Neste Oyj Unsp/Adr

Good afternoon, everybody. Welcome to discuss Neste's Q4 results that were published this morning. My name is Jukka Miettinen, MVP for Investor Relations at Neste. Here with me, we have our President and CEO, Heikki Malinen, and our CFO, Eeva Sipilä. We are referring to the presentation that was launched today on our website early this morning. In the presentation, we will go through the key highlights, for example, our Q4 financial performance and the status of our key focus areas, including the performance improvement program and the progress towards our financial targets. We will be also discussing the key regulatory developments, key opportunities and uncertainties in the market, as well as the outlook. We will have time for discussions with all of you. And 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. Heikki, please.

Thank you, Jukka. Good morning, good afternoon to everybody. Welcome also to this call on my behalf. Really looking forward to discussing with you about 2025 results, the last quarter, and also how this year will work. okay so let's start with a couple of slides here first i want to show you i'm going to start with i want to start with discussing the key figures but before i do that let me just make a few comments to provide you with a bigger picture and how i see the situation that missed after having been in charge of the company now for a bit over one year and a quarter i think overall if we look at 2025 we had a good year we have been able to achieve a financial turnaround compared to where we were just a few years ago. I'm very pleased about the fact that in 2025, all of our businesses performed better. Each of them had their own successes. I wanna highlight in the area of RP specifically that we were able to increase our volumes from 3.7 to 4.1 million tons of sales. In OP, I'm specifically pleased by the operational performance of the Portable Refinery. If you look at the utilization of the OP business, which is mainly Porvo, we achieved 90% in the fourth quarter, which actually is one of the best years we've had operationally in Porvo's history. And we were luckily, of course, then able to capture the cracks, the spiking cracks in the fourth quarter. Marketing and sales, we rarely talk about that, but still they were able to improve their results by 10%, and they actually launched some very exciting new retail concepts here in the Finnish market, which have been received very well by retail and business consumers. We also met our financial targets for 2025. I was especially pleased that the performance improvement program that Eva will go through in more detail performed really well. In fact, it performed better than I expected. I've done a number of these during my career, and I was really positively surprised how well the Neste team delivered on multiple areas very systematically, quickly, and very efficiently. So a big hats off to the Neste team for what they did. On the regulatory front, the year was filled with all kinds of rumors and expectations, but in the end, I think the tailwinds are supporting this. They're both in Europe, gradually in the United States as well with the RBO, and then we're starting to see initial green sprouts, so to speak, when it comes to SAF in Asia. And last but not least, I think overall where we are today, we have a good foundation then to perform better in 2026. But then looking at Neste in a bit more detail, I always start with safety. This is the number one subject here in the company. Every meeting starts with safety. On the left-hand side, you can see our total recordable injury frequency rates. This really is people's safety calculated per one million tons. We were at one million hours. We were able to reduce it a bit. We have a long way to go here. I think we have all the means and tools and skills to bring this down. We just need more system and discipline. But I'm not happy with the number. We can do much better. On the right-hand side, we see process safety, which in the past has been pretty tough for Neste in some areas. But overall, if you look at last year, we made good progress. We are not yet at first quartile, we need to go lower, but still I'm very pleased with how the year ended. 0.9 is a big improvement from the past. And one piece of information which is not shown in the slide but which I want to mention specifically is that in the Rotterdam Capacity Growth Project, our expansion, we actually have had a very good safety year as well, good progress. And considering how large an undertaking Rotterdam is, and we have thousands of people on the site. So far we've done well. Of course, the work continues. Then a few numbers from last year, 2025. Our comparable EBITDA was 1,683,000. uh over 400 million improvement vis-a-vis the previous year i was very pleased with that on the other hand you can see the term the sales margins on renewable products 411 dollars per ton we were impacted by the terms term deals from the fourth quarter of 2024 they did impact that number in the second half and in the final quarter we saw prices rise but uh we did that have that overhang as we often do when we turn a part of the business annually and then on the right hand side maybe i want to highlight the soft volume we doubled it to 867 000 tons Pretty much, I would say, at the level which is sort of reasonable given the amount of volume being sold overall. As we know, the renewable, let's say the soft mandates have not risen as rapidly as we had hoped, but still over 800,000 delivered to our customers. Then on the fourth quarter, shown on the bottom left-hand side, our EBITDA for the fourth quarter was €601 million. We had a very strong finish to the year on multiple fronts. As I said, all of our businesses performed better than the year before, and so, of course, we're very pleased with that. Free cash flow in the last quarter was exceptionally strong, $809 million. Eva will talk about the balance sheet further. I think overall I can say as far as the balance sheet is concerned that 40% Our leverage that we set at the beginning of the year as an absolute cap, well, I think looking at the number, we can say that we're clearly now in much better shape than we were in the past. Maybe I thought we were in clear waters, but clearly, you know, the direction of travel is very positive. So good on that front. The work continues, of course, into this year. We have a number of major things we are working on. The performance improvement program, as discussed already, and Eva goes through in more detail, delivered 376 million euros. So we actually achieved on a run rate basis more than what we had set out as a target for the two-year program. So we've really done extremely well. What I want to do here is now that we will – report to you we're actually going to continue this program for another year for 26 and then we will in 27 move more into continuous improvement type of a mode in we're not setting new public targets for this year, but we will continue reporting to you on a quarterly basis how the work continues. What I can say is that after having observed the work for one year, I see there's still good potential to raise that number even more. So you will then get reports on a quarterly basis and we'll then see where we end up after 2026, what the total final tally is. Rotterdam is a big undertaking. I go there almost every six weeks. During my last visit, I was impressed by the good work people are doing there. It's very, very busy, very intense. A lot of people there. They're making good progress. But as I said, 2027 is then the big year for the startup. And then finally, operationally, we continue the work to increase our own production, to make more advancements there, and also to be commercially successful. And then, of course, gradually get ready for the Rotterdam launch in 27. So those are some topics on the agenda of the company. We will be happy to discuss these with you in a moment when we get to the Q&A. Now let me hand it over to Eva to talk about the financials. Thank you.

Good afternoon on my behalf as well. And I'll start with the renewables market. This slide shows the reference margin development of renewable diesel. And as you can clearly see, the fourth quarter was better than the previous quarters of 2025. We had a bit of a sliding down effect during the quarter and then a small sort of jump at the year end, quite typical in a way that some late buying tightening the market, which again then typically also in early January of this year has then eased back significantly. So in this sort of supportive market environment, our EBTA on a comparable basis reached €601 million. In renewable products, we had a maintenance-heavy quarter, but higher sales volumes and margins offset the higher net production costs. In oil products, solid utilization and the November spike in gas oil market prices supported profitability. And finally, marketing and services, we saw a nice sales volume increase in Finland and Estonia. Looking at the sort of full year 2025, so we reached almost 1.7 billion in comparable EBITDA and really thanks to higher sales volume and lower costs as you see from the right hand side graph. Like Heikki already mentioned, all the business areas improved from the previous year and we're very pleased with that. The performance improvement program, indeed, one year ahead of schedule, so exceeding €350 million by the end of 2025 instead of the original target, which was only end of this current year. Very pleased with that. Of the 376 million, that is the run rate. In the P&L of 2025, there is 172 million that have come through. And this is just purely from the fact that, obviously, the... The run rate is ahead as the program started after a few months into the year and then getting sort of all activities ramped up and before there is that annual effect it comes then over the coming quarters. Like Heikki said, very pleased with the amount of activities and kind of actions and the overall engagement of the Neste team in improving our competitiveness, so we're absolutely pushing forward. 75% of what we've achieved so far has come really from cost reduction and the big elements being general procurement and logistics. And then 25% coming from margin and volume optimization. Then a bit more detail into the quarterly performance by segment. So starting with renewable products. So indeed, despite significant maintenance activities in the quarter, the sales volume reached 1.1 million tons, and our commercial team worked very hard for this. The comparable EVTA came pretty close to the third quarter level, which was always going to be a tough target since that was one of more sort of solid operations. But as you can well see, so sales volumes, margins supporting, and then really the maintenance costs visible in fixed costs dragging the result down. So no sort of surprises there per se. Moving to oil products, high utilization. We're very proud of this. And especially now in Q4, this was really worth a lot of money for us because the market prices in diesel cracks really went up to – to almost $30 a barrel, and of course, there being agile and really on top of the market and being able to leverage that opportunity was very important in reaching the $321 million for the quarter. And indeed, our refining margin of over $20 is something we're very pleased. And it did require, as I said, quite a spike in the market price. But good, really good work from the team here. And with all the volatility that we can expect to continue in the global oil markets, I think this agility... continues to be something that we're focusing a lot on in our performance management. Marketing and services also did well. 28 million unit margins were seasonally weaker, and then the fixed costs were also higher. We have a bit more higher investments ongoing in IT, and then also the new retail wheelie concept here in the Finnish retail market. But good work on the sales volumes from the team. supporting the result on to the other direction. Moving then to cash flow, and this certainly increased markedly. Obviously, improved results helped, but also a lot of good work on the networking capital side. 809 million was the cash flow for the quarter, and this then resulted in a full year cash flow before financing activities of 759 million euros. And this really despite cash out investments being 260 million in the quarter, so a bit higher than the previous two quarters. The Rotterdam expansion and then the additional maintenance work behind that slightly higher figure. And as we said earlier, the Rotterdam investment will keep our investment level high also in 26. And then we have the Porvo refinery turnaround coming up every two and a half years. And this is now the time it comes. And so that, of course, adds. adds to the capex, but we are guiding on cash-out investments to be between 1 and 1.2 billion euros. So I would say very well in line with what we said a year back. And still on the networking capital, so maybe a few points. So on the inventory side, you'll remember we were very clear that fourth quarter will be one of reduced inventories as we really push out the pre-maintenance buildup that we had to do in Q3, which hurt cash flow at that time. succeeded in that. But in addition, we had a lot of focus on AP and also AR, and I think, again, the SORDER team did very well on that, and we're certainly very pleased with the outcome. And this then leads to us being well on track with our financial targets. So as Heike already mentioned, leverage is clearly now below the 40%. And the other financial target on the performance improvement also being accomplished. Now, work continues on both of these areas, and we have a lot of things we kind of need to do still at Neste to improve, but a successful delivery in any case for 2025. And with that, handing back to you, Heikki.