Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — First Nordic Energy Summit 2011
19 slides from Norsk Hydro Asa's conference presentation, Apr 6, 2011
Slide 1: Hydro: resource rich and fully integrated
Hydro: resource rich and fully integrated Svein Richard Brandtzæg, President & CEO First Nordic Energy Summit – Oslo, April 6, 2011 (1)
Slide 2: Cautionary note in relation to certain forward-looking statements
Cautionary note in relation to certain forward-looking statements Certain statements contained in this announcement constitute “forward-looking information” within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as a
Slide 3: 2010: The turning point that initiates a new era
2010: The turning point that initiates a new era Emerging from the crisis as a stronger company Qatalum gives Hydro presence in the best quartile of the world’s primary aluminium production Acquisition of Vale’s aluminium operations in Brazil initiates a new era in Hydro’s history After a decade of
Slide 4: Aluminium is the metal of the future...
Aluminium is the metal of the future... …and Hydro’s future is in aluminium 80 000 + 76% 70 000 60 000 + 54% 50 000 Attractive properties drive demand + 39% 40 000 • Lightweight 30 000 + 18% • Recyclability • Corrosion resistant 20 000 • Formability 10 000 • Excellent conductivity 0 • Alloying techn
Slide 5: Aluminium is energy in solid state
Aluminium is energy in solid state Energy is not consumed, but stored in an infinitely recyclable material Norwegian hydropower export Norwegian hydropower export as through cables: 2 TWh/year aluminium: 15-20 TWh/year (5)
Slide 6: Now we master the entire value chain
Now we master the entire value chain The integration of Vale Aluminium is transforming Hydro Recycling Rolling Bauxite Alumina Energy Primary Casting Products Extrusion Recycling (6)
Slide 7: A transforming transaction
A transforming transaction Paragominas, bauxite mine Bauxite licenses Alunorte, alumina refinery • Capacity: 10 million tonnes CAP alumina • Capacity: 6.3 million tonnes • Ownership: 60%, 100% refinery project • Ownership: 91% from 2015 • First quartile cash cost position including Paragominas bauxi
Slide 8: Hydro becomes long in bauxite and alumina
Hydro becomes long in bauxite and alumina Enables primary aluminium expansion and exciting strategic options Aluminium equivalent equity capacity, mill tonnes Alumina market is consolidating Hydro end-2010 Pro forma 2016 Alcoa 8.0 (Before Vale transaction) (incl. 100% Paragominas) Chalco 2.8 4.2 BHP
Slide 9: 66% of bauxite availability concentrated in 3 countries
66% of bauxite availability concentrated in 3 countries Billion tonnes Guinea 14.9 China 2.1 Mali 0.9 1.2 0.0 4.0 India Vietnam Jamaica Venezuela 1.6 2.3 1.1 0.5 1.8 0.4 0.3 0.0 Indonesia Cameroon 1.0 0.1 1.2 0.0 Brazil Australia 8.2 9.5 5.9 2.0 Big-league (Top- 3) Total bauxite, billion tonnes: res
Slide 10: Shift towards shorter contract durations
Shift towards shorter contract durations % of LME per tonne alumina Contract durations Platts index in USD 1) for long-term contracts 420 <2000 2011 13.0- 13.25- 14.75% 400 13.8% 12.2- 12.7% 380 15% 25% 25% 360 45% 340 30% 60% 320 300 280 16-Aug 31-Aug 15-Sep 29-Sep 13-Oct 27-Oct 11-Nov 26-Nov 10-De
Slide 11: Hydro transformed to first tier aluminium company
Hydro transformed to first tier aluminium company USD billion 35 30.2 30 25 20 18.8 16.8 15 10 5 3.2 0 Hydro Alcoa Hydro Alcoa Jan 1, 2002* Mar 30, 2011 * Hydro’s share price 1.1.2002 adjusted for Yara and Oil & Gas using Oslo Stock Exchange’s principles. (11)
Slide 12: Attractive Qatalum fundamentals
Attractive Qatalum fundamentals Joint venture (50/50) between World-class smelter Qatar Petroleum and Hydro • Cash costs estimated around 1 400-1 500 USD per tonne at 2010 • Capacity: 585 000 tonnes market conditions when in full production 2011 focus Ideally located to serve all major • Ramp-up to
Slide 13: Improvement program on track
Improvement program on track Cost reduction target from 2009 level for ~1 000 000 tonnes annual capacity Operational improvements 300 • Improved current efficiency • Reduced power consumption • Reduced anode consumption Fixed cost reductions and lean operations 200 125 Further operational improvemen
Slide 14: Strong focus to further improve cost position
Strong focus to further improve cost position Estimated primary aluminium production Estimated business operating cost 2014 by CRU cash costs USD/tonne First half 2010, USD/tonne 2 800 2 800 Hydro Peer companies 2 400 2 400 2 000 2 000 1 600 1 600 Hydro 1 200 1 200 Accumulated world capacity, 1 000
Slide 15: Hydro is a global energy player
Hydro is a global energy player Energy consumption in smelters, rolling mills and alumina refineries Europe Power 14.8 TWh Natural gas 2.4 TWh North America Power 1.6 TWh Middle East Power 4.6 TWh South America Power 4.2 TWh Coal 5.6 TWh Fuel oil 7.4 TWh Australia/Asia Power 3.8 TWh Natural gas 0.1
Slide 16: Substantial values in long-term assets in Norway
Substantial values in long-term assets in Norway • Stable and solid cash generation Power production capacity (TWh) • Indicative annual EBITDA NOK 1.6 – 1.8 billion per region and reversion year • Hydro’s power balance, normal year Telemark • Normal production ~9.4 TW 3.0 0.5 • Sourcing on long-term
Slide 17: Aluminium – part of the solution
Aluminium – part of the solution We reduce energy consumption and emissions in our own processes We develop products and solutions that help our customers reduce energy consumption and emissions We recycle aluminium using only 5% of the initial energy consumption (17)
Slide 18: Innovation drives aluminium demand
Innovation drives aluminium demand The new trend: ”Aluminium cars” New Audi A6 contains a large amount of aluminium and aluminium solutions – making it lighter, safer and more environmentally sustainable EU: Stricter emissions limits Aluminium: Part of the solution Hydro has developed new multilayer
Slide 19: POWERHOUSE Energy-efficient solutions that pay-off
POWERHOUSE Energy-efficient solutions that pay-off (19)