FORTUM CORPORATION STOCK EXCHANGE RELEASE 19 February 2016 at 9.30 EET
Fortum reorganises its corporate structure as of 1 April 2016. The target of the new organisation is to enable the implementation of the company’s new vision and strategy, which were announced on 3 February 2016. The new organisation consists of three business divisions: Generation, City Solutions and Russia. In addition, two development units focusing on growing new businesses are established: M&A and Solar & Wind Development as well as Technology and New Ventures.
Changes to Fortum's segment reporting are minor at this point and the company will keep four reporting segments. The segments as of the second quarter 2016 are: Generation, City Solutions (mainly the former Heat, Electricity Sales and Solutions) and Russia. M&A and Solar & Wind Development as well as Technology and New Ventures will be reported under Other. Some businesses will be repositioned due to the reorganisation, but because of the minor financial impact at this point, the comparable segment information for 2015 will not be restated.
The new organisation will have four staff functions: Finance; Legal; Strategy, People and Performance as well as Corporate Affairs and Communications. Contrary to the current organisation, there will not be a Chief Operating Officer role in the new structure, and the business divisions and development units will report directly to the President and CEO. The current Chief Operating Officer will be appointed Deputy CEO to support the President and CEO in implementing the new vision and strategy.
“With the new organisation we put focus on our new strategic priorities. We enable productivity improvement of existing operations, growth in city solutions, solar and wind as well as development of new energy ventures. We also aim to increase speed and agility, reduce the number of organisational layers wherever possible and offer opportunities to talented women and men through active rotation. We will also emphasise key development efforts critical to our future,” says Pekka Lundmark, President and CEO of Fortum Corporation.
Fortum's Executive Management Team:
- Pekka Lundmark, President and CEO
- Matti Ruotsala is appointed Deputy CEO until his planned retirement in summer 2017. He is currently Fortum's Chief Operating Officer.
- Timo Karttinen will continue as Fortum’s CFO.
- Tiina Tuomela is appointed Executive Vice President, Generation. She is currently Executive Vice President, Nuclear and Thermal Power Division.
- Markus Rauramo is appointed Executive Vice President, City Solutions. He is currently Executive Vice President, Heat, Electricity Sales and Solutions Division.
- Alexander Chuvaev will continue as Executive Vice President, Russia.
- Per Langer is appointed Senior Vice President, Technology and New Ventures. He is currently Executive Vice President, Hydro Power and Technology Division.
- Kari Kautinen is appointed Senior Vice President, M&A and Solar & Wind Development. He is currently Senior Vice President, Strategy, Mergers and Acquisitions.
- Sirpa-Helena Sormunen will continue as General Counsel.
- Risto Penttinen is appointed Senior Vice President, Strategy, People and Performance. Mr Penttinen is a new member of the Fortum Executive Management Team. He is currently Vice President, Corporate Strategy.
- Arto Räty is appointed Senior Vice President, Corporate Affairs and Communications. Mr Räty is a new member of the Fortum Executive Management Team and will start at Fortum on 29 February 2016.
All the members of the Executive Management Team will report to the President and CEO apart from the General Counsel who reports to the CFO.
Mikael Frisk, currently Senior Vice President, Human Resources and IT, has requested rotation to new tasks after serving 15 years on the Fortum management team.
Esa Hyvärinen, Senior Vice President, Corporate Relations and currently member of the Executive Management Team, will in the new organisation report to Arto Räty.
Helena Aatinen, currently Senior Vice President, Corporate Communications and member of the Executive Management Team, has decided to leave the company.
"There are several changes in the management team. I want to thank Helena Aatinen, who is leaving the company, for her significant contribution to Fortum during the past few years. Mikael Frisk has been successfully leading Corporate HR since 2001. We have together come to the conclusion that it is now time for something new. Mikael will evaluate new challenges, both internally and externally. Esa Hyvärinen has done a great job in public affairs, the importance of which will not decrease even though the function will now be part of a larger unit.
I am pleased to welcome Arto Räty, who has during his impressive career created a unique national and international network to decision makers on the highest level. Arto is also close to the developments of the energy sector, and as a mature leader he will leave room in his team for exciting development opportunities for existing and new talent. I also want to welcome Risto Penttinen to the management team. He will lead a function aiming to create a strategy-led approach to the development of our talent, competences and performance culture," says Pekka Lundmark.
As of 1 April 2016, Fortum’s new organisation and Executive Management responsibilities in more detail are as follows:
This division will be responsible for the large scale power production, physical optimisation and trading activities in the Nordic area. The division will comprise nuclear, hydro and thermal power production, portfolio management and trading, industrial intelligence and nuclear services. The division will he headed by Tiina Tuomela.
This division is responsible for developing sustainable city solutions into a growing business for Fortum. The division will comprise heating and cooling, waste to energy, biomass and other circular economy solutions as well as electricity sales and services. It will include the service business currently organised in the Power Solutions unit with exception of nuclear services. The division will be headed by Markus Rauramo.
Russia division will comprise Fortum's power and heat generation and sales activities in Russia. The division is headed by Alexander Chuvaev, who will also continue as General Director, OAO Fortum.
Technology and New Ventures
In order to speed up innovation and new business development, a new unit, Technology and New Ventures, is established. This unit will be responsible for Fortum's research and development activities and be the in-house incubator for startups. It will also be responsible for direct and indirect investments in external startups as well as cooperation with universities and research institutions. Furthermore, Fortum's Corporate IT will be part of this unit and its role will be developed to a strategic enabler of digitalisation and information technology solutions and applications for the businesses. The unit will be headed by Per Langer.
M&A and Solar & Wind Development
Fortum strives to create value by driving utility industry consolidation and restructuring through transformational mergers and acquisitions in its current home markets and in the integrating European market. The company also targets a gigawatt-scale solar and wind portfolio. These efforts are centralised under a new unit dedicated to leading group-wide mergers and acquisitions and the development of the solar and wind portfolio. The unit will be headed by Kari Kautinen.
The Finance function's responsibilities include accounting and control, treasury, risk management, internal audit, investor relations and financial communication, tax and Fortum Business Services. The function is led by Timo Karttinen.
Legal is responsible for group-wide legal affairs, ethics and compliance as well as internal control. The function will be headed by Sirpa-Helena Sormunen.
Strategy, People and Performance
This new function’s target is to tie strategy and key people processes together as well as to further develop the performance culture of the company. This function comprises strategy, people processes focused on talent and competence development, HR services as well as occupational health. The unit will also drive improvement of group-wide performance in investment and procurement activities. The function will be headed by Risto Penttinen.
Corporate Affairs and Communications
This new function’s target is to further strengthen Fortum’s corporate affairs and access to stakeholders internationally as well as to build the company's reputation and brand and develop the active use of versatile communications channels. This function comprises government and public affairs, corporate communications, brand, sustainability and safety as well as corporate and information security. The function will be headed by Arto Räty.
President and CEO
Pekka Lundmark, President and CEO, tel. +358 10 45 24112
Sophie Jolly, Vice President, Investor Relations, tel. +358 40 828 7317
Pauliina Vuosio, Vice President, Financial Communications, tel. +358 50 453 2383
Background information on the new Fortum Executive Management Team members:
Senior Vice President, Strategy, People and Performance as of 1 April 2016
Born in 1968, nationality Finnish
Employed by Fortum since 2011
Vice President, Corporate Strategy, Fortum Corporation, 2014–2016
Vice President, Strategic Ventures, Fortum Power Division, 2011–2014
Partner, McKinsey & Company, 2005–2011
Consultant and Project Leader, McKinsey & Company, 1996 and 1997–2005
Key positions of trust:
Finnish Energy Industries, Member of the Committee for Power Generation 2014-
Fingrid Oyj, Member of Advisory Committee 2012-2014
Senior Vice President, Corporate Affairs and Communications as of 29 February 2016
Born in 1955, nationality Finnish
Lieutenant General (Ret.)
Cadet School, General Staff Officer Course at National Defence University, Executives in National Security Program at Harvard University, John F. Kennedy School of Government, USA, and several other international courses and programs
Permanent Secretary at the Ministry of Defence of Finland, 2011–2015 and Director of the National Defence Policy Unit, 2005–2008
Various positions within Finnish Defence Forces, including, Deputy Chief of Staff, Operations at Defence Command, 2009–2010; Chief of Staff at Army Command, 2008–2009; Brigade Commander, Pori Brigade, 2000–2002; Commanding Officer of the Finnish Battalion in KFOR , Kosovo, 2000; Deputy Chief of the International Department, Defence Command, 1997–2000
Director of the National Defence Courses of the Finnish Government, 2003–2004
Finnish Liaison Officer at NATO HQ and PCC SHAPE, Brussels, Belgium, 1994–1997
Key positions of trust:
Chairman of the Board at Destia Oy, 2015–
Member of the Board and Vice Chairman, Destia Oy, 2014–2015
Member of the Board at Ahlström Capital Cleantech Fund I, 2011–
Chairman of the National Security Committee, Finland, 2011–2015
Member of the Emergency Supply Council, 2011–2015