Financial Statements Matti Lievonen, President & CEO 7 February 2018

Transcription

1 Financial Statements 2017 Matti Lievonen, President & CEO 7 February 2018

2 Agenda 1. Year Group financials 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 Record-high financial results in a very successful year 2017 Comparable EBIT all-time high 1,101 MEUR Excellent result in Renewable Products Oil Products result highest in this decade Good operational and safety performance Dividend proposed to be increased by 31% to EUR 1.70 per share 4

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

6 Group financials 2017

7 Group financials 2017 Strong results MEUR Q4/2017 Q4/2016 Revenue 13,217 11,689 3,636 3,421 Comparable EBITDA 1,472 1, EBITDA 1,542 1, Comparable operating profit 1, Renewable Products Oil Products Marketing & Services Others (incl. eliminations) Operating profit 1,171 1, Cash flow before financing activities Comparable earnings per share, EUR

8 Higher oil prices and sales volumes increased revenue Group revenue 2016 vs. 2017, billion euros Prices Volume FX changes

9 Higher additional margins and volumes driving Q4 result Group comparable EBIT Q4/16 vs. Q4/17, MEUR Q4/16 Volumes Reference margin Additional margin Fx changes Fixed costs Others Q4/17 9

10 Sales volumes and reference margins boosted annual result Group comparable EBIT 2016 vs. 2017, MEUR , Volumes Reference margin Additional margin Fx changes Fixed costs Others

11 Segment reviews

12 Excellent Q4 result in Renewable Products Comparable EBIT, MEUR Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 MEUR Q4/17 Q4/ Revenue ,243 2,690 Comparable EBIT Net assets 1,863 1,811 1,863 1,811 Comparable EBIT 209 MEUR (146 MEUR) Additional margin USD 254/ton (127) without US Blender s Tax Credit Sales volume 713 kton (662 kton); share of North America 27% (32%) Share of waste and residues feedstock 75% (69%) Investments 24 MEUR (18 MEUR) Comparable RONA* 30.2% (25.9%) * Last 12 months 12

13 Strong additional margin and high sales volumes in Q4 Renewable Products comparable EBIT Q4/16 vs. Q4/17, MEUR Q4/16 Volumes Reference margin Additional margin Fx changes Fixed costs Others Q4/17 13

14 Sales volumes and reference margin boosted record high full-year result Renewable Products comparable EBIT 2016 vs. 2017, MEUR Volumes Reference margin Additional margin Fx changes Fixed costs Others

15 European biodiesel margins on good level FAME RED Seasonal vs. Palm oil price* differential, USD/ton 500 Vegetable oil and animal fat prices**, USD/ton Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Soybean Rapeseed Palm oil Animal fat 15 * Including $70/ton freight **Quotations in NWE, source: Oil World

16 US biodiesel margins impacted by BTC speculations SME vs. Palm oil price* differential, USD/ton Biodiesel RIN, US cent /gal Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 * Including $70/ton freight 0 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Biomass-based diesel (D4) Conventional renewable fuel (D6)

17 Additional margin maintained on good level without BTC Renewable Products margin, USD/ton Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Comparable sales margin USD 365/ton (348) Reference margin USD 321/ton (338) Additional margin USD 254/ton (127) High utilization rate 97% (88%) Reference margin Additional margin Comparable sales margin 17

18 Oil Products' Q4 result impacted by good operational performance in weaker market Oil Products comparable EBIT, MEUR Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 MEUR Q4/17 Q4/ Revenue 2,355 2,159 8,490 7,395 Comparable EBIT Net assets 2,497 2,424 2,497 2,424 Comparable EBIT 89 MEUR (98 MEUR) Sales volume 3.7 Mton (3.6 Mton) Porvoo average utilization rate 88% (78%) Urals share of feed 64% (66%) Investments 121 MEUR (73 MEUR) Comparable RONA* 19.5% (18.7%) * Last 12 months 18

19 Quarterly result impacted by weaker USD Oil Products comparable EBIT Q4/16 vs. Q4/17, MEUR Q4/16 Volumes Reference margin Additional margin Fx changes Fixed costs Others Q4/17 19

20 Higher reference margin and good operational performance Oil Products comparable EBIT 2016 vs. 2017, MEUR Volumes Reference margin Additional margin Fx changes Fixed costs Others

21 Seasonally lower refining margins and narrower Urals- Brent price differential Product margins (price differential vs. Brent), USD/bbl Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Urals vs. Brent price differential, USD/bbl Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan Diesel Gasoline Heavy Fuel Oil

22 Total refining margin supported by high additional margin Total refining margin, USD/bbl Total refining margin USD 10.69/bbl (10.53) Reference margin USD 4.93/bbl (5.19) Additional margin USD 5.76/bbl (5.34) Porvoo average utilization rate 88% (78%) including PL 4 maintenance Refinery production costs USD 5.4/bbl (5.3) 0 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Reference margin Additional margin 22

23 Challenging Q4 in Marketing & Services Comparable EBIT, MEUR Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 MEUR Q4/17 Q4/ Revenue 1, ,912 3,552 Comparable EBIT Net assets Comparable EBIT 11 MEUR (19 MEUR) Sales volumes maintained year-on-year Lower unit margins in competitive markets Investments 10 MEUR (9 MEUR) Comparable RONA* 28.5% (47.5%) * Last 12 months 23

24 Lower unit margins impacted quarterly result Marketing & Services comparable EBIT Q4/16 vs. Q4/17, MEUR Q4/16 Volumes Unit margins Fx changes Fixed costs Others Q4/17 24

25 Sales volumes maintained at lower margins Marketing & Services comparable EBIT 2016 vs. 2017, MEUR Volumes Unit margins Fx changes Fixed costs Others

26 Current topics

27 Outlook for 2018 We expect 2018 to be a strong year for Neste 27

28 Segment outlook for 2018 Renewable Products Oil Products Margin Additional margin expected to stay at good level in Margin Reference margin expected to be below 2017 average in early 2018 but to get support from start of driving season in spring. Crude oil supply limitations likely to lead to slightly narrower Urals-Brent price differential compared to Marketing & Services Unit margins and sales volumes Expected to follow previous years seasonality pattern. Actions initiated to improve financial performance. Utilization rate Utilization rates expected to be high, except for 4 week shutdown of Rotterdam refinery in Q2 and 9 week major turnaround at Singapore refinery in Q4. Utilization rate High reliability to continue in OneRefinery operations supporting good utilization rate in Scheduled unit turnarounds to be implemented during spring and autumn. 28

29 We continue to focus on Safety and operational excellence Cash flow Customer satisfaction 29

30 Appendix

31 Renewable Products comparable EBIT calculation Q1/17 Q2/17 Q3/17 Q4/ Sales volume, kt ,567 2,222 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 Refined products Q4/ Q1/17 Q2/17 Q3/17 Q4/ 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 Cash flow MEUR Q4/17 Q4/16 Q3/ EBITDA ,542 1,521 Capital gains/losses Other adjustments Change in working capital Net finance costs Taxes Net cash generated from operating activities ,094 1,193 Capital expenditure Other investing activities Cash flow before financing activities

34 Liquidity & maturity profile MEUR Short-term Long-term Total liquidity EUR 2,833 million at end of December 2017 Cash and cash equivalents EUR 783 million Unused committed credit facilities EUR 1,650 million Unused CP programmes (not committed) EUR 400 million Average interest rate for interest-bearing liabilities was 3.3%* and maturity 4.5 years at end of December No financial covenants in Group companies existing loan agreements *Average interest rate for interest-bearing liabilities excluding finance leases was 2.3%

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