Fortum Corporation Interim report January–March 2014 29 April 2014

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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.

Q1 2014 Results

Key figures (EUR) I/2014 I/2013 2013 LTM Sales, million 1,473 1,654 5,309 5,128

Comparable EBITDA, million 627 664 1,975 1,938

Operating profit, million 2,333 477 1,508 3,364

Comparable operating profit, million 477 524 1,403 1,356

Profit before taxes, million 2,341 490 1,398 3,249

Earnings per share 2.53 0.45 1.36 3.44

Items affecting comparability 2.09 -0.04 0.10

Net cash from operating activities, million 566 467 1,548 1,647

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Summary of the first quarter of 2014 • Good results despite low prices and weak rouble

• Cash flow from operations increased

• Finnish electricity distribution business sale completed EUR 1.85 billion gain booked

– Comparable Net debt/ EBITDA 2.5

– Norwegian business sale announced; expected to be completed in the second quarter

• Efficiency programme progresses as planned

• Fortum Värme treated as joint venture and consolidated with equity method

• New organization structure

– Strengthens the company’s capability to execute the company’s strategy

– Segment information restated

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Market conditions in the first quarter 2014 Nordic countries • Power consumption in the Nordic countries decreased due to exceptionally warm weather

• Water reservoir levels have normalised

• Nordic system spot prices approx. EUR 12 per MWh lower compared to 2013 European business environment and carbon market • European Commission gave its proposal for the EU’s 2020-2030 climate and energy policy

• Implementation of backloading started – EU carbon market characterised by high volatility Russia • Power consumption in Fortum’s operating areas declined marginally

• Spot price for power increased by 11% in the First price zone compared to the same period

in 2013

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Nordic water reservoirs

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Source: Nord Pool Spot

Q1 Q2 Q3 Q4

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40

60

80

100

120

rese

rvoi

r con

tent

(TW

h)

0

2000 2003 2013 2012 reference level 2014

Wholesale price for electricity

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Source: Nord Pool Spot, NASDAQ OMX Commodities Europe

0

10

20

30

40

50

60

70

80

90

100

110EUR/MWh Nord Pool Spot System Price Forwards

24 April 2014

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

Price development in the Nordic region and Russia

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Includes capacity income

-28% +9%

-13% +0%

Q1: Russia improved despite weakened rouble

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Comparable operating profit, EUR million

0

30

60

90

120

150

USD

/ bb

l

Crude oil price (ICE Brent)

2006 2007 20102008 2009 20122011 2013 2014 20150

7

14

21

28

35

EUR

/ tC

O2

CO2 price (ICE ECX EUA)

2006 2007 20102008 2009 20122011 2013 2014 2015

0

50

100

150

200

250

USD

/ t

Coal price (ICE Rotterdam)

2006 2007 20102008 2009 20122011 2013 2014 20150

20

40

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80

100

GB

p / t

herm

Gas price (ICE NBP)

2006 2007 20102008 2009 20122011 2013 2014 2015

10

Source: ICE

Market prices 24 April 2014; 2014-2015 future quotations

Fuel and CO2 allowance prices

Financials

Comparable and reported operating profit

I/2014 I/2013 I/2014 I/2013

Power and Technology 251 303 262 263 Heat, Electricity Sales and Solutions 48 57 45 51

Russia 73 41 73 40

Distribution 119 137 1,968 136

Other -14 -14 -14 -14

Total 477 524 2,333 477

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Comparable operating profit

Reported operating profit MEUR

• Non-recurring items (mainly to the sale of the Finnish electricity distribution business), IFRS accounting treatment (IAS 39) of derivatives and nuclear fund adjustments had an impact on the reported operating profit EUR 1,856 (-47) million in the first quarter

Power and Technology

MEUR I/2014 I/2013 2013 LTM

Sales 586 665 2,252 2,173

Comparable operating profit 251 303 859 807

Net assets 6,276 6,421 6,355

Comparable RONA % 13.8 13.0

Gross investments 35 26 181 190

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Q1 2014

• Lower comparable operating profit • Mainly due to EUR 6 per MWh lower achieved power price – average spot price

EUR 12 lower than during the comparison period • Higher hydro production – normalised hydro inflow • Nuclear availability high in all reactors expect Oskarshamn 2

Heat, Electricity Sales and Solutions

MEUR I/2014 I/2013 2013 LTM

Sales 446 531 1,516 1,431

Comparable operating profit 48 57 109 100

Net assets 2,365 2,408 2,295

Comparable RONA % 8.7 8.2

Gross investments 13 33 134 114

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Q1 2014

• Exceptionally warm weather, and divestments made in Finland in 2013 burdened both CHP volumes (despite new capacity) and retail sales.

The former Heat division and Electricity Sales and Solutions business area are reported as one segment . In addition, Fortum Värme, which earlier was consolidated as a subsidiary under the Heat division, is now treated as a joint venture and thus consolidated with the equity method.

Russia

MEUR I/2014 I/2013 2013 LTM

Sales 333 344 1,119 1,108

Comparable operating profit 73 41 156 188

Net assets 3,619 3,998 3,846

Comparable RONA % 5.2 6.0

Gross investments 59 71 435 423

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Q1 2014

• Comparable operating profit EUR 32 million euro higher • CSA capacity • Better heat spreads mainly due to increased tariffs • Improved bad debt collections • Increased efficiency had a positive effect on the result

• Overall, weakened rouble affected negatively approximately EUR 14 million

Distribution

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MEUR I/2014 I/2013 2013 LTM Sales 300 339 1,064 1,025

Comparable operating profit 119 137 332 314

Net assets 2,872 3,941 3,745

Comparable RONA % 8.8 8.8

Gross investments 25 49 255 231

Q1 2014 • Finnish electricity networks sale finalised • Norwegian sale announced, expected to be completed in the second quarter

2014 • Fortum continues evaluating the possible future divestment opportunity of the

Swedish electricity distribution business • First quarter result affected negatively by the warmer weather

Income statement MEUR I/2014 I/2013 2013 LTM

Sales 1,473 1,654 5,309 5,128

Other income and expenses 996 1,129 3,906 3,773

Comparable operating profit 477 524 1,403 1,356

Items affecting comparability 1,856 -47 106 2,009

Operating profit 2,333 477 1,508 3,364

Share of profit of associates and jv’s 72 78 178 172

Financial expenses, net -64 -65 -289 -288

Profit before taxes 2,341 490 1,398 3,249

Income tax expense -86 -86 -186 -186

Net profit for the period 2,255 404 1,212 3,063

Non-controlling interests 4 3 8 9

EPS, basic (EUR) 2.53 0.45 1.36 3.44

EPS, diluted (EUR) 2.53 0.45 1.36 3.44

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Cash flow statement MEUR I/2014 I/2013 2013 LTM

Operating profit before depreciations 2,483 617 2,129 3,995

Non-cash flow items and divesting activities -1,864 26 -262 -2,152

Financial items and fx gains/losses -24 -210 -188 -2

Taxes -29 -31 -210 -208

Funds from operations (FFO) 567 402 1,469 1,634

Change in working capital 0 65 79 14

Total net cash from operating activities 566 467 1,548 1,647

Paid capital expenditures -162 -210 -1,004 -956

Acquisition of shares -1 -1 -15 -15

Other investing activities 2,551 144 76 2,483

Cash flow before financing activities 2,953 400 604 3,157

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Key ratios

MEUR LTM 2013 EBITDA 3,995 2,129 Comparable EBITDA 1,938 1,975 Interest-bearing net debt 4,838 7,793 Comparable net debt/EBITDA 2.5 3.9

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Return on capital employed, ROCE (%) 17.9 9.0 Return on shareholders’ equity, ROE (%) 26.8 12.0

Good liquidity – committed credit lines total EUR 2.2 billion

Debt Maturity Profile

0

250

500

750

1000

1250

1500

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024+

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

MEUR

2014 922

2015 1,038

2016 864

2017 556

2018 642

2019 822

2020 77

2021 541

2022 1,001

2023 115

2024+

TOTAL

1,249

7,827

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per 31 Mar, 2014 per 31 Dec, 2013 Average Interest Rate (incl. swaps and forwards) 3.7% 3.6% Portion of floating / fixed debt 41/59% 51/49%

• Efficiency programme proceeding according to plan • Total annual cost savings visible in all divisions • Improved working capital efficiency • Divestments of non-core assets totalling approximately EUR 300 million

Fortum's efficiency programme 2013-2014

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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

Outlook

Outlook

• Nordic markets ‒ Fortum continues to expect that the annual electricity demand growth will average 0.5%

in the coming years ‒ Electricity is expected to continue 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 Segment during 2015

‒ Fortum is evaluating its targets on a continuing basis, and will do so also once the political and economic situation stabilises. The company will then estimate if there still are possibilities to achieve the current target or if a new target level should be set

• Key drivers and risks

‒ Wholesale price of electricity and volumes • demand and supply • fuels • hydrological situation • power plant availability • CO2 emissions allowance prices

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Outlook • Annual capex estimate excluding potential acquisitions

– 2014 EUR 0.9 to 1.1 billion (incl. Finnish distribution Q1/2014, excluding Fortum Värme)

• Hedging – Rest of the year 2014 approx. 55% hedge ratio at approx. EUR 44/MWh – 2015 approx. 25% hedge ratio at approx. EUR 42/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, a power plant tax has been adopted from the beginning of 2014. It will be

implemented provided that the EU Commission approves it. Fortum has filed a complaint. If implemented, the estimated impact on Fortum would be approximately EUR 25 million annually

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