Stock Exchange Release
15 September 2015 at 1.30 pm. (EET)
Neste Capital Markets Day 2015: Growing ambitions
Neste Corporation is holding its Capital Markets Day 2015 in London today, 15 September, featuring presentations by senior management on subjects such as the company's strategy, targets, and recent business developments.
Neste's strategy is based on a renewed vision "Creating responsible choices every day". It sets the direction for the company's ambition to grow and offer its customers low carbon solutions. Neste's strategic targets remain unchanged: be the Baltic Sea champion and grow in the global renewable markets.
Neste's success in strategy implementation is based on its unique competitive advantages. Capabilities are developed particularly in the areas of commercial excellence and optimization across the entire Neste value chain. Also feedstock sourcing and research remain one of the core focus areas.
Neste is determined to generate shareholder value and strong cash flow to support investments in improved productivity and opportunities for growth, to optimize debt, and to ensure favorable dividend distribution.
Baltic Sea champion
Neste aims to be the leading provider of low carbon solutions in the Baltic Sea markets. It has a unique offering combining both fossil and renewable products. It strives to be the company with the highest customer satisfaction and focuses on growth opportunities.
Neste continues its efforts to enhance additional refining margin, which decreases its exposure to market changes. The additional margin target is set at higher than USD 5/bbl, and it will be achieved by performance improvement actions focusing on availability and cost, continuous asset development, and strengthening market position.
Neste will focus on taking full advantage of the integrated value chain and leveraging captive sales volumes through its own network.
Global renewable growth
Neste is the global leader in the renewable diesel market, and wants to develop significant business from non-traffic renewable product markets by the end of the decade.
Neste has developed unique competitive advantages in flexible feedstock supply, global supply chain, and drop-in solutions offered for customers. It continues to drive additional margin increase through feedstock flexibility, including the achieved capability to use 100% share of waste and residue feedstock, productivity growth, and product value maximization.
Neste sees great potential in many new application areas such as bio-based distillates, chemicals and plastics, where it can provide distinct advantages. Neste has already announced first partnerships in bio-based solvents and fluids. It intends to continue way forward with some of the leading global brand owners to create unique bio-plastics and an ecosystem around them. Neste targets to have 20% of its renewable business sales volume from non -traffic applications by 2020.
Neste targets to generate EUR 100 million additional EBIT in Renewable Products, including the non-traffic applications, by 2020.
Neste's most important financial targets are leverage and ROACE after tax, and they remain unchanged. The leverage target is 25-50% and the ROACE target 15%.
Neste's dividend policy is maintained to distribute at least one third of the company's comparable net profit for the year in the form of dividends.
The reference refining margin has continued strong, and the current forward prices indicate reasonably high margin levels for the fourth quarter of 2015 as well. In Renewable Products the reference margin has improved as a result of a healthier European market.
The major turnaround at Neste's Porvoo refinery was successfully completed in June, and the refinery is back in high utilization. Also the renewable diesel refineries are running at high production rates. Neste's productivity investment program is progressing according to plan.
Neste is adjusting the way it gives guidance to be in line with industry practice. Neste will continue to provide information about the short-term market outlook and its own operational performance, which enables the capital markets to draw sound conclusions on the company's financial performance. Therefore, Neste will discontinue providing numerical guidance of results in its short-term outlook from the beginning of 2016.
CMD presentation material in English will be available at www.neste.com/investors from around 2.30 p.m. (EET) onwards.
The event can also be followed online at www.neste.com/investors from 2.30 p.m. (EET) onwards.
A replay will be available after the event at www.neste.com/investors.
Jyrki Mäki-Kala, CFO, tel. +358 10 458 4098
Neste in brief
Neste is a pioneer in oil refining and renewable solutions. We provide our customers with premium-quality products for cleaner traffic and industrial products based on world-class research. Our sustainable operations have received recognition in the Dow Jones Sustainability World Index and the Global 100 list of the world's most sustainable companies, among others. Our net sales for 2014 amounted to approximately EUR 15 billion, and our shares are listed on NASDAQ Helsinki. Cleaner traffic, energy and life are moved forward by about 5,000 professionals. More information: neste.com