Stock exchange release

Fortum discusses revised strategy and financial position in Capital Markets Day

16 September 2010, 08:30 EEST

Fortum Corporation Stock Exchange Release 16 September 2010 at 8.30 EETS

Fortum discusses revised strategy and financial position in Capital Markets Day 

Fortum Capital Markets Day for investors and analysts is held today on 16       
September 2010 in Espoo, Finland. During the event, Fortum management will      
outline the company's strategy, financial targets and capital expenditure going 

Revised strategy                                                                

Fortum's revised strategy builds on the company's core competence in CO2-free   
nuclear and hydro power, energy and resource efficient combined heat and power  
production as well as the company's expertise and proven track-record in        
operating in competitive energy markets. In the coming years, Fortum will       
continue to leverage its strong position in the Nordic power and heat market    
while creating solid earnings growth in Russia.                                 

Further opportunities for future growth stem from the need for CO2-free and     
energy efficient solutions, and increasing demand in fast growing, liberalizing 
energy markets, especially in emerging Euro-Asian countries. Coupled with the   
integration of the European energy market and with Fortum's Russian business'   
increasing weight, the importance of the Nordic power price as the main driver  
of Fortum's earnings will gradually decrease.  The existing electricity         
distribution and retail sales businesses will continue to have a substantial    
role in the Nordic market. In other regions, Fortum sees more attractive        
earnings and growth prospects in power and heat generation.                     

President and CEO Tapio Kuula underlines competitiveness as the key to value    
creation: "I believe that our core competences provide a solid basis for the    
future value creation for Fortum. We are preparing for growth, which I see will 
take place through a right balance of faster returning acquisitions and slower  
returning green field investments. In the long run, positions taken and the     
solutions applied have to be financially sound on their own merits; basing      
decisions on a continuous high level of subsidies is not sustainable."          

Capital expenditure                                                             

Fortum's capital expenditure in 2010 is estimated to be around EUR 1.4 billion -
slightly less than indicated earlier. In 2011, Fortum currently expects capital 
expenditure of around EUR 1.6 billion, exceeding the earlier forecast range of  
EUR 0.8-1.2 billion. The annual level of Fortum's capital expenditure in 2012-13
is estimated to exceed the company's normal guidance of EUR 0.8-1.2 billion. The
main reason for higher capital expenditures in 2010-2013 is the acceleration in 
Fortum's Russian investment programme, driven by the capacity payment           

In Russia, OAO Fortum's committed investment programme will increase its power  
capacity from the current approximately 2,800 MW to approximately 5,100 MW and  
is a key driver for solid earnings growth in Russia. New capacity will bring    
income from new volumes sold and is expected to receive at least 3-4 times      
higher price in the capacity market than old capacity.                          

In light of the recovering post-crises demand and development of the Russian    
capacity market, Fortum has adjusted the schedule of the investment programme   
and plans to commission the new units by the end of 2014. The commissioning of  
the first three units is now estimated to take place during the first half of   
2011. The value of the remaining part of the programme, calculated at the end of
June 2010 exchange rates, is estimated to be EUR 1.7 billion from July 2010     

In the long term, Fortum's financial targets in Russia are dictated by basic    
economic logic: Fortum's return on invested capital needs to be higher that its 
cost of capital in Russia. In 2009, Fortum's weighted average cost of capital   
(WACC) in Russia was approximately 12%. Having completed the investment         
programme, Fortum will have invested somewhat over EUR 4 billion into Russia by 
the end of 2014. Assuming an unchanged cost of capital, Fortum's comparable     
operating profit in Russia needs to be in excess of EUR 500 million shortly     
after the completion of the investment programme.                               

Financial targets and dividend                                                  

Maintaining Fortum's strong balance sheet and the flexibility of the capital    
structure will continue to be a priority also in the future. Signalling the     
importance of the strong balance sheet, Fortum has adjusted its net debt/EBITDA 
target to be around 3x. The earlier target was a range of 3.0x to 3.5x.         

Fortum's financial position and liquidity are strong. The group's key financial 
return targets remain unchanged.                                                

| Return on capital employed                           |                   12% |
| Return on shareholder's equity                       |                   14% |
| Net debt/EBITDA                                      |                    ~3 |

Fortum's dividend policy remains unchanged: the company aims to pay a dividend  
which corresponds to an average payout ratio of 50% to 60%.                     

In the Capital Markets Day Fortum reminds investors and analysts that           
continuously providing an attractive dividend to investors is an integral part  
of Fortum's way of thinking - the dividend payment is not a residual.           

Fortum Corporation                                                              
Anne Brunila                                                                    
Executive Vice President, Corporate Relations and Sustainability                

Further information:                                                            
Mika Paloranta, Vice President, Investor Relations, +358 50 452 4138            
Pauliina Vuosio, Vice President, Financial Communications, +358 50 453 2383     

Management presentations and a webcast of the Fortum Capital Markets Day are    
available at                                           

NASDAQ OMX Helsinki                                                             
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