Neste Oyj Unsp/Adr

Hello all. Welcome to Neste's Q3 24 results webcast. My name is Anssi Tammelehto. I'm the head of IR at Neste. Today, we have our new president and CEO, Heikki Malinen, and our CFO, Martti Alaherkonen, as our main speakers. As per usual, we will first start with our presentation, and after that, we will have time for your questions. As always, please pay attention to the disclaimer, as we will be making forward-looking statements in this call. With these remarks, I would like to hand over to our President and CEO, Heikki Malinen.

Good morning, good afternoon, good evening, wherever you are. Welcome also on my behalf to this webcast, and thank you, Anssi, for those introductory remarks. Okay, so this is my first Neste webcast, and some of you may know me from the past, but please allow me to introduce myself briefly with a few words here to get us going. So this is my 16th year as a CEO. I've spent almost most of my career in cyclical industries, heavy industry, industries which face tough, fierce competition. I've spent my whole career involved in different types of transformations. I've led many transformations. That's what I know, and that's what I do professionally. And I look forward to discussing with you about how we're doing and also where we're going from here in the years to come, and hopefully also meeting you in person in the not-too-distant future. This is my eighth day at Neste. I'm on an accelerated learning journey, and I will be focusing very much now in the early days more on listening and learning and understanding, but at the same time getting very quickly ready to move then into execution mode, and really with a very strong intent to make progress here within Neste. Those were sort of my opening remarks. And then if we start getting down to the order of the business of today, so a couple of key messages here for starters. So this is backdrop. I've already had a chance to talk to many Neste employees here in Porvo facility. I visited the R&D center on my first day. I've seen the Porvo refinery. I met hundreds of people. also had a chance to visit our foreign locations in Singapore and Houston and Rotterdam. And I've also spoken with a number of our customers. I talked to three CEOs of our largest customers last week and asked for their feedback and perspectives on the industry and on Neste. So I'm still in information collection mode. But a couple of observations still. First of all, my strong view here is that Neste is in a strong position. We are the pioneer in the renewable fuels industry. Really, Neste is the global market leader. We have the strongest technological and innovation base, and this gives us a profound advantage as we move forward into a more competitive industry. Our current performance is not satisfactory, and we will discuss the causes to that here in a moment. But I still want to, just for those of you who look also at the really long term, I just want to say a couple of things. One is, I mean, the green transition, it is coming. It's inevitable. It's very critical for the European economy. But the journey is not going to be linear. It's going to be nonlinear, and it's going to be volatile, and there will be phases when we go up and down. But I think the direction is clear. It's a growth industry, and Neste is well positioned. But Neste is a corporation. We need more focus. We need more focus on revenue generation. We need to take a sharper view on costs and competitiveness, and we need to keep an eye on the balance sheet and on CapEx. And so, therefore, we have now launched a full potential analysis to develop a robust plan, and that work has now started. And then finally, I'll comment in a moment, a little bit later, about what's going on with Porvo and the hydrogen electrolyzer we had been planning to invest in. Here are some of my early observations. I won't go through all the points. I'll leave you if you want to take a look at it later. But let me just comment on a few things still which I already referred to but which I feel are very strong. In addition to the long-term fundamentals, Nesta is in a unique position because we have a strong supply of feedstock. We understand the nitty-gritty of this business, and we have unique pretreatment capabilities and technologies and know-how. So that's a good foundation. We have a huge R&D team. We understand the technologies. You go to Portable and you look at the R&D center there, it's an amazing place. I mean, it's truly amazing, and I don't know if anyone in the industry in our sector has anything similar. And as I said, when I talk to Neste employees, I see really the passion in their eyes. People are very committed to take this company to the next level. So I don't have any problems with the motivation of the staff. I mean, people really have the fire in their belly to move Neste forward. We just need more clarity on the direction. But obviously, we have invested a lot in new capacity, and some of it is now starting, and more capacity is coming. So for us, operationally, we need to improve our ability now to ramp up those facilities and really to get more operational performance out of the fantastic assets this company has. So that's more of an operational challenge for the new CEO, among other things. Marty will go and do a deep dive on the numbers, but obviously maybe it's very easy for me to comment on the left-hand slide. It's the price chart for the renewable diesel sector. The curve, the shape of the curve and the trajectory and the delta is very evident. I mean, prices have corrected quite materially, and we are today in a very different spot than we were just a year ago. So that is one explanation for the change in profitability. You will not hear me making forecasts about prices going forward. I don't do that. But I think that we have a certain amount of volatility in these prices, and they can move in many directions. On the right-hand side, you can see the results, performance overall, compared to what we did a year ago in the third quarter. The change is really a major drop in profitability. But for me, that is more a challenge, an opportunity to improve. I look at the number and I say to myself, okay, what is it going to take from us to improve those numbers? And I said, you know, for me, that's more of a – it's an opportunity to show what NESTIC can do. So that's how I look at that number, although in itself it's not, of course, something that we like. So as I mentioned at the beginning – We have now started the full potential analysis. So what is that and why are we doing it? Well, as a person, I'm very fact-based. I'm very analytical. I want to see the facts and numbers. So we're now doing a deep dive where we can see basically the company. We're looking at the revenue side. We're looking at the cost side. Very comprehensively, we're looking at the capital side, including working capital. And out of this work, we will come up with a robust plan, which will have clear prioritization, and we will start executing in a logical sequence in an order that makes sense from the standpoint of trying to really hit the heavy items first, and that execution will then start next year. And I will come back to you in the beginning of the new year when I have something more concrete to share. But I just want to give you a heads up that that work has now started and is really an essential tool for me so that when I now start leading the company that we get on the right trajectory, the right clock speed, and right angle of attack, so to speak, from the get-go. Then today we have announced a decision, which of course is unfortunate, that we need to withdraw from investing in the 120 megawatt electrolyzer plant in Porvo. Now, Nest is very committed to decarbonizing our company, and Porvo, of course, does have CO2 emissions. So our objective is to reduce those and solve for that. But in the immediate future, situation we are now in. So we have two issues. One is the regulatory framework is moving in the right direction, which is positive, but the regulatory scheme does not sort of balance sufficiently well with the capacity that we were initially contemplating, so the 120 megawatt. And then secondly, we are in a cyclical business. And it's my point of view that in cyclical business, we also need to look at the leverage. And we have set clear targets on where our leverage can go. And as the trend has been rising, I think it's prudent for me as the new CEO to make a decision here and to just halt this project. Let's focus on the things we are working on now, and we will try to see if we can solve this decarbonization problem in Porvo another way, get to the same result, but through a more capital-effective manner. So we will come back to that later in the future when we have a new pathway on how to do this. But overall, as I said, I want to confirm that we are committed to the decarbonization of the Porvo facility. So those were my introductory remarks. I'll now hand it over to Marti. Marti will then go into the Q3 financials. Let's see if I can get the slide going. Marti will talk about that. And then I will come back later and talk about the outlook and give you a bit of a broader perspective about opportunities and uncertainties in this sector. And then we will be happy to answer your questions. Thank you.

Thank you very much, Heikki. So let's now go into the figures. I'd like to start by saying that financial-wise, the main theme in our third quarter result is that it reflects really the further weakened market, both in renewable products as well as in oil products. Like Heikki already mentioned, our current result level is unsatisfactory. We realize that. The challenging market conditions clearly impacted our margins, while on the positive side, we see clear initial progress on cost savings. More specifically, our third quarter EBITDA was 293 million euros. That is 72% down year on year. Last year in the third quarter, we had the peak quarter of that year, a result at that time north of 1 billion. Going more specifically into the segments, in the renewable products, our comparable sales margin was 341 U.S. dollars per ton, down about 62% from the last year's high level at 912, or 10%. still from the second quarter level of US$382 per ton. Similarly, in oil products, our total refining margin was US$10.6 per barrel, down about 60% from last year's high level at US$26.9 per barrel, and down also by 30% from the second quarter, US$15.1 per barrel. So the challenging market condition is very clearly visible in our third quarter figures, both in renewable products as well as in oil products. But on a positive note, our sales volumes increased quarter on quarter, both in renewable products. That includes also our SAF sales, where we reached a new quarterly high of 112 kilotons. clearly up also from the second quarter. As well as in oil products, we had a very solid performance and good sales following the turnaround in Portovo in the second quarter. On a positive note, furthermore, our fixed cost savings are becoming now clearly more visible, what we've been initiating over the last 12 months and starting to be visible. Our total fixed cost in the third quarter were markedly below our last year as well as the previous quarter. However, it's very clear, considering the challenging market condition, that further performance improvement actions will be required going forward. I'd like to take one more metric from this slide, which is that our greenhouse gas reduction in the quarter was 3.6 million tonnes. That is a clear increase year on year over the 2.5 million tonnes last year. This is a clear improvement, of course, about our environmental handprint. Here we visualize the key market environment drivers that impacted our margins in the third quarter. In the third quarter, looking first at renewable products and comparing to a year ago, our margin was above all affected by a substantial decrease in diesel price. The weakening diesel price was also the main factor quarter on quarter. Being more specific about that, European Northwest diesel came down about 65 U.S. dollars per ton from the second quarter compared to the third quarter average, or the South Coast diesel in the U.S. even 80 U.S. dollars per ton. In addition, when we compare year over year, the U.S. buy-your-ticket and renewable credit prices, as well as spot premiums in Europe, have both clearly weakened in a yearly comparison. At the same time, the waste and residue prices have remained relatively flat and not really giving us a helping hand margin-wise. On a positive note, during the third quarter, the credit prices, however, they slightly strengthened versus the second quarter levels. At the same time, in Europe, the spot premium still remained weak. And also in oil products, that goes for our product cracks, they decreased very clearly during the third quarter, and the decline is very visible both in year-on-year as well as in quarter-on-quarter comparisons. Our focus on efficiency, networking capital optimization, as well as balance sheet strength, those are set to continue going forward. In this slide, I'm sharing a few highlights of each of these from the third quarter. First, as to our fixed cost efficiency, in the third quarter, our comparable fixed costs were €16 million lower than a year ago. And more specifically, our employee benefit costs were €126 million in the third quarter. That is €36 million below last year at €162 million. We also now forecast that our total fixed costs will be lower compared to last year. Still in our second quarter report, we said that's slightly higher. Yet, of course, considering, I'm stating that again, considering the challenging market conditions, all our efficient actions naturally need to continue going forward. Second, looking at our change in the networking capital in our cash flow statement, our third quarter networking capital change was 143 million euros positive versus 268 million negative last year. There's a clear improvement year on year. And more specifically, in the third quarter, we succeeded in reducing our inventories by almost 600 million euros versus changes in receivables that was also due to a Higher sales volumes as well as payables contributed negatively to our network capital chains. Of note that also year-to-date, there is an improvement in the networking capital change compared to last year. And if you look forward, networking capital optimization continues to be a very high-focus area for the group, also in the fourth quarter. We have set very clear end-of-the-year targets and actions both for renewable products as well as oil products. Finally, preserving a strong balance sheet continues to be a cornerstone of our strategy and financial planning. We are extremely determined to focus on the balance sheet strength. And the same goes for preserving a strong liquidity. Here I'd like to note that at the end of the third quarter, our liquid funds as well as committed unutilized credit facilities totaled about €2.6 billion. That's actually up by €149 million from the end of the second quarter. Looking here more specifically at our cash flow in the third quarter, our cash flow was mainly impacted by the weak EBITDA, as well as by somewhat higher quarterly CAPEX compared to several earlier quarters. Cash flow before financing activities came in at slightly negative for the quarter at minus 16 million, yet a clear improvement over the first two quarters of the year. Our cash-out investments total 488 million in the third quarter. That is clearly above, for example, last year's level at 258 million. The turn rate in our total networking capital was 41 days compared to 40 days a year ago, so at about the same level. If we look at our cash flow trend, I think that the actions are already starting to be visible also here in the third quarter. Going forward, cash flow, and as I mentioned, networking capital optimization, they continue to be very high focus areas for us in the fourth quarter. Let's then turn to our third quarter group result bridges by business segment as well as by business driver segment. When first looking at the third quarter comparison bridge by business segment year on year, that is here on the left-hand side, we can see that all our business segments contributed actually to the decrease in comparable EBITDA year over year. Positive contribution only comes from others, including eliminations, but it consists of common corporate and functional costs, which as such have clearly reduced year over year, and thereby the allocation of timing of these costs to business segments very, very year over year, and as well as also by quarter. When looking at the comparison bridge by driver year over year, on the right-hand side we can see that there was a positive impact of 87 million from higher sales. And that's positive. There was actually a positive sales volume contribution from all our business segments. On the other hand, the major decline in EBDA comes from declining sales margins. And again, unfortunately, actually from all our segments, in total, 839 million. Here we again observe the impact of the adverse market conditions. On a positive note, like already mentioned, the group's comparable fixed costs were 16 million lower than last year. As to a business segment level analysis, here we have first the third quarter comparable EBITDA bridge for renewable products, as well as a longer trend of renewable sales volume, as well as comparable sales margin by quarter since the beginning of 2020. That's the graph on the right-hand side. Our comparable EBITDA in renewable products was €106 million in the third quarter, Year over year, that was positively impacted by a high sales volume, which contributed a positive 62 million. The main reasons are our total sales volume in renewable products was now 999 kilotons, almost a million tons, versus 883 kilotons a year earlier. There's growth of about 13 percent, out of which SAF volume reached a new quarterly high of 112 kilotons, up from 36 kilotons a year earlier. Just to note that the share of sales to North America was 49% in this quarter and to Europe 51%. Going forward, we expect our SAF sales to further increase towards the end of the year. Our sales margin had a negative contribution to the EBITDA by 492 million. They're the main elements, like I outlined before, where a clearly declined diesel price, as well as weaker U.S. credit prices and weaker spot premiums in Europe. During the third quarter, there were also planned maintenance shutdowns, both in Singapore original line as well as in Rotterdam. And this is reflected in the utilization, which was rather low at 52% compared to 92% last year at our own renewable production facilities. And the maintenance shutdowns also contributed to an increase in total production costs, which impacted also the comparable sales margin. Martinez continued to have a diluting impact on Neste's overall comparable sales margin as well. On the right-hand side graph, we can see the markedly declined comparable sales margin during this year versus early years. As required, we are now reporting that very clearly. Also, Neste, we are prepared to optimize our production capacity in renewable products according to the market situation, if necessary or required. It's good to note also here that after the third quarter plant maintenance shutdown in October, we have reported that Singapore's first line, that is the original line, encountered an unforeseen equipment failure that led to the shutdown of the production line at the refinery. This is also expected to influence some renewable diesel customer deliveries to the U.S. in the fourth quarter. Here we have the same third quarter comparable EBITDA bridge for oil products, as well as along the trend line of the total refining margin in U.S. dollars per barrel, as well as the utilization rate by quarter since the beginning of 2020. Our comparable EBITDA in oil products was 141 million in the third quarter. Year-on-year, positively impacted by higher sales volume, contributing 24 million. Sales were north of 3 million tons, or about 140 kilotons, or roughly 5% higher compared to a year ago. There was solid operational performance throughout the quarter at our Port of Water Refinery. The decline in EBITDA comes compared to last year from the market and a weak total refining margin in total contributing 347 million euro a year. All product cracks basically declined in a yearly comparison, but overall the key product margins still stayed above the pre-COVID averages. The summer driving season, as well as the cooling season, was supporting demand in the third quarter, but at the same time, the weak industrial cycle affected middle distillate demand, and the expected weather-related risks did not materialize. Brent crude oil prices were very volatile actually during the third quarter, ranging between U.S. $70 or up to $89, and the quarter ended at about U.S. $73 per barrel for the Brent crude price. On the right-hand side, we can see also the market declined total refining margins for oil products during this year, if we compare on that especially to two former years, 2022 and 2023. Here we see the third quarter comparable EBITDA breach for marketing and services, as well as on the right-hand side along a trend line of the comparable EBITDA, as well as comparable RONA return on net assets of this business segment by quarter since the beginning of 2020. In marketing and services, our comparable EBITDA was 32 million, down 10 million from a year ago. That was mainly due to the unit margins, which were tighter and had an impact of 8 million on the comparable EBITDA. The decline in unit margins was primarily driven by the decrease in global oil product prices, which led to inventory losses. The prior years benefited in turn from a significant increase in Brent crude oil prices, resulting in turn in higher unit margins. Fixed costs were 3 million higher also year over year, mainly due to an ongoing ERP replacement that is IT costs. Overall, I would like to say that we are satisfied with the performance in marketing and services. We have been able to maintain high market shares in our respective markets, and the performance overall has been relatively steady and returned strong. I'd like to note here that the comparable RONA was almost at 30% at the end of the third quarter, although the EBITDA in this quarter was impacted, like I said, by inventory losses. I'd also like to note that in marketing and services, as opposed to our other two business segments, renewable products and oil products, the inventory gains and losses are continuously reported in the result of the business. I will close up by taking a short look at our performance against our financial targets. At the end of September, our comparable ROAC calculated over the last 12 months was 8%, and of course not meeting the group's financial target level of higher than 15% ROAC. Going forward, actions will be required, of course, to change this trend. As to our leverage, net debt to total capital, it averaged 35.2% at the end of the third quarter, which is still meeting our financial target level of less than 40%. I'm overall somewhat quite satisfied that we were able to reduce the growth trend line in leverage in the third quarter. Having said that, of course, we have really high focus on cash flow, like I said, in the fourth quarter, and also a high focus on preserving going forward very determinedly a strong balance sheet. Also in the longer term, that is an absolute high priority for us. I will stop here and hand it back to Heikki, who will next continue on our outlook.

Thank you, Martin. So let's go to the outlook. Let me just highlight or read the main things here for the renewable products. Sales volume is expected to increase from 2023 and to reach an approximate number of 3.9 million tonnes plus minus 5% in 2024. out of which staff volumes should be in the range of 0.35 to 0.55 million tonnes, and the full year 2024 average sales margin. would be in the $360 to $490 per ton range. And on oil products, sales volumes in 2024 will be lower than in 2023, impacted by the port of a major turnaround in the second quarter. And the full year 2024 total refining margin will be lower than 23. And additional information is available in the presentation. Now let me finish off with a slide you will see me present when we have our quarterlies. I really want to take always a bit of a step back here and look at some of the opportunities and uncertainties in the business and in the sector also and in the economy which are relevant for Neste. So the things I want to highlight, obviously, is that, you know, if we look at opportunities, global macro, you know, starting to improve. China is starting to gradually stimulate its own economy. Europe starts to get its own plan and house back in order. And, of course, the U.S. economy has been very robust. If this trend continues, things should start picking up in that respect in the economy. Diesel prices have corrected quite a lot. Potential recovery, let's see next year. Then we have this whole question of effective implementation of climate regulation. A lot of regulation is coming online, for example, Red 3. How will the European Union then actually take that into concrete implementation? What is going to be the industrial policy of the European Union? How will the European Commission now, when they come on board, how will they implement these things? I think the Commission and the European Union is very, you know, deeply embedded and deeply, let's say, committed to the green transition, although it does have a bit of a, from time to time, a bit of a... and how should I say, uncertain moments, as we've seen from the media. But I think the direction is clear. And then next, the potential. I mentioned to you in the beginning that we have now started this full potential analysis, and we are then going to come back to you with what we are going to do, focusing on things we can control ourselves. Now, in terms of uncertainties, I want to highlight three. This whole quest of geopolitics, we have the U.S. election. What's going to happen? What's going to come out of that remains to be seen. But, of course, that is an uncertainty one has to consider when one is a global company like Neste. This question of the U.S. CFTC versus BTC question. Of course, if BTC continues, that would be positive for us. And then finally, I also want to mention unfair trade policies. Neste is investing heavily and has invested heavily into Europe. We're now building world-class facilities in Holland, in Rotterdam. We have two lines, second one converted. First one converted, second one is being built as we speak. I personally believe and Neste believes that there needs to be a level playing field when it comes to trade and global trade. We have renewable diesel is covered by these trade protection measures related to anti-dumping. And it's our view that SAF also needs to be included in this project. EU ruling. So we will advocate strongly that SAF is also included. We think it's only fair. There needs to be a level playing field, especially when European companies are investing so much capital at the front end of a growth trajectory. So that is just a point of view we have here now at Neste. So, ladies and gentlemen, those were our remarks. I think we are still on schedule and very much look forward to your questions. So I guess back to the operator.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Alejandro Vigil from Santander. Please go ahead.

Yes, hello, thank you for taking my questions, and hey, best of luck in the new challenges. The first question is about recognizing you have been just a few weeks as CEO of the company, and probably you will have more color, you said, in the beginning of next year. But which are your priorities, thinking about the company in terms of of capital allocation between capex and all the distributions, for example, looking at the situation of overcapacity in the market, et cetera. And the second question is about today we have also seen a big transaction in your sector with very high valuation multiples, or at least, you know, attractive valuation multiples. What Neste needs to do to show the real value in the company? Thank you.

Yeah, Alejandro, first of all, thank you for your kind words, and I look forward to the discussion with you and your colleagues in the years to come. Big questions, very important questions. I will not punt on them, but I need to give you just the answer I can give you. I think in terms of capital allocation, so as we've said before here, and Marty also confirmed, I mean, this is a growth business. It will grow long term, but the growth trajectory is nonlinear. And so we need to think about how we add capacity as we go forward so that it is in some logical balance also with respect to our ability to fund those investments. We now have those two large investments, as you know, Singapore, Rotterdam. For me as CEO, it's very much about getting those completed, ramped up, and then commercializing them. So one thing which would be one of my key priorities, which I can see already now, is next is commercial excellence. We need to get much closer to the customers. We need to be much, much more active, and we need to make sure that we move this volume profitably. So maybe I'll leave the first one there. And then in terms of valuation and value creation, honestly, I want to do my homework thoroughly. I have a reasonable understanding of the company, but it's too high level. So let me do the homework and then come back to you with something solid and robust and something which is clear also to the Neste people, because ultimately, whatever we say, we need to deliver. So sorry for the delay, but you'll have to wait until early next year.

Alejandro, still asking that with your second question, did you want to highlight the KKR buying the 25% stake in any live or I heard you say today or that was just a general question? Yes. Yeah, just on that, we've just, of course, been following on that, and we realized AnyLive was valued at $12 billion, and KKR now, they concluded buying a 25% stake for $3 billion, out of which, if I have it right, roughly $2.5 billion by buying shares, and with a half a billion investment straight into the equity of AnyLive, so... Yeah, we need to analyze that further. But, yeah, good valuation in this case anyway. A short comment.

Thank you.

The next question comes from Erwin Karuriden from RBC. Please go ahead.

Thanks for taking my question and welcoming to your new role, Heikki. And thanks for the introductory comments and the relevant details on your past experience. I've got two questions, please. First, first on guidance for next year, not so much on absolute numbers, but more on communication style. Do you consider shifting to metrics other than the RP sales margin towards next year? Do you think the market is focusing on the wrong metric when it comes to investing? This is my first question. And then my second question is, is on the slide where you highlight the strengths and the areas of concern, especially on the strengths and where you highlight feedstock and pretreatment. Up until last year, feedstock and pretreatment was an area of priority for potential strategic acquisition. I understand the framework now is completely different, but given where we are in the cycle, And given the decision you made at Porvo, does it still leave some room for potential strategic acquisition in the feedstock and pretreatment space for next year? These are my two questions. Thank you.

So, Erwin, thank you very much. I hope I pronounced your name correctly. So thanks for those. Obviously, we take the matter of guidance very seriously, and it's our job to make sure that when we guide that it's somehow helpful also to the investors, but also something that we understand and can control. I don't know what Marty wants to say here, but my own view is we take it seriously. We will look at that and consider if changes need to be made. But if we make changes, I cannot yet say what those would be. Again, I need to think carefully what the right approach here is. But, Marty, anything you want to add at this stage?

Thanks, Erwan, for the question. We cannot really comment on you saying if the market has been too much focused on the wrong metric. We know it's been very much focused on the RP comparable sales margin. Of course, the future mid-long-term outlook should be more important than the short-term performance. That's the only thing I comment on that side.

And then on the M&A, the feedstock. Obviously, feedstock is strategically super important for the company and pre-treatments as well. The way I would look at it is that, you know, we continue to scan opportunities. You know, obviously we have our eyes open and we're monitoring. But at the same time, you know, there are different size of things you can do, right, small, medium, and large. So I think I would just now pace myself here and say I'm going to do the homework, but we will keep our eyes open if something interesting pops up.

Thank you very much. That's helpful.

The next question comes from Christopher Coupland from Bofe. Please go ahead.

Hi there. I think Bank of America is nicer than Bofe, but good afternoon, good morning, everyone anyway. Heike, I'm not going to embarrass you. The anticipation is growing by the minute for your CMD next year. So I want to focus on what's going on right now. I wonder whether you can give us a little bit more of an update on the issues that have... come through on ramping up the original line in Singapore. Anything would be quite helpful if you can give us the backdrop to why things are moving more slowly and any indication for how quickly you think this can be sorted out. And then a question on the quarter. You've mentioned SAF making new records volumes-wise. What can you tell us about the impact on the margin? Has it been accretive? Yes, no. To what degree? In the same way you've been highlighting Martinez being dilutive. That would be helpful. Thank you.

Well, thank you. Good two questions. Thank you, Christopher. Also, feel free to ask me anything I answer if I can. But on the Singapore original line, so, I mean, reality is that in process industry, and I have a lot of, you know, history and experiences, you know, unfortunately, sometimes in these large lines, when you're ramping up, you know, things can happen and you can have problems. technical problems, which is the case. We have our best engineers working on it 24-7. We have our global experts supporting the work. I know the repairs have started. I've personally spoken to our local plant leader there in Singapore, so I get a regular update. We are on top of it. But I want to underline the thing that at Neste, you know, whatever we do, we always go safety first, volume second. So the repairs have to be done correctly and so that there's no safety risk. But I cannot give you a definite date, but I can confirm that the guys are working 24-7, and we have the best expertise Neste has available to try to solve this problem.

Yeah, thanks, Irvan. I'll try to answer the second question. So obviously we cannot give any of our own prices like we have said before. However, we can pay reference to the Argus and Platts open databases and their reference prices. So looking at the Argus price, the SAF price was about $3,000 per ton last year. It averaged about, if I have it right, about $2,460 in the second quarter. And actually, unfortunately, kind of following also the trend overall in the markets and renewable diesel, it came down about $480 per ton in the Argus reference prices, where it averaged about a bit south of $2,000 per ton in the third quarter. So down about $480. And right now we are between, if I have it right, in the reference price between 1800 and 1900. If you would divide that by the jet price, jet fuel price, about 700, you have a ratio of about 2.6. Of course, also the jet price have come down. But obviously, of course, we are a big supplier. We have different criteria as feedstock and so on. So this is not any quote on our prices, but this is straight from the Argus database, their reference prices.

Thank you, Marti. And I presume at those levels, though, it has been accretive to your margin that you've reported.

That we can say it's been accretive also in the third quarter, like we said. And like I said, we're looking forward to increase our sales also in the fourth quarter from the third quarter level.

Understood. Thank you.

The next question comes from Giacomo Romeo from Jefferies International Limited. Please go ahead.

Hello, thank you and welcome, Heike. Two questions. I think I want to go back to your final slides because you raised two important points there. And first one on the move to PTC from BTC. Is that still your base case that we're going to see a move to PTC from the 1st of January? And if that is the case... Do you expect you will need to redirect some of your volumes from Singapore to Europe? And sort of how are you thinking about the tradeoffs there and also in the context of terms of contract renegotiations that are occurring right now? The second question is about... the point you raise on unfair trade policies, and you make the point that you are seeking an extension of the anti-dumping measures taken in the EU to the Chinese sub-imports. Just wanted to clarify, can you reopen the RD anti-dumping case, or do you think you will need to start a new probe? And what's the timeline there?

Yeah, so good questions. I think on the U.S. situation, I think these are, of course, it's our best guess. I mean, we don't know for sure, but it would be more sort of that, you know, most likely the BTC. And I think it's probably 50-50, you know, BTC probably not being extended is a possibility.

Yeah, thank you, Heike. There is a bill currently in the Congress to extend it for another year. We don't know if it will be a bypass. So the base case for us is that the CFPC would be what comes out. But we'll see in a couple of months time perhaps more.

Indeed. But in terms of the optimizations, of course, the good thing here is that we have opportunities to optimize, that we have assets in multiple jurisdictions which allow us to try to maximize margins and revenues in different market circumstances. But ultimately, you know, money will be driven by value. So if this were to happen, then, you know, we will try to find the best mix in terms of, you know, feedstock and market demand and optimize accordingly. So, yes, to be solved. Upside here, the upside is we have ability to do things. So that would be my response. And then on the trade matter, I just wanted to raise this more as a topic here because I think this is a bit of a philosophical question also with respect to, you know, investments in Europe and the whole commitment of Europe in terms of the green transition and, you know, I come from another industry where if you follow those, you know, these are daily topics. So I have a fair amount of experience and history from understanding these. But in terms of how we practically go forward, you know, I can't really comment on that yet. I just want to raise I think it's an important topic and we will talk about it also in the future and also with the respective, you know, authorities that deal with these matters.

And to your question, Giacomo, I think there is still a little bit of time. It hasn't been a final verdict before starting a new probe. So to include SAF into the Chinese-related anti-dumping duty, it now encompasses only biofuels, including renewable fuel, renewable diesel.

Indeed, that is the case.

The next question comes from Sasakanth Chilukuru from Morgan Stanley. Please go ahead.

Hi, thanks for taking my questions. I had two, please, both related to SAF. The first was regarding SAF sales. You've highlighted voluntary SAF demand has not been increased. has not been realized as expected so far. I was just wondering what the reasons were behind this. What has changed and how does this imply for next year's sales? Do you expect airlines to meet the mandates when they start next year? How should we be thinking about SAF sales in the next year? The second one was on the Rotterdam SAF optionality project. I was just wondering where we are with that as it started producing already Yeah, the focus on that project is.

Yeah, on the first one. So obviously I have to also ask for Marty here to. To add to my commentary, but, I mean, I think the mandates are coming and it's clear. I mean, they will happen. You know, how that, you know, is it from January or is it from June or May? You know, let's see. But I think it is coming and it's a 2% until, you know, 2029, and then it goes up to 6%. So I think that's given. People will need to follow that mandate. The question with voluntary is also, I think it's, I mean, the way I sort of understand it, and I need to learn more, but the way I understand it, of course, you know, airlines have made big commitments. The reality is there is no other way in the near whatever the next half decade to evade carbon emissions. Other than SAF, that's the only way. So this product has to be used. And consequently, if airlines intend to stay to their commitments, there will also need to be voluntary reductions. And also you have corporates and others who also are taking their own decisions. I think the only problem here is that, you know, the economy is not great. Rates have gone up. There's been a lot of inflation. And I think in the in the full supply chain, whether it's the consumers or the corporates or the airlines, everybody's seeing a bit of a cost pressure here. So, I mean, I understand, of course, if you're the CEO of an airline that, you know, you're trying to find the optimum, you know, given your own business. But I think the major trend here is that the mandates are coming. Anything on the RD, on the Rotterdam One line ready to go here?

Yeah, maybe just on the SAF. So we have seen a little bit less voluntary demand now during this year. We expect, of course, higher sales in the fourth quarter. And it's an uncertain thing for next year how much there will be voluntary. Definitely we believe very much that, of course, the mandated demand, opt-in demand will come in place, but the level of the voluntary demand is more of an issue, and hopefully we can know more during next year. Then to the Rotterdam optionality project, I think you referred to our renewable jet fuel project. So the mechanical works are there complete. We are still awaiting for certain documents from authorities to be able to ramp up. We hope to be ramped up and that we have started also production by the end of the year.

Thank you.

The next question comes from Artem Beletsky from SEB. Please go ahead.

Thank you for providing your initial thoughts at this stage. I actually have three questions. So the first one is your commentary in the report relating to re-optimization of global production capacity in context of the US regulatory framework. Could you maybe a bit elaborate more about this? So is it relating to basically volume reallocation, adjustment production, or is it something potentially more structural? what you mean there. And then I would like to ask about the term deal negotiations, any comments on that front. So I understand that the vast majority of those deals are likely to be yet still to be signed, maybe in November, December. And the last one is just on current trading. So looking at some pictures you are presenting today, so there seems to be some signs of improvement when it comes to, for example, our deep price in LCFS and RINs. can you confirm that this is also something what you are seeing what comes to your own operations and margins?

So maybe if I start with the first two, if that's okay, and Marty, then you can build on that with the second and third. So I think in terms of re-optimization, you said re-optimization, capacity management and structural, so definitely not structural. So it's very much about leveraging the platform we have, taking advantage of the assets in different places, and then trying to optimize I mean, the reality is, you know, we have a lot of skills here in terms of how we manage the feed combined or match the feedstock with the customer demand. And that's what we're good at. So that is something that we would have to do then more. And that would be number one priority before we look at, you know, anything else. And we would work very hard on that reoptimization before anything else is considered. Then on the term negotiations, negotiations have started, right?

Yeah, the term negotiations have started okay. We are reading, of course, various options how also to maneuver, taking into account the current, you could say, difficult, more challenging pricing environment in terms of pricing mechanisms. Really, we have nothing at this stage to say on that side. We need to come back later during the quarter or early next year. And then to the current trading of some of the market parameters. Thanks, Arte, for, by the way, these questions. So you're right. So the LCFS as well as the RINs, they have appreciated somewhat. No further during, I think, the last when I looked at LCF was about 67 for the credit and RINs maybe at 68, coming both, I think, a bit below 60 in the third quarter. Also, the spot premiums, if you look at the Argus database, I think the average for RD in the third quarter was, again, referring to the Argus data, like 15, 60 U.S. dollars per ton. Now there's been an uptick in October to over 17. recently, so from 600 to about 1,700. However, having said that, so it's important to note that during this year we have termed on the RD side when we talk about European spot premiums, 75 or even up to 80 percent. So the spot premium hikes don't really affect to any bigger extent this year's margins. But it's, of course, positive if this trend would continue thinking about next year. Then a very important contributor is the diesel price. The diesel price went, like I said, downwards clearly in the second quarter. Now, in the beginning of the third quarter, it first appreciated back to over 700 U.S. dollars per ton, but now the latest price was again about 670. So that, on the other hand, has been moving as a very reason towards the wrong direction. So You have both positives and some negatives here in the big picture.

Okay, very good. Thank you.

The next question comes from Peter Lowe from Redburn Atlantic. Please go ahead.

Hi, thanks. In renewable products, you cite higher production costs due to kind of the maintenance shutdowns in the quarter. Are you able to quantify the impact of that on the margin and perhaps whether you'd expect a similar impact in 4Q given the Singapore turnaround? And then my second question was on hedging and really your risk management approach in renewable products. I would have expected your hedging program to protect you at least partially from the fall in diesel prices that we've seen this year and in this quarter in particular, but it doesn't really seem to have had any visible impact on the CQ results. Can you perhaps explain why that's the case? Thanks.

Thanks, Peter, for the question. So the higher production cost, rightfully so. I mentioned that because of the maintenance shutdowns, it had an impact. Well, yeah, the impact was negative in the range of 40 to 50 U.S. dollars per ton. We can give out that figure in the overall margin. So they were both the diesel price, then this on the negative side impacting the third quarter margin. On the positive side, some appreciation from the U.S. credits. Actually, there was a positive contribution, not a very large one, but also from hedging in the third quarter, coming mainly from our margin hedging in the EU side. In the US side, it's been a little bit sideways. And also from basic utilities, we had slightly negative, but overall a positive contribution from hedging. Our hedging ratio was 46% in the third quarter. At this moment, the ratio is 46% also for next year. I'd like to pick up one element there further. Of course, we used POGO, palm oil gas oil difference, as a proxy hedge. And we've seen more recently both palm oil going upwards, on the other hand, diesel downwards. So the spread has widened. So particularly on the European side, we have hedges in place, which is smoothing out the impact. You referred more to the... to the diesel price, so yes. And then you asked also about the higher production costs, what could be their impact? Too early to call for the fourth quarter, but typically if they have maintenance shutdowns, we have ramping up importantly also at Martinez, so this overall incurs some more costs to a comparable sales margin.

The next question comes from Michelle Della Vigna from Goldman Sachs. Please go ahead.

Thank you very much. It's Michele Della Vigna here. Congratulations on leading a key European clean tech leader, although clearly at a bit of a challenging time for margins. I wanted to ask you two questions. The first one is a little bit more strategic. You clearly say that the performance of Neste was not satisfactory outside of the difficult market conditions. What What would you have done differently in the last couple of years? And are there any clear low-hanging fruits that you think you can work on with clear benefits for the next couple of years? And then my second question is more about regulation. You talk about rising renewable diesel demand next year. We certainly get to the same outcome. But I was wondering if you could quantify perhaps how you expect the German renewable diesel regulatory changes perhaps to impact their demand in 2025. Thank you.

Yeah. Now, what a tough question on, you know, looking at the past. I mean, I think it's sort of, you know, not really kosher to start evaluating also past performance beyond what the numbers currently say. You know, I think that... You know, I think at this stage, my response to your question, was it Nicole, by the way, did I understand? It wasn't Michelle there. It's simply that we're going to do our homework now very thoroughly. I'm not going to start second guessing, you know, what would have made sense in the past. The past is the past. And we're going to get our homework done. I've told you the key areas we're going to focus on, the commercial side, a full review of the costs, both variable and fixed, and then a complete review of the capital side. And the answer is going to come out of those on how we create more value. What would have I had differently? I cannot – I mean, I can't give you an answer off the cuff that is not – That is not sort of prudent even. But on the regulatory side in Germany, I think we have some positive views on that. Or how is it?

Yeah, correct. Thanks, Michel, for the great question. Thanks also for the report highlighting this. So firstly, we think very positively on the recent regulatory changes in Germany. Finally, it's a big market. Of course, if that would open more into R&D and renewable fuels in general, it would be great news. There are several elements there. The first one is already in the spring there was the elimination of the so-called upstream emission right certificates as a compliance option from 2025. That we think could have a positive contribution to the demand of, say, roughly 300 kilotons. Then also there is a general increase in 2025, so next year in the GHD quota. I think it's going up to 10.6% from 9.4%. So this is still red 2, and that could bring 50 kilotons or perhaps even more. And the red 3 transposition is a further opportunity on top. And naturally also that there's EU-wide import duties now for Chinese biodiesel could have some positive impact. Then there is one more important element, which is there is a proposal at this stage, which we haven't yet fully evaluated from outside. It's a pause in the so-called carryover of the GHG certificates from compliance years. in 2025, 2026, so you couldn't carry those over what you have left, but then it's done for previous years. I think if that proposal will come true, that should have a further positive impact, but we haven't quantified that impact at this stage.

Thank you.

The next question comes from Iris Tiemann from Carnegie. Please go ahead.

Hi, this is Iris from Carnegie. And thanks for taking my questions. I have two. So firstly, I think previously you have talked about SAF demand of four million tons next year. But basically, what is your current expectation for next year in terms of SAFTIMAT? And secondly, in terms of investments, so are there any other investments basically that are under consideration or could be delayed, especially thinking about your your Rotterdam capacity investment that should be ramped up in 2026. Are you still planning to do it as previously planned? Thanks.

So do you want to comment on the staff volume estimate for 25 in terms of demand?

25, yes. The IRIS knows very well we have had a figure earlier, and at CMD it could be 4 million, but that includes also voluntary demand at the moment. Because of our experience from this year, we have become more cautious. This has been already our communication clearly during this autumn on the road show. So we are saying that the mandated and the opt-in demand in the U.S. on top of the European mandates and some other European countries like U.K., Switzerland and so forth could be up to 2.5 million tons. And then on top of that voluntary demand, which we don't know today. That is the issue, and we need to come back when we know more during next year how things shape up on that front.

Iris, nice to meet you here also. Thanks for the question on investments. And you specifically asked about the Rotterdam new facility, the line number two. I've had a chance to go and visit. It's going to be a fantastic world-class facility next to our existing line. It's a very interesting and competitive facility. and integrate overall. Teams are working very hard to build that and complete that project, and we're going to do everything we can so that it will be ready then in 26, and we will be within the budget. Obviously, building these types of investments post-COVID is not that easy always, but we have our best people on it and good partners, and we will do our utmost to make sure it's finished on time. Nothing more to say at this stage.

Okay, thank you.

The next question comes from Nash Kui from Barclays. Please go ahead.

Hey, good afternoon, everyone. I have two questions, if that's okay. The first one is on term sales. So just wonder... Our RP sales margin was more than $900 per ton Q3 last year, and this quarter is kind of mid-300s. I wonder how much premium can you lock in through term sales, or how should they think about in 2025? Is margin really low this year? Can you get really high next year? Vice versa. And then number two, I want to ask about sales. your capital framework. Henke, you said a lot of very nice things about capex discipline, about cost-cutting efficiency, stuff like that. But how should they balance on different things? If you could cut your capex, if you could improve your cash flow next year, does it mean shareholder remuneration can be protected? Henke.

I do want to comment on the term matter first.

Yes, thank you, Nash, for the question. I'm not sure if I exactly understood fully your question, but let me just conclude that, like I said, in the challenging environment, we need to also think of potential new ways of looking at the term sales. We've been... Previously, like in RD, using a lot the diesel price as the quote, and then on top of that, the customer premium and then the credits in the U.S. But, of course, now when we have also the spot prices have been on a lower level, so it comes also from our point of view, how much do we bind actually to the term sales? And should we look at some other ways of terming up? So should we instead use reference prices already to a certain extent as a contributor to the pricing? So this is something we are currently looking, I cannot say entirely, and this is, of course, a very strategic issue as well for us. So looking at different ways how to optimize our opportunities next year. I think that's the key here.

Thank you. And in terms of your question about the capital framework, I just want to still hold the horses here. As I said, we're doing the analysis now, and I will come back to you when we have formulated our total plan and we have a clear execution roadmap. So just be patient. We'll come back to you on that one. But in terms of, you know, CapEx in general, yes, you know, I've made a decision here that we've announced today regarding the portable electrolyzer. I think that's a it's kind of a separate matter because, yes, we're going to our plan is to decarbonize portable electrolyzer. Yes. But at the same time, you know, we need to make sure we do it in the most capital effective manner. And the idea we now had isn't going to be, in our view, based on what we know today, that right solution. So it's prudent to wait a moment here and rethink the plan. Also, given where we are on the leverage. which you can see from the charts where the curve is. So those were the two factors on that. Now regarding the other investments, we're in the growth industry. We make these huge investments to take advantage of the long-term growth which is coming, and we very much believe it will be coming there. The thing here is that you make these investments for decades, and it's impossible to time a huge facility like Rotterdam to the exact perfect window. So we will complete those projects. We will get ready for the growth. And, of course, if there are moments when the demand isn't picking up as rapidly, we then need to optimize. But... We are a market leader in this industry. We want to maintain our strong position globally. And like I think you said in the beginning that in the clean tech industry, we're a major player. We intend to do that in the future or maintain that position also in the future.

I understand. Thank you.

The next question comes from Matt Lofting from JP Morgan. Please go ahead.

Thanks for taking the questions and Heike, thanks for sharing your remarks earlier. I think during them you talked about the experience that you have in transformation across industrial sectors and businesses. I wondered if you could just share some initial perspectives on the extent to which you currently view Neste as a real underlying turnaround story versus being more a situation of better preparing and organizing the company for market recovery in the future, bearing in mind, as you talked about, the cyclical and regulated nature of the markets that Neste operates in. So thoughts around that would be appreciated. And then Secondly, I just wanted to come back on SAF. I mean, it does seem increasingly like the ramp of voluntary demand has proved through the last six to 12 months to be substantially below the company's prior expectations. What do you think was wrong with the prior expectations or what's been the source of the undershoot? And when you look forward to 2025 plus... What does that imply in terms of the likelihood that ultimately this industry does grow, but a scenario that it continues to grow slower than was previously hoped, even as mandates come in? Thank you.

Yeah, Matt, thank you. Sorry, I may be a little bit losing my voice. I've been speaking the whole day, so just bear with me if my voice is a little bit losing its pace here. I think it's a very good question you ask about the transformation versus turnaround. I think this is very much a company which is very well positioned. It has huge strengths. It's a formidable leader. I mean, in some ways, and I like to say to the Neste people, you know, we're the pioneer in this industry, and sometimes it's a bit tough to be the pioneer. But, you know, the basis of this company is very sound. The long-term outlook of the industry is very good. It's more sort of, you know, getting the most out of what we have and positioning the company at each moment in time of the cycle in the right way. having more focus, clock speed. We're not a massive organization. We have thousands of people, but it's getting the resources we have, really focusing on the key things that matter. I think it's more around that. Some of the industries where I worked, you had demand problems or industries have gone into a massive turmoil. That's not the case here. So the long-term outlook, you know, in that respect is good. And it's a different situation. Different situations require different, let's say, approaches. And, you know, we will come up with a good plan. And I can tell you, as I've met people here in Neste so far, I see a lot of energy. and passion, and people are super committed, you know, to make this a great company. And it ultimately starts from people. And so the energy I see in the company gives me great belief that Neste can still do many, many great things. On the voluntary about the past, maybe a hand over to Marti to question about the past assumptions.

Yeah, thanks, Matt, for the great question here. First, I want to say I think it's too early to call. I mean, the formation of the whole SAF business and the industry, if you may use that word, is still at its infantry. I mean, we don't know how it will form out in the next year or in the next several years. What we've seen is that, of course, if you look at airlines in general, I mean, there's been the COVID period. Then we had the energy crisis, high jet price, et cetera. So they have had years where they've had to struggle with their cost basis. So we have seen a number of airlines who have had... partly at least been withdrawing from their former sustainability commitments. So then raises the question how well airlines will be pushing forward a stronger agenda, what they had perhaps given out earlier. I mean, this is one of the things. Another thing I think relates to emission rights and, for example, EU member states. So air travel is within that scope. And it will go for individual countries. Is it that they want to regulate just the mandated demand level, or if they want to push based on the emission rights, how they want to abate looking from a national level related to emission rights, the greenhouse gas reductions in the whole country, though? So do they set separate incentive systems or higher levels of ambition and so forth? I want to also point out that one thing that has come out now already is UK, which is not anymore part of EU, which has a 2% mandate for next year, and then up to 10% in 2030, so higher than the 6%. And there is a ladder, how one grows up there. But, of course, the refill EU aviation doesn't have a ladder built in. That has to be then made by the individual member states. So how that all will go – From 2% to 6%, that's also an important question. So these kind of elements relate to the formation of voluntary demand. As such, I think the whole industry is very committed to cut down their CO2 greenhouse gas reductions. But how it will all go, we'll see.

Great. Thanks, Jens.

The next question comes from Henri Patricot from UBS. Please go ahead.

Yes, everyone. Thank you for the update and thank you for the introduction. I have two questions. The first one, I wanted to come back to some of the comments you made earlier about having a greater focus on revenue generation, customer excellence. I was wondering if you can expand on any area, any market. Is it in South where you think you could be doing more? Is there a particular geography that you see where you see more potential? And then secondly, just to come back to the feedstock prices, which you mentioned have increased. having held up very well this year despite the more challenging environment for renewable fuel producers. Is that something that has surprised you? Any comment you can make on how you see feedstock prices moving over the next few months? Thank you.

So if I can just maybe you could comment on the feedstock. I think on the revenue and the commercial standpoint, I mean, this is a growth industry. I think there's sort of three elements that we need to work on. Obviously, we need to stay very close to our customers, airlines and others, to understand what their needs are and find ways how we can bring our product to market. in the most efficient and cost-effective matter. So that's, I think, being just in front of the customers and expanding the customer reach globally as much as we can. Second is really advocacy. So we're still an early industry, and I think some markets like EU are kind of ahead of the curve, and many other countries are still coming back maybe three, four, five years behind EU in terms of the regulatory framework. So we need to be a strong advocate you know, to create that demand pool. And so that's why we have resources doing that. And I think the third is I think maybe just a bit of a, you know, my own sentiment that, you know, we're here to win and maintain sort of a good positive spirit in terms of growing the business. So, yeah, I think those are some of the elements. But on the more detailed side, you know, I'll have to come back then, you know, next year.

And on the feedstock, I mean, this is an element that has a big impact to our comparable sales margin in renewable products. So maybe two issues I'd like to mention, that what we're seeing is regional differences, as we've commented before. And this is an advantage for Neste, we think, because we are sourcing globally about 60 countries, more than 500 vendors, so forth, like we have said. If I look today again into the external quotes that are – they are not necessarily our prices, but in the U.S., a UCO is around about $1,000 per ton. In the EU, it's been somewhere north of $900, maybe $920. But then you are north of 800 in China. So there are, between these three regions, quite sizable differences. Overall, we're seeing relatively flat movement now in the beginning of the fourth quarter in the feedstock. Some feeds are perhaps a little bit downwards, but the big trend flat.

Thank you.

And I think we have been coming out of our time, so we have to stop the... Yeah, sorry.

So anyway, if I may just say a few final closing remarks. I usually always like to wrap up these sessions with a couple of points. So first of all, thank you very much for your great questions. And nice to have this conversation with you and look forward to meeting you also then going forward. I'll leave you with a couple of points of summary. As I said before, I think Neste is a great company. We have fantastic foundation to build our business going forward, and we are in a growth industry. Yes, I think I'm not happy with the results of the third quarter. No one in Neste is pleased with that. But I know we can and we intend to do better. We've made a decision. I've made a decision here after eight days to take a new look at that portable investment in hydrogen. I think it's a prudent decision at the moment to take. And that's how we go forward. And then finally, as I said, we've now started to work on the full potential analysis. My intention is to do it professionally, comprehensively, and then come up with a robust, realistic, but ambitious plan, and we will then discuss that in the new year. So that's all we have for today. I hope you found this helpful in your own work, and we look forward then to seeing you again in the new year. Take care.