Neste Corporation · OMXHEX:NESTE
Neste — Investor Day (March 2024)
38 slides from Neste's investor day presentation, Mar 12, 2024
Slide 1: Delivering value through competitive advantages
Delivering value through competitive advantages Rotterdam site visit and SAF deep-dive March 12, 2024
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: With you today
3 With you today Matti Lehmus Martti Ala-Härkönen Katja Wodjereck Carl Nyberg President and CEO CFO EVP, Renewable EVP, Renewables Products Supply Chain and Sustainability
Slide 4: Key topics for today
4 Key topics for today Strengthening Value creation built Strategically Positioned to global SAF on our competitive positioned in deliver attractive leadership advantages growing markets shareholder value
Slide 5: Creating a healthier planet for our children
5 Creating a healthier planet for our children
Slide 6: Neste has transformed into a global leader in SAF, renewable diesel and feedstock solutions
6 Neste has transformed into a global leader in SAF, renewable diesel and feedstock solutions for the polymers and chemicals Business units’ share Business units’ share of Group comparable EBIT of Group capex 100% 100% Oil Products Oil Products Renewable Products Renewable Products 2012 2023 2012 20
Slide 7: Broad recognition of our leadership in ESG
7 Broad recognition of our leadership in ESG Neste has achieved the Leadership Neste was selected in the Neste reached the highest AAA rating in level and A− rating for its climate Dow Jones Sustainability Indices (DJSI) for 2023 in the MSCI ESG Ratings1 actions for 8th consecutive years. the 17th c
Slide 8: Strengthening global SAF leadership
8 Strengthening global SAF leadership
Slide 9: Highly attractive demand outlook for renewable and circular solutions
9 Highly attractive demand outlook for renewable and Long-term demand outlook5 (Mt) – circular solutions Highest growth rate expected for SAF CAGR Net-zero pledges cover 88% of global emissions1 Climate ambitions turned into concrete policies E-fuels COP28 called on parties to transition away from f
Slide 10: SAF accelerating value creation
10 SAF accelerating value creation Neste is ready to scale up value creation Strong SAF demand outlook, Mt1 ~15 Forerunner SAF capacity SAF production capability at the end of the year, Mt ~4 ~2 <1 Leading SAF ambition Share of SAF of 2030 renewable Up to products sales volumes ambition 40% SAF mand
Slide 11: Strongly positioned to drive SAF business growth
11 Strongly positioned to drive SAF business growth ~80 26 Best-in-class Global SAF production Customers across the Number of airports Neste MY raw material capabilities platform aviation value chain SAF is available at globally Global SAF leader Global market frontrunner 2024→ 2019-2023 Best-in-cla
Slide 12: Leading the way with SAF together with customers and partners across the globe
Leading the way with SAF together with customers and partners across the globe Expanding SAF supply for example together with Recently launched United Airlines Air France–KLM All Nippon Airways Neste Impact Air Canada DHL Group Japan Airlines offers a real, in-sector Boeing Lufthansa Singapore Airli
Slide 13: Value creation built on sustainable competitive advantages
13 Value creation built on sustainable competitive advantages
Slide 14: Three unique pillars of Neste's value creation model
14 Three unique pillars of Neste’s value creation model 1 2 3 Leader in Global raw material Value-driven growth high-margin renewable capabilities and innovation and circular products Global optimization capability provides flexibility to maximize value and deliver resilient margins
Slide 15: Diversifying Neste's leading portfolio of renewable and circular products
15 1 Diversifying Neste’s leading portfolio of renewable and circular products Indicative shares of sales Ambition by 2030 Unique competitive volumes development, Mt advantages Strategic focus on three Up to product segments with Sustainable aviation fuel 40% understanding of customer and market nee
Slide 16: Superior margins through successful growth in differentiating renewable raw materials
16 2 Superior margins through successful growth in differentiating renewable raw materials ILLUSTRATIVE Challenging waste and residues 92% Typically require advanced pretreatment Waste & residues as a share of total renewable raw material inputs in 2023 Low carbon intensity raw materials drive Other
Slide 17: Global sourcing and advanced pretreatment capabilities unlock differentiating renewable raw materials
17 2 2 Global sourcing and advanced pretreatment capabilities unlock differentiating renewable raw materials 92% of Neste 2023 renewable raw material inputs Challenging waste and residues1 Other waste and residues Vegetable oils Waste and residues that are more Waste and residues that can be Convent
Slide 18: Neste continues to differentiate through growth in high-value waste & residues and future raw materials
18 2 Neste continues to differentiate through growth in high-value 2 waste & residues and developing future raw materials Indicative Neste HVO/HEFA renewable raw material portfolio growth Historical growth Ambition to 2030 and beyond W&R were 92% of Future raw materials for HVO/HEFA1 Target to have
Slide 19: Global sourcing and aggregation brings scale advantages
19 2 Global sourcing and aggregation brings scale advantages Rapid growth in the number of Neste is a trusted partner with a commitment to supply chain sustainability renewable raw material suppliers across >60 countries of origin + Supplier Code of Supplier approval Robust supplier engagement Condu
Slide 20: A global leader with strong product optionality for high-value SAF and pretreatment capabilities
20 3 A global leader1 with strong product optionality for high-value SAF and pretreatment capabilities Global production platform Neste renewable and circular capacity 2024 nameplate capacity at the end of the year Nameplate capacity and product optionality by the end of the year, Mt/a Value-driven
Slide 21: Porvoo refinery transformation and innovation offer additional value creation
VERY PRELIMINARY - OPTION 21 1 3 Porvoo refinery transformation and innovation offer additional value creation in renewable and circular solutions Porvoo refinery long-term transformation into Examples of innovation opportunities renewable and circular solutions hub with for scalable new products an
Slide 22: First steps of Porvoo refinery transformation underway
VERY PRELIMINARY - OPTION 22 1 3 First steps of Porvoo refinery transformation underway Step change in our circular solutions Developing our first industrial-scale renewable offering hydrogen facility Liquified waste plastics upgrading 150 120 Electrolyzer project to supply the 111 MEUR capacity tar
Slide 23: Global value chain optimization drives value creation and margin resilience
PRELIMINARY 23 Global value chain optimization drives value creation and margin resilience Porvoo Leader in key renewable and circular markets Rotterdam Global raw material Martinez Singapore capabilities Global logistics and supply chain Raw materials aggregation terminals Production sites Product
Slide 24: Strategically positioned in growing markets
24 Strategically positioned in growing markets
Slide 25: Supply and demand outlook – four key takeaways
25 Renewables’ demand outlook strengthened over 2024-2030 by regulatory developments and voluntary commitments Capacity surge in 2024 focused in renewable diesel and North America – utilization rates expected to start Supply and demand increasing after 2024 outlook – four key takeaways Markets expec
Slide 26: Renewables' demand outlook strengthened by positive regulatory developments and voluntary commitments
26 Renewables’ demand outlook strengthened by positive regulatory developments and voluntary commitments Demand outlook for renewable diesel, HEFA-SAF and renewable naphtha1 Million tonnes Total renewable diesel, SAF and renewable naphtha ~20% demand outlook for 2030 CAGR strengthened by >10% since
Slide 27: Regulatory development and voluntary commitments support long-term demand outlook
27 Regulatory development and voluntary commitments support long-term demand outlook Americas EMEA APAC Strengthened regulatory development and commitments LCFS programs driving demand growth EU Green Deal follow-up legislation finalized Accelerating momentum in high potential markets • LCFS target
Slide 28: Supply potential and demand outlook considerations
28 Supply potential and demand outlook considerations Long-term Long-term supply potential demand ● Capacity surge in 2024 focused CAGR 2024-30 Long term outlook potential ~20% based on ~11% in renewable diesel and North America CAGR current project 2024-301 pipeline1 ● Global utilization rates expe
Slide 29: Markets expected to balance through both demand and supply side mechanisms
29 Markets expected to balance through both demand and supply side mechanisms Demand upside mechanisms From capacity to supply outlook ILLUSTRATIVE ILLUSTRATIVE ● Producer-driven ● Supply potential is balancing, e.g. FAME based on the project displacement with pipeline, corrected for renewable diese
Slide 30: Product and regional market specific differences offer significant value creation opportunities
30 Product and regional market specific differences offer significant value creation opportunities Supply and demand outlook for SAF and renewable Market-wise, specific requirements on raw materials offer polymers and chemicals supported by strong demand attractive value creation opportunities e.g.
Slide 31: Neste is strongly positioned to maintain superior margins
31 Illustrative sales margins Neste is strongly Neste Flexible global end-market access competitive positioned to advantages Product optionality and scale-up maintain superior of higher value SAF margins based on Broad high-value raw materials sourcing capabilities to leverage sustainable raw materi
Slide 32: Positioned to deliver attractive shareholder value
32 Positioned to deliver attractive shareholder value
Slide 33: Neste's capital allocation principles set the frame for disciplined growth and sustainable dividends
33 Neste’s capital allocation principles set the frame for disciplined growth and sustainable dividends Prioritized maintenance Disciplined growth CAPEX Strong balance sheet Safety and operational reliability of Adjusted ROACE >15% Leverage target <40% prioritized existing assets Growth in Comparabl
Slide 34: Disciplined investments in high-margin growth opportunities sustain attractive returns
34 Disciplined investments in high-margin growth opportunities sustain attractive returns We have been able to deliver attractive returns Disciplined growth CAPEX ● Value-driven growth with focus on higher margin projects – SAF, renewable polymers and chemicals, chemical recycling, highest-return in
Slide 35: Efficiency initiatives drive additional margin support
35 Efficiency initiatives drive additional margin support Enhanced long-term competitiveness and margin support Neste Excellence Targeting new >350 Strengthened efficiency through MEUR value creation e.g. digitalization and process by the end of 2026 excellence (incl. AI) Continuous improvement in f
Slide 36: Strong financial performance enables profitable growth, strong cash flows and attractive shareholder returns
36 Strong financial performance enables profitable growth, strong cash flows and attractive shareholder returns COMP. EBITDA (BEUR) CASH CONVERSION (Cash flow from operations¹ / Comparable EBITDA) Disciplined Attractive CAPEX plan returns to 2035 through superior margins Strong cash LEVERAGE (%) DIV
Slide 37: Strengthening global SAF leadership
37 Value creation built Strategically Strengthening Positioned to on sustainable positioned to capture global SAF deliver attractive competitive value in growing leadership shareholder value advantages markets
Slide 38: Q&A
38 Q&A