Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — CRU 16th World Aluminium Conference 2011
19 slides from Norsk Hydro Asa's conference presentation, June 2011
Slide 1: Sustainability in the aluminium industry
Sustainability in the aluminium industry Jørgen C. Arentz Rostrup, Executive Vice President and CFO CRU’s 16th world aluminium conference, June 2011
Slide 2: Hydro, an integrated aluminium producer
Hydro, an integrated aluminium producer
Slide 3: A transforming transaction
A transforming transaction Paragominas, bauxite mine Bauxite licenses Alunorte, alumina refinery • Capacity: 10 million tonnes CAP alumina • Capacity: 6.3 million tonnes • Ownership: 60%, 100% refinery project • Ownership: 91% from 2015 • First quartile cash cost position including Paragominas bauxi
Slide 4: Strong positions across aluminium value chain
Strong positions across aluminium value chain The integration of Vale Aluminium is transforming Hydro Recycling Rolling Bauxite Alumina Energy Primary Casting Products Extrusion Recycling
Slide 5: Key operational priorities
Key operational priorities Million tonnes 10 • Integration of Alunorte and Paragominas 9 • Operational improvements 8 Alunorte Paragominas • Improve efficiency to achieve nameplate production 7 capacity 6 5 • USD 300 cost improvement program 4 3 2 • Qatalum ramp-up 1 0 • Responsible aluminium player
Slide 6: Attractively positioned, global reach
Attractively positioned, global reach Norway • 900 000 tonnes hydro-powered aluminium production Continental Europe • Technology centre, R&D for next-generation smelter • Leading mid and downstream position • Hydropower developments • New recycling centre North America Asia • Alouette aluminium smel
Slide 7: Strategy for further value creation
Strategy for further value creation Bauxite & Alumina • Improve operations • Integrate • Expand • Commercialize Primary Metal • Reposition – 300 USD/t program • Qatalum top quartile operation • Expand in high-class assets Energy • Develop current asset base • Implement global approach to power sourc
Slide 8: Fantastic opportunities for aluminium
Fantastic opportunities for aluminium
Slide 9: The big challenges of our generation
The big challenges of our generation Growth must be sustainable Millions climb out of Increased energy Climate change poverty demand
Slide 10: Significant aluminium demand growth expected
Significant aluminium demand growth expected Demand for semis World outside China China Million tonnes 110 +80% 48 90 36 70 50 22 53 44 30 34 10 2010 2015 2020 -10 Fight for raw materials to continue Resource-constrained world Source: CRU
Slide 11: Aluminium is the metal of the future
Aluminium is the metal of the future • Lightweight • Formability • 1/3 density of steel • Extrusion, rolling, casting • Low melting point vs. steel • Recyclability • 5% of original energy consumption • Excellent conductivity • 75% of all aluminium produced still in use • Thermal – electrical • Corro
Slide 12: Innovation drives aluminium demand
Innovation drives aluminium demand Hydro aims at forefront position Minimum thickness for maximum protection Power house 10µm 600:1 10µm Aluminium tubing
Slide 13: A sustainable industry?
A sustainable industry? HYDRO
Slide 14: Aluminium weakest performer among base metals
Aluminium weakest performer among base metals Commodity prices, indexed Premium above 90th percentile cash cost Aluminium Copper Lead (1990-2005), percentage Nickel Tin Zinc 900 Copper 34 800 Iron Ore 33 700 Zinc 29 600 Gold 28 500 Uranium 27 400 Tin 26 300 Nickel 20 200 Bauxite 17 100 Coal 17 Alumi
Slide 15: Total shareholder returns for aluminium companies low compared to other industries
Total shareholder returns for aluminium companies low compared to other industries Average annual TSR, 2005–2009 () High 120 Industry weighted average 106 100 88 Low 81 80 71 67 67 62 60 51 50 41 42 39 40 33 30 16 20 18 12 12 10 9 7 4 4 4 4 0 1 0 -1 -2 -2 -2 -10 -7 -13 -10 -10 -20 -14 -14 -19 -17 -1
Slide 16: Low returns permeates the whole value chain
Low returns permeates the whole value chain EBITDA margin downstream businesses, percentage Low High Average 15 % 10 % 5% 0% -5 % -10 % 2005 2006 2007 2008 2009 2010 Source: Company reports. 8 core companies
Slide 17: Encouraging developments
Encouraging developments • Development of more liquid bauxite and alumina markets • Bauxite, a fight for cost efficient resources going forward • Technology and application development • Continued strong demand in overseas market for advanced technology products
Slide 18: Responsibility, Ability, Profitability
Responsibility The world needs aluminium Ability Aluminium is a fantastic material to meet market needs Profitability Sustainable return is the premise for developing aluminium’s full potential
Slide 19: www.hydro.com
www.hydro.com
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