Shareholders, investors and analysts are a key stakeholder group for Fortum. As a listed company, Fortum’s obligation is to provide correct, adequate and up-to-date information regularly and equally to all market participants. Fortum’s Investor Relations function is responsible for the communication with investors, analysts and the capital market.
Fortum Corporation’s shares are listed on the Nasdaq Helsinki exchange. At the end of 2015, Fortum had 136,259 shareholders. The biggest shareholder, the Finnish State, owned 50.8% of Fortum’s shares. 25.5% of Fortum’s shares were in a book-entry register or in direct foreign ownership. Finnish households owned 11.4% of the shares, financial and insurance corporations 3.0%, and other Finnish investors the rest, i.e. around 10.0%.
The key values of Fortum’s Investor Relations are openness, transparency and easy approachability. In accordance with the Finnish Securities Markets Act, we use stock exchange releases to disclose all such decisions and factors related to the company and its operations that are within the sphere of the continuous disclosure obligation or that, in the company’s estimation, can have a material impact on its share value. Fortum’s Disclosure Policy explains the main communications principles and operating models in different communications situations. We regularly provide information on our financial performance in interim reports, the financial statements, and the operational and financial review.
Fortum’s Investor Relations and top management work in close interaction with all financial community members. We meet with investors and analysts regularly in conjunction with the publication of the quarterly interim reports, at investor meetings, road shows, and the Annual General Meeting. We participate in seminars and conferences in Finland and abroad. In 2015, we visited all the main financial centres in Europe, meeting investors. We spent some 15 days abroad and met with some 250 investment sector professionals in one-on-one or group meetings or in other events. Additionally, we participated in several events targeting private investors in Finland.
Our presentations and discussions with stakeholder groups at these events focused on topics related to the company’s strategy, the operating results of the businesses, and the development of and the outlook for the operating environment.
We also organise discussions with analysts and investors focusing on sustainability, corporate social responsibility and governance issues. In 2015, we participated in a SRI conference in Paris.
In addition to meetings and discussions, we serve out target groups through digital channels, the most important of which is the Investors section on our website. Our stakeholder groups can also follow Fortum through social media channels, such as Twitter, LinkedIn, YouTube, SlideShare and the Fortum ForEnergy blog.
By communicating openly and proactively, we aim to ensure that investors have timely and sufficient information available about decisions and factors that can have a material impact on the value of Fortum’s share. Through active and consistent communications, we also want to increase the knowledge about the company’s strategy and business operations in order to enable a fair valuation of the company’s share.
Investors are expecting long-term value creation for their investment. Financial targets are set to give investors relevant guidance about the company’s views on its value creation potential and growth strategy. At Fortum, we are committed to achieving our financial targets, and to growing and creating solid earnings. Our financial targets mirror the capital efficiency of our investments and the efficiency of our operations. In February 2016 we updated our long-term, over-the-cycle financial targets as follows:
- Return on capital employed (ROCE) at least 10%
- Comparable net debt to EBITDA around 2.5 times
One way to reward shareholders for their commitment to the company is to pay a return on their investment and distribute some of the profits back to them. Fortum’s dividend policy is to pay a stable, sustainable and over time increasing dividend of 50-80% of earnings per share, excluding one-off items. For the year 2015, Fortum’s Board of Directors proposes a dividend of EUR 1.10 per share to be paid. This will be decided by the Annual General Meeting on 5 April 2016.
Investors and our shareholders expect highly responsible operations from us. Our Code of Conduct as well as our company values – accountability, creativity, respect and honestly – define the ethical standards of our own operations and how we deal with each other internally and with customers, vendors, partners and communities and determine how we engage in business and how we safeguard our corporate assets. We believe that there is a clear connection between the high ethical business practices and successful financial results. Fortum’s Supplier Code of Conduct sets the basic sustainability requirements for suppliers of services and goods. It is based on the principles of the United Nations Global Compact and is implemented in all of our operating countries.
A challenging market environment and changing economic situations drive investors to look for not only financial key figures, but also for other measures related to environment, social responsibility and governance issues. The characteristics for successful business have partly changed and sustainability has to be an integral part of the strategy, as it is at Fortum. The tight link between business operations and corporate responsibility underscores the importance of sustainability as a competitive advantage. In its operations, Fortum gives balanced consideration to economic, social and environmental responsibility. Rankings in significant sustainability indexes support the development and continuous improvement in the responsibility of our operations. Additionally, the assessments and indexes provide investors with impartial information about the level of the company’s operations in the three sub-areas of sustainability: economic, environmental and social responsibility.
A responsible investor also expects thorough risk management from its investment target. The objective of risk management within Fortum is to support the creation of the corporate strategy, enable the strategy execution, support the achievement of agreed financial targets and avoid unwanted operational events. In today’s fast-changing operating environment, risk management is even more importantly in focus for investors. Risk management is equally applicable to global environmental and climate challenges as well as resource scarcity, just as it applies to currency or commodity price risks.