Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Bear Stearns Commodities and Capital Goods Conference 2007
17 slides from Norsk Hydro Asa's conference presentation, Nov 28, 2007
Slide 1: Hydro - a resourceful aluminium company
Hydro - a resourceful aluminium company Eivind Reiten, President and CEO November 28, 2007 (1)
Slide 2: 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 3: Restructuring the Hydro conglomerate has created significant value
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 4: "New" Hydro well received
”New” Hydro well received Relative share price development NYSE 18 December 2006 – 1 May 2007 18 December 2006 – 23 November 2007 ”New” Hydro 51% ”New” Hydro 72% Alcan 20% Alcan 110% Alcoa 14% Alcoa 16% Oslo Stock Oslo Stock Exchange Exchange 9% 10% Benchmark Benchmark Index Index Source: Yahoo Fina
Slide 5: A resourceful aluminium company
A resourceful aluminium company Aluminium ● 25 000 employees1) Metal ● Operations in more than 30 countries ● Turnover Aluminium ● 2006: NOK 99 billion Products ● First nine months 2007: NOK 73 billion ● EBIT ● 2006: NOK 7.5 billion ● First nine months 2007: NOK 9.0 billion Energy ● Market capitaliz
Slide 6: Capital employed – upstream focus
Capital employed – upstream focus Total NOK 46 billion1) 30 September 2007 Energy, 9% Automotive, 3% Extrusion, 10% Metal, 59% Rolled Products, 19% 1) Including NOK 2.5 billion in negative capital employed in “Corporate and Other” not shown in graph 6
Slide 7: Large supplier of aluminium
Large supplier of aluminium Million tonnes Primary aluminium 1.8 1.8 Primary production Remelt Third party sales Metal products* 1.8 1.4 0.3 3.5 Rolled Products Extrusion Fabricated 0.5 0.2 1.7 Automotive products 1.0 2006 figures * Upgraded primary metal such as extrusion ingot, rolling slabs and f
Slide 8: Qatalum smelter
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 9: Growth and restructuring efforts
Growth and restructuring efforts Improved cost position Business operating cash cost USD/tonne 3 000 Business operating cost Weighted average Hydro (CRU) Qatalum Hydro CRU incl closed capacity Hydro CRU incl Qatalum ex closed cap 2 600 Closed 250 000 tonnes capacity 2 200 in Norway and Germany (2003
Slide 10: Hydro well covered with alumina
Hydro well covered with alumina New refinery positions Hydro for further growth in metal Alumina coverage Percent 140% 120% 100% LME-linked contracts 80% MoU new refinery equity 60% 40% Equity 20% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 Based on existing smelter capacity and decided smelter
Slide 11: Competitive power sourcing
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% 2007 2008 2
Slide 12: Distinct businesses with leading positions
Distinct businesses with leading positions Rolled Products Extrusion Automotive* (50% of revenues) (40% of revenues) (10% of revenues) Rolled Products Extrusion Eurasia Precision Tubing Extrusion Americas Automotive Structures Building Systems Reporting sub-segments and sectors *Casting and Magnesiu
Slide 13: Healthy demand for aluminium
Healthy demand for aluminium ● Properties give competitive edge ● Recyclability more important with high energy price ● Expected annual demand growth 4.0-4.5% coming 10 years ● China represents almost 2/3 of expected growth ● Main product segments expected to grow 4.0-5.0% annually 13
Slide 14: Shift in forward curve
Shift in forward curve LME USD/tonne 2 900 31-Dec-2006 30-Jun-2007 23-Nov-2007 2 800 2 700 2 600 2 500 2 400 2 300 2 200 2 100 2 000 1 900 2007 2008 2009 2010 2011 2012 2013 14
Slide 15: Capital allocation – upstream focus
Capital allocation – upstream focus NOK billion ~80 percent of 2008 investments are 11-12 upstream Qatalum: USD 2.8 billion ● ~55 percent project financed ● Completion Q4 2009 ~6.5 Alunorte 3: USD 300 million 1.2 ● Completion Q4 2008 3.9 1.0 New alumina project: USD 300 million ● Assumed completion
Slide 16: Hydro's competitive strengths
Hydro’s competitive strengths ● Power position ● Close to markets and customers ● Operational performance ● Reputable partner in joint ventures ● Technological leadership ● Distinct project management skills across value chain ● Financial capacity to grow 16
Slide 17: www.hydro.com
www.hydro.com
Norsk Hydro — Bear Stearns Commodities and Capital Goods Conference 2007 on 6ix