Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Fortum Oyj (FORTUM.HE)

KEY EARNINGS INPUTS

Drivers 2025 2026e 2027e 2028e

Nordic Baseload Power Price

34 66 47 44

(€/MWh)

Generation Capacity (MW) 9,357 9,357 9,357 8,707

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Nordpool power prices RISKS TO UPSIDE FY Dec 2027e

Payout ratio Higher merchant power prices or long-term 1,349

PPAs drive EPS upgrades EBITDA

1,319 1,633

GLOBAL REVENUE EXPOSURE Power price convergence with Europe (€, mn) 1,421 Data centre location &/or PPA deals

Higher wind / solar capacity growth

Higher distributions from dividend, special 1,033

100% Europe ex UK dividend , buyback. EBIT 984 1,295

(€, mn)

RISKS TO DOWNSIDE 1,093

Lower power prices

Source: Morgan Stanley Research Estimate Lower dividend pay-out ratio 0.90View explanation of regional hierarchies here EPS

Lack of capital reinvestment or distribution 0.85 1.11 (€)

Data centre PPA's remain elusive 0.95

MS ALPHA MODELS Lower EPAD premiums within Nordpool

4/5 3 Month OWNERSHIP POSITIONING DPS 0.67 0.96 MOST Horizon (€)

0.83

Inst. Owners, % Active 66.8%

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is

the highest favored Quintile and 5 is the least favored HF Sector Long/Short Ratio 1.5x 9.1

Quintile ROE HF Sector Net Exposure 1.8% 8.7 11.5

(%)

Refinitiv; MSPB Content. Includes certain hedge fund 9.7

exposures held with MSPB. Information may be

inconsistent with or may not reflect broader market Mean Morgan Stanley Estimates

trends. Long/Short Ratio = Long Exposure / Short Source: Refinitiv, Morgan Stanley Research

exposure. Sector % of Total Net Exposure = (For a

particular sector: Long Exposure - Short Exposure) /

(Across all sectors: Long Exposure – Short Exposure).

Morgan Stanley Research 3