Stock exchange release

Fortum is putting its growth strategy to work in two phases, significant part of redeployment targeted in the first phase 2016-2017

16 November 2016, 8:30 EET



Today President and Chief Executive Officer Pekka Lundmark will provide a more in depth course of Fortum's strategy at the company’s Capital Markets Day.

The strategy execution plan has now been detailed, as the work has continued after defining the strategy during early 2016 in order to enable profit growth and improved cash flow. The redeployment of cash and the execution of Fortum’s strategy will take place in two phases, and a significant part of the redeployment is targeted to take place during 2016-2017.

Phase 1: The goal for the first phase is to maximise cash flow through redeployment. The first priority is consolidation of the generation business in Europe. After this, and subject to the remaining financial headroom, also further organic growth and/or acquisition-based growth of City Solutions will be considered, mainly in Europe. The resulting cash flow will be used for two purposes: 1) implementing Fortum’s dividend policy; and 2) investments into Phase 2 as described below. In addition, Fortum will continue its cost and asset portfolio optimisation in all divisions, informing the market about these as they advance.

Phase 2: The goal for the second phase is to secure Fortum’s longer-term competitiveness. This has already started through wind investments in our Nordic and Russian home markets and through solar investments in India. The next steps will include solar-enabled system solutions, maximising the added value from waste and biomass as well as minimising fossil emissions. In addition, new digital services, services for active consumers, electric traffic, new storage solutions, and other potentially disruptive innovations will be included in phase 2.

Fortum’s updated broader vision “For a cleaner world” reflects the updated mission “We engage our customers and society to drive the change towards a cleaner world. Our role is to accelerate this change by reshaping the energy system, improving resource efficiency and providing smart solutions. This way we deliver excellent shareholder value.”

Dividend policy and financial targets

The dividend policy remains unchanged. During phase 1 there are a range of factors, including macro environment, balance sheet strength as well as future investment plans, that will impact on the dividend. The aim is to ensure that shareholders at all times receive a fair remuneration for their invested capital.

Fortum’s dividend policy states that Fortum's target is to pay a stable, sustainable and over time increasing dividend of 50-80% of earnings per share, excluding one-off items.

Long-term financial targets continue to be: ROCE at least 10% and net debt to EBITDA around 2.5.

Maintenance CAPEX for 2017 is estimated to be below EUR 300 million.

Fortum Corporation

Sophie Jolly
Vice President, Investor Relations and Financial Communications

Further information:

Pekka Lundmark, President and CEO, tel. +358 10 452 4112
Timo Karttinen, CFO, tel. +358 10 453 6555

Investors Relations & Financial Communications
Sophie Jolly
, tel. +358 10 45 32552, Rauno Tiihonen, tel. +358 10 453 6150, Marja Mäkinen, tel. +358 10 452 3338, Måns Holmberg, tel. +358 10 452 1111, and investors(at)


Nasdaq Helsinki
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Fortum is a leading clean energy company which provides its customers with electricity, heating and cooling as well as smart solutions to improve resource efficiency. We want to engage our customers and society to join the change for a cleaner world. We employ some 8,000 professionals in the Nordic and the Baltic countries, Russia, Poland and India, and already 64% of our electricity generation is CO2 free. In 2015, our sales were EUR 3.5 billion. (Nasdaq Helsinki: FUM1V)