- a leading energy company in the Nordic area

Presentation for investors November 2006 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.

2 • Fortum today • Nordic power market • • Financials / outlook • Supplementary material

3 Fortum investment highlights

ƒ Fortum is a leading Nordic Power & Heat (“P&H”) company ƒ Focus entirely on power and heat following the spinn-off of the downstream oil business in 2005 ƒ Geographical focus on the Baltic rim area: , , Baltic countries, NW Russia ƒ Strong cash generation supported by leading operational efficiency ƒ Operations spanning the entire P&H value chain ƒ Majority ownership by (51.1%) ƒ Market capitalisation of around €19 billion

Key performance figures as of LTM in Q3/2006 Revenues EBITDA Net debt Market capitalisation €4,349m €1,887m €4,159m €19bn

4 Fortum provides leadership in core businesses

Businesses Power Generation Heat Distribution Markets Revenues €2,370m €1,212m €739m €1,774m Operating profit €993m (66%) €255m (17%) €249m (16%) €12m (1%) (comparable)

Portfolio Business unit Generation Management Service Heat/Värme Distribution Markets and Trading

ƒ Leading ƒBest-in-class ƒEfficient ƒNordic leader ƒLeading ƒ1.3 mio. efficiency physical and operation and in district Nordic business and ƒ 14% Nordic financial maintenance heating distribution private market market services ƒDeveloping company share operations presence in ƒ1.6 mio. sales the Baltics and customers customers Poland

Nordic market #2 Power Generation #1 Heat #1 Distribution #1 Electricity position

LTM numbers in Q3/2006

5 Fortum's strategy

Fortum focuses on the Nordic and Baltic Rim markets as a platform for profitable growth

Become the leading Become the power and heat energy supplier company of choice

Benchmark business performance

6 Presence in focus market areas

Nordic Generation 51.2 TWh Electricity sales 58.2 TWh Distribution cust. 1.6 mill. Electricity cust. 1.3 mill. NW Russia Heat sales 19.4 TWh (in associated companies) Power generation ~6 TWh Heat production ~7 TWh

Baltic countries Heat sales 1.2 TWh Poland Distribution cust. 22,000 Heat sales 3.9 TWh Electricity sales 20 GWh

7 Market Structure - Business Value Chain

Large NordicNordic customers wholesalewholesale Generation marketmarket Retail Nord Pool and Retail Retail Small bilateral companies marketmarket customers Deregulated

Regulated Transmission and system Distribution services

Independent TSO Independent DSO

8 Fortum Business structure

Fortum Markets Fortum's operating Large profit in 2005 NordicNordic customers EUR 1,334 million Fortum wholesalewholesale Small Power marketmarket customers Generation Nord Pool and Markets 2 % bilateral Other retail companies Deregulated Distribution 18 % Regulated Power Transmission Heat 18 % and system Fortum Generation services Distribution 62 %

9 Strong dividend growth

Dividend per share EUR

Fortum's aim is to pay a 1.12 dividend corresponding to Total ~ 2,750 MEUR an average payout ratio of

0.58 0.54 50% to 60% 0.42 0.31 0.23 0.26

0.13 0.18 0.58

1998 19992000 2001 2002 2003 2004 2005*

* 0.58 from continuing operations

10 • Fortum today • Nordic power market • Russia • Financials / outlook • Supplementary material

11 Towards a functioning European power market

Tomorrow Today - European - regional Nordic

Yesterday - national

2010 - 2000 - 1990s

Directives: Benefiting Market liberalisation • Market-based development • Increased competition Strategy: customers and Market integration • Increased efficiency societies

12 Nordic market becoming more integrated into Europe

Present Under construction +100 50 Planned 70 60 Discussed • In 2005, Nord Pool introduced a 1500 spot market area "KONTEK" to 800 +200 facilitate market coupling on the 500 Kontek cable + 200 550 100 • NorNed (Norway - The Netherlands) 350 1300 1040 2050 +800 1000 900 by 2008 630 (490) 900 600 +90 1600 1000 1200 300 • Estlink (Estonia - ) by 2007 700 1200600 +300 600 600 600 1000 • Nordel priority projects enhance 2200 600 550 Nordic power market integration 200 3800 1000 2500 125 1700 3500 1600 1000 2750 1500

13 Still a highly fragmented Nordic power market

Generation Distribution Retail

395 TWh 14 million customers 14 million customers > 350 companies ~ 500 companies > 450 companies

Vattenfall Fortum Fortum others others others Dong Energy 29% Vattenfall E.ON Fortum 51% 53% E.ON Helsinki BKK Dong Energy E-CO Energi Hafslund Norsk Hydro Hafslund Plusenergi PVO Statkraft Helsinki SEAS-NVE SEAS-NVE Helsinki Dong Energy E.ON BKK Statkraft Fjordkraft Göteborg Östkraft

2005 figures; the effects of the structural changes in Finland and in Denmark have been taken into account.

14 New capacity will be needed ...

... in Nordic countries ...... in the UK and ... and in Russia Germany ...

TWh 600

TWh 400 ~180 TWh Demand growth 500 200 ~300-400+ TWh 400 ~50 TWh before 2020 0 300 2005 2010 2020 200 100 TWh 0 600 Source: Ministry of Energy; Russian Energy 2005 2010 2020 ~170 TWh Strategy 2020 400 200

Source: Fortum 0 Demand 2005 2010 2020

Supply Source: Eurprog 10/2005: 2005 generation, capacity closures by 2010 and 2020 included

15 ... also in Nordic countries

Demand and capacity development in • Electricity demand is expected to the Nordic market increase around 50 TWh by 2020

TWh 500 • Committed plans of new capacity approx. 30-35 TWh 400

300 • Additionally: – Possible closures of current 200 capacity may take away up to 10 TWh by 2020 100 – Upgrade of Swedish nuclear 0 capacity requires a licence 2000 2004 2005 2010 2015 2020 Existing/remaining capacity Committed new capacity

16 New capacity will require a price

EUR/MWh EUR/MWh 80 80

Fuel costs, excl. CO2 costs 70 70 Fixed costs ( variation *) 60 60

50 50

40 40

30 30 Futures 30 October 20 2006 20 10 10

0 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 Coal Gas Nuclear Hydro Wind Source: NEA & IEA "Projected Cost of Generating Electricity", 2005 update Source: Nord Pool, Fortum (average of European projects); Elforsk: "El från nya anläggningar", 2003. *) Large variations in costs for new hydro and wind due to location and conditions

17 Nordic capacity structure

MW 35 000 Total 91 300 MW (31 Dec 2005)

30 000

25 000 Wind power Gas turbines, etc. 20 000 Condensing power 15 000 CHP, industry CHP, 10 000 1) Hydro power 5 000

0 Denmark Norway Finland

1) incl. power plants producing 100% of condensing in Denmark. The rest condensing power is included in CHP, district heating Source: Nordel

18 Power and heat production in Fortum

Fortum’s Nordic power generation Fortum’s Nordic heat production

Hydro power 42% Coal 17% Biomass fuels 24% Heat pumps, Other 2% electricity Peat 1% 16% Biomass 2% Other 11% Coal 3% Waste 6% Oil 10% Nuclear power 50% Peat 7% Natural gas 9%

51.2 TWh in 2005 20.6 TWh in 2005 Total generation capacity 11,136 MW Total production capacity 8,252 MW

19 Investments in organic growth

• Olkiluoto 3 • Swedish nuclear Total • Suomenoja ~ 1,200 MW • Värtan • Refurbishing of existing hydro assets

Value of the investment program around EUR 2,700* million

In addition • Automated meter management (EUR 240 million) • Security of supply in distribution (EUR 700 million)

* Incl. smaller capacity upgrades and refurbishments in various plants

20 The schedule for projects

Högdalen CHP OL 1&2 Done ~100 MW Forsmark 1&2 Refurbishing of hydro

Automation at Loviisa

OL 3 Ongoing ~1,200 MW Värtan CHP

Suomenoja CHP

Refurbishing of hydro

Swedish nuclear

2002 2003 2004 20052006 2007 2008 2009 2010.... 2015

21 Spot history and forwards in Europe

Yearly moving average spot price Forwards EUR/MWh EUR/MWh 100 90 80 UK 70

60 German 50 40 Nord Pool 30 Dutch 20 10 Spanish October 27, 2006 0 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Reuters, OMEL

22 Development of the European Emission Trading System Future challenges ETS Prices 2004-2006 €/tCO • EU committed to emission trading 2 35 • Improving the market by increasing market transparency 30 – information available to all 25

market participants at the same 20 time 15 – common procedures - harmonisation 10 – stability and predictability 5

• Expansion of emission trading 0 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 during the Kyoto period 2004 2005 2006 – JI and CDM utilisation – National allocation plans for second trading period (NAP 2)

23 Nordic water reservoirs

120

100

80

60

40 reservoir content (TWh) reservoir

20

1996 2000 2003 2005 2006 reference level 0 1 5 9 13172125293337414549 week

Source: Nord Pool

24 Nord Pool year forwards

€/MWh Year 05 Year 06 Year 07 Year 08 Year 09 Year 10 Year 11 60 October 27, 2006 58 56 54 52 50 48 46 44 42 40 38 36 34 32 30 28 26 24 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 2006

25 • Fortum today • Nordic power market • Russia • Financials / outlook • Supplementary material

26 From a western industry actor's perspective Russia is an emerging opportunity

Russian Energy Strategy Electricity production, TWh • Power and heat sector reform High • Need for huge investments Low 1400 • Need for efficiency 1200 improvement 1000 800 • Strong growth potential 600 400 200 0 1990 1995 2000 2005 2010 2015 2020

27 Russian power industry reform

A Nordic/Western analogy Key steps in the reform

Unbundling of businesses by ƒ "Power industry law" approved type of activity ƒ Restructuring of regional energos (P&H Competitive Regulated companies) businesses monopolies ƒ Formation of new companies ƒ Generation ƒ Transmission ƒ Establishment of Russian power exchange (ATS) ƒ Sales ƒ Distribution ƒ Launch of the free-trade sector of the wholesale market Market liberalisation in ƒ Introduction of vested bilateral contracts competitive businesses for a transitional period to replace the regulated sector of the wholesale market Pricing model reform – from tariff regulation to competitive pricing ƒ Launch of balancing power market ƒ Competitive market of ancillary services and generating capacity ƒ Gradual liberalisation of the retail market

28 Fortum's current operations in Russia

• A ~1/3 stake in companies spun-off from OAO Lenenergo, the largest utility company in northwest Russia; • Operation & maintenance services • Electricity imports • Nuclear fuel and coal imports

29 TGC-1 operating as of 1 October 2005

Installed Territorial Generating Company TGC-1 capacity • Production capacity ~ 6,070 MW, (MW) of which hydro 2,874 MW • Third largest territorial generation Sweden company in Russia 33,200 • Started operation on 1 October 2005 based on a leasing model Norway Finland 28,800 16,600 • Transfer of assets into TGC-1's owner- ship targeted at the beginning of 2007 • Fortum's calculated share ~25%

Denmark • Fortum has 3 members of 11 in total 12,700 on TGC-1's Board of Directors

Nordel figures 31 Dec 2005

30 • Fortum today • Nordic power market • Russia • Financials / outlook • Supplementary material

31 Comparable operating profit

MEUR I-III/2006 I-III/2005 2005 LTM Power Generation 696 557 854 993 Heat 158 156 253 255 Distribution 173 168 244 249 Markets 4 22 30 12 Other -34 -29 -47 -52 Comparable operating profit 997 874 1 334 1 457 Non-recurring items 23 20 30 33 Other items effecting comparability -20 -21 -17 -16 OP from continuing operations 1 000 873 1 347 1 474

32 Comparable and reported operating profit

Operating profit III/2006 Operating profit III/2005 Comparable Reported Diff. Comparable Reported Diff. Power Generation 195 184 11 161 181 -20 Heat -3 -15 12 12 13 -1 Distribution 39 42 -3 47 48 -1 Markets 26-4770 Other -8 -1 -7 -7 -9 2 Total 225 216 9 220 240 -20

33 Income statement

MEUR I-III/2006 I-III/2005 Sales 3 237 2 765 Expenses -2 237 -1 892 Operating profit 1 000 873 Share of profit of associates and joint ventures 51 28 Financial expenses, net -78 -100 Profit before taxes 973 801 Income tax expense -214 -206 Profit for the period from continuing operations 759 595 Profit for the period from discontinued operations - 474 Net profit for the period 759 1 069 Of which minority interest 26 31

EPS, Total Fortum Group (EUR) 0.83 1.19 EPS, continuing operations (EUR) 0.83 0.65 EPS, discontinued operations (EUR) - 0.54

34 Cash flow statement

MEUR I-III/2006 I-III/2005 2005

Operating profit before depreciations, continuing operations 1 311 1 178 1 754 Non-cash flow items and divesting activities -21 -13 15 Financial items and taxes -233 -288 -405 Funds from operations, continuing operations (FFO) 1 057 877 1 364 Change in working capital 2-30-93 Net cash from operating activities, continuing operations 1 059 847 1 271 Net cash from operating activities, discontinued operations - 133 133 Total cash from operating activities 1 059 980 1 404 Capital expenditures -297 -207 -346 Acquisition of shares -755 -7 -127 Other investing activities 0 57 75 Investing activities, discontinued operations - 1 155 1 155 Cash flow before financing activities 7 1 978 2 161

35 Balance sheet

MEUR Sept 30 Dec 31 2006 2005

Non-current assets 14 632 13 075 Current assets 2 272 2 055 ASSETS 16 904 15 130

Total equity 7 246 7 411 of which minority interest 223 260 Interest-bearing liabilities 4 970 3 946 Non-interest bearing liabilities 4 688 3 773 EQUITY AND LIABILITIES 16 904 15 130

Net debt / EBITDA 2.4 1.8 Equity per share (EUR) 7.97 8.17 Net debt, (MEUR) 4 159 3 158

36 Wholesale prices for electricity

EUR/MWh Spot prices Forward prices 100 90 80 70 UK 60 German 50 40 Nordic 30 20 10 October 27, 2006 0 2004 2005 2006 2007 2008 2009

Source:

37 Nord Pool year forwards

€/MWh Year 05 Year 06 Year 07 Year 08 Year 09 Year 10 Year 11 60 October 27, 2006 58 56 54 52 50 48 46 44 42 40 38 36 34 32 30 28 26 24 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 2006

38 Hedging of Power Generation's Nordic sales

Status at the beginning of October 2006:

Hedge ratio Hedge price

October to ~ 90 % ~ EUR 37 per MWh December 2006

Calendar year ~ 75 % ~ EUR 42 per MWh 2007

Calendar year ~ 35 % ~ EUR 41 per MWh 2008

39 • Fortum today • Nordic power market • Russia • Financials / outlook • Supplementary material

40 A leading Nordic power and heat company

• Leading power and heat company in Nordic • Founded and listed at the Helsinki Stock Exchange 1998 • More than 50,000 shareholders • Among the most traded shares in Helsinki stock exchange • Market cap ~19 billion euros

Households 4.8% Financial and insurance institutions 1.7%

Other Finnish investors 6.9%

Finnish State 51.1% International investors 35.5%

30 October 2006

41 Capital structure

• Fortum wants to have a prudent and efficient capital structure, which at the same time allows the implementation of its strategy • Access to flexible funding sources is key

• Dividend policy of 50 - 60% payout on the average for Fortum continuing operations' results • In the medium term, allowing the implementation of strategy and the returns of capital, Fortum expects to have its net debt to EBITDA around 3.0x

Beased on Q3/'06: Net debt/EBITDA 2.4

42 Excellent share performance

Market value Share price 19.0 Index EUR billion

700 Fortum 600 13.1

500 11.8

400 -3.3

300 6.9

Dow Jones 600 5.3 200 Utilities Index 4.0 3.4 100

2001 2002 2003 2004 2005 2006 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Mar Oil 30 Oct as 30 Oct 2006, adjusted for Neste spin-off 2000 2001 2002 2003 2004 2005 dividends 2006

43 Distribution regulation differ country by country

Finland Sweden Norway

New model for New regulatory model is The regulator has proposed a Status period 2005 - 2007 being applied to 2003 and model for the next 5-year 2004 tariffs period starting in 2007.

Regulation Rate of return, Yardstick, ex-post regulation, Revenue cap, ex-ante principle ex-post regulation with benchmarking based on regulation hypothetical efficient company

Maximum allowed rate of Actual operation vs. Maximum annual income limit Allowed return return based on actual fictious network parameters based on historical or defined defined cost data defines return cost data

Regulation authority has supervised 41 areas for 2003 and 55 areas for 2004 due to claimed overpricing. All companies that have received a decision to reimburse customers have appealed to court.

44 Fortum in Poland and the Baltic countries

• District heat to 30 cities and towns • Energy sales district heat 3.9 TWh electricity 19 GWh • Own production 0.9 TWh Operations of Fortum Heat heat plants 96 Wrocław CHP 1 Płock • Personnel: 1,200 • Energy sales in Estonia heat 1.2 TWh; gas 80 GWh • Energy sales in Lithuania heat 60 GWh; fuels 50 Gwh • Production capacity 118 heat plants 1 CHP plant • Personnel: 440

45 Fortum

2005

Generation 1.0 TWh Electricity sales 2.7 TWh Electricity distribution 2.6 TWh Heat sales 2.5 TWh

Distribution customers 161,500 Electricity customers 167,500

M€ Q1/05 Q2/05 Q3/05 Q4/05 2005 Sales 77484069234 EBITDA 30 25 8 29 92 EBIT 23 18 1 22 64

According to E.ON Finland accounts

46 47