FORTUM Power and heat company in the Nordic area, Russia, Poland and the Baltics

Investor / Analyst material

February 2013

2

Disclaimer

This presentation does not constitute an invitation to underwrite, subscribe for,

or otherwise acquire or dispose of any Fortum shares.

Past performance is no guide to future performance, and persons needing

advice should consult an independent financial adviser.

Content

3

Fortum today, pages 4 -16

European and Nordic power markets, pages 18 - 29

Data on Fortum’s nuclear fleet, pages 32 - 36

Russia, pages 38 - 45

Data on capacity payments, pages 40 - 42

Fortum’s investment programme, page 45

Financials and outlook, pages 47 – 54

Hedges, pages 53 - 54

More than 100,000 shareholders

• Power and heat company in the Nordic countries, Russia, Poland and the Baltics

• Listed at the Helsinki Stock Exchange since 1998

• Among the most traded shares on the NASDAQ OMX Helsinki stock exchange

• Market cap ~13 billion euros

4

31 January 2013

Foreign investors 24.3% Finnish State 50.8%

Other Finnish investors 10.5%

Households 10.8%

Financial and insurance institutions 3.6%

Capital returns

• Proposed dividend for 2012 EUR 1.00 per share, in total ~EUR 0.9 billion*

• Dividend policy of 50-60% payout of previous year's results on average

5

Total ~ 9,518 MEUR*

1999 2001 2003 2000 2002 2004

0.18 0.23 0.26

0.31 0.42

0.58

2005

1.12

Dividend per share EUR

0.13

1998

0.5

8

0.5

4

2006

1.26

0.7

3

0.5

3

2007

1.35

0.7

7

0.5

8

2008

1.00

72% 103% 78% 58%

1.00

2009

68%

1.00

2010

68%

1.00

2011

50%

2012

1.00*

63%

* According to a proposal

Organisational structure

6

Business Divisions

President and CEO

Tapio Kuula

Electricity Solutions and Distribution (Espoo)

Executive Vice President Timo Karttinen

Power (Espoo) Executive Vice President

Matti Ruotsala

Heat (Stockholm) Executive Vice President

Per Langer

Russia (Chelyabinsk) Executive Vice President

Alexander Chuvaev

Finance Chief Financial Officer

Markus Rauramo

Corporate Communications Senior Vice President

Helena Aatinen

Corporate Human Resources Senior Vice President

Mikael Frisk

Staff Functions

Country responsibles: Timo Karttinen / Finland, Norway; Per Langer / Sweden, Poland, Baltics; Alexander Chuvaev / Russia

Fortum’s Mission and Strategy

7

Strategy

Fortum’s purpose is to create energy that improves life for present and future

generations. We provide sustainable solutions to the society and deliver

excellent value to our shareholders.

Mission

Build on the strong

Nordic core

Create solid earnings

growth in Russia

Build platform for

future growth

Competence in CO2-free hydro and nuclear, efficient CHP production and

energy markets

Our geographical presence today

8

TGC-1 (~25%)

Power generation ~7 TWh

Heat sales ~8 TWh

OAO Fortum

Power generation 19.2 TWh

Heat sales 26.4 TWh

Russia

Poland Power generation 0.8 TWh

Heat sales 4.3 TWh

Baltic countries Power generation 0.4 TWh

Heat sales 0.9 TWh

Nordic countries

Power generation 51.6 TWh

Heat sales 14.5 TWh

Distribution customers 1.6 million

Electricity customers 1.2 million

Nr 2 Power

generation

Electricity

sales

Nr 2

Nr 1 Heat

Distribution

Nr 1

Key figures 2012 Sales EUR 6.2 bn

Operating profit EUR 1.9 bn

Balance sheet EUR 25 bn

Personnel 10,400

Great Britain Power generation 1.1 TWh

Heat sales 1.8 TWh

Divisions of Fortum

9

Power Division

Fortum’s power generation,

physical operation and

trading as well as expert

services for power

producers.

Heat Division

Combined heat and power

generation, district heating

and cooling activities and

b- to-b heating solutions.

Electricity Solutions and

Distribution Division

Fortum's electricity sales and

distribution activities. Two

business areas: Distribution

and Electricity Sales.

Russia Division

Power and heat generation

and sales in Russia. It

includes OAO Fortum and

Fortum’s slightly over 25%

holding in TGC-1.

Business

description

Comparable

operating

profit

Net assets

Volume

(TWh)

Drivers

EUR 1,144 million

Distr.: EUR 3,911 million

El. sales: EUR 59 million

EUR 3,846 million

EUR 266 million Distr.: EUR 317 million

El. sales: EUR 38 million

EUR 68 million

Distr.net. 26.6, reg.net. 17.3

El. sales: 13.0

Heat sales 19.7

Power sales: 4.2 Nordic generation 49,2

EUR 6,454 million EUR 4,335 million

Fuel mix, heat and

power price

Nordic power price,

generation volumes New capacity, and price for

that, power and heat price

Power sales.: 23.3

Heat sales.: 26.4

Distr.: Regulated

El. sales: Sales margin

Fortum mid-sized European power generation player; Global #4 in heat

10

* incl. TGC-5, TGC-6, TGC-7, TGC-9, ** incl. TGC-12, TGC-13, *** incl. International Power

Source: Company information, Fortum analyses, 2010 figures pro forma, heat production of Beijing DH not available.

Largest global producers, 2010 TWh

Largest producers in Europe and Russia, 2010 TWh

Power generation Heat production

Electricity customers in EU, 2010 millions

Customers

DEI

Irkutskenergo

*) IES

Iberdrola

RusHydro Fortum

EnBW

Vattenfall

CEZ

RWE

PGE SSE

Statkraft

Rosenergoatom Gazprom

NNEGC Energoat.

Enel

E.ON EDF

0 100 200 300 400 500 600

Inter RAO UES

GDF SUEZ ***)

Onexim

Tatenergo

Minsk Energo Kievenergo

Irkutskenergo Bashkirenergo

RAO ES East Inter RAO UES

TGC-2

Fortum

Dong Energy KDHC, Korea

TGC-14

Lukoil

Gazprom

0 20 40 60 80 100 120 140

ELCEN, Rom.

Dalkia

SUEK **)

*) IES

Vattenfall

PGNiG

0 20 40 10 30

DEI

CEZ

Enel

Centrica

EDP

Iberdrola

SSE

EnBW

Fortum

EDF

E.ON

RWE

Gas Natural Fenosa

PGE

Tauron

GDF SUEZ

Hafslund

Dong Energy

Vattenfall

Biggest nuclear and hydro generators in Europe and Russia

11

TWh E

DF

Rosenerg

oato

m

E.O

N

NN

EG

C E

nerg

oato

m

Enel

RusH

ydro

Vattenfa

ll

GD

F S

UE

Z

Irkuts

kenerg

o

Sta

tkra

ft

RW

E

Iberd

rola

Fo

rtu

m

EnB

W

CE

Z

Verb

und

Kra

snoyars

kaya

HP

P

Axpo

Hid

roele

ctr

ica

ED

P

Gazpro

m

Alp

iq

Ukrh

ydro

energ

o

EP

S, S

erb

ia

Gas N

atu

ral F

enosa

E-C

O E

nerg

i

Nors

k H

ydro

DE

I

Agder

Energ

i

Edis

on

BK

K

Inte

r R

AO

UE

S

SS

E

PG

E

IES

0

50

100

150

200

250

300

350

400

450

500

550

600

Total generation

Other

Nuclear

Hydro

Figures 2010 pro forma

Fortum's carbon exposure among the lowest in Europe

12

Source:

PWC & Enerpresse, Novembre 2012

Changement climatique et Électricité, Fortum

Note: * includes Scottish Power

Figures for all other companies include only European generation.

0

200

400

600

800

1000

1200

DE

I

Dra

x

RW

E

CE

Z

SS

E

Edip

ow

er

Vattenfa

ll

Enel

ED

P

E.O

N

GdF

Suez E

uro

pe

Do

ng

Un

ion

Feno

sa

EnB

W

*Iberd

rola

Fort

um

tota

l

Verb

und

PV

O

Fort

um

EU

ED

F

Sta

tkra

ft

88

g CO2/kWh electricity, 2011

2011

65% of Fortum's total power generation CO2-free

85% of Fortum’s power generation in the EU CO2-free

Close to 100% of the ongoing investment programme

in the EU CO2-free

Average 338 g/kWh

192

Fortum’s strategic route

13

Divestment of

non-strategic

heat business

Länsivoima

→100% E.ON Finland

Separation of

oil businesses

Elnova

50%→100%

District heat

in Poland 2003 →

Østfold

Shares in

Hafslund

Shares in

Lenenergo

Starting

TGC-1

Divestment of

Lenenergo

shares

TGC-10

Divestment of

Fingrid shares

Divestment of

heat operations

outside of

Stockholm

2008 2005 2006 2007 2002 2003 2004 1999 2000 2001 1996 1998 2009 2010 2011

Länsivoima

45% → 65%

2012

Stockholm

Energi

Gullspång

Birka Energi 50% Fortum

50% Stockholm

Gullspång

Skandinaviska

Elverk

Birka Energi

50% → 100%

Stora

Kraft

Lenenergo

shares 1998→

IVO

1997

Neste

Divestment

of small

scale hydro

14

Fortum in the Nordic electricity value chain

Competitive businesses

Regulated businesses

Power generation

Nordic wholesale market

Power exchange and

bilateral agreements

Large customers

Retail customers

Private customers, small businesses

Independent transmission system

operator

Independent distribution companies Distribution Transmission and

system services

Hydro power

47%

Coal 4%

Other 1%

Nuclear power 43%

Biomass 2%

European generation 53.9 TWh

(Generation capacity 11,271 MW)

Fortum's European

power generation in 2012

Natural gas 3%

European production 18.5 TWh

(Production capacity 9,035 MW)

Fortum's European

heat production in 2012

Peat 2%

Oil 2%

Heat pumps, electricity

18%

Waste 10%

Natural gas

21%

Coal 20%

Biomass fuels

27%

Fortum's European power and heat production

15

Fortum a forerunner in sustainability

• Dow Jones Sustainability World Index

– Included for ten consecutive years

– Fortum the only Nordic power and heat company

• Carbon Disclosure Leadership Index

– Fortum globally third best company in the utility

sector 2012

– Fortum the only Nordic power and heat company

• SAM Sustainability Yearbook

• STOXX® Global ESG Leaders indices

• oekom

• OMX GES Sustainability Finland Index

• Storebrand SRI

16

European and Nordic power markets

17

Fortum today, pages 4 -16

European and Nordic power markets, pages 18 - 29

Data on Fortum’s nuclear fleet, pages 32 - 36

Russia, pages 37 - 44

Data on capacity payments, pages 40 - 42

Fortum’s investment programme, page 44

Financials and outlook, pages 47 – 55

Hedges, pages 52 - 53

Market coupling milestones - cross-border power flows optimised by power exchanges

• Market coupling between NL, BE and FR since 2006

• Germany – Nord Pool Spot coupling started 11/2009

• Market coupling for Central Western Europe (DE, FR, BeNeLux) since 11/2010 with a continued coupling mechanism with Nord Pool Spot

• NorNed cable (NO-NL) included in January 2011

• Poland coupled with Nord Pool Spot since December 2010

• UK coupling started through BritNed cable in April 2011

• Czech, Slovakia and Hungary coupled since September 2012

• The TSOs and power exchanges are developing a single market coupling for the whole western Europe by end-2013

• In addition to day-ahead coupling, intraday market coupling and balancing market integration targeted as well

• Estonian price area in Nord Pool Spot since April 2010, Lithuanian bidding area from 6/2012, Latvia to follow in June 2013

• EU’s European Target Model for cross-border power trading sets 2014 as deadline for an EU-wide market coupling

18

2009

2013

2012

2010-

2013

Current transmission capacity from Nordic area to Continental Europe is over 4000 MW

19

Countries Transmission capacity MW

From Nordics To Nordics

Denmark - Germany 2,365 2,100

Sweden - Germany 610 600

Sweden - Poland 600 600

Norway - Netherlands 700 700

Total 4,275 4,000

• Theoretical maximum in transmission capacity ~35 TWh

per annum

• Net export from Nordic area to Continental Europe

during the Nordic wet year 2012 was ~18 TWh

• During 2011 net export was 7 TWh

• Approximately 20 TWh of net export is now reachable

700

2,365 610 600

350

Nordic and Continental markets are integrating – interconnection capacity could double by 2020

20

Both TSO and merchant projects for

links to the UK by 2020; North Seas

Countries’ Offshore Grid Initiative

launched for supergrid development

First direct 1,400 MW NO-DE link

agreed to be built by 2018

EU financial support for 700 MW

DK-NL link to connect offshore

wind, too

Jutland – DE capacity planned to

grow by 1,000-1,500 MW by 2017

EU support to connect Kriegers

Flak offshore wind area to DK&DE

by 2020

European Commission included the Northern

Seas Offshore Grid and the Baltic Energy Market

Integration Plan as priority electricity corridors in

its 2011 Infrastructure Package proposal

New interconnections

could double the capacity

to over 8,000 MW by 2020

LitPol Link of 1,000 MW to

connect the Baltic market to

Poland by 2015/20. It would open a

new transmission route from the

Nordic market to the Continent

EU’s European Energy Programme

for Recovery cofinancing Estlink 2

and NordBalt

New internal Nordic grid

investments provide for increased

available capacity for export to the

Continent and Baltics

Nordic water reservoirs

21

2000 2003 2010 2012 2011 reference level 2013

rese

rvo

ir c

on

ten

t (T

Wh

)

0

20

40

60

80

100

120

Q1 Q2 Q3 Q4

Source: Nord Pool Spot

Nordic year forwards

22

Source: NASDAQ OMX Commodities Europe

€/MWh

0

10

20

30

40

50

60

70

Q1

30 January 2013

2007

Q2 Q3 Q4 Q1

2008

Q2 Q3 Q4 Q1

2009

Q2 Q3 Q4 Q1

2010

Q2 Q3 Q4 Q1

2011

Q2 Q3 Q4 Q1

2012

Q2 Q3 Q4 Q1

2013

Year 15 Year 17 Year 09 Year 10 Year 11 Year 12 Year 13 Year 14 Year 16 Year 18

Wholesale price for electricity

23

Source: Nord Pool Spot, NASDAQ OMX Commodities Europe

0

10

20

30

40

50

60

70

80

90

100

110

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

EUR/MWh Nord Pool System Price Forwards

31 January 2013

Wholesale prices for electricity

24

Source: Nord Pool Spot, NASDAQ OMX Commodities Europe, EEX, APX-ENDEX, Bloomberg Finance LP, ATS, Fortum

Dutch

German

Nordic

Russian*

* Including weighted average capacity price

2008 2009 2010 2011 2012 2013 2014 2015

10

20

30

40

50

60

70

80

90

100

110

0

Spot prices Forward prices EUR/MWh

29 January 2013

25

Fuel and CO2 allowance prices

Source: ICE

Market prices 31 January 2013; 2013-2014 future quotations

020406080

100120140160

US

D /

bb

l

Crude oil price (ICE Brent)

2006 2007 20102008 2009 20122011 2013 20140

5

10

15

20

25

30

35

EU

R /

tC

O2

CO2 price (ICE ECX EUA)

2006 2007 20102008 2009 20122011 2013 2014

0

40

80

120

160

200

240

US

D /

t

Coal price (ICE Rotterdam)

2006 2007 20102008 2009 20122011 2013 20140

20

40

60

80

100

GB

p /

th

erm

Gas price (ICE NBP)

2006 2007 20102008 2009 20122011 2013 2014

EU carbon market extremely sensitive to politics

• The ETS market is currently very nervous and overreacts to all political messages:

– Jan 24: Price collapsed temporarily to an all-time intraday low of €2.81/t after EP ITRE negative vote on ETS Directive, and then increased back to slightly above €4/t

– Jan 18: German auction cancelled due to low demand

• Majority of member states don’t have a final position on “backloading”;

– UK conditionally supportive,

– Germany the key question mark – elections interfering its decision making

• Next milestones in 2013:

– 19 February vote on ETS Directive in ENVI committee in EP

– February-April: Final decision of the Parliament.

– March-May: Member States vote on backloading

– July-September: implementation of backloading earliest

• During the existing Commission’s mandate only backloading and set-aside feasible – no time for broader structural revisions.

26

ITRE: Industry Committee (giving an opinion to the ENVI Committee on ETS Directive changes)

ENVI: Environment Committee (preparing a proposal to the EP Plenary deciding the Parliament’s position)

EP: European Parliament

Nordic power generation – dominated by hydro, but fossil needed

27

Source: ENTSO-E Memo 2011 *) Normal annual Nordic hydro generation 200 TWh, variation +/- 40 TWh.

0

20

40

60

80

100

120

140

160

Denmark Norway Sweden Finland

Fossil fuels

Nuclear

Biomass

Wind

Hydro *

TWh/a

Total Nordic generation

378 TWh in 2011

Net import in 2011: 3 TWh

24

80

TWh %

57

200

17

6

21

15

53

5

Still a highly fragmented Nordic power market

28

Source: Fortum, company data, shares of the largest actors, pro forma 2010 figures.

Power generation

378 TWh

>350 companies

Electricity distribution

15 million customers

~500 companies

Electricity retail

15 million customers

~350 companies

32%

Fortum

Vattenfall

Dong Energy

Others

Statkraft

E.ON PVO

E-CO Energi

Helsinki

Norsk Hydro BKK

Others

52%

E.ON

Vattenfall

Fortum

Dong Energy

Göteborg

SEAS-NVE

Hafslund

Helsinki

Statkraft

Bixia

Fortum

Vattenfall

Others

E.ON

54%

SEAS-NVE

Hafslund

Helsinki

Göteborg

Syd Energi

Dong Energy

Elenia

New capacity needed for increasing demand and retiring capacity replacements

• Growing global energy demand

will be increasingly fulfilled by

electricity in the future

• Substantial demand growth in

the emerging markets

• Retirements and moderate

demand growth in the EU

• Globally, 5,900 GW of new

capacity needed by 2035

29

1) Total new capacity needed for increasing demand and retiring capacity replacements Source: IEA WEO 2012 (New polices scenario)

384

606

548

923

153

245

190

1,487

70

666

631

1,964

1,976

5,891 New capacity,

total (1

Capacity changes, 2012-2035 (GW)

Retiring capacity

US Europe Russia China India Other

areas

World

total

0 %

50 %

100 %

150 %

200 %

250 %

~20%

~ 40%

~130%

~240%

Growth, 2010-2035

Primary energy demand

Electricity generation

New capacity, except nuclear, will require over 60 EUR/MWh power price

30

Gas Nuclear Hydro Wind Clean coal

EUR/MWh

0

10

20

30

40

50

60

70

80

90

100

110

Estimated lifetime average cost in nominal 2014 terms.

Large variations in cost of new hydro and wind due to location and conditions.

Other costs ( variation)

CO2 cost

0

10

20

30

40

50

60

70

80

90

100

110

Coal

Source: Nord Pool spot, NASDAQ OMX Commodities Europe

EUR/MWh

Futures

31 January 2013

1995 -97 -99 -01 -05 -07 -09 -11 -13 -03 -15 -17

Fortum’s investment programme – Nordic region, Poland and Baltic countries

Additional electricity capacity around 950 MW

100% CO2-free

Project Electricity, MW Heat, MW Commissioned

Olkiluoto 3, Finland 400

Swedish nuclear upgrades 290

Refurbishing of hydro power 10 annually

Brista, Sweden 20 57 Q4 2013 (waste CHP)

Klaipeda, Lithuania 20 60 Q1 2013 (waste CHP)

Total ~950 ~500

Jelgava, Latvia 23 45 Q3 2013 (biomass CHP)

Järvenpää, Finland 23 63 Q2 2013 (biomass CHP)

Värtan, Sweden 130 280 2016 (biomass CHP)

31

Blaiken, Sweden, wind power 30

Overview of Fortum’s nuclear fleet

32

LOVIISA OLKILUOTO OSKARSHAMN FORSMARK

Commercial operation started

Unit 1: 1977

Unit 2: 1981

Unit 1: 1978

Unit 2: 1980

Unit 3: (Under construction)

Unit 1: 1972

Unit 2: 1974

Unit 3: 1985

Unit 1: 1980

Unit 2: 1981

Unit 3: 1985

Generation Capacity

Fortum’s share

Unit 1: 496 MW

Unit 2: 496 MW

Total: 992 MW

Unit 1: 880 MW

Unit 2: 880 MW

(Unit 3: 1,600 MW)

Total: 1,760 MW (3,360)

27% 468 MW

Unit 1: 473 MW

Unit 2: 638 MW

Unit 3: 1,400 MW

Total: 2,511 MW

43% 1,089 MW

Unit 1: 984 MW

Unit 2: 996 MW

Unit 3: 1,170 MW

Total: 3,150 MW

22% 699 MW

Yearly production

Fortum’s share of production

8 TWh

8 TWh

14 TWh

4 TWh

17 TWh

7 TWh

25 TWh

5.5 TWh

Share of Fortums Nordic production

18% 9% 16% 13%

Majority owner

Fortum’s share

Fortum

Pohjolan Voima

26.6%

E.ON

43.4%

Vattenfall

22.2%

Operated by Fortum Teollisuuden Voima (TVO)

OKG Aktiebolag Forsmarks Kraftgrupp

Responsibilities Loviisa: Fortum is the owner, licensee and operator with all the responsibilities specified in the Nuclear Energy Act, Nuclear Liability Act, and other relevant nuclear legislation

Other units: Fortum is solely an owner with none of the responsibilities assigned to the licensee in the nuclear legislation. Other responsibilities are specified in the

Companies Act and the Articles of Association and are mostly financial.

Olkiluoto

Loviisa Forsmark

Oskarshamn

Fortum's nuclear power in the Nordics

33

• Finnish units world class in availability

• Overview of production and consumption: www.fortum.com/investors - energy related links

Source: Fortum

Variety of technologies and ages

34

PWR = Pressurized Water Reactor The most common reactor type in the world (e.g. all French units, most US units). Also the Loviisa units are PWRs, but based on Russian design.

High pressure prevents water from boiling n the reactor. The steam rotating the turbine is generated in separate steam generators.

BWR = Boiling Water Reactor Similar to the PWR in many ways, but the steam is generated directly in the reactor. Popular reactor type e.g. in Sweden, the US and Japan.

*Generation refers to technical resemblence based on KSU classification and not to reactor design generations. All reactors are of Generation II except Olkiluoto-3 (EPR) which is of Generation III.

Unit Mwe (Net) Share (%) Share (Mwe) Commercial

operation

Age Type/

Generation *

Supplier

Loviisa 1

Loviisa 2

496

496

100,0

100,0

496

496

1977-05-09

1981-01-05

34

30

PWR / 1

PWR / 1

AEE (Atomenergoexport)

AEE (Atomenergoexport)

Olkiluoto 1

Olkiluoto 2

Olkiluoto 3

880

880

(1,600)

26,6

26,6

25,0

234

234

(400)

1979-10-10

1982-07-10

(?)

32

29

BWR / 3

BWR / 3

PWR / 3

Asea-Atom / Stal-Laval

Asea-Atom / Stal-Laval

Areva / Siemens

Oskarshamn 1

Oskarshamn 2

Oskarshamn 3

473

638

1,400

43,4

43,4

43,4

205

277

607

1972-02-06

1975-01-01

1985-08-15

39

36

26

BWR / 1

BWR / 2

BWR / 4

Asea-Atom / Stal-Laval

Asea-Atom / Stal-Laval

Asea-Atom / Stal-Laval

Forsmark 1

Forsmark 2

Forsmark 3

984

996

1,170

23,4

23,4

20,1

230

233

236

1980-12-10

1981-07-07

1985-08-18

31

30

26

BWR / 3

BWR / 3

BWR / 4

Asea-Atom / Stal-Laval

Asea-Atom / Stal-Laval

Asea-Atom / Stal-Laval

Third party nuclear liability in case of severe accident

35

Sweden

(new, not

in force)

Finland,

temporary

legislation

Current,

Sweden

700 M€

200 M€ 360 M€

500 M€ Responsibility of company

(insurance or guarantee)

Unlimited

company

responsibility

Convention

parties 300 M€

State

responsibility

300 M€

500 M€

700 M€

New Paris

convention

700 M€

145 M€

145 M€

Old,

Finland

240 M€

145 M€

Has been approved by the Parliament.

In force 1.1.2012 onwards.

Law approved by Parliament in

2010, requires separate decision

from Government to come into

force.

Requires ratification by 2/3

of member states to come

into force. In Finland

approved by Parliament in

2005

Nuclear upgrades in Sweden

36

Reactor

OKG 1

Completion

-

Increase 100% (MW)

0

Fortum's capacity increase

(MW)

Additional generation for Fortum

(TWh/a)

Fortum's capacity

after increase

(MW)

Fortum's generation

after increase

(TWh/a)

- 205 ~2

OKG 2 2009, 2015 30 + 180 95 355 ~3

OKG 3 2011 255 110 607 ~5

FKA 1 Decision 2013 120 ~25 257 ~2

FKA 2 2013 120 25 259 ~2

FKA 3 Decision 2013 170 ~35 270 ~2

Total ~290 ~2 ~1,950* ~15

Capacity increase and completion timetable based on recent estimate (Nord Pool). At 31.12.2012

* Fortum's share of Swedish nuclear capacity was 1,787 MW.

Russia

37

Fortum today, pages 4 -16

European and Nordic power markets, pages 18 - 29

Data on Fortum’s nuclear fleet, pages 30 - 36

Russia, pages 38 - 45

Data on capacity payments, pages 40 - 42

Fortum’s investment programme, page 45

Financials and outlook, pages 47 – 54

Hedges, pages 53 - 54

Russia is the World’s 4th largest power market

38

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

TWh

5,000

Power generation in 2011 based on gross output.

Source: BP Statistical Review of World Energy June 2012

Fortum - a major player in Russia

OAO Fortum (former TGC-10)

• Operates in the heart of Russia’s oil and gas producing region,

fleet mainly gas-fired CHP capacity

• 23,3 TWh power generation, 26,4 TWh heat production in 2012;

more than Fortum’s Nordic heat sales (19,7 TWh)

• Investment programme to add 85%, almost 2,400 MW to power

generation capacity

• Annual efficiency improvement reached

EUR 100 million in Q2 2011 (compared to 2008 level)

TGC-1

• Slightly over 25% of territorial generating company TGC-1

operating in north-west Russia

• ~6,400 MW electricity production capacity (appr. 50% hydro),

~26 TWh/a electricity, ~30 TWh/a heat

39

OAO Fortum

Tyumen

Tobolsk

Chelyabinsk

Nyagan

TGC-1

St. Petersburg

Moscow

40

Day ahead wholesale market prices – increase driven by recovering demand and gas price

2

Key electricity, capacity and gas prices in the OAO Fortum area

IV/12 IV/11 2012 2011

Electricity spot price

(market price), Urals hub,

RUB/MWh

973 858 956 925

Average regulated gas

price, Urals region, RUB

1000 m3

2,924 2,548 2,736 2,548

Average capacity price

for CCS ”old capacity”,

tRUB/MW/month

168 174 152 160

Average capacity price

for CSA ”new capacity”,

tRUB/MW/month

627 534 539 560

Average capacity price,

tRUB/MW/month

254 246 227 209

Achieved power price for

OAO Fortum, EUR/MWh 30.9 28.9 30.6 29.2

0

5

10

15

20

25

30

35

40

€/ M

Wh

Day ahead power market prices for Urals

In addition to the power price generators receive a capacity payment.

2007 2008 2009 2010 2011 2012

Source: ATS

2013

Power market liberalisation – two markets

41

Capacity wholesale market Electricity wholesale market

Capacity prices

• Competitive capacity selection (CCS) and free bilateral

agreements (FBA)

• A higher, fixed capacity price for new

capacity (CSA* agreements, built after 2007)

• Lower capacity price for old capacity, price caps limits the price in

some areas

• Old capacity intended for households are priced by regulated

bilateral agreements (RBA)

Electricity prices

• Day ahead (spot) market, financial market, free bilateral

agreements (FBA) and regulated bilateral agreements (RBA)

• Fully liberalised from 1 Jan 2011 except for volumes intended for

households priced by RBA (~10% of volume)

* Capacity supply agreement

•CSA is the intended mechanism for earning a (reasonable) return on invested capital in new capacity

•Capacity prices are a big part of a power generator’s income

– a typical CHP plant ~35%, CCGT ~55%, of revenues

•In the day ahead (spot) market, the price mechanism is a day ahead hourly auction. Supply – demand balance and

variable cost (fuel) are the key drivers for the spot price

•Financial market for electricity started in June, 2010

42

Capacity prices for new capacity considerably higher than prices for old capacity prices

• Long term rules and price parameters approved

• Both “old” and “new” capacity can participate in capacity auctions

• Old capacity (pre 2007) and new capacity priced differently – Old capacity is priced by capacity auctions; price cap possibility

– New capacity under capacity supply agreements to receive guaranteed payments

• The payments for new capacity are based on approved pricing formulas – Vary according to plant size, fuel, geographic location, capital costs

– Allow the recovery of capital costs and include return on invested capital; the targeted ROCE level 12-14% (with current government benchmark bond yields)

– After three years (2014), the regulator will review the earnings from the electricity-only market and can revise the payments, same goes after 6 years.

• “Old” capacity prices will depend on auction outcomes, but will likely

remain relatively low; potentially price caps could limit the price

Long-term financial target will be dictated by basic economic logic

43

Assuming, having completed the investment programme, an invested capital of

~EUR 100 million improvement in

EBITDA through the efficiency

improvement programme

Invested capital

EUR

~2.5 bn

~4 bn

2011 ~2014

In 2009, WACC for Russia was ~12%

a

b

a

… and an unchanged

cost of capital b

The annual comparable

operating profit in Russia

needs to be ~EUR 500

million in order to beat the

cost of capital (WACC) after

the completion of the

investment programme

Key factors behind the profitability improvement in Russia

44

Efficiency improvement programme 2008-2011

– Increasing heat production profitability

– Fuel efficiency improvement

– Cost savings

New CSA capacity commissioning 2011-2014

– Additional capacity 2,388 MW; +85%

– Capacity is sold at CSA (Capacity Supply

Agreement) contracts with guaranteed higher

price

Pace of new capacity increase of Fortum investment programme in Russia

2011 - 638 MW

2012 - 0 MW

2013 - 1,254 MW

2014 - 496 MW

Total - 2,388 MW

85% increase in power generation capacity by the end of 2014 through the investment programme

45

85% increase in power generation capacity in Russia by the

end of 2014 through the investment programme

Total 2,785 2,388 5,173

Plant Fuel type Existing (MW) Planned (MW) Total

Tyumen CHP-2 Gas 755 755

Tyumen CHP-1 Gas 472 209 681

Tobolsk CHP Gas 452 213 665

Chelyabinsk CHP-3 Gas 360 216 576

Chelyabinsk CHP-2 Gas, coal 320 320

Argayash CHP Gas, coal 195 195

Chelyabinsk CHP-1 Gas, coal 149 149

Chelyabinsk GRES Gas 82 578

Nyagan GRES Gas 3 x 418 1,254

Boilers -

(CHP/Condensing)

(CHP/Condensing)

(Condensing)

(Condensing)

Supply date

2013

June/2011

Feb/2011; 2014

Oct/2011

2014 2 x 248 (CHP/Condensing)

Represents over 50%

of new capacity

Financials and outlook

46

Fortum today, pages 4 -16

European and Nordic power markets, pages 18 - 29

Data on Fortum’s nuclear fleet, pages 32 - 36

Russia, pages 38 - 45

Data on capacity payments, pages 40 - 42

Fortum’s investment programme, page 45

Financials and outlook, pages 47 – 54

Hedges, pages 53 - 54

Income statement

47

MEUR IV/2012 IV/2011 2012 2011

Sales 1,834 1,667 6,159 6,161

Expenses -1,247 -1,159 -4,420 -4,359

Comparable operating profit 587 508 1,739 1,802

Items affecting comparability 32 71 122 600

Operating profit 619 579 1,861 2,402

Share of profit of associates and jv's -5 19 21 91

Financial expenses, net -76 -66 -307 -265

Profit before taxes 538 532 1,575 2,228

Income tax expense 123 -88 -72 -366

Net profit for the period 661 444 1,503 1,862

Non-controlling interests 58 23 94 93

EPS, basic (EUR) 0.68 0.47 1.59 1.99

EPS, diluted (EUR) 0.68 0.47 1.59 1.99

Comparable and reported operating profit

48

MEUR

IV/2012 IV/2011 IV/2012 IV/2011 2012 2011 2012 2011

Power 380 351 387 443 1,144 1,201 1,173 1,476

Heat 93 96 118 100 266 278 339 380

Russia 28 35 28 35 68 74 79 74

Distribution 101 49 103 41 317 295 328 478

Electricity Sales 9 2 5 -6 38 27 38 3

Other -24 -25 -22 -34 -94 -73 -96 -9

Total 587 508 619 579 1,739 1,802 1,861 2,402

Comparable operating

profit

Reported operating

profit

Comparable operating

profit

Reported operating

profit

• Non-recurring items, IFRS accounting treatment (IAS 39) of derivatives and nuclear fund adjustments had an impact on the reported operating profit EUR 32 (71) million in the fourth quarter, and EUR 122 (600) million in 2012.

Cash flow statement

49

MEUR IV/2012 IV/2011 2012 2011

Operating profit before depreciations 794 734 2,525 3,008

Non-cash flow items and divesting activities -31 -126 -181 -726

Financial items and fx gains/losses -87 -86 -522 -376

Taxes -17 -32 -269 -394

Funds from operations (FFO) 659 490 1,553 1,512

Change in working capital -260 -18 -171 101

Total net cash from operating activities 399 472 1,382 1,613

Paid capital expenditures -503 -421 -1,422 -1,285

Acquisition of shares -11 -18 -14 -62

Other investing activities 24 -38 308 522

Cash flow before financing activities -91 -5 254 788

Key ratios

50

Good liquidity – committed credit lines total EUR 2.7 billion

MEUR 2012 2011 2010

EBITDA 2,525 3,008 2,271

Comparable EBITDA 2,403 2,374 2,396

Interest-bearing net debt 7,814 7,023 6,826

Comparable Net debt/EBITDA 3.3 3.0 2.8

Return on capital employed (%) 10.0 14.8 11.6

Return on shareholders' equity (%) 14.3 19.7 15.7

Debt Maturity Profile

51

0

250

500

750

1000

1250

1500

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023+

Bonds Financial institutions Other long-term debt CPs Other short-term debt

MEUR

2013 1,078

2014 1,282

2015 1,117

2016 871

2017 604

2018 199

2019 871

2020 75

2021 596

2022 1,004

2023+

TOTAL

1,080

8,777

per 31 Dec, 2012 per 31 Dec, 2011

Average Interest Rate (incl. swaps and forwards) 4.5% 4.4%

Portion of floating / fixed debt 45/55% 47/53%

Outlook

• Nordic markets

– Annual electricity demand growth estimated to be on average 0.5%

– Electricity continues to gain share of total energy consumption

• Russia

– Fortum’s goal is to achieve an operating profit level of about EUR 500 million and to create positive economic value added after completing the on-going investment programme

• Key drivers and risks

– Wholesale price of electricity and volumes

• Demand and supply • Fuels

• Hydrological situation • Power plant availability

• CO2 emissions allowance prices

52

Outlook

• Annual capex excluding potential acquisitions

– 2013 EUR 1.1 to 1.4 billion

– 2014 EUR 0.9 to 1.1 billion

• Hedging

– 2013 approximately 70% hedge ratio at approximately EUR 45/MWh

(Q3: 60% at EUR 45/MWh)

– 2014 approximately 35% hedge ratio at approximately EUR 43/MWh

(Q3: 30% at EUR 43/MWh)

• Target for efficiency programme is to improve cash flow by EUR 1 billion during 2013-2014

• Effective tax rate for the Group 19-21%

53

54

Hedging improves stability and predictability

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

EUR/MWh

Realised prices quarterly since 2000

Achieved power price Spot price, SE&FI avg.

2009 onwards thermal and import from Russia excluded

Efficiency programme launched to maintain and strengthen the strategic flexibility and competitiveness

55

"The core of our activities is to fulfill our strategy of long-term

business operations, the aim of which is to strengthen our Nordic

core business, create solid earnings growth in Russia and build a

platform for future growth"

Fortum's efficiency programme 2013-2014

56

SPEED - Cash flow improved by EUR 1 billion - FLEXIBILITY

CAPEX EUR 250-350 million

DIVESTMENTS EUR 500 million

WORKING CAPITAL

Reduction

FIXED COSTS

Reduce EUR 150 million compared to 2012

WHY WHAT WHEN

2013-2014

• Efficiency programme proceeding according to plan

• Integrated into division plans for 2013-2014

• Net cash impact EUR 50 million in 2012

• Minor cost reductions already achieved

57

Fortum has decided to assess the future alternatives, including

divestment, of its electricity distribution business

In accordance with its strategy, Fortum seeks growth in low-carbon power

generation, energy-efficient combined heat and power (CHP) production

and customer offerings

The Board’s decision regarding Fortum’s electricity distribution business

Fortum Distribution’s Nordic network

Nordic countries Customers: 1,6 million

Distributed electricity: 43,954 GWh

Length of network: 156,000km

Nr of employees: ~ 900

Sales:1,070

Comparable operating profit: 317

Comparable EBITDA: 526

Net assets: 3,911

Sweden Customers: 900,000

Distributed electricity:

28,925 GWh

Norway Customers: 102,000

Distributed electricity:

2,405 GWh

Finland Customers: 633,000

Distributed electricity:

12,624 GWh