Sale of Fortum’s electricity

distribution business

in Sweden

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.

Any references to the future represent the management’s current best

understanding. However the final outcome may differ from them.

Fortum’s mission and strategy

3

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

Fortum’s Distribution business divestment

• Fortum sells its electricity distribution business in Sweden to a consortium consisting of Första AP-Fonden, Tredje AP-Fonden and Folksam from Sweden and Borealis Infrastructure Management Inc.

• Total consideration SEK 60.6 billion on a debt- and cash-free basis

– Corresponding to EUR 6.6 billion

• Fortum’s Distribution business divestment now concluded

• Fortum is looking for growth

• Sweden is our home market

4

Distribution business in Sweden sold for approx. EUR 6.6 billion

5

EUR SEK

Total consideration ~6.6 bln ~60.6 bln

Sales gain ~4.4 bln ~40 bln

Sales gain per share ~5 euro

• Subject to regulatory approvals and customary closing conditions

• Closing estimated during the second quarter 2015

• Approx. 390 employees will transfer after closing with the existing

terms of employment

Divestment of distribution in Finland, Norway and Sweden

TOTAL

Total consideration ~EUR 9.3 billion

Sales gain booked in 2014 and 2015 ~EUR 6.3 billion

Key facts about the Distribution business in Sweden

6

2014

Customers 906,000

Electricity network, km 71,000

Volume of distributed electricity, TWh 13.7

EUR

million

SEK

billion

Sales 634 5.8

Comparable operating profit 235 2.1

Comparable EBITDA 365 3.3

Net assets (at period end) 2,615 24.6

Capital expenditure 134 1.2

Fortum has been in the distribution business in Sweden since 1997 through acquisitions

Buyers with more than 20 years of experience of infrastructure and strong presence in Sweden

• Extensive experience and competence, long-term commitment to infrastructure and customer service

• Members have over 20 years of combined experience in the acquisition and management of infrastructure assets

• Strong Swedish presence, with 50% of the shares owned by local members

• Development of the business as a core business

• Customer relationships continue as before

Consortium members:

• Första AP-Fonden (AP 1) 12.5%

• Tredje AP-Fonden (AP 3) 20.0%

• Folksam 17.5%

• Borealis Infrastructure Management Inc. 50.0%

7

Customer relationships continue as before

• Distribution customer position

continues the same

– Regulated by the Swedish Energy

Market Directorate (Ei)

– Licenced business

• Fortum will continue as electricity

supplier to retail customers

– 1.3 million retail customers in the Nordic

countries – The largest electricity retailer

– New products and services for the

management of electricity consumption

and energy saving

8

Change in ownership – Distribution personnel view

9

• Some 390 Fortum employees will

move with the business with existing

terms

• Long-term commitment from the buyer

to develop as a core business

• Buyer has extensive experience in the

management of electricity networks

• Strong domestic presence in the

buyer’s side

10

Sweden continues to be important part of Fortum’s home market

1,139

4,615

Other thermal

Hydro

Nuclear

CHP

3,279

Wind 30

Nordic power

generation capacity

9,501

438

Nordic MW

3,088

1,820

30 12

Sweden MW

Hydro

Nuclear

Wind

Other

Power generation capacity, total 4,950

1,526

1,460

438

1,127

0,4 Hydro

Nuclear

CHP

Otherthermal

Wind

Power generation capacity, total 4,551

Heat production capacity, total 1,936

Finland MW

Number of employees in

Sweden approx. 640

Number of electricity sales

customers in the Nordics 1.3 million,

nearly half of them in Sweden Fortum Värme MW

CHP electricity 627

Heat

production

capacity, total

3 636

Number of employees in Fortum Värme appr. 700

AB Fortum Värme samägt med Stockholms Stad

is a joint venture with City of Stockholm

Fortum continues according to its strategy

11

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

Lo

w

Eff

icie

ncy

Hig

h E

ffic

iency

High Emissions Emission free

Solar based production with

high overall system efficiency

Traditional

energy production Exhaustible fuels that

burden the environment

Coal Gas

Oil

Advanced

energy production Energy efficient and/or

low-emission production

Nuclear

today

Nuclear

tomorrow

CHP

CCS

Geothermal

Hydro

Wind

Sun

Ocean

Bio

Storage

Active

Consumer Demand

Response

Interconnectors

Smart

applications

12

Copyright © Fortum Corporation

All rights reserved by Fortum Corporation and shall be deemed the sole property of Fortum Corporation and nothing in this slide

or otherwise shall be construed as granting or conferring any rights, in particular any intellectual property rights

Towards solar economy

13

Next generation energy company

Our strategic route

14

Birka Energi

50% → 100%

Østfold

Shares in

Lenenergo

Shares in

Hafslund

Gullspång

Neste

Divestment of

non-strategic

heat business

Oil business

spin-off

2007

Skandinaviska

Elverk

Länsivoima

45% → 65%

Birka Energi

50% Fortum

50% Stockholm Gullspång merged

with Stockhom Energi

E.ON

Finland

TGC-10

District heating

in Poland →

Divestment of

Fingrid shares

Divestment of

heat operations

outside of

Stockholm

Divestment of electricity

distribution and heat

businesses

TGC-1

established

Divestment

of Lenenergo shares

Divestment of electricity

distribution business

1996

IVO Fortum

Divestment of

small scale

hydro

2012 2008 2006

1997

Lenenergo

shares →

Stora Kraft

Länsivoima

→100%

2000

Elnova

50% → 100%

2003 2005

2011

Divestment of

Grangemouth power plant

2014

1998 2002

Research and development supporting business

15

• New solutions for electricity customers

– E.g. Fortum Fiksu: online optimisation of

heating

• New solutions in district heating

– Demand side management

– Open district heating network

• Bio-oil CHP+ concept: renewable energy

and flexibility

• Nuclear R&D: Nures® – purifying radioactive liquids

• Solar power plans: Pilots in India

• Wave power in demonstration phase

0

200

400

600

800

1 000

1 200

DE

I

RW

E

Dra

x

SS

E

CE

Z

E.O

N

Vatt

en

fall

ED

P

Enel

Edip

ow

er

EnB

W

Gas N

atu

ral F

enosa

GD

F S

UE

Z

Do

ng

En

erg

y

Fo

rtu

m to

tal

Iberd

rola

PV

O

ED

F

Verb

und

Fort

um

EU

Sta

tkra

ft

64

g CO2/kWh electricity, 2013

2014

64% of Fortum's total power generation CO2-free

94% of Fortum’s power generation in the EU CO2-free

Close to 100% of the ongoing investment program

in the EU CO2-free

Average 328 g/kWh

200

Fortum's carbon exposure among the lowest in Europe

16

Note: : Fortum’s specific emissions of the power generation in 2014 in the EU were 39 g/kWh and in total 177 g/kWh.

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

Source:

PWC & Enerpresse, December 2014

Climate Change and Electricity, Fortum