizes the importance of low-carbon technologies, with 99% of its electricity production already decarbonized [34] Operational Efficiency and Cost Management - Fortum has cut EUR 100 million in annual fixed costs, with a target fixed cost level of EUR 870 million from 2026 onwards [37] - The optimization premium from flexible hydro is expected to be around EUR 8-10 per megawatt-hour for 2026, with a long-term guidance of EUR 6-8 [25][61] Customer Engagement and Commercial Strategy - Fortum is shifting focus towards direct interaction with industrial customers, aiming to stabilize revenue streams through long-term contracts [17][26] - The company targets to hedge at least 25% of its Nordic wholesale electricity production over a rolling 10-year period by the end of 2028 [48] Other Important Insights - Fortum's hydro assets are viewed as highly valuable due to their low carbon emissions and infinite lifespan, although new hydro plants are difficult to build [5][38] - The company is exploring new supply options, including pumped hydro storage, to meet future demand [38] - Fortum's strategy includes a focus on digitalization and enhancing operational capabilities to improve efficiency and customer satisfaction [30][31] This summary encapsulates the key points discussed during Fortum's Investor Day 2025, highlighting the company's strategic direction, market dynamics, financial targets, and commitment to sustainability.