Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — SEB Enskilda's Norway in New York Seminar 2008
30 slides from Norsk Hydro Asa's conference presentation, May 23, 2008
Slide 1: Hydro
Hydro Jørgen C. Arentz Rostrup, Executive Vice President and Head of Energy SEB Enskilda’s Norway in New York Seminar, May 23, 2008 (1)
Slide 2: Cautionary note in relation to certain forward-looking statements
Cautionary note in relation to certain forward-looking statements Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management’s plans, objectives and
Slide 3: Agenda
Agenda ● Company overview ● Aluminium market outlook ● Solar investments ● Summary (3)
Slide 4: Company overview
Company overview (4)
Slide 5: A resourceful aluminium company
A resourceful aluminium company Aluminium ● 22 000 employees Metal ● Operations in more than 30 countries ● Turnover Aluminium ● 2006: NOK 99 billion Products ● 2007: NOK 94 billion ● Underlying EBIT ● 2006: NOK 10.2 billion ● 2007: NOK 9.9 billion Energy ● Market capitalization ~NOK 100 billion / U
Slide 6: Strong aluminium industry position
Strong aluminium industry position Integrated Emerging Market Mining & Metal Manufacturing 4 179 4 084 Primary 3 693 Rolled Production in 1 000 tonnes Extrusions 3 151 Other 2 327 2 279 1 742 1 342 1 100 1 030 985 910 900 625 4 527 330 260 230 163 3 2 Alcoa¹ Hydro UC Rusal Chalco BHP RioTinto Vale B
Slide 7: Hydro in the aluminium value chain
Hydro in the aluminium value chain Primary aluminium production Aluminium in products, recycling Bauxite/ Primary Metal Semi alumina Energy aluminium products fabrication Remelt 63% equity in Good long-term 1.74 mill. mt/year 3.2 mill. mt/year 1.7 mill. mt/year 728 000 ton alumina coverage of power
Slide 8: Capital employed – upstream focus
Capital employed – upstream focus Energy, 9% Bauxite & Alumina, 12% Automotive, 4% Extrusion, 9% Rolled Products, 19% Primary Aluminium, 41% Commercial, 6% 1) Including NOK 5.3 billion in negative capital employed in “Corporate and Other” not shown in graph (8)
Slide 9: Underlying EBIT per segment
Underlying EBIT per segment NOK million Aluminium Metal Aluminium Products Energy Corporate and eliminations 2 885 2 938 2 883 369 266 2 455 229 2 538 2 692 398 498 492 558 383 207 2 235 2 440 288 269 2 375 2 370 294 2 032 367 2 102 2 130 1 697 399 1 831 341 1 755 370 1 331 1 255 2006 2007 2008 (9)
Slide 10: Improved return on capital
Improved return on capital RoaCE Hydro Aluminium Metal Aluminium Products Energy 22.5% 23.0% 19.1% 18.0% 14.6% 10.7% 4.70% -0.70% 2006 2007 2006 2007 2006 2007 2006 2007 Capital employed – March 31, 2008 (NOK billion) 42.8 28.0 15.9 4.1 (10)
Slide 11: 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 (C RU) Qatalum Hydro C RU incl closed capacity Hydro C RU incl Qatalum ex closed cap 2 600 Hydro average: 1 624 USD/tonne 2 200 Hydro average ex. Neuss:
Slide 12: 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 13: 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 14: Competitive power sourcing
Competitive power sourcing Critical for aluminium smelting Power coverage ● Power represents 30% of production costs 100% Neuss ● Long-term power sourcing ensures 75% predictable costs Contract Contracts ● Globalization of Hydro’s power 50% activities 25% Self Generated Self generated 0% 2007 2008 2
Slide 15: Business development
Business development Energy ● NorSun, Norway ● Increased stake from 16% to 18% ● Ascent Solar, U.S. ● Increased stake from 23% to 35% ● Convexa, Norway ● Venture capital fund investment Aluminium Metal ● Famco, Taiwan ● 45% in remelter under construction Aluminium Products ● Alumafel, Spain ● Buildi
Slide 16: Market outlook
Market outlook (16)
Slide 17: 2008 outlook
2008 outlook ● Primary aluminium demand expected to grow by 8-9% ● Driven by China and despite weak US economy ● Moderate slowdown in market growth for semi-fabricated products in Europe ● Support for aluminium price at high level ● Healthy market balance, cost pressure for input factors and weak US
Slide 18: Significant change in forward curve
Significant change in forward curve USD per tonne LME forward price, USD/tonne 3 200 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 May-08 3 000 3 200 2 800 2 600 3 000 2 400 2 800 2 200 2 000 2 600 1 800 2 400 1 600 1 400 2 200 1 200 2 000 1 000 1 800 800 600 1 600 400 LME (3-month avg.) 1 400 200 LME f
Slide 19: China net import/export
China 1 000 tonnes ● Export tax on metal and low 500 value-added products Net import 400 300 ● Majority of export to Asian markets 200 100 ● China expected to be balanced, 0 medium to long-term in primary (100) aluminium (200) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 06 06 06 06 07 07 07 07 08* (300) ● Reduced pr
Slide 20: Solar investments
Solar investments (20)
Slide 21: Buildings comprise 30 % of energy consumption in OECD-countries
Buildings comprise 30 % of energy consumption in OECD-countries (21)
Slide 22: Energy-efficient buildings may reduce consumption with as much as 50 %
Energy-efficient buildings may reduce consumption with as much as 50 % (22)
Slide 23: Buildings will become energy producers
Buildings will become energy producers Energy-efficient buildings with integrated solar systems may cover their own energy consumption (23)
Slide 24: Ascent – super thin and flexible solar cells
Ascent – super thin and flexible solar cells ● NASAQ: ASTI ● Hydro recently increased its stake to 34.8% from 23.0% ● Produces thin-film solar cells for integration into buildings ● Pilot plant completed in 2008 ● Commercial operation of large- scale plant on stream in 2010 (24)
Slide 25: Ascent + Hydro Building Systems
Ascent + Hydro Building Systems = a promising partnership ● Joint development team ● Prototype window shades with solar cells ● Energy-efficient facades that capture solar energy (25)
Slide 26: NorSun - ingot and wafer production
NorSun - ingot and wafer production ● Hydro largest industrial owner with 18% ownership ● Production of monocrystalline silicon ingots and wafers ● 2008 production in Årdal, Norway: 130 MW ● Planning production of silicon wafers in Singapore and solar- grade silicon in Saudi-Arabia (26)
Slide 27: Thin-film value chain
Si value chain Hydro positioned across the solar value chain System/ Polysilicon Ingot Wafer Cell Module Installation HyCore Norsun Thin-film value chain cell module system Hydro Ascent Building Systems (27)
Slide 28: Summary
Summary (28)
Slide 29: 2008 priorities
2008 priorities ● Operational excellence ● Qatalum execution ● Aluminium Metal growth opportunities ● Aluminium Products selective growth investments ● Solar energy portfolio development (29)
Slide 30: www.hydro.com
www.hydro.com
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