Fortum Sverige AB

Fortum discusses revised strategy and financial position in Capital Markets Day

Pressmeddelande   •   Sep 16, 2010 10:01 CEST

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

Key media

Fortums syfte är att skapa energi som gör livet bättre idag och för kommande generationer. Vi erbjuder hållbara lösningar som tillgodoser behoven av låga utsläpp, effektiv resursanvändning och en trygg energiförsörjning samtidigt som vi levererar ett förstklassigt resultat till våra aktieägare.
Vår verksamhet omfattar produktion, distribution och försäljning av el och värme samt drift och underhåll av kraftverk.

Fortums verksamhet är fokuserad på Norden, Ryssland och Östersjöområdet.
I framtiden ser vi även att de snabbt växande energimarknaderna i Europa och Asien ger ytterligare möjligheter för tillväxt. Under 2009 uppgick Fortums omsättning till 5,4 miljarder euro och rörelseresultatet var 1,8 miljarder euro. Vi sysselsätter cirka 11.500 personer. Fortums aktie är noterad på NASDAQ OMX Helsingfors. Ytterligare information: