Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — OTCQX virtual conference (June 2019)
19 slides from Norsk Hydro Asa's conference presentation, Jun 20, 2019
Slide 1: Norsk Hydro OTCQX virtual conference
Norsk Hydro OTCQX virtual conference Stian Hasle, Head of Investor Relations June 20, 2019
Slide 2: The global and complete aluminium company
The global and complete aluminium company “…create a more viable society by innovative and efficient use of natural resources and products” More than 110 Aluminium Hydropower Engaged in the Global reach, Involved and years of industrial – metal of the – infinitely entire value chain local presence e
Slide 3: World class assets, high-end products and leading market positions globally
World class assets, high-end products and leading market positions globally Raw materials Primary aluminium production, Aluminium in products processing and energy marketing and recycling Bauxite & Alumina Energy Primary Metal Metal Markets Rolled Products Extruded Solutions • High quality Gibsite b
Slide 4: Strong positions across the value chain
Strong positions across the value chain Upstream Midstream Downstream Competitive cash cost position upstream Strong position in value added products1 Improving NAV1,2 in Extruded Solutions 1,2 Alumina BOC curve by company1 (2018) 100% 1,0 USD/mt 0,8 90% 0,6 80% 0,4 0,2 70% 0,0 Extrusion Extrusion B
Slide 5: Sustainability and innovation – key competitive advantages
Sustainability and innovation – key competitive advantages Lowest CO2 emissions Tonnes CO2/tonne aluminium, 2018 18,0 16,0 Direct Indirect 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 Hydro Source: Republished under license from CRU International Ltd 5
Slide 6: Robust balance sheet, competitive pay-out ratio
Robus balance sheet, competitive pay-out ratio Debt/equity compared to peers* Dividend per share and payout ratio 300% 57% 300 % Average 1,75 250% payout ratio 250 % 2014-2018 200% 200 % 1,25 1,25 150 % 1,00 1,00 150% 100 % 100% 50 % 50% 0% 0% Hydro Dividend policy 40% of net income over the cycle,
Slide 7: Market outlook
») Hydro Market outlook
Slide 8: Geopolitical events impacting our industry
Geopolitical events impacting our industry Aluminium demand remains solid Geopolitical events impacting China moderating primary supply Underlying demand trade flows, EU struggling with growth, global climate concerns remains solid continued Brexit uncertainty continue to rise Rusal sanctions 1-3% G
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: Competitive advantage China
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: Aluminium's reach is growing over the next decade in response to key long-term trends
Aluminium’s reach is growing over the next decade in response to key long-term trends Substitution continues to be a key driver for aluminium Transport Packaging Building & construction Electrical Semis 3-4% 2-3% 2-3% 2-3% ~3 % Primary 2-3 % Urbanization Urbanization Substitution Light-weighting Sus
Slide 13: Q1 highlights
Q1 highlights 13
Slide 14: Hydro: a resource rich global aluminium company
Hydro: a resource rich global aluminium company Hydro underlying EBIT quarterly, NOK billion 2 725 5 692 9 656 6 425 11 215 9 069 3.5 3.0 2.5 2.0 1.5 1.0 • Based in Norway, • Operating revenues involved in activities in • 2016: NOK 82 billion • Operating revenues 0.5 • 2018: NOK 159 billion more tha
Slide 15: 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 16: 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 17: 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 18: 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 18
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