Public November 2017 Finland´s Transmission System Operator
Disclaimer These materials have been prepared based upon information that Fingrid Fingrid Oyj assumes no obligation to, and expressly disclaims any Oyj believes to be reliable. Market data presented is based on the obligation to, update or revise any forward-looking statements, whether as information and belief of Fingrid Oyj's management and has not been a result of new information, future events or otherwise. independently verified. Certain data in this presentation was obtained from various external data sources and Fingrid Oyj has not verified such data The circulation of these materials may, in certain countries, be subject to with independent sources. Such data involves risks and uncertainties and specific regulation and the person(s) in possession of this presentation is subject to change based on various factors. Fingrid Oyj makes no should observe such restrictions. representation or warranty, express or implied, as to the accuracy or completeness of the information contained in these materials and Nothing in these materials shall constitute or form part of any legal accordingly, Fingrid Oyj accepts no responsibility or liability (in negligence agreement, or any offer to sell or the solicitation of any offer to buy any or otherwise) for the information contained herein. securities or notes issued under Fingrid Oyj's commercial paper or medium-term note programs. These materials may contain forward-looking statements. These forward- looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. These statements are subject to risks, uncertainties, assumptions and other important factors, many of which are outside management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation.
Table of Contents • Executive summary 4 • Company overview 9 • Operations • Description of operations 25 • Efficiency of operations 35 • Earnings model 42 • Pricing 48 • Capex 55 • Operating environment 59 • Financials • Financial performance 69 • Financing 79 • Ratings 85
Executive summary 4 9.11.2017
Fingrid is the sole transmission system operator (TSO) in Finland Fingrid transmits Fingrid manages Fingrid continuously in its own network cross-border ensures power approximately connections system production 78% between Finland and consumption and Sweden, balance in Finland of electricity transmitted Estonia, Russia in Finland and Norway 5 Fingrid Debt Investor Presentation 9.11.2017
Fingrid's network covers entire Finland 14 600 km 10 reserve power of power lines over 116 substation plants 300 km 49 000 towers > 935 MW reserve of submarine cable 6 Fingrid Debt Investor Presentation 9.11.2017
Fingrid has achieved its targets in 2011 - 2016 2011 2016 Net profit MEUR 33 MEUR 139 Return Below regulatory allowed Below regulatory allowed Dividend MEUR 7 MEUR 98 Efficiency High benchmark study rankings High benchmark study rankings Investments In schedule and budget In schedule and budget Fingrid has a proven track record of continuously executing its defined strategy 7 Fingrid Debt Investor Presentation 9.11.2017
Key investment considerations Regulation Fair, stable and predictable regulatory model Ownership The Finnish state owns 53% and Finnish financial institutions 47% Strategic importance Considered as strategically important holding to the Finnish state* Operating leverage Construction and maintenance of the network is outsourced Efficiency & Quality Fingrid is one of the most cost efficient and reliable TSOs worldwide Financials Continuously improved operating profitability in past three years Rating Fingrid benefits from AA-/A+ ratings (S&P, Fitch) * Source: Prime Minister's Office, Finland. (2016). Government resolution on state-ownership policy. Fingrid provides a solid long-term investment in a stable operating environment 8 Fingrid Debt Investor Presentation 9.11.2017
Company overview 9 9.11.2017
Vision We are a forerunner in transmission system operation • We are respected and influential in energy matters in Finland and abroad • We are a manifestation of professional skills and efficiency • We are able to renew ourselves and we boldly embrace changes 10 Fingrid Debt Investor Presentation 9.11.2017
Mission Fingrid is Finland’s transmission system operator. We secure reliable electricity for our customers and society and we shape the clean, market-oriented power system of the future. 11 Fingrid Debt Investor Presentation 9.11.2017
Our values In all our operations, we are transparent impartial efficient responsible 12 Fingrid Debt Investor Presentation 9.11.2017
Balanced strategy We secure reliable electricity and a well-functioning electricity market for society. We offer affordable services that meet our customers' needs. We operate cost-effectively and bring value to our owners We carry out investments and maintenance We actively maintain and develop We operate the national grid safely and efficiently at the right time. the electricity market. proactively and reliably. An open, collaborative, renewing and target-oriented work community. 13 Fingrid Debt Investor Presentation 9.11.2017
Strategic key performance indicators Customers and society Customer losses from disturbances – Market disturbances caused by transmission restrictions – Customers' trust in Fingrid – Tariff level Finance FAS-profit – Credit rating – Dividend payment ability Internal processes Ensuring transmission System security Promoting the electricity capacity maintenance market System security of power system Realization of investments – Efficiency Success in promoting the electricity – of maintenance – Occupational safety market – Timing of interruption in Adequacy of reserves Swedish connections Personnel and expertise Dedication – Leadership – Sharing of information – Innovation 14 Fingrid Debt Investor Presentation 9.11.2017
Fingrid operates in a matrix organisation structure Fingrid Oyj Jukka Ruusunen, President & CEO 81% of Fingrid's GRID SERVICES ASSET POWER MARKETS FINANCE AND ICT HRD COMMUNICATION AND PLANNING MANAGEMENT SYSTEM TREASURY personnel holds OPERATIONS an academic degree Full-time, permanent employees at the end of 2016 Asta Reima Päivinen Kari Suominen Jussi Jyrinsalo Kari Kuusela Jan Montell Tiina Miettinen Sihvonen-Punkka Customers Jussi Jyrinsalo Executive Finance and business development management team Jan Montell is highly regarded Adequacy of transmission system Kari Kuusela Reima Päivinen in the Finnish System operation Asta Promotion of market functioning Sihvonen-Punkka business community Personnel and competence Tiina Miettinen Fully implemented matrix structure ensures efficient strategy implementation and personnel engagement 15 Fingrid Debt Investor Presentation 9.11.2017
Fingrid's business model 16 Fingrid Debt Investor Presentation 9.11.2017
Responsibility is part of our values, strategy and everything we do Corporate responsibility management is founded on the company's strategy and guided by the company's Code of Conduct Focus on Systematic and Engagement materiality target-oriented of the approach personnel and suppliers We report responsibility as part of the annual report according to GRI Standards 17 Fingrid Debt Investor Presentation 9.11.2017
Excellent reliability in the grid Economic losses caused by disturbances 10 minutes / year / connection 8 point 6 4 2 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Only 1.4 minutes outage caused by faults in the grid in 2016 18 Fingrid Debt Investor Presentation 9.11.2017
For the benefit of customers and society Customer satisfaction: High quality services The customers' trust survey grade was 4,0 (scale 1-5) in 2016 19 Fingrid Debt Investor Presentation 9.11.2017
Network bottlenecks: Functioning electricity market Congestion hours between Finland and Sweden in 2016 34 % Finland 85,1 TWh/a Finland + Sweden 220 TWh/a 20 Fingrid Debt Investor Presentation 9.11.2017
Affordable fees for grid services ENTSO-E comparison on grid service fees European peers 2016 €/MWh 18 16 14 12 10 8 6 4 2 0 Lowest Average Highest Fingrid * Source: ENTSO-E 2016 2015 Operational targets are centered around cost competitiveness and customer service 21 Fingrid Debt Investor Presentation 9.11.2017
Legal structure Fingrid Oyj 100 % 33,3 % Finextra Oy eSett Oy Peak load capacity and guarantee of origin Balance settlement process on behalf of service and other services not part of the Nordic TSOs grid service operations 100 % 18,8 % Fingrid Datahub Oy Nord Pool AS Centralized information exchange in the Power market operations for day-ahead Finnish power market. Market operations and intraday markets to begin in 2019 22 Fingrid Debt Investor Presentation 9.11.2017
Recommend
More recommend
