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

Investor / Analyst material

December 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 -17

European and Nordic power markets, pages 19 - 33

Data on Fortum’s nuclear fleet, pages 34 - 38

Russia, pages 40 - 46

Data on capacity payments, pages 42 - 44

Fortum’s investment programme, page 45

Financials and outlook, pages 48 – 54

Hedges, pages 54 - 55

More than 130,000 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 ~15 billion euros

4

30 November 2013

Foreign investors 26.2% Finnish State 50.8%

Other Finnish investors 9.5%

Households 10.8%

Financial and insurance institutions 2.7%

Capital returns / Dividend for 2012 EUR 1.00 ~ EUR 0.9 billion

• Fortum’s dividend policy is based on the following preconditions:

– The dividend policy ensures that shareholders receive a fair remuneration for their

entrusted capital, supported by the company’s long-term strategy that aims at increasing

earnings per share and thereby the dividend.

– When proposing the dividend, the Board of Directors looks at a range of factors,

including the macro environment, balance sheet strength as well as future investment

plans.

5

1,00 1,00 1,00 1,00 1,00

200858%

200968%

201068%

201150%

201263%

5 year dividend per share (EUR) history

• Fortum Corporation's target is to pay a stable, sustainable

and over time increasing dividend of 50-80% of earnings

per share excluding one-off items

Fortum has since 1998 annually paid dividends

in total ~9,518 MEUR

Organisational structure – Fortum Management Team

6

Business Divisions

President and CEO

Tapio Kuula

Electricity Solutions and Distribution Executive Vice President

Timo Karttinen

Power Executive Vice President

Matti Ruotsala

Heat Executive Vice President

Per Langer

Russia Executive Vice President

Alexander Chuvaev

Finance Chief Financial Officer

Markus Rauramo

Communications Senior Vice President

Helena Aatinen

Human Resources Senior Vice President

Mikael Frisk

Corporate Staff Functions

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

Legal General Counsel Kaarina Ståhlberg

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 for society and deliver excellent

value to our shareholders.

Mission

Build on the strong

Nordic core

Create solid earnings

growth in Russia

Build a platform for

future growth

Strong 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 3 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

10

Fortum mid-sized European power generation player; major producer in global heat

* incl. Bashkirenergo, ** incl. RAO ES East, *** incl. TGC-5, TGC-6, TGC-7, TGC-9, **** incl. TGC-12, TGC-13, ***** incl. energy services

Source: Company information, Fortum analyses, 2011 figures pro forma, heat production of Beijing DH not available.

Largest global producers, 2011 TWh

Largest producers in Europe and Russia, 2011 TWh

Power generation Heat production

Electricity customers in EU, 2011 millions

Customers

GDF SUEZ

DEI

CEZ

Enel

Centrica

EDP

Iberdrola

SSE

EnBW

Fortum

EDF

E.ON

RWE

Gas Natural Fenosa

PGE

Tauron

Hafslund

Dong Energy

0 20 40 10 30

Vattenfall

KDHC, Korea

Quadra

Tatenergo Minskenergo

DTEK, Ukraine

EuroSibEnergo

MOEK

TGC-2

Fortum

Dong Energy

TGC-14

Lukoil

Gazprom

0 20 40 60 80 100 120 140

ELCEN, Rom.

Sibgenco ****)

***) IES

Vattenfall

PGNiG

Inter RAO UES *)

Dalkia *****)

RusHydro **)

***) IES

DEI

EuroSibEnergo Iberdrola

Fortum

EnBW

Vattenfall

CEZ

RWE

PGE

SSE Statkraft

Rosenergoatom Gazprom

NNEGC Energoat.

Enel E.ON EDF

0 100 200 300 400 500 600

GDF SUEZ

DTEK, Ukraine

Inter RAO UES *)

RusHydro **)

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

0

200

400

600

800

1000

1200

DE

I

Dra

x

RW

E

CE

Z

SS

E

Edip

ow

er

Vatt

en

fall

Enel

ED

P

E.O

N

GD

F S

UE

Z

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

2012

68% of Fortum's total power generation CO2-free

93% 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

Note:

Fortum’s specific emission of the power generation in 2012 in the EU were 42 g/kWh and in total 171 g/kWh.

Only European generation except “Fortum total“ which includes Russia.

Source:

PWC & Enerpresse, Novembre 2012

Changement climatique et Électricité, Fortum

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

Fortum's total power and heat production by source

15

Nuclear power 32%

Hydro power

34%

Coal 5%

Biomass 2%

Total generation 73.1 TWh

(Generation capacity 14,675 MW)

Natural gas 27%

Fortum's power generation

in 2012

Total production 43.3 TWh

(Production capacity 22,431 MW)

Fortum's heat production

in 2012

Oil 1%

Waste 5%

Heat pumps, electricity 8%

Peat 1%

Biomass

11%

Natural gas

62%

Coal 12%

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

27%

Fortum's European power and heat production by source

16

Fortum a forerunner in sustainability

• Carbon Disclosure Nordic Leadership Index

– Fortum no. 1, scores 100/100

• SAM Sustainability Yearbook

• STOXX® Global ESG Leaders indices

• oekom

• OMX GES Sustainability Finland Index

• Storebrand SRI

17

European and Nordic power markets

18

Fortum today, pages 4 -17

European and Nordic power markets, pages 19 - 33

Data on Fortum’s nuclear fleet, pages 34 - 38

Russia, pages 40 - 46

Data on capacity payments, pages 42 - 44

Fortum’s investment programme, page 45

Financials and outlook, pages 48 – 54

Hedges, pages 54 - 55

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, NL, BE) since 11/2010 with a continued coupling 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

• Estonian price area in Nord Pool Spot since April 2010, Lithuanian bidding area from 6/2012. Latvia joined in June 2013, with the whole Baltic market now in Nord Pool Spot

• A common day-ahead market coupling for the whole north-western Europe to start 4 February 2014

• Most other EU regions and Switzerland are preparing to join during 2014

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

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

19

2009

February

2014

2012

2010-

2013

2014

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

20

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 will double by 2020

21

NO-UK link of 1,400 MW agreed to

be built 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 a 700 MW

DK-NL link, due to be built by 2019

Jutland – DE capacity planned to

grow by 1,000-1,500 MW by 2018

EU support to connect Kriegers

Flak offshore wind area to DK&DE

by 2018

The Northern Seas Offshore Grid and the Baltic

Energy Market Integration Plan are included as

priority electricity corridors in EU’s Infrastructure

Guidelines, approved in April 2013

New interconnections will

double the capacity to

over 8,000 MW by 2020

LitPol Link (500+500 MW) to

connect the Baltic market to

Poland in 2015/20. It will open a

new transmission route from the

Nordic market to the Continent

EU’s European Energy Programme

for Recovery co-financing Estlink 2

(2014) and NordBalt (2015)

New internal Nordic and Baltic grid

investments provide for increased

available capacity for export to the

Continent and Baltics

Svenska Kraftnät is starting a

study to extend the South West DC

Link from Sweden to Germany

350 MW of export capacity from

Finland to Russia due to become

available from March 2014

Nordic water reservoirs

22

Source: Nord Pool Spot

2000 2003 2010 2012 2011 reference level 2013

Q1 Q2 Q3 Q4

20

40

60

80

100

120

rese

rvo

ir c

on

ten

t (T

Wh

)

0

-15

-10

-5

0

5

10

15

20

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39

2012 2013

TWh

fro

m n

orm

al

I

Norway reservoir balance Sweden reservoir balance Finland reservoir balance

Weekly reservoir deficits compared to normal; High surplus in 2012 has changed to heavy deficit 2013

23

Fortum Q3/2013

hydro 3.9 TWh Fortum Q3/2012

hydro 6.3 TWh

Sources: NVE, Svensk Energi, SYKE, Fortum

Nordic year forwards

24

Source: NASDAQ OMX Commodities Europe

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

0

10

20

30

40

50

60

70

29 November 2013 €/MWh

2013

Q1

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 Q2 Q3 Q4

0

10

20

30

40

50

60

70

80

90

100

110

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

EUR/MWh Nord Pool System Price Forwards

29 November 2013

Wholesale price for electricity

25

Source: Nord Pool Spot, NASDAQ OMX Commodities Europe

25

Wholesale prices for electricity

26

Source: Nord Pool Spot, NASDAQ OMX Commodities Europe, APX-ENDEX, Bloomberg Finance LP, ATS, NP “Market Council”, Fortum

* Including weighted average capacity price

10

20

30

40

50

60

70

80

90

100

110

2008 2009 2010 2011 2012 2013 2014 2015

Dutch

German

Nordic

Russian*

Spot prices Forward prices EUR/MWh

29 November 2013 0

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

27

Source: ICE

Market prices 29 November 2013; 2013-2014 future quotations

Fuel and CO2 allowance prices

Nordic power generation – dominated by hydro, but fossil needed

28

Source: ENTSO-E Memo 2012 *) 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

406 TWh in 2012

Net import in 2012: -14 TWh

24

83

TWh %

43

237

19

6

21

10

58

5

29

Fortum’s Nordic generation capacity

SE1

SE2

SE3

SE4

MW Finland

Wind 3

Hydro 1 499

Nuclear 1 460

CHP 703

Other thermal 1 388

5 053

Generation capacity

in Finland

1 685

4 665

Other thermal

Hydro

Nuclear

CHP

3 247

Wind 17

Nordic capacity 10 929

1 315

Nordic MW

At the end of Q3 2012

Price areas MW

SE2 1 557

Hydro 1 543

Wind 14

SE3 4 022

Hydro 1623

Nuclear 1 787

CHP 612

Other thermal 297

SE4

Sweden

5 876

Generation capacity

in Sweden

Still a highly fragmented Nordic power market

30

Power generation

406 TWh

>350 companies

Electricity distribution

15 million customers

~500 companies

Electricity retail

15 million customers

~350 companies

Vattenfall

33%

Statkraft

Dong Energy

Others

Fortum

E.ON PVO E-CO Energi

Agder Energi

Norsk Hydro

BKK

Fortum

Vattenfall

Others

E.ON

54%

SEAS-NVE

Hafslund

Helsinki

Göteborg

Syd Energi

Dong Energy

Elenia

Others

52%

E.ON

Vattenfall

Fortum

Dong Energy

Göteborg, DinEl

SEAS-NVE

Hafslund

Helsinki

Statkraft

Bixia

Source: Fortum, company data, shares of the largest actors, pro forma 2012 figures.

New power generation capacity needed for increasing demand and retiring capacity replacements

31

• 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, ~6 000 GW of new

capacity needed by 2035

Source: IEA WEO 2013 (New polices scenario) 1) Total new capacity needed for increasing demand and replacements of retiring capacity

377

234

611

530

340

870

149

73

222

205

1328

1533

68

649

717

612

1487

2099

1941

4111

6052 New capacity, total (1

Capacity changes, 2013-2035 (GW)

Retiring capacity

US Europe Russia China India Other

areas

World

total

0%

50%

100%

150%

200%

250%

16%

44%

110%

221% Growth, 2011-2035

Primary energy demand

Electricity generation

Capacity increase

New capacity will require over 60 EUR/MWh power price

32

Estimated lifetime average cost in nominal 2014 terms.

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

Gas Nuclear Hydro Wind Clean coal

EUR/MWh

0

10

20

30

40

50

60

70

80

90

100

110

Other costs ( variation)

CO2 cost

Coal 0

10

20

30

40

50

60

70

80

90

100

110

Source: Nord Pool spot, NASDAQ OMX Commodities Europe

EUR/MWh

Futures

29 November 2013

1995 2013 2023

Fortum’s investment programme – Nordic region and Baltic countries

33

Already commissioned in 2013

Blaiken, Sweden, wind power 30 60 Q1 2013

Klaipeda, Lithuania, waste CHP 20 60 Q2 2013

Järvenpää, Finland, biomass CHP 23 63 Q2 2013

Jelgava, Latvia, biomass CHP 23 45 Q2 2013

Brista, Sweden, waste CHP 20 57 Q4 2013

Additional electricity capacity around 830 MW, 100% CO2-free

Project Electricity, MW Heat, MW Commissioned

Olkiluoto 3, Finland 400

Swedish nuclear upgrades 290

Refurbishing of hydro power 10 Annually

Värtan, Sweden, biomass CHP 130 280 Q2 2016

Total ~ 830 ~ 280

Overview of Fortum’s nuclear fleet

34

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

35

• 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

36

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

36

32

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

(?)

34

31

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

41

38

28

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

33

32

28

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

37

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

38

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 2014 120 ~25 257 ~2

FKA 2 2013 120 25 259 ~2

FKA 3 Decision 2014 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

39

Fortum today, pages 4 -17

European and Nordic power markets, pages 19 - 33

Data on Fortum’s nuclear fleet, pages 34 - 38

Russia, pages 40 - 46

Data on capacity payments, pages 42 - 44

Fortum’s investment programme, page 45

Financials and outlook, pages 48 – 54

Hedges, pages 54 - 55

Russia is the World’s 4th largest power market

40

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

TWh

5,000

Power generation in 2012 based on gross output.

Source: BP Statistical Review of World Energy June 2013

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

• 19 TWh power generation, 25 TWh heat production in 2012;

more than Fortum’s Nordic heat sales (15 TWh)

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

generation capacity

TGC-1

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

north-west Russia

• ~6,800 MW electricity production capacity (more than 40% hydro),

~28 TWh electricity, ~31 TWh heat in 2012

41

OAO Fortum

Tyumen

Tobolsk

Chelyabinsk

Nyagan

TGC-1

St. Petersburg

Moscow

42

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

III/13 III/12 I-III/13 I-III/12 2012 LTM

Electricity spot price

(market price), Urals hub,

RUB/MWh

1 136 1 114 1 013 951 956 1 030

Average regulated gas

price, Urals region, RUB

1000 m3

3 327 2 924 3 029 2 673 2 736 3 127

Average capacity price for

CCS ”old capacity”,

tRUB/MW/month

149 138 158 147 152 160

Average capacity price for

CSA ”new capacity”,

tRUB/MW/month

507 485 550 510 539 564

Average capacity price,

tRUB/MW/month

251 207 258 218 227 257

Achieved power price for

OAO Fortum, EUR/MWh 33,8 33,1 31,6 30,5 30,6 31,4

0

5

10

15

20

25

30

35

40

€/

MW

h

Day ahead power market prices for Urals

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

Source: ATS

2008 2009 2010 2011 2012 2013

Power market liberalisation – two markets

43

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

44

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

Key factors behind the profitability improvement in Russia

45

Efficiency improvement programme 2008-2011

– Increasing heat production profitability

– Fuel efficiency improvement

– Cost savings

New CSA capacity commissioning 2011-2015

– 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 - 836 MW

2014 - 418 MW

2015 - 496 MW

Total - 2,388 MW

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

46

Financials and outlook

47

Fortum today, pages 4 -17

European and Nordic power markets, pages 19 - 33

Data on Fortum’s nuclear fleet, pages 34 - 38

Russia, pages 40 - 46

Data on capacity payments, pages 42 - 44

Fortum’s investment programme, page 45

Financials and outlook, pages 48 – 54

Hedges, pages 54 - 55

Income statement

MEUR III/2013 III/2012 I-III/2013 I-III/2012 2012 LTM

Sales 1,148 1,140 4,466 4,325 6,159 6,300

Expenses -982 -917 -3,352 -3,164 -4,407 -4,595

Comparable operating profit 166 223 1,114 1,161 1,752 1,705

Items affecting comparability -69 3 24 90 122 56

Operating profit 97 226 1,138 1,251 1,874 1,761

Share of profit of associates and jv’s 4 7 66 26 23 63

Financial expenses, net -78 -83 -234 -234 -311 -311

Profit before taxes 23 150 970 1,043 1,586 1,513

Income tax expense 4 -30 -177 -196 -74 -55

Net profit for the period 27 120 793 847 1,512 1,458

Non-controlling interests -4 -6 47 37 96 106

EPS, basic (EUR) 0.04 0.14 0.84 0.91 1.59 1.52

EPS, diluted (EUR) 0.04 0.14 0.84 0.91 1.59 1.52

48

Comparable and reported operating profit

III/2013 III/2012 III/2013 III/2012 I-III/2013 I-III/2012 I-III/2013 I-III/2012

Power 138 201 43 205 651 765 643 787

Heat -14 -9 -3 -10 167 177 180 225

Russia -15 -12 -15 -12 46 40 46 51

Distribution 57 57 75 58 254 218 272 227

Electricity Sales 13 9 14 11 41 29 45 33

Other -13 -23 -17 -26 -45 -68 -48 -72

Total 166 223 97 226 1,114 1,161 1,138 1,251

49

Comparable

operating profit

Comparable

operating profit

Reported

operating profit

Reported

operating profit MEUR

• Non-recurring items, IFRS accounting treatment (IAS 39) of derivatives and nuclear fund adjustments had an impact on the reported operating profit EUR -69 (3) million in the third quarter, EUR 24 (90) during January-September.

Cash flow statement

MEUR III/2013 III/2012 I-III/2013 I-III/2012 2012 LTM

Operating profit before depreciations 295 394 1,684 1,740 2,538 2,482

Non-cash flow items and divesting activities 57 -38 -104 -157 -192 -139

Financial items and fx gains/losses 64 -161 -283 -435 -522 -370

Taxes -76 -85 -158 -252 -269 -175

Funds from operations (FFO) 340 110 1,139 896 1,555 1,798

Change in working capital 74 1 321 87 -173 61

Total net cash from operating activities 414 111 1,460 983 1,382 1,859

Paid capital expenditures -330 -342 -877 -919 -1,422 -1,380

Acquisition of shares 0 0 -12 -3 -14 -23

Other investing activities 66 -3 99 284 308 123

Cash flow before financing activities 150 -234 670 345 254 579

50

Key ratios

MEUR LTM 2012 2011

EBITDA 2,482 2,538 3,008

Comparable EBITDA 2,416 2,416 2,374

Interest-bearing net debt *7,897 7,814 7,023

Comparable net debt/EBITDA 3.3 3.2 3.0

51

Return on capital employed, ROCE (%) 9.5 10.2 14.8

Return on shareholders’ equity, ROE (%) 14.4 14.6 19.7

Good liquidity – committed credit lines total EUR 2.2 billion

*30.9.2013

Debt Maturity Profile

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 669

2014 1.280

2015 1.109

2016 883

2017 589

2018 680

2019 830

2020 75

2021 562

2022 969

2023+

TOTAL

1,346

8,992

52

per 30 Sep, 2013 per 31 Dec, 2012

Average Interest Rate (incl. swaps and forwards) 4.0 % 4.5 %

Portion of floating / fixed debt 50 / 50 % 45 / 55 %

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 (EBIT) of about EUR 500 million run-rate in its Russia Division during 2015

• Key drivers and risks

‒ Wholesale price of electricity and volumes • demand and supply • fuels

• hydrological situation • power plant availability

• CO2 emissions allowance prices

53

Outlook

• Annual capex estimate excluding potential acquisitions – 2013 EUR 1.1 to 1.4 billion

– 2014 EUR 0.9 to 1.1 billion

• Hedging – Rest of 2013 approximately 85% hedge ratio at approximately EUR 44/MWh

(Q2: 75% at EUR 45/MWh)

– 2014 approximately 65% hedge ratio at approximately EUR 42/MWh

(Q2: 50% at EUR 42/MWh)

– 2015 approximately 20% hedge ratio at approximately EUR 41/MWh

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

• Taxation – Effective tax rate for the Group 19-21%

• In Finland, corporate tax rate to be reduced from 24.5% to 20% starting 1 January 2014. The decrease would cause a one-time positive effect that would be booked in the fourth quarter 2013

– Fortum estimates that costs would increase by approximately EUR 45 million in 2013 compared to 2012 due to updated real estate taxation values in Sweden

– The Finnish Government have announced that a power plant tax (so-called windfall tax), to be introduced in 2014, will be cut to EUR 50 million from EUR 170 million annually

54

55

Hedging improves stability and predictability

2009 onwards thermal and import from Russia excluded

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

EUR/MWh

Achieved power price Spot price, SE&FI avg.

Realised Nordic prices quarterly since 2000

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

56

"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

57

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 well according to plan

• Cost savings – Visible in all divisions

• Divestments – EUR 200 million of non-core assets divested since the

start

Assessment of Fortum’s electricity distribution business

• Fortum decided in Jan 2013 to assess the future alternatives, including divestment, of its

electricity distribution business

• The assessment , that is expected to be concluded by the end of 2013, is progressing well

according to plan – high interest towards the assets.

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

energy-efficient CHP production and customer offerings

58

Fortum Distribution • Customers: 1.6 million

• Distributed electricity: 43,954 GWh

• Length of network: 156,000 km

• Nr of employees: ~ 900

• Sales: 1,105 MEUR

• Comparable operating profit: 356 MEUR

• Comparable EBITDA: 575 MEUR

• Net assets: 3,774 MEUR

Finland Customers: 633,000

Distributed electricity:

12,624 GWh

Sweden Customers: 900,000

Distributed electricity:

28,925 GWh

Norway Customers: 102,000

Distributed electricity:

2,405 GWh