- a leading energy company in the Nordic area...Price developments in Q1 2007 2 Price of EU emission allowances 0 5 10 15 20 25 30 35 Q1 Q4 Q4 2005 Q2 Q3 Q1 2006 Q2 Q3 Q1 2007 €/tCO

- a leading energy companyin the Nordic area

Mikael LiliusPresident and CEO, Fortum Corporation

Helsinki25 April 2007

2

• Fortum's first quarter 2007• Russia• Energy demand and climate change

3

• The highest ever quarterly result, despite warm weather and low spot prices

• Good hedging

• Strong cash flow

• Markets' result a disappointment

• Investment programme proceeding

Solid performance continued

4

• Comparable operating profit EUR 512 (486) million , + 5% • Earnings per share EUR 0.59 (0.39), + 51%• Net cash from operating activities EUR 497 (303) million

• Fortum’s net debt decreased to EUR 3,932 (4,345 at year end) million

• A gain from the Hafslund sale of its REC shares in Q1 result

– EUR 180 million booked in share of profit of associates

– Fortum's share of the proposed special dividend approximately EUR 120 million

Strong financial performance

Comparison: I/2006 financial results

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MEUR I/2007 I/2006 2006 LTMPower Generation 328 293 985 1 020Heat 137 126 253 264Distribution 78 81 250 247Markets -14 0 -4 -18Other -17 -14 -47 -50Comparable operating profit 512 486 1 437 1 463Non-recurring items 1 0 61 62Other items effecting comparability -23 -14 -43 -52Operating profit 490 472 1 455 1 473

Comparable operating profit

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• 41% decrease in Nord Pool whole sale price to26.7 EUR/MWh

• Power Generation's achieved Nordic power price increased by 6% to 39.2 EUR/MWh

• Average CO2 price decreased clearly to2.1 EUR/tonne

Price developments in Q1 2007

2

Price of EU emission allowances

0

5

10

15

20

25

30

35

Q4Q1 Q42005

Q2 Q3 Q12006

Q2 Q3 Q12007

€/tCO2

Source: Nord Pool

2007

2008

4

Nord Pool power price

Source:

2003 2004 2005Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2006Q2 Q3 Q4

€/MWh

0

10

20

30

40

50

60

70

80

Q12007

7

Nordic water reservoirs

Source: Nord Pool

0

20

40

60

80

100

120

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

2005 200620001996 2007 reference level

rese

rvoi

r con

tent

(TW

h)

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• Water reservoirs about 3 TWh above the average at mid April 2007. The combined snow and water reservoir level is generally estimated to be clearly higher than the average.

• Annual Nordic electricity consumption to increase about 1%

• Forward power prices at mid April 2007:

– rest of 2007 ~ 28-29 EUR/MWh

– 2008 ~ 42-43 EUR/MWh

• CO2 prices at mid April 2007:

– for 2007 ~ EUR 1 per tonne

– for 2008 ~ EUR 17-18 per tonne

Market fundamentals

9

Wholesale prices for electricity

Source:

UK

German

Nordic

EUR/MWh Spot prices Forward prices

0

10

20

30

40

50

60

70

80

90

100

2005 2006 2007 2008 2009April 20, 2007

10

Hedging of Power Generation's Nordic sales

Hedge ratio Hedge price

Rest of 2007 ~ 70 % ~ EUR 40 per MWh

Calendar year 2008 ~ 40 % ~ EUR 42 per MWh

Status at the beginning of April 2007:

11

• Fortum's first quarter 2007• Russia• Energy demand and climate change

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Fortum's current operations in Russia

TGC-1• Electricity production capacity

~6,070 MW(of which hydro 2,874 MW)

• Production volume of electricity ~22 TWh and heat ~29TWh

• Third largest TGC• Started operation on 1

October 2005 based on a leasing model

• Merger on 1 November 2006• On TGC-1's Board of Directors

Fortum has 3 representatives out of a total of 11 members

Other operations:• Operation & maintenance services• Electricity imports• Nuclear fuel and coal imports Owners of TGC-1:

RAO UES ~56%Fortum ~25%Norilsk Nickel ~7%Others ~12%

Fortum's holdings in Russia:TGC-1, Lenenergo and WGC-5- Invested amount ~300 MEUR- MCAP at 24 Apr 2007 ~1,200 MEUR

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Reform impacts industry structure

Competitive businesses

14 territorial

generation companies

(TGCs)

6 thermal wholesale generation companies

(WGCs)

1 hydro wholesale generation company (WGC)

<49% 65 -100%

System operator

0% 75 -100%

Holdings of guaranteeing

suppliers, isolated energos

48%

Federal Grid

Company (FGC)

4-5 inter-regional

distribution companies

(IDCs)

<25% 48%

49%

Holding of

IDCs

Regulated monopolies

Share of private ownership

Target structure planned to emerge in

2008

49 - 100%

Sales companies

Privatised companiesState-controlled companies

Ownership share

RAO UES restructuring

14

• Fortum's first quarter 2007• Russia• Energy demand and climate change

15

A huge foreseen increase in energy demand...

Source: IEA World Energy Outlook 2006 (the Reference Scenario)

0 2,000 4,000 6,000 8,000

Total

Coal

Oil

Gas

Nuclear

Hydro

Biomassand waste

Other RES

10,000 14,000 18,000

200420152030

* million tons oil equivalent

Mtoe*

+420%

+40%

+69%

+21%

+68%

+42%

+60%

+53%

• By 2030, globally, it is estimated that

– demand for primary energy grows 50% +

– demand for power more or less doubles

– power sector share of primary energy demand grows from 37% to 41%

Primary energy demand until 2030

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... and a need for significant investments in...

... Europe ...

Existing/remaining capacityDemand

Source: Eurprog 2005; Europe: EU25

0500

1,0001,5002,0002,5003,0003,500

2000 2005 2010E2015E2020E

TWh

900 TWh

... the Nordic market... ... and in Russia

Source: Ministry of Energy; Russian Energy Strategy 2020

Demand growth~300-400+ TWh by2020(lately, also higher estimates presented)

80 TWh

Committed new capacityExisting/remaining capacity

Demand

TWh

0

100

200

300

400

500

2000 2005 2010E2015E2020E

Source: Fortum

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New capacity will require an EUR 40+ power price

Source: IEA "World Energy Outlook 2006"; Elforsk "El från nya anläggningar", 2003 and Fortum

Adjusted to indicate nominal costs year 2011.Large variations in cost of new hydro and wind due to location and conditions

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

Fuel costsFixed costs( variation)

CO2 cost 15 €/ton

EUR/MWh

0

10

20

30

40

50

60

70

80

Cleancoal

Coal Gas Nuclear Hydro Wind

Source: Nord Pool

0

10

20

30

40

50

60

70

80EUR/MWh

Futures23 April 2007

18

Increasing use of energy will impact emissions dramatically

Greenhouse gases

Energy emissions 65%

Other emissions 35%

Source: Stern: Review on the economics on climate change, 2006; data from World Resources Institute Climate Analysis Indicators Tool (CAIT), 2000; IEA World Energy Outlook 2006 (the Reference Scenario)

Energy related CO2 emissions estimated to grow 55% by 2030Mill. tonnes CO2 2004 2030Power generation 10,587 17,680Industry 4,742 7,255Transport 5,289 8,246Resid. & services 3,297 4,298Other 2,165 2,942

Total 26,079 40,420

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Fortum's carbon exposure among the lowest in Europe

Source: PWC and Enerpresse 2005

Carbon exposure – European power companies

g/kWh

0

200

400

600

800

1000

1200

DE

I

Dra

x

RW

E

Ener

gi E

2

ED

P

Uni

on F

enos

a

CE

Z

Edis

on

Ende

sa

Scot

tish&

Sout

hern

Esse

nt

EN

EL

E.O

N

Els

am

Vatte

nfal

l

Elec

trabe

l

Hel

sink

i

PVO

Iber

drol

a

Verb

und

Fort

um

Briti

sh E

nerg

y

ED

F

Sta

tkra

ft

20

Some EU objectives by 2020

Competitiveness Environment

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 C02 emissions 20% (2020)

• Renewables 20% (2020)

• Development of CO2capture and storage

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• Olkiluoto 3• Swedish nuclear• Suomenoja• Värtan• Refurbishing of existing hydro assets• Peak load gas turbine

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

Fortum's accelerated investment programme

Value of the investment programme around EUR 2,800* million of which 90% CO2-free

Total~ 1,500 MW

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Other(peat, gas, coal, other)

CO2 -free production(nuclear power, hydro power, bio fuels)

• ~9 TWh increase in CO2 -free production*

• ~10 TWh increase in total production*

Continued increase in CO2 -free power production

0

10

20

30

40

50

60

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

TWh

2006 After theinvestmentprogramme

Fortum's power production

* compared to 2006;with normal utilisation

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• Järvenpää (CHP), Finland - bio-fuels (80%) and peat (20%).The power plant will replace a number of heat boilers based on heavy fuel oil and natural gas

• Wind power, Sweden

New environmentally benign investments

19

Other(peat, gas, coal, other)

CO2 -free production(nuclear power, hydro power, bio fuels)

• ~9 TWh increase in CO2 -free production*

• ~10 TWh increase in total production*

Continued increase in CO2 -free power production

* compared to 2006;with normal utilisation

0

10

20

30

40

50

60

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

TWh

2006 After theinvestmentprogramme

Fortum's power production

18

• Olkiluoto 3• Swedish nuclear• Suomenoja• Värtan• Refurbishing of existing hydro assets• Peak load gas turbine

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

Fortum's accelerated investment programme

Value of the investment programme around EUR 2,800* million of which 90% CO2-free

Total~ 1,500 MW

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• Continued focus on the Nordic and Baltic Rim countries

• Competitive corporate and cost structure

• Flexible and climate-benign production portfolio

• Strong financial position

• Promising opportunities in Russia

Fortum is well positioned

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