Fortum is launching an efficiency programme for 2013-2014 in order to maintain and strengthen its strategic flexibility and competitiveness in an increasingly demanding business environment.
"The economic situation in Europe and globally – especially the uncertainty regarding its duration - has affected our businesses. We also see a structural change in the energy industry in the future and we want to be in a forerunner position to utilize the arising opportunities. In the short term, the hydrological situation has been putting additional pressure on Nordic electricity prices, which are clearly lower than a year ago. External pressures combined with cost increases are making it necessary for us to improve efficiency and to find cost reductions in time", says President and CEO Tapio Kuula.
The efficiency programme will be implemented during 2013 - 2014. Fortum's aim is to improve the company’s cash flow by more than EUR 1 billion during these years. That will be reached by reducing capital expenditures by EUR 250 - 350 million, divesting approximately EUR 500 million of non-core assets, reducing fixed costs and focusing on working capital efficiency.
In 2012, Fortum's capital expenditure will be around EUR 1.5 billion. In 2013, Fortum's capital expenditure is estimated to be EUR 1.1 – 1.4 billion and in 2014 EUR 0.9 - 1.1 billion. At the end of 2014, the cost run rate will be approximately EUR 150 million lower compared to 2012, including growth projects.
"Unfortunately, the efficiency programme may have an effect on our personnel. If headcount reductions are needed, they will be implemented on a unit level by using natural rotation, rearranging vacant jobs and by retirements, whenever possible", says Tapio Kuula.
Fortum's purpose is to create energy that improves life for present and future generations. We aim to build on the strong Nordic core business, create solid earnings growth in Russia and build a platform for future growth.
The efficiency programme will be further defined as part of the business planning processes for 2013 - 2014.
Executive Vice President, Corporate Relations and Strategy
More information: Tapio Kuula, President and CEO, tel: +358 10 452 4112
NASDAQ OMX Helsinki
Fortum's purpose is to create energy that improves life for present and future generations. We provide sustainable solutions that fulfil the needs for low emissions, resource efficiency and energy security, and deliver excellent value to our shareholders. Our activities cover the generation, distribution and sales of electricity and heat as well as related expert services.
Fortum's operations focus on the Nordic countries, Russia, Poland and the Baltics. In the future, the integrating European and fast-growing Asian energy markets provide additional growth opportunities. In 2011, Fortum’s sales totalled EUR 6.2 billion and comparable operating profit was EUR 1.8 billion. We employ approximately 10,800 people. Fortum’s shares are quoted on NASDAQ OMX Helsinki.
Further information: www.fortum.com