Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Nordic Energy Summit 2012
23 slides from Norsk Hydro Asa's conference presentation, Mar 28, 2012
Slide 1: Hydro and the future of the Nordic market
Hydro and the future of the Nordic market Aluminium as an energy play and key balancer in the Nordic power market Arvid Moss, Executive Vice President and Head of Energy and Corporate Business Development Nordic Energy Summit, March 28, 2012
Slide 2: Hydro's new platform
Hydro’s new 1 platform (2)
Slide 3: Attractively positioned, global reach
Attractively positioned, global reach Bauxite & alumina Energy Metal products Fabricated products 2.3 million mt* bauxite 2.4 million mt primary 1 million mt rolled 9.4 TWh 3.3 million mt* alumina 3.8 million mt sales 0.6 million mt extruded Bauxite/alumina Primary aluminium Extruded and rolled prod
Slide 4: Significant portfolio measures
Significant portfolio measures Acquisition of Vale’s aluminium assets Qatalum producing at 600 000 mtpy (4)
Slide 5: Substantial values in long-term assets in Norway
Substantial values in long-term assets in Norway • Stable and solid cash generation Power production capacity (TWh) • Indicative annual EBITDA NOK 1.6 – 1.8 billion per region and reversion year • Hydro’s power balance, normal year Telemark • Normal production ~9.5 TW 3.0 0.5 • Sourcing on long-term
Slide 6: Upstream focus
Upstream focus Capital employed1 2011 EBITDA2 Energy, 3% Energy, 17% Downstream, 15% Metal Markets, Bauxite & 3% Downstream, Alumina, 24% Bauxite & 14% Alumina, 41% Primary Metal, Primary Metal, Metal Markets, 40% 38% 5% 1) Q4 2011, graph excludes NOK 7.9 billion in negative capital employed in Othe
Slide 7: Aluminium is an energy play
Aluminium is an energy play 38% Primary 14% 2000 USD/t 29% Alumina Carbon 760 USD/t 280 USD/t Bauxite 34% 220 USD/t 34% 6% 25% Energy Energy Energy Energy 55 USD 260 USD 680 USD 15 USD Total energy cost: 1010 USD ~50 % Indicative figures Source: CRU, Hydro Analysis (7)
Slide 8: A challenging 2012
A challenging 2012 2 (8)
Slide 9: Long-term outlook remains encouraging
Long-term outlook remains encouraging Aluminium remains the metal of the future Demand for semis World outside China China Million mt 120 ~75% 100 49 80 36 60 23 53 40 45 35 20 0 2010 2015 2020 Source: CRU (9)
Slide 10: Healthy demand growth expected
Healthy demand growth expected Manageable supply/demand balance World excluding China, thousand mt 28 000 Supply Demand 27 000 26 000 Base case 25 000 3-5 % p.a. 24 000 23 000 Supply influences Demand influences 22 000 • New projects • Developing regions • Potential restarts • European debt crisis 2
Slide 11: Healthy demand growth expected
Healthy demand growth expected Manageable supply/demand balance World excluding China, thousand mt 28 000 Supply Demand 27 000 26 000 Base case 25 000 3-5 % p.a. 24 000 23 000 Update Update Supply influences 22 000 Demand influences • ~1 million mt • Greece crisis “resolved” announced curtailed 21 0
Slide 12: China a significant net importer
China a significant net importer In terms of aluminium equivalents across the total value chain Annualized aluminium equivalents*, million mt 15 2006 2007 2008 2009 2010 2011 • Bauxite and alumina • Increasing bauxite imports • Decreasing alumina imports to China Import • Increasing net raw material
Slide 13: Hydro and the future of the Nordic power market
Hydro and the future 3 of the Nordic power market (13)
Slide 14: Energy and climate in a global perspective
Energy and climate in a global perspective Carbon footprint should become key location factor in the future In tonnes CO2-equivalents per tonne aluminium Kasakhst Kina Australia USA EU27 Canada Norge Island Source: Institut für angewendte Ökologie (Öko-institut e.V.), 12.5.2011 (14)
Slide 15: Nordics turn towards considerable surplus
Nordics turn towards considerable surplus 4 key developments Consequences Global middeltemperatur Climate change Considerable surplus in Warmer, wetter, wilder– the Nordic power market more hydropower, less consumption for heating New renewables Green certificates result in increased production Drop
Slide 16: Interconnectors are no one-way street…
Interconnectors are no one-way street… Power flows both ways in accordance with supply and demand Considerable focus on interconnectors... Eksisterende kabler Eksisterende sjøkabler Nye sjøkabler (16)
Slide 17: Interconnectors are no one-way street…
Interconnectors are no one-way street… Power flows both ways in accordance with supply and demand Considerable focus on interconnectors... ...but power will flow both ways 70 €/MWh 60 50 Eksisterende kabler 40 Eksisterende 30 sjøkabler Nye sjøkabler 20 10 0 M onday T ues day Wednes day T hurs day Fr
Slide 18: Considerable Nordic power export - and import
Considerable Nordic power export - and import The net effect is limited Net export from Norway and Sweden, and total Price difference between Norway and Germany, and export capacity to continental Europe export from Norway and Sweden in % of capacity TWh 60 30 70% Potential export from Norway and Sw
Slide 19: Growing consensus among key stakeholders
Growing consensus among key stakeholders ’Energy Dialogue’, Energy Panel’, ’Energy Government Report’ (19)
Slide 20: Growing consensus among key stakeholders
Growing consensus among key stakeholders ’Energy Dialogue’, Energy Panel’, ’Energy Government Report’ For more than 100 years, access to renewable energy has contributed towards value creation and represented a competitive advantage for for Norwegian industry and business The Committee is of the opi
Slide 21: Different industries, common cause
Different industries, common cause Nordic EII’s and the energy sector have a joint challenge – and opportunity (21)
Slide 22: Strategy for further value creation
Strategy for further value creation Bauxite & Alumina Primary Metal Energy Mid- and downstream • Excellence in • Reposition • Increase value of • Adjust capacity and operations • Keep solid cash flow in energy business cost base to market • Commercialize current assets • Develop current base • Conti
Slide 23: www.hydro.com
www.hydro.com