Why invest in Fortum

Fortum is a power company with the purpose to drive the change for a cleaner world. Fortum’s core operations are located in the Nordics and consist of CO2-free power generation, electricity sales, district heating as well as recycling and waste solutions.

Read more about Fortum's strategic focus and business portfolio

Focus on clean energy

Fortum is the third-largest power generator in the Nordics and one of Europe’s cleanest power generators. In 2023, roughly 98.5% of the Group’s EBITDA originates from the company’s Nordic 45 TWh outright power generation, which is based on CO2-free hydro and nuclear power. Fortum is also the largest electricity retailer in the Nordics with 2.4 million customers representing a market share of 15%. Furthermore, Fortum has district heating and cooling business in Finland and Poland. In 2023, Fortum produced 4.3 TWh of heat mainly from energy-efficient combined heat and power (CHP) plants. These businesses are complemented by onshore wind and solar, electricity and gas retail business in Poland and circular economy businesses.

In the near term, the energy sector continues to be impacted by geopolitical tensions, general weaker economic outlook with higher inflation and interest rates, tightening regulation and volatile commodity markets.

However, in the longer term, electricity is expected to continue to gain a significantly higher share of total energy consumption. Electricity demand will increasingly benefit from the decarbonisation of energy-intensive industrial, transport and heating sectors through direct electrification and clean hydrogen. The Nordic market provides clean and affordable electricity for decarbonisation, and Fortum is well-positioned to drive this transition.

Ambitious environmental targets

Fortum’s position as a leading Nordic clean energy company is complemented by considerably enhanced environmental targets with the aim to be a leader in sustainability.

Fortum brought forward its target to reach carbon neutrality (Scopes 1, 2, 3) by 2030 and will exit all coal generation by the end of 2027. Fortum has also committed to set emission reduction targets based on the climate science (SBTi 1.5 °C). Fortum continues the work by further developing its transition plan and defining near- and long-term company-wide emissions reduction paths and targets in line with the SBTi criteria. Fortum’s climate targets will be revisited and aligned to correspond to the SBTi Net-zero Standard during the target setting process. Fortum’s transition will include the exit from coal and emission reduction in the company’s own operations as well as influencing its electricity sales footprint through product selection and electricity purchases.

To measure the progress, mid-point targets have also been set for specific emissions: below 20 g CO2/kWh for total energy production and below 10 g CO2/kWh for power generation by 2028. Fortum is already taking steps to reach the new environmental targets and examples of these include the Loviisa nuclear power plant lifetime extension, increasing the use of hydro power and the ongoing decarbonisation projects in district heating.

Further, Fortum is also committed to an ambitious biodiversity target to have no net loss of biodiversity (excluding any aquatic impacts) from existing and new operations (Scopes 1, 2) from 2030 onwards. In addition, the company will reduce its negative dynamic terrestrial impacts in upstream Scope 3 by 50% by 2030 (base year 2021). Fortum will continue local initiatives, especially in hydropower generation, and is committed to developing a science-based methodology to assess the company’s aquatic impacts.

Financial targets

  • Stable credit rating of at least BBB.
  • Leverage guidance: financial net debt/comparable EBITDA of 2.0-2.5 times in the longer term (2023: 0.5 times for continuing operations).
  • Hurdle rates for new investments of project WACC +150 bps to +400 bps hurdles depending on technology or investment project, as well as environmental targets.
  • Fortum's dividend policy is based on a payout ratio of 60-90% of comparable EPS . The payout ratio will be used so that the upper end of the range of the pay-out ratio is applied in situations with a strong balance sheet and low investments, while the lower end of the range would be applied with high leverage and/or significant investments and high capital expenditure. Dividend history is presented below.

    For the year 2023, Fortum’s Board of Directors proposes a dividend of EUR 1.15 per share which corresponds to 90% of the Groups comparable EPS of EUR 1.28. 

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Fortum's strategy

Our purpose is defined by our deter­mi­nation to work towards a world where there is a healthy balance between the well-being of people, the needs of societies, the success of businesses and the diversity of nature: To power a world where people, businesses and nature thrive together.

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