Honorable shareholders, I'm Mikael Silvennoinen. I'm the Chairman of the Board of Fortum Oyj, and it is my pleasure to warmly welcome annual general meeting of Fortum, where we will discuss the most relevant financial events and achievements of the company in 2025. All the meetings with many participants are begun with safety instructions, and this is how I will start this meeting. In a case of fire or other safety risk, please evacuate the room through the closest safe emergency exit. Their locations are marked on the plan behind me. The meeting point is in the parking space, which is around the corner. From the main entrance, you turn to your left and then once more to your left, and you will find the meeting point there.
When needed, the first aid counter is in the lobby on my left-hand side behind the doors. It will be staffed throughout the meeting. In 2025, Fortum progressed with determination with the execution of the company strategy despite the uncertainties in our operating environment. We continued to optimize our production throughout the year by leveraging our flexible hydropower and base load nuclear fleet, but also developed our performance by digitalization and efficiency improvements. At the same time, we strengthened our preparedness to respond to the power demand of our industrial customers through investments in renewables and expanding our capabilities in flexibility solutions. With these measures, we improve our ability to capture new opportunities and lead the transition to a low carbon society, which is driven by the decarbonization and electrification across different industrial sectors.
On the occasion of the Investor Day in November, we presented our updated strategic and financial targets, as well as clear key performance indicators, which are closely aligned with our remuneration policy. In April 2025, the AGM elected nine board members as proposed by the shareholders' nomination board. Three of the members are women and six are men. The chair, the deputy chair, and all members of the Board are independent of the company and its largest shareholders. I will now briefly present to you the Board that has been operational since the last AGM. Let's start with Jonas Gustavsson, who is Deputy Chair.
Jonas has been with the Board since 2023, and he has a long career in Sandvik, also as Chair of AFRY and the President and CEO of AFRY, and he has a close cooperation with the energy sector. Now he is President of MacGregor and also member of the Technology and Investment Committee of Fortum. The next one is Ralf Christian. Ralf has been on the Board since 2022. He has a long career with Siemens Energy and GE, so he too has lots of expertise in energy from the technology point of view. Ralf is the Chair of the Technology and Investment Committee. Next, Luisa Delgado. Luisa has been on the Board since 2021.
She's a professional in boards, now Swarovski, Chairman of the Board, IKEA, the parent company board, and Telia board. Luisa has lots of experience in business management in the consumer business, and also HR experience in senior management. She therefore is a member in the People and Remuneration Committee of Fortum. The next one is Stefanie Kesting. She was elected to the Board in spring 2025. She too has a long experience in energy industry at E.ON, Uniper, and NEUMAN & ESSER . Nowadays she is chief executive officer of Gasum. There is also experience in gas through Stefanie in Fortum. She is a member of the Audit and Risk Committee of Fortum.
Next, Marita Niemelä. She has been with the Board since 2023, and she too has a long-standing career in energy and technology companies worldwide in Australia and Finland. For the time being, she is a Senior Vice President, Sustainable Energy Solutions with Rejlers Finland, and she's a member of the Technology and Investment Committee. Teppo Paavola. Teppo has been in the Board since 2020. He worked several years as an independent consultant and board professional with a long career in digitalization of major companies like Spanish Bank, BBVA, and Adecco. Now, Teppo is Enento Group's Chief Executive Officer. They offer digital solutions to customers. Teppo has been a member in the People and Remuneration Committee of Fortum. Teppo has said that he will no longer be available from now on in the Board.
On behalf of, in front of all the shareholders, I would like to warmly thank you on behalf of the Board and the senior management, for your excellent contribution to the success of the company the past six terms of office. Thank you. Next, I will introduce Johan Söderström, who has been on the Board since 2023. He's been EMEA Operative Director in Hitachi Energy, and now Hitachi Energy consultant of senior management, executive advisor, and he is also in the Technology and Investment Committee of Fortum. Next, Vesa-Pekka Takala, who has been on the Board since 2023, is now CFO, Chief Financial Officer of Metsä Group, with a long career with major capital investment companies. With these merits, he is a member, actually, chair of the Audit and Risk Committee.
My own background is in banking and consulting, and also in a board of several companies. In Fortum, I'm also a Chair of the People and Remuneration Committee, and I was member in the Audit and Risk Committee, and also the Chairman of the Board of Fortum. This, in this meeting, we will complement the expertise in the Board if later the candidates, Emmanuelle Verger-Chabot and Mika Anttonen, will be elected as board members. But we will come back to that later when the shareholders nomination board and their chair will introduce them in more detail. In 2025, we focused on building growth as an essential target of the corporate strategy, improving customer focus in managing the company, and developing our organization structure and capabilities to better execute the company strategy.
To further improve its work and as part of its functions, the Board carried out a self-evaluation late 2025, which included the evaluation of committee work as well. In 2025, the Board met 12x , and the attendance rate was 99%. the Board is assisted in its work by three committees, the Audit and Risk Committee, the People and Remuneration Committee, and the Technology and Investment Committee. The Audit and Risk Committee assists the Board in tasks relating to the financial reporting process, the control, and risk management. The People and Remuneration Committee assist the Board in matters related to successor planning and remuneration of the company's management, as well as in developing capabilities in the whole organization.
The Technology and Investment Committee monitors technological developments in the energy sector, evaluates Fortum's technological capabilities, makes proposals on the development of technologies, and prepares major investments for the Board to decide on. In 2025, the Board committees met 17 times in all. Fortum's performance and financial situation are on a robust foundation, and we are in a unique position to respond to the growing demand for low carbon power in the Nordics. We are committed to making sure that our performance is based on excellence and to allocating our capital with rigor, focusing on value creation. We are confident in our ability to lead the energy transition and produce sustainable value to our shareholders as our generation capacity is nearly fully decarbonized. We have a deep insight into our customers, and we are prepared to seize new growth opportunities.
In 2026, this year, the Board shall focus on the annual evaluation and further reinforcement of the corporate strategy. We started that in a board meeting Annual General Meeting. our objective is to be ready for a customer-driven growth phase while improving financial performance despite the strong geopolitical tensions that continue to influence our operating environment and which potentially cause uncertainty to major industrial investments in the Nordics. As a major player based on its competitive generation portfolio and technological skills, Fortum will develop the energy market and pioneer in a customer-driven energy transition. Good cooperation and trust between the Board and the senior management has continued in 2025, and dialogue with all shareholders has been smooth throughout the year.
I would therefore like to thank the shareholders and the AGM for your confidence, and I especially thank my colleagues in the Board for their commitment or their committed work to the benefits of Fortum. A warm thank you to the executive management and who are present here in full and to personnel for a good performance in the past year. The company is now in a solid financial position and well-placed to take the next steps in its path to its growth. Following the solid financial result, the Board is proposing to the AGM that the company pay a dividend of EUR 0.74 per share, which is 90% of the group's comparable earnings per share as set out in the company dividend policy. The President and CEO will discuss this further in his own review. I now officially declare Annual General Meeting open.
We will move to agenda point two, which is calling the meeting to order. I propose that Mikko Heinonen, Attorney-at-law, chair this meeting as proposed in the document of organization attached to the notice of the meeting. The chairmanship is a challenging task. It needs legal knowledge and advance preparation. I know that Mikko is well prepared for this task. Is it okay for the AGM that Mikko Heinonen chair this meeting? No hands up. No other comments. There are no other proposals. Mikko Heinonen will thus chair the meeting. Mikko, please take your seat at the front.
I thank you for the trust and welcome to the participants here in the room and all those who are following the streamed webcast Annual General Meeting. Kati Levoranta, Head of Corporate Legal of Fortum Corporation, will keep the records of this meeting, as you've seen in the document of organization attached to the notice. Ms. Levoranta, please take a seat at the podium. The documents of organization has been referred to several times, so I'm not going to repeat what is said in it. It describes housekeeping items and the organization of the meeting under points one to five. This document of organization is part of the notice and available to the participants. Of course, shareholders have a right to speak on any of the items under points one to five and also ask for a vote, but as they are now prepared in advance, they accelerate the meeting.
The document of organization will be attached to the minutes as well. Just to add, should you wish to address the meeting, please ask for the floor, and once you get that, you will get the microphone, then start by telling your name and the name of the shareholder you represent and the number of your voting card. Also this meeting is streamed. The webcast participants under the limited liability act cannot participate, but can follow the meeting, which means that requests for the floor are to be sent to those who follow this online. Those who request for the floor are not recorded on a video on the stream.
In this meeting, we will follow the order of the agenda and the notice, and please keep your interventions to the point and on the subject matter which is under discussion. This was shortly the housekeeping. We continue to point three, election of scrutineers of the minutes and supervisors of the counting of votes. In line with the document of organization, I propose we elect two persons to scrutinize the minutes and two persons to oversee the counting of votes. The document of organization proposes Jukka Vähäpesola and Kalle Karppinen to scrutinize the minutes, and according to that document, SeMmi Seljavaara and Teemu Taivalantti to oversee the counting of votes. Just to check, are these persons present? Jukka Vähäpesola, you're here, and you can take the task. Kalle Karppinen, are you here?
Yes.
Yes. Thank you. Semmi Seljavaara, are you here?
Yes.
Yes. Teemu Taivalantti, you are here too.
Yes.
This is the proposal for the AGM. Are there other proposals or comments on the election of scrutineers of the minutes and supervisors of the counting of votes? Since there are no requests for the votes, we elect the scrutineers of the minutes and supervisors of the counting of votes as proposed. We are now under point four, statutory requirements for convening the AGM. Here we can say that the notice to the AGM was published on the website of Fortum and as a stock exchange release on February 3, 2023. The company has also published a short ad about convening the AGM in Helsingin Sanomat on February 17th, 2026. Pre-registration was to be made by 26th of March, 2026 at 10:00 A.M. Also, nominee-registered shareholders wishing to attend the meeting were to be registered in the temporary shareholders' register by that date.
It is my understanding that the convening of this meeting complies with statutory requirements of the Companies Act and the requirements of the articles of association. Are there any remarks concerning the convening of the meeting, for legality and quorum? No requests, so this meeting has been convened in line with statutory requirements of the Companies Act and requirements of the articles of association. It can take valid decisions where quorum. We are now in point 5, recording the attendance at the meeting of the adoption of the list of votes. All shareholders who are present in the meeting are entered in a list stating their number of shares and votes, and there are also those who registered in advance. The summary there.
At the start of the meeting at 2:00 P.M., there were 2,451 shareholders present, represented, and 374 of them present here in the room. The majority of those participating are either nominee registered chair representatives or voted in advance. These about 2,500 shareholders represent 691,955,877 shares and votes and shares. This is almost 700 million corresponds to approximately 77.12% of all company votes and shares. This voting list is annexed to the minutes, and it will be updated to reflect the situation of attendance in the room under each agenda point which is being voted on.
I would like to mention that according to the corporate governance code's requirements, all current members of the Board, the candidates for the Board are attending this meeting, as well as the President and CEO, the CFO, the lead auditor and authorized sustainability auditor, plus the proposed new lead auditor and a sustainability auditor for the financial year 2027. There are also members of Fortum's leadership team and meeting officials attending this meeting. We now confirm the voting list and the attendance situation. There are no comments, so this voting list has been confirmed. We are now in point six. The subject matter proper presentation of the financial statements, the consolidated financial statements, the operating and financial review, the auditor's report, and the sustainability statement assurance for the year 2025.
I ask that Markus Rauramo will present his review on the financial situation. After that, Jukka Vattulainen, the lead auditor and the authorized sustainability auditor, will present the auditor's report and the assurance report on the sustainability statement for year 2025. After both of these presentations, I will open the floor for discussion and questions. Markus Rauramo, please.
Thank you, Chair. Thank you to the Board Chair for your kind words. This cooperation is very fluent, and we have a good contact with the whole of the Board, and I'd like to thank my leadership team. They are here in their entirety, and it's a very good cooperation I have with each and every one of them. Good afternoon, honorable shareholders, and warmly welcome to this Annual General Meeting. [audio distortion]
Target is to reduce all our emissions to almost half compared to 2023. After this, we shall continue the reductions of emissions in the value chain. Finally, the potential residual emissions will be neutralized to reach net zero emissions in 2040. Neutralization here means that if some emissions cannot technically be removed, they will be compensated for with the help of carbon sinks or negative emission technologies in line with the SBTi criteria. The aim is, however, to primarily reduce emissions and to use compensation only as the last step. Finally, I would like to elaborate further on our capital allocation principles. Our priorities concern how we manage our balance sheet, make investments, and distribute dividends to shareholders. We closely monitor market developments, but at the same time, we continue to adhere to a disciplined approach to capital allocation.
A key target continues to be ensuring a credit rating of at least BBB. As we have said, the gearing, so the financial net debt to comparable EBITDA can be a maximum of 2.5x . Currently, our balance sheet is strong and our credit rating is BBB+ with stable outlook. The logic behind our capital allocation is that if investment opportunities are limited and we're not making major investments, we will distribute more capital to shareholders in the form of dividends. Conversely, even when we have profitable investment projects, we will allocate less capital to shareholder dividends and more to promising projects. We have said that we expect the committed capital expenditure to be approximately EUR 2.0 billion, excluding acquisitions for the period of 2026 through 2030.
Should attractive investment opportunities arise, Fortum has potential to invest an additional EUR 2.5 billion until 2030. Since growth in customer demand for electricity in the Nordic countries is currently subdued, we do not currently see any profitable investment opportunities in new generation capacity that meet our criteria. Investments are always about building profitable megawatts. As I mentioned earlier, however, we are building up our investment capacity so that we are ready to respond to growth in demand. Of course, we want to use our capital efficiently, and this is linked to our new long-term profitability target of Comparable return on net assets of 14%. With this target, we aim to ensure that every euro generates sufficient value for our owners. In line with our dividend policy, we pay out 60%-90% of the comparable earnings per share.
The dividend payout ratio is used as follows. The upper end of the range of the payout ratio is applied in situations with a strong balance sheet and low investments, while the lower end of the range is applied with high leverage and or significant investments. As mentioned, this year, the dividend proposal represents 90% payout of a comparable earnings per share. This is how we return capital to you, our shareholders, where not all of the cash flow is needed to finance growth. I shall finish my presentation here, but to conclude, I want to thank you shareholders for your trust and confidence on behalf of myself and on behalf of the whole Fortum group. Together with you, we want to advance the energy transition, combat climate change, and [audio distortion].
[audio distortion] of the AGM. My name is Jukka Vattulainen. As the chair said, I have been the lead auditor since financial year 2020 at the audit company Deloitte, who was first elected since 2016. So 2025 is the last term for Deloitte's audit company. I will come back to that after my presentation when I've given the opinions of the auditor. In addition to myself, I had 50 auditors in my team, and also IT, sustainability, finance, and IFRS experts. The Fortum Group, we continued the delivery of the interim reports and then corporate governance and remuneration and all those reports. As I said, also the sustainability statement where we gave our assurance.
The 2025 audit was based on the audit plan, which is based on their strategy, business sectors, processes and IT and how we evaluated those based on risk. The key audit matters for 2025 audits are the valuation of property, plant and equipment and goodwill, and they don't have much goodwill, but the property and land almost EUR 7 million worth. That's a sixth of the balance sheet, which is significant. Another one is shares in nuclear waste funds and nuclear provisions and for in Finland and Sweden, several technical audits and accounting, and they are all in provisions. A third key audit matter is the business model.
As the CEO said, there are long sales contracts, but also the derivatives and hedges thereof are very important, but they are very complex technically, but it has come down in the past years, though. During the audit work, we have reported back to the Risk and Audit Committee and senior management, and at the end and at the beginning of February, we have given our standard audit report and opinions and a summary to both the Board and to the Audit and Risk Committee. As I said, the report has a standard form and includes the opinion of the audit on the adoption of the financial statements and also discharge questions to the Board and the CEO and President.
Briefly also on the opinions, I can say that we— It is our opinion that the consolidated financial statements give a true and fair view of the group's financial position, financial performance and cash flows in accordance with IFRS accounting standards. The financial statements give a true and fair view of the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. As I said, as an auditor, we are in favor of the adoption of the financial statements, the the Board of Directors regarding the treatment of distributable funds and the discharge of the members of the Board and the CEO, President of this financial year.
This was done in Espoo the 2nd of February 2026 and signed by me, of the company Deloitte. As I said, for the listed companies, the EU directives also require a sustainability statement and the chair said it is part of the financial review of the Board, which describes sustainability, environment, social and operations and also administration. This sustainability statement has been given limited or restricted assurance. We have given the—
Our opinion is that based on the procedures, there is no evidence that the group's sustainability statement doesn't comply in all material respects with the requirements laid down in the Accounting Act, Chapter 7 and the requirements laid down in Article 8 on EU taxonomy or the science-based information and they are all complied with. This is also signed by me in Espoo in February 2, 2026 by authorized sustainability auditor and authorized sustainability audit firm. As I said that today a 20-year mandate comes to an end for Deloitte audit firm. I would like to personally thank on behalf of the Fortum Company, Fortum's personnel who have been transparent in cooperation. We have had very good cooperation between, and they have a very high ethical professionalism.
I would like to thank the senior the Board of Directors for good, transparent, and smooth cooperation, and high professionality, and integrity. The culture in Fortum is to do things properly, very professionally, and correctly, and as I've noticed as an auditor, this culture reflects the values of Fortum that we just heard from President Markus Raura mo. We have targets high, and we achieve them. Also, as the chairman of the Board said, Fortum is today has a very solid foundation financially, and it has good potential to grow. Fortum's strategy is very clear and understandable. I would like to wish to all of you at Fortum the best of luck in the future, would like to thank all of you at Fortum who have worked with me or worked with Deloitte, both in the audit and the assurance of the sustainability statement. Thank you.
Thank you, APA Vattulainen. I think this was the first vote after an auditor's report. Before opening the discussion, the CEO has presented the financial statements and the financial review. These documents, the consolidated financial statements and material related to that, have been available from the 18th of February on the company website. They also have been published as a press release, and the auditor's report and sustainability assurance report have also been available on the company website and published as a notice. I want to open now the floor on the financial statements, operating and financial review for financial year 2025, and more generally, in Fort um's meeting, we have usually a lengthy question- and- answer session. Let's start from the right-hand side of me, left-hand from looking at your side. It's microphone number 7. Please, the floor is yours. Marjatta Näätänen, voting slip 209.
My question is related to the matter that you have been convinced us that Fortum is a strong, solid company with high ethical morale and that hydropower is the greatest resource. I'm talking about Kemijoki and which affects the whole of Lapland in northern Finland. The resource use of Kemijoki, is Fortum the only one who has the right to use this hydro resources? Could we imagine that we would bring back the migrating fish to this river? Because if you would bear your responsibility, you would enable this. Then the pump stations. The pump stations will be introduced to the River Kemijoki. Why cannot we use the reserves we have up in Lapland?
Thank you. The next question is microphone 11. We'll take that one, and then we will let the CEO answer voting slip 154. The question is, as we saw, power demand will increase in the future. What about power prices? Could there be a minimum price with which we would enable the balancing power and the nuclear power to be constructed in the future, that capacity? The second question, you mentioned onshore power, but what about offshore power? Have you considered that, and are there limiting factors? Why haven't offshore resources been considered in wind power? Let's see first the pump stations and Kemijoki and then the regulating power. CEO Rauramo.
Thank you for good questions. I want to refer to what I just said on Fortum's environmental, ESG, and biodiversity targets. We take these very seriously, both aquatic and terrestrial environment, and therefore Kemijoki and Fortum, we do construct these migrating fish paths and use different kind of machinery to get the fish stocks back to their natural habitats. We're also very specific and careful when we work in resuscitating the spawning waters and spawning areas of fish stocks to produce the best possible result. In the big picture, as in my presentation it became evident, emissions are easy to measure, and we can have absolute targets for emissions. I feel that both terrestrial and aquatic biodiversity are the more difficult, and factually they are difficult to measure, and that's why we invest in those.
The question of pump power, the future electricity system, this is related to wind and solar power. Mostly this new power will be generated in combination of wind and solar power. We need storage power and pumped storage power, and of course, we have lots of opportunities to regulate some hours. If we go further into the future, then we need something reactive power production. It could be, for example, at Fortum, we have gas turbines. They could be that gas motors and storage could be provided by pumped storage power, and this can be stored then in batteries. These have environmental impact related to them. In addition to Fortum, three projects in Sweden, the environmental impact assessment is essential.
The Pyhäjoki mine is something we know very well, and the pump stations Fortum is looking at all the different options and opportunities, and then we look at what is best to commercialize, taking into account environment. Regarding the minimum price of power or balancing the power prices, of course, the state already now has the opportunity to make price difference agreements, and the EU has taken a positive stance towards this. Fortum wants to balance its revenue flow by making long-term power agreements. That's what our customers demand from us, and that's interesting for us. That's how we can stabilize our profitability and make visibility towards our cashflow. I look at it from a bigger picture. In Europe, it seems that there has been heated discussion on the power electricity market and the ETS system and pricing of carbon dioxide.
In addition to Fortum, I participate in Eurelectric. I am the chairman of this organization. We have 3,500 company members in all EU countries. We conducted a roundtable survey in every country, and only one is opposed to this, to say that another market model than the current would be functioning. The functioning market is of critical importance. Everyone agrees that we need a functioning emissions trading system, but that doesn't concern so much Finland, but Central Europe more. Chemical industry and heavy industry sectors in Central Europe, they are living difficult times, and on a country basis, they could have tailor-made deviations from ETS either free of charge or by supporting them in some other manner.
Question related to terrestrial onshore wind, we can produce this with half the price than that than offshore would be produced. Onshore, the conditions are such that in Central Europe, we could have five turbines for onshore wind power. But for us, we would need 50 turbines for the corresponding level, and the solar power is comparable in prices than onshore. Offshore wind power is in our planning when we reach the point that we are not able to harness more onshore wind power due to land use or other things. In Eastern Finland, we are very interested in that area from the point of view of onshore wind and solar power.
If we look at the map of Finland and the conditions there's a natural reason why onshore wind projects are in Western Finland, because the conditions are almost like offshore wind. The wind conditions are almost the best in Europe. When we have less opportunities in Western Finland, Eastern Finland becomes more attractive to us as an investment target. Then, of course, we have to go through defense-related matters, but it's a question of cost mostly. Thank you.
Thank you, CEO. Then we will have microphone number eight, I think. From the left of me, and then we have Jukka Sulanto here in the middle. First, we have Mr. Virtanen.
[Non-English Content]. Thank you, Chairman. Hannu Virtanen. My number is 467. I would start by saying what the chairman of the Board said, that Mr. Heinonen was well-prepared. So was I. So we are both alike. We both prepare carefully. I read the paper this morning, which said the Nebius, I suppose you know, Lappeenranta will have an AI data center in 2028. I was wondering, was it 310-something MW, I think. That's the unit. But big anyway. So how does this have an effect on a normal consumer?
How are we supposed to get our electricity for a good price if a giant pops up out here? I'm a worried person drinking his morning coffee. Next question. I don't know if it's to Mr. Rauramo or Chairman of the Board. We speak a lot about availability of electricity and whether Fortum or the Board has planned those small nuclear reactors, which would be the most sustainable solution. About flexibility. We remember last winter where it was very cold, no wind, no sun. How can we trust that if we have the solar cells or windmills which don't move? I was looking at EUR 0.82 was the price of my electricity that I wanted rather to sit in a cold room than pay that price. What about these small modular reactors? There is a small question.
Maybe that was a question to the president. Another question from Mr. Sulanto in the middle of the room, please.
[Non-English Content]
Yes. There's a couple of more words by Mr. Virtanen, but later maybe.
[Non-English Content]
[Non-English Content]
Chairman number 283.
Small questions. First of all, w hat do you mean by a margin of optimization, which is one critical figure in your presentation? Another one concerns the Swedish operations. As far as I know, in north and south of Sweden, there are bottlenecks in the grid distribution nets. Does it have an effect on Fortum's business if these bottlenecks are opened? The third question. Does Fortum actively follow the debate in Germany concerning nuclear power? Do you agree with some Finns who find Germany a bad country? Some questions about Russia. These Russian plants, have they been written down in your balance sheet, or are discussions still going on the ownership? Hanhikivi case in arbitration, are you involved in that?
[Non-English Content] Thank you. There are lots of questions. We start with Lappeenranta.
Thank you. Good questions. The data centers, AI, colocation and hyperscalers, as I said, the Nordic grid companies are expected that by 2050, consumption could even be 2.5x bigger. We need a lot of new power from renewables, from flexibility, and also would be good to be able to build nuclear. But that is the dimension we are talking about. Data centers in the short term have a major role in the growth of demand, but the growth in the long term comes from elsewhere. Nebius coming here, good question. He 310 MW, we could refer to the record for consumption in Finland was about 15,300 MW.
The Nebius addition is very small compared to that and compared to Microsoft 3 x 200 MW built by Microsoft in around Helsinki. Is there enough electricity for consumers then? Well, our generation capacity is 9,500 MW. Our wind and solar permits are another 8,000 MW. Compare 300 MW to 8,000 MW. Our capacity to capture that demand is excellent. That's what we've told our customers and to the society at large. If there are projects coming in, and they ask whether there is power available, we can say, "You have all the power and electricity you want.
We want and we can increase our production or generation if needed. This 8,000 MW, so 8 GW, in addition to that, we understand that it's not continuous. It's wind and solar, so we need flexibility. There we have this 2.5 GW flexibility target of which 700 MW flexible generation or consumption has been constructed or built. The dimensions are scaled for that sort of a clientele. The SMRs or something else. Fortum is making a feasibility study on nuclear, and we are now at a point of there is that seven suppliers, 11 different reactor types.
Now we have come up to two large reactors, EDF and Westinghouse, which are well-known and used on the markets, for example, in Olkiluoto, and we are now studying SMRs. That is the furthest in the Western world. GE Hitachi, 300 MW, which is now being built in Canada, Ontario. This should be ready by 2030, which will give us an impression how it works, how it can be scaled. The SMRs are smaller ones that can be scaled up and can then be more cost efficient. But SMR per produced MWh is more expensive than from a larger plant. These costs are not scaled up.
Infrastructure, the building and all that, they are not comparable in to the size of the reactors or the small one. Smaller one is less efficient. As a summary, small and big reactors depending on the need, if we need 300 MW, then it's SMR. If 1000 MW is enough, then it's Westinghouse. If 1600 MW, then it's EDF. But we have a neutral approach to all these, which we are developing together with the suppliers. The question about Sweden, too. What if it's very cold and the system in January, February started to be at the very edge? The prices were high, record high, up to EUR 800/ MWh. The solution there is that we build more transfer lines.
We are integrated with Norway, Sweden, the Baltic countries, so we need more transmission lines and that is what we need to develop. We need new production, new generation, and we need regulatory power. This has been the will of the state, NFS program, and we are in favor of having a reactive generation. Could be gas turbines, gas engines, could be storage, pumped storage, batteries, and so on. This is the whole portfolio that we are now improving. Mr. Suvanto asked about the optimization margin. What it is?
It means that when we look at, after hedging, what is the average price of power in the market and what was the price that we received from our generation, the EUR 9.7 is the difference to the average spot price compared to what we really received. What is the difference caused by? It is because we have this flexible hydro which can be regulated. We can time our generation to those hours when the demand is highest, and then we can save the water when there is enough offer and the prices are down. In addition, with our production capacity, we can offer grid services, the inertia up and down regulation.
If Fingrid, you look in their pages, you see that these regulatory features are needed more and more, because the market is now with the 15-minute frequencies. We can offer the guarantee of origins for nuclear and hydro. If you as a consumer, you buy pure electricity, then the buyer actually already bought that with the guarantee of origin from, for example, Fortum, which is a guarantee of no emissions. What about the bottlenecks in Sweden, what we think about that? Well, the opening of the bottlenecks in Sweden between price areas balances the prices. With a higher price, they come back down, and with a lower price, they come up as an average. I will come back to my earlier—
Opening the bottlenecks is good because then we can use the same resources more efficiently. Just a small side leap into the world and to Europe. In the world, there are no so big energy systems as in Europe. Somebody might say that the European electricity market is the biggest machine in the world. We are integrated from Southern Spain to Northern Lapland, 3,500 TWh where we are physically integrated. Every 15 minutes, electricity goes where it can be generated and consumed in the most efficient way. Opening the bottlenecks is a good thing, as I said, also a benefit for Finland because we are at the far end of like, geographically. Being linked with Europe is a good thing for us.
There was the question about Germany. What do we think about Germany? Germany is a big market. Germany hasn't dealt with the energy transition like in the Nordics. They still have lots of fossil production, the lignite coal. Lots of renewables, of course, but nuclear is closed now. It was decommissioned, and even the last three reactors, which were 4 GW, they too are being decommissioned as we speak. The earlier capacity, the exit from the early capacity, is irreversible. We follow the debate in the German market, of course. What is decided in Europe, in the big countries in Europe, will have an influence on us too, at least indirectly, on us and our clients.
In Germany, there is a lot of debate about fusion energy and nuclear, at least, theoretically. The Merz government has a more positive stance, but there are no signs of Germany in any time close or reopen nuclear. Questions about Germany. Sorry, about Russia. Russian operations, since they took control of that, were written down. There is nothing left in our balance sheet from Russia. But there is an arbitration going on against the Russian Federation about our ownership and then about our Russian company because of the loans that haven't been paid back.
Either we get everything back that belongs to us, or then for the sales, we get full control so that we can sell, divest the operations in Russia to whom we want. Before the control took place, we had lots of procedures with interested buyers, but this is now come to a halt. Hanhikivi, we know that there are different processes, but Fortum has no information about that. Thank you.
We give the floor to the government ownership, Prime Minister's Office. Mrs. Strandberg.
Thank you. I'm Maija Strandberg. I have a proxy from the Finnish state, my voting number 397. The role of shareholders, in particular large ones, as drivers impelling businesses to grow, has been discussed widely during the past autumn and this spring in public and between shareholders. The state is Fortum's biggest shareholder, and I would like to take this opportunity to clarify the ownership strategy of the state. I also have a question, so my message goes to, the Board of Directors, because you represent us shareholders in the company. The state is in favor of your strategy as such and the management and Board, and at the same time, we expect courage, innovativeness, and ambition from you to increase shareholder value.
We also expect that once circumstances has stabilized, your business will have a strong future orientation. The state expects you to invest in profitable growth which sustains shareholder value, so we expect that you continue to prioritize in R&D and in innovation. The state owner expects investment in Finland in particular. We wish that Fortum would drive growth and new innovation in Finland at large.
You have a very strong shareholder base, and you have all the required prerequisites to continue as a front runner and take controlled risk. Like the auditor said, the company is in a good financial position, and you have a strong balance sheet. I would also like to comment on the expectations of the state as regards dividend policy. I'm not at all underestimating the importance of stream of dividends, but we have not and will not weigh the company's investment in improvement against its dividends. This is not a question of either/or for the state but rather a both/and situation, and I believe that this will be in the best interest of all shareholders.
We also wish that when the Board is planning KPIs that measure growth and innovation, they are included both in the STI and LTI schemes for all senior management, that they are measurable and transparent so that we shareholders can monitor the trends in the company also through outcomes in remuneration. the Board of Directors to be brave and forward-looking and that way bear their responsibility in the Finnish society where we need growth. I had a the Board of Directors and their chairman. How can you see growth, innovativeness, and reform concretely in your board work? Thank you.
Thank you for this comment and question, and perhaps we can take the response to that from the Chairman of the Board, Mikael Silvennoinen, and he will answer to this question. I believe you will get a microphone in no time at all. Go ahead.
Thank you for this question, Maija, particularly the end of the question so we can see it in concrete terms in the fact that growth is strongly present in every board meeting of Fortum. Growth actually is the main target of the existing strategy of Fortum and was mentioned in my opening. I also mentioned that we are reevaluating our strategy currently, and that doesn't mean that we will change or abolish the current strategy. We want to look at, in addition to what has already been decided, what we could do.
In any case, Fortum will invest EUR dozens of millions in growth in the upcoming years. Actually, the ready-to-build investments were already mentioned by the CEO in his review. Actually, the wind power project that were acquired in 2025, bringing 7 GW more of capacity are all invested in advance so that once the demand will grow, we can actually meet that demand. In the most recent LTI scheme, in connection to the management, remuneration has clear growth targets, so if the growth is not executed, then the remuneration won't take place either. What can I say that is concrete is that we discuss it in every board meeting and will be again discussed in our April meeting, so growth and investments will be talked about.
As to the investments, Fortum is a listed company and of course part of Finnish society. We understand how important investments in Finland would be. On the other hand, when Fortum board is evaluating the investments, we need to look at the interests of all shareholders. In our investment calculations, we have these two matters to consider. The message was pleasant to us, and board is happy to hear it, and the state owner can be assured that we will continue to keep it in our board work. Thank you.
Thank you. Then we have the microphone number 8, with two questions on both sides of the corridors. So let's start with you, please.
Werner Janhonen. 557 is my voting slip number. There's a war in Europe. Employees are being dismissed. The employees don't get any pay. They are being laid off. Does a company, such a small company of only 4,600 employees, need a board that is this large that we need to have 10 members instead of the former nine? If we do need to have more, what for? I think this has to do with the next items when you talk about the composition and size of the Board.
Another question on the other side of the corridor. Go ahead.
Lasse Reunanen. Ballot number 4543. Mr. Virtanen took up the electricity trading, and the question was, Can Fortum have any say on limitations to this kind of electricity trading? We heard that it was less than 5% the average price, but we've gone up to EUR 0.80, almost 1 EUR, and then there's also been minus figures on the price. It would be good to have some d elimitations between €0.05, €0.60, 1/4, some limitations. This minus is not good for the spot price. Is it possible to have any restrictions on that?
Currently, there seem to be no more requests for the floor. If you do have requests. There's one more. Yes. I believe it is shareholder Virtanen, but with another first name.
Chairman, thank you. Finally. 120 is my voting slip number. When the generation comes from solar and other renewables, where there's a lot of variation and fluctuations, and sometimes we don't get any power. We've talked about storage, power storage, and this kind of storage has two effective ways, pumped storage power and ammonia and hydrogen. The industry needs a lot of hydrogen and ammonia.
When we think about balancing prices, have you got any plans to increase the number of such plants? Because today, these kinds of plants have a good new technology, and in Southern Finland, we're going to see large new data centers that certainly will need guaranteed power. If there are any changes in the grid or breaks due to a war or some other destruction, running a grid up is not very easy or simple. How have you prepared for such scenarios so that we can be sure that the majority of the area of the country is covered by power and won't be dark? Thank you.
We have three questions. One, the first one was of the composition of the Board. It might be dangerous for the CEO to comment on it, but we won't forbid him to do that. We are going to speak about it in the next items, but there are other operative matters you can comment on freely.
Good. The first question had to do with the electricity and trading. It has meaning to our 2.2 million customers, and we carefully listen to our customers on a daily basis. Almost weekly, I go to our customer service and listen to phone calls, talk with our customer service people to hear what customers want. You know that our two main products that when our customers are happy with using flexible electricity and are happy with using the low price hours, I am part of that group. I've been using the spot-priced electricity.
I have to say that in January and February, I wasn't too pleased when I heard about the prices, how high up we went at that time. Then on the other end, if you don't want to worry about it and monitor the developments in the electricity prices, then a fixed product is good. This morning I just checked that our two-year product for two-year fixed price is EUR 0.0779/kWh, including tax. It also contains some flexibility to either direction, so with your own actions, you can actually impact it. As to the price limits we need to offer, or we have products where you can buy such a cap on the price, or you can fix your price for a specific period of time.
When we talk with our customers on the phone, we first survey customers' needs and take our time in listening to their situation, what kind of devices they have at home and so on. Why I'm speaking at length about this is that, Mikael, if you want to stand up, maybe you can come to him later. It's really Mika's business that generates almost 1/2 our revenues, and the customer services go through his organization. Knowing the customers is something we've invested in, and this is also visible in our performance in the customer segment. We are actually spending money on being able to offer our customers personalized service, and it's not something every utility is providing. I just want to show you that listening to customers is very important to us.
This very strong volatility of power prices is not good for anyone. When we go from one end to the other all the time, that's why we're talking about flexible capacity, regulatory capacity, so that through the market and generation, it's good if we can generate some reactivity on the market. A good link to Mr. Virtanen's question. Hydrogen, technically speaking, is a logical solution to when we should be decarbonizing our whole energy system. Power is being consumed in Europe, roughly 2.5 TWh and about double of gas of that. Having decarbonization, it should go the other way around. Electricity consumption should be doubled, it should all be generated with clean energy, and then the majority of consumption will also go to the generation of clean gas in that logic.
Of course, the gas that customers need can be provided through methane or methane synthesis, whereas for current purposes, we can store hydrogen and hydrogen derivatives like ammonia can be stored. According to our view, gas and liquid synthetic fuels are better used in processes that need them directly, whereas to generate hydrogen first to use it in power generation, again, creates a lot of waste. It's not in our plans because we have the actual pumped storage power first. Of course, we will work hard with our large industrial customers to help them utilize the capacity. On the hydrogen side, we have conducted large feasibility studies. We've looked into 100 MW, even 600 MW electrolysis equipment, but production costs has been too high compared to customers' ability to pay.
The large equipment has not made progress in the Nordics yet. We have been building our first electrolyzer now, and you can go to our website to view it. It's a fantastic plant in Loviisa, very small, but technically completed. We can generate synthetic hydrogen there, and we now have the full infrastructure for pumping and transporting hydrogen in containers, ready. Very soon, we can soon go to commercial use. And that way we found customers who need hydrogen and who we can deliver it. But the price and the production costs are still too high for it to become large, to see a large commercial breakthrough. But I believe technology will advance, and we can see more on that front in the future. The last point was being prepared, which is a very topical matter.
Fortum, throughout my career since 2012, our position here has taken preparedness with great commitment and emphasis, and there are three main elements to that. First, we have to have a good understanding of the situation, what's happening, what evil players there are, hostile countries or instances, maybe some planning, some commercial harm. We want to have tight collaboration with the authorities. When we've had hydropower, wind power or other such consumer businesses too, we are in contact with the police, the rescue authorities, the defense forces in close contact on all levels. I personally speak with the management of all these organizations on a regular basis. The third element is practice, which is really essential considering preparedness. If or when something happens, of course, we want to prevent things from happening in close collaboration with authorities.
When something happens, how do we recover from that? Recovery resilience is very important. In addition to these aforementioned things, our collaboration with authorities has been expanded so that we're actually also practicing with NATO and National Guards. It has to do with various hybrid threats, practicing on such situations. This is everyday life to us, practicing for those scenarios. A couple of years ago, we realized that we need to have even better understanding of the worst-case scenarios. Therefore, together with external help, we started looking into the kinds of attacks in Ukraine on the critical infrastructure, where there were about 1,000 attacks.
Now we've expanded this activity so that we've actually surveyed the 2,400 attacks on critical infrastructures in Ukraine and looked what equipment was destroyed and how we could acquire them, should that happen with us, so that we actually end up having a European-wide preparedness through our collaborating agencies. We take it very seriously and want to make sure that under all circumstances, we can deliver to you and to our customers reliable and clean energy.
[Non-English content] Thank you. I see that Janhonen would like to speak, whether it is on the composition of the Board. I propose that we come back to it under Item 12. Please.
If I can get the microphone. Yes. I would just like to make an observation that the CEO didn't see any need for expanding the Board of Directors.
I think that the CEO doesn't say anything. I think that the Chairman of the Board and the Nomination Board will look at these. Let's keep to the official roles, and we will come back to the question of the Board of Directors under item 12. Do we still have questions? Both Virtanens have raised their hands. Erkki Virtanen first.
Well, Hannu changed to Erkki. Well, Hannu Virtanen, that's my name. 467, voting slip number. Well, this is a comment to Jukka Vattulainen, the principal auditor. Yesterday, I was approaching the airport in Naples, and it said, "Deloitte." And I said that, "Can you imagine what I'm thinking about?" I'm thinking about Jukka Vattulainen. You are an internationally known person, and you already received an applause here and a bravo shout-out. I have asked this previously, when you are talking about sustainability reporting or sustainability reporting standard, the ESRS, and as the CEO stated, we are producing emission-free energy. Is there any sense than now that we have this obligation of sustainability reporting, is there more costs than utility? I'd like to hear from Mr. Vattulainen.
Yes, Mr. Vattulainen, please, the floor is yours.
Thank you for a good question. Reporting is a statutory obligation used throughout the whole energy transition, and all high-quality companies require this kind of sustainability reporting, so it's a societal obligation as well.
Are there still questions? The neighboring Virtanen, the floor is yours. I'm not going to call you by your first name.
Yes, this was Raimo Virtanen this time. To the previous question, the outages and disturbances in the power network, the power is distributed very unevenly in Finland, depending on the size of the company or the town, whether there are any trials or experiments in the pipeline, how to get back the power grid in operation if there are disturbances. How do they recover? Because often there are big problems and peaks which can maybe even destroy some of the appliances, and this is a question of security of supply and a very topical question in today's situation. Thank you.
Now, no further requests for the floor, I can see. In the meantime, let's give the CEO the opportunity to answer to Raimo Virtanen's very good question.
Thank you for that. I also respond to Vattulainen's question. Our doing good work in sustainability, and we are a leader in sustainability, leads to the fact that everyone can invest in Fortum's share, and that's not a trivial matter, because if we have different limitations, we operate in a sector where some investors want to exclude from their portfolios.
Traditionally, defense, gaming, et cetera, have belonged to these kind of categories or sectors, and the total investable money is smaller. Therefore, we have better opportunities, and more investors are interested globally in our share, so that's good for the management as well. On the high-voltage grid, I'm not a super expert on that, but we know that both in the transmission and distribution network, exercises and practicing happens. What is the ability to recuperate, recover from disturbances in these networks? We looked at the Iberian example, the Apagón. You can remember from Spain, Portugal, some of you might have been there then. The whole grid crashed there, and the final conclusions have yet to be drawn.
You can see ENTSO-E's 260-page report on what happened per 1/1,000th of a second when different devices were shut off and the grid was shutting itself down. The connections between the countries were put out, and the nuclear plants didn't operate. It was scary to see how quickly this happened and how quickly both Spain and Portugal were able to recover, and they were able to reopen the grid, so through small interlinks, connections, gas turbines, motors, hydropower plants, and others which can operate without external electricity. They have islands of power plants in action, and then these become clusters. On the Iberian Peninsula, by the end of the day, almost the whole grid was in operation again, and this is something we practice for in Finland as well.
Thank you for good questions, for good answers. Let it be stated that the financial statement, the consolidated financial statements, and the operating financial statements, and the auditor's report, as well as the sustainability reporting assurance report, have been Annual General Meeting, and the discussion has been held. These will be appended to the meeting minutes. Thank you.
We move on t o item seven on the agenda, adoption of the financial statements and consolidated financial statements. These documents were presented the Board of Directors has proposed that the general meeting adopt the financial statements and the consolidated financial statements, and as the auditor mentioned, he has supported the adoption of the financial statements. Can the financial statements and consolidated financial statements of Fortum Oyj be adopted? There are no requests for Annual General Meeting has adopted the financial statements and consolidated financial statements. We are at Item 8, resolution on the use of the profit shown on the balance sheet and the distribution of dividend. The distributable funds of Fortum Corporation as at the end of the financial year amounted to EUR 6,769 million and some thousands, including the profit for the financial year of EUR 253 million.
the Board of Directors has proposed that a dividend of EUR 0.74 per share be paid for the financial year 2025, which corresponds to some 90% payout of the group's comparable earnings per share. Based on the number of shares registered as at the 2nd of February 2026, the total amount of dividend would be the Board of Directors has proposed that the remaining part of the distributable funds be retained in the unrestricted equity of the company. The dividend would be paid to shareholders who, on the record date of the dividend payment, the 2nd of April 2026, in two days, are recorded in the company shareholders register held by Euroclear Finland and the dividend would be paid on the 14th of April.
The auditor has in his opinion noted that this proposal is in accordance with the Companies Act. This proposal is described in the notice of the meeting. Any requests for the floor on this proposal? There is one request. We now remember it is Mr. Virtanen, but please tell us your first name.
My Christian name is Hannu. Chair, 'cause it's been so fashionable to buy back the company's own shares, and I have been opposing to that. Has the Chairman of the Board ever considered another solution, or maybe the CEO can also respond when you think about it. Has Fortum had any such ideas?
I can help the Board by saying that they haven't had those ideas, so that it would have been on the notice of the meeting on the agenda. There's no such authorization to decide on the repurchase of the company's own shares. Perhaps the company's Chairman of the Board could respond to that. Mr. Silvennoinen, the Chairman of the Board, will respond to that question. Go ahead.
Thank you for the question. We have discussed this on several occasions and always ended up in the conclusion that the shareholders overall appreciate the compensation coming in monetary terms directly instead of shares. The appreciation of money is the reason why we are in favor of cash dividends, but we are very familiar with this theme and topic. Thank you.
the Board clearly knows its shareholders when they got applause for this response. Are there any other requests for the floor on this proposal? No.
Annual General Meeting has resolved that a dividend be distributed to the for the financial year in accordance with the the Board of Directors. we move on to item nine, resolution on the discharge from liability of the members of the Board and the President and CEO for the financial year. The members of the Board were already mentioned in the opening speech of the Chairman of the Board. In addition to this, we have had Mr. Kairisto and Rauramo acting as CEO. Any requests for the floor on this discharge from liability? No. We can state that this general meeting has decided to grant discharge to all the the Board of Directors and the CEO who acted during the financial year 2025. We are now at Item 10.
Listed companies are required to publish a remuneration report containing information about the remuneration in line with the company's remuneration policy of board members, as well as the President and CEO and any interim CEO during the previous financial year. This report will now be presented to you, the Chairman of the People and Remuneration Committee, who is also the Chairman of the Board, Mr. Silvennoinen, please.
Thank you, Chairman and shareholders. I will now present you the remuneration of Fortum senior management and also the question on the composition of the Board. The Chairman of the Shareholders' Nomination Board agreed that I comment this, and maybe she will also come to that question. First of all, remuneration. Further information can be found in the Remuneration Report 2025 on company website. I will first discuss the key elements which had an effect on the remuneration of senior management in 2025. These include the indicators and outcome of remuneration. I will first show you the outcome of the key remuneration indicators from last year and from previous years Board of Directors sets out annual indicators for performance and share-based incentives for senior management and personnel, and the targets to them.
The overall outcome of the 2025 short-term incentive plan almost reached the target level. The financial performance indicator, the Comparable operating profit reached 43%. You can see it on the bottom left of the figure. The annual fixed costs amounted to 26%. The target for safety measures reached the very good level of 80%, which you can see on the bottom right on the figure. The annual indicators also included the availability rate of the production fleet, which was unfortunately very low in 2025. The President and CEO told you about the reasons for that. While the index for customer satisfaction was well above target. As to the President, the outcome of his short-term targets in 2025 was 45% overall of the maximum.
The President's short-term incentives for last year amount to 45% of his annual fixed salary and will be paid this spring, actually in April, next month. Let us now look at the long-term incentive plan and how it turned out. The key indicator for the 2023 to 2025 incentive plan with a weighting of 70% was the relative TSR, the total shareholder return, measured against a European utilities peer group. The outcome of this target was 44%, which you can see on the bottom left of the figure. The plan also included an ESG target, which is connected to science-based emissions reduction targets and Fortum's reputation index development among key stakeholders. The outcome of the ESG indicator concerning emissions reduction was 100%, which is excellent, on the bottom right of the figure.
Concerning the development of the Reputation Index, 38% of the maximum level. The overall income for 2023 to 2025 LTI plan was 52% of the maximum level. In line with the terms of the 2022 Solidium Bridge financing facility with the Finnish state, the President and CEO Markus Rauramo will not be paid any long-term incentives earned in 2022 and 2023. Therefore, for the President and CEO, the final outcome of the 2023 to 2025 LTI plan was 34%. The plan was 52% in general. The 2023 was cut out of that. The LTI plan that ended in the end of 2025 was the last one that involved these restrictions to remuneration.
The shares earned under the plan of 2023 to 2025 were paid to the beneficiaries in February 2026. On this slide, you can see actual payments made to the President in 2025. They consisted of his fixed salary, what was paid to him in 2025. They consisted of his fixed salary, supplementary pension plan, STI and LTI incentive plans, fringe benefits, and the awards of the employee share savings plan. As you can see, in 2025, it was EUR 1.8 million, of which fixed salary was 70%. In the Board of Directors approved a change in the remuneration structure of the president to better align it with the market practices.
As a consequence of that decision from January 25 onwards, the share of the fixed monthly salary was reduced, and the share of earning potential in variable elements, i.e. STI and LTI, was increased. On this slide, you can see the remuneration paid to the Board. It consists of a fixed annual compensation and meeting allowances. The remuneration of members of the Board was EUR 968,000. Here I would like to comment on the composition, the question concerning the composition. We will hear a proposal in a while where the number the Board members, if the AGM approves that, will be increased from nine to 10. Fortum Oyj, the articles of association, set a maximum limit at 10.
My personal opinion is that the minimum of the Board in a company like Fortum is eight, rather nine than eight, because this company, its board needs three committees. If we were eight, and each of them is not only a member, but also in a committee, it would be three- three- two, and two is too small as a committee. Should there be nine or 10, it's a question of choice, but we need good people from the markets when they are available. My personal opinion is that the proposal that we are going to hear is that these two persons that are now candidates complement the skills in the Board very well.
Committee work to assist the Board is one justification that we need sufficient number of people in the Board, and the other one is skills. Already now, we have good skills and experience in the Board, but it will be even further strengthened if you adopt the candidates. The composition of skills in the Board, if we have investment proposals from the company executive, the Board needs to have sufficient experience and skills to discuss those, whether it be electricity, hydrogen or gas investments or the markets. That is a very good reason that we have a sufficient board, nine and 10. That is a question of choice. It doesn't disturb the dynamics. Here you can see the overall costs of the Board of.
It is not a significant question, be it nine or 10 for the company. This is my reflection on the question from a shareholder, and the Chair of the Nomination Board will come back to that probably. In 2025, we decided that the remuneration to members of the Board would be increased in line with the earlier decision of principle. The AGM decided to pay in shares and cash ratio of 40% of shares acquired on behalf and in the name of the Board member, and then the remaining 60% will be paid in cash. Meeting fees for meetings of the Board and committees are paid fully in cash. Here you can see that the fixed were 78% and the meeting allowance is 22% of the total.
On the other leadership team members' remuneration in 2025, just like the president, the leadership team members' remuneration consists of a fixed basic salary, supplementary pension plan, benefits in kind, and the awards, and their remuneration in 2025 was about EUR 4.3 million, fixed salaries 74%. Remuneration of personnel. It is basic salary, performance incentives, and competitive employee benefits. Our Finnish employees participate in the Fortum Personnel Fund. Until the end of 2025, participation in that fund was possible only to those employed in Finland who did not participate in the long-term incentive scheme.
At the beginning of this year, the structure of the personnel fund was reformed so that profit bonuses will no longer be paid into the Personnel Fund, but investment into the fund will instead be made through the incentives earned in short-term incentive plans. As part of this reform, participation in the Personnel Fund has been extended to include all employees of affiliated companies, including those who participate in LTI plans. They may now also transfer their short-term incentive awards to the fund. Here you can see the figures from 2025, STI, EUR 27 million, LTI, EUR 1 million. The Personnel Fund participation rate 36%, and the Finnish fund, EUR 3.4 million were paid this year. Thank you.
Thank you for this presentation. This has been published on the company website and is available to the shareholders. Any need for discussion or can we decide on this matter? There seems to be a request for the floor. Jukka Sulanto, the floor is yours.
Chairman, 283 was my voting slip. Are there any limits regarding transfers of these option programs?
The next request for the floor was by Hannu Virtanen.
Thank you, Chair. I also want to ask whether the Board remuneration is paid only in cash. Could this be paid in shares because there is a employee share investment program? This would maybe commit employees more, to the company, and this could be emphasized to the whole, staff. Maybe if there would be shares available, they would be more committed to the company.
Thank you. Two questions. Maybe Mr. Silvennoinen, as the Chairman of this committee and Chairman of the Board could answer.
Well, for senior management, there is an accumulation obligation, which means that the share awards are being accumulated until it represents the fixed salary of a year. Actually, the Board gets their fixed remuneration in shares, not in cash. The fixed remuneration annually is paid in shares, but then there are about 40%, because the rest is paid in taxes and the meeting allowances are paid in cash. Each board member owns shares, holds shares of the company. Thank you. There seem to be no other requests for the floor or questions, so I Annual General Meeting has resolved to support the remuneration policy by an advisory decision. Thank you.
We move over to Item 11, Resolution on the Remuneration of the the Board of Directors. i propose that the Shareholders' Nomination Board Chair, representing the Ownership Steering Department at the Prime Minister's Office, Director General Maija Strandberg, she will present Items 11, 12, and 13, so the remuneration, the number of board members, as well as the the Board of Directors. after that, we will look at each of these items one at a time. Maija Strandberg.
Thank you, Chairman, distinguished shareholders. I am the Chairman of the Shareholders' Nomination Board. I work as the Director General of the Ownership Steering Department at the Prime Minister's Office. On behalf of the Nomination Board, I will now present our Annual General Meeting. the purpose and task of the Shareholders' Nomination Board of Fortum Corporation is to prepare and present the general meeting proposals on the number the Board members, the the Board of Directors. the nomination Board also looks for successor candidates for the Board of Directors. according to its charter, there are three members in the Nomination Board. The three biggest shareholders have nomination right, and the biggest shareholders are determined according to the first business day situation of the 1st of June.
Fortum Chairman of the Board serves as an expert on this board without right to vote. According to the ownership on the 2nd of June 2025, I was nominated as the representative of the State of Finland. The President and CEO of Ilmarinen Mutual Pension Insurance, Mikko Mursula. Before Mikko Mursula, actually the previous CEO, Jouko Pölönen, for a moment, and then the CEO of Varma Mutual Pension Insurance Company, Risto Murto, was nominated on this board. The board of directors, Mikael Silvennoinen, served as an expert to the nomination board without voting right. The nomination board elected in June 2025 has convened so far on seven occasions, and the participation rate has been 100%, and we have had informal discussions in between the meetings.
The Nomination Board gave its proposal Annual General Meeting at the end of last year on the 17th of December. The Nomination Board evaluates Fortum Board and its competencies as a whole, and we strive to ensure that taking account of the company's situation and strategy, the Board has sufficiently diverse expertise. We look at diversity as a broader matter than just gender balance and try to preempt possible changes in the the Board of Directors. from a Fortum Board member, we expect the ability to commit to the company and time use the task requires. We have estimated that the proposed board has now a diverse know-how and experience related to international business and development required by the Fortum strategy as well as a strong experience of the sector and technology know-how from technology sectors essential to Fortum.
Requirements set forth by the legislation and the Finnish Corporate Governance Code for listed companies regarding diversity have also guided the work of the nomination board. Next, I will look at the remuneration proposal. The company has a remuneration policy, and the the Board of Directors is an essential part of this. According to the Annual General Meeting resolves annually on the remuneration of the members of the Board based on the proposal Annual General Meeting by the nomination board. We state that the proposal of the shareholders' nomination board is based on a proposal that was published as a stock exchange release on the 29th of January 2021, in accordance with which the aim has to be to bring the the Board of Directors to market level by 2026.
We see that the goals of the program to increase the Board remuneration have been achieved in accordance with the plan. Benchmark data prepared by an external advisor has been used in defining the market level. The aim is to include the most relevant benchmark group as possible, consisting of companies listed on the Helsinki Stock Exchange but also conducting their business globally. The remuneration proposal is described in the presentation on the screen behind me and is available in the meeting material. As I already heard by the the Board of Directors, also this year, the shareholders' nomination board proposes that the annual fee for the Board work the Board members be paid in company shares so that 40% of the amount of the annual fee is payable in company shares and the remainder in cash.
The company will pay the costs and the transfer tax related to the purchase of company shares. Meeting fees are proposed to be paid entirely in cash. Next, I present the proposal on the number of members of the Board. The shareholders' nomination board the Board of Directors consist of 10 members, the chair and the deputy chair included. We propose the following persons to be the Board of Directors. re-elected Ralf Christian, Jonas Gustavsson, Stefanie Kesting, Marita Niemelä, Mikael Silvennoinen, Johan Söderström, and Vesa-Pekka Takala. As new members, we propose Mika Anttonen and Emmanuelle Verger-Chabot. I will now present the new members briefly. First, Mika Anttonen. Mika Anttonen is an energy technology engineer and the the Board of Directors of a Finnish energy company, St1. Before St1, he has worked at Neste as Director of Trading Operations. Thank you, Mika.
The second new member, Emmanuelle Verger-Chabot. Emmanuelle Verger-Chabot is French, and she works as Group Executive Director of Hydro Activities in the French energy company EDF. She has a 25-year work experience in many nuclear power and finance-related managerial duties at EDF. Thank you. The nomination board proposes as Chairman of the Board, Mikael Silvennoinen, and Deputy Chair, Jonas Gustavsson. From 2020, Board Member Teppo Paavola is no longer available for re-election. At this point, on behalf of the nomination board and my own behalf, I would like to thank Teppo Paavola for his very valuable work for the benefit of the company in the past years as member of the Board.
The shareholders remember that we had quite a the Board of Directors in 2023, and Teppo, you are one of the only ones who has lived through the whole life cycle Board of Directors. thank you for that. I'd then like to state that the task of the Shareholders' Nomination Board is to ensure that the proposed board as a whole possesses extensive competencies and experience relevant for the company in addition to ensuring the qualifications of the individual board member candidates. We're also responsible for ensuring the Board diversity principle is put and appropriately taken into account all the requirements related to listed companies. On the subject of the election procedure the Board members, the Shareholders' Nomination Board suggests that the shareholders take a stand on the Board composition and nominations as a whole.
Annual General Meeting the board members according to the nomination board proposal, the new gender balance would be 40% women and 60% men which corresponds to the target set in the act on limited liability companies stating that at least 40% the Board members shall represent the under-represented gender by June 2026. I want to state that no female candidate is a quota female, but they have been elected on the basis of their know-how, competence, and experience. In closing, I state that all of the nomination board proposals were made unanimously. Thank you, Chair.
Thank you, I think there was a reply to Werner Janhonen's question about the composition, the composition of 10. Thank you for this proposition. We can now go through the proposals one by one. First of all, the remuneration of the the Board of Directors, i'm not going to repeat what that proposal was. It was in the notice, and it has been presented to, there was one request for the floor microphone. It will be brought to you on the remuneration of the Board. Five, four, three.
Lasse Reunanen is my name. Yes, there's a proposal for the chair of the Board, a EUR 20,000 increase. It's about 11%, compared with last year. But the others, about 10%, increase. You pay less, but is this more than 11% increase for the Chairman of the Board? The remuneration in Finland of 2 million workforce, there are rarely increases more than 5% for salaried employees. This has been planned in advance, but an annual 11% increase, I wouldn't recommend it. Now that the company's biggest large shareholders have accepted that, we need to comply with it. I just want to remind you that the Chairman of the Board who gets an increase of more than 10% and the Board is a responsible body now that there are negotiations with Russia.
Of course there is will be a peace one day between Ukraine and Russia, but it is not only the state owner who, when we look at all the shareholders because there have been seizures to Ukraine. We shouldn't do like with Uniper that we sold Uniper to Germany at a discount. You need to look at the whole company. This was my comment. Thank you.
Are there any other requests for the floor about remuneration to the members of the Board? No, I don't see that the AGM has adopted the proposal of the Shareholders' Nomination Board. We go on to point 12, deciding on the number of the Board members.
We've been told that the articles of association say that it consists of the chairman, deputy chairman and no less than three and no more than eight members, so maximum 10 members which is now being proposed. Any requests? We have touched upon this once or twice, so no further requests. The AGM decided to endorse the proposal of the nomination board of 10 the Board of Directors. on we go to point 13. We now need to elect these 10 members, chair, deputy chair, and eight members. The articles of association, article 6 says the term of office of the members and the chair plus deputy chair ends at the closure of the first AGM following their election, so in about a year's time.
We just heard from the chair of the nomination board chair, members, chair and a deputy chair. You see the proposal on the screen. All the members, all the candidates have agreed to be elected. This is the proposal. Are there any comments or requests for the floor? No. The AGM decided that for the term ending at the closure of the next AGM, the chair, the deputy chair, and the the Board of Directors are elected as proposed by the nomination board. We are now in point 14, remuneration of the auditor and sustainability reporting assurance provider. Fortum practice is that they be paid according to an invoice adopted by the company.
This information is on the proposal of the Board. On the recommendation of the audit and the Board of Directors has proposed that the fees of the auditor and the sustainability reporting assurance provider for the financial year 2027 be paid pursuant to the invoices approved by the company. Can such a proposal be adopted?
I can't see any requests for the floor, and therefore it is noted that the general meeting has resolved in accordance with the the Board of Directors that the fees of the auditor and the sustainability reporting assurance provider be paid pursuant to the invoices approved by the company. We move on to Item 15, election of the auditor and the sustainability reporting assurance provider for the financial year 2027. At this item we should state that according to Section 11 of the Articles of Association, the company has one regular auditor who must be an audit firm as intended in the Auditing Act, and the term of office of the auditor shall be one financial year.
The general meeting has been proposed that an assurance provider for the sustainability reporting be elected in a similar manner, and the elected assurance provider has to be a sustainability reporting auditor or a sustainability reporting auditing firm, as referred to in the Auditing Act. We are going to have a new auditor, so in the board of directors, the Annual General Meeting of 2025 selected Deloitte Oy as its principal auditor and sustainability reporting assurance provider, as has been stated here, with Jukka Vattulainen as the principal auditor. For the financial year 2026, the audit firm KPMG Oy Ab was elected, with Kirsi Jantunen, authorized public accountant and assurance assurer of sustainability reporting as its principal the Board of Directors has proposed and will propose the election of an auditor and sustainability reporting assurance provider.
That the general meeting elects an auditor and a sustainability reporting assurance provider for the financial year following the election date. On the recommendation of the audit and the Board of Directors has proposed to the general meeting that KPMG Oy Ab be reelected as the company's auditor and the sustainability reporting assurance provider for the financial year 2027. KPMG has notified that Kirsi Jantunen would be the principal auditor and principal authorized sustainability auditor. In addition, it's been proposed to the general meeting that the meeting requests the auditor to give a statement on the granting of discharge from liability to the the Board of Directors, the President and CEO, and the possible deputy President and the Board of Directors' proposal for the distribution of funds and on the adoption of the financial statements.
The Board's proposal is available in full in the meeting material. I note that the proposed principal auditor and sustainability reporting auditor have given their consent to the position and that Kirsi Jantunen is also present at the general meeting. This is the proposal for Item 15. Any requests for the floor on this item relating to the election of the auditor for the financial year 2027? There are no requests for the floor. It is noted that the general meeting has resolved on the auditor and sustainability reporting assurance provider in accordance with the proposal of the Board. We then move on after these routine items to two proposals by the Board to the general meeting, and the first one is at Item 16, amendment of certain articles of the company's articles of association.
the Board of Directors has proposed, as is indicated in the notice of the meeting, that Section 11 of the Articles of Association be changed so that the company would also have, in addition to the auditor, an assurance provider for the sustainability reporting with the term of office of one financial period. In line with Annual General Meeting would also always have the assurance report presented for the sustainability reporting, and also that the fees for the sustainability reporting assurance provider would be decided on. This way, the articles of association would be made to comply with the current legislation. Are there any requests for the floor on this item? The proposal was included in the notice of the meeting and is now also reflected on the screen. No requests.
We can Annual General Meeting has resolved to amend the articles of association in the Board of Directors' proposal. we are now at the Board of Directors to decide the Board of Directors has proposed to this general the Board of Directors be authorized to decide on contribution in the total maximum amount of EUR 1.5 million to Aalto University for the purpose of establishment of a full-time endowed professorship in the energy strategy area. The contribution to Aalto University to be made pursuant to a decision under the authorization would be paid in several installments tentatively during the years 2026 through 2030.
The second part of this proposal the Board of Directors is asking it to be authorized to decide on contributions in the total maximum amount of EUR 500,000 for charitable or similar purposes, and to decide on the recipient's purposes and other terms of the contributions. In addition, as the the Board of Directors is asking that the general meeting authorize it to decide on contributions in a maximum amount of EUR 1 million for incidental emergency relief or similar purposes as needed, and to decide on the recipient's purposes and other terms of these contributions. A three-part authorization, in total a EUR 3 million authorization, broken down to various financial years. Any requests for the floor on this? There is one here in the front. Shareholder Jukka Sulanto, you will receive the microphone. Go ahead.
Thank you, Chairman. This contributions procedure, does it contain any influence to Fortum on the election of this professorship? Thank you.
I think this is the sphere of academic freedom. Does the CEO, Markus Rauramo, have any comments on this?
That's true. I already have a microphone. This is so handy. Yes, it is really in the sphere of academic freedom. The Aalto University will make the decision on the election of that professor, and we have no say in how that is even explored, but this is a very important matter to us. During this general meeting, there were several questions on how the future energy system will work, and it will be potentially disruptive and will require a lot of storage capacity.
If we think about the pumped storage power, and the industrial flexibility being connected as part of the system, we also need the use of digitalization and AI consumer consumption changes in that, changes in the system. This is why we are so interested in this. The whole House of Energy concept in the Aalto University, to which these professorships are linked, is a matter where we will be taking active participation in.
There's another question from Hannu Virtanen.
Thank you, Chair. I fully support this, donation or contribution to Aalto University, and there are always good charitable purposes in question, but sometimes it goes to the, Extinction Rebellion or something like that. Well, have you got any, further details about the EUR 3 million? I would feel more secure about this decision. Thank you.
I think the CEO has more examples.
That's right. We have three ideas here. The first one would be this professorship at Aalto University. The second one is a more traditional donation authorization regarding youth work, any young people in distress and such things. We make careful selection as to what we will propose this authorization for, and the Board will obviously approve of that. The EUR 1 million came along when the war in Ukraine started, and that was related to concrete situations we were faced with where equipment that we no longer had use for, transformers, other things that had a book value and that exceeded the EUR 500,000 donation authorization. In previous years, we have been donating these kinds of equipment to Ukraine.
Another example was when there was a big earthquake in Turkey, and there was aid needed there. So for these kinds of purposes, where we can mobilize things that we have available to us.
Thank you for that response. There's another request for the floor. I believe Mr. Werner Janhonen.
What often happens with these donations is that they go to places where there already are a lot of donations going to, but others could use them as well. We could, for example, make a donation to higher sciences, say to theology, for a change.
I'm sure the Board will think of other beneficiaries for this. There seem to be no further requests for the floor, and therefore, the general meeting has resolved to authorize the Board to decide on contributions. This takes us to the last item on this agenda, 18, closing of the meeting. I would like to thank you for good preparations for this meeting, for good presentations, proposals, questions to this meeting, and for the good responses given to these questions. I should note that all the items to be discussed have been covered, and minutes of this meeting will be drawn up that will be available for inspection by the shareholders on the company website at the latest in two weeks' time. I thank all the participants, wish you a very nice spring, and this meeting is closed at 4:53 P.M.