Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Deutsche Bank dbAccess Global ESG Conference 2022
32 slides from Norsk Hydro Asa's conference presentation, Mar 2, 2022
Slide 1: Pål Kildemo, EVP and CFO
Pål Kildemo EVP and CFO 2 March 2022
Slide 2: Seizing opportunities where our capabilities match the megatrends
Seizing opportunities where our capabilities match the 2, megatrends 1) Strengthen position in low-carbon aluminium 6 Diversify and grow in new energy
Slide 3: Commercial improvements of NOK 1.5 billion delivered
Commercial improvements of NOK 1.5 billion delivered2) Improvement Program Commercial ambition 20252)3) 2018 vs. 2021 vs. 2025 target NOK billion NOK billion 0.4 0.5 +1.0 0.6 28.0 0.7 2.5 1.7 2.4 Indicative potential from greener 6.3 2.1 2.9 product offerings 3.4 4.7 NOK 8.5 billion 1.5 Improvement
Slide 4: Ambitious abatement targets driving demand in all sectors but especially Automotive OEMs
Ambitious abatement targets driving demand in all sectors but especially Automotive OEMs Share of greener1) aluminium demand per segment OEMs are pushing for ever more ambitious lifecycle decarbonization targets % greener of total aluminium demand Timeline to achieve target Decarbonization target 20
Slide 5: On track to achieve 30% carbon emissions reduction by 2030 and net zero by 2050 or earlier
On track to achieve 30% carbon emissions reduction by 2030 and net zero by 2050 or earlier GHG emissions – ownership equity Million tonnes CO2 (% of 2018 baseline emissions) Fuel switch, Electrifying coal electrical boilers, boilers, grid mix Roadmap to 2050 other initiatives improvements, 11.3 smel
Slide 6: The renewable energy leader enabling the decarbonization and energy transition
With renewables, energy efficiency and electrification we can tackle Green hydrogen to address 30% 70% of global emissions from ‘hard to abate’ sectors World-class energy competence center Batteries The renewable energy leader enabling the decarbonization and energy transition for industries 6
Slide 7: Investment highlights
Attractive asset base Strong market position Leadership in greener aluminium 1st NOK 8 billion 2.3 and 4.0 quartile cost position of EBITDA in tons CO2 per ton Extrusions by 2025 aluminium in Low greener products carbon footprint Profitable growth journey Strong balance sheet and shareholder focus S
Slide 8: dbAccess Global ESG Conference Fireside
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Slide 9: Seizing opportunities where our capabilities match the megatrends
Seizing opportunities where our capabilities match the megatrends 1 2 9
Slide 10: Improvement program, commercial ambition and recycling investments key strategic levers
Improvement program, commercial ambition and recycling investments key strategic levers • Safety and operational excellence • New products, including greener brands • Double post-consumer scrap use by 2025 • 1st quartile cost positions upstream • Market share in attractive segments • Develop recycli
Slide 11: Bauxite & Alumina and Aluminium Metal cost curves
Bauxite & Alumina Aluminium Metal Alumina Business Operating Cost curve (2021) Smelter Business Operating Cost curve1) (2021) 900 5000 800 700 4000 600 500 3000 400 2000 300 200 Hydro B&A 1000 Hydro AM 100 0 0 Status quo Global CO2 price 50 USD/t CO2e Status quo Global CO2 price 50 USD/t CO2e Global
Slide 12: Hydro: Industries that matter
Hydro Industries that matter
Slide 13: dbAccess Global ESG Conference Fireside
dbAccess Global ESG Conference Fireside 2 March 2022 13
Slide 14: Capitalize on market demand through circularity while decarbonizing primary value chain
Capitalize on market demand through circularity while decarbonizing primary value chain XX tCO2/t first commercially 2.3 available volumes XX tCO2/t pilot volumes Advanced sorting technology 1.0 Circal Decarbonization of remaining <0.5 Pilot for Hydrogen in recyclers emissions 0.0 2025 2030 2040 205
Slide 15: On track to achieve 30% carbon emissions reduction by 2030 and net zero by 2050 or earlier
On track to achieve 30% carbon emissions reduction by 2030 and net zero by 2050 or earlier GHG emissions – ownership equity Million tonnes CO2 (% of 2018 baseline emissions) Fuel switch, Electrifying coal electrical boilers, boilers, grid mix Roadmap to 2050 other initiatives improvements, 11.3 smel
Slide 16: Technologies ready for pilot phase
Technologies ready for pilot phase Carbon capture and storage HalZero chloride process decarbonizing existing smelters technology for decarbonizing greenfield developments Tonnes CO2e / tonne aluminium, scope 1 and 2 emissions, liquid metal Tonnes CO2e / tonne aluminium, scope 1 and 2 emissions, liq
Slide 17: Post Consumer Scrap: scaling up volumes in line with market demand
Post Consumer Scrap (PCS): scaling up volumes in line with market demand PCS Decarbonization Tonnes CO2e / tonne aluminium ~6.9 ~0.3-0.5 • Going deeper in the scrap pile to lift profitability - Laser-based sorting (LIBS) Scope 1 Scope 2 Scope 3 - Screw extruder 4.8 • Recycling friendly alloys • Rene
Slide 18: Strengthen position in low-carbon aluminium
Strengthen position in low-carbon aluminium 3.2 ~1.4 ~1.5 ~0.3 Average Norwegian Alunorte decarbonization Off-gas capture Direct air capture smelters (liquid metal) First of three el-boilers started at Alunorte Hydro invests in Verdox CCS company Solar park to power new press in Poland • World’s lar
Slide 19: dbAccess Global ESG Conference Fireside
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Slide 20: Increasing customer awareness and regulatory push driving circular economy
Increasing customer awareness and regulatory push driving circular economy Market: Post-consumer scrap to take larger Customers: Increased awareness and desire Regulatory: Green deal, Grønn Plattform; share of future metal demand to use recycled aluminium reduce waste & CO2 footprint, promoting circ
Slide 21: Announced projects and project pipeline
Capacity Announced projects increase Greenfield recycler Cassopolis, Michigan +120 kt Høyanger Recycling, Norway +36 kt1) Expansion project Rackwitz, Germany +25 kt Expansion project Deeside, UK +7 kt LIBS sorting pilot N/A Greenfield recycler Székesfehérvár, HUN +90 kt Expansion project Sjunnen, Sw
Slide 22: dbAccess Global ESG Conference Fireside
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Slide 23: Containing global warming only possible through massive electrification and decarbonization of industries
Containing global warming only possible through massive electrification and decarbonization of industries COP 26 COP 26concluded with concluded nation with Confirms the need Urgent need for industrial for for Will require Will requiremassive massiveamounts of Confirms the need state pledges towards
Slide 24: Industrials represent ~40% of global emissions
Industrials represent ~40% of ~50% of fuel used for energy by Eliminating industry carbon global emissions industrials can be electrified footprint requires a combination using existing technology of solutions and technologies Scope 1 and 2 Breakdown of global industrial energy consumption Renewable
Slide 25: The renewable energy leader enabling the decarbonization and energy transition
With renewables, energy efficiency and electrification we can tackle Green hydrogen to address 30% 70% of global emissions from ‘hard to abate’ sectors World-class energy competence center Batteries The renewable energy leader enabling the decarbonization and energy transition for industries 25
Slide 26: Hydro's portfolio
Storage systems 1. Early entry Brazil Energy efficiency 2. Developer / operator position Nordics Onsite generation 3. Long-term ownership strategy Market 10 TWh repowering need in Hydro by 2025 and 100+ sites identified in 4. Value enhancing services to potential large potential for serving clients
Slide 27: Diversify and grow in new energy
Diversify and grow in new energy Developing onshore wind projects in Hydro becomes largest shareholder Europe’s largest battery recycling plant to Sweden with Eolus through private placement start commercial production early Q2 • Stor-Skälsjön project in construction, • Hydro participated in private
Slide 28: Strengthen position in low-carbon aluminium
Strengthen position in low-carbon aluminium Electrifying the best-selling vehicle in the United States • Hydro supplying complex aluminium components for new all-electric Ford-150 Lightning, launching this spring • Aluminium is natural choice for EVs to reduce weight and maintain excellent crash- wo
Slide 29: dbAccess Global ESG Conference Fireside
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Slide 30: Sustainability position: EU Taxonomy aligned share of revenue and CAPEX
Sustainability position Aligned share estimated to be 22 – 27% of revenue and 30 – 35% of CAPEX Not eligible revenue Eligible revenue Description Eligible CAPEX Not eligible CAPEX ≈ 22 – 27% Majority of Secondary Norwegian European aluminum hydropower ≈ 30 – Primary production production1) 35% Extru
Slide 31: An additional ten percentage points may align with the EU Taxonomy
Sustainability position An additional ten percentage points may align with the EU Taxonomy The EU Taxonomy aims to incentivise Taxonomy sensitivity Accumulated 2022-25e • Switching to low carbon electricity NOK billion • Reducing production emissions 44 41 EU Taxonomy Not eligible Eligible 2022-25 C
Slide 32: Hydro: Industries that matter
Hydro Industries that matter
Norsk Hydro — Deutsche Bank dbAccess Global ESG Conference 2022 on 6ix