Neste Oyj Unsp/Adr

Thank you, and good afternoon, ladies and gentlemen. Welcome to this conference call to discuss Neste's first quarter results published this morning. I am Anssi Tammilehto, Head of IR at Neste. Here with me on the call are President and CEO Matti Lehmus, or CFO, Martti Alaiharkonen, and the business unit heads Katja Bodjerek of Renewable Products and Markku Korveranta of Oil Products. We will be referring to the presentation that can be found on our website. And as always, please pay attention to the disclaimer, since we will be making forward-looking statements in this call. With these remarks, I would like to hand over to our president and CEO, Matti Lehmus, to start with the presentation. Matti, please go ahead.

Thank you. And a very good afternoon also on my behalf. It's great to have you all participating in the call. As we anticipated in our previous quarterly earnings call, the market in renewables was clearly more challenging in the first quarter, both in the US and in Europe. In this weaker market environment, we have kept our focus on our resilience strategy and on our competitive advantages to defend margins. So, moving to the first slide, our group comparable EBITDA was 551 million euros in the first quarter. This is one-third lower than last year, despite growth in renewable sales volume. One key driver for the lower result is the lower renewable sales margin of $562 per ton, which compares to last year's average of $863 per ton. The margin in the first quarter reflects the lower bioticket prices and renewable sales premiums versus last year, and also the renegotiated annual term contracts. as the old contract expired at the end of the year. On a year-on-year basis, the sales volumes grew in renewable products but were slightly below the previous quarter's level due to the SAF inventory build-up and preparation for upcoming maintenance turnarounds, and also the seasonally lower demand at the beginning of the year. In oil products, good operational performance and high utilization rates supported our performance and we achieved a total refining margin of $20.4 per barrel in the first quarter. This is a good achievement, noting that the refining margin was slightly higher than in the previous quarter. Our cash flow in the first quarter was impacted by the inventory buildup before the Porvo refineries' major turnaround in the second quarter and in renewables, and was negative. During the first quarter, We also finalized the organizational simplification and restructuring, and we expect this to lead to a cost saving of €50 million annually going forward. I note that we have prepared for a more challenging market environment in renewables and are well positioned to capture and to leverage our competitive advantages also in this market. When looking at the key market indicators, the change in the renewables market is well visible. In the US, The average RIN credit price weakened by 31% versus the previous quarter, and versus one year ago, the change is 65%. Also in Europe, renewable price premiums continued to weaken during the first quarter and are at a clearly lower level than last year. I note that on the feedstock side, the average feedstock price has weakened slightly, approximately 2% on average. In oil products, product margins gasoline strengthened versus the previous quarter with inventory levels for both gasoline and diesel on a relatively low level. So moving forward, I would state that we continue to actively pursue our strategic priorities and to support the business performance improvement through our own activities. Our strategy remains resilient also in the current renewables market. build around, first of all, a strong position in the growing SAF market, secondly, creating value through our competitive advantage in feedstocks and global sales optimization, and finally, a strong positioning in all key markets, positioning as well for the long-term growth in the renewable and circular market. We'll also continue to focus on operational excellence and cost efficiency to strengthen our long-term competitiveness. With these words, I'm handing over to Katja Wodirek, who will go through the renewable products performance.

Thank you, Matti. Good afternoon also on my behalf. Let's go through the results and market updates for renewable products. 2024 has started in a challenging market environment. We have been preparing for this for the last 10 years already and strengthened our global platform both on the feedstock production product optionality side and secondly, by mastering world-class optimization on a continuous basis. Let's zoom into the first quarter. Comparable EBITDA was 242 million euros and below previous year's level. This result was mainly impacted by sales volume results at a year-over-year growth to 849 KT and a weaker market resulting in a sales margin of 562 US dollars per metric ton. Our sales volume were impacted by seasonally lower demand, the build-up of our sub-inventories and our preparation for the upcoming turnarounds in 2024. Our sales were quite evenly balanced between Europe and North America markets and we continued to optimize our full value chain in the weaker markets. Our sales margin is clearly at a lower level than what we saw last year. As we have highlighted for a long time already, the market has been impacted by the additional capacity, especially in the US, but also in Europe. In addition, the Martinez joint operation had a diluting impact on our margin also in the first quarter, and we are working on several improvement areas to enhance the profitability. We move to the next slide. On our focus areas for 2024, they center around four pillars. Our end-to-end optimization, providing competitive advantage also in this market situation, Continuation of focus on growing our soft business, we see positive momentum building specifically towards the end of the year. Our focus on finalizing the ramp-ups and new projects in our sites of Singapore, Rotterdam, and through our JV in the US, and in addition execute on our cost and efficiency improvement plans. And every player in this business has to have both access and the capability to process feedstock. Last but not least, we have been seeing positive regulatory developments in the Netherlands, but are also awaiting the final decisions, for example, in countries such as Germany. Our strategy remains. We continue to grow in selected feedstocks and markets by various means. Thank you, and over to Markku.