Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Corporate Update (January 2015)
19 slides from Norsk Hydro Asa's corporate update, Jan 16, 2015
Slide 1: Market Update
Market Update Pål Kildemo Head of IR (1)
Slide 2: The paradox of the aluminium industry
The paradox of the aluminium industry Demand winner – yet price laggard Yearly consumption (Index 2000=100), global 3-month LME price (Index 2000=100) 150 800 130 600 110 400 90 200 70 0 2000 2002 2004 2006 2008 2010 2012 2013 2000 2002 2004 2006 2008 2010 2012 2013 Copper Tin Lead Aluminium Nickel
Slide 3: Improved market balance
Improved market balance Brighter outlook after years of overproduction, world ex-China Production less demand world ex-China Supply/demand world ex-China** Inventory days Quarterly annualized* Primary aluminium, in thousand tonnes World ex-China reported primary aluminium inventories Primary alumini
Slide 4: Supply growth next year mainly in Asian regions
Supply growth next year mainly in Asian regions World ex-China Supply Demand Demand growth Thousand tonnes base case: 3-4 % 28 000 Supply development 2015 26 000 (million tonnes) 24 000 Other ~0.4 Structural issues 22 000 Ramp-up challenges 20 000 Supply Potential influences curtailments, 18 000 Few
Slide 5: All-in price of aluminium in upward trend
All-in price of aluminium in upward trend All-in ingot price exceeds USD 2 500/tonne as premiums continue to rise to new records Regional standard ingot premiums All-in ingot aluminium price USD per tonne USD per tonne NOK per tonne 600 3 000 18 000 400 2 500 14 000 200 2 000 0 1 500 10 000 Jan-08 M
Slide 6: Product premiums also at record high levels
Product premiums also at record high levels USD per tonne 900 800 700 600 500 400 300 Product 200 premium lifted on its own 100 fundamentals 0 Jan-90 Feb-92 Mar-94 Apr-96 May-98 Jun-00 Jul-02 Aug-04 Sep-06 Oct-08 Nov-10 Dec-12 Dec-14 EI over ingot European duty-paid ingot Metal Bulletin Billet Premi
Slide 7: Market balance indicates pricing above 90th percentile on the cost curve
Market balance indicates pricing above 90th percentile on the cost curve High inventories separates current period from earlier periods where demand exceeded production LME price vs BOC development world ex-China LME price and marginal Supply/demand balance in smelter in USD world ex-China in thousa
Slide 8: China to remain balanced on imports/exports of primary aluminium
China to remain balanced on imports/exports of primary aluminium Bauxite import declined amid Indonesian export ban Annualized aluminium equivalents*, million mt YTD 25 2011 2012 2013 2014** • Bauxite and alumina − Significant drop in bauxite China import 20 imports since January − Alumina imports i
Slide 9: China developing new bauxite import sources
China developing new bauxite import sources No Indonesian bauxite exports translates to higher prices average CIF China Import volume by origin Value-in-use bauxite price increasing more Million tonnes USD per tonne 80 Delta 2014 vs 2011: 80 Indonesia -27 Avr CIF China Value-in-Use 70 Australia +6 7
Slide 10: Lighter vehicles make a big impact on the climate challenge
Lighter vehicles make a big impact on the climate challenge Aluminium – part of the solution For each 10% reduction Declining CO2 emission targets around the world in vehicle weight, car manufacturers achieve fuel-savings of 5-7% Land Rover Sport 2010 Land Rover Sport 2014 3,100 kg 2,200 kg C02 emis
Slide 11: Robust long-term growth outlook for flat rolled products worldwide
Robust long-term growth outlook for flat rolled products worldwide Transport is main driver for growth – Body-in-White consumption growth outperforming all other segments Global FRP consumption by end-use 2014 CAGR 2014-2018 Body-in-White demand in thousand tonnes 10% 14% Transport 11% 2 100 CAGR 9%
Slide 12: Hydro's aspiration for higher value creation
Hydro’s aspiration for higher value creation (12)
Slide 13: • Continue improvements drive • Capture commercial • Extend technology and
• Continue improvements drive • Further strengthen relative • Turn leading HSE/CSR position industry position into competitive advantage • Capture commercial opportunities • Enhance market positions • Deliver on fast-developing and high-grade portfolio customer demands • Extend technology and innova
Slide 14: Hydro improvement drive continues at full pace
Hydro improvement drive continues at full pace ‘Energy Aspiration’ Sapa JV Total contribution from Hydro’s improvement programs (excl. Sapa) ‘JV program’ ‘From B to A’ 2011*-2014 2015-2016** ‘Climb’ BNOK 3.7 BNOK 1.5 ‘USD 300 program’ CCIP II * USD 300 from 2009 ** Real 2014 terms Realized improveme
Slide 15: Alumina pricing on own fundamentals
Alumina pricing on own fundamentals Index spot price exposure Alumina price 100% USD per mt Percent 500 20% 19% 450 18% 400 17% 350 16% 15% 300 14% 250 13% 200 12% 2015 2017 2020 Aug-10 Sep-11 Oct-12 Nov-13 Dec-14 Internal demand LME linked sales Index exposure Alumina % of LME (15)
Slide 16: Bigger: A solid platform for building an even stronger Hydro
Bigger: A solid platform for building an even stronger Hydro Bauxite & Alumina Energy Primary Aluminium Rolled Products • Move beyond nameplate • Mature captive growth • Enhance position in • Expand automotive capacity capacity opportunities high-margin segments to 200,000 t/yr by end-2016 • Further
Slide 17: The industry's most ambitious climate strategy: Carbon-neutral by 2020
The industry’s most ambitious climate strategy: Carbon-neutral by 2020 Supported by the three pillars of Hydro’s technology strategy Energy and primary production Reduce emissions, increase efficiency Aluminium in use Maximize user- phase benefits ‘End-of-life’ Increase recycling, back to the loop (
Slide 18: Hydro 2015
Hydro 2015 Lifting performance and shareholder value in tight physical markets • Delivering on improvement programs • Targeting high-margin markets and maturing growth portfolio, while maintaining tight capital discipline • Increasing energy-efficiency and lowering climate footprint (18)
Slide 19: Infinite Aluminium Hydro
INFINITE ALUMINIUM HYDRO