Norsk Hydro ASA · OSL:NHY
Norsk Hydro ASA — BMO Metals & Mining Conference 2008
12 slides from Norsk Hydro ASA's conference presentation, February 2008
Slide 1: Hydro – a resourceful aluminium company
Hydro – a resourceful aluminium company
Slide 2: Slide 2
Slide 3: Cautionary note in relation to certain forward-looking statements
Cautionary note in relation to certain forward-looking statements Certain statements contained in this announcement constitute “forward-looking information” within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as a
Slide 4: Key financials / Underlying EBIT per segment
Key financials NOK million Q4 2007 Q3 2007 Q4 2006 Year 2007 Year 2006 Revenue 21 651 21 966 23 234 94 316 98 752 Underlying EBITDA 2 625 3 355 3 381 13 472 14 278 Underlying EBIT 1 731 2 507 2 235 9 930 10 165 Underlying income from continuing operations 1 425 1 981 1 960 7 847 7 811 Underlying EPS
Slide 5: Capital employed – upstream focus / Improved return on capital
Capital employed – upstream focus Total NOK 44 billion1) 31 December 2007 Bauxite & Energy, 9% Alumina, 13% Automotive, 4% Extrusion, 9% Rolled Products, Primary 19% Aluminium, 40% Commercial, 6% 1) Including NOK 1.7 billion in negative capital employed in “Corporate and Other” not shown in graph (6
Slide 6: Hydro in the aluminium value chain / Growth and restructuring efforts
Hydro in the aluminium value chain Primary aluminium production Aluminium in products, recycling Bauxite/ Primary Metal Semi alumina Energy aluminium products fabrication Remelt 63% equity in Good long-term 1.74 mill. mt/year 3.2 mill. mt/year 1.7 mill. mt/year 728 000 ton alumina coverage of power
Slide 7: Qatalum smelter / Hydro well covered with alumina
Qatalum smelter Largest greenfield capacity built in one step ● First-stage capacity ● Smelter: 585 000 tonnes per year ● 704 cells in 2 double-lined potrooms ● Hydro technology ● Anode plant and cast houses ● 1 250 MW power plant ● Possible expansion to 1 200 000 tonnes per year ● Technology design
Slide 8: Competitive power sourcing / 2008 outlook
Competitive power sourcing Critical for aluminium smelting Power coverage 100% ● Power represents 30% of Neuss production costs 75% Contract Contracts ● Long-term power sourcing ensures predictable costs 50% ● Globalization of Hydro’s power 25% Self Generated Self generated activities 0% ● 9 TWh cap
Slide 9: Significant change in forward curve / China striving for balance
Significant change in forward curve LME forward price, USD/tonne 3 000 2 800 2 600 2 400 2 200 2 000 1 800 1 600 1 400 1 200 2003 2005 2007 2009 2011 2013 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Feb-08 (14) China striving for balance 1 000 tonnes ● Export tax on metal and low value- 500 added products 40
Slide 10: Capital allocation / Dividend and share buyback for 2007
Capital allocation NOK billion ● ~80% of 2008-2009 investments upstream 12-13 12-13 ● Qatalum: USD 2.8 billion ● Alunorte 3: USD 0.3 billion ● Aluminium Products ● Selective growth initiatives in Extrusion and Building Systems 5 ● Sustaining capex NOK 3 billion annually 2007 2008E 2009E Debt-finance
Slide 11: Restructuring the Hydro conglomerate has created significant value / Hydro's competitive strengths
Restructuring the Hydro conglomerate has created significant value NOK billion 400 350 300 250 Dividend and buybacks Yara 200 Oil and gas Aluminium 150 Hydro 100 50 0 1999* 2007** * 4 January 1999 close, nominal value ** 28 September 2007 close. Aluminium and Oil & Energy based on transaction equati
Slide 12: Hydro
Hydro is a Fortune Global 500 supplier of aluminium and aluminium products. Based in Norway, the company employs 25,000 people in more than 30 countries and has activities on all continents. Rooted in a century of experience in renewable energy production, technology development and progressive part