Neste Capital Markets Day 2021: Delivering on strategy and renewal through innovation

Neste Corporation, Press Release, 23 September 2021 at 9 a.m. (EET)

Neste is holding a Capital Markets Day 2021 as a webcast today, 23 September 2021. It will feature presentations by President and CEO Peter Vanacker as well as senior management on subjects such as the company's strategy execution, market outlook and updated strategic targets.

Great progress in strategy execution

Neste’s strategy remains relevant: we aim to be a global leader in renewable and circular solutions. Demand for renewable products is growing substantially, driven by higher climate ambitions and supportive regulation. We will grow in renewable aviation, renewable polymers and chemicals, and in renewable road transportation, and intend to have three substantial renewables businesses by 2030. We have an excellent safety record, and great progress has been made in strategy execution despite the uncertainties caused by the global pandemic.

Three strong renewables businesses by 2030

In Renewable Aviation, we have established ourselves as the global leader in Sustainable Aviation Fuel (SAF). Sustainable aviation is a high growth and very attractive market as regulations and voluntary demand scale up, and we expect the global SAF demand to exceed 12 million ton/a by 2030. We will support market growth with 1.5 million tons/a planned capacity already available by the end of 2023 and aim to grow our capacity even further to be able to serve sustainability minded aviation customers.

In Renewable Polymers and Chemicals, we are leading the creation of a circular bioeconomy in the polymers and chemicals industry. There is a significant market opportunity for renewable and recycled hydrocarbons within our chosen industry segments, and we see the size of the addressable market to be over 100 million tons/a in 2030. We are expanding our global presence and working together with production partners and brand owners globally.

In Renewable Road Transportation, we are the leader in the fast growing renewable diesel market for road transportation. The global climate targets set a very high ambition for sustainable solutions in transportation, and the global renewable diesel demand has potential to exceed 30 million ton/a by 2030. Neste is helping heavy duty customers and other partners to achieve their sustainability goals, and we are expanding the Neste MY platform to reach thousands of customers.

We also have an ambition to make Porvoo the most sustainable refinery in Europe by 2030. That will be achieved by reducing the refinery’s GHG emissions by 50% by 2030 and reaching carbon neutral production by 2035. We also aim to increase the share of renewable and circular feedstock to over 10% of the refinery feed by 2030.

Innovation will continue to be at the core of our success. We are targeting commercial-scale operations in at least one of our current innovation business platforms by 2030.

New sustainability vision

Neste sets high standards for sustainability. Our new broadened sustainability vision covers climate, biodiversity, human rights, supply chain and raw materials. We are committed to transformation towards a carbon neutral value chain. We aim to reduce the emission intensity of sold products, and work with our suppliers and partners to decrease emissions across our value chain (Scope 3). We are well on track and continue to progress with our existing climate commitments to reduce our own emissions and reach carbon neutral production (Scope 1 & 2) by 2035, and to help our customers to reduce emissions by at least 20 million tons CO2e annually by 2030.

Renewables production platform growth progressing

Neste’s renewable feedstock and production platform has been substantially strengthened through organic growth and recent acquisitions, and we will continue to grow our platform globally. The Singapore capacity expansion investment project is currently on schedule for start-up by the end of the first quarter 2023. The EUR 1.5 billion investment is planned to increase our renewable products capacity by 1.3 million ton/a, and bring our total production capacity to 4.5 million tons annually. The new production line in Singapore will also include optionality to produce up to 1 million tons/a of SAF at the facility. Together with our Rotterdam SAF optionality project, we expect to reach SAF production capability of 1.5 million tons/a by the end of 2023.

We have chosen Rotterdam as our possible next worldscale renewables refinery location. The project is in the engineering phase, and its scope is similar to the new Singapore unit. We are targeting investment decision readiness in early 2022 to continue to grow our business in renewables. Our current 1.4 million ton capacity for renewable products in Rotterdam is the largest in Europe.

We expect the global waste and residue availability to grow to 40 million tons by 2030. We are  focusing on developing new sources while growing the existing feedstock pool. Our target for the share of crude palm oil and refined palm oil grades is to reach zero by the end of 2023, and the share of novel vegetable oils and other new low-ILUC feedstock is expected to grow post 2023.

Improvement targets of Neste Excellence program upgraded

Great progress has been made with the Neste Excellence program. By the end of 2020, a comparable EBIT improvement totaling EUR 237 million was realized through the program. The improvement targets for the Neste Excellence program have been increased from EUR 225 million to EUR 350 million by the end of 2022, and from EUR 300 million to EUR 500 million by 2030. These improvements are measured compared to the year 2018.

Neste's long-term financial targets are leverage ratio and ROACE after tax, and they remain unchanged. The leverage target is below 40% and the ROACE target is 15%. Neste's dividend policy also remains unchanged. According to the policy, the company will distribute at least 50% of the company's comparable net profit for the year in the form of dividends.

Our estimate for the Group’s full-year 2021 cash-out capital expenditure, excluding M&A, has been revised from approximately EUR 1.2 billion to EUR 1.1 billion.

Presentation materials and webcast

Capital Markets Day presentation material will be available at www.neste.com/investors from around 2 p.m. (EET) onwards. The webcast can be followed online at www.neste.com/investors.

Neste Corporation

Susanna Sieppi
Vice President, Communications

Further information: Please contact Neste’s media service, tel. +358 50 458 5076 / media@neste.com (weekdays from 8:30 a.m. to 4:00 p.m. (EET)).

Neste in brief

Neste (NESTE, Nasdaq Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. We refine waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. We are the world’s leading producer of renewable diesel and sustainable aviation fuel, developing chemical recycling to combat the plastic waste challenge. We aim at helping customers to reduce greenhouse gas emissions with our renewable and circular solutions by at least 20 million tons annually by 2030. As a technologically advanced refiner of high-quality oil products with a commitment to reach carbon-neutral production by 2035, we are also introducing renewable and recycled raw materials such as waste plastic as refinery raw materials. We have consistently been included in the Dow Jones Sustainability Indices and the Global 100 list of the world’s most sustainable companies. In 2020, Neste's revenue stood at EUR 11.8 billion, with 94% of the company’s comparable operating profit coming from renewable products. Read more: neste.com