Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Q1 2019 Earnings Presentation
20 slides from Norsk Hydro Asa's earnings presentation, May 2019
Slide 1: First quarter results 2019
First quarter results 2019
Slide 2: Driving sustainability, Lifting profitability
Driving sustainability Lifting profitability
Slide 3: Immediate actions to improve performance and cash generation
Immediate actions to improve performance and cash generation • Safe and efficient operations - always key priority • Return Alunorte, Paragominas and Albras to full production and operational excellence • Rolled Products restructuring and strategic review • New improvement efforts across all busines
Slide 4: Q1 2019: Results down on volume, price and raw material cost
Q1 2019: Results down on volume, price and raw material cost 4
Slide 5: First quarter highlights
First quarter highlights • Underlying EBIT of NOK 559 million • Production embargos at Alunorte lifted by Federal Court – Alunorte, Paragominas and Albras resuming production • Financial impact of cyber attack NOK 300-350 million in Q1 – main impact in Extruded Solutions • Strong performance in Extr
Slide 6: Operations in Pará moving towards normal production
Operations in Parà moving towards normal production Status • Federal court in Belem, Brazil, lifted production embargoes May 15 and 20 – allowing full value chain in Pará to move towards normal production • Federal court decision to keep embargos on the new bauxite residue disposal area (DRS2) Opera
Slide 7: Going forward
Going forward • Safe ramp-up of Alunorte, Albras and Paragominas key priority • Fully committed to deliver on obligations under technical and social agreement (TAC and TC) • Continued dialogue with state environmental agency SEMAS and Ministerio Público on creating common platform – timing for embar
Slide 8: Status update cyber attack
Status update cyber attack Operational and financial impact • Overall financial impact for Q1 NOK 300-350 million • Of which Extruded Solutions NOK 250-300 million • Production running close to normal in Extruded Solutions, with value creation approaching 100% • Production running as normal in other
Slide 9: Global market expected in deficit for 2019
Global market expected in deficit for 2019 China largely balanced, world outside China in deficit World ex. China 2019 Estimated primary market balance 2019 (mill t.) 0-2 % (‘000t) 1 000 2-3 % ~29.7 – 30.2 Production ~28.2 – 28.5 Demand 0 China 2019 (mill t.) -1 000 1-3 % 2-4 % Production ~36.5 – 37
Slide 10: Declining aluminium and alumina prices
Declining aluminium and alumina prices LME and SHFE aluminium prices Platts alumina index (PAX) USD/mt USD/mt 750 2 600 PAX % of LME 3m 32% 650 2 400 2 200 550 27% 2 000 450 22% 1 800 350 1 600 Apr-19 17% 250 1 400 1 200 150 12% Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 M
Slide 11: Inventories gradually trending downwards, increasing Chinese semis exports
Inventories gradually trending downwards, increasing Chinese semis exports Global reported and unreported, in thousand tonnes Inventory days Semis exports from China, in thousand tonnes Comp. adv (USD/mt) 16000 140 600 1 000 120 800 500 12000 Competitive advantage China 100 600 400 80 400 8000 300 6
Slide 12: Raw material costs for the aluminium industry continue to trend downwards
Raw material costs for the aluminium industry continue to trend downwards Petroleum coke FOB USG (indexed) Pitch FOB USG (indexed) Alumina PAX index (indexed) 2,5 2,5 2,5 2,0 2,0 2,0 1,5 1,5 1,5 1,0 1,0 1,0 0,5 0,5 0,5 0,0 0,0 0,0 Q116 Q316 Q117 Q317 Q118 Q318 Q119 Q116 Q316 Q117 Q317 Q118 Q318 Q119
Slide 13: BACK-UP
») Hydro We are aluminium BACK-UP
Slide 14: Q1 vs Q4: upstream costs down, stable margins
Q1 vs Q4: upstream costs down, stable margins Implied alumina cost and margin All-in implied primary cost and margin USD/mt 1) USD/mt 4) 54 50 50 375 2 350 62 2 200 2 075 84 287 409 311 1 7255) 2 0005) 1 8505) Q1 2018 Q4 2018 Q1 2019 Q1 2018 Q4 2018 Q1 2019 371 463 373 Price 2) 2 435 2 403 2 256 All
Slide 15: Rolled Products: Stable sales volumes Q1 2019 vs Q1 2018
Rolled Products: Stable sales volumes Q1 2019 vs Q1 2018 Lower foil sales offset by higher sales in automotive and general engineering Q1 2019 vs Q1 2018 Q1 2019 vs Q4 2018 Sales volume 14% 13% Growth in % 12% 9% 4% 4% 0% -6% Can & foil Special products Can & foil Special products Lithography & Tota
Slide 16: Extruded Solutions: Continued improvements in net added value
Extruded Solutions: Continued improvements in net added value Net added value* per kg (NOK**, indexed to 2016) 1,2 1,0 0,8 0,6 0,4 0,2 0,0 Extrusion Europe Extrusion North America Building Systems Precision Tubing Extruded Solutions 2016 2017 2018 Roll 12m (Q1 2019) * Net Added Value: calculated as
Slide 17: Net debt increased in Q1 2019
Net debt increased in Q1 2019 Affected by the new IFRS16 Leases standard NOK billion Net cash flow from operations NOK 0.8 billion (8.7) 0.1 (3.1) (1.9) 2.6 (1.6) (11.7) 0.5 (12.1) End Q4 2018 IFRS16-Leases* End Q4 2018 Underlying EBITDA Operating capital Taxes and other Investments/divestments Othe
Slide 18: Adjusted net debt up in Q1
Adjusted net debt up in Q1 Driven by increased net debt position Mar 31 Dec 31 Dec 31 Sep 30 NOK billion 2019 2018 2018 2018 Restated1) Cash and cash equivalents 6.1 6.0 6.0 6.8 Short-term investments 1.3 1.0 1.0 1.2 Short-term debt (8.9) (9.4) (8.5) (6.6) Long-term debt (10.6) (9.3) (7.1) (7.9) Net
Slide 19: 2019 priorities
2019 priorities • Safe and efficient operations • Ramp up Alunorte, Paragominas and Albras, resume DRS2 operations • Rolled Products restructuring and strategic review • New improvement drive • Focus on cash 19
Slide 20: Slide 20