Neste Oyj Unsp/Adr

Good afternoon everybody. Welcome to discuss Neste's Q3 results that were published this morning. My name is Jukka Miettinen, Vice President of Investor Relations at Neste. Here with me, we have our President and CEO Heikki Malinen and our CFO Eeva Sipila. We are referring to the presentation that was published in our website early this morning. The key highlights of our presentation today includes the highlights of our Q3 performance as well as our financial performance. On the topicals we will discuss update on our Rotterdam expansion project as well as our newly established dividend policy that was launched today. We will have time for discussions and please pay attention to the disclaimer as we will be making forward-looking statements. With these remarks, I would like to hand over to our president and CEO, Heikki Malinen. Heikki, please.

Thank you, Jukka, and good morning, good afternoon to all of you. Nice to see you again in this webcast. So, today we're going to go through Q3 2026. Let me first of all say that this really is a historical achievement. We had a really great quarter. I'm very happy and very pleased with the performance of the Neste team. I know people have been working very hard to get us out of the trough we saw in 23 and 24. Many things went really well in the third quarter. The operational performance, especially in our renewable products area, was very good. Singapore and Rotterdam ran very well, and those volumes helped to improve the performance and financial results over the third quarter. I think our utilization rate in the third quarter in RP renewables demonstrates that when we get to full production, how much potential there really is in our business. We've added resources and focused on predictive maintenance. This really is improving our ability to get more stability in the production lines. We've also emphasized the need to have faster response times when we have technical issues. which occur from time to time. And so that also helped to get us into a good result. We're now in the midst of a heavy turnaround season. PORVO TA26 has been completed. Rotterdam turnaround has started and then in the next year we will have turnaround in Singapore. Overall the objective is to increase our reliability Availability, and of course then secure good volumes. A few words about portable 2026 turnaround. We prepared very thoroughly. We had a lot of people on the site. Overall, I'm very pleased with the outcome. TA26 was clearly better than TA24, so we've learned as an organization how to manage these complex turnarounds. With this turnaround now complete, We can run portable into 2029 with good production. Given how strong the market is at the moment, this of course is a favorable fact. Global markets remain tight. The market is very volatile. Margins are comparably high. It's of course very difficult to forecast what will happen to markets in the coming quarters. But for the time being, markets are very good. In Rotterdam, I'll come back to Rotterdam a bit later, but as said, the Rotterdam budget has now been revised. Finally, on the financial position, it is strengthening, has been strengthening every quarter. The deleveraging of the company is for me very positive, and I'm pleased to announce that we now have a new dividend policy, which we will then review a bit later in more detail. Safety is of course at Neste, The number one subject. Looking at these charts here, I have to say we've been going sideways. I want to emphasize that we spent a huge amount of time with the Neste management to try to improve safety, but we've been going sideways. So we have work to be done. We analyze data, we work with our employees, we have good relationships with our worker unions to try to move this to a better level, but so far the curves are not changing. And so for 2027, we need to come up with new medicine. So the job still is not done when it comes to safety. But I can assure you that the commitment to improve those figures is extremely high. Looking at then still Q3, as said, we're very pleased with the volumes, almost 1.3 million kilotons. It's a record level. Singapore and Rotterdam did very, very well. and recognizing that we also had turnaround in portable, those two small lines. Our OP refining margin was also exceptionally high at $48 per barrel. Overall, we had very strong earnings. EBITDA for the whole company was over 1.5 billion. RP made a billion in the quarter, which is really a record amount. As a result of our strong performance, As said, our deleveraging continues, and Eeva will talk about the balance sheet in more detail, but as said, the direction of travel has been very positive. So with those introductory remarks, let me hand it over now to Eeva to take it from here. Eeva, please.

Thank you, Heikki, and a very good afternoon to everybody on my behalf as well. I'll start with the renewable diesel reference margin development. and the margin moved quite a bit in the quarter. Had a sort of very upward trend in the beginning of the quarter and then turned downwards in September. Overall, it was still $100 up in average compared to the previous quarter. Moving then to the nest figures. Renewable products delivered two thirds of our 1,555,000,000 euro comparable EVTA results and oil products then half a billion for its part. And obviously this half a billion illustrates the strength of the market considering that we were in turnaround since late August. Very pleased with the performance improvement program which continued to deliver a very strong result. We now reached 697 million euros of annualized EBTA run rate impact. And the realized in-quarter impact in the third quarter was 172 million euros. We saw the share of revenue and margin optimization increase a few percentage points from the previous quarter, totaling now 44% of the total. and cost reductions then covered 56% of the total. Now this two year program is coming to its final months and we will end the program in the end of this year as earlier announced. Moving then into the quarterly performance by our segments, so let me start with the renewable products. On the graph on the left, shows very nicely the clear step up in renewable sales volumes in the quarter. And despite the light blue line that indicates the sales margin being down, this obviously contributed to an improvement in EVTA results and to that roughly one billion level that Heikki already mentioned. When we look at the right-hand side, which gives you the main items driving the renewable products EBITDA compared to the second quarter, you really see the importance of the sales volumes. And the majority of that came from renewable diesel. SAF margins continue to be less attractive for us. The share of Europe continues very stable, 73%, and then North America on the 27%. Now, the sales margin was down despite the increase in diesel prices, and this is due to the higher feedstock prices as well as the negative hedging impact. Now in this market I would say that the negative hedging result is more an expected outcome whereas the Q2 was more of an outlier when we had more of an abrupt jump in the soya prices and that sort of netted out negative impacts. Moving then to oil products. So starting on the left-hand side shows very clearly the light blue line, the impact of the turnaround. So our utilization rate dropped to around 50%. In the third quarter, we lost some 1.5 million tons of product due to a turnaround. But then indeed the dark blue columns bar shows how high indeed that $48 per barrel refining margin took us. On the right-hand side, a very similar story to the left-hand side. The waterfall really tells it all. Volumes down while margin significantly up. and obviously a slight increase in fixed costs as we had some turnaround related costs in books in that row. Then finally a marketing and services segment. So here it's been a very volatile year and you could say that the inventory gains or losses have really driven the quarterly ups and downs. In the first quarter, we had a significant gain from inventory as the market prices really reacted to the Middle East crisis in the March period. Then we had a significant inventory loss in Q2 when prices came down towards the end of June. And now again, as we saw significant price impacts increasing in September, we had a very significant inventory Profit pretty much sort of explains the whole difference. As such, the marketing and services team is doing a good job in running the sort of daily operations. So with that, I'd move back to the group level figures and cash out investments in the quarter, 327 million, obviously up due to the turnaround in oil products, very much in line with our earlier guidance We have indicated from the beginning of the year that this year is a capex-heavy year in the second half. And this will continue in the fourth quarter. We'll see some further increases as the two turnarounds in renewable products have gotten going. We maintain our four-year guidance on investments of approximately 1.2 billion euros. I'm very pleased with our ability to deliver cash flow despite the sort of challenging market one thinks of as a sort of working capital and really the sort of big fluctuations in prices. Strong profitability was obviously a big driver behind 877 million cash flow results for the quarter. I would say though that we succeeded very well in inventory planning in oil products around the turnaround and this then helped moderate the impact of working capital in the quarter. We are sitting on a very high level of inventories at the end of September in renewable products due to the fact that we have obviously prepared to deliver and so on. So all in all, the negative impact from working capital was a lot less than it could have been and a good job from the team. And then finally, my final slide illustrates our financial position. And we've made very good progress on the leveraging for the past 12 months. and our leverage now stands at 22.6%. We are more than comfortably hitting already both our financial targets that we set for ourselves in early, early 25. And with that, handing it back to you, Heikki.