Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Q2 2009 Earnings Presentation
98 slides from Norsk Hydro Asa's earnings presentation, July 2009
Slide 1: Investor presentation Q2 July 2009
Investor presentation Q2 July 2009 (1)
Slide 2: Table of contents
Table of contents Company overview 3 Forward-looking statements Certain statements included within this announcement contain forward- Industry & market outlook 10 looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of managem
Slide 3: Company overview
Company overview (3)
Slide 4: Hydro
Hydro A focused aluminium and energy company Primary • 21 000 employees Metal • Operations in 40 countries Metal Metal • Turnover Markets • 2006: NOK 99 billion • 2007: NOK 94 billion • 2008: NOK 89 billion Rolled Products • Underlying EBIT • 2006: NOK 10.2 billion • 2007: NOK 9.9 billion Extruded •
Slide 5: Hydro's value proposition
Hydro’s value proposition • Solid long-term fundamentals for aluminium • Industry-leading captive power position • World-class upstream growth projects • Leading positions in attractive extrusion segments • Competence in metallurgy and project execution – basis for solar growth • Strong operational
Slide 6: Strong aluminium industry position
Strong aluminium industry position Integrated Emerging Market Mining & Metal Manufacturing 7,946 Alumina Primary Rolled 5,878 Extrusions Production in 1 000 tonnes* Other 4,692 4698 4,494 4,062 4,007 3,250 3,151 2,372 2,296 1,750 1,489 1,298 1,192 970 985 958 910 639 598 593 353 328 182 230 114 163
Slide 7: Hydro in the aluminium value chain
Hydro in the aluminium value chain Primary aluminium production Aluminium in products, recycling Bauxite/ Primary Metal Semi alumina Energy aluminium products fabrication Remelt 65% equity in Solid long-term 1.75 mill. mt/year 2.9 mill. mt/year 1.6 mill. mt/year 502 000 ton alumina coverage of power
Slide 8: Hydro improves cost position
Hydro improves cost position Business operating cash cost USD/tonne 3 400 Dynamic cost curve • Falling input costs 3 000 • Production curtailments and capacity closures 2 600 2 200 1 800 1 400 Accumulated tonnage (1 000 tonnes) 1 000 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 BOC Q1 20
Slide 9: Capital employed – upstream focus
Capital employed – upstream focus NOK million June 30, 2009 Energy, Primary Metal 28 683 7% Metal Markets 5 384 Rolled Products 7 915 Extruded Extrusion 5 594 Products, 14% Automotive 1 617 Other and eliminations 158 Extruded Products 7 369 Energy 3 419 Rolled Products, Primary Metal, 54% 15% Other
Slide 10: Industry & market outlook
Industry & market outlook (10)
Slide 11: Healthy long term demand for aluminium
Healthy long term demand for aluminium • Properties lead to increased market share • Aluminium intensive urbanisation and infrastructure • Climate challenge – aluminium as part of the solution • Recyclability more important with high energy price • Beyond current downturn • Return to trend growth of
Slide 12: Unprecedented fall in aluminium price
Unprecedented fall in aluminium price USD per tonne 3 400 Primary aluminium LME USD/tonne NOK/tonne 3 200 3 000 Q2 2009 average 1 524 9 883 Q2 2009 end 1 651 10 611 2 800 2 600 Q1 2009 average 1 397 9 593 Q1 2009 end 1 405 9 555 2 400 2 200 Average 2008 2 620 14 453 2 000 1 800 Average 2007 2 662 15
Slide 13: Sales volumes at low level
Sales volumes at low level Hydro’s downstream sales Q2 2009 vs Q1 2009 Total downstream sales Rolled Extrusion Building Extrusion Automotive Precision Products Eurasia Systems Americas Structures Tubing Q2 09 vs Q1 09 H1 09 vs H1 08 29% 19% 9% 1% 3% 1% -2% -27% Hydro’s upstream sales Q2 2009 vs Q1 2
Slide 14: Inventories still increasing
Inventories still increasing USD per tonne Days 3 500 120 110 3 000 100 90 2 500 80 70 2 000 60 1 500 50 40 1 000 30 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aluminium inventories (days of consumption)* LME 3-month average *IAI and LME reported stocks
Slide 15: China currently net importer
China currently net importer 1 000 tonnes Primary / alloyed Semis Fabricated Scrap Total • Swift response to drop in demand in Q4/Q1 600 • Production curtailments 550 500 • Strategic government purchases Net import 450 400 350 • 1-2 million tonnes of capacity being 300 restarted due to increased dem
Slide 16: Significant curtailments announced
Significant curtailments announced Announced capacity curtailments in percent of 2008 production 30 % 28 % 26 % 25 % 22 % 21 % 20 % 15 % 11 % 10 % 10 % 5% 0% C entury Aluminium Hydro C halco Alcoa UC Rusal Rio Tinto Source: CRU / company reports / Hydro estimates (16)
Slide 17: Announced capacity curtailments
Announced capacity curtailments Unchanged from Q1 12% 3% Alcoa 7% C entury Hydro China ~3.5 million tonnes* Rio Tinto 6% Rest of world ~3.4 million tonnes 51% UC Rusal Other Total ~6.9 million tonnes C hina 7% 14% Source: CRU / company reports / Hydro estimates. *Not adjusted for reports of restarts
Slide 18: Substantial supply/demand imbalance
Substantial supply/demand imbalance World production and consumption (excl. China) Annualized • Majority of curtailments executed end-Q2 30 000 Production C onsumption • Imports to China of 750 000 tonnes of 25 000 primary aluminium during 2009 • Increased demand end-Q2 20 000 15 000 10 000 5 000 0
Slide 19: Transport and construction areas hit hard by downturn
Transport and construction related areas are hit hard by the economic downturn Share of semis consumption • Transportation, construction and housing is weak C onsumer Electrical durables 6% • Engineering markets follow construction 11% Packaging and transport into collapse Machinery 9% & equipment 1
Slide 20: Commodity prices weakening
Commodity prices weakening Industry input costs declining Crude oil – Brent (USD/bbl) Coal – CIF ARA (USD/mt) Petroleum coke FOB USG (USD/tonne) 160 245 550 140 210 500 120 175 450 100 140 400 80 105 350 60 70 300 40 35 250 20 0 200 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 20
Slide 21: Power spot prices stabilize
Power spot prices stabilize South Norway price (NO1) Water reservoir levels in South Norway (NO1) NOK/MWh Percent 600 100 2008 2009 2008 2009 90 500 80 70 400 60 300 50 40 200 30 20 100 10 0 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Price
Slide 22: Climate policies – effects on aluminium
Climate policies – effects on aluminium Demand-effect • Changed semi’s and end-product prices • Aluminium vs. steel and plastics when CO2 emissions get a price tag • Regulatory measures Supply – effects on production cost and long-term prices • Cost per tonne CO2 increases over time • Direct carbon
Slide 23: 2009 outlook
2009 outlook • Aluminium prices to remain low • Limited forward visibility • Still increasing LME inventory • No substantial pick-up in demand • Primary aluminium consumption ex-China could decline up to 15-20% from 2008 • Chinese consumption in line with 2008 • Input costs further down (23)
Slide 24: Second quarter results 2009
Second quarter results 2009 (24)
Slide 25: Highlights
Highlights • Firm execution of corrective measures – significant cost-savings achieved • Strong cash flow from operations • Demand apparently flattening out at low level • Underlying EBIT down 25% from Q1 • Weak upstream result - 28% drop in realized aluminium price vs Q1 • Improved downstream resul
Slide 26: Firm corrective measures taken
Firm corrective measures taken Initiative Result/target 2008-2009: 40% reduction, NOK 2.5 billion Capital expenditure cuts 1) 2009-2010: 15% reduction, NOK 0.5 billion Operating capital reduction NOK 5 billion during first half 2009 Production curtailments Primary aluminium 26% reduction from 2008 l
Slide 27: Upstream capacity curtailments completed
Upstream capacity curtailments completed Primary aluminium Closed production Curtailment Curtailment Smelter capacity in tonnes announced completed Comment Karmøy (Søderberg line) 120 000 Q4 2008 Q1 2009 Permanent closure Temporary closure, currently operating Neuss 180 000 Q1 2009 Q2 2009 50 000 ou
Slide 28: Significant cash cost improvements achieved
Significant cash cost improvements achieved Cost* in USD per tonne indexed, 2008=100 • Production curtailments at high-cost smelters • Reduced input costs in first half 2009 ~(25)% • Alumina 2-3 months lag • Petroleum coke • Fuel oil, caustic soda, coal, freight and alloys • Further cost improvement
Slide 29: Curtailments executed in flexible system
Curtailments executed in flexible system Primary aluminium Remelt 1 000 tonnes, production rate per year 1 000 tonnes, production rate per year 2 000 2 000 1 920 1 750 330 1 588 1 600 1 600 290 1 352 1 200 1 300 1 200 1 000 1 000 1 000 1 040 100 496 264 900 800 800 736 504 400 400 0 0 2008 Q1 2009 Q
Slide 30: Innovation and improvements downstream
Innovation and improvements downstream Hydro opens energy-neutral building Avg. German energy consumption: 180 kWh/m²a (primary) Energy consumption: 50 kWh/m²a (primary) Solar energy production: 30 000 kWh/a (30)
Slide 31: Underlying EBIT
Underlying EBIT 2 032 1 619 1 490 868 -493 -618 NOK million Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Primary Metal 938 795 906 93 (185) (895) Metal Markets 363 139 (41) 242 (245) 196 Rolled Products 147 240 170 93 (53) (28) Extruded Products 223 296 152 (332) (204) (26) Energy 421 302 460 683
Slide 32: Key financials
Key financials First half First half NOK million Q2 2009 Q1 2009 Q2 2008 2009 2008 Revenue 17 123 16 854 23 980 33 976 45 510 Underlying EBIT (618) (493) 1 619 (1 111) 3 651 Items excluded from underlying EBIT 1 029 (1 105) (911) (77) (1 764) Reported EBIT 410 (1 598) 708 (1 188) 1 887 Financial inc
Slide 33: Items excluded from underlying EBIT
Items excluded from underlying EBIT First half First half NOK million Q2 2009 Q1 2009 Q2 2008 2009 2008 Underlying EBIT (618) (493) 1 619 (1 111) 3 651 Unrealized effects power contracts (118) 580 (1 997) 463 (3 287) Unrealized LME and other derivative effects 1 427 (708) 450 719 1 000 Metal effect,
Slide 34: Primary Metal
Primary Metal Q2 Q1 Q2 Key figures 2009 2009 2008 Alumina production, kmt 494 578 506 Primary aluminium production, kmt 338 397 437 Total sales volumes, kmt 447 440 584 Realized LME price, USD/mt 1 468 1 996 2 610 Realized LME price, NOK/mt 9 598 13 393 13 553 Underlying EBIT, NOK million (895) (185
Slide 35: Metal Markets
Metal Markets Q2 Q1 Q2 Key figures 2009 2009 2008 Remelt production, kmt 111 89 145 Total metal products sales, kmt 602 573 801 Underlying EBIT, NOK million 196 (245) 139 Underlying EBIT, NOK million Q2 operating results 703 (48) • Neutral currency effects vs significant negative 363 effects in Q1 2
Slide 36: Rolled Products
Rolled Products Q2 Q1 Q2 Key figures 2009 2009 2008 External sales volumes, kmt 187 191 259 Underlying EBIT, NOK million (28) (53) 240 Underlying EBIT, NOK million Q2 operating results 651 (82) • Positive contribution from cost savings 240 • Stable volumes in a weak market 170 147 93 Outlook • Uncer
Slide 37: Extruded Products
Extruded Products Q2 Q1 Q2 Key figures 2009 2009 2008 External sales volumes, kmt 120 113 164 Underlying EBIT Extrusion, 5 (88) 292 NOK million Underlying EBIT Automotive, (37) (115) 2 NOK million Underlying EBIT, NOK million (26) (204) 296 Underlying EBIT, NOK million Q2 operating results 338 (230)
Slide 38: Energy
Energy Q2 Q1 Q2 Key figures 2009 2009 2008 Power production, GWh 1 809 2 477 3 021 Net spot sales, GWh 413 838 1 331 Southern Norway spot price (NO1), 297 341 171 NOK/MWh Underlying EBIT, NOK million 281 447 302 Underlying EBIT, NOK million Q2 operating results 1 865 728 • Low production 683 • Lower
Slide 39: Strong cash flow from operations
Strong cash flow from operations • Significant reductions in operating Q2 Q1 Q2 NOK million 2009 2009 2008 capital Net income (loss)* 282 (280) 902 Depreciation 805 827 819 • Capital discipline – investments at Operating capital 2 907 2 199 (449) low level Other adjustments (1 984) (3 857) 1 634 Net
Slide 40: Financial position
Financial position Net cash / (debt) in NOK billion Secured financing: ~NOK 20 billion 8.7 • EUR 750 million in 3-year bank facility • NOK 1 billion in commercial paper • USD 1.7 billion in a multi-currency revolving 3.5 1.7 3.0 facility maturing in 2014 • NOK 1.3 billion short-term June 30, 2008 De
Slide 41: Priorities in 2009
Priorities in 2009 Proactive corrective measures • Cost reductions and margin management • Working capital and counterparty risk Cash focus • Maintain financial flexibility Solid operations Qatalum execution Stay close to markets (41)
Slide 42: Primary Metal
Primary Metal (42)
Slide 43: Strong growth in alumina production
Strong growth in alumina production Hydro’s equity alumina production Alunorte, Brazil 1 000 tonnes • World’s largest alumina refinery • Third expansion completed in 2008 3 500 • Capacity: 6.3 million tonnes of alumina (100%) • 34% owned by Hydro 3 000 2 500 Alpart, Jamaica 2 000 • Capacity: 1.65 mi
Slide 44: Well covered with alumina
Well covered with alumina CAP positions Hydro for further growth in metal Alumina coverage Percent 140% 120% LME-linked contracts 100% 80% Equity from CAP* 60% 40% Equity 20% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 *CAP is illustrated with the first stage plus two expansi
Slide 45: Aluminium Metal Production System
Aluminium Metal Production System AMPS is not a project – it’s a way of operating! Standardized work processes Defined customer and supplier relationships Optimized flow A systemized method for development of operational excellence and continuous improvements • Product quality • Cost Dedicated teams
Slide 46: Strong performance culture
Strong performance culture TRI per million hours work1) Kg CO2e / kg aluminium2) 10 6 8 5 4 6 3 4 2 2 1 0 0 2005 2006 2007 2008 1990 2005 2006 2007 2008 2010E kwh / Kg aluminium3) Specific emissions kg fluorine / tonne aluminium4) 16.0 1.2 15.0 1.0 0.8 14.0 0.6 13.0 0.4 12.0 0.2 11.0 0.0 1993 1998 2
Slide 47: Primary Metal production facilities
Primary Metal production facilities North America Europe: • 115 000 mt smelting capacity in 1 smelter • 1 270 000 mt primary smelting capacity in 8 smelters • 540 000 mt remelt capacity in 8 smelters Middle East: • Qatalum 1 smelter under construction (Hydro share: ~300 000 mt) Australia: • 238 000
Slide 48: Develop technology to fulfill ambitions
Develop technology to fulfill ambitions 2007 2009 2020 HAL300 technology HAL4e technology Beyond HAL4e • Low diffuse emissions • Improved energy efficiency • Zero PFC concept • Good working environment • Benchmark GHG • Simpler CO2 capture • SU4, Qatalum • Prepared for CO2 concentration • New materi
Slide 49: Qatalum nearing completion
Qatalum nearing completion • 84% complete by end-Q2 2009 • Main ongoing activities • 21 500 workers by end-Q2 2009 • Construction of buildings • On target for scheduled start-up 2009/2010 • Installation of equipment • Development of operating organization • First decile position on cash cost curve (
Slide 50: Qatalum nearing completion
Qatalum nearing completion Power plant Heat recovery units Paste plant Casthouse building (50)
Slide 51: Qatalum facts
Qatalum facts Capacity • Smelter: 585 000 tonnes per year • 704 cells in 2 double-lined potrooms • Anode plant and cast houses • 1 250 MW power plant • Possible expansion to 1 200 000 tonnes per year • Hydro technology, designed for • Low specific energy consumption • High-labour productivity • Low
Slide 52: Metal Markets
Metal Markets (52)
Slide 53: Casthouse products add value
Casthouse products add value Leading supplier in Europe – growing globally Own production Primary foundry alloys Extrusion ingot Remelting & recycling Wire rod Sheet ingot Commercial agreements Casthouse (53)
Slide 54: Metal Markets production facilities
Metal Markets production facilities Qatalum: well positioned to serve all major markets North America Europe • 114 000 mt remelt capacity in 2 remelters • 368 000 mt remelt capacity in 6 remelters Qatar Hydro off-take agreement for 100% of Qatalum products • First metal by end of 2009 • Building up
Slide 55: Rolled Products
Rolled Products (55)
Slide 56: Main products and applications
Main products and applications Focus on margin management and cash generation Foil • Flexible packaging and technical applications Litho • Offset plates for the printing industry Packaging & Building • Cans, packaging and architecture Automotive, Heat Exchanger & General Engineering • Transport, hea
Slide 57: Rolled products consumption
Rolled products consumption Falling demand in main markets1) Western Europe North America Asia Pacific Million tonnes Million tonnes Million tonnes 7 7 15% 7 15% 15% 13% 13% 13% 6 6 6 11% 11% 11% 5 9% 5 9% 5 9% 7% 7% 7% 4 4 5% 4 5% 5% 3 3% 3 3% 3 3% 1% 1% 1% 2 2 -1% 2 -1% -1% -3% -3% 1 -3% 1 1 -5% -
Slide 58: Extruded Products
Extruded Products (58)
Slide 59: Distinct businesses with leading positions
Distinct businesses with leading positions Diverse markets – each with strong Hydro presence Extrusion Automotive (81% of revenues) (19% of revenues) Extrusion Eurasia Precision Tubing Extruded Products strategy Build on proven business Extrusion Americas concept, selective growth in Europe, Middle-
Slide 60: Extruded products consumption
Extruded products consumption 1) Falling demand in Europe, American demand still depressed Europe North America Million tonnes % growth (RHS) Million tonnes Million tonnes 3.5 3.5 8% 8% 3.0 4% 3.0 4% 2.5 0% 2.5 0% 2.0 -4% -4% -8% 2.0 -8% 1.5 -12% 1.5 -12% 1.0 -16% 1.0 -16% -20% -20% 0.5 -24% 0.5 -24
Slide 61: Main products and applications
Main products and applications Innovative solutions Creative Technology TRIANGEL Germany The new stairway system SANITEC OTIS (61)
Slide 62: Building Systems
Building Systems Hydro the market leader in Europe, worldwide presence CHELSEA Customer INTERCOM, NY CHELSEA Customer INTERCOM, NY DIQUE IV – Puerto Madero Larnaka Airport, Cyprus Foch 94, Beirut Q-Tower, Manila (62)
Slide 63: Development in energy efficiency
Development in energy efficiency Reducing energy use in buildings InventSkin® multiple layer façade concept • Several energy-efficiency functions • Reduces primary energy and CO2 emissions • Cooperation between Hydro building Systems and Ascent Solar (63)
Slide 64: Automotive applications
Automotive applications Global leadership in Precision Tubing Structures in a leading position in crash management systems • Bumper beams • Crash boxes • Longitudinals • Windshield frames • Sub frame components • Add-on frames/solutions (64)
Slide 65: Energy
Energy (65)
Slide 66: Strong power position
Strong power position – self-generated and renewable energy sources Share of self-generated power *) Share of renewable energy origin Percent Percent 50% 80% 45% 70% 40% 60% 35% 50% 30% 25% Industry avg 40% 2007 **) 20% 30% 15% 20% 10% 10% 5% 0% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2
Slide 67: Long-term power sourcing at competitive prices
Long-term power sourcing at competitive prices Indexation of power supplies • Power consumption ~26 TWh in Metal in Percent 2008 100% 90% • Self-generation and long-term contracts 80% ensures predictability 70% 60% 50% • Limited commodity exposure 40% • Indexation to LME and coal with time-lag 30% 2
Slide 68: Developing Norwegian hydropower assets
Developing Norwegian hydropower assets Development potential Normal production capacity per region and terms • 0.5 – 1 TWh • Utilizing existing concession areas 3.0 0.5 and infrastructure Telemark • Investment NOK 1.2 – 2.5 billion 2044- from 2011 onwards No reversion 2049 • Normal production today
Slide 69: Power portfolio management
Power portfolio management – significant volatility in price and volume Quarterly production and spot price • Norwegian power portfolio TWh optimized versus market NOK/MWh 3.5 550 • Production and market prices strongly 500 impacted by hydrological conditions 3.0 450 • ”Dry” versus ”wet” years 400 2
Slide 70: Nordic power market – estimated based on forward curves
Nordic power market – estimated based on forward curves NOK/MWh 650 600 550 500 450 400 350 300 250 200 Apr 08 Oct 08 Apr 09 Oct 09 Apr 10 Oct 10 End Q1 2008 End Q2 2008 End Q3 2008 End Q4 2008 End Q1 2009 End Q2 2009 (70)
Slide 71: Solar
Solar Industrial ambitions within Solar NorSun (18%) – mono-crystalline wafers • Total investments NOK 500 million • Hydro largest industrial owner • 155 MW production on Årdal, started 2008 • Seeking polysilicon production opportunities Ascent Solar (35%) – thin-film • Total investments NOK 260 mil
Slide 72: Secured opportunities across the value chain
Secured opportunities across the value chain Investments of around NOK 800 million Polysilicon Ingot Wafer Cell Module System/ Installation HyCore (49%) NorSun (18%) Hydro Building Ascent (35%) Systems Metallurgy Industrialization Internal synergies / building systems (72)
Slide 73: Additional information
Additional information (73)
Slide 74: New reporting structure
New reporting structure Until Q1 2009 Q2 2009 and onwards Aluminium Metal Primary Metal Bauxite & Alumina Primary Aluminium Metal Markets Commercial 1) Aluminium Products Rolled Products Rolled Products Extrusion Extruded Products Automotive Energy Energy 2) Other and eliminations Other and eliminat
Slide 75: Financial policy
Financial policy Maintain investment-grade rating NOK billion Dec 31, 2007 Dec 31, 2008 June 30, 2009 • Currently: BBB- (S&P), Baa2 (Moody’s), Cash and cash equivalents 9.3 3.3 4.9 both with negative outlook Short-term investments 2.7 1.6 1.4 Short-term debt (1.0) (1.2) (2.2) • Competitive access to
Slide 76: Hedging policy
Hedging policy Hydro to remain exposed to LME prices • Partly natural hedge through alumina contracts and power contracts Operational LME hedging • Three months forward • Managing customers’ pricing • Marked-to-market valuations of positions result in unrealized gain/losses Currency exposure, mainly
Slide 77: Price and currency sensitivities
Price and currency sensitivities Aluminium price sensitivity +/- 100 USD per tonne NOK/USD sensitivity +/- 0.1 NOK 900 850 200 800 700 650 150 600 130 500 100 90 400 300 200 50 100 0 0 EBIT Net income EBIT Net income • Annual sensitivities • Aluminium price sensitivity is net of aluminium price inde
Slide 78: Underlying income Q2 2009
Underlying income Q2 2009 NOK million Reported income Adjustments Underlying income Primary Metal (537) (357) (895) Metal Markets 472 (275) 196 Rolled Products 438 (466) (28) Extruded Products 87 (114) (26) Energy 321 (40) 281 Other and eliminations (370) 224 (146) Total EBIT 410 (1 029) (618) Finan
Slide 79: Underlying income Q1 2009
Underlying income Q1 2009 NOK million Reported income Adjustments Underlying income Primary Metal (1 837) 1 652 (185) Metal Markets (315) 70 (245) Rolled Products (379) 325 (53) Extruded Products (187) (17) (204) Energy 451 (4) 447 Other and eliminations 669 (922) (253) Total EBIT (1 598) 1 105 (493
Slide 80: Underlying income Q2 2008
Underlying income Q2 2008 NOK million Reported income Adjustments Underlying income Primary Metal 1 343 (548) 795 Metal Markets 106 33 139 Rolled Products 504 (264) 240 Extruded Products 285 10 296 Energy 307 (6) 302 Other and eliminations (1 838) 1 685 (153) Total EBIT 708 911 1 619 Financial incom
Slide 81: Reported and underlying results
Reported and underlying results Hydro Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Year Year NOK million 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2007 2008 Reported EBIT 3 672 3 001 2 013 338 1 179 708 2 414 (3 106) (1 598) 410 9 025 1 194 Underlying EBIT 2 883 2 886 2 686 1 699 2 032 1 619 1 490 868 (493
Slide 82: Items excluded from underlying results - 2009
Items excluded from underlying results - 2009 NOK million Q1 2009 Q2 2009 Unrealized derivative effects on currency contracts (Alunorte) Primary Metal (11) (222) Rationalization charges and closure costs Primary Metal 305 62 Unrealized derivative effects on power contracts Primary Metal 338 57 Unrea
Slide 83: Items excluded from underlying results - 2008
Items excluded from underlying results - 2008 NOK million Q1 2008 Q2 2008 Q3 2008 Q4 2008 2008 Unrealized derivative effects on LME related contracts (Alunorte) Primary Metal 83 (8) (134) (37) (96) Unrealized derivative effects on LME related contracts Primary Metal 263 (350) (586) 112 (560) Unreali
Slide 84: Items excluded from underlying results - 2007
Items excluded from underlying results - 2007 NOK million Q1 2007 Q2 2007 Q3 2007 Q4 2007 2007 Unrealized derivative effects on LME related contracts (Alunorte) Primary Metal (13) 40 (108) (82) (163) Unrealized derivative effects on LME related contracts Primary Metal (263) (110) (100) (49) (425) Un
Slide 85: Operating segment information – Underlying EBIT
Operating segment information Underlying EBIT Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Year Year NOK million 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2007 2008 Primary Metal 2,289 2,172 1,941 1,245 938 795 906 93 (185) (895) 7,646 2,732 Metal Markets 135 186 252 65 363 139 (41) 242 (245) 196 639 703 R
Slide 86: Operating segment information – Underlying EBITDA
Operating segment information Underlying EBITDA Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Year Year NOK million 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2007 2008 Primary Metal 2,789 2,652 2,416 1,735 1,398 1,285 1,399 638 290 (372) 9,591 4,720 Metal Markets 175 221 285 101 388 162 (15) 274 (212) 226 7
Slide 87: Operating segment information – EBIT
Operating segment information EBIT Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Year Year NOK million 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2007 2008 Primary Metal 2 407 2 437 2 033 1 136 215 1 343 1 768 (1 647) (1 837) (537) 8 012 1 679 Metal Markets 176 12 150 35 546 106 (142) (178) (315) 472 373 332
Slide 88: Operating segment information – Total revenue
Operating segment information Total revenue Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Year Year NOK million 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2007 2008 Primary Metal 11 321 10 766 9 894 8 780 8 858 9 837 9 256 8 478 6 471 6 365 40 761 36 428 Metal Markets 15 700 14 712 12 576 12 536 12 781 14 50
Slide 89: Operating segment information – Internal revenue
Operating segment information Internal revenue Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Year Year NOK million 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2007 2008 Primary Metal 9 862 9 269 8 388 7 384 7 988 8 680 8 111 7 278 5 640 5 290 34 904 32 057 Metal Markets 5 864 5 595 4 417 4 743 4 876 5 226 4 4
Slide 90: Operating segment information – Depreciation
Operating segment information Depreciation, amortization and impairment Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Year Year NOK million 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2007 2008 Primary Metal 490 471 465 473 452 481 484 1 295 464 461 1 899 2 711 Metal Markets 40 179 33 36 24 23 26 67 32 30 287
Slide 91: Income statement
Income statement Q2 Q1 Q2 First half First half Year NOK million 2009 2009 2008 2009 2008 2008 Revenue 17 123 16 854 23 980 33 976 45 510 88 643 Share of the profit (loss) in equity accounted investments (42) (413) 256 (455) 162 (915) Other income, net 223 134 470 357 581 865 Total revenue and incom
Slide 92: Balance sheets
Balance sheets June 30, March 31, December 31, September 30, June 30, NOK million 2009 2009 2008 2008 2008 Cash and cash equivalents 4 860 3 128 3 333 3 583 7 985 Short-term investments 1 439 1 652 1 648 4 454 2 112 Receivables and other current assets 14 988 16 077 18 833 19 744 19 967 Inventories
Slide 93: Pensions
Pensions December 31, December 31, Weighted average assumptions December 31, December 31, NOK million 2008 2007 at end of year 2008 2007 Projected benefit obligation (23 440) (20 584) Discount rate 4.7% 5.0% Fair value of plan assets 12 386 15 579 Expected return on plan assets 5.7% 6.3% Termination
Slide 94: Primary Metal – operational data
Primary Metal – operational data Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Volumes and prices 1) 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 Realized premium above LME (USD/mt) 1) 326 338 331 330 350 353 328 268 230 230 Realized premium above LME (NOK/mt) 1) 2 035 2 056 1 928 1 843 1 905 1 832 1 740 1 706
Slide 95: Metal Markets and Rolled Products – operational data
Metal Markets – operational data Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Volumes and prices 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 Remelt production (1 000 mt) 190 179 163 153 141 145 121 97 89 111 Sale of metal products from own production (1 000 mt) 771 772 699 680 724 753 667 571 548 577 Sale of
Slide 96: Extruded Products and Energy – operational data
Extruded Products – operational data Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Volumes and prices 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 Extrusion external shipments (1 000 mt) 134 135 123 117 130 133 122 103 96 99 Automotive external shipments (1 000 mt) 43 30 29 28 31 31 26 18 17 21 Extrusion – EBI
Slide 97: Investor Relations in Hydro
Investor Relations in Hydro t: +47 22 53 92 80 Stefan Solberg Head of Investor Relations m: +47 917 27 528 e: stefan.solberg@hydro.com t: +47 22 53 25 22 Stian Hasle Investor Relations Officer m: +47 977 36 022 e: stian.hasle@hydro.com t: +47 22 53 92 24 Irene Raposo Investor Relations Assistant m:
Slide 98: www.hydro.com
www.hydro.com