Financial outlook

In the near term, the operating environment is impacted by strong geopolitical tensions, including US trade policies, which cause uncertainty and turbulence in the general economic outlook and may affect international production chains and commodity markets. Despite interest rate cuts, geopolitical risks, heightened uncertainty and reduced visibility may pose challenges to major industrial investments in the Nordics.

In the long term, electricity is expected to gain a significantly larger share of total energy consumption. The electricity demand growth rate will be influenced by factors such as macroeconomic and demographic development, improved energy efficiency, and decarbonisation through direct electrification of energy-intensive sectors, including various industries, data centres, transport, and heating and cooling, and, in the longer term, by green hydrogen.

Hedging

At the end of the third quarter of 2025, approximately 90% of the Generation segment’s estimated Nordic power sales volume was hedged at 42 EUR/MWh for the remainder of 2025, and approximately 70% at 41 EUR/MWh for 2026 (at the end of the second quarter of 2025: 60% at 40 EUR/MWh), and approximately 45% at 39 EUR/MWh for 2027. Fortum’s hedge ratios and prices comprise its outright nuclear, hydro and wind generation volumes. The reported hedge ratios are based on hedges and power generation forecasts of the Generation segment.

In February 2024, Fortum set a strategic target to have a hedged share of rolling 10-year outright generation volume of more than 20% by the end of 2026. The achievement of this target is updated once a year in connection with the Group’s full-year results. At the end of 2024, the hedged share of the rolling 10-year outright generation volume was approximately 18%.

The reported hedge ratios may vary significantly, depending on Fortum’s actions on the electricity derivatives markets. Hedges are mainly financial contracts, most of which are electricity derivatives quoted on the power futures exchange and traded either on the futures exchange or with bilateral counterparties. As an additional liquidity risk mitigation measure, Fortum is mainly hedging with bilateral agreements, and the exposure on the futures exchange is clearly lower. Fortum continues to utilise dual channels for its hedging: bilateral arrangements and trading on the futures exchange, depending on market liquidity and financial optimisation.

Generation

The Generation segment’s achieved Nordic power price typically depends on factors such as hedge ratios, hedge prices, spot prices, availability and utilisation of Fortum’s flexible generation portfolio, as well as currency fluctuations. The annual outright portfolio of hydro, nuclear and wind generation amounts to approximately 47 TWh. In 2025, the total generation volumes are expected to be clearly below the normal level. Currently, the expected decrease, mainly due to the unplanned outage at Oskarshamn 3, of total nuclear volumes for the full year is 3.6 TWh, of which 3.0 TWh has realised in first nine months. In addition, Fortum assumes that its annual hydro volume in 2025 will be below that of a normal hydro year, which has been 20-20.5 TWh.

The split of Fortum’s blended price based on its price area exposure of the normalised outright generation portfolio is approximately: Finland 46%, Sweden SE3 37% and Sweden SE2 17%. The volumes depend on various criteria such as outages, hydrology and other market ‍dynamics.

Excluding potential effects from changes in the power generation mix, a 1 EUR/MWh change in the Generation segment’s achieved Nordic power price will result in an approximately EUR 47 million change in the segment’s annual comparable operating profit (assuming annual generation volumes on a normal level).

Fortum’s achieved power price includes operations in the physical and financial commodity markets, as well as the optimisation premium of Fortum’s outright generation portfolio. For 2025, the annual optimisation premium included in the achieved power price for the whole outright portfolio is estimated to be approximately 10 EUR/MWh (previously 7–9 EUR/MWh). For the following years, the guidance is 6–8 EUR/MWh. The optimisation premium depends on overall market conditions, level of volatility, and market prices for electricity and environmental value products. In 2024, Fortum's optimisation premium was 8.7 EUR/MWh.

The annual property tax in Sweden will increase by approximately EUR 30 million from the year 2025. The new run-rate is effective until the end of 2030.

Efficiency Improvement Programme

Fortum is reducing its annual fixed costs by EUR 100 million (excluding inflation) by the end of 2025 with a full run-rate from the beginning of 2026. The reduction of EUR 100 million corresponds to some 10% of the Group’s fixed cost base for the year 2022. The divestments made in 2024 in Circular Solutions, mainly Fortum’s recycling and waste business, reduce the Group’s fixed cost base by approximately EUR 150 million from 2025. Fortum estimates that the new run-rate for its fixed cost base in 2026 will be approximately EUR 870 million, including the fixed cost increase of EUR 20 million in the Swedish property tax from 2025.

As part of the programme, total cost synergies materialising from the Consumer Solutions segment's 2024 brand mergers are approximately EUR 13 million in 2025. In addition, actions related to change negotiations in the Finance and the Sustainability and Corporate Relations functions earlier during the year contributed to the cost reductions. The negotiations resulted in the reduction of 62 job positions in these functions, comprising retirements, transfers to other positions at Fortum, as well as lay-offs.

Income taxation

The comparable effective income tax rate for Fortum is estimated to be in the range of 18–20% for 2025–2026. Fortum’s comparable effective tax rate is impacted by the weight of the comparable profit in different jurisdictions and differences in standard nominal tax rates in these jurisdictions. The tax rate guidance excludes items affecting comparability.

Capital expenditure

Fortum's capital expenditure for 2025–2027, including maintenance but excluding acquisitions, is expected to be approximately EUR 1.4 billion, of which annual growth capital expenditure is expected to be EUR 150–300 million and annual maintenance capital expenditure EUR 250 million. Depending on the general market development and investment environment, new investment decisions may be made.