Neste Oil - Financial Statement Release

Neste Oil's Financial Statements for 2014

Neste Oil Corporation
Financial Statements Release
4 February 2015 at 9.00 a.m. (EET)


Neste Oil's Financial Statements for 2014


Strong full-year comparable operating profit as a result of a record fourth
quarter
2014 in brief:

  * Comparable operating profit totaled EUR 583 million (2013: EUR 596 million)
  * Total refining margin was USD 9.83/bbl (2013: USD 9.60/bbl)
  * Renewable Products' comparable sales margin was USD 278/ton (2013: USD
    328/ton)
  * Net cash from operations totaled EUR 248 million (2013: EUR 839 million)
  * Return on average capital employed (ROACE) was 10.1% (2013: 11.7%)
  * Leverage ratio was 37.9% as of the end of December (31.12.2013: 30.0%)
  * Comparable earnings per share was EUR 1.60 (2013: EUR 1.89)
  * The Board of Directors will propose a dividend of EUR 0.65 per share (2013:
    0.65), totaling
    EUR 166 million (2013: EUR 167 million).

Fourth quarter in brief:
  * Comparable operating profit totaled EUR 254 million (Q4/2013: EUR 163
    million)
  * Total refining margin was USD 11.43/bbl (Q4/2013: USD 9.53/bbl)
  * Renewable Products' comparable operating profit was EUR 141 million
    (Q4/2013: EUR 94 million), including EUR 89 million from US Blender's Tax
    Credit 2014
  * Net cash from operations was EUR 351 million (Q4/2013: EUR 629 million)
President & CEO Matti Lievonen:"Neste Oil generated a strong comparable result in 2014 despite of the market
volatility and operational incidents at the Porvoo refinery. The 50% decline in
crude oil price during the second half of the year caused significant inventory
valuation losses, and impacted our cash flow. However, we were able to improve
our internal performance by lowering costs, which resulted in more than EUR 50
million improvement, as promised in April. We achieved a full-year comparable
operating profit of EUR 583 million (596 million) in 2014.

Oil Products' reference refining margin was volatile, but strengthened against
expectations during the second half of the year, and averaged USD 4.7/bbl in
2014. European demand for petroleum products remained soft, and additional
refining capacity was brought on-line in the Middle East and Asia. Also diesel
imports from the US to Europe grew especially during the summer. Productivity at
the Porvoo refinery was negatively impacted by an unscheduled production outage
in production line 4 in the spring and a damaged hydrogen unit in August.
Supported by various improvement actions, Oil Products segment recorded a
comparable operating profit of EUR 285 million compared to EUR 275 million in
2013.

Renewable Products' reference margin remained significantly below the levels
seen in 2013. We were able to grow our additional margin via feedstock
flexibility and improvement actions in supply chain. Our sales volume increased
by 9% from the previous year. A significantly higher share, 73% of the volume,
was allocated to the European market in 2014. The volume allocation reflected
the margin situation and continued regulatory uncertainty in the US. Decision to
reintroduce the US Blender's Tax Credit for the year 2014 was confirmed in late
December. It had an almost EUR 90 million positive impact on the segments'
comparable operating profit.  The use of waste- and residue-based feedstock was
successfully expanded and averaged 62% of total renewable inputs in 2014.
Renewable Products recorded a full-year comparable operating profit of EUR 239
million compared to EUR 273 million in 2013.

Oil Retail's station sales continued to grow, but unit margins were increasingly
under pressure in Finland and Northwest Russia due to tightening competition,
weakening ruble, and inventory valuation losses caused by the oil price decline
during the fourth quarter. The segment generated a full-year comparable
operating profit of EUR 68 million, below the record-high EUR 77 million booked
in 2013.

Crude oil price changes, supply and demand balances, together with uncertainties
related to political decision-making on biofuel mandates, the US Blender's Tax
Credit and other incentives will be reflected in the oil and renewable fuel
markets. We expect the Group's full-year 2015 comparable operating profit to
remain robust, although probably lower than that reached in 2014."

The Group's fourth-quarter 2014 results

Neste Oil's revenue of EUR 3,552 million in the fourth quarter was lower than
that during the last quarter of 2013 (EUR 4,516 million). The decrease mainly
resulted from lower overall sales prices due to the oil price decline. The
Group's comparable operating profit came in at EUR 254 million. Comparable
operating profit for the corresponding period in 2013 was EUR 163 million. Oil
Products' result was positively impacted by reference refining margins, which
were clearly higher than in the last quarter of 2013. Also Renewable Products
improved significantly due to the Blender's Tax Credit (BTC), which was
confirmed in the US for the year 2014 in late December. Oil Retail's performance
was lower than that during the corresponding period in 2013. Oil Retail's result
was negatively impacted by lower margins particularly in Russia and Finland. The
Others segment improved from the fourth quarter of 2013, but it was still loss-
making at comparable operating profit level.

Oil Products' fourth-quarter comparable operating profit was EUR 109 million (67
million), Renewable Products' EUR 141 million (94 million), and Oil Retail's EUR
8 million (15 million). The comparable operating profit of the Others segment
totaled EUR -2 million (-11 million); joint arrangements accounted for EUR 1
million (-9 million) of this figure.

The Group's IFRS operating profit was EUR -27 million (185 million), which was
impacted by inventory losses totaling EUR 322 million (gains of 16 million),
changes in the fair value of open oil derivatives totaling EUR 49 million (4
million), and non-recurring items totaling EUR -8 million (2 million) mainly
related to restructuring charges. Pre-tax profit was EUR -32 million (167
million), profit for the period EUR -23 million (193 million), and earnings per
share EUR -0.09 (0.75).

The Group's full-year results for 2014

Neste Oil's revenue in 2014 totaled EUR 15,011 million (17,238 million). This
decline year-on-year mainly resulted from lower overall market prices, which had
an impact of EUR 1.2 billion, lower trading activity, and lower sales volume in
Oil Products. The Group's comparable operating profit for the year was EUR 583
million, only slightly below the 596 million reported in 2013. Oil Products'
full-year comparable operating profit was 4% higher than in 2013. The Renewable
Products' result was strong, but it could not reach the record levels of 2013.
Oil Retail's result was also somewhat lower than in 2013 due to lower margins.
The Others segment improved significantly compared to 2013, but remained
negative. The Group's fixed costs came in at EUR 654 million (693 million), a
decrease that was mainly caused by the disposal of Shipping, and internal
performance improvement actions.

Oil Products' full-year comparable operating profit was EUR 285 million (275
million), Renewable Products' EUR 239 million (273 million), and Oil Retail's
EUR 68 million (77 million). The comparable operating profit of the Others
segment totaled EUR -7 million (-31 million), of which Nynas accounted for EUR
11 million (-10 million).

The Group's full-year IFRS operating profit was EUR 150 million (632 million),
which was impacted by inventory losses totaling EUR 492 million (19 million),
changes in the fair value of open oil derivatives totaling EUR 74 million (4
million), and non-recurring items totaling EUR -16 million (51 million) mainly
related to restructuring charges. Pre-tax profit was EUR 78 million (561
million), and profit for the period EUR 60 million (524 million). Comparable
earnings per share were EUR 1.60 (1.89), and earnings per share EUR 0.22 (2.04).
The Group's effective tax rate was 23.2% (6.6%).

Outlook

Developments in the global economy have been reflected in the oil, renewable
fuel, and renewable feedstock markets; and volatility in these markets is
expected to continue.

Global oil demand is anticipated to continue increasing, but growth estimates
are generally slightly below 1 million bbl/d for 2015. The forward reference
refining margin is currently reasonably strong. However, the refining capacity
growth of more than 1 million bbl/d in Asia and Middle East, is expected to
create some pressure on global product supply demand balance particularly during
the second half of the year. Transatlantic supply demand balance is also
dependent on the planned and unplanned refinery shutdowns. Gasoline margins are
currently supported by contango buying, and the coming driving season typically
supports gasoline market in the spring. Middle distillate imports from Russia,
the Middle East, and the US are expected to remain on a high level also in 2015.

Vegetable oil price differentials are expected to vary, depending on crop
outlooks, weather phenomena, and variations in demand for different feedstocks,
but no fundamental changes in the drivers influencing long-term average
feedstock price differentials are expected. Feedstock prices have been on a
downward trend, but vegetable oil price differentials have remained narrower
than the historical average. Market volatility in feedstock and oil prices is
expected to continue, which will have an impact on the Renewable Products
segment's profitability.

In 2015, the Group's investments are expected to total approx. EUR 450 million,
including some EUR 100 million for a major turnaround at the Porvoo refinery.
The Porvoo turnaround is scheduled to start in April 2015 and is expected to
last for approx. 8 weeks. Product inventory of approx. EUR 200 million is
planned to be built in anticipation of the turnaround. The turnaround is
expected to have an approx. EUR 70 million negative impact on Oil Products
segment's comparable operating profit.

Crude oil price changes, supply and demand balances, together with uncertainties
related to political decision-making on biofuel mandates, the US Blender's Tax
Credit and other incentives will be reflected in the oil and renewable fuel
markets.

Based on the above, Neste Oil expects the Group's full-year 2015 comparable
operating profit to be robust, although probably lower than that reached in
2014.

Dividend distribution proposal

Neste Oil's dividend policy is to distribute at least one third of its
comparable net profit in the form of a dividend. The parent company's
distributable equity as of 31 December 2014 amounted to EUR 1,123 million, and
there have been no material changes in the company's financial position since
the end of the financial year. The Board of Directors will propose to the Annual
General Meeting that Neste Oil Corporation pays a cash dividend of EUR 0.65 per
share (0.65) for 2014, totaling EUR 166 million (167 million) based on the
number of outstanding shares.

The proposed dividend represents a yield of 3.2% (at year-end 2014 share price
of EUR 20.06) and 41% of the comparable net profit in 2014.

Further information:

Matti Lievonen, President & CEO, tel. +358 10 458 11
Jyrki Mäki-Kala, CFO, tel. +358 10 458 4098
Investor Relations, tel. +358 10 458 5292
News conference and conference call

A  press conference  in Finnish  on 2014 results  will be held today, 4 February
2015, at  11:30 a.m. EET at the  company's headquarters at Keilaranta 21, Espoo.
www.nesteoil.com  will feature English versions of the presentation materials. A
conference call in English for investors and analysts will be held on 4 February
2015 at  3 p.m. Finland / 1 p.m.  London / 8 a.m. New  York. The call-in numbers
are  as follows: Finland:  +358 (0)9 2310 1620, Europe: +44 (0)20 3427 1916, US:
+1 646 254 3366, using  access code 5331558. The conference call can be followed
at the company's web site. An instant replay of the call will be available until
11 February  2015 at +358 (0)9 2310 1650 for  Finland at +44 (0)20 3427 0598 for
Europe and +1 347 366 9565 for the US, using access code 5331558#.

Neste Oil in brief

Neste  Oil Corporation is a refining and marketing company specializing in high-
quality  fuels  for  cleaner  traffic.  The  company  produces  all  of the most
important  oil products and is  the world's leading supplier  of diesels made of
renewable  raw  materials.  In  2014, the  company's  net sales stood at EUR 15
billion,  and it employs some  5,000 people. Neste Oil shares  are listed on the
NASDAQ Helsinki.

Neste  Oil has been accepted into the  Dow Jones Sustainability World Index. The
company  has  also  been  on  the  Global  100 list of sustainable companies for
several  years in succession.  CDP Forest has  selected Neste Oil  as one of the
best  companies  taking  care  of  their  forest  footprint  in  the oil and gas
industry. www.nesteoil.com


[HUG#1891588]

Attachments:

Neste Oil Financial Statements 2014.pdf