Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — 2018 Global Metals, Mining & Steel Conference
21 slides from Norsk Hydro Asa's conference presentation, May 16, 2018
Slide 1: Norsk Hydro
Norsk Hydro Svein Richard Brandtzæg 2018 Global Metals, Mining & Steel Conference
Slide 2: Fully integrated across the aluminium value chain and markets
Fully integrated across the aluminium value chain and markets Broad products and solutions offering from bauxite to end-user products Bauxite Transport & Building & Packaging Electronics & Machinery & Consumer automotive construction electrical equipment durables Alumina Energy Primary Metal Rolled
Slide 3: Situation in Brazil
Situation in Brazil 3
Slide 4: Alunorte situation – status and measures
Alunorte situation – status and measures Status Measures • Alunorte producing at 50% following orders from • MNOK ~500 in increasing water treatment environmental authorities and court capacity by 50% • Paragominas producing at 50%, due to reduced Alunorte • MNOK ~250 to support broad collaboration
Slide 5: Negotiations to resume production progressing
Negotiations to resume production progressing • Hydro seeking dialogue with all relevant authorities to find solutions • Constructive dialogue with Government of Pará, including state environmental agency SEMAS • Seeking negotiations with Ministerio Publicò • Other legal and political processes ongo
Slide 6: High alumina prices following market uncertainty
High alumina prices following market uncertainty Platts alumina index (PAX) USD/mt Percent 750 35% • Uncertainty on alumina availability following Alunorte curtailment and Rusal sanctions, 650 30% triggering price spike and high volatility 550 • High price arbitrage between China and world 25% outsi
Slide 7: Aluminium supported by strong fundamentals
Aluminium supported by strong fundamentals 7
Slide 8: Demand driven both by substitution and expansion into new markets
Demand driven both by substitution and expansion into new markets Aluminium is the fastest-growing base metal in the world Marine / Offshore applications Zero-emission electrical car ferries in B&C, e.g. Supertall buildings Transportation, truck & trailer applications 100% aluminium for light-weight
Slide 9: Aluminium’s reach is growing in response to key long-term trends
Aluminium’s reach is growing in response to key long-term trends Substitution continues to be a key driver for aluminium Transport 3-4% Packaging 2-3% Building & 2-3% Electrical 2-3% Semis & foil construction ~3 % Urbanization Lightweighting Urbanization Substitution China moderating Substitution Su
Slide 10: Primary aluminium market moving towards deficit in 2018, increased uncertainty
Primary aluminium market moving towards deficit in 2018, increased uncertainty World ex. China 2018 3-4 % Estimated primary market balance 2018 (mill t.) (‘000t) 3-4 % 2 000 ~30.1 – 30.4 Production ~28.0 – 28.3 Demand 1 000 0 -1 000 China 2018 3-4 % (mill t.) -2 000 4-6 % ~37.4 – 37.8 -3 000 Product
Slide 11: Further strengthening Hydro’s solid position
Further strengthening Hydro’s solid position 11
Slide 12: Better, Bigger, Greener
Better, Bigger, Greener Hydro’s aspiration for higher value creation Better Bigger Greener Raise performance and Expand the use of aluminium and Lead the transition improve customer offering strengthen Hydro’s platform for growth towards sustainable solutions • Extend Hydro’s leadership in advanced
Slide 13: Industry-leading improvement drive
Industry-leading improvement drive Better improvement program hit by Brazil situation, not expected to reach 2018 target Better Better Better Better Bauxite & Primary Rolled Alumina Metal Products BNOK 1.3 BNOK 1.0 BNOK 0.7 BNOK 3.01) 1) Real 2015 terms. Includes some larger investments of NOK 3-3.5
Slide 14: Proven track-record of value creation with further potential
Proven track-record of value creation with further potential Successful value-over-volume strategy, increasing sales within higher-margin segments Extruded Solutions Rolled Products Last 12 months underlying EBITDA (MNOK) Sales by segment 5,000 2016 2021est 4,000 3,000 2,000 15% 1,000 24% 0 10% Q1 Q
Slide 15: Hydro in premium segment for casthouse products
Hydro in premium segment for casthouse products Extrusion ingots customer value survey 2017* poor customer Premium Hydro extrusion ingot value segment Competitors extrusion ingot Bubble size indicates market share Relative perceived price 10% 25% 50% good Commodity customer segment value Relative pe
Slide 16: Karmøy pilot now producing the world’s most climate and energy-efficient aluminium
Karmøy pilot now producing the world’s most climate and energy-efficient aluminium • Ramp-up during first half 2018 • Technology implementation program established to tailor-make spin-off packages/solutions for other electrolysis lines • ~50% of 200 000 mt creep ambitions – estimated annual EBITDA e
Slide 17: Hydro acquires ISAL, Aluchemie and Alufluor
Hydro acquires ISAL, Aluchemie and Alufluor Strengthening Hydro’s position as Europe’s #1 supplier of value-add products Transaction details Strategic rationale • Binding offer to Rio Tinto to acquire • Increases Hydro’s total primary aluminium capacity to 2.4 million tonnes - 100 % in Icelandic alu
Slide 18: Part of the solution – turning words into action
Part of the solution – turning words into action Industrial strategy, business development and climate ambitions hand in hand Value-creating, climate friendly investments Karmøy technology pilot Primary Metal, Norway Automotive line 3 Rolled Products, Germany UBC recycling line Production Rolled Pro
Slide 19: Hydro’s climate strategy converted into low-carbon products
Hydro’s climate strategy converted into low-carbon products Our uniqueness is our integrated value chain, share of hydropower and post-consumer scrap recycling Hydro 4.0 Hydro 75R All-in approach At least 75% post-consumer recycled aluminium Maximum or below 4.0 kg CO2e/kg Al Verified by DNV GL base
Slide 20: 2018 priorities
2018 priorities • Safety first • Delivering on short and long-term sustainability agenda in Parà • Resuming production at Alunorte, Paragominas and Albras • Value-creating integration • Technology pilot, automotive line and recycling facility
Slide 21: Follow us on:
INFINITE ALUMINIUM Follow us on: f) ry] in) (a) W HYDRO
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