Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — SEB Nordic Seminar, Copenhagen 2015
22 slides from Norsk Hydro Asa's conference presentation, 2015
Slide 1: Lifting performance, creating value in tight markets
Lifting performance, creating value in tight markets CFO, Eivind Kallevik SEB Nordic Seminar Copenhagen 2015
Slide 2: Cautionary note in relation to certain forward-looking statements
Cautionary note in relation to certain forward-looking statements Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management’s plans, objectives and
Slide 3: A highly attractive asset base
A highly attractive asset base High-quality bauxite and alumina Captive hydropower Competitive smelter portfolio World-class Qatalum European leader in rolling A global extrusion champion (3)
Slide 4: Hydro has maintained a robust financial position through the downturn
Hydro has maintained a robust financial position through the downturn NOK billion Net cash/(debt) 3.5 (2.1) 31-Dec-08 30-Sep-14 Adjusted net debt excl. EAI1 31-Dec-08 30-Sep-14 (10.6) (14.1) 1) Net pension liability, operating lease commitments and other. (4)
Slide 5: Our agenda for value creation
Our agenda for value creation Curtailing 26% of USD 300 program Climb From B to A JV program primary metal capacity 2009 2010 CCIP 1 2011 2012 CCIP 2 2013 Starting up Qatalum Acquiring bauxite and Establishing alumina assets Sapa JV (5)
Slide 6: Where is the Business Cycle?
Where is the Business Cycle? (6)
Slide 7: The paradox of the aluminium industry: Demand winner – yet price laggard
The paradox of the aluminium industry Demand winner – yet price laggard Yearly consumption (Index 2000=100), global 3-month LME price (Index 2000=100) 150 800 130 600 110 400 90 200 70 0 2000 2002 2004 2006 2008 2010 2012 2013 2000 2002 2004 2006 2008 2010 2012 2013 Copper Tin Lead Aluminium Nickel
Slide 8: Improved market balance
Improved market balance Brighter outlook after years of overproduction, world ex-China Production less demand world ex-China Supply/demand world ex-China** Inventory days Quarterly annualized* Primary aluminium, in thousand tonnes World ex-China reported primary aluminium inventories Primary alumini
Slide 9: Supply growth next year mainly in Asian regions
Supply growth next year mainly in Asian regions World ex-China Supply Demand Demand growth Thousand tonnes base case: 3-4 % 28 000 Supply development 2015 26 000 (million tonnes) 24 000 Other ~0.4 Structural issues 22 000 Ramp-up challenges 20 000 Supply Potential influences curtailments, 18 000 Few
Slide 10: All-in price of aluminium in upward trend
All-in price of aluminium in upward trend All-in ingot price exceeds USD 2 500/tonne as premiums continue to rise to new records Regional standard ingot premiums All-in ingot aluminium price USD per tonne USD per tonne NOK per tonne 600 3 000 18 000 400 2 500 14 000 200 2 000 0 1 500 10 000 Jan-08 M
Slide 11: China to remain balanced on imports/exports of primary aluminium
China to remain balanced on imports/exports of primary aluminium Bauxite import declined amid Indonesian export ban Annualized aluminium equivalents*, million mt YTD 25 2011 2012 2013 2014** • Bauxite and alumina − Significant drop in bauxite China import 20 imports since January − Alumina imports i
Slide 12: China developing new bauxite import sources
China developing new bauxite import sources No Indonesian bauxite exports translates to higher prices average CIF China Import volume by origin Value-in-use bauxite price increasing more Million tonnes USD per tonne 80 Delta 2014 vs 2011: 80 Indonesia -27 Avr CIF China Value-in-Use 70 Australia +6 7
Slide 13: Lighter vehicles make a big impact on the climate challenge
Lighter vehicles make a big impact on the climate challenge Aluminium – part of the solution For each 10% reduction Declining CO2 emission targets around the world in vehicle weight, car manufacturers achieve fuel-savings of 5-7% Land Rover Sport 2010 Land Rover Sport 2014 3,100 kg 2,200 kg C02 emis
Slide 14: Robust long-term growth outlook for flat rolled products worldwide
Robust long-term growth outlook for flat rolled products worldwide Transport is main driver for growth – Body-in-White consumption growth outperforming all other segments Global FRP consumption by end-use 2014 CAGR 2014-2018 Body-in-White demand in thousand tonnes 10% 14% Transport 11% 2 100 CAGR 9%
Slide 15: Hydro’s aspiration for higher value creation
Hydro’s aspiration for higher value creation (15)
Slide 16: • Continue improvements drive • Capture commercial • Extend technology and
• Continue improvements drive • Further strengthen relative • Turn leading HSE/CSR position industry position into competitive advantage • Capture commercial opportunities • Enhance market positions • Deliver on fast-developing and high-grade portfolio customer demands • Extend technology and innova
Slide 17: Hydro improvement drive continues at full pace
Hydro improvement drive continues at full pace ‘Energy Aspiration’ Sapa JV Total contribution from Hydro’s improvement programs (excl. Sapa) ‘JV program’ ‘From B to A’ 2011*-2014 2015-2016** ‘Climb’ BNOK 3.7 BNOK 1.5 ‘USD 300 program’ CCIP II * USD 300 from 2009 ** Real 2014 terms Realized improveme
Slide 18: Alumina pricing on own fundamentals
Alumina pricing on own fundamentals Index spot price exposure Alumina price 100% USD per mt Percent 500 20% 19% 450 18% 400 17% 350 16% 15% 300 14% 250 13% 200 12% 2015 2017 2020 Aug-10 Sep-11 Oct-12 Nov-13 Dec-14 Internal demand LME linked sales Index exposure Alumina % of LME (18)
Slide 19: Bigger: A solid platform for building an even stronger Hydro
Bigger: A solid platform for building an even stronger Hydro Bauxite & Alumina Energy Primary Aluminium Rolled Products • Move beyond nameplate • Mature captive growth • Enhance position in • Expand automotive capacity capacity opportunities high-margin segments to 200,000 t/yr by end-2016 • Further
Slide 20: The industry’s most ambitious climate strategy: Carbon-neutral by 2020
The industry’s most ambitious climate strategy: Carbon-neutral by 2020 Supported by the three pillars of Hydro’s technology strategy Energy and primary production Reduce emissions, increase efficiency Aluminium in use Maximize user- phase benefits ‘End-of-life’ Increase recycling, back to the loop (
Slide 21: Hydro 2015
Hydro 2015 Lifting performance and shareholder value in tight physical markets • Delivering on improvement programs • Targeting high-margin markets and maturing growth portfolio, while maintaining tight capital discipline • Increasing energy-efficiency and lowering climate footprint (21)
Slide 22: Infinite Aluminium Hydro
INFINITE ALUMINIUM HYDRO