Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Investor Day (2005)
26 slides from Norsk Hydro Asa's investor day presentation, 2005
Slide 1: A viable society. A need. An idea.
A viable society. A need. An idea. 36,000 professionals. Energy. Cooperation. Aluminium. Determination. Pushing boundaries. Respect. Nature. Courage. 100 years. Thinking ahead.
Slide 2: Supply and demand for aluminium 2005 - 2015
Supply and demand for aluminium 2005 - 2015 Arvid Moss Head of Metal Products, Aluminium
Slide 3: Supply and demand for aluminium 2005 - 2015
Supply and demand for aluminium 2005 - 2015 z Downstream consumption 2002 – 2006 z Primary market balance 2005 – 2006 z Long-term outlook
Slide 4: Rolled Products consumption
Rolled Products consumption Moderate growth rates in Europe Western Europe Mill. tonnes 6.0 12% 5.0 10% 4.0 8% 3.0 6% 2.0 4% 1.0 2% 0.0 0% 2002 2003 2004 2005E 2006E Million tonnes % growth (RHS) Source: CRU. North America includes Mexico
Slide 5: Rolled Products consumption
Rolled Products consumption Moderate growth rates in Europe Western Europe North America Mill. tonnes Mill. tonnes 6.0 12% 6.0 12% 5.0 10% 5.0 10% 4.0 8% 4.0 8% 3.0 6% 3.0 6% 2.0 4% 2.0 4% 1.0 2% 1.0 2% 0.0 0% 0.0 0% 2002 2003 2004 2005E 2006E 2002 2003 2004 2005E 2006E Million tonnes % growth (RHS)
Slide 6: Rolled Products consumption
Rolled Products consumption Moderate growth rates in Europe Western Europe North America Asia Pacific Mill. tonnes Mill. tonnes Mill. tonnes 6.0 12% 6.0 12% 6.0 12% 5.0 10% 5.0 10% 5.0 10% 4.0 8% 4.0 8% 4.0 8% 3.0 6% 3.0 6% 3.0 6% 2.0 4% 2.0 4% 2.0 4% 1.0 2% 1.0 2% 1.0 2% 0.0 0% 0.0 0% 0.0 0% 2002 2
Slide 7: Extruded products consumption
Extruded products consumption Sharp correction from high growth in 2004 Europe Mill. tonnes 3.0 12% 2.5 10% 2.0 8% 1.5 6% 1.0 4% 0.5 2% 0.0 0% 2002 2003 2004 2005E 2006E -0.5 -2% -1.0 -4% Million tonnes % growth (RHS) Source: EAA / Hydro (EU25 + EFTA)
Slide 8: Extruded products consumption
Extruded products consumption Sharp correction from high growth in 2004 Europe North America Mill. tonnes Mill. tonnes 3.0 12% 3.0 12% 2.5 10% 2.5 10% 2.0 8% 2.0 8% 1.5 6% 1.5 6% 1.0 4% 1.0 4% 0.5 2% 0.5 2% 0.0 0% 0.0 0% 2002 2003 2004 2005E 2006E 2002 2003 2004 2005E 2006E -0.5 -2% -0.5 -2% -1.0 -4
Slide 9: Primary castings consumption
Primary castings consumption Growing strongly Europe Mill. tonnes 1.4 14% 1.2 12% 1.0 10% 0.8 8% 0.6 6% 0.4 4% 0.2 2% 0.0 0% 2004 2005E 2006E Million tonnes % growth (RHS) Source: Hydro
Slide 10: Primary castings consumption
Primary castings consumption Growing strongly Europe North America Mill. tonnes Mill. tonnes 1.4 14% 1.4 14% 1.2 12% 1.2 12% 1.0 10% 1.0 10% 0.8 8% 0.8 8% 0.6 6% 0.6 6% 0.4 4% 0.4 4% 0.2 2% 0.2 2% 0.0 0% 0.0 0% 2004 2005E 2006E 2004 2005E 2006E Million tonnes % growth (RHS) Source: Hydro
Slide 11: Primary castings consumption
Primary castings consumption Growing strongly Europe North America Asia Pacific Mill. tonnes Mill. tonnes Mill. tonnes 1.4 14% 1.4 14% 1.4 14% 1.2 12% 1.2 12% 1.2 12% 1.0 10% 1.0 10% 1.0 10% 0.8 8% 0.8 8% 0.8 8% 0.6 6% 0.6 6% 0.6 6% 0.4 4% 0.4 4% 0.4 4% 0.2 2% 0.2 2% 0.2 2% 0.0 0% 0.0 0% 0.0 0% 2004
Slide 12: Primary metal balance 2005
Primary metal balance 2005 Reflects customers’ inventory reduction 1 000 tonnes 300 700 200 200 200 100 0 (200) - 100 - 200 - 300 - 400 100 - 500 - 600 (600) - 700 Undersupply Net 2005 Net new Increased Change Total 2004 restarts/new capacity consumption export inventory (inventory closures (primary
Slide 13: Primary metal balance 2006
Primary metal balance 2006 Continued low inventories 1 000 tonnes 700 700 600 500 400 300 200 200 100 (450) 0 - 100 (300) (250) (100) - 200 Oversupply Net 2006 Net new Increased Change Total 2005 restarts/new capacity consumption export inventory (inventory closures (primary China/CIS decrease 06E i
Slide 14: Long-term outlook
Long-term outlook
Slide 15: Aluminium improving relative competitiveness
Aluminium improving relative competitiveness Prices, USD per tonne Jan. 2000 = 100 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 Aluminium Copper Steel Source: LME and CRU
Slide 16: Healthy demand
Healthy demand z Properties give competitive edge z Recycling friendliness becomes more important with high energy price z Expected demand growth 4.0 - 4.5% p.a. the next ten years z All main segments expected to grow 4.0 - 5.0% p.a. (except packaging)
Slide 17: China is leading the demand growth
China is leading the demand growth Metal products consumption (primary and recycled based) Million tonnes 80 70 67 CAGR 2005-15 R CAG 4 .5% Rest of the World 4.6% 4 .0 – 60 CIS and E. Europe 6.4% 55 50 Other Asia 3.3% 44 40 36 China 7.6% 30 20 Western Europe 2.3% 10 North America 2.5% 0 2000 2005E 2
Slide 18: Considerable new smelter capacity to meet demand for primary aluminium
Considerable new smelter capacity to meet demand for primary aluminium Estimated capacity changes 2005-15 Million tonnes z Implies USD ~70 billion in total 2005 demand 32 investments the next 10 years Creep 2 z Represents ~3 new smelters annually with 500 000 tpy capacity Closures 3 China growth* 8
Slide 19: Regions with competitive energy resources
Regions with competitive energy resources
Slide 20: Changing winds from China?
Changing winds from China? 1 000 tonnes 2 000 Primary / alloyed Fabricated / semi-fabricated 1 500 Scrap metal Net import 1 000 500 0 Net export - 500 -1 000 -1 500 2002 2003 2004 2005E 2006E Source: Antaike / Hydro
Slide 21: Increased export from CIS
Increased export from CIS 1 000 tonnes Current supply growth drivers: 6 000 z Abundant hydro power at low cost z Regional authorities fostering positive Production environment to attract and maintain 5 000 industrial activity z Rusal’s ambitions 4 000 3 000 Main challenges: z Alumina deficit z Dista
Slide 22: Possible primary capacity changes in Europe
Possible primary capacity changes in Europe 1 000 tonnes Capacity creep 750 New capacity Iceland Closures Norway Closures Germany Closures Rest of Europe Sum new capacity 2006 2007 2008-2010 Source: Hydro / CRU
Slide 23: Middle East a key to new primary capacity
Middle East a key to new primary capacity World excluding China and CIS Million tonnes 5.0 4.7 4.5 Various / creep 4.0 3.8 Latin America 3.5 2.9 Africa 3.0 2.5 2.1 2.0 Middle East 1.5 1.5 Asia excl. China 1.0 0.8 0.5 Europe North America 0.0 2005E 2006E 2007E 2008E 2009E 2010E Source: Hydro / CRU. T
Slide 24: Supply development complex and demanding
Supply development complex and demanding z Few, energy rich areas “stranded” for the lifetime of a smelter z State-of-the-art smelter technology ownership in few hands z New smelters will probably be built with approximate 600 000 tpy capacity, and include development of power supply z Countries wit
Slide 25: Summary
Summary Short term: z Healthy supply / demand balance and high production costs give support for high prices into 2006 Long-term: z Healthy outlook for demand over next 10 years z More time consuming and financially challenging than before to bring new greenfield capacity to market - Prices may supp
Slide 26: A viable society. A need. An idea.
A viable society. A need. An idea. 36,000 professionals. Energy. Cooperation. Aluminium. Determination. Pushing boundaries. Respect. Nature. Courage. 100 years. Thinking ahead.