Half-year results Matti Lievonen, President & CEO 3 August 2017

Transcription

1 Half-year results 2017 Matti Lievonen, President & CEO 3 August 2017

2 Agenda 1. Q2/17 Group financials 2. January-June 2017 review 3. Q2/17 Segment reviews 4. Current topics 5. Appendix 2

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 expenditures, future cash sources and requirements, liquidity and cost savings that involve known and unknown risks, uncertainties and other factors that may cause Neste Corporation s or its businesses actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In some cases, such forward-looking statements can be identified by terminology such as may, will, could, would, should, expect, plan, anticipate, intend, believe, estimate, predict, potential, or continue, or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the following forward-looking statements, possibly to a material degree. All forward-looking statements made in this presentation are based on information presently available to management and Neste Corporation assumes no obligation to update any forward-looking statements. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities or otherwise to engage in any investment activity. 3

4 Solid performance continued Comparable EBIT 236 MEUR Good quarter in Oil Products Record-high sales volumes in Renewable Products Marketing & Services improved performance from Q1/17 4

5 Solid performance visible in financial targets ROACE, rolling 12 months, % Leverage, % Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 0 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 5

6 Q2/17 Group financials

7 Group financials Q2/17 MEUR Q2/2017 Q2/2016 Revenue 3,280 2,927 Comparable EBITDA EBITDA Comparable operating profit Oil Products Renewable Products Marketing & Services Others (incl. eliminations) -6-9 Operating profit Cash flow before financing activities Comparable earnings per share, EUR

8 Increased sales volumes and supportive markets Group comparable EBIT Q2/16 vs. Q2/17, MEUR Q2/16 Volumes Reference margin Additional margin Fx changes Fixed costs Others Q2/17 8

9 January-June 2017 review

10 Result on right track Higher sales volumes compared to H1/2016 Higher reference margin in both Oil Products and Renewable Products Lower additional margins impacted result Strategic refinery investments making progress 10

11 Group financials H1/17 MEUR H1/2017 H1/2016 Revenue 6,351 5,234 Comparable EBITDA EBITDA Comparable operating profit Oil Products Renewable Products Marketing & Services Others (incl. eliminations) Operating profit Cash flow before financing activities Comparable earnings per share, EUR

12 Result close to H1/16 level Group comparable EBIT H1/16 vs. H1/17, MEUR H1/16 Volumes Reference margin Additional margin Fx changes Fixed costs Others H1/17 12

13 Q2/17 Segment reviews

14 Good performance in Oil Products Oil Products comparable EBIT, MEUR Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Comparable EBIT 122 MEUR (149 MEUR) Sales volume 3.6 Mton (3.7) Urals share of feed 74% (69%) Investments 61 MEUR (89 MEUR) Comparable RONA* 18.6% (20.4%) MEUR Q2/17 Q2/ Revenue 2,080 1,916 7,395 Comparable EBIT Net assets 2,597 2,451 2,424 * Last 12 months 14

15 Lower additional margin in similar refining market Oil Products comparable EBIT Q2/16 vs. Q2/17, MEUR Q2/16 Volumes Reference margin Additional margin Fx changes Fixed costs Others Q2/17 15

16 Urals-Brent differential narrowed Product margins (price differential vs. Brent), USD/bbl Jan-14 Jan-15 Jan-16 Jan-17 Urals vs. Brent price differential, USD/bbl Jan-14 Jan-15 Jan-16 Jan Diesel Gasoline Heavy Fuel Oil

17 Total refining margin level maintained at good level Total refining margin, USD/bbl Total refining margin USD 10.67/bbl (11.19) Reference margin USD 5.68/bbl (5.59) Additional margin USD 4.99/bbl (5.60) Porvoo average utilization rate 92% (97%) Refinery production costs USD 4.3/bbl (3.8) 2 0 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Reference margin Additional margin 17

18 Record-high sales volumes in Renewable Products Comparable EBIT, MEUR Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 MEUR Q2/17 Q2/ Revenue ,690 Comparable EBIT Net assets 1,895 1,735 1,811 Comparable EBIT 101 MEUR (119 MEUR) US Blender s Tax Credit expired at end Sales volume 674 kton (485 kton); share of North America 32% (41%) Share of waste and residues feedstock 81% (93%) Investments 24 MEUR (37 MEUR) Comparable RONA* 24.8% (28.2%) * Last 12 months 18

19 Expiry of BTC visible in additional margin Renewable Products comparable EBIT Q2/16 vs. Q2/17, MEUR Q2/16 Volumes Reference margin Additional margin Fx changes Fixed costs Others Q2/17 19

20 European margins higher year-on-year FAME RED Seasonal vs. Palm oil price* differential, USD/ton 500 Vegetable oil and animal fat prices**, USD/ton 1, , , Jan-14Jul-14 Jan-15Jul-15 Jan-16Jul-16 Jan-17Jul-17 * Including $70/ton freight **Quotations in NWE, source: Oil World 400 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Soybean Rapeseed Palm oil Animal fat

21 US margins improved after biofuel mandates reconfirmed SME vs. Palm oil price* differential, USD/ton Biodiesel RIN, US cent /gal Jan-14Jul-14 Jan-15Jul-15 Jan-16Jul-16 Jan-17Jul-17 * Including $70/ton freight 0 Jan-14Jul-14 Jan-15Jul-15 Jan-16 Jul-16 Jan-17Jul-17 Biomass-based diesel (D4) Conventional renewable fuel (D6)

22 Comparable sales margin maintained at Q1/17 level Renewable Products margin, USD/ton Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Comparable sales margin USD 270/ton (405) Reference margin USD 278/ton (232) Additional margin USD 101/ton (303) High utilization rate 96% (71%) Reference margin Additional margin Comparable sales margin 22

23 Marketing & Services improved performance Comparable EBIT, MEUR Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 MEUR Q2/17 Q2/ Revenue ,552 Comparable EBIT Net assets Comparable EBIT 19 MEUR (23 MEUR) Sales volumes maintained year-on-year Unit margins improved from Q1/17 Heavy traffic continues to recover in Finland Investments 12 MEUR (6 MEUR) Comparable RONA* 37.2% (46.9%) * Last 12 months 23

24 Result impacted by lower unit margins Marketing & Services comparable EBIT Q2/16 vs. Q2/17, MEUR Q2/16 Volumes Unit margin Fx changes Fixed costs Others Q2/17 24

25 Current topics

26 Outlook for 2017 Strategy implementation proceeding well Focus on customers and growth initiatives continues We are confident that year 2017 will be another successful one for Neste 26

27 Segment outlook for 2017 Oil Products Margin Reference margin in 2017 expected to be on average similar to Additional margin targeted at least USD 5.5/bbl after strategic investments completed. Renewable Products Margin Reference margin in 2017 expected to be on average higher than in Aiming at higher additional margin. Utilization rate Porvoo refinery expected to run at high utilization with normal unit maintenances including Production Line 4 decoking starting in October. Naantali unit scheduled for major two-month turnaround starting in August. Utilization rate Utilization rates expected to stay high. Marketing & Services Unit margins and sales volumes Expected to follow previous years seasonality pattern. 27

28 Capital Markets Day 2017 Neste will host a Capital Markets Day in London on 19 September 2017 The program will cover an update on Neste s strategy and businesses More information on neste.com/investors 28

29 We continue to focus on Safety Cash flow Refinery productivity Markets and customers 29

30 Appendix

31 Renewable Products comparable EBIT calculation Q2/16 Q3/16 Q4/ Q1/17 Q2/16 Sales volume, kt , Reference margin, $/ton Additional margin, $/ton Variable production costs, $/ton Comparable sales margin, $/ton Comparable sales margin, MEUR Fixed costs, MEUR Depreciations, MEUR Comparable EBIT, MEUR

32 Refinery production costs, Porvoo & Naantali Q2/16 Q3/16 Q4/ Q1/17 Q2/17 Refined products Million barrels Exchange rate EUR/USD Utilities costs Fixed costs External cost sales Total EUR million USD/bbl EUR million USD/bbl EUR million USD/bbl EUR million USD/bbl

33 Balance sheet Total assets Non-current assets Current assets Total equity and liabilities Int-bear. liabilities Equity Int-free liabilities 8,000 7,000 7,077 7,094 8,000 7,000 7,077 7,094 6,000 5,000 4,176 4,141 6,000 5,000 3,898 3,300 4,000 4,000 3,000 2,000 1, ,901 2, Jun Jun 16 3,000 2,000 1, ,169 1,790 2,010 2, Jun Jun 16 33

34 Cash flow MEUR Q2/17 Q2/16 Q1/17 H1/17 H1/ EBITDA (IFRS) ,521 Capital gains/losses Other adjustments Change in working capital Net finance costs Taxes Net cash generated from operating activities ,193 Capital expenditure Other investing activities Cash flow before financing activities

35 Liquidity & maturity profile MEUR Short-term Long-term Total liquidity at the end of June 2017 was EUR 1,872 million Cash and cash equivalents totalled EUR 222 million Unused committed credit facilities totalled EUR 1,650 million Unused CP programmes (not committed) totalled EUR 400 million Average interest rate for interest-bearing liabilities was 3.1%* and maturity 5.0 years at the end of June No financial covenants in Group companies existing loan agreements *Average interest rate for interest-bearing liabilities excluding finance leases was 2.1%

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