St1 Nordic Corporation – Financial Statements Release 2015

The main event for St1 Nordic group in 2015 was its acquisition on 1 October of the Norwegian company Smart Fuel AS from Shell Explorations and Production Holdings B.V.. Smart Fuel AS trades liquid fuels for transport and heating in Norway, and continues using the Shell brand at service stations under a licensing agreement. The transaction added 400 service stations to the group, which now operates a total of nearly 1,500 service stations. The operations of Smart Fuel AS have been integrated into the St1 operating format. St1 Oy CEO Mika Wiljanen is now also serving as CEO of the Norwegian company. Due to competition authority ruling, St1 Nordic will divest its chain of 39 automated St1 filling stations in Norway. A share transaction to this effect was signed in January 2016. The deal is subject to competition authority approval and is estimated to be completed during the second quarter of the year.

The net sales of St1 Nordic group in 2015 were EUR 3,602.4 million, representing a fall of EUR 245.2 million from the pro forma net sales of the preceding year. The figures for 2015 include the result of Smart Fuel AS for the last quarter. The reduction in net sales was due to lower product prices following a fall in the global crude oil market price. Some 38 % of revenues were generated in Finland, 48 % in Sweden and 14 % in Norway.

Operating profit increased to EUR 86.7 million from the pro forma figure of EUR 72.6 million in the preceding year. The development was favorable in both service station operations and direct sales.
In order to achieve cost-effective operation, the personnel structure of Smart Fuel AS was reduced. The company recorded a EUR 7 million cost associated to this, reducing operating profit. Profit after tax amounted to EUR 72.4 million (compared to a pro forma profit of EUR 57.0 million for the preceding year).

The pro forma income statement for 2014 includes the entire year for the Swedish retail and marketing operations that were transferred to the group in October 2014. The pro forma figures are unaudited.

Consolidated equity increased to EUR 320.8 million, including an increase of EUR 56 million in the invested non-restricted equity fund. This equity issue was directed at the current owners of St1 Nordic Corporation with a view to reinforcing the equity structure of the group for the Norway transaction.

The strong cash flow from operations, amounting to EUR 175.5 million, was due to profitability development and improved efficiency of working capital.

Kim Wiio, CEO of St1 Nordic Corporation

The acquisition of Shell’s Norwegian marketing company Smart Fuel AS has reinforced the status of St1 as a Nordic energy company and fuel reseller. A strong foothold in Norway balances the regional spread of St1 Nordic core operations, with a fairly even presence in Finland, Sweden and Norway. The acquisition was completed on schedule, with swift integration of commercial operations. Personnel restructuring was a regrettable but necessary measure to make the organisation competitive.

The market in our sector remained well balanced and the operating environment was stable. General economic trends and fluctuations in global crude oil prices have had no substantial impact on the profits of St1 Nordic. Our associated wind power company Tuuliwatti Oy continued to grow, completing construction development of approximately 65 % of its investment programme.

We embark on 2016 with a view to further improving profits from the 2015 level with the operations in Norway. We continue to optimise cost-effectiveness in all operations. In February 2016 we took a decision to construct a pilot geothermal energy plant at Otaniemi in Espoo. Construction work will begin in the spring with a view to starting plant operations in 2017. St1 Biofuels will deliver the first Cellunolix® ethanol plant using wood-based raw materials to North European Bio Tech. Construction work is under way in Kajaani, Eastern Finland, and the plant will come on stream during 2016.

St1 continues pursuing its vision of developing renewable domestic fuels and energy sources that replace imported fossil fuels. Our operations will strongly emphasise the importance of biofuels and the investments in wind power continue according Tuuliwatti investment programme.

Audited financial information

Consolidated income statements: 1.1.2015-31.12.2015, 1.1.2014-31.12.2014, pro forma unaudited 1.1.2014-31.12.2014
Consolidated balance sheet 31.12.2015, 31.12.2014
Consolidated cash flow statement 1.1.2015-31.12.2015, 1.1.2014-31.12.2014

St1 Nordic Corporation will publish its annual report on 2 May 2016 and its interim report on 31 August 2016.

 St1 Nordic Oy financial statements report 2015

For further details please contact

Kati Ylä-Autio, CFO, tel. +358 10 557 5263
Kim Wiio, CEO, tel. +358 10 557 11