Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — SEB Nordic Seminar 2019
27 slides from Norsk Hydro Asa's conference presentation, 2019
Slide 1: Norsk Hydro SEB Nordic Seminar 2019
Norsk Hydro SEB Nordic Seminar 2019 Stian Hasle, Head of Investor Relations
Slide 2: The global and complete aluminium company
The global and complete aluminium company “…create a more viable society by innovative and efficient use of natural resources and products” More than 110 Aluminium Hydropower Engaged in the Global reach, Involved and years of industrial – metal of the – infinitely entire value chain local presence e
Slide 3: Product service offering and quality along the value chain
Product service offering and quality along the value chain Built on market understanding, customer closeness and competence North America Europe ~24% Strong ~22% #1 Strong #3 position market presence in market position market ~18% extrusion share in the Nordic share in in value presence market share
Slide 4: Roadmap to full production in Brazil
Roadmap to full production in Brazil 4
Slide 5: Alunorte site
Alunorte Communities site Pará river World’s largest alumina refinery outside China • Nameplate capacity of 6.3 mtpy, Bauxite residue Wastewater storage area with more than 2 000 employees treatment DRS2 plant • Connected to Paragominas bauxite Bauxite residue mine via 244 km slurry pipeline storage
Slide 6: Rainfall event of February 2018
Rainfall event of February 2018 Wastewater treatment plant Rainfall event on February 16-17 Flooded area & • No spills from bauxite residue disused areas DRS 1 and DRS2 pipes • Confirmed by IBAMA and SEMAS 2 • Unlicensed discharges of rain 1 water from: Unlicensed 1. Canal Velho discharge from Refin
Slide 7: Current situation in Brazil
Current situation in Brazil Embargos on Alunorte Operations • State environmental agency SEMAS: production limited to • Alunorte production at 50%, using DRS1 combined with 50% of capacity press filter • Federal court: production limited to 50% of capacity / no use • Paragominas production at 50%, i
Slide 8: Way forward for Alunorte
Way forward for Alunorte Process addresses technical, environmental and social aspects Operations and environment Today January 2019 Q2 2019 Q2/Q3 2019 Alunorte, Paragominas, Increasing water basin Increasing waste water Adding additional Albras production at 50% capacity by 350% treatment capacity
Slide 9: Process to restore normal production at Alunorte
Process to restore normal production at Alunorte • Timing for resuming 100% production remains uncertain • Operational, environmental and social investments in progress, totalling BRL ~1.1 billion • Continued dialogue with authorities on creating common platform to resume normal operations • Alunort
Slide 10: Market outlook
») Hydro Market outlook
Slide 11: Geopolitical events impacting our industry
Geopolitical events impacting our industry Aluminium demand remains solid Geopolitical events impacting China moderating primary supply Underlying demand trade flows, EU struggling with growth, global climate concerns remains solid continued Brexit uncertainty continue to rise Rusal sanctions 2-3% G
Slide 12: Global aluminium market expected in deficit in 2019
Global aluminium market expected in deficit in 2019 Inventories gradually trending towards historical levels Inventory levels trending downwards Estimated primary market balance 2019 Global reported and unreported, in thousand tonnes Inventory days (‘000t) 16000 140 1 000 120 12000 100 0 80 8000 60
Slide 13: Aluminium's reach is growing over the next decade
Aluminium’s reach is growing over the next decade in response to key long-term trends Substitution continues to be a key driver for aluminium Transport Packaging Building & construction Electrical Semis 3-4% 2-3% 2-3% 2-3% ~3 % Primary 2-3 % Urbanization Urbanization Substitution Light-weighting Sus
Slide 14: Engineering the future, lightweighting our planet
Engineering the future, lightweighting our planet 14
Slide 15: Sustainability and innovation – key competitive advantages
Sustainability and innovation – key competitive advantages Our purpose is to create a more viable society by developing natural resources into products and solutions in innovative and efficient ways Lowest CO2 emissions Tonnes CO2/tonne aluminium, 2018 18,0 16,0 Direct Indirect 14,0 12,0 10,0 8,0 6,
Slide 16: Sustainability is fully integrated into our business
Sustainability is fully integrated into our business People, Planet, Prosperity Making a positive difference Improving our footprint Driving innovation 16
Slide 17: 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 Hydro’s climate strategy: Carbon-neutral from a life-cycle perspective by 20201 2,5 2,0 1,5 1,0 0,5 0,0 2012 2013 2014 2015 2016 2017 2018 2019 2020 -0,5 -1,0 17 1) In millio
Slide 18: Responsible, low-carbon products for a greener future
Responsible, low-carbon products for a greener future
Slide 19: Driving innovation, R&D and product development
Driving innovation, R&D and product development Support customers, increase market share and lift efficiency Next-generation electrolysis Automotive lightweighting Low-carbon, circular solutions Digitalization and Industry 4.0 19
Slide 20: Financial framework, competitive positions
Financial framework, competitive positions 20
Slide 21: Strong positions across the value chain
Strong positions across the value chain Upstream Midstream Downstream Competitive cash cost position upstream Strong position in value added products1 Improving NAV1,2 in Extruded Solutions Alumina BOC curve by company1 (2018) USD/mt 100% 1,2 1,0 90% 0,8 0,6 80% 0,4 0,2 70% 0,0 Extrusion Extrusion B
Slide 22: Solid balance sheet, balanced capital allocation, competitive pay-out ratio
Solid balance sheet, balanced capital allocation, competitive pay-out ratio Adjusted net debt / Equity Uses of cash 2015-Q3 2018 Dividend per share and payout ratio 60 % 300 % <55 % 1,75 50 % 250 % 200 % 1,25 40 % 32 % 150 % 1,00 1,00 70% 30 % Average 26 % 26 % 27 % 24 % 0,75 22 % 100 % payout ratio
Slide 23: Solid balance sheet, balanced capital allocation, competitive pay-out ratio
Solid balance sheet, balanced capital allocation, competitive pay-out ratio Debt/equity compared to peers* Uses of cash 2015-Q3 2018 Dividend per share and payout ratio 300% 300 % 1,75 250% 250 % 200% 200 % 1,25 150% 150 % 1,00 1,00 70% Average 0,75 100 % payout ratio 100% 2013-2017 50 % 50% 0% Othe
Slide 24: Industry-leading improvement drive
Industry-leading improvement drive Better improvement program hit by Alunorte situation, will not meet 2019- target of BNOK 3* Hydro’s improvement BNOK 3.0 Better improvement Primary Metal drive until 2015 program progress • 50% production at Albras impacting improvement program negatively In BNOK 2
Slide 25: Summary of strategic focus areas going forward
Summary of strategic focus areas going forward On-going initiatives and strategic ambitions Bauxite & Alumina Energy Primary Metal Rolled Products Extruded Solutions • B&A operations • RSK solution • Pilot spin-offs • Further growth in • Selective growth back on track • New business • Husnes restart
Slide 26: Hydro key focus areas
Hydro key focus areas Engineering the future, lightweighting our planet • Resolving Alunorte situation • Maintaining financial strength and flexibility • Providing attractive returns over the cycle • Strengthening competitiveness through continuous improvement, innovation and sustainability
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