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Neste Capital Markets Day 2017: Delivering profitable growth - Leverage target and dividend policy revised

Neste Corporation
Stock Exchange Release
19 September 2017 at 7 am. (EET)


Neste Capital Markets Day 2017: Delivering profitable growth - Leverage target
and dividend policy revised

Neste is holding a Capital Markets Day 2017 in London today, 19 September,
featuring presentations by senior management on subjects such as the company's
strategy, market outlook and the next steps for delivering profitable growth.

Clear strategy

Neste's success in strategy execution is based on its unique competitive
advantages.  The strategic objectives remain unchanged: be the Baltic Sea
champion and create global renewables growth. The strategy sets the direction
for the company's ambition to grow and create shareholder value.  Neste is also
looking for opportunities to acquire new technologies and competences into its
portfolio.

The company is determined to generate strong cash flow to invest in profitable
growth and productivity, to optimize debt, and to ensure favorable dividend
distribution.

Leverage target and dividend policy revised

Neste's long-term financial targets are leverage ratio and ROACE after tax. The
leverage target has been revised to below 40%, when it was previously 25-50%.
The ROACE target remains at 15%.

Neste's dividend policy has also been revised. The company will distribute at
least 50% of the company's comparable net profit for the year in the form of
dividends. The previous policy was to distribute at least 40% of the comparable
net profit. The company intends to distribute the annual dividend in two
installments, and this will be proposed to the Annual General Meeting 2018.

Baltic Sea champion

Neste seeks value growth in all business areas in its home markets in the Baltic
Sea area. This will be reached by offering win-win solutions to customers,
further improvements in operational performance and refinery transformation.
Neste has a unique customer offering combining both fossil and renewable
products. It will continue to develop premium products and tailor-made
solutions, and focus on customer experience through customer service design and
digitalization.

The medium-term refining business environment is seen to remain supportive, and
the reference margin is expected to be supported by the International Maritime
Organization's (IMO) bunker sulphur regulation change in 2020. Neste is well
prepared for this change with the Solvent Deasphalting (SDA) unit and other
strategic refinery investments to be finalized in 2017. Neste continues its
efforts to enhance additional margin, and the target for that is at least USD
5.5/bbl on average.

Global renewables growth

Neste is the global leader in the renewable diesel market, and is committed to
developing significant business from outside road transportation markets by
2020. Neste has developed unique competitive advantages in flexible feedstock
supply, global supply chain, and low-carbon renewable drop-in solutions.  Sales
volumes of the 100% renewable diesel delivered to end-users are targeted to grow
from approx. 25% in 2017 to 50% of the total sales in 2020. The company has
built a strong low-quality waste and residue feedstock position and intends to
develop that further by commercial and technological solutions.

Neste sees great potential in many new renewable product applications such as
renewable jet fuel and bio-based chemicals, where it can provide distinct
advantages to its customers by decreasing their carbon footprint. Neste has
introduced a Green Hub concept to promote renewable jet fuel use through airport
partnerships, and the first partnership was recently announced with the Geneva
Airport.  Following a successful production trial, Neste aims to make the first
commercial delivery of bio-based plastics during the first half of 2018. Neste
targets to have 20% of its renewable business sales volume from the new
applications by 2020.

During the last four years Neste has increased its renewable diesel production
capacity from 2.0 to 2.6 million tons/a with minor investments.  Neste's target
is to increase its renewables capacity further, and it will continue the
debottlenecking of the existing capacity to 3 million tons/a by 2020. The
company will finalize the feasibility studies for a new, up to 1 million ton/a
production capacity by the end of 2017. These feasibility studies include the
selection of the site location as well as an updated feedstock and demand
outlook. The project scope includes renewable diesel and jet fuel production as
well as pretreatment enabling processing of lower-quality raw materials. Neste
aims to make the final investment decision on a new production unit by the end
of 2018 with a target to have it operational by 2022.

Short-term outlook

Neste expects Oil Products' reference refining margin to continue strong into
the autumn and to average above the previous year's level in 2017. Global demand
for oil products has continued healthy and a number of supply disruptions have
recently occurred at refineries on both sides of the Atlantic. The Porvoo
refinery is expected to run at a high utilization rate, except for a scheduled
four-week decoking maintenance at the Production Line 4 during the fourth
quarter. At the Naantali unit a major two-month turnaround and finalization of
the new conversion set-up are ongoing.

During the second half of 2017 Renewable Products' additional margin is expected
to be higher than in the first half of the year. Sales volumes of the 100%
renewable diesel delivered to end-users are expected to grow and we target to
reach 25% of the total sales volumes in 2017. The vegetable oil market is
expected to remain volatile, and Neste aims to expand the use of lower-quality
waste and residue feedstock. Utilization rates of our renewable diesel
facilities are expected to be high. The biopropane unit at the Rotterdam
refinery is getting ready for the first product deliveries.

In Marketing & Services the sales volumes and unit margins are expected follow
the previous years' seasonality pattern.

The year has continued well, and we expect the year 2017 to be another
successful one for Neste.

CMD presentation material in English will be available at
www.neste.com/investors from around 2.30 p.m. (EET) onwards.

The event can also be followed online at www.neste.com/investors from 2.30 p.m.
(EET) onwards.

A replay will be available after the event at www.neste.com/investors.

Neste Corporation

Kaisa Lipponen
Director, Corporate Communications

Further information:
Jyrki Mäki-Kala, CFO, tel. +358 10 458 4098

Neste in brief

Neste (NESTE, Nasdaq Helsinki) creates sustainable choices for the needs of
transport, businesses and consumers.  Our global range of products and services
allows customers to reduce their carbon footprint by combining high-quality
renewable products and oil products to tailor-made service solutions. We are the
world's largest producer of renewable diesel refined from waste and residues,
and we are also bringing renewable solutions to the aviation and plastics
industries. We want to be a reliable partner, whose expertise, R&D and
sustainable practices are widely respected. In 2016, Neste's net sales stood at
EUR 11.7 billion, and we were on the Global 100 list of the 100 most sustainable
companies in the world. Read more: neste.com


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