- a leading power and heat companyin the Nordic area

Presentation for investorsFebruary 2009

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.

3

• Fortum today• European power markets• Russia• Financials and outlook

4

We intend to keep our leading position

To be the benchmark power and heat company excelling in sustainability

High ethicsCo-operative spiritExcellent performance

Fortum focuses on the Nordic, Russian and Baltic Rim markets as a platform for profitable growth Become the leading power and heat company

Become the energysupplier of choice

Benchmark business performance

Vision

Strategy

Values

Core Purpose

"Our energy improves life for present and future generations"

Creativity and innovation

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 TWh

2008 data

TGC-10* Power generation 16.6 TWhHeat sales 25.7 TWh

*pro forma

Russia

PolandHeat sales 3.6 TWh Electricity sales 18 GWh

Baltic countriesHeat sales 1.3 TWh Distribution cust. 24,000

6

Strong growth in EBITDA and in cash flow

Net debt

4 345 4 466

6 179

0

1 500

3 000

4 500

6 000

7 500

2006 2007 2008

MEUR

EBITDA

2 4782 066

1 884

0

500

1 000

1 500

2 000

2 500

2006 2007 2008

MEUR

Adjusted net debt/EBITDA (LTM)

2.3 2.22.5

0,0

1,0

2,0

3,0

4,0

2006 2007 2008

Sales gain From Lenenergo shares

Total net cash from operating activities

1 1511 550

2 002

0

500

1 000

1 500

2 000

2006 2007 2008

MEUR

Additional dividend from Hafslund

7

Growing capital returns

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 of EUR 1.00 per share proposed to the AGM, 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

8

Fortum Markets

Large customers

Fortum in the Nordic electricity value chain

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

9

Fortum's European power and heat 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%

10

Fortum's carbon exposure is among the lowest in Europe

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 Électricit é

Average 373 g/kWh

2007

g CO 2/kWh electricity

Source:PWC & Enerpresse , 2008Changement climatique et Électricit é

Average 373 g/kWh

64

Fortum 2008: 41 gCO2/kWh

1111

• 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• Częstochowa, Poland (coal/biomass CHP)• Tartu, Estonia (biomass/peat CHP)• Pärnu, Estonia (biomass/peat CHP)

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

MW (El.) MW (Heat)

400300240 220

25 5520 60

1501065 12025 5025 45

EUR 200-500 million per annum until 2013– electricity capacity ~1,200 MW– Nuclear investments in associated company balance sheets– ~80% CO2-free

12

Foreign investors 35.4%Finnish State 50.8%

Other Finnish investors 7.2%

Households 5.1% Financial and insurance institutions 1.5%

• 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 ~14 billion euros

A leading Nordic power and heat company

31 January 2009

13

• Fortum today• European power markets• Russia• Financials and outlook

14

Key EU objectives by 2020

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

15

Huge need for new capacity

Globally ... ... European wide ... ... and in Russia

Source: IEA World Energy Outlook 2006, reference scenario for generation1 Production 2004: 17 408 TWh/IEA 2006

1,700

1 000

1 200

1 400

1 600

1 800

2000 2005 2010 2015 2020

700+ TWh by 2020

Source: Ministry of Industry and Energy

Existing/remaining productionDemand

Source: Eurprog 2006; Europe, EU27; Fortum

1,300 TWh

0

1,000

2,000

3,000

4,000

2000 2005 2010E2015E2020E

TWh TWh

0

5,000

10,000

15,000

20,000

25,000

30,000

~10,000 TWh

20041 2010E 2020E

TWh 2,000

16

Demand is growing – new capacity is needed in the Nordic market

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

Nuclear OL3

Nuclear upgrades

Hydro

CHP

Thermal

Wind

Committed new production ~45 TWh

Demand forecasts for the Nordic market

• Electricity demand is expected to increase by ~35 TWh by 2020 compared to 2007

• Estimated retiring generation approx. 35 TWh*)

• Total need for investments roughly 70 TWh– decisions for another 25 TWh still needed

370

380

390

400

410

420

430

440

450

460

470

2010 2015 2020

TWh

Fortum

Eurprog

DG TREN

Vattenfall

Svensk Energi high

Svensk Energi low

17

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

0102030405060708090

100110

Source: Nord Pool

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

EUR/MWh

Futures4 February 2009

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.

18

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

Countries Stations Transmissioncapacity MW

From Nordel To Nordel

Denmark - Germany 2100 1550

Sweden - Germany 600 600

Sweden - Poland 600 600

Norway - Netherlands 700 700

Total 4000 3450

700

2100 600 600

350

• Theoretical maximum in transmission capacity ~35 TWhper annum

• 2007 net export from Nordic area to Continental Europe was ~9 TWh

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

19

Additional700 MW cable NO-NL

studied

New investments could double capacity to Continent by 2020Present interconnections from the Nordic market to the Continent have a total capacity of abt. 4000 MW

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 2017

PolLit 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

20

Market coupling milestones

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

• Market coupling EEX - Nord Pool started 29 September 2008 but was on 8th October suspended until Q1/'09 due to technical problems

• Market coupling NL-Nord Pool 2009 trough the NordNedcable

– during 2009 implicit auctions, synchronized with market coupling Nord Pool-Germany and Germany-BE/NL/FR

• Market coupling agreement signed in June for DE-F-BeNeLux.

– during 2009• NL-UK planned trough the BritNed cable• Integration of the Baltic power market into the Nordic power

market is discussed– Baltic Spot price area not before Q3 2009 due to Estonian law

change requirements• Fingrid is studying possibilities to increase flexibility in

electricity trade with Russia

Existin

g

2009

Q32008

2010

21

Source: Nord Pool

Nordic water reservoirs

rese

rvoi

r con

tent

(TW

h)

0

20

40

60

80

100

120

1996 2007 reference level2008 2009

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

22

Nord Pool year forwards

Year 06 Year 07 Year 08 Year 09 Year 10 Year 11 Year 12 Year 13 Year 14€/MWh3 February 2009

2005 2006Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2007Q2 Q3 Q4 Q1

2008Q2 Q3 Q4 Q1

2009

1015202530354045505560

70

05

65

75

23

Wholesale prices for electricity

Source: , ATS

Spot prices Forward pricesEUR/MWh

Dutch

German

Nordic

Russian*

0

10

20

30

40

50

60

70

80

90

100

110

* Including capacity tariff estimate. E.g 2009 11 €/MWh

2005 2006 2007 2008 2009 2010 2011

30 January 2009

24

Fuel and CO2 allowance prices

Source: ; market prices February 2009; 2009-2010 future quotations

CO2 price (EUA)

05

101520253035

EUR

/ tC

O2

2005 2006 20092007 2008 2010

Crude oil price (Brent)

020406080

100120

USD

/ bb

l

140160

2005 2006 20092007 2008 2010

Coal price (API2)240

04080

200

120160

USD

/ t

2005 2006 20092007 2008 2010

Gas price (NBP)

020406080

100120

GB

p/ t

herm

2005 2006 20092007 2008 2010

25

Nordic power generation mix

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

%

26

Still a highly fragmented Nordic power market

SEAS-NVE

Fortum

Vattenfall

Others

Hafslund

E.ON50%

HelsinkiStatkraft

GöteborgSyd Energi

Dong Energy

Electricity distribution14 million customers~500 companies

Power generation397 TWh

>350 companies

Fortum

Vattenfall

Dong Energy

Others

Statkraft

30%

E.ONPVO

E-CO Energi

BKKNorsk Hydro

Helsinki

Electricity retail14 million customers~350 companies

51%

Helsinki

Dong Energy

Fortum

VattenfallOthers

E.ON51%

Hafslund

SEAS-NVEStatkraft

ÖstkraftÖresundskraft

Current market shares based on 2007 figures, active players

27

Economic downturn has affected power consumption

• Nordic paper and metal companies have announced plant closures and temporary production cuts

• Power demand has decreased the most in Finland; the biggest share of energy intensive industry among the Nordic countries

• In the longer term, electricity consumption in the Nordic countries is still predicted to increase by less than 1% a year

Power demand decreased in all Nordic countries except Norway in 2008 …

… and the most dramatic decline in demand took place during Q4 / 2008

% c

hang

e (Q

4)

Sweden

Norway

Finland

Denmark

-10%

-8%

-6%

-4%

-2%

0%

- 5%

Nordic

Preliminary estimates

% c

hang

e (fr

om y

ear 2

007)

Sweden

Norway

Finland

Denmark

-4%

-3%

-2%

-1%

0%

1%

2%

- 1%

Nordic

Preliminary estimates

28

• Fortum today• European power markets• Russia• Financials and outlook

29

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

Source: IEA, 2008, data 2006*) Ministry of Industry and Energy

8001,0001,2001,4001,6001,8002,0002,200

2000 2005 2010 2015 2020

1,700

2,000

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

Demand growth 700+ TWhbefore year 2020

• High scenario 2,000 TWh/a by 2020• Base scenario: 1,700 TWh/a by 2020

Russia is the 4th largest power market in the World

Demand for electricity in Russia to increase 50% by 2020 *)

30

TGC-10

Surgut

Kurgan

Tyumen

TobolskMoscow

St. Petersburg

Chelyabinsk

NyaganKhanty-Mansisk

TGC-1

Fortum's current holdings in Russia

• Fortum holding 93.4% at the moment (income statement consolidated from 1 April 2008)• TGC-10 operates in the heart of Russia’s oil and gas producing region• EUR 2.5 billion paid of which EUR 1.3 billion remains in the company (share issue) and

will be used for planned investment program of TGC-10• The acquisition adds appr. 18 TWh/a electricity and appr. 27 TWh/a heat• Annual efficiency improvement approximately EUR 100 million in 2011• Marginally earnings dilutive for two years• Fortum's management model in place since September 2008

TGC-10

TGC-1• Fortum holding 25.7% at the moment (associated company) • ~6,250 MW electricity production capacity (appr. 50% hydro), ~24 TWh/a electricity, ~30 TWh/a heat

31

"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

Russian power industry reform has progressed well

Time

32

Reform – Recent and planned events for 2009

• RAO UES ceased to exist in June 2008 • Market Council established to continue

the power market development• Interest promotion organisation for

GenCos established • Launch of Transitional Capacity Market • Liberalisation rate increased to 25%• First capacity auction held in July 2008• Daily gas trading experiments• Share issue completed in all TGC's and

WGC's except WGC-1• Launch of exchange traded combined

energy and capacity contracts

• Increase of power market liberalisation rate to 50%

• Launch of Long Term Capacity Market rules in March 2009

• First long term capacity auction at the end of 2009

• Daily trading of gas

• Launch of Ancillary Services Market

• Launch of Financial Derivatives Market

Events taken place in 2008 Planned events during 2009

33

Further power market liberalisation

5 %10 %

15 %25 %

30 %

50 %60 %

80 %100 %

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

1/1/

2007

7/1/

2007

1/1/

2008

7/1/

2008

1/1/

2009

7/1/

2009

1/1/

2010

7/1/

2010

1/1/

2011

100 %

• 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 (of capacity)

34

Currently 30% of electricity sold with liberalised prices

• 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

0

5

10

15

20

25

30

35

40

€/M

Wh

2006 2008 20092007

35

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

Investment programme of TGC-10

Electricity 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 -

TGC-10 3,020 2,270 5,290Kurgan Generation (49%) Gas 235 235

36

Efficiency improvement appr. 100 MEUR in 2011

• Purchasing

• Portfolio Management and Trading (PMT)

• Heat regulation

• Heat - technical and business improvements

• Generation - technical improvements

• Others

37

• Fortum today• European power markets• Russia• Financials and outlook

38

Operational performance improved by 18%

Low sales margin in Markets

MEUR Higher achieved price and higher hydro power production in Power Generation

Higher fuel and CO2costs in Heat

Distribution – one-time costs in 2007

The first year of integration in Russia

Comparable operating profit

-5-3217433

1845

1564

-92-40

PowerGeneration2007 Heat Distribution Markets Russia Other 2008

39

Income statement

MEUR IV/2008 IV/2007 2008 2007

Sales 1 602 1 320 5 636 4 479Expenses -991 -800 -3 673 -2 632

Operating profit 611 520 1 963 1 847Share of profit of associates and jv's 48 18 126 241Financial expenses, net -54 -37 -239 -154

Profit before taxes 605 501 1 850 1 934Income tax expense 2 -108 -254 -326

Net profit for the period 607 393 1 596 1 608Minority interest 44 25 54 56

EPS, basic (EUR) 0.64 0.41 1.74 1.74EPS, diluted (EUR) 0.64 0.41 1.74 1.74

40

Cash flow statement

MEUR IV/2008 IV/2007 2008 2007

Operating profit before depreciations 743 635 2 478 2 298

Non-cash flow items and divesting activities -237 -18 -275 -286

Financial items and taxes 273 -162 -99 -393

Funds from operations (FFO) 779 455 2 104 1 619

Change in working capital -217 -110 -102 51

Total net cash from operating activities 562 345 2 002 1 670

Paid capital expenditures -338 -251 -1 018 -592

Acquisition of shares -28 -28 -1 243 -285

Other investing activities 23 10 -21 268

Cash flow before financing activities 219 76 -280 1 061

41

MEUR 2008 2007 2006

EBITDA 2 478 2 298 1 884Cash flow from operations 2 002 1 670 1 151Interest-bearing net debt 6 179 4 466 4 345Shareholders' equity 7 954 8 359 7 908Balance sheet total 20 278 17 674 16 839Net debt/EBITDA* 2.5 2.2 2.3Return on capital employed (%)* 15.0 14.0 13.4Return on shareholders' equity (%)* 18.7 15.8 14.4

Key figures and ratios

*2007 adjusted for REC and Lenenergo gains

42

Current Fortum Group financial targets

Return on capital employed 12%

Return on shareholder's equity 14%

Net debt/EBITDA 3.0–3.5

43

Capital expenditures EUR 1 - 1.5 billion – significant flexibility

• Annual capital expenditures EUR 1–1.5 billion

• Maintenance/productivity EUR 300–500 million p.a.

• Growth in Nordic and Baltic rim countries EUR 200-500 million p.a.

• Investments in Russian growth on average EUR 500 million per annum

Maintenance

Growth

Russian growth

~ EUR 300–500 m

~ EUR 500 m

~ EUR 200–500 m

Esimated annual Capex 2009-2013

44

Good liquidity

MEUR Available Outstanding Total amountSHORT TERM FINANCING

Commercial Paper ProgrammesFinnish CP Programme 328 172 500SEK 5.000 M Swedish CP Programme 175 285 460

503 457 960LIQUID FUNDS AND COMMITTED CREDIT LINES

Committed Credit Lines Short Term 206 0 206Long Term 2 100 600 2 700

2 306 600 2 906Liquid FundsCash and cash equivalents 733Bank Deposits over 3 months 588

1 321of which in Russia 1 020

Total Available Cash and Committed Financing 3 627(~ 50% in euros, ~ 50% in roubles)

45

Debt maturity profile

0

500

1000

1500

2000

2500

Y2009 2011 2013 2015 2017 2019+

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

MEUR

31 Dec, 2008 31 Dec, 2007Duration (years) 1,6 1,3Average interest rate (incl. swaps and forwards) 4,7 % 4,6 %Portion of floating / fixed debt 64 / 36 % 67 / 33 %

7592016:742017:12018:

2252015:

8812019+:

2462014:1.1042013:

4452012:2.2422011:

5432010:9802009:

MEUR

46

Hedging of Power Generation's Nordic sales

Hedge ratio Hedge price

rest of 2009 ~ 65% ~ EUR 53 per MWh

Status at the end of January 2009(Status at the beginning of October 2008)

(~55%) (~ EUR 53 per MWh)

2010 ~ 50% ~ EUR 46 per MWh(~20%) (~ EUR 55 per MWh)

47

• Flexible and climate-benign production portfolio

• Integration of Russian TGC-10 proceeding

• Growth through investment programmes in Russia and Baltic Rim countries

Fortum in a stable position

• Two new CHP plants to be commissioned in 2009

• Strong balance sheet and liquidity

• Good hedging positions

Fortum in a stable position to weather the turbulence,despite lower visibility beyond 2009

48