Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Fortum Oyj (FORTUM.HE)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026e Dec 2027e Dec 2028e

Nordic Baseload Power Price

34 73 53 45

(€/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 1,428

PPAs driving EPS upgrades EBITDA

1,324 1,653

GLOBAL REVENUE EXPOSURE Power price convergence with Europe (€, mn) 1,441 Data centre location and/or PPA deals

Higher wind/solar capacity growth

Higher distributions from dividend, special 1,112

100% Europe ex UK dividend, buyback EBIT 1,004 1,314

(€, mn)

RISKS TO DOWNSIDE 1,110

Lower power prices

Source: Morgan Stanley Research Estimate Lower dividend payout ratio 0.98View explanation of regional hierarchies here EPS

Lack of capital reinvestment or distribution 0.88 1.15 (€)

Data centre PPAs remaining elusive 0.97

MS ALPHA MODELS Lower EPAD premiums within Nordpool

4/5 3 Month OWNERSHIP POSITIONING DPS 0.73 1.04 MOST Horizon (€)

0.83

Inst. Owners, % Active 67.4%

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 9.9

Quintile ROE HF Sector Net Exposure 1.8% 8.9 11.5

(%)

Refinitiv; MSPB Content. Includes certain hedge fund 9.8

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