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.