Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Investor Presentation (August 2004)
22 slides from Norsk Hydro Asa's investor presentation, August 2004
Slide 1: Performance and strategic direction
Aluminium Hydro Aluminium Jon-Harald Nilsen Executive Vice President Performance and strategic direction
Slide 2: Focus areas
Focus areas z The aluminium market – structural changes and outlook z Value creation z Strategy and priorities 51145_2 • H ydro M edia • 08.2004 • 2
Slide 3: A fully integrated global aluminium company
A fully integrated global aluminium company Bauxite/ alumina Electrolysis metal Casthouse products Rolling Extru- sion Fabrication & Systems Automotive 51145_2 • H ydro M edia • 08.2004 • 3
Slide 4: Hydro Aluminium 2003
Hydro Aluminium 2003 Revenues NOK 69.2 bn EBITDA NOK 6.5 bn Gross NOK 70.4 bn Hydro Investment *) Aluminium CAPEX NOK 5.6 bn CEO Employees *) 26 700 Primary Metal Metal Products Rolled Products Extrusion Automotive North America (Oslo) (Oslo) (Cologne) (Lausanne) (Cologne) (Baltimore) Metals Rolled
Slide 5: Western World demand expected to grow in the coming years
Western World*demand expected to grow in the coming years 4.4% average annual growth 2004 – 2007E 1 000 tonnes % growth per segment 40 000 35 000 2900 4.0 Other 2700 3000 30 000 5.1 2500 2700 Durables 2400 2500 5900 25 000 2400 5500 5100 3.8 Electrical & 4800 20 000 6600 engineering 6200 5800 3.2 B&
Slide 6: China is emerging as a major aluminium market
China is emerging as a major aluminium market Global primary demand 2003 Global primary demand 2012E 27.3 million tonnes 42 million tonnes Other 8% US Other CIS 18% 10% 5% US 24% Other Asia 13% Other Asia 14% Europe China 21% 19% Europe 25% Japan 9% China Japan 28% 6% Sources: CRU; Hydro Aluminium 5
Slide 7: The metal deficits in Europe and the US will continue to grow
The metal deficits in Europe and the US will continue to grow Net exports, primary aluminium 1 000 tonnes 4 000 3 000 2 000 2000 2005E 1 000 2012E 0 -1 000 -2 000 -3 000 -4 000 -5 000 Asia* Europe USA China Canada South Australia & CIS ROW ** America NZ * Excluding China ** Rest of the World, includ
Slide 8: China expected to be balanced
China expected to be balanced Main permanent challenges 1 000 tonnes z Limited bauxite reserves z Alumina deficit 10 000 Semi-permanent 8 000 z Energy deficit in most Production provinces – high prices z Grid 6 000 z High inland transport costs of alumina and metal 4 000 Consumption Short term/polic
Slide 9: Metal balance 2004 better than expected
Metal balance 2004 better than expected 1 000 tonnes 1 000 750 500 250 0 Underlying Net 2004- Net new capacity Increased Change export Total inventory "oversupply"- restarts/new consumption China decrease speed 2003 closures (primary - 250 shipments) - 500 51145_2 • H ydro M edia • 08.2004 • 9
Slide 10: A changing industry structure
A changing industry structure Production Million tonnes 4 000 3508 3400 Primary 3 500 Rolled Products 3 000 Extrusions 2435 2365 2 500 2350 2 000 1470 1 500 1130 870 890 890 1 000 740 740 570 500 240 200 40 50 40 110 0 0 0 0 0 0 Alcoa* Alcan** Rusal Hydro BHP SUAL Chalco Newco Billiton FRP *Excludin
Slide 11: We have delivered on our commitments
We have delivered on our commitments CROGI target achieved one year ahead of plan Improvement programs delivered CROGI 1998 – 2003: Actual prices Percent 12 All projects as planned Workforce reduction Cost reduct ions 2 000 3 000 CROGI (norm alised*) Magnesium Al umi nium Active portfolio developmen
Slide 12: Strong improvement within safety
Strong improvement within safety Total recordable injuries per million worked hours 50 Hydro Aluminium excluding VAW VAW only Hydro aluminium 45 40 40 35 33.8 30 25.7 25.7 * 25 23.2 19.8 20 16.9 14.6 15 12 10.2 9.1 10 5.7 5 0 1997 1998 1999 2000 2001 2002 2003 2004 H1 * Constructed based on each com
Slide 13: The Hydro Way – Building a Strong Company Culture
The Hydro Way – Building a Strong Company Culture Hydro Way Dialogue Forums Ins t i tu ti o nal t s al ue An ale n ts V a b ge s ou ilit y u ra r ce C o ect Ad bus to dev sp on ine ss e elop R e er ati ri An ve t o op ion s Co inat com ins tin op t imi m et er ht Ap m e ct t o rci ze D ig a r es ass
Slide 14: Creating value through innovative solutions
Creating value through innovative solutions Agile Customer Unique organisation responsiveness portfolio Business concepts Applications Technology 51145_2 • H ydro M edia • 08.2004 • 14
Slide 15: Continued strong focus on bottom line growth
Continued strong focus on bottom line growth EBITDA NOK million Depreciation and + Full effect of implemented and new 7000 improvement programs amortization 6000 EBIT + Volume increase from investments and better asset utilisation 5000 + Best practice sharing and focus on 4000 continuous improvement
Slide 16: A unique portfolio composition 2003 and development to 2007E
A unique portfolio composition 2003 and development to 2007E 1 000 tonnes Equity Medium/long term contracts Alumina * 820 650 1700E Equity Electrolysis metal 1470 1700E 3rd party Equity alliances Remelt Metal products 1470 260 1600 Extrusion & 4300 – 4700E Rolled Automotive Downstream 893 634 1600 –
Slide 17: Key elements in our strategy
Key elements in our strategy 1. Improve global cost position upstream 2. Strengthen leadership in Europe, midstream and downstream 3. Performance focus and selective growth outside 4. Performance focus and selective growth Europe midstream and downstream in global automotive 51145_2 • H ydro M edia
Slide 18: Continued strong focus on bottom-line growth
Continued strong focus on bottom-line growth z Continue to strengthen European leadership and build global presence in selected segments and geographical areas z Capitalize on a unique portfolio profile and value chain integration in an environment of structural change z Improve relative cost positi
Slide 19: Forward-looking statements / use of non-GAAP financial measures
19 Forward-looking statements/ use of non-GAAP financial measures In order to utilize the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, Hydro is providing the following cautionary statement: This presentation contains certain forward-looking statemen
Slide 20: Appendix
Aluminium Hydro Aluminium Appendix
Slide 21: Aluimprover – New improvement program
Aluimprover – New improvement program Aluimprover Norway z Annual cost reduction: NOK 350~400 million z Cost of program: NOK 800 million z Demanning: 800 employees z Completed in first quarter 2005 Aluimprover Germany under evaluation Strong focus on best practice transfer in all smelters 51145_2 Da
Slide 22: Active portfolio development 2002 - 2005
Active portfolio development 2002 - 2005 Alumina Rolled Products z Alunorte expansions I, II z Grevenbroich: new litho line z Comalco agreement z Upgrading of Hamburg and Slim z Alpart transaction Extrusions z New press in Brazil Primary smelters z Sunndal 4 Automotive z Alouette z Precision Tubing