Neste Corporation · OMXHEX:NESTE
Neste — Debt Investor Presentation (May 2017)
35 slides from Neste's debt investor presentation, May 2017
Slide 1: Neste Bond Investor Presentation May 2017
Neste Bond Investor Presentation May 2017
Slide 2: Table of Contents
Table of Contents 1 Strategy 2 Oil Products 3 Renewable Products 4 Marketing & Services 5 Financial position 6 Concluding remarks 2
Slide 3: Disclaimer
Disclaimer The following information contains, or may be deemed to contain, “forward-looking statements”. These statements relate to future events or our future financial performance, including, but not limited to, strategic plans, potential growth, planned operational changes, expected capital expe
Slide 4: Neste in 2016
Neste in 2016 Comparable Revenue operating profit € 11.7 billion € 983 million Largest owner 5,000 employees, the Finnish State operations in 18 (50.1%) countries 4
Slide 5: Investment highlights
Investment highlights Network of over Complex refining Strong position in 1,000 stations in assets focused on the Baltic Sea Finland, the Baltic high-value products market states and Russia World’s largest Growth Solid financial producer of opportunities in bio- performance renewable diesel based ch
Slide 6: Solid performance visible in financial targets
Solid performance visible in financial targets ROACE*, % (rolling 12 months) Leverage**, % Target: 25-50% 20% 50% 16.9% 43.2% 16.3% Target: over 15% 40% 37.9% 15% 11.7% 30.0% 29.4% 30% 10.1% 10% 20% 15.4% 5.0% 5% 10% 0% 0% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 * ROACE: 100 x ((Comparable
Slide 7: Creating the next wave of profitable growth
Creating the next wave of profitable growth
Slide 8: Clear strategic objectives
Clear strategic objectives Baltic Sea Global champion renewables growth 8
Slide 9: Current supporting trends
Current supporting trends Oil product Oil demand supply and Urals-Brent growth demand price spread continues balanced mid- widened term Paris Regulators in agreement Decarbonization core markets confirms global of global raising GHG commitment to economy reduction and tackle climate biofuels targets
Slide 10: Strategy implementation visible in financial performance
Strategy implementation visible in financial performance Comparable EBIT, MEUR 983 1000 925 800 596 583 600 400 340 200 0 2012 2013 2014 2015 2016 10
Slide 11: Oil Products
Oil Products NESTE
Slide 12: Baltic Sea champion
Baltic Sea champion Leader in low carbon solutions in the Baltic Sea markets Differentiation Benchmark in through unique asset quality and Strong customer driven operational financials offering excellence 12
Slide 13: Increasing our annual additional margin target from USD 5.0 to 5.5/bbl
Increasing our annual additional margin target from USD 5.0 to 5.5/bbl Total refining margin, USD/bbl Additional margin, USD/bbl 15 10 10 Target: $5.5/bbl 5 5 0 0 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Neste reference margin Additional margin Additional margin 13
Slide 14: Long term asset development
Long term asset development • Productivity investments with short pay back • Feedstock flexibility optimization • Disciplined baseload maintenance capex One Refinery program • SDA investment at Porvoo refinery • Naantali reconfiguration and new role • Increased fuel oil to distillates conversion • I
Slide 15: Renewable Products
Renewable Products NESTE
Slide 16: Global renewables growth
Global renewables growth Creating the next wave of profitable growth Expanding to new Strong waste and New capacity markets and residue feedstock increase program drop-in solutions position globally 16
Slide 17: Global climate targets supporting long term demand for renewables
Global climate targets supporting long term demand for renewables US EUROPE Regulation up to 2018 Regulation up to 2030 • EPA has confirmed 5% annual • RED II proposal sets target of biomass-based diesel demand minimum 6.8 % of renewable growth until 2017 and proposes energy for fuel suppliers simil
Slide 18: Road transport market growing for high quality biofuels
Road transport market growing for high quality biofuels Bio-/renewable diesel demand, Mton/a 50 • European mandates continue to drive demand towards 20 Mton of 40 biofuel in diesel pool by 2021 13 • US mandates translate into almost 30 doubling current demand up to 10 10 Mton by 2021 20 11 • More st
Slide 19: New HVO capacity emerging as expected
New HVO capacity emerging as expected Europe Global HVO capacity in 2016, Mton • ENI’s Venice refinery conversion done and Gela refinery conversion announced 5 • Total’s La Mede refinery conversion ongoing Competitors’ capacity estimated to increase by 4 1.2 Mton/a by 2021 1.5 3 United States 2 • Di
Slide 20: 20% of sales volume by 2020
Making outside road traffic applications significant part of our renewables business 20% of sales volume by 2020 20
Slide 21: New capacity increase program
New capacity increase program • Europe and North America remain key markets for our renewable products • Our ambition is to increase renewable products capacity further to maintain global market leadership • Debottlenecking of existing units to 3 Mton/a by 2020 • We are exploring different options f
Slide 22: Strong waste and residue feedstock player
Strong waste and residue feedstock player • We intend to develop our global Commercial waste and residue position expansion further by investing in capability to process lower quality raw materials • Pre-treatment capacity W&R acquired in Sluiskil, feedstock Netherlands player R&D and Partnerships i
Slide 23: Marketing & Services
Marketing & Services NESTE
Slide 24: Marketing & Services to be the market leader in Finland and the Baltics
Marketing & Services to be the market leader in Finland and the Baltics Station network • Strong market position • Captive marketing channel • Light assets and high RONA • Retail network sales and Finland wholesale 797 Russia 71 60 Estonia 66 Latvia 69 Lithuania 24
Slide 25: Financial position
Financial position NESTE
Slide 26: Group financials
Group financials MEUR Q1/2017 Q1/2016 2016 Revenue 3,071 2,306 11,689 Comparable EBITDA 293 262 1,349 IFRS EBITDA 361 341 1,521 Comparable operating profit 204 175 983 Oil Products 126 86 453 Renewable Products 80 80 469 Marketing & Services 11 22 90 Others (incl. eliminations) -14 -13 -29 IFRS oper
Slide 27: Investments focusing on growth and productivity
Investments focusing on growth and productivity Cash-out capex, MEUR 600 Maintenance 500 Growth and productivity 131 Estimate 400 300 66 259 71 450 200 44 374 100 226 201 170 148 0 2012 2013 2014 2015 2016 2017 27
Slide 28: Strong free cash flow generation
Strong free cash flow generation Free cash flow, MEUR 1,000 834 800 759 600 480 400 260 200 -59 0 2012 2013 2014 2015 2016 -200 28
Slide 29: Balance sheet
Balance sheet Total assets Total equity & liabilities Non-current assets Int-bear. liabilities Equity Current assets Int-free liabilities 8,000 7,325 7,443 8,000 7,325 7,443 7,000 7,000 6,000 6,000 4,157 3,988 3,755 5,000 4,157 5,000 4,000 4,000 3,000 3,000 1,471 1,229 2,000 2,000 3,168 3,285 1,000
Slide 30: Liquidity and maturity profile
Liquidity and maturity profile Maturity profile, MEUR • Total liquidity at the end of March 2017 was EUR 2,561 million • Cash and cash equivalents 700 totalled EUR 511 million 600 • Unused committed credit facilities totalled EUR 1,650 million 500 • Unused CP programmes (not 400 committed) totalled
Slide 31: Funding sources
Funding sources Q1/2017, EUR Million Financial institutions LT/ST Others 29 156 Leases 91 Financial inst 2% Bonds 78% Leases 7% Bonds LT/ST Others 13% 953 Interest bearing liabilities totaling EUR 1 229 million of which EUR 113 million short term debt 31
Slide 32: Concluding remarks
Concluding remarks NESTE
Slide 33: Proposed Offering & Debt Repurchase
Proposed Offering & Debt Repurchase Issuer: Neste Corporation Currency / Size: Minimum EUR 300m • Neste also invites the holders of the its Tenor: 7 years outstanding 2019 and 2022 notes to tender their notes for cash Status: Senior Unsecured • Neste intends to accept any and all of the Rating: Unra
Slide 34: Consistent cash allocation strategy
Consistent cash allocation strategy Investing in Paying out Optimizing growth and favorable leverage productivity dividends 34
Slide 35: Investment highlights
Investment highlights Network of over Complex refining Strong position in 1,000 stations in assets focused on the Baltic Sea Finland, the Baltic high-value products market states and Russia World’s largest Growth Solid financial producer of opportunities in bio- performance renewable diesel based ch