Interim Report January-March 2016 Fortum Corporation

28 April 2016

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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

Q1/2016: Satisfactory results, considering continuously weak power prices

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Key figures (MEUR), continuing operations I/2016 I/2015 2015 LTM

Sales 989 1,040 3,459 3,408

Comparable EBITDA 357 396 1,102 1,063

Operating profit 369 350 -150 -131

Comparable operating profit 275 343 808 740

Profit before taxes 390 350 -305 -265

Earnings per share, EUR 0.37 0.33 -0.26 -0.22

Net cash from operating activities 375 516 1,228 1,087

Summary of the first quarter of 2016

– The key factor currently influencing Fortum’s business performance is the low wholesale price of

electricity

– Highest ever first quarter hydro volumes 6.6 TWh • Nordic hydrological conditions were close to normal at the end of the first quarter of 2016, as the snow level was

below historical average

– The availability in nuclear was very good; utilisation rates were high in all our nuclear power plants

both in Finland and Sweden, 99% in average

– The multi-year investment programme in Russia was completed

– Continuing optimisation of our current fleet we sold the 665-MW Tobolsk CHP plant in Russia

– Fortum acquired the Polish electricity and gas sales company Grupa DUON S.A.

– We launched our new vision, strategic cornerstones as well as updated our financial targets. In

addition, we reorganised our business structure; and our new Executive Management Team has

been in place as of 1 April

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Acquisition of the electricity and gas sales company Duon

• One of the leading independent providers of electricity

and natural gas in Poland

• A leading distributor and transporter of LNG

• A high-growth company

• Revenues in 2015: EUR 206 million

• EBITDA in 2015: EUR 10 million

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Market conditions in the first quarter of 2016

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Nordic countries

− Power consumption in the Nordic countries was higher than in Q1/2015 and

totalled 117 (110) TWh

− The average system spot price was EUR 24.0 (28.1) per MWh

• Higher hydro power production and a lower marginal cost of coal condense

− The average area price in Finland was EUR 30.4 (32.1) per MWh and in

Sweden (SE3 ) EUR 24.1 (28.6) per MWh

• Finnish prices were somewhat higher during the beginning of the quarter, but

decreased as a result of the opening of the Sweden-Lithuania power cable and

mild weather during the latter part of the quarter

Russia

− Power consumption in Fortum’s operating area in Russia was marginally

higher than in Q1/2015 and totalled 212 (211) TWh

− Electricity spot price (in RUB) in the Urals hub decreased by 3% compared to

Q1/2015

Nordic water reservoirs

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Source: Nord Pool

Q1 Q2 Q3 Q4

20

40

60

80

100

120

rese

rvo

ir c

on

ten

t (T

Wh)

0

2000 2003 2015 2014 reference level 2016

Wholesale price for electricity

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Source: Nord Pool, Nasdaq Commodities

EUR/MWh Nord Pool System Price Forwards

25 April 2016

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 0

10

20

30

40

50

60

70

80

90

100

110

Price development in the Nordic region and Russia

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Includes capacity income

-15%

-19% -5%

-3%

Comparable and reported operating profit

I/2016 I/2015 I/2016 I/2015

Power and Technology 153 203 209 203

Heat, Electricity Sales and Solutions 56 58 61 64

Russia 79 97 111 98

Other -13 -15 -12 -15

Total, continuing operations 275 343 369 350

Discontinued operations - 82 - 81

Total, Fortum 275 425 369 431

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Comparable

operating profit

Reported

operating profit MEUR

Fortum’s first quarter 2016 operating profit was impacted by items affecting comparability EUR 94 (7) million

including sales gains EUR 44 (7) million as well as fair value changes in derivatives and nuclear fund

adjustments EUR 50 (0) million.

Q1: Lower Nordic power prices

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Comparable operating profit, EUR million

• 7 EUR/MWh lower achieved price

• 0.9 TWh higher volumes

• 27 million higher CSA provision release in 2015

• Weakened russian rouble EUR -11 million

• Lower volumes mainly due to sale of Tobolsk

Income statement

MEUR I/2016 I/2015 2015 LTM

Sales 989 1,040 3,459 3,408

Other income and expenses -714 -697 -2,651 -2,668

Comparable operating profit 275 343 808 740

Items affecting comparability 94 7 -958 -871

Operating profit 369 350 -150 -131

Share of profit of associates and jv’s 67 58 20 29

Financial expenses, net -47 -57 -175 -165

Profit before taxes 390 350 -305 -265

Income tax expense -59 -55 78 74

Net profit, continuing operations 331 295 -228 -192

Net profit, discontinued operations - 63 4,369 4,306

Net profit, Fortum total 331 358 4,142 4,115

EPS, basic (EUR), continuing operations 0.37 0.33 -0.26 -0.22

EPS, basic (EUR), discontinued operations - 0.07 4.92 -

EPS, basic (EUR), Fortum Total 0.37 0.40 4.66 4.63

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Cash flow statement

MEUR I/2016 I/2015 2015 LTM

Cash from operating activities:

Realised FX gains/losses 128 168 292 252

Other funds from operations 218 314 907 811

Change in working capital 29 34 29 24

Cash from operating activities, cont. operations 375 516 1,228 1,087

Cash from operating activities, discontinued operations 87 154 67

Cash from operating activities, total Fortum 375 603 1,381 1,153

Cash used in investing activities:

Paid capital expenditures -113 -101 -527 -539

Proceeds from divestments 44 36 55 63

Other investment activities -310 19 437 108

Total investing activities, continuing operations -379 -46 -35 -368

Total investing activities, discontinued operations

-43 6,303 6,346

Cash used in investing activities, total Fortum

-379 -89 6,268 5,978

Cash flow before financing activities, total Fortum -4 514 7,650 7,132

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Debt portfolio and average interest rate at the balance sheet date March 31, 2016

1) In addition Fortum has received EUR 202 million based on Credit Support Annex agreements with several counterparties. This amount has been booked as a short term liability.

• Total interest-bearing debt

EUR 6,070 million

– Average interest 3.5%

(2015: 3.7%)

– Portfolio mainly in EUR and

SEK with average interest cost

2.4% (2015: 2.6%)

– EUR 677 million (2015: 641)

swapped to RUB, average

interest cost including cost for

hedging 12.7%

(2015: 12.8%)

0

250

500

750

1000

1250

1500

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026+

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

Maturity profile

1)

Fortum has a strong financial position

MEUR LTM 2015

Comparable EBITDA, continuing operations 1,063 1,102

Comparable EBITDA, total Fortum 1,114 1,265

Interest-bearing net debt, total Fortum -2,158 -2,195

Comparable net debt/EBITDA, total Fortum -1.9 -1.7

ROCE % Return on capital employed, total Fortum 22.5 22.7

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Liquid funds totalled EUR 8.2 billion

Committed credit lines total EUR 2.2 billion

Outlook

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Nordic markets

• Fortum continues to expect that the annual electricity demand growth will be

approximately 0.5% on average in the coming years

• Electricity is expected to continue to gain share of total energy consumption

Russia

• The targeted operating profit (EBIT) level of RUB 18.2 billion in the Russia

segment is targeted to be reached during 2017-2018

Annual capex estimate, excluding potential acquisitions

• 2016 approximately EUR 650 million (maintenance capex approximately

EUR 300-350 million)

Hedging

• 2016 approx. 60% hedge ratio at approx. EUR 30/MWh

• 2017 approx. 30% hedge ratio at approx. EUR 28/MWh

Taxation

• Effective tax rate for 2016 for the Group 19-21%

For further information: www.fortum.com/investors