Tapio Kuula, President and CEOFortum Corporation

Fortum A leading power and heat companyin the Nordic area

EEI Conference, London, March 14, 2011

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.

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

4

• Leading power and heat company in Nordic countries• Listed at the Helsinki Stock Exchange 1998• More than 100,000 shareholders• Among the most traded shares in Helsinki stock exchange• Market cap ~20 billion euros

A leading Nordic power and heat company

Dividend per shareEUR

2005

1.12

0.58

0.54

2006

1.26

0.73

0.53

2007

1.35

0.77

0.58

2008

1.00

72% 103% 78% 58%

1.00

200968%

1.00

201068%

2005

1.12

0.58

0.54

2006

1.26

0.73

0.53

2007

1.35

0.77

0.58

2008

1.00

72% 103% 78% 58%

1.00

200968%

1.00

2010

Foreign investors 30.3%

Other Finnishinvestors 8.8%

Households 7.6% Financial and insurance institutions 2.5%

28 February 2011

Finnish State 50.8%

5

Divisions of Fortum

Power DivisionFortum’s power generation, physical operation and trading, operation, maintenance and development of power plants as well as expert services for power producers.

Heat DivisionCombined heat and power generation, district heating activities and business to business heating solutions.

Electricity Solutions and Distribution DivisionFortum's electricity sales, solutions and distribution activities. The division consists of two business areas: Distribution and Markets.

Russia DivisionPower and heat generation and sales in Russia. It includes OAO Fortum and Fortum’s over 25% holding in TGC-1.

6

Our geographical presence today

TGC-1 (~25%)Power generation ~6 TWhHeat sales ~8 TWh

OAO Fortum Power generation 16.1 TWhHeat sales 26.8 TWh

Russia

PolandHeat sales 4.0 TWh Electricity sales 0.1 TWh

Baltic countriesHeat sales 1.4 TWhElectricity sales 0.3 TWhDistribution cust. ~24,000

Nordic countriesPower generation 52.3 TWhHeat sales 20.7 TWhDistribution cust. 1.6 millionElectricity cust. 1.2 million

Nr 2 Power generation

Electricity sales

Nr 2

Nr 1 Heat

DistributionNr 1

Key figures 2010Sales EUR 6.3 bnOperating profit EUR 1.7 bn Personnel 10,600

7

Fortum's power and heat production by source

Hydro power 32%

Coal 7%

Other 2%

Nuclear power 32%

Biomass 2%

Total generation 69.8 TWh(Generation capacity 14,113 MW)

Natural gas 25%

Fortum's power generation in 2010

Total production 52.1 TWh(Production capacity 24,494 MW)

Fortum's heat production in 2010

Peat 2%

Oil 3%Heat pumps, electricity 6%

Waste 2%

Biomass fuels 11%

Natural gas 59%

Other 4%

Coal 13%

8

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

* incl. TGC-5, TGC-6, TGC-7, TGC-9, ** incl. TGC-12, TGC-13. *** incl. International PowerSource Company information, Fortum analyses, 2009 figures pro forma, **** 2007

Largest global producers, 2009 TWh

Largest producers in Europe and Russia, 2009TWh

Power generation Heat productionElectricity customers in EU, 2009

millions

Customers

OneximTatenergo

Minsk EnergoKievenergo

IrkutskenergoBashkirenergo

RAO ES East

Inter RAO UESTGC-2

Fortum

DongKDHC, Korea

TGC-14

Lukoil

Gazprom

0 20 40 60 80 100 120 140ELCEN, Rom.

Dalkia****)

Vattenfall

SUEK**)

Beijing DH****)

*) IES

DEICEZ

Enel

CentricaEDP

Iberdrola

SSEEnBW

Fortum

EDFE.ONRWE

Vattenfall

Gas NaturalFenosa

PGE

Tauron

GDF SUEZ

HafslundDong

0 20 4010 30

Irkutskenergo*) IES

Iberdrola

RusHydro

FortumEnBW

Vattenfall

CEZ

RWE

DEIPGE

SSE

Statkraft

RosenergoatomGazprom

NNEGC Energoat.

EnelE.ONEDF

0 100 200 300 400 500 600

Inter RAO UES

GDF SUEZ***)

9

Fortum among the biggest nuclear and hydro generators in Europe and Russia

9

ED

F

Ener

goat

om

E.O

N

NN

EG

C

Rus

Hyd

ro

Vatte

nfal

l

Enel

Ele

ctra

bel

Sta

tkra

ft

Irkut

sken

ergo

Fortu

m

Iber

drol

a

RW

E

EnB

W

CE

Z

Ver

bund

Axp

o

Kras

noya

rska

ya

Hid

roel

ectri

ca

Gaz

prom

Alpi

q

E-C

O E

nerg

i

Nor

sk H

ydro

EDP

EPS,

Ser

bia

Ukr

hydr

o-

BKK

Agde

r

SSE DEI

Edis

on

PGE

IES

WG

C-1

OtherNuclearHydro

TWh

0

50

100

150

300

200

250

600

550

500

Con

cern

Ener

goat

om

HP

P

ener

go

Total generation

10

Fortum's carbon exposure among the lowest in Europe

Source: PWC & Enerpresse, Novembre 2010Changement climatique et Électricité, Fortum

g CO2 /kWh electricity, 2009

Average 346 g/kWh

0

200

400

600

800

1000

1200

DE

I

Dra

x

RW

E

CE

Z

SSE

EDP

Ene

l

Vat

tenf

all

E.O

N

Don

g

Uni

on F

enos

a

GD

F S

UE

Z E

urop

e

Iber

drol

a

Fortu

m to

tal

ED

F

PVO

Ver

bund

Fortu

m E

U

Sta

tkra

ft

41155

The share of CO2 -free power generation was 69% ofFortum's total power generation.

In the EU, the share was 91% of the power generation and ~100% of the capacity of the ongoing investment programme.

Note:Fortum’s specific emission of the power generation in 2010 in the EU were 84 g/kWh and in total 189 g/kWh, 86 % (91 %) emission free in EU and 66 % (69 %) emission free overall.Figures for all other companies include only European generation.

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

1212

Global mega trends drive the industry - Updated strategy supports sustainable business development

Create solid earnings growth in Russia

Leverage the strong Nordic core

Build platform for future growth

Competence in CO2 free nuclear, hydro and energy efficient CHP production, and operating in competitive energy markets

Strategy

• Power and heat demand and supply• Degree of market liberalization and integration• Climate change response• Energy system structure• Business models and competition

1313

New capacity needed for increasing demand and retiring capacity replacements

Source: IEA WEO 2010 (New polices scenario)

• 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, 5 700 GW of new capacity needed by 2035

0%

50%

100%

150%

200%

250%

300%

US Europe Russia China India Other areas

World total

Growth, 2008-2035Primary energy demandElectricity generation

~20%~ 40%

~180%

~270%

531

842

506

835

156

229

180

1533

80

628

527

1606

1980

5673New capacity, total (1

Capacity changes, 2010-2035 (GW)

Retiring capacity

1) Total new capacity needed for increasing demand and retiring capacity replacements

14

Ongoing new nuclear power projects and plans globally

USA9 (23*)

1

Russia

Canada 23

(3*)

Indonesia2 (4*)

14 (30*)

10

China

50 (110*)

27

2

12 (1*)

Japan56

South Korea

18 (40*)

6Vietnam2 (12*)

India

4 (4*)

12 (1*)

Argentina

1(4*)

Brazil

Thailand2 (5*)

4 (10*)

UAE

1(1*)

Egypt1Jordan

1 2 (2*)

Kazakhstan

Turkey

EU

6

22-28 2

2

Ukraine

BelarusArmenia

1

2 (1*)

Iran

1

2 (2*)

Pakistan

* In addition proposed projects, totally ~300Source: WNA, World Power Reactors & Uranium Requirements 6 January 2011, EU area: in addition announcements of power companies and authorities, news

Construction started / under start-up, in total ~60 reactors

Planned, in total ~160 reactors

15

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

New interconnections could double the capacity to over

8000 MW by 2020

Additional 700 MW cable NO-NL, as well 1400 MW

NO-DE links studied

EU financial support for 700 MW DK-NL link to

connect offshore wind, too

EU support to connect Kriegers Flak offshore wind area to DK&DE; new 400 kV

AC cable SE-DK by 2017

Jutland – DE capacity to be increased by 500 MW in 2012

and by further 500 MW by 2018 LitPol Link of 1000 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

New internal Nordic grid investments provide for

increased available capacity for export to the

Continent and Baltics

EU’s European Energy Programme for Recovery to cofinance to Estlink 2

and NordBalt

1400 MW link to the UK could connect offshore wind, too; North Seas Countries’ Offshore Grid Initiative launched for supergrid development

In the EU's Second Strategic Energy Review the Commission focuses

strongly on interconnecting the Baltic states and Poland to form an electricity

market around the Baltic Sea

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

17

Fortum's nuclear power capacity in Nordics

Olkiluoto

LoviisaForsmark

Oskarshamn

• Low utilisation in two units in Sweden

• Finnish units world class

• Currently all units running – Oskarshamn 3 with old capacity and Forsmark 2 at full capacity

Source: IAEA, NordPool. Rounded numbers.

Load factor 2005 2006 2007 2008 2009 2010 Revision days in 2011Oskarshamn 1 80 51 63 85 68 77 22Oskarshamn 2 90 78 76 86 75 90 20Oskarshamn 3 85 95 88 70 17 31 31

Forsmark 1 85 76 81 81 88 93 70Forsmark 2 94 72 85 79 64 39 21Forsmark 3 95 92 88 69 86 81 42Loviisa 1 95 93 94 86 96 93 17Loviisa 2 95 88 96 93 95 89 17

Olkiluoto 1 98 94 97 94 97 92 7Olkiluoto 2 94 97 94 97 95 95 24

18

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

Electricity capacity around 750 MW~100% CO2 -free

Project Electricity, MWHeat,MW Commissioned

Olkiluoto 3, Finland 400 2013Swedish nuclear upgrades 260 by 2013- Forsmark 3 upgrade (to be decided) 30 post 2013Refurbishing of hydro power 20-30 annually

Brista, Sweden 20 60 2013(waste CHP)Klaipeda, Lithuania 20 60 2012(biofuel/waste CHP)

Total by ~2013 ~750 ~120

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

2020

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• 16 TWh power generation, 26 TWh heat production in 2010,

which is more than Fortum’s Nordic heat sales• Ongoing investment programme to add 85% to Fortum’s

power generation capacity - Total investment EUR ~4 billion of which EUR 2.5 billion spent, will be completed by end of 2014

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

operating in north-west Russia• ~6,350 MW electricity production capacity (appr. 50% hydro),

~27 TWh/a electricity, ~31 TWh/a heat

OAO Fortum

Surgut

Tyumen

TobolskMoscow

St. Petersburg

Chelyabinsk

Nyagan

TGC-1

21

Fortum has been able to accelerate its investment programme in Russia

• Fully liberalised electricity market from 1 Jan 2011 except for volumes intended for households priced by RBA (~10% of volume)

• The ongoing investment programme will increase power capacity from 2785 MW to 5146 MW

– In 2011 +657 MW– In 2012 +836 MW– In 2013 +418 MW– In 2014 +450 MW

• Capacity prices for "new capacity" 3-4 times current "old capacity" prices

– Long term rules and price parameters approved– “Old” capacity prices will depend on auction outcomes, but likely remain relatively

low; potentially price caps could limit price– “new” capacity to receive higher guaranteed payments

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

23

Business environment improved

• Nordic power consumption up by 5% during 2010– Power consumption in the Nordic countries 396 TWh in 2010,

397 TWh in 2008 (pre-recession)– Temperature corrected power consumption in Nordic countries was still appr. 4%

(~16 TWh ) lower than in 2008– Water reservoirs at historically low levels– Nordic spot prices increased, forward prices more stable

• Russian power consumption increased by about 4% during 2010– Electricity spot price in Russia up 32% from a year ago

The overall Nordic and Russian power consumption continued to increase in 2010. Industrial activity clearly picked up in Fortum’s key market areas and the Russian

economy continued a solid path of recovery

24

Solid performance continued

• Comparable operating profit, EUR 1,833 (1,888) million – Lower hydro volumes in Power– Improvement in Russia, Distribution and Heat

• Earnings per share EUR 1.46 (1.48)– Negative IAS 39 accounting effect corresponding to EUR 0.18

• Net cash from operating activities EUR 1,437 (2,264) million – Decline due to SEK appreciation (roll-over of currency balance sheet hedges)

• Proposed dividend of EUR 1.00 per share

25

Key ratios – Strong financial position

MEUR 2010 2009EBITDA 2 271 2 292Comparable EBITDA 2 396 2 398Interest-bearing net debt 6 826 5 969Net debt/EBITDA 3.0 2.6Comparable Net debt/EBITDA 2.8 2.5

Return on capital employed (%) 11.6 12.1Return on shareholders' equity (%) 15.7 16.0Portion of floating / fixed debt 49/51% 62/38%

26

Outlook

• Key drivers and risks– Wholesale price of electricity

• Fuel, CO2 emissions prices and water reservoirs

• Nordic Markets– Market continues to recover – 2008 level reached by 2012-2014– Electricity continues to gain share of total energy consumption

• Russia– Wholesale market fully liberalised– Achieved efficiency improvements compared to the time of the acquisition to

be approximately EUR 100 million in 2011– Profits from Russia builds up in pace with the capacity increase

27

Outlook

• Capex (excluding potential acquisitions)– 2011-2012 around EUR 1.6 to 1.8 billion (mainly due to Russian investment

programme)– 2013-2014 around EUR 1.1 to 1.4 billion– Preliminary divestments agreed: total approximately EUR 0.5 billion in 2011

• Hedging– 2011 approximately 70% hedge ratio at approximately EUR 45/MWh– 2012 approximately 40% hedge ratio at approximately EUR 44/MWh

282828

Key strategic actions going forward

Focus on performance– Organisational efficiency– Nuclear availability– Value creation from Russian investments

Prepare for growth– Prioritized value enhancing acquisitions while maintaining strong balance sheet– Investigating high growth Asian markets

Create strategic partnerships for new innovative solutions, market entries and R&D– Partnerships in nuclear and bio energy– Electricity Sales and Distribution: services, solutions and partnerships

Continuous development of competences

Readiness for change– Leadership and organisational culture enabling readiness for change

Slide Number 1DisclaimerSlide Number 3A leading Nordic power and heat companyDivisions of FortumSlide Number 6Fortum's power and heat production by sourceFortum mid-sized European power generation player; �Global #4 in heatFortum among the biggest nuclear and hydro generators in Europe and RussiaFortum's carbon exposure among the lowest in EuropeSlide Number 11Global mega trends drive the industry - Updated strategy supports sustainable business developmentNew capacity needed for increasing demand and retiring capacity replacementsOngoing new nuclear power projects and plans globallyNordic and Continental markets are integrating – interconnection capacity could double by 2020Slide Number 16Fortum's nuclear power capacity in NordicsFortum’s investment programme �– Nordic region, Poland and Baltic countriesSlide Number 19Slide Number 20Fortum has been able to accelerate its investment programme in RussiaSlide Number 22Business environment improvedSolid performance continuedKey ratios – Strong financial positionOutlook OutlookKey strategic actions going forwardSlide Number 29

Tapio Kuula, President and CEO

Fortum Corporation

Fortum

A leading power and heat company

in the Nordic area

EEI Conference, London, March 14, 2011

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.

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

A leading Nordic power and heat company

Leading power and heat company in Nordic countries

Listed at the Helsinki Stock Exchange 1998

More than 100,000 shareholders

Among the most traded shares in Helsinki stock exchange

Market cap ~20 billion euros

Dividend per share

EUR

68%

68%

68%

2005

1.12

0.58

0.54

2006

1.26

0.73

0.53

2007

1.35

0.77

0.58

2008

1.00

72%

103%

78%

58%

1.00

2009

1.00

2010

2005

1.12

0.58

0.54

2006

1.26

0.73

0.53

2007

1.35

0.77

0.58

2008

1.00

72%

103%

78%

58%

1.00

2009

1.00

2010

Foreign investors 30.3%

Other Finnish

investors 8.8%

Households 7.6%

Financial and insurance institutions 2.5%

28 February 2011

Finnish State 50.8%

Divisions of Fortum

Power Division

Fortum’s power generation, physical operation and trading, operation, maintenance and development of power plants as well as expert services for power producers.

Heat Division

Combined heat and power generation, district heating activities and business to business heating solutions.

Electricity Solutions and Distribution Division

Fortum's electricity sales, solutions and distribution activities. The division consists of two business areas: Distribution and Markets.

Russia Division

Power and heat generation and sales in Russia. It includes OAO Fortum and Fortum’s over 25% holding in TGC-1.

Our geographical presence today

Poland

Heat sales 4.0 TWh Electricity sales 0.1 TWh

Baltic countries

Heat sales 1.4 TWh

Electricity sales 0.3 TWh

Distribution cust. ~24,000

Nr 2

Power generation

Electricity

sales

Nr 2

Nr 1

Heat

Distribution

Nr 1

Nordic countries

Power generation 52.3 TWh

Heat sales 20.7 TWh

Distribution cust. 1.6 million

Electricity cust. 1.2 million

Key figures 2010

Sales EUR 6.3 bn

Operating profit EUR 1.7 bn Personnel 10,600

TGC-1 (~25%)

Power generation ~6 TWh

Heat sales ~8 TWh

OAO Fortum

Power generation 16.1 TWh

Heat sales 26.8 TWh

Russia

Fortum's power and heat production by source

Hydro power

32%

Coal 7%

Other 2%

Nuclear power 32%

Biomass 2%

Total generation 69.8 TWh

(Generation capacity 14,113 MW)

Natural gas 25%

Fortum's power generation

in 2010

Total production 52.1 TWh

(Production capacity 24,494 MW)

Fortum's heat production

in 2010

Peat 2%

Oil 3%

Heat pumps,

electricity 6%

Waste 2%

Biomass fuels 11%

Natural gas

59%

Other 4%

Coal 13%

Fortum mid-sized European power generation player;

Global #4 in heat

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

Source Company information, Fortum analyses, 2009 figures pro forma, **** 2007

Dalkia

****)

SUEK

**)

Beijing DH

****)

*)

IES

Onexim

Tatenergo

Minsk Energo

Kievenergo

Irkutskenergo

Bashkirenergo

RAO ES East

Inter RAO UES

TGC-2

Fortum

Dong

KDHC, Korea

TGC-14

Lukoil

Gazprom

0

20

40

60

80

100

120

140

ELCEN, Rom.

Vattenfall

DEI

CEZ

Enel

Centrica

EDP

Iberdrola

SSE

EnBW

Fortum

EDF

E.ON

RWE

Vattenfall

Gas Natural

Fenosa

PGE

Tauron

GDF SUEZ

Hafslund

Dong

0

20

40

10

30

*)

IES

GDF SUEZ

***)

Irkutskenergo

Iberdrola

RusHydro

Fortum

EnBW

Vattenfall

CEZ

RWE

DEI

PGE

SSE

Statkraft

Rosenergoatom

Gazprom

NNEGC Energoat.

Enel

E.ON

EDF

0

100

200

300

400

500

600

Inter RAO UES

Largest global producers, 2009

TWh

Largest producers in Europe and Russia, 2009

TWh

Power generation

Heat production

Electricity customers in EU, 2009

millions

Customers

Fortum among the biggest nuclear and hydro generators in Europe and Russia

*

TWh

0

50

100

150

300

200

250

600

550

500

Concern

Energoatom

HPP

energo

Total generation

*

Fortum's carbon exposure among the lowest in Europe

Source:

PWC & Enerpresse, Novembre 2010

Changement climatique et Électricité, Fortum

The share of CO2-free power generation was 69% of

Fortum's total power generation.

In the EU, the share was 91% of the power generation and

~100% of the capacity of the ongoing investment programme.

Note:

Fortum’s specific emission of the power generation in 2010 in the EU were 84 g/kWh and in total 189 g/kWh,

86 % (91 %) emission free in EU and 66 % (69 %) emission free overall.

Figures for all other companies include only European generation.

0

200

400

600

800

1000

1200

DEI

Drax

RWE

CEZ

SSE

EDP

Enel

Vattenfall

E.ON

Dong

Union Fenosa

GDF SUEZ Europe

Iberdrola

Fortum total

EDF

PVO

Verbund

Fortum EU

Statkraft

41

155

g CO2/kWh electricity, 2009

Average 346 g/kWh

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

*

Global mega trends drive the industry - Updated strategy supports sustainable business development

Create solid earnings

growth in Russia

Leverage the strong

Nordic core

Build platform for

future growth

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

operating in competitive energy markets

Strategy

Power and heat demand and supply

Degree of market liberalization and integration

Climate change response

Energy system structure

Business models and competition

*

*

New capacity needed for increasing demand and retiring capacity replacements

Source: IEA WEO 2010 (New polices scenario)

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, 5 700 GW of new capacity needed by 2035

1)Total new capacity needed for increasing demand and retiring capacity replacements

0%

50%

100%

150%

200%

250%

300%

US

Europe

Russia

China

India

Other

areas

World

total

Growth, 2008-2035

Primary energy demand

Electricity generation

~20%

~ 40%

~180%

~270%

531

842

506

835

156

229

180

1533

80

628

527

1606

1980

5673

New capacity,

total (1

Capacity changes, 2010-2035 (GW)

Retiring capacity

Ongoing new nuclear power projects and plans globally

* In addition proposed projects, totally ~300

Source: WNA, World Power Reactors & Uranium Requirements 6 January 2011, EU area: in addition announcements of power companies and authorities, news

Indonesia

2 (4*)

Vietnam

2 (12*)

Thailand

2 (5*)

4 (10*)

UAE

1

Jordan

2 (2*)

Kazakhstan

2

2

1

2 (1*)

Iran

1

2 (2*)

Pakistan

USA

9 (23*)

1

Russia

Canada

2

3

(3*)

14 (30*)

10

China

50 (110*)

27

2

12 (1*)

Japan

5

6

South Korea

18 (40*)

6

India

4 (4*)

1

2 (1*)

Argentina

1

(4*)

Brazil

1

(1*)

Egypt

1

Turkey

EU

6

22-28

Ukraine

Belarus

Armenia

Construction started / under start-up, in total ~60 reactors

Planned, in total ~160 reactors

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

New interconnections could double the capacity to over 8000 MW by 2020

Additional 700 MW cable NO-NL, as well 1400 MW NO-DE links studied

EU financial support for 700 MW DK-NL link to connect offshore wind, too

EU support to connect Kriegers Flak offshore wind area to DK&DE; new 400 kV AC cable SE-DK by 2017

Jutland – DE capacity to be increased by 500 MW in 2012 and by further 500 MW by 2018

LitPol Link of 1000 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

New internal Nordic grid investments provide for increased available capacity for export to the Continent and Baltics

EU’s European Energy Programme for Recovery to cofinance to Estlink 2 and NordBalt

1400 MW link to the UK could connect offshore wind, too; North Seas Countries’ Offshore Grid Initiative launched for supergrid development

In the EU's Second Strategic Energy Review the Commission focuses strongly on interconnecting the Baltic states and Poland to form an electricity market around the Baltic Sea

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

Fortum's nuclear power capacity in Nordics

Low utilisation in two units in Sweden

Finnish units world class

Currently all units running – Oskarshamn 3

with old capacity and Forsmark 2 at full capacity

Source: IAEA, NordPool. Rounded numbers.

Olkiluoto

Loviisa

Forsmark

Oskarshamn

*

*

Fortum’s investment programme

– Nordic region, Poland and Baltic countries

Electricity capacity around 750 MW

~100% CO2-free

Project

Electricity, MW

Heat,MW

Commissioned

Olkiluoto 3, Finland

400

2013

Swedish nuclear upgrades

260

by 2013

- Forsmark 3 upgrade (to be decided)

30

post 2013

Refurbishing of hydro power

20-30

annually

Brista, Sweden

20

60

2013

(waste CHP)

Klaipeda, Lithuania

20

60

2012

(biofuel/waste CHP)

Total by ~2013

~750

~120

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

*

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

16 TWh power generation, 26 TWh heat production in 2010, which is more than Fortum’s Nordic heat sales

Ongoing investment programme to add 85% to Fortum’s

power generation capacity - Total investment EUR ~4 billion

of which EUR 2.5 billion spent, will be completed

by end of 2014

TGC-1

Slightly over 25% of territorial generating company TGC-1 operating in north-west Russia

~6,350 MW electricity production capacity (appr. 50% hydro), ~27 TWh/a electricity, ~31 TWh/a heat

Surgut

Tyumen

Tobolsk

Moscow

St. Petersburg

Chelyabinsk

Nyagan

OAO Fortum

TGC-1

Fortum has been able to accelerate its investment programme in Russia

Fully liberalised electricity market from 1 Jan 2011 except for volumes intended for households priced by RBA (~10% of volume)

The ongoing investment programme will increase power capacity

from 2785 MW to 5146 MW

In 2011 +657 MW

In 2012 +836 MW

In 2013 +418 MW

In 2014 +450 MW

Capacity prices for "new capacity" 3-4 times current "old capacity" prices

Long term rules and price parameters approved

“Old” capacity prices will depend on auction outcomes, but likely remain relatively low; potentially price caps could limit price

“new” capacity to receive higher guaranteed payments

Fortum today

Global and European power markets

Nordic power market

Russian power market

Financials and outlook

Content

Business environment improved

Nordic power consumption up by 5% during 2010

Power consumption in the Nordic countries 396 TWh in 2010,

397 TWh in 2008 (pre-recession)

Temperature corrected power consumption in Nordic countries was still appr. 4%

(~16 TWh ) lower than in 2008

Water reservoirs at historically low levels

Nordic spot prices increased, forward prices more stable

Russian power consumption increased by about 4% during 2010

Electricity spot price in Russia up 32% from a year ago

The overall Nordic and Russian power consumption continued to increase in 2010.

Industrial activity clearly picked up in Fortum’s key market areas and the Russian

economy continued a solid path of recovery

Solid performance continued

Comparable operating profit, EUR 1,833 (1,888) million

Lower hydro volumes in Power

Improvement in Russia, Distribution and Heat

Earnings per share EUR 1.46 (1.48)

Negative IAS 39 accounting effect corresponding to EUR 0.18

Net cash from operating activities EUR 1,437 (2,264) million

Decline due to SEK appreciation (roll-over of currency balance sheet hedges)

Proposed dividend of EUR 1.00 per share

Key ratios – Strong financial position

Portion of floating / fixed debt 49/51% 62/38%

Outlook

Key drivers and risks

Wholesale price of electricity

Fuel, CO2 emissions prices and water reservoirs

Nordic Markets

Market continues to recover – 2008 level reached by 2012-2014

Electricity continues to gain share of total energy consumption

Russia

Wholesale market fully liberalised

Achieved efficiency improvements compared to the time of the acquisition to be approximately EUR 100 million in 2011

Profits from Russia builds up in pace with the capacity increase

Outlook

Capex (excluding potential acquisitions)

2011-2012 around EUR 1.6 to 1.8 billion (mainly due to Russian investment programme)

2013-2014 around EUR 1.1 to 1.4 billion

Preliminary divestments agreed: total approximately EUR 0.5 billion in 2011

Hedging

2011 approximately 70% hedge ratio at approximately EUR 45/MWh

2012 approximately 40% hedge ratio at approximately EUR 44/MWh

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Key strategic actions going forward

Focus on performance

Organisational efficiency

Nuclear availability

Value creation from Russian investments

Prepare for growth

Prioritized value enhancing acquisitions while maintaining strong balance sheet

Investigating high growth Asian markets

Create strategic partnerships for new innovative solutions, market entries and R&D

Partnerships in nuclear and bio energy

Electricity Sales and Distribution: services, solutions and partnerships

Continuous development of competences

Readiness for change

Leadership and organisational culture enabling readiness for change

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EDF

Energoatom

E.ON

NNEGC

RusHydro

Vattenfall

Enel

Electrabel

Statkraft

Irkutskenergo

Fortum

Iberdrola

RWE

EnBW

CEZ

Verbund

Axpo

Krasnoyarskaya

Hidroelectrica

Gazprom

Alpiq

E-CO Energi

Norsk Hydro

EDP

EPS, Serbia

Ukrhydro-

BKK

Agder

SSE

DEI

Edison

PGE

IES

WGC-1

Other

Nuclear

Hydro

MEUR20102009

EBITDA2 2712 292

Comparable EBITDA2 3962 398

Interest-bearing net debt6 8265 969

Net debt/EBITDA3.02.6

Comparable Net debt/EBITDA2.82.5

Return on capital employed (%)11.612.1

Return on shareholders' equity (%)15.716.0

Load factor200520062007200820092010Revision days in 2011

Oskarshamn 180516385687722

Oskarshamn 290787686759020

Oskarshamn 385958870173131

Forsmark 185768181889370

Forsmark 294728579643921

Forsmark 395928869868142

Loviisa 195939486969317

Loviisa 295889693958917

Olkiluoto 19894979497927

Olkiluoto 294979497959524