Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Q1 2013 Earnings Presentation
43 slides from Norsk Hydro Asa's earnings presentation, April 2013
Slide 1: Result up on higher volumes and prices
Result up on higher volumes and prices First quarter presentation 2013 (1)
Slide 2: Q1 highlights
Q1 highlights • Underlying EBIT NOK 1 077 million • Higher sales volumes driven by seasonality • Increased realized alumina and aluminium prices • Higher production and prices in Energy • Continued challenging markets (2)
Slide 3: Increased global macro uncertainty
Increased global macro uncertainty • Momentum of US recovery? • Solution for sovereign debt crisis in EU? • Chinese growth? (3)
Slide 4: Balanced primary aluminium market
Balanced primary aluminium market World outside China (quarterly annualized) • Seasonally stronger demand in Q1, 1 000 mt resulting in balanced market 30 000 25 000 • 2-4 % aluminium demand growth expected in world outside China 20 000 in 2013 15 000 • Balanced market expected in 2013, 10 000 given
Slide 5: Ingot premiums stable at high levels
Ingot premiums stable at high levels 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 4,000 40 150 125 3,000 30 100 2,000 20 75 50 1,000 10 25 0 0 0 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Jan-
Slide 6: Aluminium prices remain at low levels
Aluminium prices remain at low levels USD per tonne 3 400 • Decreasing aluminium prices towards end of Q1 3 000 • Reflecting increased global macro 2 600 uncertainty • Partly offset by weaker NOK 2 200 1 800 Primary aluminium LME USD/mt NOK/mt Q1 2013 average 2 042 11 484 1 400 Q1 2013 end 1 911 11
Slide 7: Alumina price retracting, holding up relative to LME
Alumina price retracting, holding up relative to LME Platts index* USD per mt Percent 450 20 • Average Platts alumina index Alumina price % of LME rose to USD 340 per mt in Q1 2013 from USD 327 per mt in Q4 2012 400 18 • Alumina price dropped towards end of quarter, on the back of macro uncertainty
Slide 8: Increased bauxite imports into China
Increased bauxite imports into China Annualized aluminium equivalents*, million mt 2011 2012 2013** • Bauxite and alumina − Significant increased imports 15 of bauxite after removal of to China temporary export restrictions Import from Indonesia 10 − Slight drop in alumina imports • Primary aluminiu
Slide 9: Operational focus in Bauxite & Alumina
Operational focus in Bauxite & Alumina • Stable production volume in Paragominas at 9 million tonnes yearly run rate • Weak Alunorte production − Continued production effects from power outage end 2012 − Operational issues with coal boilers • «From B to A» program target to reach NOK 1 billion impro
Slide 10: USD 300 program to reach target by end-2013
USD 300 program to reach target by end-2013 Estimated primary aluminium cash • Improvement program progressing cost and margin according to plan USD/mt 1) 475 475 425 300 2 000 425 • Downward trend in cash cost 1 775 − Improved casthouse margins 1 625 − Increased contribution from Qatalum 1 375 1 25
Slide 11: Seasonally higher shipments in Rolled Products
Seasonally higher shipments in Rolled Products Rolled Products sales by segment Rolled Products total sales Q1 13 vs Q4 2012 Foil & Can Litho & Auto General engineering Q1 2013 Q1 2013 & Other vs Q4 2012 vs Q1 2012 10% 9% 5% 4% -4% (11)
Slide 12: Energy: Increased prices, low reservoir levels
Energy: Increased prices, low reservoir levels Market price Southwestern Norway (NO2) Water reservoir levels Southwestern Norway (NO2) NOK/MWh Percent 700 100 2012 2013 90 600 80 500 70 400 60 50 300 40 200 30 20 100 10 2012 2013 0 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 1 4 7 10 13 16
Slide 13: Taking measures in challenging markets
Taking measures in challenging markets • Ambitious improvement programs − From B to A − USD 300 per mt program • Announced Sapa JV − Creating stronger extrusion company − Positioned for restructuring and value creation • Reduced remelt production − To improve margins − 200 kt reduction in 2012 • Exp
Slide 14: Underlying EBIT
Underlying EBIT 1 810 1 606 1 343 1 223 1 077 578 531 172 16 NOK million Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Bauxite & Alumina 155 272 302 159 (144) (188) (386) (73) (63) Primary Metal 583 765 653 484 36 245 (4) 58 364 Metal Markets 143 244 93 (39) 88 45 8 70 146
Slide 15: High-level quarterly result development
High-level quarterly result development NOK billion 0.3 1.1 0.4 0.2 0.2 Underlying EBIT Q4 2012 Energy volume and price Alumina and aluminium Other Underlying EBIT Q1 2013 volume/price (15)
Slide 16: Key financials
Key financials NOK million Q1 2013 Q4 2012 Q1 2012 2012 Revenue 16 111 15 585 17 044 64 181 Underlying EBIT 1 077 172 578 1 297 Items excluded from underlying EBIT 372 (532) (132) 725 Reported EBIT 705 704 710 571 Financial income (expense) (171) (152) 375 (629) Income (loss) before tax 535 552 1 08
Slide 17: Financial income (expense)
Financial income (expense) Finance NOK million Q1 2013 2012 Interest income 62 286 Dividends received and net gain (loss) on 39 133 securities Financial income 102 418 Interest expense (93) (393) Net foreign exchange gain (loss) (115) (280) Net interest on pension liability (32) (282) Other (32) (93
Slide 18: Items excluded from underlying EBIT
Items excluded from underlying EBIT NOK million Q1 2013 Q4 2012 Q1 2012 Year 2012 Underlying EBIT 1 077 172 578 1 297 Unrealized effects on power and raw material contracts (269) 168 252 937 Unrealized derivative effects on LME related contracts (30) 346 42 109 Metal effect, Rolled Products 5 41 (60
Slide 19: Bauxite & Alumina
Bauxite & Alumina Q1 Q4 Q1 Key figures 2013 2012 2012 Alumina production, kmt 1 361 1 397 1 464 Total alumina sales, kmt 1 874 1 880 1 776 Realized alumina price, USD/mt 296 285 293 Apparent alumina cash cost, USD/mt 257 239 269 Bauxite production, kmt 2 210 2 378 2 290 Underlying EBITDA, NOK millio
Slide 20: Primary Metal
Primary Metal Q1 Q4 Q1 Key figures 2013 2012 2012 Primary aluminium production, kmt 478 485 514 Total sales, kmt 541 505 627 Realized LME price, USD/mt 2 043 1 940 2 155 Realized LME price, NOK/mt 11 533 11 069 12 404 Underlying EBITDA, NOK million 838 528 582 Underlying EBIT, NOK million 364 58 36
Slide 21: Improved result for Qatalum
Improved result for Qatalum Key figures – Qatalum (50%) Q1 2013 Q4 2012 Q1 2012 • High and stable production volumes Revenue, NOK million 1 125 1 034 1 018 • Underlying net income up NOK 103 million from Q4 2012 Underlying EBITDA, NOK million 349 250 226 Underlying EBIT, NOK million 106 4 (14) • Hig
Slide 22: Metal Markets
Metal Markets Q1 Q4 Q1 Key figures 2013 2012 2012 Remelt production, kmt 135 119 152 Metal products sales, kmt 701 661 785 Underlying EBITDA, NOK million 163 92 114 Underlying EBIT excl currency and inventory 110 40 117 valuation effects, NOK million Underlying EBIT, NOK million 146 70 88 Underlying
Slide 23: Rolled Products
Rolled Products Q1 Q4 Q1 Key figures 2013 2012 2012 External sales volumes, kmt 236 226 227 Underlying EBITDA, NOK million 265 189 262 Underlying EBIT, NOK million 153 70 150 Underlying EBIT NOK million 637 153 Q1 results • Seasonally higher shipments compared to previous quarter for most products 2
Slide 24: Energy
Energy Q1 Q4 Q1 Key figures 2013 2012 2012 Power production, GWh 2 904 2 448 3 190 Net spot sales, GWh 1 518 1 099 1 879 Southwest Norway spot price (NO2), 311 268 272 NOK/MWh Underlying EBITDA, NOK million 557 363 584 Underlying EBIT, NOK million 517 322 556 Underlying EBIT Q1 results NOK million •
Slide 25: Discontinued operations – Extruded Products
Discontinued operations – Extruded Products • Underlying income from discontinued operations NOK 49 million • Pro-forma underlying EBIT negative NOK 22 million1) • Higher volumes compared to Q4 2012, although below Q1 2012 levels • Continued weak European extrusion markets 1) Pro-forma underlying EB
Slide 26: Net cash/(debt) development Q1 2013
Net cash/(debt) development Q1 2013 NOK billion Net cash flow from operations NOK 0.5 billion 2.2 0.7 1.0 0.5 1.7 0.5 0.5 0.3 0.4 Net cash Q4 Underlying Operating Other Investments Discontinued Financial lease Other Net cash Q1 2012 EBITDA capital adjustments operations 2013 (26)
Slide 27: Outlook summary
• Ambitious improvement efforts across Hydro • Global macro uncertainty • Balanced primary aluminium market (27)
Slide 28: Cautionary note
Cautionary note 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 strategies for Hydro, such as planned expansions,
Slide 29: Additional information
Additional information (29)
Slide 30: Items excluded from underlying results - 2013
Items excluded from underlying results - 2013 NOK million (+=loss/()=gain) Q1 2013 Unrealized derivative effects on LME related contracts Bauxite & Alumina 13 Total impact Bauxite & Alumina 13 Unrealized derivative effects on LME related contracts Primary Metal 72 Unrealized derivative effects on po
Slide 31: 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 32: 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 Q1 2013 Year 2011 Year 2012 Bauxite & Alumina 237 272 302 159 (144) (188) (386) (73) (63) 969 (791) Primary Metal 592 765 653 484 36 245 (4) 58 364 2 495 335 Metal Markets 143 24
Slide 33: 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 Q1 2013 Year 2011 Year 2012 Bauxite & Alumina 213 339 326 620 (136) (199) (387) (62) (76) 1 498 (783) Primary Metal 622 826 675 (760) (91) (1 227) (48) 112 19 1 363 (1 254) Metal Markets 15
Slide 34: 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 Q1 2013 Year 2011 Year 2012 Bauxite & Alumina 2 183 4 271 4 227 3 790 3 195 3 573 3 032 3 465 3 304 14 471 13 265 Primary Metal 8 234 9 627 9 148 7 711 7 458 7 578 6 169 5 485 5 94
Slide 35: 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 Q1 2013 Year 2011 Year 2012 Bauxite & Alumina 1 168 1 688 1 587 1 433 1 241 1 356 1 111 1 098 1 322 5 876 4 806 Primary Metal 7 582 8 283 7 892 6 501 6 331 6 341 5 097 4 442 5 1
Slide 36: 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 Q1 2013 Year 2011 Year 2012 Bauxite & Alumina 178 482 470 450 475 439 428 409 429 1 580 1 750 Primary Metal 467 543 548 1 577 542 1 645 482 356 470 3 13
Slide 37: Income statements
Income statements NOK million Q1 2013 Q4 2012 Q1 2012 Year 2012 Revenue 16 111 15 585 17 044 64 181 Share of the profit (loss) in equity accounted investments 19 (95) (117) (450) Other income, net 234 257 257 853 Total revenue and income 16 364 15 747 17 184 64 583 Raw material and energy expense 10
Slide 38: Balance sheets
Balance sheets NOK million Mar 31 2013 Dec 31 2012 Sep 30 2012 Jun 30 2012 Mar 31 2012 Cash and cash equivalents 6 410 7 034 8 654 7 234 8 786 Short-term investments 3 572 4 343 2 465 1 743 1 568 Accounts receivable 10 228 8 761 12 681 14 320 14 524 Inventories 10 125 9 685 12 140 12 411 13 201 Othe
Slide 39: Operational data
Operational data Pro forma Bauxite & Alumina Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Year 2011 Year 2012 Alumina production (kmt) 1 336 1 448 1 553 1 490 1 464 1 491 1 441 1 397 1 361 5 827 5 792 Sourced alumina (kmt) 436 523 581 418 324 332 399 335 476 1 958 1 390 To
Slide 40: Operational data
Operational data Year Year Metal Markets Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 2011 2012 Remelt production (1 000 mt) 150 151 133 131 152 142 136 119 135 565 548 Third-party metal products sales (1 000 mt) 38 47 59 73 76 82 81 85 84 217 323 Metal products sales excl
Slide 41: Price and currency sensitivities
Price and currency sensitivities Commodity price sensitivity +10%* Currency sensitivities +10%* NOK NOK Financial Income Net million EBIT million EBIT items before tax income** Aluminium 2 670 USD 2 130 (890) 1 240 900 Oil (180) BRL (760) 700 (60) (20) Pet coke (210) EUR (140) (1 100) (1 240) (880)
Slide 42: Investor Relations in Hydro
Investor Relations in Hydro Next events Rikard Lindqvist Head of Investor Relations Annual General Meeting t: +47 417 51 199 e: rikard.lindqvist@hydro.com May 8, 2013 & Second Quarter Results Pål Kildemo Investor Relations Officer July 18, 2013 t: +47 970 96 711 e: pal.kildemo@hydro.com For more inf
Slide 43: Infinite Aluminium Hydro
INFINITE ALUMINIUM HYDRO