FORTUMA leading power and heat companyin the Nordic area

Presentation for investors

June 2009

2

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.

Disclaimer

3

Content

Fortum today

European power markets

Russia

Financials and outlook

4

We intend to keep our leading position

5

Our geographical presence today

Nordic countriesGeneration 51.6 TWhElectricity sales 59.1 TWhHeat sales 20.0 TWhDistribution cust. 1.6 millionElectricity cust. 1.3 million

Nr 1

Nr 2

Heat

Electricity sales

Distribution

Power generation

TGC-1 (~25%)Power generation ~7 TWhHeat sales ~7 TWhOAO Fortum*Power generation 16.6 TWhHeat sales 25.7 TWh

*pro forma

Russia

2008 data

PolandHeat sales 3.6 TWh Electricity sales 18 GWh

Baltic countriesHeat sales 1.3 TWh Distribution cust. 24,000

6

Total ~ 5,965 MEUR

1999 2001 20032000 2002 2004

0.18 0.23 0.26 0.310.42

0.58

2005

1.12

Dividend per shareEUR

0.13

1998

0.58

0.54

2006

1.26

0.73

0.53

• Dividend 2008 EUR 1.00 per share, in total ~EUR 0.9 billion

• Dividend policy of 50 - 60% payout of previous year's results on the average

2007

1.35

0.77

0.58

2008

1.00

Capital returns

72% 103% 78% 58%

7

Fortum’s strategic route

StockholmEnergi

Gullspång

Birka Energi50% Fortum

50% Stockholm

Østfold

Shares in Hafslund

Shares in Lenenergo

Starting TGC-1

District heat in Poland

2003 →

Divestment of Lenenergo

shares

TGC-10

Länsivoima→100% E.ON Finland

Separation of oil businesses

Gullspång

SkandinaviskaElverk

Birka Energi50% → 100%

StoraKraft

Länsivoima45% → 65%

Elnova50% → 100%

1996 20071997 1998 1999 2000 2001 2002 2003 2004 20062005 2008

IVO

Neste

8

Tapio Kuula• President and CEO of Fortum Corporation since May 2009• Joined Fortum in 1996 and has been a member of the Management Team since

1997• Holds a Master's degree both in electrical engineering and economics• Latest responsibility areas within the company are Generation, Power Portfolio

Management and Trading, Service and TGC-10 as well as Fortum's activities in Finland and Russia

• Earlier positions are within forest industry and managing director positions of several utility companies.

• Vice Chairman of the Board of Teollisuuden Voima Oy (TVO), Chairman of the Board of OAO Fortum, Member of the Board of Territorial Generating Company 1 (TGC-1) and Member of the Supervisory Board of Varma Mutual InsuranceCompany, Committee Member of Baltrel and its Chairman 2002-2005

• Previously Chairman/Vice Chairman of the Boards of several power and heat and distribution companies in Finland, Sweden, Russia, Germany and the UK

9

Foreign investors 34.0%Finnish State 50.8%

Other Finnish investors 7.6%

Households 5.7% Financial and insurance institutions 1.9%

• Leading power and heat company in Nordic• Listed at the Helsinki Stock Exchange 1998• More than 50,000 shareholders• Among the most traded shares in Helsinki stock exchange• Market cap ~16 billion euros

A leading Nordic power and heat company

31 May 2009

10

Fortum in the Nordic electricity value chain

Fortum Markets

Large customers

Small customers

Other retail companies

Fortum Distribution

Transmission and system services

Nordic wholesale

market

Nordic wholesale

market

Nord Pool and bilateral

FortumPower

Generation

Deregulated

Regulated

11

Fortum's European production by source

Total production 25.0 TWh (Production capacity 10,468 MW)

Fortum's heat production in 2008

Oil 4%

Peat 7%Heat pumps, electricity 13%

Waste 7%

Biomass fuels20%

Natural gas16%Other 10%

Coal 23%

Hydro power 44%

Peat 1%

Coal 4%

Other 2%

Nuclear power 45%

Biomass 2%

Total generation 52.6 TWh (Generation capacity 10,788 MW)

Fortum's power generation in 2008

Natural gas 2%

12

0

200

400

600

800

1000

1200

DEI

Nuo

n

RW

E

Dra

x

CEZ

Sco

ttish

&S

outh

ern

Uni

on F

enos

a

Ende

sa

Ene

l

EDP

Vat

tenf

all

Don

g En

ergy

E.O

N

Elec

trabe

l

PVO

Iber

drol

a

EDF

Brit

ish

Ene

rgy

Verb

und

Fortu

m

Sta

tkra

ft

g CO 2/kWh electricity

Source:PWC & Enerpresse , 2008Changement climatique et Électricité

Average 373 g/kWh

2007

g CO 2/kWh electricity

Source:PWC & Enerpresse , 2008Changement climatique et Electrici

Average 373 g/kWh

64

Fortum's carbon exposure is among the lowest in Europe

13

Fortum’s investment programmeNordic region, Poland and Baltic countries

• Olkiluoto 3, Finland, nuclear• Swedish nuclear• Suomenoja, Finland (gas CHP)• Järvenpää, Finland (biomass CHP)• Brista, Sweden (waste CHP)• Refurbishing of existing hydro assets• Wind power, Sweden• Czestochowa, Poland (coal/biomass CHP)• Tartu, Estonia (biomass/peat CHP), completed March'09• Pärnu, Estonia (biomass/peat CHP)

Electricity capacity ~1,200 MW~80% CO2-free

14

Decision-in-Principle application for Loviisa 3• A Decision-in-Principle application for the construction of a new

1000-1800 MW nuclear power plant unit in Loviisa• Designed service life of the unit at least 60 years• Fortum already has two nuclear power plant units in Loviisa• The power plant unit will be designed to allow for combined heat and

power production• Five reactor alternatives• The investment cost of one nuclear unit is EUR 4-6 billion• The plant site and its basic infrastructure ready, the basic investments in

nuclear waste management have been made

15

Planned schedule for the implementation of Loviisa 3

16

Fortum today

European power markets

Russia

Financials and outlook

17

Competitiveness Sustainability

Security of supply

• Implementation of internal energy markets

• Energy efficiency +20% (2020)

• Increased resources for technology development

• Development of cross-border transmission• Increase in own production• Enhancement of external energy relations

• Minimum reduction of EU CO2 emissions 20% (2020)

• Renewables 20% (2020)• Development of CO2

capture and storage

Key EU objectives by 2020

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New capacity needed in the Nordic market

Demand and capacity development in the Nordic market

0

100

200

300

400

500

2000 2005 2010 2015 2020

Committed projectsExisting/remaining generation*Demand

TWh

*) Existing capacity partly decommissioned due to increasing environmental requirements, partly replaced by more efficient new plants; may still be available as peak-load capacity.

OL 3nuclear

Nuclear upgradesHydro

Wind

CHP bio

CHP other

Committed new production ~40 TWh

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New capacity, except nuclear, will require over 60 EUR/MWh power price

Other costs ( variation)CO2 cost

Coal Gas Nuclear Hydro Wind Cleancoal

EUR/MWh

0102030405060708090

100110

Estimated lifetime average cost in nominal 2014 terms.Large variations in cost of new hydro and wind due to location and conditions.

0102030405060708090

100110

Source: Nord Pool

1995 -97 -99 -01 -05 -07 -09 -11 -13-03

EUR/MWh

Futures29 May 2009

20

700

2100 600 600

350

• Theoretical maximum in transmission capacity ~35 TWhper annum

• Net export from Nordic area to Continental Europe in 2007 was ~9 TWh and in 2008 ~15 TWh

• Approximately 20 TWh net export fairly easily reachable• NorNed was taken into use in May 2008

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

CountriesTransmissioncapacity MW

From Nordel To Nordel

Denmark - Germany 2 100 1 550

Sweden - Germany 600 600

Sweden - Poland 600 600

Norway - Netherlands 700 700

Total 4 000 3 450

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

Additional700 MW cable NO-NL

studied

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

700 -1400 MW NO-DE studied

DK-NL link studied

Baltic Wind Link 1100 MW studied to connect SE, DK and DE through the Kriegers Flak

offshore wind park

Jylland – DE capacity to be increased by 500 MW in 2011

and by further 500 MW by 2017PolLit Link of 1000 MW planned to connect the Baltic market to Poland

by 2012-2016. It would also open a

new transmission route from the Nordic market

to the Continent

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

New internal Nordic grid investments provide for

increased available capacity for export from

southern Sweden, Norway and Denmark

EU granted 100 MEUR for the Estlink 2 -project

22

Market coupling milestones

• Market coupling between Netherlands (APX), Belgium (Belpex) and France (Powernext) since 2006

• Market coupling Germany (EEX) - Nord Pool started in September 2008 but was suspended in October.Restart after modifications is due during Q3/2009.

• Market coupling agreement signed in 2008 for DE-F-BeNeLux coupling due to start in 2010

• Market coupling NL - Nord Pool planned through the NordNed cable synchronized with market coupling Nord Pool-Germany and Germany-NL/BE/FR

• NL-UK planned trough the BritNed cable from 2011• Integration of the Baltic power market into the Nordic

power market is discussed• Fingrid is studying possibilities to increase flexibility

in electricity trade with Russia

Existin

g

2010

Q22009

2010

2011

23

Nordic water reservoirs

2003 2007 reference level2008 2009

week

rese

rvoi

r con

tent

(TW

h)

0

20

40

60

80

100

120

1 5 9 13 17 21 25 29 33 37 41 45 49

Source: Nord Pool

24

Nord Pool year forwards

05

1015202530354045505560657075 29 May 2009

Year 06 Year 07 Year 08 Year 09 Year 10 Year 11 Year 12 Year 13 Year 14€/MWh

2005 2006Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2007Q2 Q3 Q4 Q1

2008Q2 Q3 Q4 Q1

2009Q2

25

EUR/MWh Spot prices Forward prices

Dutch

German

Nordic

Russian*

0

10

20

30

40

50

60

70

80

90

100

110

2005 2006 2007 2008 2009 2010 2011 * Including capacity tariff estimate. E.g 2009 11 €/MWh

25 May 2009

Source: , ATS

Wholesale prices for electricity

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Fuel and CO2 allowance pricesCrude oil price (ICE Brent)

020406080

100120140160

USD

/ bb

l

2006 2007 20102008 2009

CO2 price (NP EUA)

05

101520253035

EUR

/ tC

O2

2006 2007 20102008 2009

Coal price (ICE API2)

04080

120160200240

USD

/ t

2006 2007 20102008 2009

Gas price (ICE NBP)

0

20

40

60

80

100

GB

p / t

herm

2006 2007 20102008 2009

Source: ICE, Nord Pool

Market prices 29 May 2009; 2009-2010 future quotations

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Source: Nordel

0

20

40

60

80

100

120

140

160

Denmark Norway Sweden Finland

Fossil fuels

Nuclear

Waste

Biomass

Wind

Hydro

TWh/a

Total Nordic generation 397 TWh in 2007

4

19

10

214

63

87

TWh

Hydro variance +/- 40 TWh from average

Net import in 2007: 3TWh

1

5

3

54

16

22

%

Nordic power generation mix

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Current market shares based on 2007 figures, active players

Power generation397 TWh

>350 companies

Fortum

Vattenfall

Dong Energy

Others

Statkraft

30%

E.ONPVO

E-CO Energi

BKKNorsk Hydro

Helsinki

Electricity distribution14 million customers~500 companies

SEAS-NVE

Fortum

Vattenfall

Others

Hafslund

E.ON50%

HelsinkiStatkraft

GöteborgSyd Energi

Dong Energy

Electricity retail14 million customers~350 companies

Helsinki

DongEnergy

Fortum

VattenfallOthers

E.ON51%

Hafslund

SEAS-NVEStatkraft

ÖstkraftÖresunds-kraft

Still a highly fragmented Nordic power market

29

Fortum today

European power markets

Russia

Financials and outlook

30

Source: IEA, 2008, data 2006

0500

1,0001,5002,0002,5003,0003,5004,000

USChin

aJa

pan

Russia

India

Canad

a

German

y

France

Brazil

Nordic UK

South

Korea

TWh

Russia is the 4th largest power market in the World

Demand, General scheme, base case, 2007Demand, APBE, base case, post-crisis, March 2009

2006 2010 2015 20200

1,200

400

800

1,600

200

600

1,400

1,800

1,000

TWh

Demand for electricityin Russia

Russia is the World’s 4th largest power market – and growing rapidly

General scheme = power sector development target adopted by the government in 2007

APBE = forecasting agency in charge of updating General Scheme

31

OAO Fortum (TGC-10)• Majority of the Russian territorial generating company

OAO Fortum in the Urals region• OAO Fortum operates in the heart of Russia’s oil and

gas producing region• OAO Fortum adds 18 TWh/a to Fortum’s power

generation and the heat sales double• Annual efficiency improvement approximately

EUR 100 million in 2011• Fortum's management model in place since

September 2008TGC-1• Slightly over 25% of territorial generating company

TGC-1 operating in north-west Russia• ~6,250 MW electricity production capacity (appr. 50%

hydro), ~24 TWh/a electricity, ~30 TWh/a heat

Fortum - a major player in Russia

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"Power industry law" approved 2003Establishment of Russian power exchange (ATS) 2001Launch of the free-trade sector of the wholesale market

in European & Urals 2003in Siberia 2005

Launch of balancing power segment 2006Launch of new wholesale market model 2006Restructuring of regional "energos" (P&H companies) completeFormation of new companies completeCapacity market – transitional model 2008Long term capacity market model 2009Competitive market of ancillary services 2009Financial derivatives market 2009Full liberalisation of the wholesale market 2011 onwards

Key steps in the reform Time

Russian power industry reform has progressed well

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• Further liberalisation of energy market to increase to 50% in July 2009

• The rate of liberalised volume is based on 2007 balance. All new capacity is sold with liberal prices

• The sales to households will remain regulated still after 2011

Share of liberalised trade for existing capacity

5 %10 %

15 %25 %

30 %

50 %60 %

80 %100 %

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

Jan 2007

100 %

July 2007

Jan 2008

July 2008

Jan 2009

July 2009

Jan 2010

July 2010

Jan2011

Further power market liberalisation

34

• Day-Ahead-Market for electricity well-functioning and competitive

• All volume sold to Day-Ahead-Market, but market based price formation for about 30% of the volume

1) In addition generators currently receive on average about 11 EUR/MWh capacity paymentUsed EUR/RUB daily exchange rate

European and Urals part power price 1)

development; EUR/MWh

Currently 30% of electricity sold with liberalised prices

0

5

10

15

20

25

30

35

40

€/M

Wh

2009200820072006

35

Price development in Russia

Key electricity, capacity and gas prices for OAO Fortum

I/2009 I/2008 Change, %

Electricity spot price (market price), Urals hub, RUB/MWh 535 705 -24

Average regulated electricity price for OAO Fortum, RUB/MWh 541 479 +13

Average regulated capacity price, RUB/MW/month 189,500 157,900 +20

Average limit gas price in Urals region, RUB/1000 m3 1,750 1,660 +5

36

ChelyabinskKurgan

Tyumen

NyaganTobolsk

Moscow

2007 2013

MW

+73%+2,270 MW

3,020

0

1,000

2,000

3,000

4,000

5,000

6,000

5,290

Power generation capacity (MW)Plant Fuel type Existing Planned Total

Tyumen CHP-2 Gas 755 450 1,205Tyumen CHP-1 Gas 472 190 662Tobolsk CHP Gas 452 210 662Chelyabinsk CHP-3 Gas 360 220 580Chelyabinsk CHP-2 Coal, gas 320 320Argayash CHP Coal, gas 195 195Chelyabinsk CHP-1 Coal, gas 149 149Chelyabinsk GRES Gas 82 82Nyagan GRES Gas 1,200 1,200Boilers -

Total 3,020 2,270 5,290Kurgan Generation (49%) Gas 235 235

Investment programme of OAO Fortum

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• Purchasing

• Portfolio Management and Trading (PMT)

• Heat regulation

• Heat - technical and business improvements

• Generation - technical improvements

• Others

Efficiency improvement in Russia~100 MEUR in 2011

38

Fortum today

European power markets

Russia

Financials and outlook

39

Income statement

MEUR I/2009 I/2008 2008 LTM

Sales 1 632 1 440 5 636 5 828Expenses -1 033 -831 -3 673 -3 875

Operating profit 599 609 1 963 1 953Share of profit of associates and jv's -33 34 126 59Financial expenses, net -32 -45 -239 -226

Profit before taxes 534 598 1 850 1 786Income tax expense -111 -122 -254 -243

Net profit for the period 423 476 1 596 1 543Non-controlling interests 17 24 54 47

EPS, basic (EUR) 0.46 0.51 1.74 1.69EPS, diluted (EUR) 0.46 0.51 1.74 1.69

40

Cash flow statement

MEUR I/2009 I/2008 2008 LTM

Operating profit before depreciations 721 720 2 478 2 479

Non-cash flow items and divesting activities 1 -37 -275 -237

Financial items and taxes 125 -122 -99 148

Funds from operations (FFO) 847 561 2 104 2 390

Change in working capital -25 -19 -102 -108

Total net cash from operating activities 822 542 2 002 2 282

Paid capital expenditures -180 -164 -1 018 -1 034

Acquisition of shares -50 -772 -1 243 -521

Other investing activities -7 -26 -21 -2

Cash flow before financing activities 585 -420 -280 725

41

MEUR LTM 2008 2007

EBITDA 2 479 2 478 2 298Cash flow from operations 2 282 2 002 1 670Interest-bearing net debt 5 634 6 179 4 466Equity 8 729 8 411 8 651Balance sheet total 21 709 20 278 17 674Net debt/EBITDA* 2.3 2.5 2.2Return on capital employed (%)* 12.6 15.0 14.0Return on shareholders' equity (%)* 17.0 18.7 15.8*2007 adjusted for REC and Lenenergo gains

in Q1 '09

Key ratios

42

Return on capital employed 12%

Return on shareholder's equity 14%

Net debt/EBITDA 3.0–3.5

Current Fortum Group financial targets

43

Good liquidity

Note: Situation after repayments in April

MEUR Available Outstanding Total amountSHORT TERM FINANCING

Commercial Paper ProgrammesFinnish CP Programme 290 210 500SEK 5.000 M Swedish CP Programme 182 275 457

472 485 957

LIQUID FUNDS AND COMMITTED CREDIT LINES

Committed Credit Lines Short Term 207 0 207Long Term 2 700 0 2 700

2 907 0 2 907Liquid FundsCash and cash equivalents * 659Bank Deposits over 3 months 441

1 100of which in Russia 841

Total Available Cash and Committed Financing 4 007* Approximate figure after loan and dividend payments in April

44

Debt maturity profile after repayments in April

0

500

1000

1500

2000

Y2009 2011 2013 2015 2017 2019+

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

MEURMEUR

2009: 630

2010: 574

2011: 1,741

2012: 440

2013: 505

2014: 992

2015: 224

2016: 768

2017: 73

2018: 1

2019+: 1,698

31 March, 2009 31 Dec, 2008Duration (years)* 2.0 1.6Average interest rate (incl. swaps and forwards) 3.3 % 4.7 %Portion of floating / fixed debt 66 / 34 % 64 / 36 %*Duration is calculated on the Group’s total interest bearing net debt incl. long-term receivables

45

Hedging of Power Generation's Nordic sales

Hedge ratio Hedge price

rest of 2009 ~ 75% ~ EUR 51 per MWh

Status in mid-April 2009(Status at the end of January 2009)

(~65%) (~ EUR 53 per MWh)

2010 ~ 65%(~50%)

~ EUR 43 per MWh(~ EUR 46 per MWh)

2011 ~ 30% ~ EUR 42 per MWh

46

• Flexible and climate-benign production portfolio• Integration of Russian OAO Fortum proceeding as planned• Growth through investment programmes in Nordic and Baltic Rim

countries and in Russia– Capital expenditure for the next 4-5 years expected to be

within EUR 0.8-1.2 billion

• Good hedging positions• Strong balance sheet and liquidity

Fortum in a strong position

47