- a leading energy companyin the Nordic area

Presentation for investorsFebruary 2006

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• Nordic power market• Russia• Financials / outlook• Supplementary material

4

Fortum's strategy

Become the leadingpower and heat

company

Become theenergy supplier

of choice

Benchmark business performance

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

5

Towards an open European power market

• Market-based development • Increased competition• Increased efficiency

EU Directive: Market liberalisation, i.e., free choice of supplier

EU Commission Integration of national power strategy: markets through regional

markets into one European power market

1990's 2000 - 2010 -

6

Nr 1 Nr 2Power generation

Heat Electricity sales

Distribution

A leading Nordic power and heat company

7

Baltic countriesHeat sales 1.2 TWhDistribution cust. 22,000Poland

Heat sales** 3.9 TWhElectricity sales 20 GWh

NW Russia(in associated companies)Generation ~6 TWhHeat production ~10 TWh

NordicGeneration 51.2 TWhElectricity sales 58.2 TWhDistribution cust. 1.4 mill.Electricity cust. 1.2 mill.Heat sales 19.4 TWh

Presence in focus market areas

8

Operations throughout the entire power and heat energy chain

• Best-in-class physical and financial market operations

• Efficient operation and maintenance services for industry and energy companies

Portfolio Mgmt & Trading

Generation

Heat / Värme

Distribution

Service

• Nordic leader in district heating with strong industrial co-operation and a developing presence in the Baltics and Poland

• Leading Nordic distribution company with 1.4 million customers in Finland, Sweden, Norway and Estonia

• One of Europe’s most efficient generators with a approximately 14% market share of Nordic consumption

• Wide product offering for 1.2 million business and private electricity sales customers Markets

9

Power and heat production in Fortum

20.6 TWh in 2005Total production capacity 8,252 MW

Fortum’s Nordic heat production

Oil 10%

Peat 7%

Heat pumps, electricity16%

Waste 6%

Biomass fuels 24%

Natural gas 9%

Other 11%

Coal 17%Hydro power 42%

Peat 1%

Coal 3%

Other 2%

Nuclear power 50%

Biomass 2%

51.2 TWh in 2005Total generation capacity 11,136 MW

Fortum’s Nordic power generation

10

Strong dividend growth

Fortum aims at paying a dividend that corresponds to an average payout ratio of

50% to 60%

Total ~ 2,750 MEUR

* The Board proposal for the AGM(0.58 from continuing operations)

1999 2001 20032000 2002 2004

0.18 0.23 0.26 0.310.42

0.58

2005*

1.12

Dividend per shareEUR

0.13

19980.

580.

54

11

Excellent share performance

Neste Oil market value at 8 Feb 2006 ~ EUR 6,2 billion

Share priceIndex

Fortum

Dow Jones 600

0

50

100

150

200

250

300

350

400

450

1/01 1/02 1/03 1/04 1/05

Market valueEUR billion

4.05.3

6.9

11.8

31 Dec2001

31 Dec 2004

31 Mar2005

Neste Oil as

dividends8 Feb 2006

13.1

-3.3

31 Dec2000

3.4

31 Dec2002

31 Dec2003

16.5

1/06

12

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

13

wholesale priceSupply Demand

retail price

The wholesale market is liquid and Nordic, but retail markets are local

GenerationNordic wholesale market (Nordpool)

RetailLocal retail markets

Retail customers

Industry

DemandSupply

14

Fortum

Vattenfall

Elsam

others

Statkraft

31%

E.ON

PVOEnergi E2

E-CO EnergiHelsinki

Norsk Hydro

Fortum

Vattenfall

Nesa

others

Hafslund

E.ON54%

CopenhagenHelsinki

StatkraftGöteborgBKK

Still a highly fragmented Nordic power market

Distribution

14 million customers>500 companies

Retail

14 million customers ~450 companies

Generation

379 TWh> 350 companies

Source: Fortum, Company data; Shares of 10 largest actors, 2004 figures

Fortum

Vattenfall

Hafslund

othersE.ON

55%Nesa

PlusenergiCopenhagen

HelsinkiFjordkraft

Öresundskraft

15

New capacity will be needed

Demand and capacity development in the Nordic market

Existing/remaining capacityCommitted new capacity

0

100

200

300

400

500

2000 2004 2005 2010 2015 2020

TWh

• Electricity demand is expected to increase by around 55 TWh to 2020

• Committed plans of new capacity approx. 20 TWh

• Additionally:– effect increases in Swedish

nuclear may bring up to 8 TWh more capacity

– possible closures of current capacity may take away up to 10 TWh by 2020

16

New capacity will require an EUR 35+ price

Source: NEA & IEA "Projected Cost of Generating Electricity", 2005 update (average of European projects); Elforsk: "El från nya anläggningar", 2003.

0

10

20

30

40

50

60

70

80

Coal Gas Nuclear Hydro Wind

EUR/MWh

Fixed costs

Fuel costs, excl. CO2 costs

0

10

20

30

40

50

60

-94 -04-02-00-98-96 -06 -08Source: Nord Pool

EUR/MWh

Futures27 Jan 2006

17

Forwards

Source: Reuters, OMEL, ATS

EUR/MWh

Dutch Spot

German Spot

Nord Pool System

Spanish Spot

German futures

Nord Pool futures

Yearly moving average spot price ForwardsEUR/MWh

0

10

20

30

40

50

60

70

2001 2002 2003 2004 2005 2006 2007 2008Feb 7, 2006

18

Nordic market becoming more integrated into Europe

• Nord Pool has introduced a spotmarket area "KONTEK" to facilitatemarket coupling on the Kontek cable

• NorNed (Norway-the Netherlands)by 2008

• Estlink (Estonia-Finland) by 2007• Nordel priority projects enhance

Nordic power market integration

PresentUnder construction

DiscussedPlanned

2750 1500

1300

300

5060

900

2200

900

1200

600

1000 200

125

600

5001600

2500

35001700

550

+~700

1500800

500

2050

70

1040630(490)+901600

550600

1200

3800

700

350

600

500

+100

100+ 200

+300

1000

600

600

+200

600

19

Futures indicate continued high fuel prices and CO2 allowance prices

Oil price

20

30

40

50

60

70

USD

/ bb

l

2004 2005 20082006 2007

CO2 price

05

1015202530

EUR

/ tC

O 2

2004 2005 2006 2007 2008

Coal price

20

40

60

80

100

USD

/ t1

3

2004 2005 2006 2007 2008

Gas price

15

35

55

75

95

115

GB

p / t

herm

2004 2005 2006 2007 2008

Source: Reuters, Market prices Feb 8, 2006; 2006-2008 future quotations

20

Nordic water reservoirsre

serv

oir c

onte

nt (T

Wh)

week

0

20

40

60

80

100

120

1 5 9 13 17 21 25 29 33 37 41 45 49 53

2000 2005 2006 reference level

rese

rvoi

r con

tent

(TW

h)

week

0

20

40

60

80

100

120

1 5 9 13 17 21 25 29 33 37 41 45 49 53

2000 2005 2006 reference level

21

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

22

The large Russian power market is undergoingmajor change

Source: IEA

• A major need for new capacity

• Big potential for efficiency improvement

Power generation 2003

0

500

1 000

1 500

2 000

USChin

aJa

pan

Russia Ind

iaGerm

any

Canad

aFran

ce UKNord

icBras

il

> 4,000TWh

23

Development of Russian power industry –a Nordic/Western analogy

Unbundling of businesses by type of activity

Competitive businesses:

Market liberalisation in competitive businesses

• Generation• Sales

Pricing model reform – from tariff regulation to competitive pricing

Regulated monopolies:

• Transmission• Distribution

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• "Power industry law" approved• Restructuring of regional energos (P&H companies)• Formation of new companies• Establishment of Russian power exchange (ATS) • Launch of the free-trade sector of the wholesale market• Introduction of vested bilateral contracts for a transitional

period to replace the regulated sector of the wholesale market• Launch of balancing power market• Competitive market of ancillary services and generating capacity• Gradual liberalisation of the retail market

Key steps in the reform

25

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

26

Prices of fuel and electricity in Russia are currently low

Source: IEA, RAO UESAverage prices Jan - Oct 2005

Hydro 17%

156 TWh

Nuclear16%

150 TWh

Oil 3%

Gas 45%407 TWh

Coal 19% 172 TWh

Russian power generation914 TWh in 2003

• Liberalisation of price of gas as fuel is important in setting the electricity price in Russia

• So far, the implicit price cap set by the tariff in the regulated sector prevents free price formation in the free-trade sector of the wholesale market

0

10

20

30

40

50

Russia Germany

Electricity price and typical marginal costs for gas-fired power plant

Gas cost

CO2 cost

Electricity price

27

Lenenergo shareholding

Fortum has a long experience of successful co-operation

1950 1960 1970 1980 1990 2000

Nuclear fuel import

Electricity import

Loviisa NPP constructionConstruction of hydro power plants in Kola area

Construction of North-West CHP in St Petersburg

Automation & information systemdeliveries to thermal power plants

Safety improvements for nuclear power plants

Permanent presence in Moscow/St Petersburg

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Fortum's strong foothold in NW Russia today originates from stake in Lenenergo

• Largest utility in northwest Russia• 9 thermal and 6 hydro plants• Power generation

– capacity ~3,240 MW – production ~13.4 TWh/a

• Heat generation – capacity ~13,900 MW – production ~25.2 TWh/a

• Personnel ~12,500 • Fortum's share of the company

about one third

29

Hydro power generation Hydro power capacityShare of TGC-1's hydro capacity

Thermal power generation Thermal power capacityHeat sales

Electricity sales

Distribution volumeNumber of customers

Key financials in 2004Net sales Total assetsInterest-bearing debt

Number of employees

Ownership of Kolenergo:Fortum 24.8%, RAO UES 49.2% and others 26.0%

Kolenergo – northwest Russian power company

TWh/aMW

TWh/aMW

TWh/a

TWh/a

TWh/a

MEURMEURMEUR

6.51,59355%

1335

4

11

11200,000

24840415

3,330

Key figures of Kolenergo

Interregional DistributionCompany

InterregionalTransmissionCompany *)

Territorial GeneratingCompany TGC-1

Electricity salescompany

Kola DistributionCompany

Kola BackboneNetworks Company

KolaPower Generation

Companies

ElectricitySale Company

Exchange rate EUR/RUB 25.11.2005*) Owned by Federal Grid Company

Unbundled companieswith the same shareholding

structure as Kolenergo

Companies are planned to be merged with territorial or

interregional companies

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TGC-1 operating as of 1 October 2005

Finland 16,500

Installed capacity MW

Norway 28,300

Sweden 33,600

Denmark 12,700

Territorial Generating Company TGC-1• Production capacity ~ 5,750 MW,

of which hydro 2,874 MW • Third largest territorial generation

company in Russia• Started operation on 1 October 2005

based on a leasing model• Transfer of assets into TGC-1's owner-

ship targeted at the beginning of 2007• Fortum's calculated share ~26% *)

• On TGC-1's Board of Directors Fortum has 3 representatives out of a total of 11 members

*) Direct owners of TGC-1 are initially Lenenergo 63%, Kolenergo 25%, Karelenergo 12%

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

32

• Successful separation and listing of Neste Oil

• Significant progress in Russia and Poland

• Agreements to acquire E.ON Finland shares from the city of Espooand E.ON Nordic

• The comparable operating profit of all segments improved from 2004

An outstanding year for Fortum

33

• EUR 1,334 (1,148) million comparable operating profit from continuing operations, up by 16%

• From continuing operations

– earnings per share EUR 1.01 (0.79)

– net cash EUR 1,271 (1,232) million

• Proposed cash dividend EUR 1.12 per share

– of which EUR 0.58 per share from continuing operations

• Revised targets for capital structure

• Planned share repurchase programme of EUR 1 billion in the next three years, of which EUR 500 million proposed for 2006

Comparison: 2004 financial results

Strong performance

34

Revised targets for capital structure

• Fortum wants to have a prudent and efficient capital structure, which at the same time allows the implementation of its strategy

• The company targets a capital structure where net debt to EBITDA is in the range of 3.0 - 3.5

• In the medium term, allowing the implementation of strategy and the returns of capital announced today, Fortum expects to have its net debt to EBITDA around 3.0

– proposed dividend ~ 980 MEUR

– proposed repurchase programme ~ 500 MEUR

– E.ON Finland deal ~ 750 MEUR

35

• 1% increase in Nord Pool system area price to 29.3 EUR/MWh in 2005

• Fortum's achieved Nordic Generation power price increased by 7% to 31.2 EUR/MWh in 2005

• 17% increase in Nord Pool system area price to 32.3 EUR/MWh in Q4/2005

• Fortum's achieved Nordic Generation power price increased by 10% to 33.0 EUR/MWh in Q4/2005

Development of power prices

36

MEUR IV/2005 IV/2004 2005 2004Power Generation 297 232 854 730Heat 97 75 253 207Distribution 76 57 244 240Markets 8 -1 30 23Other -18 -14 -47 -52Comparable operating profit 460 349 1 334 1 148Non-recurring items 10 29 30 18Other items effecting comparability 4 -15 -17 29OP from continuing operations 474 363 1 347 1 195

Comparable operating profit

37

MEUR 2005 2004Net sales 3 877 3 835

Expenses -2 530 -2 640Operating profit 1 347 1 195

Share of profit of associates and joint ventures 55 12Financial expenses, net -135 -245

Profit before taxes 1 267 962Income tax expense -331 -259

Profit for the period from continuing operations 936 703Profit for the period from discontinued operations 474 589Net profit for the period 1 410 1 292

Of which minority interest 52 33

EPS, Total Fortum Group (EUR) 1.55 1.48EPS, continuing operations (EUR) 1.01 0.79EPS, discontinued operations (EUR) 0.54 0.69

Income statement

38

MEUR 2005 2004

Operating profit before depreciations continuing operations 1 754 1 583Non-cash flow items and divesting activities 15 -37Financial items and taxes -405 -341

Funds from operations continuing operations (FFO) 1 364 1 205

Change in working capital -93 27

Net cash from operating activities continuing operations 1 271 1 232

Net cash from operating activities discontinued operations 133 526

Total cash from operating activities 1 404 1 758Capital expenditures -346 -335Other investing activities -52 -124Investing activities discontinued operations 1 155 -277

Cash flow before financing activities 2 161 1 022

Cash flow statement

39

Balance sheet

MEUR Dec 31 Dec 312005 2004

Non-current assets 13 075 15 213Current assets 2 055 2 354ASSETS 15 130 17 567

Total equity 7 411 7 650 of which minority interest 260 150Interest-bearing liabilities 3 946 5 240Non-interest bearing liabilities 3 773 4 677EQUITY AND LIABILITIES 15 130 17 567

Gearing (%) 43 67Equity per share (EUR) 8.17 8.62Net debt, (MEUR) 3 158 5 095

40

Nord Pool Year Forwards

Feb 7, 2006

€/MWh

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q12004 2005 2006

24

26

28

30

32

34

36

38

40

42

Year 06 Year 07 Year 08

41

Hedging of Nordic Power Generation sales

Fortum has hedged its Nordic Power Generation sales volume at the end of January 2006:

2-12 / 2006

Hedge ratio Hedge price

75 % ~ EUR 32 per MWh

Calendar year 2007

40 % ~ EUR 34 per MWh

42

• Continued focus on the Nordic and Baltic Rim countries

• Attractive growth opportunities

• Strong financial position and cash flow

• Favourable market fundamentals, an upward trend in electricity forward prices

Fortum well positioned also for the future

43

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

44

Internationalinvestors 33.5%

Finnish State 51.5%

Other Finnishinvestors 7.8%

Households 5.1% Financial and insuranceinstitutions 2.1%

• 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

Fortum - a listed company

31 January 2006

45

Current Fortum Group financial targets

• ROE >12%• ROCE >12%• Net debt / EBITDA 3.0 - 3.5• Normal CAPEX <depreciation

46

Credit ratings

• Moody's long-term rating A2 (stable outlook)• Standard & Poor's long-term rating A- (stable outlook)

"Due to the cash outflows, which in 2006 total €2.23 billion, Fortum’s debt is expected to increase significantly and credit measures are likely to weaken as a

result, thereby markedly reducing rating headroom. Nevertheless, given the company's very strong financial results in 2005 that led to a low adjusted debt-to-total-capital ratio of 33% at year-end, we expect credit metrics to remain in

line with our previously indicated ratio targets."Standard & Poor's

47

Funding sources and maturity profile

• Funding and treasury risk management centralised to Group Treasury

• Transparent loan portfolio

• Access to all relevant debt markets

Interest bearing loans in the end of 2005Average interest rate disclosed in the end of 2005 for the year 2005 was 4%.

2006 2007 2008 2009 2010 2011 2012

Bonds Bank loans Other long-term debt Short-term debt

828

144

580

41

542

81

1,697

Total 3,946 MEUR

33

2013+

48

Heat key figures

Nr 1

Heat

DistributionEUR million 2005 2004

Net sales 1,063 1,025Comparable operating profit 253 207

Employees 2,385 2,146Production plants

CHP plants 23heat plants and stations abt 700

·

····· ····· ··

····

····

·

···

·

·

· ······

·

· ········· ········

··········

····· ·

·

···

···· ··

·· ····· ···

· ······

··· ·0.19.5

9.8

1. 2

1.1(3.9**)

0.03

-

-

Fortum's heat and steam sales, TWh, 2005** including Wroclaw and PEC Plock (acq.2005)

49

Polish power and heat markets

• Population 38 million• GDP growth around 4.5% in 2004• Total electricity consumption 130-140

TWh/a• Polish generation approx. 150 TWh/a• Number of electricity customers around

15.6 million• 8 distribution companies• Energy sector privatisation ongoing in

generation, district heating and distribution• Size of the heating markets around 165

TWh/a

Source: EIU, Eurelectric/Eurprog; 2004 or 2003 estimates, Fortum

Existing operations of Fortum HeatWrocław Płock

Płock

Operations of Fortum Heat in Poland

50

Baltic countries' power and heat markets

• Population 1.3 million (Estonia), 2.3 million (Latvia) and 3.4 million (Lithuania)

• GDP growth 6.0% (Estonia), 5.5% (Latvia), 6.5% (Lithuania)

• Total electricity consumption; Estonia and Latvia 6-7 TWh/a, Lithuania 10 TWh/a

• Total generation; Estonia 9-10 TWh/a, Latvia 4-5 TWh/a, Lithuania 18 TWh/a

• Three larger distribution companies in Estonia, one in Latvia, two in Lithuania

• Privatisation not active in generation or distribution, privatisation of district heating started in 2000

• Size of the heating markets around 30 TWh/a

Source: EIU, Eurelectric/Eurprog; 2004 or 2003 estimates

51

Distribution regulation differ country by country

Finland

Maximum allowed rate ofreturn based on actualdefined cost data

Sweden Norway

Maximum annual income limitbased on historical or definedcost 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.

Status

Regulation principle

Allowed return

New model for period 2005 - 2007

New regulatory model is being applied to 2003 and 2004 tariffs

The regulator has proposed a model for the next 5-year period starting in 2007.

Rate of return,ex-post regulation

Yardstick, ex-post regulation, with benchmarking based on hypothetical efficient company

Revenue cap, ex-ante regulation

Actual operation vs.fictious network parametersdefines return

52