FORTUM CORPORATION FINANCIAL STATEMENTS BULLETIN 7 FEBRUARY 2024 AT 9:00 EET

This release is a summary of Fortum's January-December 2023 Financial Statements Bulletin. The complete report is attached to this release as a PDF file. It is also available on the company's website at www.fortum.com/investors

A year of transformation and stabilising business operations - good quarterly performance with elevated power prices from cold spells in the Nordics

• Comparable EBITDA was EUR 459 (774) million.
• Comparable operating profit was EUR 359 (669) million.
• Operating profit was EUR 376 (-174) million. In the comparison period, items affecting comparability included fair value changes in non-hedge-accounted derivatives of EUR -804 million.
• Comparable earnings per share were EUR 0.35 (0.42).
• Earnings per share were EUR 0.45 (0.48).
• Cash flow from operating activities totalled EUR 149 (451) million.

• Comparable EBITDA was EUR 1,903 (2,025) million.
• Comparable operating profit was EUR 1,544 (1,611) million.
• Operating profit was EUR 1,662 (1,967) million, mainly impacted by fair value changes in non-hedge-accounted derivatives. In the comparison period, items affecting comparability included tax-exempt capital gains of EUR 785 million.
• Comparable earnings per share were EUR 1.28 (1.21).
• Earnings per share were EUR 1.68 (2.34).
• Cash flow from operating activities totalled EUR 1,710 (1,717) million.
• Financial net debt was EUR 942 million and the financial net debt-to-comparable EBITDA ratio was at 0.5 times.
• In March, the Group's new strategy and new financial and environmental targets were published. A renewed Group operating model, business structure and a revised Fortum Leadership Team became effective at the end of March.
• In the second quarter, the Russian authorities seized control of Fortum's assets in Russia, Fortum lost control of and deconsolidated and reported these operations as discontinued operations. The Russian assets were fully written down and impairments of EUR 1.7 billion (equity impact) and deconsolidation-related negative cumulative foreign exchange translation differences of EUR 1.9 billion (no equity impact) were recorded.
• On 17 May, Fortum successfully issued five- and ten-year bonds with a total nominal amount of EUR 1.15 billion.
• On 7 June, Fortum agreed to acquire the entire shareholding in the Swedish electricity solutions provider Telge Energi AB on a cash and debt-free basis for approximately SEK 450 million (EUR 39 million). On 31 August, the transaction was completed.
• On 21 June, Fortum announced that it will invest approximately EUR 225 million in waste heat projects in Espoo and Kirkkonummi in Finland.
• Fortum's Board of Directors proposes a dividend of EUR 1.15 (0.91) per share and that the dividend will be paid in two instalments.

• The Generation segment's Nordic outright generation hedges: approximately 70% at EUR 47 per MWh for 2024, and approximately 40% at EUR 43 per MWh for 2025.
• Capital expenditure, including maintenance but excluding acquisitions, is expected to be approximately EUR 550 million in 2024 and the annual maintenance capital expenditure is expected to be EUR 300 million. For the 2024-2026 period, Fortum's capital expenditure is expected to be approximately EUR 1.7 billion (excluding acquisition) of which growth capital expenditure is expected to be EUR 800 million and annual maintenance capital expenditure EUR 300 million.

Key figures, continuing operations

EUR million or as IV/2023 IV/2022 2023 2022
indicated restated restated
Reported
Sales 1,858 2,407 6,711 7,774
Operating profit 376 -174 1,662 1,967
Share of profit/loss of 89 -59 59 -185
associates and joint
ventures
Net profit 413 427 1,515 2,084
Net profit (after non 410 431 1,514 2,080
-controlling interests)
Earnings per share, EUR 0.45 0.48 1.68 2.34
Net cash from operating 149 451 1,710 1,717
activities

EUR million or as IV/2023 IV/2022 2023 2022
indicated restated restated
Comparable
EBITDA 459 774 1,903 2,025
Operating profit 359 669 1,544 1,611
Share of profit/loss of 31 -68 7 -40
associates and joint
ventures
Net profit (after non 317 370 1,150 1,076
-controlling interests)
Earnings per share, EUR 0.35 0.42 1.28 1.21

EUR million or as 31 Dec 2023 31 Dec 2022
indicated
Financial position
Financial net debt (at 942 1,084
period-end)
Financial net debt, at N/A 1,127
period-end, excl.
Russia
Financial net 0.5 0.6
debt/comparable EBITDA
excl. Russia

Key figures, total of continuing and discontinued operations

Fortum's condensed consolidated income statement and consolidated cash flow statement include the Russia segment as discontinued operations in the first quarter of 2023 and in 2022, and the Uniper segment as discontinued operations in 2022. Comparative information for the first quarter of 2023 and all quarters of 2022 was restated following the classification of the Russia segment as discontinued operations in the second quarter of 2023. For further details, see Note 1.

EUR million or as IV/2023 IV/2022 2023 2022
indicated restated restated
Reported
Net profit (after non 410 -608 -2,069 -2,416
-controlling
interests)
Earnings per share, 0.45 -0.68 -2.31 -2.72
EUR
Net cash from 149 607 1,819 -8,767
operating activities
Comparable
Net profit (after non 317 216 1,184 -988
-controlling
interests)
Earnings per share, 0.35 0.25 1.32 -1.11
EUR

Fortum's President and CEO Markus Rauramo:

"Year 2023 was characterised by a downward trend for gas and power prices in Europe. In the autumn, the Nordic weather realised milder than normal, however, turned cold and dry in the fourth quarter. The cold breeze, together with below-normal wind conditions, led to a rapidly decreasing water reservoir balance; consequently Nordic spot prices recovered by the end of the year from the lower levels seen in the previous quarter.

In our 2023 financial results, the Generation segment's strong performance was the key earnings driver throughout the year. The segment benefitted from high power prices in the Nordics and good physical optimisation supported by high price volatility, posting an all-time high comparable operating profit of EUR 1,679 million and an achieved power price of 63.1 euro per MWh for the full year. In the fourth quarter, the Generation segment's comparable operating profit declined due to the lower achieved power price, lower power production of condensing power generation, lower results in the renewables and decarbonisation businesses and higher costs related to co-owned production companies. This was partly offset by higher power generation volumes and lower depreciations in the Loviisa nuclear power plant.

During 2023, we successfully regained our financial strength, driven by solid earnings and cash flow. At the end of the year, our leverage was at 0.5 times, and we had undrawn credit facilities and liquid funds of EUR 7.5 billion. In May, we successfully returned to the fixed income market by issuing two bonds totalling EUR 1.15 billion. To finance future potential investments in clean energy, we prepared the Green Finance Framework, which was published in January 2024.

Based on the strong Group results in 2023, Fortum's Board of Directors is proposing to the Annual General Meeting a dividend of EUR 1.15 per share, corresponding to a 90% payout of comparable EPS.

Overall, after a period of unprecedented turbulence, 2023 was a year of stabilising and transforming our operations. In March, we announced our new strategy and purpose with a Nordic focus along with new financial and environmental targets.

One of our strategic priorities is to deliver reliable and clean energy. To ensure long-term productivity and security of supply, we announced several projects in 2023 that enhance our best-in-class operations, such as the Loviisa nuclear power plant lifetime extension until 2050 and upgrades of the hydropower plants, for example Untra in Sweden. A hugely important event was the start of commercial power generation of the Olkiluoto 3 nuclear power unit, of which Fortum owns 25%. The construction of our Pjelax 380-MW wind farm, which is Finland's third largest, progressed on time and within budget. Testing of power generation has started, and the wind farm will be commissioned in the second quarter of 2024. The acquisition of Telge Energi, one of the 10 largest clean energy providers in Sweden, is a very good fit with our consumer business, and it increases our consumer and enterprise customer base by 150,000. During the winter months, Finland's last coal-fired condensing plant, Meri-Pori, has operated on a commercial basis to support security of supply in the Nordic power market, but it will be transferred to production reserve for emergency situations in March 2024.

Our second strategic priority is to drive decarbonisation in industries. Our aim is to offer clean and stable power supply for our customers' decarbonisation needs and to actively develop projects to enable growth longer term to build new clean energy production in partnership with strategic customers. In the scope of our nuclear feasibility study, we have partnered up and are exploring potential cooperation opportunities with both technology suppliers as well as energy customers. The support for nuclear power in Finland and Sweden is at a record high at the moment, and we are engaging with both governments to discuss how the conditions for potential new nuclear could be improved. During the year, we made a 225-million-euro investment decision related to the Espoo Clean Heat programme and began the groundworks of the heat pump plant in Kirkkonummi. As part of a unique collaboration project with Microsoft, we will capture sustainable waste heat from their new data centres for use in our district heating. We also saw progress in our strategic target to build a strong power purchase agreement (PPA) portfolio by signing power supply contracts with various industrial customers; these contracts support decarbonisation of industries while also lowering risks and contributing to stabilisation of earnings and cash flow from our outright power generation.

With our third strategic priority to transform and develop, we launched a new operating model and business structure, appointed a new leadership team, completed a reorganisation and set up new core governance processes. We are continuing to develop our culture and leadership to enable efficient strategy execution. As Fortum is a much smaller company than it was a year ago, we need to adjust to fit the new structure and purpose; therefore, we launched an efficiency improvement programme with the target to gradually lower annual fixed costs by EUR 100 million until the end of 2025. To reach the target, actions unfortunately also include personnel reductions. We are also addressing turnaround actions for underperforming businesses as well as a rescoping of our focus areas.

Geopolitical tensions remained high during the year and, unfortunately, Russia's attack on Ukraine and the full-blown war continued. In the second quarter, we closed the books on our operations in Russia for good. Due to the Russian authorities' unlawful seizure of our assets in Russia, we lost control of our operations, impaired them in full and deconsolidated the Russia segment. As Russia's actions are a crude violation of the international investment protection treaties and deprive Fortum of its shareholder rights, we have sent notices of dispute to Russia and the consequent arbitration proceedings are expected to be initiated in early 2024.

In the second half of 2023, uncertainty in Fortum's operating environment increased further. Economic softness is widespread, with elevated inflation and interest rates that dampen the investment sentiment across all sectors. One decisive factor for investments is abundant subsidies available for non-economic decarbonisation projects, which seems to steer investments outside Finland and the Nordics. As economic weakness is forecasted to continue in 2024, we will navigate the uncertainty through our phased strategy execution. In the near term, we will sharpen our focus and ensure optimisation of existing operations, especially our generation portfolio, as well as manage business risks. At the same time, we are building preparedness for the electrification and growth phase longer term. As one of the largest energy companies in the Nordics, we are in a unique position. The Nordic power market as well as our power generation are already almost fully decarbonised and clean with hardly any fossil production to be replaced. Together with our customers, we are preparing for the growth phase and are ready to pave the way for decarbonisation of other industries as well once demand picks up again.

The developments in the Nordic power market following the winter of 2022-23 crisis show that high price volatility and even extreme price peaks have become the new normal. The main reason is the increasing share of intermittent wind power and lower share of firm and flexible capacity in the Nordic energy system. While the market works as it was designed to, the volatility was extreme as the spot price was negative during 11 days in 2023 and reached a daily average of up to 900 euros per megawatt hour on the harshest cold spell day in January 2024. An expectation of future rare price peaks, however, will not be a sufficient incentive for merchant investments in new firm or flexible capacity. On the contrary, induced fears could deter investments into electrification for decarbonisation. It is evident that additional measures, such as capacity mechanisms or other investment incentives, are needed to ensure security of electricity supply and to encourage investments into industrial decarbonisation.

Finally, I would like to thank all our employees for their commitment and hard work during the year and our customers and all other stakeholders for their continued trust in us to deliver our purpose to power a world where people, businesses and nature thrive together."

Espoo, 6 February 2024

Fortum Corporation
Board of Directors

Webcast/teleconference

A combined live webcast/teleconference for investors, analysts and media will be arranged online on 7 February 2024 at 11:00 EET. For the webcast, use the following link: https://fortum.videosync.fi/financial-statements-2023.

To ask questions, please join the teleconference by registering using the following link: http://palvelu.flik.fi/teleconference/?id=10011765. After the registration you will be provided with phone numbers and a conference ID to access the conference. To ask a question, please press *5 on your telephone keypad to enter the queue.

A recording of the webcast, as well as the transcript will be published after the event.

Further information:

Investor Relations and Financial Communications: Ingela Ulfves, tel. +358 40 515 1531, Rauno Tiihonen, tel. +358 10 453 6150, Nora Hallberg, tel. +358 40 720 1775, Pirjo Lifländer, tel. +358 40 643 3317, and investors@fortum.com

Media: Fortum News Desk, tel. +358 40 198 2843

Financial calendar in 2024

Fortum's Financial Statements and Operating and Financial Review for 2023 will be published during week 7 at the latest.

• January-March on 30 April 2024 at approx. 9.00 EEST
• January-June on 15 August 2024 at approx. 9.00 EEST
• January-September on 29 October 2024 at approx. 9.00 EET

Fortum's Annual General Meeting 2024 is planned to be held on 25 March 2024.

Distribution:

Nasdaq Helsinki
Key media
www.fortum.com