Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Investor Presentation (February 2013)
96 slides from Norsk Hydro Asa's investor presentation, February 2013
Slide 1: Investor presentation February 2013
2012 Investor presentation February 2013 (1)
Slide 2: Table of contents
Table of contents Company overview 3 Cautionary note Certain statements included within this announcement contain forward- Market outlook 14 looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management’s plans, objective
Slide 3: Company overview
Company overview (3)
Slide 4: Hydro: a resource rich global aluminium company
Hydro: a resource rich global aluminium company • Based in Norway with operations Hydro underlying EBIT quarterly, NOK million in 40 countries 9 930 6 009 (2 555) 3 551 5 982 1 158 3 200 • 23 000 employees 2 800 • Operating revenues* 2 400 − 2011: NOK 72 billion 2 000 − 2012: NOK 64 billion 1 600 1
Slide 5: Hydro's path towards global leadership
Hydro’s path towards global leadership Curtailing 26% of Launching USD primary metal capacity 300 program Announcing SAPA JV Creating the world’s leading aluminium solutions provider 2009 2010 2011 2012 Acquiring bauxite and Starting up Qatalum alumina assets (5) (5)
Slide 6: Hydro's value proposition
Hydro’s value proposition • Improve relative industry position • Capitalize on raw material positions • Maintain financial strength and flexibility • Ensure competitive shareholder return (6)
Slide 7: Strong positions across aluminium value chain
Strong positions across aluminium value chain Raw materials processing Primary aluminium production, Aluminium in products and energy marketing and recycling Bauxite Rolled Extruded Energy Primary Metal Metal Markets & Alumina Products Products • Bauxite capacity • Long-term power supply • 2.4 milli
Slide 8: Aluminium is the metal of the future
Aluminium is the metal of the future • Lightweight • Corrosion resistant • Excellent conductivity − 1/3 density of steel − Oxide layer − Thermal – electrical • Recyclability • Formability • Alloying technology − 5% of original energy − Extrusion, rolling, casting − Gives wide range of physical consu
Slide 9: Hydro - a first tier aluminium company
Hydro - a first tier aluminium company Production in 2012 in aluminium equivalents excl. China, thousand mt 9 000 Alumina Aluminium 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 Alcoa UC Rusal Rio Tinto Norsk BHP Pacific Hindalco Glenc. Vedanta Dubal Aluminium Century Alcan Hydro Billiton Alu. B
Slide 10: Raw material is key to our aluminium future
Raw material is key to our aluminium future Aluminium equivalent consolidated capacity, million tonnes End-2010 End-2011 Post-CAP 4.3 • Long position in bauxite and alumina creates 3.4 flexibility 3.3 • Strategically attractive 2.3 2.4 2.4 assets 1.9 • New business 1.4 opportunities 0.5 • Resource c
Slide 11: Strategy for further value creation
Strategy for further value creation Bauxite & Alumina Primary Metal Energy Mid- and downstream • Improvement efforts and • Reposition • Increase value of energy • Adjust capacity and cost cost reduction • Keep solid cash flow in business base to market • Commercialize current assets • Develop curren
Slide 12: Ideally positioned for future growth
Ideally positioned for future growth Attractive growth Partnerships and project portfolio joint ventures Hydro Financial Structural strength and changes flexibility (12)
Slide 13: Safe and responsible operations is a top priority
Safe and responsible operations is a top priority TRI rate 10.3 7.0 6.0 5.4 4.0 4.1 3.9 3.7 3.8 3.4 2.9 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (13)
Slide 14: Market outlook
Market outlook (14)
Slide 15: Aluminium is part of the solution
Aluminium is part of the solution Demand for semis Share of semis consumption Million mt 2012 – 65 million mt Global trends 120 Consumer 4-6% annual growth durables 6% 100 Electrical 12% Packaging 9% 80 53 Foil stock 8% Machinery & equipment 10% 41 Other 6% 60 27 40 Transport 25% Capabilities Constr
Slide 16: Rolled Products 2012 sales in line with 2011
Rolled Products 2012 sales in line with 2011 Rolled Products sales by segment Rolled Products total sales 2012 vs 2011 Foil & Can Litho & Auto General engineering 2012 vs Q4 2012 Q4 2012 & Other 2011 vs Q3 2012 vs Q4 2011 5% 3% -1% -3% -2% -7% (16)
Slide 17: Balanced primary aluminium market
Balanced primary aluminium market World outside China (quarterly annualized) • Seasonally lower demand in Q4 1 000 mt 30 000 • Aluminium production increasing 25 000 due to restart of disrupted capacity 20 000 • 2-4 % aluminium demand growth expected in world outside China 15 000 in 2013 10 000 • Ba
Slide 18: Continued upward trend in ingot premiums
Continued upward trend in ingot premiums World reported primary aluminium inventories Regional ingot premiums 1 000 mt Days USD per mt 8 000 80 300 275 7 000 70 250 6 000 60 225 200 5 000 50 175 150 4 000 40 125 3 000 30 100 75 2 000 20 50 1 000 10 25 0 0 0 Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Ja
Slide 19: Increased bauxite imports into China
Increased bauxite imports into China Annualized aluminium equivalents*, million mt 15 2006 2007 2008 2009 2010 2011 2012 to China 10 Import 5 0 from China Export -5 Source: CRU/Antaike/Hydro * Bauxite/alumina to aluminium conversion factor: 5.4/1.925 Bauxite Alumina Scrap Primary aluminium Fabricate
Slide 20: Volatile aluminium prices at low levels
Volatile aluminium prices at low levels USD per tonne 3 400 • Increased aluminium price towards end of quarter 3 000 • Aluminium price still at low levels 2 600 − Reflecting weak macro-economic outlook 2 200 Primary aluminium LME USD/mt NOK/mt 1 800 Q4 2012 average 2 017 11 458 Q4 2012 end 2 072 11
Slide 21: 66% of available bauxite in 3 countries
66% of available bauxite in 3 countries Billion mt Guinea 41.0 China1) 3.8 0.9 Jamaica Mali Vietnam 1.1 4.0 1.2 4.7 0.5 Venezuela 0.0 India 1.8 1.6 0.3 0.4 0.4 Indonesia Cameroon 1.0 1.2 0.5 0.0 Australia Brazil 9.5 8.2 5.9 2.0 Atlantic Pacific Big-league (Top- 3) Total bauxite, billion tonnes: rese
Slide 22: Alumina market is consolidating
Alumina market is consolidating Net long alumina position, million tonnes Alcoa 4.3 Alcoa 8.8 Vale 3.0 Hydro 2.1 Glencore 2.4 BHP Billiton 1.7 BHP Billiton 1.9 Rio Tinto Alcan 1.6 Kaiser 1.0 UC Rusal -0.8 Alcan 0.8 Vedanta -1.1 Sual 0.7 Century -1.1 Rio Tinto 0.5 Alba -1.7 Pechiney 0.4 China -1.9 VA
Slide 23: Commodity prices drive industry costs
Commodity prices drive industry costs Fuel oil A1 (USD/mt) Steam coal (USD/mt) Petroleum coke FOB USG (USD/mt) 900 180 600 750 150 500 600 120 400 450 90 300 300 60 200 150 30 100 0 0 0 2002006 200 2007 2002008 200 2009 2012010 0 2012011 1 2012012 2 200 200 200 200 2010 2011 2012 200 200 200 200 201
Slide 24: Energy: Increased prices, normal reservoir levels
Energy: Increased prices, normal reservoir levels Market price Southwestern Norway (NO2) Water reservoir levels Southwestern Norway (NO2) NOK/MWh Percent 700 100 2011 2012 2013 2011 2012 2013 90 600 80 500 70 400 60 50 300 40 200 30 20 100 10 0 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 1
Slide 25: Fourth quarter results 2012
Fourth quarter results 2012 (25)
Slide 26: Q4 highlights
Q4 highlights • Underlying EBIT NOK 138 million • Lower raw material costs • Lower realized aluminium prices, higher alumina prices • Higher power prices and production in Energy • Ambitious improvement programs on track • Proposed 2012 dividend NOK 0.75 per share (26)
Slide 27: Increased bauxite imports into China
Increased bauxite imports into China Annualized aluminium equivalents*, million mt • Bauxite and alumina 2011 2012 − Increased imports of bauxite after removal of temporary 15 export restrictions from Indonesia to China Import − Significantly increased alumina 10 imports in 2012 • Primary aluminium
Slide 28: Stable raw material prices, LME still lagging
Stable raw material prices, LME still lagging Indexed (Q1 2010=100) 3-month LME Caustic price Coal price Fuel oil price* Pet coke price +127% +125% +119% +105% +87% +84% +87% +67% +67% +56% +54% +50% +35% +36% +30% +15% +17% +10% +1% -1% +3% +4% -8% -12% -8% Q1 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q1 Q2 Q3 Q4 Q1 Q1
Slide 29: 2012 production up in Paragominas, stable in Alunorte
2012 production up in Paragominas, stable in Alunorte • Paragominas stabilizing above 9 million tonnes − 9.2 million tonnes produced in 2012 − 13% increase in 2012 vs 2011 • Alunorte production stable vs 2011 − 5.8 million tonnes produced in 2012 − «From B to A» improvement program includes identifi
Slide 30: USD 300 program to reach target by end-2013
USD 300 program to reach target by end-2013 Estimated primary aluminium cash • USD 300 per mt improvement program cost and margin is targeted to be reached by end-2013 USD/mt 1) 475 425 − Achieved USD 235 per mt by end-2012 475 300 − Weak markets put pressure on casthouse margins 2 000 1 775 1 375 1
Slide 31: Underlying EBIT
Underlying EBIT 1,810 1,606 1,343 1,223 543 496 138 -19 NOK million Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Bauxite & Alumina 155 272 302 159 (144) (188) (386) (73) Primary Metal 583 765 653 484 30 240 (10) 53 Metal Markets 143 244 93 (39) 87 44 7 69 Rolled Products 232 232 1
Slide 32: High-level quarterly result development
High-level quarterly result development NOK billion 0.2 0.2 0.3 0.2 0.1 0.0 Underlying EBIT Q3 Variable cost Energy volume and Alumina and aluminium Other Underlying EBIT Q4 2012 price volume/price 2012 (32)
Slide 33: Key financials
Key financials NOK million Q4 2012 Q3 2012 Q4 2011 2012 2011 Revenue 15 585 14 722 17 157 64 181 71 500 Underlying EBIT 138 (19) 1 223 1 158 5 982 Items excluded from underlying EBIT 532 (249) (1 176) (725) 4 086 Reported EBIT 669 (267) 46 432 10 068 Financial income (expense) (82) 251 (13) (348) (1
Slide 34: Tax and financial expense
Tax and financial expense Tax Finance NOK million 2012 2011 NOK million Q4 2012 Q3 2012 Income before tax 85 8 819 Interest income 86 60 Tax free loss (gain) of shares, revaluation gain (47) (5 348) Dividends received and net gain (loss) on 51 47 securities Equity accounted investments 453 276 Finan
Slide 35: Items excluded from underlying EBIT
Items excluded from underlying EBIT NOK million Q4 2012 Q3 2012 Q4 2011 2012 2011 Underlying EBIT 138 (19) 1 223 1 158 5 982 Unrealized effects on power and raw material contracts 168 182 (37) 937 153 Unrealized derivative effects on LME related contracts 346 (266) (343) 109 (328) Metal effect, Roll
Slide 36: Bauxite & Alumina
Bauxite & Alumina Q4 Q3 Q4 Key figures 2012 2012 2011 Alumina production, kmt 1 397 1 441 1 490 Total alumina sales, kmt 1 880 1 683 1 956 Realized alumina price, USD/mt 285 270 306 Apparent alumina cash cost, USD/mt 239 261 261 Bauxite production, kmt 2 378 2 439 2 317 Underlying EBITDA, NOK millio
Slide 37: Primary Metal
Primary Metal Q4 Q3 Q4 Key figures 2012 2012 2011 Primary aluminium production, kmt 485 484 539 Total sales, kmt 505 557 593 Realized LME price, USD/mt 1 940 2 022 2 439 Realized LME price, NOK/mt 11 069 11 856 13 834 Underlying EBITDA, NOK million 522 476 1 097 Underlying EBIT, NOK million 53 (10)
Slide 38: Improved result for Qatalum
Improved result for Qatalum Q4 Q3 • High and stable production volumes Key figures – Qatalum (50%) 2012 2012 2012 Revenue, NOK million 1 034 1 075 4 292 • Underlying net income up NOK 90 million from Q3 2012 Underlying EBITDA, NOK million 250 179 998 Underlying EBIT, NOK million 4 (79) (22) • Higher
Slide 39: Metal Markets
Metal Markets Q4 Q3 Q4 Key figures 2012 2012 2011 Remelt production, kmt 119 136 131 Metal products sales, kmt 661 717 717 Underlying EBITDA, NOK million 91 32 (13) Underlying EBIT excl currency and inventory 40 104 80 valuation effects, NOK million Underlying EBIT, NOK million 69 7 (39) Underlying
Slide 40: Rolled Products
Rolled Products Q4 Q3 Q4 Key figures 2012 2012 2011 External sales volumes, kmt 226 228 215 Underlying EBITDA, NOK million 190 325 211 Underlying EBIT, NOK million 71 214 86 Underlying EBIT NOK million 673 640 Q4 operating results • Stable sales volumes 232 232 204 • Margins reduced due to product m
Slide 41: Energy
Energy Q4 Q3 Q4 Key figures 2012 2012 2011 Power production, GWh 2 448 2 157 2 706 Net spot sales, GWh 1 099 989 1 430 Southwest Norway spot price (NO2), 268 131 259 NOK/MWh Underlying EBITDA, NOK million 363 250 484 Underlying EBIT, NOK million 322 220 441 Underlying EBIT Q4 operating results NOK m
Slide 42: Discontinued operations – Extruded Products
Discontinued operations – Extruded Products • Underlying loss from discontinued operations NOK 59 million • Pro-forma underlying EBIT negative NOK 75 million1) • Reduced sales volumes somewhat offset by improvement efforts • Continued weak European extrusion markets *1) Pro-forma underlying EBIT inc
Slide 43: Net cash/(debt) development Q4 2012
Net cash/(debt) development Q4 2012 NOK billion Net cash flow from operations NOK 2.8 billion 0.6 1.0 1.0 0.1 1.2 1.7 0.0 Net debt Q3 2012 Underlying EBITDA Operating capital Other adjustments Investments Dividends and other Net cash Q4 2012 (43)
Slide 44: Decreased net pension liability
Decreased net pension liability December December • Projected benefit obligation down NOK billion 31, 2012 31, 2011 NOK 5 billion on changed assumption Projected benefit obligation (15.5) (20.5) − Extruded Products as discontinued operations − Increased discount rate in Norway, reduced Fair value of
Slide 45: Adjusted net debt down to NOK 8.3 billion
Adjusted net debt down to NOK 8.3 billion Dec 31, Dec 31, • Reduced net adjusted debt due to NOK billion 2012 2011 − Completion guarantee in Qatalum Cash and cash equivalents 7.0 8.4 Short-term investments 4.3 1.8 − Reduced net pension liability Short-term debt (6.0) (4.3) − Extruded Products classi
Slide 46: Proposed 2012 dividend NOK 0.75 per share
Proposed 2012 dividend NOK 0.75 per share • Strong commitment to return cash to shareholders • Solid operational performance • Solid financial position • Uncertain market outlook • Average five year payout ratio* is ~172% − Dividend policy is 30% payout over the cycle • Represents payout of ~NOK 1.5
Slide 47: Summing up 2012 / Priorities for 2013
Summing up 2012 • Challenging markets, in particular in Europe • Increasing global demand for aluminium products • Continue our efforts to create a global leader in aluminium Priorities for 2013 • USD 300 program in Primary Metal • Performance in Bauxite & Alumina through «From B to A» • Competitive
Slide 48: Business overview
Business overview (48)
Slide 49: Bauxite & Alumina
Bauxite & Alumina (49)
Slide 50: High-quality asset portfolio
High-quality asset portfolio MRN Paragominas Alunorte alumina CAP alumina bauxite mine bauxite mine refinery refinery project • 5% ownership • 60% ownership, 100% by 2016 • 91% ownership • 81% ownership • Volume off-take agreement for • One of the world’s largest • World’s largest alumina refinery •
Slide 51: Strengthening the competitiveness of Bauxite & Alumina
Strengthening the competitiveness of Bauxite & Alumina From B to A Alunorte Improvements in million NOK • Increase productivity and rightsize organization 1000 • Stabilize performance at nameplate capacity • Improve logistics efficiency 800 Paragominas • Increase productivity and rightsize organizat
Slide 52: Paragominas – One of the world's largest bauxite mines
Paragominas – One of the world’s largest bauxite mines • 2012 production: 9.2 million mt • Target to stabilize and continue to deliver production increases • Possible expansion: up to 15 million mt • Current reserve life: 30 years − ~300 million mt − Long-life resource (52)
Slide 53: Bauxite mining costs in Paragominas
Bauxite mining costs in Paragominas • Energy cost – power and fuel Paragominas bauxite mining costs 2011 • Labor cost − Influenced by Brazilian wage level 15% 19% − Productivity improvements • Maintenance and consumables − Influenced by Brazilian inflation 16% 21% • Large fixed cost base − Important
Slide 54: Alunorte – World's largest alumina refinery
Alunorte – World’s largest alumina refinery • 2012 production: 5.8 million mt • Targeting stable production above 6 million tonnes • World-class conversion cost position • Modern technology • Bauxite supplied from Paragominas and MRN (54)
Slide 55: Favorable integrated alumina cash cost position
Favorable integrated alumina cash cost position • Integrated alumina cash cost position 2012 Integrated alumina cash cost position 2011 − USD 259 per mt − Alunorte, Paragominas and sourced alumina 5% • Bauxite 11% − Cash cost to be improved as Paragominas increase production and pipeline is fully ut
Slide 56: External alumina sourcing
External alumina sourcing • 1.4 million mt of external alumina sourcing in 2012 • Long term off-take agreement with Rio Tinto − Increasing with 400 000 mt annually, linked to Yarwun expansion • Short- and medium term contracts − To balance and optimize position geographically − Various pricing mecha
Slide 57: Alumina pricing shifting from LME-link to market fundamentals
Alumina pricing shifting from LME-link to market fundamentals • Future pricing should reflect fundamentals of bauxite and alumina value chain • Spot market activity is important • New norm for the industry − Index pricing and short to medium-term contracts − Getting wider acceptance in the market •
Slide 58: Primary Metal
Primary Metal HYDRO
Slide 59: World-wide production network
World-wide production network Primary aluminium annual production capacity 42% Norway, 880 000 tonnes • Sunndal (100%) : 375 000 tonnes • Årdal (100%): 190 000 tonnes 6% • Karmøy (100%): 170 000 tonnes Canada, 115 000 tonnes • Høyanger (100%): 60 000 tonnes • Alouette (20%): 115 000 tonnes • Søral (
Slide 60: Primary Metal improvement program continues
Primary Metal improvement program continues USD 300 per mt to be realized within 2013 300 Operational improvements • Improved current efficiency • Reduced power consumption 65 • Reduced anode consumption Fixed cost reductions and lean operations 200 Further operational improvements Technology costs/
Slide 61: Develop technology to fulfill ambitions
Develop technology to fulfill ambitions Next- generation smelter HAL 300 HAL4e R&D portfolio • Operating for several years in • Benchmark technology • HAL4e optimization – to be Sunndal – process parameters and ready for next project environment • Ramping up in Qatar • HAL Ultra – future vision • 30
Slide 62: Metal Markets
Metal Markets (62)
Slide 63: Preferred partner in casthouse products
Preferred partner in casthouse products • Capitalizing on value-added casthouse products portfolio • Enhancing value of market Extrusion ingot 1.6 million mt system through margin management • Growing market positions in US and Asia with Qatalum volumes Foundry alloys 0.6 million mt • Utilizing prod
Slide 64: Metal Markets earnings drivers
Metal Markets earnings drivers • Remelters Underlying EBIT excluding currency effects and − Revenue impact – volume and product ingot stock valuation effect, NOK million premiums above LME 300 − Cost impact 250 − Scrap and standard ingot premiums above LME 200 − Raw material mix − Freight cost – pro
Slide 65: Rolled Products
Rolled Products (65) AY HYDRO
Slide 66: No. 1 flat rolled products producer in Europe
No. 1 flat rolled products producer in Europe External sales in tonnages • World leader in high-end products Foil foil and litho Litho 13% 20% • Strategy of high-grading product portfolio − Margin management and cash generation − Focus production system on core assets – Alunorf (JV 50%) - world’s la
Slide 67: Attractive market position and customers
Attractive market position and customers More than 50% of products with global reach Our products Our customers Our position Litho World market leader Global reach Foil Can Leading position in Europe Auto Regional reach Leading position in Europe GE/ Building (67)
Slide 68: Rolled Products earnings drivers
Rolled Products earnings drivers Underlying EBIT per tonne, NOK • Contract structure 1 400 − Margin business based on conversion price − LME element passed on to customers 1 200 − Medium-term contracts − Range from spot contracts to multi-year contracts 1 000 800 • High share of fixed costs - volume
Slide 69: Extruded Products – Discontinued operations
Extruded Products – Discontinued operations (69)
Slide 70: Hydro and Orkla combine extruded aluminium assets
Hydro and Orkla combine extruded aluminium assets Sapa joint venture - facts • 50/50 joint venture between Hydro and Orkla, to be named Sapa • Creating a stronger company better positioned for value creation − No. 1 position in North America and Europe − Positioned for restructuring and value creati
Slide 71: Hydro's Extruded Products: European leader with global presence
Hydro’s Extruded Products: European leader with global presence • Leading position in Europe External sales in tonnages (2011) • Strong position in US and Brazil Other Transport 9% 11% • Global leader in precision tubing • Strategy of solidifying leading positions Domestic & office equipments − Rein
Slide 72: Hydro innovation drives product demand
Hydro innovation drives product demand Foil packaging Automotive Beverage cans Solar parks Building & construction Consumer electronics Lithographic plates (72)
Slide 73: Extruded Products earnings drivers
Extruded Products earnings drivers Classified as discontinued operations • Contract structure Underlying EBIT per tonne*, NOK − Mainly short-term contracts 2 000 − Large number of small orders to small/medium-sized customers 1 750 − Produce to order - limited share of commodity type products 1 500 •
Slide 74: Energy
Energy (74)
Slide 75: Aiming to lift power production to 10 TWh
Aiming to lift power production to 10 TWh Power production capacity (TWh), per region and reversion year Telemark • Power producing assets and ongoing projects Normal − Maintain cost control in operations and projects production 3.0 0.5 − Holsbru project concluded, production start April 1 − Vasstøl
Slide 76: Hydro's energy map
Hydro’s energy map Energy consumption in alumina refineries, smelters and rolling mills Europe Power 15.2 TWh North America Natural gas 2.4 TWh Power 1.6 TWh Middle East Power 4.6 TWh South America Power 4.2 TWh Australia/Asia Power 2.0 TWh Coal 5.6 TWh Natural gas 0.1 TWh Fuel oil 7.4 TWh Based on
Slide 77: Reversion regime secures Hydro's values
Reversion regime secures Hydro’s values • Pursue value enhancement strategy − Develop and enhance value of power assets − Power assets remain an integrated part of aluminium production in Norway − Power and smelter portfolio will be reviewed concurrently − Participate in restructuring of power secto
Slide 78: Energy earnings drivers
Energy earnings drivers Underlying EBIT* and spot price • Production and market prices strongly NOK million NOK/MWh 2 000 500 linked to hydrological conditions 1 500 400 • Relatively stable annual EBIT contribution 300 1 000 200 − Large quarterly variations due to volatile spot 500 100 sales and spo
Slide 79: Additional information
Additional information (79)
Slide 80: Shareholder and financial policy
Shareholder and financial policy • Hydro aims to give its shareholders competitive returns compared to alternative investments in peers • Maintained dividend policy − Ordinary dividend: 30% of net income over the cycle − Average ordinary pay-out ratio 2007-2011 is ~70% – NOK 0.75 per share proposed
Slide 81: Hedging policy
Hedging policy • Upstream − Remain primarily exposed to LME prices − Partly off-setting effects through raw material prices and negative currency correlations with LME − Operational LME hedging − One month forward sales − Currency exposure, mainly USD and BRL − Policy of maintaining long-term debt i
Slide 82: Capital allocation mainly upstream
Capital allocation mainly upstream NOK billion • Sustaining capex NOK 3 billion Debt-financed investments Qatalum annually Invest ments Qatalum 10.2 Growth capex • No major growth projects planned for Sustaining capex 2013 • ~85% of capital to be allocated 6.2 upstream in 2013 4.61 4.1 • Depreciatio
Slide 83: Price and currency sensitivities
Price and currency sensitivities Commodity price sensitivity +10%* Currency sensitivities +10%* NOK Financial Income Net NOK million EBIT EBIT million items before tax income** Aluminium 2 660 USD 2 150 (850) 1 300 1 000 Oil (170) BRL (760) 720 (40) (25) Pet coke (200) EUR (140) (1 140) (1 280) (910
Slide 84: Items excluded from underlying results - 2012
Items excluded from underlying results - 2012 NOK million (+=loss/()=gain) Q1 2012 Q2 2012 Q3 2012 Q4 2012 2012 Unrealized derivative effects on LME related contracts Bauxite & alumina (8) 11 1 (11) (8) Total impact Bauxite & alumina (8) 11 1 (11) (8) Unrealized derivative effects on LME related con
Slide 85: Items excluded from underlying results - 2011
Items excluded from underlying results - 2011 NOK million (+=loss/()=gain) Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Unrealized derivative effects on currency contracts (Alunorte) Bauxite & alumina (1) - - - (1) Derivative effects on LME related contracts (Vale Aluminium) Bauxite & alumina 16 (67) (24) 3
Slide 86: Operating segment information
Operating segment information Underlying EBIT NOK million Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Year 2011 Year 2012 Bauxite & Alumina 1) 237 272 302 159 (144) (188) (386) (73) 969 (791) Primary Metal 1) 592 765 653 484 30 240 (10) 53 2 495 314 Metal Markets 143 244 93 (39)
Slide 87: Operating segment information
Operating segment information EBIT NOK million Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Year 2011 Year 2012 1) Bauxite & Alumina 213 339 326 620 (136) (199) (387) (62) 1 498 (783) 1) Primary Metal 622 826 675 (760) (96) (1 232) (53) 107 1 363 (1 275) Metal Markets 151 335 158
Slide 88: Operating segment information
Operating segment information Total revenue NOK million Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Year 2011 Year 2012 Bauxite & Alumina 2 183 4 271 4 227 3 790 3 195 3 573 3 032 3 465 14 471 13 265 Primary Metal 8 234 9 627 9 148 7 711 7 458 7 578 6 169 5 485 34 720 26 690 Meta
Slide 89: Operating segment information
Operating segment information Internal revenue NOK million Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Year 2011 Year 2012 Bauxite & Alumina 1 168 1 688 1 587 1 433 1 241 1 356 1 111 1 098 5 876 4 806 Primary Metal 7 582 8 283 7 892 6 501 6 331 6 341 5 097 4 442 30 258 22 210 Met
Slide 90: Operating segment information
Operating segment information Depreciation, amortization and impairment NOK million Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Year 2011 Year 2012 Bauxite & Alumina 178 482 470 450 475 439 428 409 1 580 1 750 Primary Metal 467 543 548 1 577 542 1 645 482 356 3 136 3 026 Metal Ma
Slide 91: Income statements
Income statements NOK million Q4 2012 Q3 2012 Q4 2011 Year2012 Year 2011 Revenue 15 585 14 722 17 157 64 181 71 500 Share of the profit (loss) in equity accounted investments (96 (219) (166) (453) (276) Other income, net 257) 194 613 853 6 147 Total revenue and income 15 746 14 698 17 604 64 580 77
Slide 92: Balance sheets
Balance sheets NOK million Dec 31 2012 Sep 30 2012 Jun 30 2012 Mar 31 2012 Dec 31 2011 Cash and cash equivalents 7 034 8 654 7 234 8 786 8 365 Short-term investments 4 343 2 465 1 743 1 568 1 780 Accounts receivable 8 761 12 681 14 320 14 524 13 217 Inventories 9 685 12 140 12 411 13 201 14 157 Othe
Slide 93: Operational data
Operational data Pro forma Bauxite & Alumina Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Year 2011 Year 2012 Alumina production (kmt) 1 336 1 448 1 553 1 490 1 464 1 491 1 441 1 397 5 827 5 792 Sourced alumina (kmt) 436 523 581 418 324 332 399 335 1 958 1 390 Total alumina sales
Slide 94: Operational data
Operational data Pro forma Primary Metal 1) Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Year 2011 Year 2012 Realized aluminium price LME, USD/mt 2 366 2 509 2 592 2 439 2 155 2 167 2 022 1 940 2 478 2 080 Realized aluminium price LME, NOK/mt 13 664 13 803 14 225 13 834 12 404 12
Slide 95: Operational data
Operational data Metal Markets Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Year 2011 Year 2012 Remelt production (1 000 mt) 150 151 133 131 152 142 136 119 565 548 Third-party metal products sales (1 000 mt) 38 47 59 73 76 82 81 85 217 323 Metal products sales excl. ingot trading
Slide 96: Investor Relations in Hydro
Investor Relations in Hydro Rikard Lindqvist Head of Investor Relations t: +47 417 51 199 e: rikard.lindqvist@hydro.com Next event First Quarter Results Pål Kildemo Investor Relations Officer April 24, 2013 t: +47 970 96 711 e: pal.kildemo@hydro.com For more information see www.hydro.com/ir Irene Al