Slide 1: Actions initiated to respond to a challenging market environment
1 Actions initiated to respond to a challenging market environment and Place and crop your weak financial image here performance Heikki Malinen, President & CEO Anssi Tammilehto, Interim CFO, SVP, Strategy, M&A and IR February 13, 2025 February 13, 2025
Slide 2: Disclaimer
2 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 ex
Slide 3: Agenda
3 Agenda 1. Key figures President & CEO Heikki Malinen 2. Financial performance Interim CFO Anssi Tammilehto 3. CEO’s update & Guidance 2025 President & CEO Heikki Malinen 4. Q&A
Slide 4: Key figures
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Slide 5: Strong focus on safety continues
5 Strong focus on safety continues Total Recordable Incident Frequency Process Safety Event Rate (PSER)2, per (TRIF)1, per million hours worked million hours worked 1) Including new organizational units in the US, for example Mahoney Environmental from 2023 onwards 2) Process safety performance is r
Slide 6: Year 2024 in brief: Actions started to change the direction
6 Year 2024 in brief: Actions started to change the direction ● Renewable margins pressured by overcapacity Group comparable EBITDA ○ Full-year margin over reference margin 1,252 MEUR ● Normalization of Oil’s Products’ market (3,458) environment ● Volume availability affected by planned Comp. sales
Slide 7: Key figures for 2024: cash flow impacted by weak EBITDA
7 Key figures for 2024: cash flow impacted by weak EBITDA and large cash out investments Comparable EBITDA, Cash-out investments, Cash flow before financing EUR million EUR million activities, EUR million
Slide 8: Q4 figures affected by operational challenges, strong cash flow
8 Q4 figures affected by operational challenges, strong cash flow Group comparable EBITDA Cash flow before financing activities 168 MEUR (797) 504 MEUR (475) Comparable sales Sales volume Total refining margin, Sales volume Oil margin, USD/ton Renewable Products, USD/bbl Products, kton kton 242 (813
Slide 9: Key achievements in 2024
9 Key achievements in 2024 Improving Strengthening our Margin premium the foundation for feedstock pool despite weak value creation market ● Expansion of ● Continued growth in ● Great customer renewable production sourcing of waste relationships and capabilities and residue successful term feedstock
Slide 10: Financial performance
10 Financial performance nESTE
Slide 11: Reference margins have decreased
11 Reference margins have decreased North-West Europe: RD margin indicator (UCO), $/t Reference sales margin: RD margin indicator less reference cost of production and logistics, $/t 2,000 2023 avg. reference margin 650-700 $/t 2024 avg. reference 1,600 margin 150-200 $/t 1,200 800 400 0 2021 2022 2
Slide 12: We achieved a margin premium in 2024 despite weak market
12 We achieved a margin premium in 2024 despite weak market Neste 2024 RP comparable sales margin: 377 USD/t 2024 drivers of premium Short and mid-term drivers of change ● Anti-dumping and anti-subsidy Neste + Global presence schemes in the EU premium + Upstream integration ● CFPC eligibility for US
Slide 13: Q4/24 results reflect the market changes and operational challenges
13 Q4/24 results reflect the market changes and operational challenges Group Comp. EBITDA, by segment, Q4/24 vs. Q4/23, EUR Group Comp. EBITDA, by driver, Q4/24 vs. Q4/23, EUR million million
Slide 14: Full-year result affected by weakening market and sales volume availability
14 Full-year result affected similarly by weakening market environment and sales volume availability Group Comp. EBITDA, by segment, FY2024, EUR million Group Comp. EBITDA, by driver, FY2024, EUR million Group’s Renewable Oil Marketing & Others Group’s Group’s Sales Sales Currency Fixed Others Group
Slide 15: Comparable ROACE below target level, leverage meeting target
15 Comparable ROACE below target level, leverage meeting target Financial targets 2024 New financial targets 2025-2026 Comparable ROACE, after tax, Leverage, Net debt to capital, % % EBITDA EUR 350 million Target <40% run rate improvement by the end of 2026, of which EUR 250 million from operational
Slide 16: Q4 Renewable Products: Weak market environment affected comparable EBITDA
16 Q4 Renewable Products: Weak market environment and operational challenges affected comparable EBITDA Comparable EBITDA Q4/24 vs. Q4/23, EUR million Renewable sales volume, kt (left axis) and Comparable Sales volume 926 (870) kt sales margin, USD/ton (right axis) SAF volume 195 (40) kt NA/EU 47/53
Slide 17: Q4 Oil Products: Solid operational performance, product cracks decreased
17 Q4 Oil Products: Solid operational performance, but product cracks decreased considerably Q4/24 vs. Q4/23 Comparable EBITDA Q4/24 vs. Q4/23, EUR million Total refining margin, USD/bbl (left axis) and utilization rate, % (right axis) Total refining margin 11.8 (18.9) USD/bbl Utilization rate 88 (9
Slide 18: Q4 Marketing & Services: Comparable RONA at 31.4%
18 Q4 Marketing & Services: Comparable RONA at 31.4 (35.2)% Comparable EBITDA Q4/24 vs. Q4/23, EUR million Comp. EBITDA, MEUR (left axis) and Comp. RONA (L12M), % (right axis)
Slide 19: CEO's update & Guidance 2025
19 CEO’s update & Guidance 2025
Slide 20: CEO's update
20 CEO’s update Renewed focus Performance improvement program Updated financial targets and capital allocation Full potential analysis of Strict capital discipline Neste and key conclusions Dividend proposal for the year 2024 Rotterdam expansion revised schedule and budget Change negotiations
Slide 21: Financial targets and capital allocation for 2025-26
21 Financial targets and capital allocation for 2025-26 Financial targets Capital allocation EBITDA Capex 2 years EUR 350 million EUR 2.4 billion run rate improvement by the end of 2026, of which EUR 250 million 1.3BEUR Rotterdam expansion, 0.9 BEUR TAs and from operational costs maintenance, and 0.
Slide 22: Market outlook for 2025
22 Market outlook for 2025 The uncertainty in the global economic outlook and geopolitical situation is expected to cause ongoing market volatility The market in renewable fuels is expected to be oversupplied and therefore challenging in 2025 Possible changes in the regulatory framework especially i
Slide 23: Guidance 2025
23 Guidance 2025 Renewable Products' sales volumes in 2025 are expected to be higher than in 2024. Sales volumes Oil Products' sales volumes in 2025 are expected to be higher than in 2024 Scheduled maintenance A 5-week turnaround in Rotterdam in Q4 2025 and a 6-week turnaround starting in turnaround
Slide 24: Q&A
24 Q&A nESTE
Slide 25: Summary
25 Summary 1. Year 2024 performance was weak and not sustainable 2. Full potential analysis completed, next steps defined and actions started 3. New financial targets and capital allocation set 4. Guidance for year 2025 based on volume, comparable fixed costs, maintenance schedule and capex
Slide 26: Thank you!
26 Thank you!
Slide 27: Appendix
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Slide 28: 2024 volume and key drivers to 2025
28 2024 volume and key drivers to 2025 2024 RP volumes Drivers to 2025 Renewable Products volume NAM ~50% of RD - Transition to CFPC in US risking exports from Singapore to US volume sold 3.2 Mt RD Europe ~50% of RD + New mandates across Europe volume sold + New demand from ReFuelEU, however uncerta
Slide 29: Key market environment drivers in Q4/2024
29 Key market environment drivers in Q4/2024 Change, % vs. Change, % vs. Avg, Q4/24 Q3/24 Q4/23 Crude oil price (USD/bbl) 75 -7% -11% Macro drivers1) Diesel price (USD/ton) 685 -5% -20% Renewable Used cooking oil (USD/ton) 1,006 +5% +15% feedstock costs2) Animal fat (USD/ton) 948 -2% -3% California
Slide 30: Renewable Products: Key market drivers in the US market
30 Renewable Products: Key market drivers in the US market California Low Carbon Fuel Standard, LCFS credit price, RIN prices, US cent/gal USD/ton Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Source: Opis
Slide 31: W&R and vegetable oil price development
31 W&R and vegetable oil price development Selected waste and residue and vegetable oil prices1, USD/ton Comments • Generally, waste and residue prices remained rather stable during Q4/2024 • Used Cooking Oil price increased towards year end to above 1,000 USD/ton level Q4 22 Q1 23 Q2 23 Q3 23 Q4 23
Slide 32: Oil Products: Key product margins
32 Oil Products: Key product margins Product margins (price differential vs. Brent), USD/bbl Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Source: Platts
Slide 33: Group financials Q4/24
33 Group financials Q4/24 Comparable EBITDA totaled EUR 1,252 million (EUR 3,458 million) MEUR Q4/24 Q4/23 Q3/24 2024 2023 Revenue 5,568 6,303 5,624 20,635 22,926 EBITDA 143 672 301 1,005 2,548 Comparable EBITDA 168 797 293 1,252 3,458 Renewable Products 13 433 106 514 1,906 Oil Products 153 330 141
Slide 34: Cash flow impacted by weak EBITDA
34 Cash flow impacted by weak EBITDA MEUR Q4/24 Q4/23 Q3/24 2024 2023 EBITDA 143 672 301 1,005 2,548 Capital gains/losses 3 0 0 1 0 Other adjustments 58 -225 -178 -150 108 Change in net working capital 709 495 143 454 21 Finance cost, net 0 -38 -51 -122 -91 Income taxes paid -2 -213 77 -5 -307 Net c
Slide 35: Renewable Products' comparable EBITDA calculation
35 Renewable Products’ comparable EBITDA calculation Q4/23 2023 Q1/24 Q2/24 Q3/24 Q4/24 2024 Total RP sales volume kton1 870 3,382 849 955 999 926 3,729 Comparable sales margin USD/ton 813 863 562 382 341 242 377 Comparable sales margin MEUR 657 2,699 439 339 310 209 1,297 Fixed costs MEUR -221 -791
Slide 36: Oil Products' refinery production costs
36 Oil Products’ refinery production costs Q4/23 2023 Q1/24 Q2/24 Q3/24 Q4/24 2024 million Refined products bbls 22.6 87.5 21.4 10.2 22.2 22.2 76.0 Exchange rate EUR/USD 1.08 1.08 1.09 1.08 1.10 1.07 1.08 MEUR 74.0 319.8 70.3 46.5 61.4 63.8 242.0 Utilities costs USD/bbl 3.5 4.0 3.6 4.9 3.0 3.1 3.4 M
Slide 37: Liquidity and maturity profile
37 Liquidity and maturity profile Maturity profile, MEUR Short-term Long-term • Group’s liquidity EUR 2,880 million at the end of December – Liquid funds EUR 955 million – Unused committed credit facilities EUR 1,925 million • Average interest rate for interest-bearing liabilities was 3.3% and matur