Slide 1: Neste Q1 2024
Neste Q1 2024 Matti Lehmus | President and CEO | 25 April 2024
Slide 2: Contents
2 Contents 1. Key takeaways from Q1 2024 2. Market update Place and crop your 3. Segment reviews image here 4. Group financials 5. Outlook 6. Appendix
Slide 3: Disclaimer
3 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 4: Key takeaways Key figures Q1 2024
4 Key takeaways Key figures Q1 2024 • Demonstrating resilience in a weak Group comparable Comparable sales Total refining margin, renewables market EBITDA, EUR m margin, USD/ton USD/bbl • In Renewable Products, defending margins 551 (830) 562 (945) 20.4 (21.8) in a weaker market in both US and Europ
Slide 5: Key market environment drivers in Q1 2024
5 Key market environment drivers in Q1 2024 Comments Change, % vs. Change, % vs. Avg, Q1/24 Q4/23 Q1/23 • US renewable credit price levels, Crude oil price (USD/bbl) 83.2 -1% +2% Macro especially RINs continued to drivers1) Diesel price (USD/ton) 842 -1% -2% decline. Also European renewable diesel s
Slide 6: Our strategy remains resilient in current renewables market
6 Our strategy remains resilient in current renewables market Value creation Strategically through competitive Continued focus positioned in Strengthen global advantages in on efficiency growing renewable SAF leadership feedstocks and and long-term and circular global competitiveness markets optimiz
Slide 7: Segment reviews
7 Segment reviews Place and crop your image here and send to back
Slide 8: Q1/24 impacted by a clearly weaker market in renewable diesel
Q1/24 impacted by a clearly weaker market in renewable diesel Comparable EBITDA Q1/24 vs. Q1/23, MEUR Comments • Sales volume was 849 (678) kton, added capacity ○ Seasonally lower demand ○ Build-up of SAF inventories ○ Preparation for the upcoming maintenance turnarounds in 2024 • Sales to European
Slide 9: Renewable Products: Focus areas in 2024
9 Renewable Products: Focus areas in 2024 Value capture Full capacity Continued through Growing the ramp-up of new feedstock end-to-end SAF business facilities, driving growth optimization efficiency • Further optimize the value • SAF sales expected to • Ramp-up of Singapore 2nd line • Continue to e
Slide 10: Solid operational performance in Oil Products and preparing for the turnaround
10 Solid operational performance in Oil Products and preparing for the turnaround Comparable EBITDA Q1/24 vs. Q1/23, MEUR Comments • Oil Products sales volume decreased due to preparing for the Porvoo TA • Total refining margin was supported by still elevated product margins, and more normalized nat
Slide 11: Oil Products: Focus areas in 2024
11 Oil Products: Focus areas in 2024 Porvoo Continue the solid Porvoo Neste Excellence turnaround operational Transformation driving efficiency execution performance • Execution safely and in • Maintain high utilization • Green hydrogen project • Focus on optimization, schedule during Q2/24 rates at
Slide 12: Marketing & Services profitability at previous year's level
12 Marketing & Services profitability at previous year’s level Comments Comparable EBITDA, Q1/24 vs. Q1/23, MEUR • Sales volumes increased slightly year-over-year and market share remained on a high level • The political strikes in Finland had an impact on fuel deliveries and logistics Sales volumes
Slide 13: Group financials
13 Place and crop your Group financials image here and send to back
Slide 14: Strong foundation for profitable growth
14 Strong foundation for profitable growth Solid cash flow Risk Efficiency New sustainable generation management improvement funding secured in focus • Three green bond • Ensuring continued issues with long strong performance in • Neste Excellence program maturities in 2023, in a more volatile marke
Slide 15: Defending margins in a weaker renewables market
15 Defending margins in a weaker renewables market Group comparable EBITDA, by segments, Q1 Group comparable EBITDA, by driver, Q1
Slide 16: Continuing to meet the Group's financial targets
16 Continuing to meet the Group’s financial targets Comparable ROACE, Leverage, net debt to Comments after tax, rolling 12 capital, % months % • Comparable return on average capital Target <40% employed after tax (Comparable ROACE) and leverage ratio are Neste's key financial targets • The company's
Slide 17: Q1 2024 cash flow impacted by inventory build-up
17 Q1 2024 cash flow impacted by inventory build-up Cash flow before Cash out investments, Net working capital, financing activities, EUR million EUR million and in EUR million days outstanding
Slide 18: Disciplined investments in high-margin growth opportunities sustain attractive returns
18 Disciplined investments in high-margin growth opportunities sustain attractive returns Disciplined growth CAPEX ● Value-driven growth with focus on higher Disciplined Attractive margin projects – SAF, renewable polymers CAPEX plan returns and chemicals, chemical recycling, to 2035 through highest
Slide 19: Market outlook and guidance
19 Place and crop your Market outlook and guidance image here and send to back
Slide 20: Summary of Neste's FY 2024 outlook
Summary of Neste’s FY 2024 outlook Guidance for 2024 Additional information Renewable Products Oil Products Location Q1 Q2 Q3 Q4 Sales volume expected to increase Sales volume in 2024 lower than in Porvoo 2 months to approximately 4.4 Mt (+/-10%) in 2023, impacted by the planned 2024, out of which S
Slide 21: Strengthened long-term demand outlook in renewable and circular solutions
21 Strengthened long-term demand outlook in renewable and circular Long-term demand outlook4 (Mt) – Highest growth rate expected for SAF solutions CAGR E-fuels Net-zero pledges 88% of global emissions1 and concrete policies Sustainable ~40% aviation fuel COP28: transition away from fossil fuels and
Slide 22: Taking charge of change
Taking charge of change Our strategy is to deliver outstanding value with renewable and circular solutions Rapid growth in aviation as well as polymers and chemicals sectors Expansion of global feedstock base Profitable
Slide 23: Appendix
23 Place and crop your Appendix image here and send to back
Slide 24: Renewable Products: Key market drivers in the US market
24 Renewable Products: Key market drivers in the US market California Low Carbon Fuel Standard, LCFS credit price, RIN prices, US cent/gal USD/ton Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 • LCFS credit price continued declining after Q4 but • A
Slide 25: Vegetable oil and W&R price development
25 Vegetable oil and W&R price development Vegetable oil and selected waste and residue prices1, USD/ton Comments • The downward trend of vegetable oil markets began to change in March when the palm oil supply shortage led to increased prices • Waste and residue feedstock prices stabilized at the en
Slide 26: Oil Products: Key product margins
26 Oil Products: Key product margins Product margins (price differential vs. Brent), USD/bbl Comments • Gasoline margin was supported by seasonally healthy demand in North America • Diesel margin continued elevated driven by the inventory tightness and unexpected geopolitical events • Volatility exp
Slide 27: Group financials Q1/2024
27 Group financials Q1/2024 Comparable EBITDA totaled EUR 551 million (EUR 830 million) MEUR Q1/24 Q1/23 Q4/23 2023 Revenue 4,801 5,298 6,303 22,926 EBITDA 442 463 672 2,548 Comparable EBITDA 551 830 797 3,458 Renewable Products 242 415 433 1,906 Oil Products 278 393 330 1,434 Marketing & Services 2
Slide 28: Cash flow impacted by inventory build-up
28 Cash flow impacted by inventory build-up MEUR Q1/24 Q1/23 Q4/23 2023 EBITDA 442 463 672 2,548 Capital gains/losses -2 0 0 0 Other adjustments -7 180 -225 108 Change in net working capital -382 -209 495 21 Finance cost, net -34 -23 -38 -91 Income taxes paid -48 -34 -213 -307 Net cash generated fro
Slide 29: Renewable Products' comparable EBITDA calculation
Renewable Products’ comparable EBITDA calculation Q1/23 Q2/23 Q3/23 Q4/23 2023 Q1/24 Total RP sales volume kton1 678 957 883 870 3,382 849 Comparable sales margin USD/ton 945 800 912 813 863 562 Comparable sales margin MEUR 598 703 741 657 2,699 439 Fixed costs MEUR -184 -192 -194 -221 -791 -211 Com
Slide 30: Oil Products' refinery production costs
30 Oil Products’ refinery production costs Q1/23 Q2/23 Q3/23 Q4/23 2023 Q1/24 Refined products million bbls 21.3 21.3 22.3 22.6 87.5 21.4 Exchange rate EUR/USD 1.07 1.09 1.09 1.08 1.08 1.09 MEUR 102.4 68.9 74.5 74.0 319.8 70.3 Utilities costs USD/bbl 5.2 3.5 3.6 3.5 4.0 3.6 MEUR 49.7 55.6 52.8 57.0
Slide 31: Liquidity and maturity profile of loan portfolio
31 Liquidity and maturity profile of loan portfolio Maturity profile, MEUR Short-term Long-term • Group’s liquidity EUR 3,268 million at the end of March – Liquid funds EUR 1,368 million – Unused committed credit facilities EUR 1,900 million • Average interest rate for interest-bearing liabilities w