Fortum Oyj (FORTUM) Earnings Call Transcript & Summary

[Interpreted] Ladies and gentlemen, a couple of words on safety. In the case of fire or other safety risks, please evacuate this room by using the closest safe emergency exit. The locations are marked on the map. The meeting point is in the parking area, turning left from the main entrance and again, left from the corner of the building. Staff will help and assist you in evacuation. There is a first aid counter in the corridor to the right from the meeting room with staff present throughout the whole meeting.

[Interpreted] Dear shareholders, my name is Mikael Silvennoinen, and from last spring, I have acted as the Chairman of the Board of Directors and I in that position open this meeting. You are warmly welcome to Fortum Annual General Meeting. Before moving on, in the meeting. I'd like to present the renewed Fortum Board and Fortum Board operations. The past year 2023 has been a year of stabilization for Fortum. The strategy published in March 2023 was consistently put into action, which could be seen as a good development in core business performance. A disciplined financial management enabled a stronger financial position, reducing debt and achieving a healthier balance sheet even earlier than expected. The CEO will dwell more deeply in these matters later on in his review. Before that, the company variance unprecedented turbulence. Russian war of aggression led to many events also concerning Uniper and finally, the loss of our business operations in Russia, we lost this in administrative terms, not in legal terms. Of course, this is to be condemned the actions by the Russian authorities and the loss of business is regrettable, but it's in no way endangers the implementation of the company's new strategy. Although Fortum didn't come out completely undamaged from these turbulent times. The company leadership team navigated together Fortum toward calmer waters, and we can now concentrate our business development and customer work. I would like to present briefly the Fortum Board, which was significantly renewed last spring. I thought that it's good to present in the beginning of the meeting, the Board of Directors. First of all, when we look at the discharge of liability for the Board of Directors it's very relevant to remind everyone who has sat on the Board of Directors. And the second thing is that except for one person, this same team will be proposed to be reelected. So it's good to remind ourselves about what the team has been for the past year. I'd like to present everyone. I start with Essimari Kairisto and present myself as last. And once I call your name, please stand up and face the audience so that the shareholders can see who you are. First of all, Essimari Kairisto has acted from 2018 on the Board of Directors. Her main work at the moment is an independent consultant, but she has a very varied career, from many international businesses, German especially. And she has operated as the Chairman of the Financial and Risk committee, and she is also the Deputy Chair of the Board of Directors. Ralf Christian, Ralf has operated from 2022 on the Board of Directors, he has a long career in Siemens and General Electric leadership positions, and he has a deep knowledge on the energy market sector. And last spring, we set up a new committee on the board Technology and Investment Committee, and Ralf has operated as the Chairman of this committee. Thank you, Ralf. Next, we have Luisa Delgado, Luisa was elected in spring 2021 on the Board of Directors. She is a Board professional currently and has a broad experience globally on brand and consumer businesses, and she has significant knowledge on HR and leadership positions. Luisa has operated on the Board of Directors, Nomination and Remuneration Committee member. Thank you, Luisa. Next, we have Jonas Gustavsson. He was nominated on the Board a year ago, last spring. Jonas is at AFRY, he is the CEO of AFRY and he has a long career from Sandvik, a group, which operates in Sweden. And he has, in addition, to being the member of Board of Directors. He's also a member of the Audit and Risk Committee. Thank you, Jonas. Next Marita Niemelä, she was also elected last spring on the Board of Directors. Marita currently operates as Rejlers Finland, Sustainable Energy Solutions, Director. Marita has a very long technology background on the power sector. Before this task she worked in Australia for several years, and she has worked on the Technology and Innovation -- Investment Committee of the Board. Next Teppo Paavola. Teppo has operated from 2020 on the Board of Directors. He is leaving Adecco Group, the digital management leadership role. He will operate as an independent consultant from then on, and Teppo has been on the Remuneration and Nomination Committee of the Board. Next, we have Maija Strandberg. Maya also was elected last spring on the Board of Directors. Her main work is now at the Prime Minister's office, the government ownership and steering department and this before this spring, she was on the remuneration and Nomination Board as well as the Audit and Risk Evaluation Committee. Thank you, Maija. Then we have Johan Söderström. Unfortunately, he is ill currently with fever. He's in -- at home in Sweden, and he's unable to attend, and he wasn't able to attend to the Board meeting for the same reason. Johan was elected last spring on the Board of Directors. He is the EMEA Regional Manager for Hitachi. So he knows the power sector very well. And last term, he was a member of the Investment Technology Committee. Then we have Vesa-Pekka Takala. Who was also elected last spring on the Board of Directors. He is the CFO of Metsä Group. So he knows the process industry and big investments, how to handle these processes very efficiently, Vesa-Pekka has operated on the Board of Directors as a member of the Audit and Risk Committee as well as the Technology and Innovation Committee. Thank you, Vesa-Pekka. And I also joined the Board of Directors last spring. I have an industrial and financial background and -- the Remuneration Board and as a member of the Technology and Innovation Committee. So with this team, the Board of Directors has operated during the past 12 months. Internally, Fortum's emphasis lie on renewal and development. The company introduced a new business model. And due to this the structure of the organization was changed to correspond to the new strategy and its implementation. Also, the Board renewed its mode of operation to correspond to the new business structure and to be able to efficiently support the company strategy implementation. During 2023, the Board has looked into the group businesses and future potential, for example, related to nuclear power, hydropower, renewable energy sources, electricity sales to customers and also different opportunities offered by hydrogen. The Board visited last year hydropower plants in Imatra and in Sweden, the Olkiluoto nuclear plant and Fortum's customer service center as well as met with customers and investors as individual members. The Board convened as a complete Board 16 times during the year and the participation rate was 89%. So 6 out of 10 were new Board members, and there are always timetables to reconcile. So that's why I think that this 89% reflects this. I -- as a Board of Chair, I wanted to be available to the operative leadership team on a very low threshold also outside the Board and committee meetings. My aim is to ensure a very straightforward and efficient cooperation between leadership and the Board. Cooperation between leadership and the Board has started off well, I think. And in addition, I feel that there is a good and functioning dialogue with the state owner. As it was said last March 2023, the Board renewed significantly with 6 new members. And the next slide, if you can see that, you can see the main emphasis of the Board work. One was, of course, specifying the new Board getting to know the new business, the new leadership team as well as integrating amongst ourselves. We also looked at the business strategy and the structure because last March, there were guidelines on the new strategy of the group. And on the board work, we promoted this and the newest guidelines were published in the beginning of this year. An important thing last year was stabilizing the situation in the company and when the business structure strongly changed, also Board operation and to correspond this new business structure and model was very important. In addition to this, the Board also sacrificed a lot of time on preparing work on the risk and Board committee as well as looking at the risk appetite of the company. That was very important last year. Also sustainability, the sustainable reporting question was on our agenda on many occasions. And one of the biggest things was the requirements of the Sustainability Reporting Directive (sic) [ Corporate Sustainability Reporting Directive ], CSRD and issues related to regulatory environment. This means that in the financial on annual accounts, actually, the nonfinancial reporting will have as big a share as the financial numbers, and it takes a lot of time, both from the technology and innovation as well as the audit committees working time. Especially in the beginning of the year, the Board followed closely the effects of the Russian war of aggression against Ukraine on the energy crisis, which led to the loss of control over Russian operations last spring. Related to this, to be able to monitor this efficiently, the Board set up a temporary committee to follow up and monitor the situation in Russia. And the CEO will look at this in his review as well what was done last year. The Russia committee as an internal committee of the Board of Directors continues operations. With all these activities, we have tried to ensure continuity and support the company leadership in stabilizing the company. A couple of words on the Board committees. The next slide, please. The Board committees are very important for board work. You can see that the Board committees, when you sum them up, convened on 30 occasions altogether in 2023. And when the Board meets 60 times, we can say that in one form or the other Board held 46 meetings altogether. And these committees prepare board work. And this slide shows the different task areas on, for example, Audit and Risk Committee, they looked at the risk appetite and they convened on 10 occasions, and also ensuring that the company financial reporting is correct. Nomination and Remuneration Committee they convened on 8 occasions during the past year. And their task was developing the long and short-term remuneration and incentive programs. And getting to know the organization's talent. The new Technology and Investment Committee convened last year on 4 occasions, and they had actually meetings on the road and their task is to ensure that Fortum is well positioned to the future technologies and ready for investments as well in these new technologies. This committee also discusses customer and partnership solutions, especially for the major customers of Fortum. And then as I said, we set up the temporary committee, the Russia Committee, which convened on 8 occasions last year. And on this slide, you can see the planned priorities of board work this year. Despite the global economy showing only slight rays of light and the investment environment is still very unstable. After the measures put in place in 2023, Fortum is in excellent shape. The company has implemented the new strategy consistently and created a basis for success for the coming years. A good result, strong balance sheet and excellent liquidity led to the company proposing the highest-ever dividend to the shareholders. And on this theme, you will hear more later on during the meeting. We have created a good basis for this year. And you can see the priorities of this year, the Board concentrates on supporting the implementation of the reformed business strategy, promoting clean transition investment promoting this in Finland and in the Nordic countries, it is one central element and the core of our agenda on the Board. And it's also important to identify the longer-term growth opportunities for the company and investments related to those. At this point, I'd like to thank the shareholders for your trust during the past year, a warm thanks to all the Board members, my colleagues with whom we have been working throughout the year, and I'd like to thank the leadership team, the CEO for a very good cooperation during the past year 2023. Together, we have promoted the renewal of Fortum, I think, significantly in a magnificent way. So this is a good way forward. With these words, I declare this Annual General Meeting officially open. We will now move on, which is moving on to agenda Item 2, calling the meeting to order. Chairing an Annual General Meeting is a very demanding task, you have to know -- the limited liabilities companies act very well. You have to know the company very well. And the Chairman must be very well prepared to these tasks. So therefore, it requires company-specific know-how. And all this know-how also the preparation is very well combined in the personality of Mikko Heinonen who has chaired very successfully these meetings previously. Therefore, I propose that we call upon Mikko Heinonen to act as Chair of the General Meeting. If there are any other proposals, please take the floor or use your voice. There was support, since there are no other proposals, I conclude that Mikko Heinonen should act as Chair, and I ask him to take a seat at the front desk.

[Interpreted] Thank you. The Chairman of the Board and the shareholders for your trust and confidence, and I thank for good number of presentation. And I'd like to welcome on my behalf, all the participants here present and following the webcast to this Annual General Meeting. I said that according to the Fortum organizational document attached to the notice of the meeting Deputy General Counsel, Henrik Hinders, will act as the Secretary of the meeting. Please take your seat here beside me. Before moving on to the agenda items, I would like to explain some common meeting practicalities and the organizational matters under Items 1 to 5. They have been explained in more detail in the Fortum organizational document which has been distributed as part of the general meeting materials to the participants. So this actually shortens the monologue in the beginnings of these meetings. I'm not going to go in detail through these items, but the shareholders do have the right to take the floor also in Items 1 to 5 containing the organizational document, and the organizational document will be attached to the minutes of the meeting. Please note that regarding the potential interventions, please ask for the floor on each item. And when you ask for the floor, please state the name or the shareholder you represent as well as the number of the voting slip. I ask the speakers to keep to the item that is up for discussion during the intervention. And please ask for the floor from the meeting assistance located in the different parts of the room. The participants have received the annual accounts and the agenda of the meeting according to which we shall proceed and which also includes the Board proposals. It will be interpreted into English, and should you need translation, the headphones are available around the entrance to the meeting hall. We move on to Item 3. I propose that according to the organizational document, we will elect two persons to scrutinize the minutes and then two people to supervise the counting of votes. According to the organizational document, there was a proposal of Pekka Lankinen and Jukka Ylipesola as persons to scrutinize the minutes and people to supervise accounting of votes, Robert Gordin and Teemu Taivalantti. Pekka Lankinen and Jukka Ylipesola, are you present? And you give your consent to this task, yes? Then Gordin and Taivalantti both are here on the left of the meeting room, and they will accept the task. Any other proposals for these duties. There are no requests for the floor. Therefore, we state that Pekka Lankinen and Jukka Ylipesola have been elected to scrutinize the minutes and Robert Gordin and Teemu Taivalantti to supervise counting of votes. We are now proceeding to Item 4, recording the legality of the meeting. Here we can state that the notice of the meeting has been published on the 7th of February. In the stock exchange release and on the company website. The company has also published a brief advertisement on the convocation of the general meeting in the Finnish newspaper, Helsingin Sanomat on the 8th of February 2024. The advanced registration according to the notice was at the latest last Wednesday, 20th of March by 10:00, and also, the nominee registered shareholders had to be notified to the temporary shareholders released by the same time at the latest. According to my understanding, the general meeting has been convened in accordance with the provisions of the Articles of Association and the Finnish Companies Act and is, thus, legally convened, any comments on the convocation procedure or the legality of the meeting. There are no request for the floor. I state that the general meeting has been convened in accordance with the provisions of the Articles of Association and the Finnish Companies Act and is thus legally convened and it is quorate. We are now on Item 5, recording the attendance at the meeting and the adoption of the list of votes. A list of all shareholders represented at the meeting will be prepared, including the number of votes and shares at the beginning of the meeting, they were represented altogether 2,029 shareholders either through advanced vote or personally at the venue or represented by a proxy or authorized representative. At the beginning of the meeting, there were represented altogether, 663,748,983 votes and shares corresponding to altogether 74% of all votes and shares. Let it be stated that according to the advanced votes, a majority required by the Companies Act is in favor of the proposals that have been made to the Annual General Meeting. A list of votes is appended to the meeting and is available for scrutiny at the Chairman's desk. And if there is a vote, we will update the list of votes at each Item. And a summary of the division of advanced votes is appended to the meeting minutes. Let it be stated that with the exception of Johan Söderström, all the Board members, as we heard just a moment ago, the company's CEO, CFO and the auditor with main responsibility are all present at the meeting today. There are also other members of the Fortum leadership team and technical staff as well as students of law. If there are no comments, we will adopt the list of votes and shares and it corresponds to the situation in the meeting -- of the meeting. We will move on now to Item 6, which is more important. It is the first substantial issue, the presentation of the 2022 (sic) [ 2023 ] financial statements, the consolidated financial statements, the operating and financial review as -- and we have the President and CEO, Markus Rauramo, who will now present the financial year 2022 (sic) [ 2023 ] of Fortum Group. And I request now that the shareholders who want to take the floor, they will do this -- after this presentation and after the auditor's presentation. Now CEO, Markus Rauramo. The floor is yours.

[Interpreted] Thank you, Chairman. Good afternoon. Ladies and gentlemen, I would like to warmly welcome you to Fortum's Annual General Meeting. I can confirm what the Chair just said of good cooperation. Cooperation has been flawless, flexible. The Chairman of the Board is always available for us, and he's very interested in what the company does and is so the corporation is very well founded. I start by telling few words about Fortum today before briefly discussing what happened in 2023, how our performance developed and what our strategy has been and how it has been executed. Today [Audio Gap] 98% of the energy we generate is clean, which is reflected in our earnings and the distribution of our production. We are the second cleanest power generator in Europe the specific emissions of our power are only 16 gram of CO2 per kilowatt hour. [Audio Gap] Forsberg is our General Counsel. She is now in a training for defense. And Bernhard Gunther, who used to be our CFO, who is now our Chief Transformation Officer. Let me now move on to discussing the important events and the performance of Fortum in 2023. Last year was largely about stabilizing our business. Despite the volatile market environment, we strengthened our financial position and financial performance was good. Our price hedging gives stability against extremely volatile market prices of power, and we have developed our exposure management with a new risk management framework. Our balance sheet is strong, and our leverage ratio is very low. In May, we returned to the relevant markets, which normalized our financial structure and balanced the majority profile of our debt. One of the major events last year were the changes in our Russia business. Last year, we closed the books on our Russian operations for good. The Russian authorities unlawfully seized our assets due to which we fully impaired or rolled them down. The Russia segment was deconsolidated in the second quarter of 2023. The new management, which was appointed by the Russian state has changed the company name from PAO Fortum to Forward Energo. Since the Russian measures are a blatant violation against international investment protection treaties and [Technical Difficulty] Fortum of its shareholder rights. We have initiated arbitration proceedings against Russia to protect our final position and the interests of our shareholders. We are demanding damages for the unlawful seizure of our assets. Fortum is seeking compensation at the value of its shares in PAO Fortum and its investments in Russia, amounting to several billion euros. Our plants functioned very well last year. We commissioned the Olkiluoto 3 plant. Its commercial power generation began in May. As a consequence of the good availability of our generation plants, the higher power generation volumes and the smaller share of condensing power generation, the specific emissions of our power generation dropped to 16-gram per kilowatt hour from 25 grams kilowatt hour the year before. After the exit from Uniper 1 year ago, we published a new strategy, a new operating model and a new business structure altogether with a new leadership team and a completely new organization. I will come back to them when discussing the execution of our strategy. Since our financial foundation is solid, and the earnings of the financial year, so good, the Board of Directors is proposing to the AGM to distribute a dividend of EUR 1.15 per share. Despite an excessively busy year in a continuously volatile market environment, we succeeded well. And a big thank you goes naturally to our engaged personnel who has made this possible. I shall next address the comparable key figures of the group's continuing operations for the past year. The comparable operating profit of Q4 didn't reach the level of previous years, but was offset by the very strong performance of Q1. Therefore, the whole year's performance decreased only slightly from the previous year. The comparable earnings per share was lower than in Q4 -- was lower in Q4, but the whole year, we exceeded the result of 2022. The operative cash flow reached the good level of the previous year. And lastly, the balance sheet and most importantly, their leverage. The balance sheet continued to strengthen and the ratio of financial net debt to comparable EBITDA was 0.5x. The low leverage level provides a good starting point for Fortum's future development. And I welcome the latest news from our rating agency -- credit rating agencies in the past week. First, Fitch Ratings affirmed Fortum's long-term rating of BBB with stable outlook. And today, this morning, another one, Standard & Poor's ratings affirmed that they increase Fortum's rating from BBB to BBB+ with stable outlook. These are a signal to us that our work and our efforts in the financial performance and stabilizing that and the execution of strategy are now bearing fruit. I'm also very pleased with the performance of our Generation segment. Its comparable operating profit was at an all-time high. Let us now look more closely at our financial performance. The comparable EBITDA declined slightly from the previous year, but it was still at a very good level, EUR 1.9 billion. The comparable operating profit also came slightly down being EUR 1.5 billion whereas the comparable net profit improved to EUR 1.15 billion. The comparable earnings per share of 2023 was EUR 1.28, increase from the previous year. And it is our dividend policy to pay between 60% and 90% of the comparable earnings per share. And this year's dividend proposal corresponds to 9% of the earnings per share figure. Looking at cash flow. The net cash from operating activities for the year was EUR 1.71 billion, which is well in line with levels of preceding year, although the comparable EBITDA was EUR 122 million smaller. The main underlying reason was the positive change in working capital. The total assets at the year-end were EUR 19 million. The change from year-end was caused by, among other things, the deconsolidation -- consolidation of the Russian segment. Our financial position is very solid, and our balance sheet is very strong. Our gross debt is EUR 5.8 billion, but at the same time, our liquidity position is very strong. At year-end, we had sufficient liquidity reserves, EUR 7.5 billion in all, of which EUR 4.2 billion are liquid funds and EUR 3.3 billion undrawn committed credit facilities and overdraft limits. Thanks to our liquidity position. We can continue optimizing our cash and credit limits in order to manage the future impact of excessive volatility in the markets. We aim at a sufficient and optimal liquidity while striving to minimize net financial costs. During the past year, we further developed our risk management tools and created a new risk management framework. It helps us monitor and continuously review our liquidity in different scenarios in order to ensure a sufficient liquidity that corresponds to our needs. The highly volatile prices of power and the current market sentiment make our needs greater than in the past. It is good to remember that at their peak, the margining requirements for hedging were at EUR 5 billion in the autumn of 2022. I shall next take a closer look at how we implemented our strategy over the past year. Here is the essence of our strategy launched in March 2023. We want to use our energy to build a world where people, businesses and nature thrive together. To achieve this, we need to innovate and evolve to deliver clean energy reliably and to drive industrial decarbonization. We started to implement the new strategy with determination right away. Let's take a closer look at what we achieved last year. Let's start with our priority, delivering clean energy reliably. Last year, we announced a number of projects that will improve our operations. We won our application to extend the lifetime of the Loviisa nuclear power plant until 2050. We will invest a total of around EUR 1 billion in the Loviisa plant during the extension period. We will also invest in maintenance upgrades at hydropower plants, for example, at the Untra power plant in Sweden. A major highlight of the year was the start of commercial power generation at the Olkiluoto 3 nuclear power plant unit, where Fortum owns 25%. The acquisition of Telge Energi, Sweden's 10th largest clean energy retailer, fits perfectly with our consumer business. The acquisition increased our consumer and business customer base by 150,000 customers and strengthens our position as the largest electricity retailer in the Nordic region. The construction of the 380-megawatt Pjelax wind farm in Ostrobothnia is progressing on time and on budget. Our total investment in Pjelax is over EUR 200 million, and this is the third largest wind farm in Finland. It will be commissioned in the second quarter of this year. Helen, a Finnish company is a shareholder in the project and will purchase most of the electricity generation under a long-term contract. During the winter months of last year, Fortum's last coal-fired power plant in Finland, Meri-Pori operated commercially to support security of supply in the Nordic electricity market. As of the beginning of next month, the plant will under an agreement with the National Emergency Supply Agency, being put into security of supply operation for crisis and disruption situations until the end of 2026. Already 98% of our electricity production was carbon dioxide-free. We will continue our efforts in those areas that are not yet decarbonized. One example is the electrification of district heating systems and the move away from combustion-based generation technologies. Last year, we decided to invest EUR 225 million in the Espoo Clean Heat program to make use of the waste heat from Microsoft's future data centers in Espoo and Kirkkonummi. The aim is to cover around 40% of the heating needs of the Espoo region with this carbon dioxide-free waste heat. The total investment in the Espoo Clean Heat program is around EUR 300 million. Let's now look at our next priority, promoting industrial decarbonization. In our nuclear power study, we export the potential for both small modular reactors, the SMRs, and conventional large reactors in Finland and Sweden. In the framework of the study, we have established partnerships and are now exploring opportunities for cooperation with both technology suppliers and energy customers. During the past year, we signed several cooperation agreements under the study, including with KHNP in Korea and Westinghouse Electric Company in the U.S. During the first year, we gained a very good understanding of the new nuclear suppliers. We will continue with the study this year, focusing on the viability of potential projects, identification of potential new building sites, risk mitigation measures, the preclearance process and the evaluation of potential suppliers. One of our strategic objectives is to build a strong portfolio of long-term power purchase agreements, the PPAs. We made good progress in 2023, signing a number of PPAs with industrial customers that not only support the decarbonization of the industrial sectors, but also reduce our own risks and stabilize our wholesale power generation revenues and cash flow. Finally, a few words about our renew and evolve priority, which is mainly related to the internal changes underway. Our goal is to build an effective operating model that fits Fortum's changing operating environment, the size of our organization and the basis of our operations. At the same time we are developing our culture and leadership to best support the implementation of our strategy, emphasizing close collaboration with our customers. The reorganization was completed last year and we are now introducing our new governance processes. In the summer, we also started a strategic review of our circular solutions businesses, which is expected to take about a year. As part of the ongoing transformation, we launched an efficiency program to cut fixed costs by EUR 100 million by the end of 2025. The world around us today is uncertain, unstable and unpredictable. Demand for electricity has weakened and our customers' investments have been postponed. And we do not see any growth in electricity demand in the short term. Below visibility due to uncertainty is the reason why we have provided the implementation of the strategy into 2 phases. In the near future, we will focus on our core business in order to optimize our strongest activity, electricity generation. At the same time, we will manage our business risks, in particular, the dependence of our profitability on electricity price volatility. Fortune will continue to pursue a prudent and disciplined capital allocation i.e., a balance between balance sheet, dividend and investments, which I will return to in more detail in a moment. We aim to maximize value creation through flexibility, efficiency and cash flows. This will prepare us for future growth and enable us to be ready when demand picks up. Electricity demand in the Nordic countries is expected to grow by 1/4 by 2030 and almost double by 2050. We will continue to prepare for this long-term growth driven by decarbonization through electrification in other sectors. We will seek partnerships with our own decarbonized generation and continue to grow with clean energy together with our industrial customers. In February this year, we published new strategic objectives with clear performance indicators to measure our progress and action. The targets are set in 4 key strategic areas that we want to develop to ensure optimal performance and risk management. First, we need to ensure high availability of nuclear and hydropower generation to strengthen our leadership in the Nordic region. This will also support security of supply. The availability of our power plants has historically been very good, and we have now set targets to improve it further. We aim to keep the availability of our nuclear plants above 90% and our hydroelectric plants above 95%. Secondly, our flexible hydropower resources are a clear competitive advantage that add value. We have set the so-called optimization premium for flexible generation at EUR 6 to 8 per megawatt hour compared to the historical level of EUR 1 to EUR 3 per megawatt hour. The optimization premium is 1 element of the achieved electricity price in addition to the effects of hedging and spot prices. There are a number of factors that contribute to the optimization, the most important of which are flexibility and environmental values. The third objective is the stabilization of revenue streams to reduce the electricity price risk. We hedge our electricity generation to ensure predictable and stable cash flows. Our objective is to increase the share of long-term electricity contracts in our contracts with industrial operators. We have set a target to hedge at least 20% of Nordic wholesale electricity generation on a rolling 10-year basis by 2026. Currently, we have hedged around 15% of our production for the period 2024 through 2033. The fourth performance indicator relates to our readiness to invest in longer-term growth as demand recovers. We are developing potential investment projects in onshore wind and solar power generations. Our target is to have at least 800-megawatt of capacity ready for construction by the end of 2026. Currently, we have projects in various stages of development with potential capacities well above our targets. However, they are not ready to be built and not all projects are progressing towards construction readiness. The project development situation also reflects the current market situation in the Nordic countries, where supply currently exceeds demand for electricity. Then some words about capital allocation. As I said, our priorities relate to how we use our balance sheet, how we make investments and how we distribute dividends to shareholders. We will closely monitor market developments. But at the same time, we will continue to be disciplined in our capital allocation. Our key objective is to ensure that our credit rating is at least BBB. As we have said, our leverage ratio can be up to 2 through 2.5. Currently, our balance sheet is very strong, and our leverage is closer to 0. The logic of our capital allocation is that if investment opportunities are limited and we are not making large investments, we will distribute more capital in the form of dividends to shareholders. Conversely, if and when we have profitable investment projects, we will allocate less capital to dividend yields for shareholders and more to promising projects. Given the current sluggish growth in Nordic customer demand for electricity, we do not see profitable investment opportunities in new generation capacity that meet our criteria right now. Investment is always about building profitable megawatts. However, as I said above, we are building our investment capacity to be ready to meet future demand growth. It is also important to note that our dividend policy does not aim at a stable dividend between years. Our dividend policy is to pay between 60% and 90% of comparable earnings per share. The dividend payout ratio is applied by applying the upper end of the range in situations of strong balance sheet and low investment while the lower end of the range is applied in situations of high leverage and/or significant investment. For this reason, our current priority is to pay more dividends. This is also reflected in our dividend proposal for 2023, where we would pay 90% of comparable earnings per share. We want to be at the forefront of sustainable development and see this as a clear competitive advantage. Our work is guided by more ambitious environmental objectives. We have brought forward our carbon neutrality target to 2030, and will phase out all coal-based energy production by the end of 2027. To measure our progress, we have set milestones for specific emissions by 2028. We are also committed to setting science-based emission reduction targets in line with the SBTi initiative 1.5 degrees Celsius. In addition to the above, we are committed to 3 ambitious biodiversity targets. No loss of terrestrial nature from 2030 onwards. We will reduce annual upstream impacts on terrestrial biodiversity by 50% by 2030 and when the baseline is 2021. We will continue to support local biodiversity, particularly in hydropower production, and we commit to developing a science-based methodology to assess the company's impact on water. Finally, a short summary about Fortum's position. Electricity demand in the Nordic countries is forecast to grow significantly in the long term. Enabling this growth is a cornerstone of our strategy. In implementing this strategy, we take into account the uncertainty in the operating environment. Fortum is built on 3 pillars. First, there are only 2 players in the Nordic countries that can offer a competitive, reliable, and clean energy on a terra watt hour scale. We are 1 of them. This makes us a sought-after partner for industrial players as they reduce their emissions through electrification. To maintain a strong competitive position, we need to focus on excellence, maintain high availability, efficiency and safety in our facilities. This will also ensure good profitability of electricity generation. Secondly, we want to be at the forefront of sustainable development so that we can enable the energy transition and do our part to preserve the balance of nature. We are one of the cleanest energy producers and we have ambitious climate and environmental targets. They guide us in creating sustainable shareholder value. And finally, we have a sound financial position which we are nurturing in the face of uncertainty. We are selective in our investments and selectively pursue growth projects. The profitability of our projects is a priority. To ensure value creation, we focus on balance sheet strength, investments and dividends as appropriate. I thank you, shareholders, for your confidence on my own behalf and on behalf of the Fortum Group. Thank you.

[Interpreted] Thank you, CEO, Rauramo, for a very good and detailed review and he presented the 2023 annual accounts, including the financial statements, the operating and financial review and documents, including the financial statements and the operating and financial review are being at the disposal of shareholders on the company website from the 3rd of March, and the originals of these documents can be consulted at the Secretary's desk. We next look at the auditor's report, and we have here the main responsible auditor, Jukka Vattulainen, APA, representing the audit company, Deloitte. The auditor's report is also on the Page 83 of the meeting materials. Jukka Vattulainen, the floor is yours.

[Interpreted] Thank you, Chair. Dear Fortum shareholders and all AGM participants, my name is Jukka Vattulainen, and on behalf of audit company Deloitte, I have acted as the main responsible auditor for Fortum since financial year 2020. I have not been alone auditing the company, there are several authorized public accountants and other specialists, and we also have APA, [ Janet Lewell ], who has headed together with me Fortum Group audit implementation and monitoring from 2020 on. Before reading out the standard audit report opinions, I will briefly touch upon the audit of Fortum 2023 and its main key audit matters. We have gone through the detailed audit plan for 2023, it's based on the understanding of Fortum strategy, business sector, business processes, information systems and risk assessments of the items of the annual accounts. And we have also in June 2023, looked at the audit plan in the Risk and Audit Committee meeting. And this plan has been evaluated continuously throughout the financial year. We have stated as 4 key audit matters. First of all, the discontinued operators -- as the Board of -- Chairman of the Board as well as the CEO mentioned, it's a loss of control over the Russian operations. And due to this significant impairments and it of course, affected the financial accounts. There is a EUR 3.6 billion noncash flow impairment when Russia was deconsolidated, and therefore, it has had a negative impact. The CEO also mentioned commodity derivatives, and it's significant, of course, that the commodity derivatives can have influence on the financial accounts for these derivates. The EUR 1 billion and that is EUR 1.5 billion, and this is not as significant as previous financial years -- when we have an EUR 18 billion balance sheet. Then a valuation of property, plant and equipment and goodwill, this is EUR 8 billion, a significant part of the balance sheet. It has been a key audit matter due to the assumptions used in the valuation of the balances in question and require substantial management judgment. And looking at last year's performance and the impairment tests, this hasn't been a very challenging audit matter. The last point is then the shares in nuclear waste funds and nuclear provisions, which has been looked upon according to the IFRS accounting treatment and is an obligatory requirement in IFRS accounting. The auditor has no significant notes to make on the matters during the audit. As part of the audit, which includes going through the quarterly reports, the audit of the financial year and Fortum consolidated accounts, we have been in regular contact with the local audit teams in Fortum different operating countries as well as the financial and business management as part of the monitoring of the audit implementation and the conduct of the audit. Based on the audit plan, we have regularly reported to the leadership team as well as the Board Audit and Risk Committee on the progress of audit during the 10 committee meetings of the Audit and Risk Committee as the Board Chair mentioned. We have also reported in December 2023, a summary of the annual audit to the Audit and Risk Committee. I looked at the summary as well as -- this was presented both the CEO and Audit and Risk Committee in February 2024. In addition to the annual accounts, we have also audited Fortum's governance, annual report, remuneration report and drawing up the corporate governance statement. Based on this audit work, we have given a standard report, and I will now read the opinion part of the auditor's report and state the other opinions at the end of the board. Our opinion, we have audited the Fortum accounts. In our opinion, 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 as adopted by the EU. 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. Our opinion is consistent with the additional report submitted to the Audit Committee. And there are also conclusions as other opinions. We support that the financial statements be adopted by the Annual General Meeting, the proposal by the Board of Directors regarding the use of profit shown on the balance sheet is in compliance with a Limited Liabilities Company Act. We support that the Board of Directors of the parent company and the President and CEO should be discharged from liability for the financial period audited by us. This audit report was given on the February 6, 2024, in S4 and has been signed on behalf of Deloitte and in my name. Thank you.

[Interpreted] Thank you, APA, Vattulainen. Also, the auditor's report has been now presented and has been available for shareholders on the company website and has also been distributed to the participants among the meeting materials. Next, we can move on to the questions related to Item 6. Shareholders, now you have the opportunity to present questions on the financial statements, operating and financial review to the CEO's review as well as the auditor's report, you can also ask questions in English and Swedish. And I'm sure that there are several questions. Therefore, we take a couple of questions together. The leadership team prepares to respond to these and then we take further questions in another batch. Let's begin from the center. Microphone #2, and then Microphone #3 prepares. Microphone #2 in the center of the room, the floor is yours.

[Interpreted] Voting card number 582. Thank you to the CEO, President, I would like to thank the Chairman of the Board for his intervention very good, indeed, both of you. About the arbitration and Vattulainen also mentioned that both Chairman of the Board and President and Auditor mentioned about arbitration. I am interested and many of us are interested of knowing about the procedure what is the status quo? Who is going to be arbitrating? When is the money EUR 3.6 billion to be expected to return? Could somebody tell in detail. Maybe Chairman of the meeting, Chairman of the Board, but that was my question about arbitration.

[Interpreted] Then microphone 3, and then we have answers to questions. Sector 2, first roll then following and then in the middle afterwards. But first, microphone 3.

[Interpreted] 514 is the number of my voting card. It was really interesting hearing from the sustainability agenda and strategy and the new strategies that support sustainability. One concern, though, a couple of years back in this very same room. There were proud presentations about production of reused material for consumer packaging. It was really good then. But now we are the second worse recyclers of European consumer plastic packaging. One reason being that the plans of Fortum in Riihimäki are outdated completely. And we have heard several times that the investments should be made, but in addition is that the new law about waste increased recycling requirements. There are 2 systems for producer responsibility. One of them has to send recycled plastic packaging to Sweden. My question, what is the situation now? What is the waste solution? Have you dropped it altogether? I didn't hear any words of waste solutions in your strategies that you mentioned. But of course, energy and CEO to decarbonization is important.

Thank you, [ Mr. Lihau ]. CEO, Rauramo, is coming to reply.

[Interpreted] Thank you very much for the questions, and thank you for the thanks. It's nice to know that you appreciated. About Russia, Fortum has now taken this unlawful seizure to an arbitration court. And what happens next is that parties and the arbitration panel are going to appoint a tribunal, which is going to be a third-party. There's a mechanism, if Russia is not going to appoint member in that panel, then we'll appoint others. And the proceedings will take place with the investment protection agreements that Russia has with the Netherlands and Sweden, and we believe that we have a strong case for the arbitration tribunal to rule that we are going to receive some compensation. These are typically very long procedures. They will take years to be completed. And although we believe that we have a good case, another thing is what the respondent is -- how the respondent is going to pay to us, the other party. We don't know how. That's another question altogether. But what is more important that we are taking this case on we protect our and your interests. It is good to remember that back when -- in the time when Soviet Union finished and Russia took the place of the Soviet Union, then Russia finally did pay the debts taken by the Soviet Union. So if Russia wants to come to the international capital markets, again, then the liabilities and debts need to be paid. At the same time, the Russia segment -- Russia business is -- the sale is -- the consolidation is still ongoing. We are the legal owner of that business still today. Although we cannot control our business in Russia, we are still the lawful owner and we are striving to divest or sell our assets there. The machinery is working there. As far as we know, plants are working on a solid basis. Buyers are abundant, non-Russian, non-western interested parties to buy those assets. Another question about sustainability and circular economy. Circular economy, of course, for all of us is very important. It is important to remember what is the focus of our business, what are our strengths, where are our main competencies and strengths. And starting by the circular economy and why that was in our strategic focus is that we need to think where we can grow. Where is the potential growth with sustainable way. Of course, circular economy is very interesting. We have done different projects trying to find growth, but the business of circular economy today of our EBITDA is about 3%. So 97% of EBITDA comes from elsewhere than circular economy and processing plastic is a small fragment. So most of our -- is from hazardous waste treatment, landfills and project sales. So recycling of plastic is included. But I was closely included when we constructed the Riihimäki plant for plastic recycling, plastic optical treatment to attract -- to make 7 different tractions of plastic. But it is very difficult to find customers for those fractions to pay a price to -- for us to be profitable. So processing of plastic, which is globally important for us, for our EBITDA, it is a very, very small share. So in Fortum, I can say that there is, we don't expect new openings in that sense.

[Interpreted] Thank you, CEO for these answers. Then microphones 2, 3 and 8 next. Microphone 2, please.

[Interpreted] Chairman, shareholders, 639 is my voting card. Looking at R&D, it is still very modest 0.8%. But it is good to hear that Fortum is included in the small-scale nuclear plant modular reactor project. Have you looked at a capture of power -- of course, the industry is going to use hydrogen and ammonium. There are periods where there is a lot of production, but not very much consumption, then store hydrogen to produce ammonia afterwards. And it is important for transport, for example, but also heavy transport would be able to use it. Any plans to that effect? And I also would like to thank you for the President's review.

[Interpreted] Thank you. Then Microphone 3, please.

[Interpreted] Chairman, 382 is my voting card. I partially the words of a mouth, but let's continue on that same thread. When Rauramo discussed storage of energy and the modular reactors, small modular reactors, I read an article in Helsingin Sanomat recently on that -- said that by 2040 it would be a competitive energy form. Is it in your strategy now? And secondly, what Rihmo didn't ask, let's ask what about hydropower. Are there growth possibilities there? Then unfortunately about risk management and balance sheet on the events over the past years, can shareholder sleep his night through or are there still risks coming up, new skeletons to be found in the cupboard. You said that a new clear reserves, EUR 1.1 billion worth, is this a positive reserve? It could be -- it could have some positive write-downs. And what are they connected with.

[Interpreted] Thank you. I think we'll stop here for a while, and we -- microphone 8 will be writing first of storage. And then on hydro, and then on balance sheet and risks. President, Rauramo.

[Interpreted] Thank you for the questions. And I want to credit [ Raymond Virtanen ] for keeping up this topic already at the time when nobody else talked about hydrogen, I remember from a decade ago. If we talk -- start with electricity storage, if we look ahead what we will need in electricity in the future when there will be a bigger proportion of renewal forms. And the volatility will demand increased production. We already saw that volatility is not good for the producer or the consumer or the industry. But through the renewable forms, we can get a lot of [Audio Gap] through nuclear power perhaps, and we need storage and flexibility. So a combination of all these 3 things will create a reliable, predictable and competitive clean energy system -- electricity system. And then about electricity storage, what can be done there? Well, already now Fortum has been active for years in manufacturing batteries, for example. And originally we thought that we can use these batteries for storing electricity but we noticed too that they are more likely being used for network or grid services. So what used to be done with hydropower, adjusting speed is now done with batteries. These hydropower equipment will otherwise be worn out much more quickly. We can gain a high scale flexibility and storage potential. And in Kalmykia Oy, Fortum is the biggest owner of that hydropower generation. And as you may have seen, Kalmykia is now carrying out a study on this pump power and they're looking into what will be possible in the Nordics. And of course, there's a lot of potential in Sweden as well, they have even more hydropower there than what we have in Finland. And what is going on right now with electricity storage and energy storage and flexibility is something you may have noticed last week. Fortum said that as part of the Espoo Clean Heat program, we are investing in the district heat system in Espoo in electricity -- boilers and electricity storage. Well, these boilers are very well suited to support renewable energy when there's a lot of wind or sunshine, power is much cheaper. And then we can produce district heat with these boilers that we used to produce with fossil sources or with biomass or waste. So we get away from combustion and get directly to electrification. And the investment that we revealed last week was a 50-megawatt boiler. It's a huge size compared to many hydropower plants in Finland, it's very big, and you can adjust it from 0 to 100. And to a company, we are building 800-megawatt hour warm water storage in Espoo. So in addition to producing this water, we can also store it. And then about hydrogen and traffic, Hydrogen is the logical key to integrating gas and electricity. And it is a missing piece, so to speak, it's a European, even global basic solution. If there will be a lot of renewable forms of energy, we need to do something that can be stored and gas or liquid fuels are more easy to store than power. And we've seen this in long -- large scale in SABs with regard to high hydrogen production. Synthetic hydrogen compared to hydrogen that is produced in the fossil form or something that it's supposed to replace is not competitive yet without subsidies. But we are getting closer and closer. So we assume that slowly these sectors will be converged. And if you take it to the traffic side, we will not only need hydrogen, but carbon -- hydrogen. And Finland has an advantage because we have a lot of the biogenetic carbon by storing carbon dioxide. We can get synthetic methanol and other hydrogen, carbon hydrogen substances. So theoretically, we can get to a point where we can replace fossil, traffic fuels or other raw materials for the chemical industry. But you can imagine when all these hydro chain and storage synthesis are still undergoing technological development, this is happening in many frontiers. And then about the SMRs and nuclear power. And maybe this is a good situation to include Petra here. To give a short comment on what is going on with the nuclear survey because she's actually running this study. Can we find a microphone for Petra?

[Interpreted] And together with Petra, we have been touring the world, but maybe you can say a couple of words what's going on right now.

[Interpreted] Thank you, Chair, distinguished shareholders. Indeed, in our study, we have the study of SMRs, the small modular reactors. We want to see when and how they are developing, what are the most promising plans and opportunities there and basically, when they might be competitive. So this is a work that we've been carrying out to very intensely, and I want to confirm that this is an integral part of our strategy. What is our estimate right now is that the development is advancing rapidly, and this situation is very dynamic, but it may take some 10 years from now before we will see them in the market and in the power generation in a larger scale and while they are being produced. We need to have the same plants in serial production. So that is something we expect to happen in the 2030s. So maybe in some 10 years from now, we will have more of them in operation. So this was a brief comment.

[Interpreted] Very much better for this comment, and I can still summarize that. What we've learned this year when we've been touring the existing plants, just a short conclusion is that should we now commission a new nuclear power plant. It couldn't be anything apart from a conventional 1 because there are no SMRs in place that we could come and visit. If you think that you want to buy a car with the car dealers, maybe a model of 2024, somebody is presenting their model for 2025 or make of that, you can maybe drive it, but the first ones to be used will be in '28, '29. And for Fortum, this kind of first of a kind will not be purchased for this second time when we remember our experiences with Olkiluoto 3. Then about risk management. If you can sleep well during the night, there are risks, certainly. Our operations involve risks and Jukka Vattulainen already covered them. One thing is volatility in our result. We have seen that our result is dependent on the electricity prices. And then, of course, regulation is another thing, European Finnish regulation can change and of course, we are hedging with regard to electricity prices, we're engaging into longer contracts and so on. With regulation, we are working closely with Sweden, the Nordic countries and the European regulators simply by telling them how we see things, what should happen so that we could get stable, predictable and clean energy. As a third point, I might just take the availability of the plants. So all the prospects for the future depend on the fact that our plants will be available. And of course, for me, Petra and [indiscernible], this is the key to our operations. The equipment must be well operating, reliable every day, every hour, it's in all of our interest to have electricity available at all times. And the third thing was a question on the nuclear power reserves. And this has to do with phasing out of nuclear and the final location for nuclear waste. And I could say that Finland and the Nordic countries, we since have done unique work, all of us because for the life cycle of nuclear power, we have sold all the technical matters, the availability, the final destination of used nuclear fuel, but also the funding. So we're normally do not only carry the responsibilities but also the funds. And over the years, if at any point, we want to stop using a nuclear unit, we have the funds for closing operations down and locating the nuclear waste. And when I joined Fortum years ago, I thought that shareholders are investors who are going to ask a lot of questions about it, but we don't get many questions because all of these things are well described in our annual reports and also our legislation and preparedness for the situations is unique. There is no other country in the world that has the same level of preparedness.

[Interpreted] Thank you. We move on to microphone 8 and then to microphone 3. And if you don't have long questions, we might take the question at mic 2.

[Interpreted] 533. In 2014 at the Crimean War, we should have exited Russia. That was the last time. But still, we bought Uniper which had the biggest business in buying gas in Russia. And we were told that EUR 5 billion were lost. I forgot to mention that we could have got EUR 2 billion yield from the electricity grade by selling them, we bought Uniper. And I'm afraid that is it so that we haven't learned anything from that. We are isolating the tubes of the District heat grid with material when you compare it to the modern heat standard, you lose about 6x more heat out from the pipelines compared to the current standard. And you say that sustainable development is important. How does it fit to that we are heating streets with the district's heat and it's not enough to say that there are calculations to make it technically and financially solid. But if you're not looking after the District heat grids, are you going to sell, divest that operations to get good bonus.

Thank you and next microphone 3, go ahead.

[Interpreted] Chair. My name is Mikko [indiscernible]. My ballot number is 84. I would like to ask CEO, Rauramo. You mentioned the magic word, shareholder value, which, of course, is essential for all the shareholders. How and of course, it has had a very weak development actually negative development. How do you see the shareholder value development in the near future and also in the longer term.

[Interpreted] Thank you, important questions. And we'll take 1 more question at microphone 2, so we get 3 questions. Go ahead.

[Interpreted] Chairman, ladies and gentlemen, [indiscernible], ballot #323. First, I have a comment to make and then a couple of questions to the CEO. And my comment is the following. I do not intend to ask about Fortum's adventures with Uniper, just going to make everybody's heart speed too rapidly, people getting anxious. And I want to thank the Chairman of the Board for discussing also the rather new Board and its activities. Hopefully, the new Board of Directors will not end up in such problems with credibility as the previous one did. And then my couple of questions, I feel that Mr. CEO has done very well in all his responses, but regarding power generation, you're doing it with hydropower, wind power, solar power, nuclear power. And you, as Fortum, are a very big power producer. And since there are some discomfort and instability, perhaps you have some collaboration with Fingrid talking about the base grid, the -- to guarantee the security of supply. Could you please -- could you take the last question too, please?

[Interpreted] well, [indiscernible] already touched upon this research and development activity. As I understand you used to have CTO or a development director and you used to invest in R&D. But apparently, you have now delegated that to the equipment suppliers and others. So how doing with that sector? Now I understand there's a question of waste, heat, District heat grid, shareholder value, power generation partnerships with Fingrid perhaps. And then a question on R&D, whether that's been outsourced to the equipment suppliers, CEO, please?

[Interpreted] Thank you for excellent questions. And going back to -- in your first question on 2014, we should have exited Russia. Well, I'd like to go back to those days by saying that in 2008, when we had done the big investment decisions, after that, Fortum announced that it will invest a max of EUR 200 million in Russia in renewables. And out of 5 District or condensed powers, we had already divested to before the war of aggression in Ukraine. So the new investments in addition, to those big investment decisions were very small. So the idea was that we are not increasing our presence in Russia, but rather decreasing it, but that was too late and that's clear; too slow, too late. We should have been able to exit earlier, and we are still exiting. Have we learned anything? Well, absolutely, as the Chairman of the Board said, risk management and the Board concentrating on risk management and the new risk management systems. And I said, how we look at new investments. We're very conservative, selective and we are preparing for volatility. So we try to learn in a very humble manner on everything that's happened. On District heating then, when we look at our business operations division, our heat and District heat is our core area. As I was talking about our investments, one of our biggest investments is this. And it's very interesting that you said waste heat. I was talking about waste heat myself. So we try to capture, of course, the waste heat, we look, of course, at our grid and its condition, and we continuously monitor its condition and on European and global scale in the Nordics, we are in comparison to many other places in the world. We are on a completely different level. But if we think about this building, for example, how much key do we produce and machinery? How much does that -- does it produce and generate? We try to capture this waste heat and steer it to those areas where it's needed. And now that we have District heating, we have to offer District heating and cooling as well as waste heat capture and storage good examples[indiscernible] , the Metro Center, Espoo Hospital, for example, Microsoft data centers as the biggest example of these. So capturing, storing heat and circulating it through District heating grids. So heat recovery is very important, and we monitor it continuously. On shareholder value then. Shareholder value is the share price development as well as dividend, and we have been talking about dividend a lot in our presentations, and we'll come back to that because it's on a record high level. The share price has dipped though very strongly. And when we talk about global investors, I have gone to Boston, London, Paris, New York, Helsinki, et cetera. Something that worries our share price at the moment is the economic outlook. And gladly, despite all the turbulence, we have had a warm Winter, the global energy supply is at a high level. The demand for heat is at a low level in Asia, in Europe and the gas reserve is at a historically high level. That's why gas prices have gone down to the level of the pre-Russian aggression levels, and that affects, of course, the electricity future prices in the Nordics as well. And this is an important factor when investors discount their future cash flows in their calculations, this is the underlying matter. And on my behalf, I say to investors and to you shareholders that may be we should enjoy this momentary pause that the geopolitical turbulence hasn't gone away, but the high gas reserve, high supply of LNG, low energy prices leads to a low-lying energy market where their prices are low. Then the third set of questions. Instability, Fingrid, very important question. Maybe not so in Finland, but when we go over to Sweden, not to mention Europe, the significance of the grid is essential for the future of power and electricity, renewable energy, renewable electricity grids or networks, green transition won't happen if we don't have the grids. And we're talking about hundreds of billions of investments in the grid. In Finland, we have a good position because Fingrid has constructed a very strong base grid, so that the whole of our country is integrated. We have opportunity or potential of a very high voltage. So we are cooperating continuously so that Fingrid can see where it should construct more grids so that industrialization in Finland can progress and where we can create new demand and supply and regulation permissions, et cetera, play an important role. In R&D, we have actually progressed very far there in the different business segments. We develop our operations. One of the biggest projects is what Petra was talking about, nuclear power, profitability pre-study in innovation and venturing side, we make big future investments there. We, for example, for vehicle charging batteries, et cetera, also in hardware. But on hardware, what I would say is that Fortum mainly is a technology user or -- and not the supplier. If we, let's say, look at the nuclear pre-study, our interest is that we have many competent hardware suppliers, turbines, generators, automation, et cetera. So we have a good availability to get a competitive machinery for our technology. So we integrate customer demand and a very guaranteed generation. And we, of course, need to provide the suppliers of machinery in between. And I've heard a flattering statement that Fortum knows machinery better than their machinery providers. And for some part, that might be true because we've been using the same machinery for 30, 40 years, even longer. So we know our hardware by heart, and we can also tell our hardware suppliers, what we need right now and what our needs are in the future.

[Interpreted] Thank you, CEO, then microphone #1 and microphone #6. The next question and then microphone 2. But let's begin with microphone 1, then 6, then 2.

[Interpreted] [indiscernible] Voting slip 649. Thank you for an excellent presentation by the CEO. We are now talking about CO2 being generated not that much. That's fossils CO2. But how much would based District heat where we burn wood in smaller District heating plants. Do we have and have you ever considered, for example, that biocarbon could be used in connection to burning wood.

[Interpreted] Then microphone #6.

[Interpreted] Chairman, [indiscernible] voting slip 276. Two complementary questions. What is the Russian party that you have subpoenaed to the arbitration? And do they actually adopt or accept the international arbitration rules? The second question, is Fortum looking at other hydropower, pump power opportunities than [indiscernible] through your subsidiaries or through Fortum proper.

[Interpreted] Thank you, and then microphone #2.

[Interpreted] Thank you, Chair. [indiscernible], 582 is my voting slip number. Fortum for sure, has suffered from strategic risks the most, and that's why I would like to point out all shareholders look at Page 64. Fortum has gained points for noting down the strategic risks. I'm going to read out the current geopolitical insecurity has led to more risks of escalation outside Ukraine. In the most extreme scenario, this could lead to a situation where Sweden and Finland would require emergency power when Fortum would lose its operative management for an indetermined period. I'd like to point out that risks -- the risk is huge. Fortum could lose its independence if there would be a war. As an old man, I can remember when we used to talk about the risky power plants in Russia, and we had a Russian guy in the leadership team who managed the Russian power plant. And I asked about the power plant in Russia, and he was bounced up like [indiscernible] invited me to come and see myself, well, I never went because I'm a humble man.

[Interpreted] Let's first look at District heat. Thank you. Yes, a couple of units we still have industry heating using wood-based fuel and [indiscernible] is one of them. which is not that far away. When you take the [indiscernible] from Helsinki to Espoo on the right side, you can see the lives there, we use pellets and chips. And then we have the [indiscernible] power plant joint venture where biomass is used. And then in Czestochowa, in Poland, I remember or Mika or Petra can you remember, is there any other plant than Czestochowa. That sounds good. So very little wood-based fuel. Also in District heat, our transition to combustion into using heat recovery and direct electrification, boilers, heat pumps and one investment done years ago already or water, what we use and what the Helsinki water company use, we capture or we recover heat from there. There have been proposals on these different fuels, and we have evaluated different kinds of fuels, but it's competitiveness and bio coal is not -- so coal made from wood that has never ended up as one of our fuel sources. Then there was a question whether the Russian party in arbitration accepts the regulations. Well, Russia is party to this international investment agreement. So these are agreements between the Netherlands and Russia and Sweden and Russia because we have owned through these countries. So they are a signee to these agreements. So it is the Russian state and the Russian state ownership body that has set the new CEO. And for them, we are claiming for damages. So if you have signed an agreement, you -- it is taken for granted that you also accept the terms of the contract. Will these damages then be paid, we will have to see that then later on. Whether we look into other pump power, we see pump power potential, of course, more extensively. The pre-study we have communicated is extensive. The [indiscernible] pre-study. We are involved there very tightly, and we are represented at their different bodies as well. But that's the project we have reported on already. Then the escalation risk in the geopolitical situation, well, this is similar to the question on whether risks are price volatility, regulation, result volatility, availability of plants. When we look at the whole spectrum of risks, if things escalate what can happen. Well, if we would use these emergency laws, authorities would take over control of our plants, but that would mean extreme emergency when the Emergency Powers Act would be taken to use. But I would see this as a positive matter because in Finland, we have really thought this matter through. We are prepared. We have good preparedness. [indiscernible] in the military course right now, a national defense course. And so therefore, we have prepared -- we have prepared plans for situations if an outer power would influence us so that we wouldn't be able to manage our plants ourselves, the authorities would take over. But of course, this is related to the Emergency Powers Act.

[Interpreted] Thank you. And now microphone #2, and please show of hands if there still are requests for the floor after microphone 2. Well, microphone 2, now is the last one.

[Interpreted] [indiscernible], 249 voting slip, when will you give up the Ash processing plant.

[Interpreted] Since there are no other questions, let's look at the Ash processing or treatment plant. Microphone 8, yes.

[Interpreted] [indiscernible], voting slip 36. A question related to Uniper. Uniper owns nuclear and hydro power in Sweden and Fortum steel has the privilege of making a tender. Are you still interested in these units? Or are there any news to be expected? We have understood that Uniper doesn't want to invest in nuclear, but the state of Sweden would like to invest. So the situation is difficult.

[Interpreted] thank you. Then CEO, please.

[Interpreted] yes, about Ash treatment. We have an advanced plant in Pori. And all in all, in the circular economy, and we participate that in through Ash treatment. Combustion processes produce different ashes, flying volatile fly ash. And instead of them to be in construction industry, in concrete as a raw material, our treatment plant takes the good part of ash or recovers it and then the dangerous parts of -- are treated by us. It is better for nature and for consumers and for industry than landfill. The challenge is that regulation in these areas is not very good, like in plastics, the price impulse should be better for advanced Ash treatment to be profitable. And the question about Uniper. We have preempted right if Uniper were to sell their business or divest. Nuclear and hydro are our focus, if those businesses would be sold, we would be interested in looking at them, but they are not very often divested. And if other hydro or nuclear would be for sale, then I think we would be interested. Then what Uniper is doing about that? Well, in their own strategy, they have communicated that Nordic clean energy generation is important for them, but they are not interested in growing in nuclear. So that was the tension that the question was about between the political targets between Germany and Sweden. I think the things are ongoing. Sweden want to develop their nuclear further and Uniper not, although they own nuclear in all the 3 sites in Sweden, but they don't want to construct more, but we'll wait and see. I think there are no more questions, I can say that we have had a thorough about financial statements, the consolidated financial statements and operating and financial review and the auditor's report and had a long discussion on them, good questions and good answers. This will close the plant #6.

[Interpreted] thank you, Chair, and thank you to the audience for excellent questions. It was a pleasure to answer to them.

[Interpreted] Thank you. Now we move on to Item 7. Let's see if that will get such a round of applaud, perhaps it will. At Item 7. It's about the adoption of the financial statements and consolidated financial statements. And as we just heard, the auditor has supported the adoption of the financial statements. Can the financial statements and the consolidated financial statements be adopted? There are no requests for the floor. Hence, the AGM has adopted the financial statements and the consolidated financial statements. We are now at Item 8, resolution on the use of the profit shown on the balance sheet and the payment of dividend. The distributable funds of the parent company on this financial year, where EUR 7,397,637,631 including the profit for the financial year EUR 1.922 billion. I can see that there is a request for the floor. Is it about this item? Yes, I will come back to you then. And the Board of Directors proposal on the payment of dividend was EUR 0.0115 per share, in total, EUR 1,031,854,000 and some. The Board of Directors has proposed that the remaining part of the distributable funds be retained in the shareholders' equity. The liquidity of the company is good and the Board's proposal on the payment of dividend will not compromise the company's liquidity. The proposal proposes 2 installments so that the first dividend installment would be EUR 0.58 per share, that would be paid to the shareholders who are on the record date of the second dividend installment of the of 27th of this month are recorded in the company's shareholders' register held by Euroclear Finland. The Board of Directors has proposed in their proposal that the first dividend installment to be paid on the 5th of April. The second dividend installment of EUR 0.0115 dividend would be paid on the 2nd of October to those shareholders who are recorded in the shareholders register. It will be paid out on the 9th of October, and it would be EUR 0.57 per share. Furthermore, the Board of Directors has proposed that the Annual General Meeting be authorized to resolve if necessary, on a new record date and date of payment for the second dividend installment, should the rules of Euroclear Finland or statutes applicable to the Finnish book interest system be amended or should other rules binding upon the company so require. The auditor in his report has stated that the proposal of the Board of Directors is consistent with the Finnish Companies Act. The proposal was included in the notice to the Annual General Meeting. It has been available on the company's website and was also included in the meeting materials that were handed out to all participants. Now requests for the floor. First, shareholder, go ahead.

[Interpreted] [indiscernible] I welcome this dividend proposal. A small comment on this. We said in Nordea's Annual General Meeting who paid it in 1 installment. I understand when there is money to be paid, it would be no longer in the cash of the company. Would it be possible next year to pay the dividend in one go, justified. There was some debate in company about the effect of that on the share price. If the dividend is good, we will -- that increases the share price. But if it is paid at one go, then the share price would come down to 80% and not fully, at 80% only. So a good dividend payer would then regain that swiftly. A small justification for the Chairman of the Board may be. So next year, could you pay that in 1 installment, please, next year?

[Interpreted] so whether the dividend should be paid in 1 or 2 installments. And the comment was directed to the Chairman of the Board. So Mr. [indiscernible] go ahead.

[Interpreted] Thank you for that question. There are different wishes for dividends by many shareholders wanted to have in 2 installments and even more. There are Finnish shareholders, non-Finnish shareholders at Fortum. And for that point of view, the expectations may differ. The market, principally is going to a direction of not paying the dividends in one go, although Nordea did that. In the 2 past years, Fortum paid dividends in 2 installments and I know many other companies who use this practice. The liquidity is good as the President said that we would have enough money to pay that in one go. But many companies and Fortum too if you pay a lot out, it is something out of liquidity. So 2 installments are better for liquidity, although as the President says, we have more than EUR 4 billion of liquid funds. So management of liquidity in the Board's view, made us propose the payment of dividend in 2 installments, I did hear the shareholder concerned, we will discuss this in the Board going forward to the 2025 Annual General Meeting. I can't commit my hands. I heard you, and we are going to take this up in the Board. But now I would like to keep these 2 installment proposal.

[Interpreted] thank you. I can't see any other requests for the floor. Hence, I take it that the Board's proposal on the payment of the dividend, EUR 0.0115 be paid in 2 installments, thus adopted. We move on to Item 9, resolution of the discharge from liability of the members of the Board of Directors and the President and CEO for the financial year 2023. The discharge from liability concerns all the people who have acted as members of the Board and CEO during the financial year 2023 and certain members who served on the Board of directors until last year's Annual General Meeting on the 13th of April 2023, and certain members who served on the board from 13th of April 2023 onwards. And the current Board of Directors has already been introduced at the beginning of the meeting. It is noted that the auditor in his report has supported granting the stretch to all the members of the Board and the CEO for 2023. Any requests for the floor? Discussion? There seem to be no requests for the floor. I note that the Annual General Meeting has resolved to granting stretch from liability to all persons, who acted as members of the Board of Directors and the CEO during the financial year 2023. Item 10, presentation of the company Remuneration Report. As a background, listed companies have from 2021 had to publish a Remuneration Report concerning the governing bodies which includes information on the remuneration of the Board members, the CEO and possible Deputy CEO, according to the company remuneration policy during the financial year. A listed company must resolve at the AGM on the adoption of the Remuneration Report. This decision is advisory in nature. The Board Nomination and Remuneration Committee must be presented and will be now presented on every 4 years or always when there are significant amendments. Previously, this was presented at the 2020 AGM. The remuneration Committee Chairman, Board of Directors, Chairman Mikael Silvennoinen will now represent the Remuneration Report of the governing bodies and also the remuneration policy .11. After this, we will then open the floor and discussion on each Item one at a time. Now Mikael Silvennoinen, the floor is yours.

[Interpreted] Chairman, shareholders, there are several items now and many slides because remuneration is very detailed nowadays. So please follow closely. I will start with the Remuneration Report and then move over to the remuneration policy. And additional information, Remuneration Report has been published and it is among the meeting material and available on the company website as well if you want to read through it later on. Let's start on the Fortum leadership team remuneration restrictions, which target years 2022 and 2023. I will briefly look at the elements relating to the remuneration in 2023. There are, among others, the remuneration restrictions in the incentive programs, remuneration measures and outcomes from last year. In September '22, if we look back in history, Fortum made a bridge financing facility with the state of Finland and it affected leadership remuneration. You might remember last spring at the Annual General Meeting, the Annual General Meeting rejected the Remuneration Report for 2022 of the company governing bodies due to the interpretation of the bridge financing facility. After this, the renewed Board reevaluated the implementation of the Solidium bridge finance facility, and we looked at the implementation of remuneration. The current Board decided that we changed the previous sports interpretation on how the bridge finance facility should be interpreted for the operating leadership. For the long-term incentive program, we decided that the incentive periods, all years will be measured, but for the Fortum leadership team, they cannot earn shares for 2022 and '23. Although the measure would lead to payments being made. Based on this, the maximum number of shares was cut. And according to the restrictions, the Fortum leadership team, members can, depending on the program, earn a maximum of 1/3 or 2/3 of the original number of shares to be earned. During the period 2020 to 2022, this led -- this interpretation led to a 9% outcome. And these shares were to be awarded this spring 2024. Last spring when this was up for discussion, the Fortum leadership team informed the Board that they will voluntarily give up the shares of the incentive program period 2020 to 2022 as well as 2021 to 2023, which would be paid out. So the leadership team made a proposal to the Board to give up these shares. The share program that covered '20 to 2022, the outcome for others participating was 14%. For leadership team, it would have been 9% and for the others, this is 14%, and the shares were awarded in spring 2023. And the same principle goes for all long-term incentive programs that were used in 2022 and/or in 2023 for others than the Fortum leadership team. You can also see here in the -- on the slide that the temporary restrictions to remuneration, the Fortum leadership team did not receive either short-term incentives or long-term incentives in 2023. So the dark green area for 2023 and the same covers also the year 2022. You see the LTI, long-term incentive 2022 and LTI 2021 to 2023. So no shares to the leadership team, and the leadership team was not paid short-term incentives. So the annual incentive despite 2023 result with the businesses was the second best in history. It's also good to note at this point that the persons having started in the Fortum leadership team in March 2023 were entitled to remuneration based on their previous roles in the company in the LTI program 2020 to 2022 as well as to the 2022 short-term incentive because the leadership team was complemented and therefore, they had previous rights to these incentives. According to the terms of Solidium agreement, the fixed pay of the leadership team was not increased in 2023. It's also worth noting that although the restrictions concerned only the years '22 and '23, for these 2 years, there are 4 different share-based incentive programs, the last of which stretches to the end of 2025. You can see this from the slide. Please go 1 slide backwards. So there are certain LTIs, targeting '22, '23. There are 4 altogether. An example in the beginning of this year, there is a program starting covering '24 to '26, and when '26 in the ending year aim the spring '27, it's possible that the Fortum leadership team will get some share incentives from that program. And correspondingly, if you look at the program concerning 2022 and 2024. And 2024 is the last year of that program, if incentives come from there to the leadership team, it will be paid out in the spring of 2025. But out of this possible incentive, only 1/3 will be paid because the 2 previous years '22 and '23, we have due, to the bridge financing facility, the restrictions on remuneration. And you can also see that the short-term incentive programs were not paid in spring 2023, neither are they paid now due to the restrictions in place. Leadership team have an own incentive program for 2024, if they will earn something from that, they will get it out in 2025. Next slide then. Next, I'd like to look at the outcome of the measures from last year, outcome of key indicators. The Board determines annually the measures for the personal performance and share-based remuneration programs and their targets. In this connection, let me point out that the short-term incentive program for personnel concerning 2023. So last year, the targets related to the comparable operating profit is set -- which was set at the end of 2022, when the situation was very exceptional. The market considers -- conditions were exceptional. This target level that was set then for year 2023, the comparable operating profit didn't achieve this threshold value. But as the CEO said, the operative result was very good for the group and for continuous operations historically seen it was the second best. This is why Board decided to use its discretion for personnel, not for the leadership team, but other personnel of the company so that when we look at the achievement of targets of the personnel from financial measures, we considered the conditions in 2023, personnel performance and also the exceptional conditions. Although the group operating profit did not reach the threshold value, the Board evaluated that the personnel in respect of the company operating profit would result in a 45% outcome. We discussed this, we evaluated the progress. We looked at the situation and took this decision. We think that it is only justified and right from the point of view of company personnel. And you can see this in the light green on the left -- in the left box. We also had another target for last year, which is the safety target. Safety leadership training and safety culture enhancement were essential targets and the outcome was very good, 89% out of the maximum level. We also had a customer satisfaction index target, but that remained somewhat under target level. Then the next slide. Here, you can see the outcome of the significant long-term incentive programs, 2021 share incentive period. The measure was the total share return compared to the group of European power companies, so a peer group. The target remained under the minimum limit there. Therefore, the total outcome does not lead into any incentives. There were also ESG-related targets related to corporate responsibility. This you can see in the right-hand box. It was related to the reduction of coal-based electricity generation in '21 and '22 and the development of Fortum Reputation Index in 2023. The ESG measure was 45% out of the maximum. Next, I'd look at remuneration of the CEO in 2023. Here, you can see the actual payment of the President and CEO in 2023. It consists of fixed salary, supplementary pension, French benefits and the awards of employee share savings plan. If you go back 1 slide, you can see here that the President CEO was not paid any LTI, STIs as they are 0. The CEO did participate rightly so to the employee share savings plan where the President and CEO and the rest of the personnel, [indiscernible] a certain share of their monthly salary to the share savings plan. And in the bridge financing facility, it didn't exclude this. If we go on to the Board of Directors actual payments in 2023. This slide shows the remuneration paid to the Board of Directors consisting of annual remuneration, fixed fees for committee work and meeting allowances. Looking at the remuneration of the Board, it is good to remember that the number of meetings of the Board was significantly smaller compared with the previous rather exceptional year. And as with the leadership team, the fees for the Board of Directors were at the level of EUR 800,000. As for the leadership team, the fixed remuneration was not increased in 2023, respecting the bridge financing facility. Then the remuneration of the rest of their leadership team, as the President and CEO, the other members of the leadership team consists of a fixed base salary performance and share-based incentives as well as pension benefits and other benefits in line with market practices. The same remuneration restrictions were applied to the President and CEO and the Fortum leadership team, and they were able to participate in the employee share savings plan. And you can see the leadership team was paid all in all at the amount of EUR 4.3 million. Then looking at personnel for Fortum personnel, remuneration consists of the base salary, performance incentives and competitive employee benefits. Our Finnish employers are members of the Fortum personnel fund excluding around those 100 employees who participate in the long-term incentive program, they cannot simultaneously be participating in the personnel fund. So those are the rules. Then if we go on to remuneration policy, yes, the updated remuneration policy. First, I will mention about the policy and it's key principles concerning the President and CEO at Fortum, remuneration builds on the company's business performance and meeting its strategic objectives. Remuneration of the President and CEO consists -- as I said before, the components, I'm not going to repeat them here. You can see them on the slide. But the important is that remuneration follows normal market practice. And the green part, you can see the components of his remuneration. The performance in the indicators are decided annually to align them with key business targets, and they are usually linked with the group's financial performance, safety, social responsibility and also with common strategic targets for the leadership team or for individuals. The President, CEO and the leadership team's performance-based incentives cannot exceed 40% of their fixed annual salary. So maximum is now 40% of the fixed salary. Our strategic objectives and priorities are reflected in the indicators for the share-based plans, which are determined annually for a period of 3 years. We introduced a couple of years ago, new ESG objectives, that is environmental, social and governance indicators, which are in line with that strategy. Then let's look at the principles of the remuneration policy I'm talking about remuneration policy for the governing bodies. Governing bodies are the President, CEO or the Board of Directors of the company. And it has been updated for this Annual General Meeting. It was submitted last time in the 2020 Annual General Meeting. I'm going to discuss the key changes compared with the previous policy for remunerating Fortum's governing bodies. We have updated the remuneration principles to more clearly reflect the link between the remuneration of the President, CEO and the company's business strategy, the sustainability agenda and more broadly, the link with the personnel and other stakeholders. The short-term incentive principles have also been updated in order for Fortum to introduce more ESG indicators, which reflect the current principles of its sustainability agenda and its short-term incentive schemes. The inclusion of strategic performance indicators in the long-term incentive plan has been made more flexible compared with the previous policy. And the Board can, for example, decide on performance indicators, in line with Fortum's business priorities, but a significant share of the long-term incentive awards continues to build on performance indicators related to financial performance and the share price. There is a chapter called deviations from the remuneration policy, and we've updated the chapter to cover situations where the Board can use its discretion to depart from the remuneration policy of governing bodies. All the proposed amendments are in line with market practices in Finland and in Europe. Chairman, that was my contribution.

[Interpreted] Thank you, Mikael Silvennoinen for his presentation. So we have presented the remuneration policy and the remuneration report. Now are there any requests for the floor on these items. There seem to be no requests for the floor. Hence, I state that the Remuneration Report has been presented to the Annual General Meeting and that the Annual General Meeting has decided to adopt the remuneration report for the governing bodies for 2023. At Item 11, we had the Chairman of Nomination and Remuneration Committee, Mikael Silvennoinen present the remuneration policy and the changes compared with the previous remuneration policy can be viewed in your meeting materials. Do you have any requests for the floor regarding the new remuneration policy, questions or comments. There seem to be no requests for the floor. Hence, we state that this Annual General Meeting has decided to support the remuneration policy for the company's governing bodies, hence resolved. We move on now to Item 12. Resolution on the remuneration of the members of the Board of Directors. The company has a Shareholders' Nomination Board appointed by the Annual General Meeting. The task of the Board is to prepare for the Annual General Meeting, the proposals regarding the election of the members of the Board of Directors as a remuneration payable to the members of the Board of Directors. I shall now ask the Chair person of the Shareholders' Nomination Board, Minna Pajumaa to present the activities of the Nomination Board as well as the proposals of the Nomination Board as a whole, so that the resolutions are nevertheless taken individually for each item. So shall we start with Item 12, but we will also hear the proposals regarding Items 13 and 14. Go ahead Minna Pajumaa.

[Interpreted] Thank you, Chair. Distinguish shareholders, as the Chairman mentioned, I am the Chair of the Shareholders' Nomination Board of Fortum. I work as a Senior Ministerial Adviser of Financial Affairs in the ownership steering Department of the Prime Minister's Office. I shall now present our proposal to the Annual General Meeting on behalf of the Nomination Board. It is a task of Fortum Shareholders' Nomination Board to prepare and present the proposals to the Annual General Meeting of Fortum regarding the remuneration and number of members and the members to be elected. The Nomination Board also seeks candidates for members of the Board of Directors. The Nomination Board has 4 members, and the 3 largest shareholders have a right to nominate. Based on the situation of Holdings on the first of September 2023, I as the representative of the state of Finland, Jouko Pölönen, the CEO representing Mutual Pension Insurance Company, Ilmarinen and Risto Murto, CEO, representing the mutual pension insurance company Varma were appointed to the nomination Board. The fourth member of the Nomination Board has been Mr. Mikael Silvennoinen, Chairman of the Board of Fortum. The Nomination Board elected in September has met a total of 6x with 100% attendance, right. The Nomination Board submitted its proposal to the Annual General Meeting on the 31st of January 2024. Fortum's Shareholders' Nomination Board evaluates the composition of the Board of Directors with the aim of identifying potential future Board candidates that meet the requirements of international business. In our review of the composition of Fortum's Board of Directors, we have assessed that the proposed Board composition has the diverse skills and experience in managing and developing international business and knowledge of the Nordic markets required by Fortum's strategy. The work of the Nomination Board has also been guided by the principles of Board diversity as set out in the Finnish corporate governance code for listed companies. Dear Shareholders, I am now dealing with the nomination proposal for the remuneration of the members of the Board of Directors. The company has a remuneration policy for the company's governing bodies of which the remuneration policy of the Board is an integral part. Just a short while ago at Item 11, the Annual General Meeting discussed the company's new policy on the remuneration for the governing bodies. According to the remuneration policy, the Annual General Meeting decides annually on the remuneration of the members of the Board of Directors on the basis of a proposal prepared by the Shareholders' Nomination Board and presented to the Annual General Meeting. The Nomination Board notes that the program to increase the remuneration for the members of the Board of Directors decided by the Board in 2021 and announced in the Stock Exchange release on 29th of January 2021, will be continued as planned so that the remuneration of the Board of Directors will reach market level in 2026. The Nomination Board has considered it very important for the development of the company to reach market level by that date at the latest so that we can also ensure good international talent on the Board of Directors in the future, a capable board is important to enable us to increase shareholder value, and this is in the common interest of all shareholders. The proposal made by the Nomination Board to the Annual General Meeting is based on a recent report by an external adviser, which contributed to confirming that Fortum's Board Remuneration is significantly behind current market practice. The last increase in the remuneration of the Board of Directors was decided by the Annual General Meeting in 2022. Prior to that, only a small increase has been made at the Annual General Meeting in 2020. And due to the bridge funding, there was this stop in the increase. The Nomination Board, therefore, proposes that the fees of the Chairman, Vice Chairman and other members of the Board of Directors be amended in line with the previously decided increase as shown in the attached proposal, and in this presentation. Next, I will present a proposal for the number of members of the Board of Directors. The nomination board proposal to the general meeting is that the Board of Directors shall consist total of 9 members, including the Chairman otherwise Chairman. I will -- the Nomination Board proposes to the Annual General Meeting that the following persons be reelected to the Board, Ralf Christian, Luisa Delgado, Jonas Gustavsson, Marita Niemela, Teppo Paavola, Mikael Silvennoinen, Johan Soderstrom and Vesa-Pekka Takala. The Nomination Board proposes Mr. Mikael Silvennoinen as the Chairman of the Board; and Mrs. Essimari Kairisto as the Vice Chair of the Board. Ms. Maija Strandberg has informed the Shareholders' Nomination Board that she is not available as a member of the Board for the forthcoming term of office. The Shareholders' Nomination Board proposes that the shareholders take a position on the nominations for the Board of Directors as a whole at the Annual General Meeting. The proposal is based on the fact that the company has a Shareholders' Nomination Board as decided by the general meeting in accordance with the Corporate Governance Code and good corporate governance. The role of the Nomination Board is to ensure that not only the qualifications of the individual board candidates, but also the proposed Board as a whole has the necessary skills and experience for the company and that the company's principles of board diversity are taken into account. The composition of the proposed Board must also meet other requirements set out in legislation and the Corporate Governance Code for listed companies. The Nomination Board is aware the proposed Fortum Board of Directors now comprises 33.3% women, and this will be taken into account in the future proposals by the Nomination Board. Mikael Silvennoinen did not participate in the decision-making process when the Nomination Board made the proposal for the Chairman of the Board and the remuneration of the board. On behalf of the entire Shareholders' Nomination Board, I would like to take this opportunity to thank the outgoing member of the Board, Maija Strandberg, for the work she's done for Fortum. Finally, I will present the proposal of the Nomination Board to amend its charter, which will be decided under Item 23 of the agenda. The work of the Shareholders' Nomination Board is governed by the charter approved by the general meeting, which is proposed to be amended as follows: the shareholders entitled to nominate a member of the Nomination Board would henceforth be determined on the basis of the list of shareholders of the company maintained by Euroclear Finland as at the first business day of June each year. Previously, this was determined on the basis of the situation on the first business day of September. In addition, the Nomination Board proposes that the charge will be amended so that the Chairman of the Board of Directors would in future act as a nonvoting expert of the Shareholders' Nomination Board. In the past, the Chairman of the Board of Directors has been a member of the Nomination Board. In addition to these changes, some technical amendments are proposed to be made to the charter of the Nomination Board. Finally, I would like to say that the Nomination Board made all its proposals unanimously. Thank you to the Nomination Board and its Chair. We now heard proposals on points 12, 13, 14 and 23.12. Remuneration of the members of the Board. We heard from the Nomination Board Chair -- on the [indiscernible]. It has been presented in the Internet page of the company and the documents. It was behind on the screen. It will be added to the minutes. Do you want to say something about remuneration of the Board. No requests for the floor. So the -- oh, there is one. Microphone one, please.

[ Mikko Puotila ], 724 is my voter card. The increase is very big. The market practice, what is market practice or level? The Chairman of the Board never asked never once thanked the personnel. He did thank the leadership, but not the personnel. I think this increase is too high, but I do not request a vote on this.

Thank you. Well noted. Any other requests for the floor? No, I don't think so. So we say that the Annual General meeting has decided to [indiscernible] at members of the Board of Directors as proposed by the Shareholders' Nomination Board. On point 13, deciding on the number of members in the Board of Directors under Article 6 of the Articles of Association, the Board of Directors consists of the Chairman, the Deputy Chairman and no less than 3 and no more than 8 members. Chair, Deputy Chair altogether 10 and the Nomination Board proposes that the Board consists of 9 members, of which 7 ordinary members and then Chair and Deputy's Chair. Are there any comments to the proposal of the Nomination Board? No. The AG decided to endorse the proposal of the Nomination Board to elect 9 members in the Board of Directors. Then point #14 on the agenda, electing these 9 members. So under Article 6 of Articles of Association, the term of office of members and Chair plus Deputy Chair of the Board ends at the closure of the first AGM following their election. So the end will finish in the spring 2025. And we need to elect 9 members. The Nomination Board proposes to elect or reelect the following persons you can see the names, Mika Silvennoinen would continue as Chair and as Essimari Kairisto would continue as Deputy Chair. This proposal is in the documentation and of the AGM. Do you have any comments? Microphone 3, your comment is the first one, and then microphone 2, please.

Yes, Chairman that the [ phrase ] 82 is the my voting number. Naturally, the Uniper exit plays a role here. And after that, many camps. There have been courageous, fine, decisive conclusions based on which last year, most of the Board was changed and also the political Board decided, the present government also decided that the state's key competence is not needed in leading companies steering, of course, the company from the outside. And therefore, the Board was changed practically last year and now the Finnish government also withdraw from the Board of Directors, which was very good. But I'm a little bit curious that these candidates that used to work in the Board during the Uniper exit already, none of them is irreplaceable, I suppose. It would have been more courageous now at the latest in this general meeting to change the rest of the members in the Board who were there during the Uniper exit. This is my personal opinion. Of course, if the elimination bought -- remembers my comment in a year's time when proposing the Board for the 2025 Annual General Meeting.

Thank you. I'm sure they will remember that shareholder [ Veripinen ].

thank you, Chairman. As on the same aspect of [ phrase ], the King Louis XIV said that the state is me. Well, the state of Finland can say, Fortum is me. What about the Chairman of the Nomination Board who is now representing the state, if any? I understood from Peter that there is no person appointed to represent the state.

Thank you. If I understand none of the members of the Board works for the state of Finland or for the government. Minna Pajumaa, would you like to comment on that?

Naturally, the Board looks in the interest of all shareholders and not in the interest of their employer.

Thank you, Chairman you took the words out of my mouth. All the members in the Board represent all shareholders. In the previous 2 years, the Board of Fortum had represent somebody who was attached to the largest shareholder. But now in this composition, we proposed, there is nobody representing the state of Finland.

Thank you. Then the third row, microphone #2, there is a question or comment.

[ Vernerjan Jonen ] 561 is my voting card#. I would like to ask Ms. Tuomela of the diversity of the Board in basketball, we should have -- if we should elect the best team or should we have in basketball, somebody who can then serve to play [indiscernible]. But I would like to compare this to chess, the Finish championships of chess are upcoming next week. We need tactics and strategy under time pressure. Now in chess, the situation in Finland is that the best Finish born lady is in the list. Well, in chess, we evaluate performance unlike in Board work. The best women is at 793 and the worst man is at 27. So are you really sure that you would have the best team for chess or basketball if you need to elect somebody from 793 for ideological reasons.

Tiina Tuomela, question to you.

Question concerning gender and quotas. The law here is changing in the spring 2026, all listed companies need to elect at least 40% of either gender. Minna Pajuma, how would you answer?

Thank you. Diversity is very important. And we do see that in the independency of chess statistics. The Board is represented by men and women and diverse qualifications, diverse expertise from other listed companies and expertise in different managerial positions in different markets. And as I said in my introduction, in the coming years, we will take this into account and increase the share of women to the -- at least minimum 40% of the Board.

Thank you. The greetings have reached the Nomination Committee. There are no further requests for the floor. We resolved according to the Nomination Board proposal on the composition of the Board, so that Mikael Silvennoinen continues as Chair, Essimari Kairisto Vice Chair and 7 members on the screen. Adopted. Item 15, remuneration of the auditor, Mikael Silvennoinen and he still wants to say something, of course, as the Board of Directors. He has the floor. The floor is yours, please.

Thank you, Chair. As for the elected Board, I'd like to thank the shareholders for your trust. We respect it and we try to act upon your trust. The second request for the floor came from me is that Minna Pajuma thanked Maija Strandberg for her work on the Board. I would like to thank her as well. She worked on the Board, and we got to know her as a very competent demanding, but very constructive and consistent. We had 1 year. She is now stepping down. I'd like to thank you, Maija, for your term in office. Now that we know your new role, we will be in good contact. This is a thanks for you. We will not say goodbye to you. And the third item I want to pick up is that we haven't thanked the personnel. And you are right. We haven't thanked the personnel explicitly, I'd like to thank the whole personnel explicitly here and now. Thank you for your work. Implicitly, I did thank them because on the basis of our profit, we will pay out a 45% of the incentive program, although the threshold value was not exceeded. That is because the personnel worked so well during the past year. So without mentioning this explicitly would have been wrong. So I'd like to thank you now very clearly for your efforts.

Thank you. This will be noted in the minutes of the meeting. Item 15, auditors, remuneration. The auditor has been paid against an invoice approved by the company. And the details on this can be seen on the Board proposal, and this is also the Board proposal after having consulted the Audit and Risk Committee. So that the auditors to be paid pursuant to invoice approved by the company. Any requests for the floor on this item? There are no requests for the floor. Therefore, we adopt under Item 15, the Board proposal on the auditor's fee. We move on to item 16, Election of the Auditor. According to Articles of Association, Article 11. The company has one main responsible auditor, which must be an audit company and the auditor's term ends at the next Annual General Meeting after election. Currently, Deloitte is the audit company with the principal auditor, authorized public accountant Jukka Vattulainen whom we have already seen on stage today, and on the recommendation of the Audit and Risk Committee, the Board of Directors proposes that Deloitte why be elected as the company's auditor. Deloitte has informed that the principal auditor in the case of election would be APA Jukka Vattulainen. In addition, the Board has requested and the general meeting must approve that the auditor grant discharge from liability in addition to the regulatory statements and opinions and on profit distribution, this is also a proposal that is included in the meeting materials. The proposed principal auditor has given consent and this is the proposal, any request for the floor on the election of auditor. I think it is shareholder, [indiscernible] who wants to take the floor, please.

Chairman [indiscernible] voting slip 323, just to be sure because no one mentioned it. For how long has Deloitte being the audit company of Fortum. For how long?

I can answer this. Thank you for the question because this is up for discussion on under Item 19. So they have been the audit company from 2006, and therefore, there is a proposal for amending an article in the company's Articles of Association. So from 2006. Thank you.

Then there will be a change. There will be a change after next year. That is true. Deloitte was the proposal to the Annual General Meeting. Any other requests for the floor there are none. Therefore, the Annual General Meeting has the result on the auditor and the statements given by the auditor according to the Board proposal. Item 17 next, it's a new item on the Annual General Meeting agenda. Resolution on the Remuneration of the Sustainability Reporting Assurer. This is related to the new EU Corporate Sustainability Reporting Directive, CSRD and the relevant national legislation, meaning that listed companies have an obligation to publish a sustainable report -- sustainability report for the financial year 2024. This sustainability report must be assured and audited and upon the recommendation of the Audit and Risk Committee, the Board of Directors proposes that the fee of the sustainability reporting assure be paid pursuant to invoice approved by the company. Can we approve this? any requests for the floor? There seems to be none. Therefore, the Annual General Meeting has decided in accordance with the Board proposal that the fee of the sustainability reporting assurer, be paid pursuant to the invoice appropriate company. Item 18 next, which is Election of the Sustainability Reporting Assurer. Here also having consulted the Audit and Risk Committee, the Board of Directors proposes that the sustainability audit firm to be elected as the sustainability reporting assurer is Deloitte Oy for a term ending at the end of the next Annual General Meeting. The sustainability reporting assurer would be Jukka Vattulainen who is APA as well as ASA authorized sustainability auditor would be the principal authorized sustainability auditor? Any request for the floor? Yes, [indiscernible] microphone #2.

Thank you very briefly because this is such a new item. Could Vattulainen maybe say a few words on what this means, has he drawn up such sustainability report previously. I want to ask this now that we have an expert here and it's free of charge. Yes, APA ASA Vattulainen you can respond. Thank you.

A very brief response have companies drawn up sustainability reforms. Yes, but it has been voluntary and now from 2024 on in the EU, big listed companies have a regulatory statutory requirement, corporate, social reporting directive requirement to draw up such a report. They must report certain operations and measurements according to taxonomy, and these are reported to the authorities and used for example, in financial institutions for lending, for credit operations. And currently, the legislation requires that it is the auditor of the company that also makes this assurance regarding the taxonomy of the EU directive. Then in spring 2027, this has been -- will have been integrated to the audit process. So therefore, it is an audit level assurance process that will take place then. Is this sufficient for shareholder [indiscernible].

Thank you. Any other requests for the floor? There seems to be none. Therefore, we state that the Annual General Meeting has resulted on the sustainability assurer according to the Board proposal.

We are at Item 19 that we already touched upon. It is the management of Article 11 of the company's Articles of Association and this is related to Deloitte having been the auditor of the company since 2006 -- '26 -- 2006 rather. And so we need to change the auditors so that Deloitte can only upright or act as the auditor until the end of 2025. But so that changing auditors can be done fluently and in good order, the Articles of Association could allow for electing 2 auditors for the year 2026 so that the auditors could also work in 2026 before the Annual General Meeting. So the changed paragraph would read as follows. The term of office of an auditor shall be 1 financial year and Article 11 would remain otherwise unchanged. This is the proposal by the Board of Directors. It has been described in the notice to the meeting and is also available on the company website. Have you got any request for the floor would you like to address the meeting. There seem to be no requests for the floor, so we say that the Annual General Meeting has resolved that Article 11 of the Articles of Association currently in force shall be amended in accordance with the proposal by the Board of Directors. Item 20, authorizing the Board of Directors to decide on the repurchase of the company's own shares. The Board of Directors has proposed to this Annual General Meeting that the Board of Directors be authorized to decide the repurchase of the company's own shares. The proposal is described in the notice to the meeting has been made available on the company's website and has also been distributed in the general meeting material to all participants. The Board would be authorized to 2.23% of the shares of the company and only the unrestricted effort of the company could be used to repurchase own shares on the basis of the authorization. And this authorization would cancel the authorization granted by the company's Annual General Meeting in 2022 to decide on the repurchase of the company's sole shares. The validity of the resolution requires the support of shareholders with at least 2/3 of the votes and shares represented in the meeting. And for the sake of clarity, the Board did not use the previous authorization credit in the 2022 meeting. Any requests for the floor. There seems to be none. The general meeting has a result that the Board of Directors is authorized to decide on the repurchase of the company's own shares in accordance with the proposal of the Board. We are now at Item 21 authorizing the Board of Directors to decide on the disposal of the company's own shares. This proposal also is described in the notice to the meeting has been made available on the company's website and was distributed to the participants in the meetings material. And it is kind of counterpart for the previous proposal, it would authorize in total, EUR 20 million shares, which corresponds to 2.23% of companies all shares. And this would cancel the authorization granted by the Annual General Meeting in 2023. And would be valid until the next annual general meeting, however, not longer than 18 months. For clarity's sake, we shall state that the Board of Directors has not exercised the previous authorization granted to it at the 2023 General Meeting on the disposal of the company's auditors. Any requests for the floor. No requests for the floor on item 21. Hence, the general meeting has resolved that the Board is authorized to decide on the disposal of the combinational shares in accordance with the Board's proposal. We are now at Item 22 authorizing the Board of Directors to decide on changeable contributions. At this point, the Board of Directors has proposed to the meeting that the Board of Directors be authorized to decide on contributions in the total maximum amount of EUR 500,000 for charitable or similar purposes. In addition, the Board of Directors has proposed to the meeting that the Board be authorized to decide on contributions in the total maximum amount of EUR 1 million for incidental emergency relief to similar or similar purposes as needed. For each of the contribution authorizations, the Board of Directors will decide on the recipients, purposes and other terms of the contributions. Both authorizations would be valid until the next Annual General Meeting.

Would you like to address the meeting on this item 22. There seems to be no hands raised. The Annual General Meeting has resolved that the Board of Directors is authorized to decide on the contributions for charitable purposes and incidental emergency relief or similar purposes as needed. We are now in the second to last item. Amendment of the Charter of the Shareholders' Nomination Board. A while ago, we had the Chair of Shareholders' Nomination Board Minna Pajuma presenting the small amendments to this charter and the most essential amendment would be that the right member would be determined by the first Business Day in June instead of the first business day in September and that the Chairman of the Board of Directors when participating in the work of the Nomination Board would be -- have nonvoting rights where the chair used to be a proper member. So these were the amendments proposed to this Annual General Meeting. Would you like to take the floor on this? no requests for the floor. And so we state that the Annual General Meeting as a result to amend the charter of the Shareholders' Nomination Board in accordance with the proposal of the Shareholders' Nomination Board and this leads us to the last item, closing of the meeting. It is noted that there is no other business and that the issues mentioned in the notice to the meeting have been discussed. The minutes of this Annual General Meeting will be available for the shareholders inspection on the company's website no later than in 2 weeks. I would like to thank you for your active participation in this meeting and wish the attendance a good Easter week and a good spring. And this Annual General Meeting is declared closed at 17:07. Thank you.