Transmission System Operator Disclaimer These materials have been - PowerPoint PPT Presentation

Public March 2018 Finland´s Transmission System Operator

Disclaimer These materials have been prepared based upon information that Fingrid Fingrid Oyj assumes no obligation to, and expressly disclaims any Oyj believes to be reliable. Market data presented is based on the obligation to, update or revise any forward-looking statements, whether as information and belief of Fingrid Oyj's management and has not been a result of new information, future events or otherwise. independently verified. Certain data in this presentation was obtained from various external data sources and Fingrid Oyj has not verified such data The circulation of these materials may, in certain countries, be subject to with independent sources. Such data involves risks and uncertainties and specific regulation and the person(s) in possession of this presentation is subject to change based on various factors. Fingrid Oyj makes no should observe such restrictions. representation or warranty, express or implied, as to the accuracy or completeness of the information contained in these materials and Nothing in these materials shall constitute or form part of any legal accordingly, Fingrid Oyj accepts no responsibility or liability (in negligence agreement, or any offer to sell or the solicitation of any offer to buy any or otherwise) for the information contained herein. securities or notes issued under Fingrid Oyj's commercial paper or medium-term note programs. These materials may contain forward-looking statements. These forward- looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. These statements are subject to risks, uncertainties, assumptions and other important factors, many of which are outside management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation.

Table of Contents • Executive summary 4 • Company overview 9 • Operations • Description of operations 25 • Efficiency of operations 35 • Earnings model 42 • Pricing 50 • Capex 56 • Operating environment 60 • Financials • Financial performance 70 • Financing 81 • Ratings 88

Executive summary 4 28.3.2018

Fingrid is the sole transmission system operator (TSO) in Finland Fingrid transmits Fingrid manages Fingrid continuously in its own network cross-border ensures power approximately connections system production 76% between Finland and consumption and Sweden, balance in Finland of electricity transmitted Estonia, Russia in Finland and Norway 5 Fingrid Debt Investor Presentation 28.3.2018

Fingrid's network covers entire Finland 14 400 km 10 reserve power of power lines over 115 substation plants 300 km 49 000 towers > 935 MW reserve of submarine cable 6 Fingrid Debt Investor Presentation 28.3.2018

Fingrid has achieved its targets in 2011 - 2017 2011 2017 Net profit MEUR 33 MEUR 131 Return Below regulatory allowed Below regulatory allowed Dividend MEUR 7 MEUR 174* Efficiency High benchmark study rankings High benchmark study rankings Investments In schedule and budget In schedule and budget Fingrid has a proven track record of continuously executing its defined strategy *MEUR 50 of dividend shall be paid subject to the Board's decision after the half-year report has been confirmed 7 Fingrid Debt Investor Presentation 28.3.2018

Key investment considerations Regulation Fair, stable and predictable regulatory model Ownership The Finnish state owns 53% and Finnish financial institutions 47% Strategic importance Considered as strategically important holding to the Finnish state* Operating leverage Construction and maintenance of the network is outsourced Efficiency & Quality Fingrid is one of the most cost efficient and reliable TSOs worldwide Financials Continuous solid operating profitability Rating Fingrid benefits from AA-/A+ ratings (S&P, Fitch) * Source: Prime Minister's Office, Finland. (2016). Government resolution on state-ownership policy. Fingrid provides a solid long-term investment in a stable operating environment 8 Fingrid Debt Investor Presentation 28.3.2018

Company overview 9 28.3.2018

Vision We are a forerunner for electricity network operations • We are respected and influential in energy matters in Finland and abroad • We are a manifestation of professional skill and efficiency • We are able to renew ourselves and we boldly embrace change 10 Fingrid Debt Investor Presentation 28.3.2018

Mission Fingrid is Finland’s transmission system operator. We secure reliable electricity for our customers and society and shape the clean, market-oriented power system of the future. Our values guide us in all our activities. 11 Fingrid Debt Investor Presentation 28.3.2018

Our values In all our operations, we are transparent impartial efficient responsible 12 Fingrid Debt Investor Presentation 28.3.2018

Balanced strategy CUSTOMERS AND SOCIETY We secure reliable electricity and a well-functioning electricity market for society. We offer affordable services that meet our customers’ needs. FINANCE We operate cost-effectively and bring value to our owners. INTERNAL PROCESSES Adequacy of the transmission system System operation Promoting the electricity market We carry out investments and maintenance We operate the national grid proactively We actively maintain and develop the safely and efficiently at the right time. and reliably. electricity market. PERSONNEL AND EXPERTISE An open, collaborative, renewing and target-oriented work community. Fingrid Debt Investor Presentation

Strategic key performance indicators Customers and society Customer losses from disturbances – Market disturbances caused by transmission restrictions – Customers' trust in Fingrid – Tariff level Finance Cost-effectiveness – Credit rating – Dividend payout capacity Internal processes Ensuring transmission System security Promoting the electricity capacity maintenance market Implementation of investments – System security of power system Success in promoting the electricity Efficiency of maintenance – – market Procurement chain – Occupational Adequacy of reserves safety Personnel and expertise Workplace atmosphere – Leadership – Responsible operating methods 14 Fingrid Debt Investor Presentation 28.3.2018

Fingrid operates in a matrix organisation structure Fingrid Oyj Jukka Ruusunen, President & CEO 83% of Fingrid's GRID ASSET POWER MARKETS FINANCE AND ICT HRD LEGAL AND COMMUNICATI SERVICES MANAGEMENT SYSTEM TREASURY ADMINISTRATI personnel holds AND OPERATIONS ON VE AFFAIRS PLANNING an academic degree Full-time, permanent employees at the end of 2017 Asta Kari Kuusela Reima Päivinen Jussi Jyrinsalo Jan Montell Kari Suominen Tiina Miettinen Marina Louhija Sihvonen-Punkka Customers Executive Jussi Jyrinsalo management team Finance and business development Jan Montell is highly regarded Adequacy of transmission system Kari Kuusela in the Finnish Reima Päivinen System operation Asta business community Promotion of market functioning Sihvonen-Punkka Personnel and competence Tiina Miettinen Fully implemented matrix structure ensures efficient strategy implementation and personnel engagement 15 Fingrid Debt Investor Presentation 28.3.2018

Fingrid’s business model RESOURCES IMPACTS BUSINESS PROCESS • • Personnel and expertise Enabling the Management of Promoting the Adequacy of the transformation of the • Suppliers and business transmission electricity system electricity market energy system partners system operation • Reliable electricity for • Developing market • Income and debt society and industry • rules to enable a Planning of the • Grid planning financing clean electricity operation of the • Promoting Finland’s system • electricity system Grid building • Electricity from power competitiveness plants and neighbouring • • • Promoting the Grid maintenance Monitoring and • countries Developing the regional electricity control of the electricity sector and markets electricity system • Grid transmission lines, expertise substations and reserve • • Ensuring the Managing • power plants Financial benefits for continuity of the disturbances and stakeholders electricity market the continuity of the • Land required for electricity system • transmission lines; Major grid investments natural resources and and employment materials • Local changes in land SERVICES FOR • ICT structures use and the environment Electricity transmission Balance services CUSTOMERS and energy losses in • Knowledge capital on electricity transmission Electricity market Information exchange in Guarantee-of-origin electricity, markets and Fingrid Debt Investor Presentation the retail markets certificate information customers