Slide 1: Rolled Products: Close to the Customer
Rolled Products: Close to the Customer Kjetil Ebbesberg Executive Vice President and Head of Rolled Products (1)
Slide 2: Agenda
• 1 Business overview • 2 Rolling in the value chain • 3 Market • 4 Financials and strategy (2)
Slide 3: Business overview
• 1 Business overview • 2 Rolling in the value chain • 3 Market • 4 Financials and strategy (3)
Slide 4: Mastering safety, means to master processes
Mastering safety, means to master processes We continuously improve HSE • Focus on high risk incidents, awareness and Hydro TRI Rate employee involvement 30 • Special attention to contractor management and involvement 25 • Key tools: near-miss reporting, training, WOC*, 20 LOTO** and auditing 15 10
Slide 5: Health, Safety, Security and Environment
Health, Safety, Security and Environment Hydro Aluminium Rolled Products Holmestrand «ALways Today Before Better» (5)
Slide 6: A century of innovation and development
A century of innovation and development Courage, Respect, Cooperation, Determination – and Foresight We start rolling Grevenbroich Alnor, Karmøy Litho centre Recycling Recycling Recycling Strengthening of Decision to increase Establishment of foil mill opens Commissioning of Hydro’s first co- instal
Slide 7: Rolled Products – No 1 producer in Europe
Rolled Products – No 1 producer in Europe • European production base with global reach • 1 million tonnes of flat rolled products per year Holmestrand • World class assets Karmøy − Casthouse network & integrated recycling capacity − World’s largest rolling mill with dedicated conversion mill Hamburg
Slide 8: Rolled Products organization
Rolled Products EVP Rolled Products Kjetil Ebbesberg Strategy & Finance External Affairs Berit Askheim Kjetil Ebbesberg Performance HR & Organization Management Joachim Deppe Tatjana Draese Communications & Research & Development Public Affairs Pascal Wagner Peter Heimerzheim BU BU Litho, BU Grevenb
Slide 9: Rolled Products market positions
Rolled Products market positions* Leading market positions – supported by leading R&D competence 12% 19% 18% Lithography Foil Beverage can World market leader World market leader Leading position in aseptic foil in Europe 28% 8% 11% 4% Foil Can Building and other Auto Automotive General Engineering
Slide 10: Our mills and their share in output
Our mills and their share in output Shipments from our plants Holmestrand,Norway Karmoy, Norway Cisterna Karmoy Hamburg, Germany Norf/Grevenbroich, Germany Holmestrand Cisterna, Italy Hamburg Grevenbroich (10)
Slide 11: Unique Aluminium triangle utilizing synergies
Unique «Aluminium triangle» utilizing logistical, cost and process synergies (11)
Slide 12: Other continental Europe: Hamburg and Slim
Other continental Europe: Hamburg and Slim Slim Hamburg • Founded in 1964 • Founded in 1972 • 390 employees • 650 employees • Own casthouse • Own casthouse • New cold mill and • Production 2014: major revamp in 2006 150,000 tonnes • Production 2014: 70,000 tonnes (12)
Slide 13: Norway: Holmestrand and Karmøy
Norway: Holmestrand and Karmøy Karmøy Holmestrand • Founded in 1968 • Founded in 1917 • 220 employees • 400 employees • Continuous • Own casthouse strip-casting • Production 2014: • Production 2014: 80,000 tonnes 80,000 tonnes (13)
Slide 14: R&D Bonn
R&D Bonn • Industry leading R&D facility; major innovation driver for Rolled Products • Founded 1964 • Highly skilled personnel • Well equipped laboratories, servicing Hydro units and other customers • Production and marketing of advanced products by business center • Simulation process know-how (14
Slide 15: Rolling in the value chain
• 1 Business overview • 2 Rolling in the value chain • 3 Market • 4 Financials and strategy (15)
Slide 16: Rolled Products: The final step of the value chain
Rolled Products: The final step of the value chain Recycling Rolling Bauxite Alumina Energy Primary Casting Products Extrusion Recycling (16)
Slide 17: Hot rolling, Continuous casting
Hot rolling Continuous casting (17)
Slide 18: Cold rolling
Cold rolling Cold Rolling in Intermediate Cold Rolling in Slitting Final several steps er cial (opt.) ! anavalng O peas QO | 7 Weseese eo2[eo es HYDRO
Slide 19: Coil coating, Lithography
Coil coating Lithography (19)
Slide 20: Market
• 1 Business overview • 2 Rolling in the value chain • 3 Market • 4 Financials and strategy (20)
Slide 21: Some signs of positive developments in Europe last 6 months
Some signs of positive developments in Europe last 6 months Eurozone manufacturing PMI climbs from 50.1 to 52 Manufacturing PMI, major Eurozone economies PMI 60 55 50 45 40 jan. 14 apr. 14 jul. 14 okt. 14 jan. 15 apr. 15 Germany France Eurozone Italy Spain Source: Ecowin PMI – Purchasing manager ind
Slide 22: 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, in 23 million tonnes market Global FRP consumption by end-use 2014 CAGR 2014-2019 Global Body-in-White demand in kT Transport 12% 14% CAGR Total consumption 5% 20% 2100 4% Electrical 5% 10% 1500 C
Slide 23: Transport is also main contributor in Europe
Transport is also main contributor in Europe European FRP consumption by end-use 2014 CAGR 2014-2019 European body-in-White demand in kT Transport 9% 10% CAGR Total consumption 3% 700 11% Electrical 3% 43% 21% 500 Packaging 2% Consumer durables & other 2% 300 3% 13% Machinery 1% 11% Construction 1%
Slide 24: Structural growth in Chinese exports
Structural growth in Chinese exports Majority of growth bound for Asia and Americas Chinese strip and foil exports in tons Chinese competitive advantage downstream* Comp. adv 2,600 Other Asia (USD/t) Middle East 1000 2,400 Africa 2,200 800 Americas Improved comp. adv. China 2,000 Rest of world 1,800
Slide 25: Financials and strategy
• 1 Business overview • 2 Rolling in the value chain • 3 Market • 4 Financials and strategy (25)
Slide 26: Rolled Products is a margin business
Rolled Products is a margin business Resulting in more stable earnings than rest of Hydro as a whole Underlying EBIT Rolled Products and Hydro • Margin business based on conversion price 4-quarters rolling* − LME and premium element (to a large extent) passed on to customers NOK bn NOK bn 2500 1000
Slide 27: Rolled Products aims to lift margins through clear aspiration
Rolled Products aims to lift margins through clear aspiration (27)
Slide 28: Better
Better HYDRO
Slide 29: Extend innovation lead: close to customer
Extend Close totechnology customer: and innovation creating lead value through innovation Forming optimized AA5182 variant in automotive applications • High formability and high corrosion resistance due to optimized specification ‒ Strategic supplier to major European OEM’s ‒ Based on leading R&D co
Slide 30: Climb: Continuous Improvements in Rolled Products
Climb: Continuous Improvements in Rolled Products • Fixed cost reductions and lean operations Revamp HM AluNorf AluNorf Holmestrand HM1 Steps 1+2 HM1 Step3 • Further operational improvements Product Focus Automotive Building & HEX line 3 • Investments and maintenance Climb program Revamp Sexto GV Ex
Slide 31: Bigger
HYDRO
Slide 32: Pursuing attractive growth opportunities
Pursuing attractive growth opportunities Hydro BiW development tonnes Brands 250 000 35 30 200 000 25 150 000 20 100 000 15 10 50 000 5 Major step in automotive Body-in-White (BiW) market 0 0 2008 2014 2017 2020 • Installation of automotive line 3 lifting capacity to 200 thousand tonnes per year Hyd
Slide 33: Hot mill expansion and strengthening of recycling position
Hot mill expansion and strengthening of recycling position Expanding AluNorf hot mill capacity • Capacity increase by ~60 000 tonnes • Debottlenecking core asset • Start of production 2016 Establishing strong recycling position • Installation of UBC* recycling line • Fulfilling customer needs and st
Slide 34: Greener
Greener (34)
Slide 35: Fulfilling customer and environmental needs
Extend technology Fulfilling innovation leadneeds customer and environmental Products • 5µm high-performance aluminium foil saves up to 16% in material • Light-weighting in automotive by replacing steel saves up to 20kg of CO2 per kg of aluminium used Process • Continuous improvement and step change
Slide 36: Rolled products brings Hydro closer to climate neutrality in 2020
Rolled products brings Hydro closer to climate neutrality in 2020 Protection Weight Durability Quality Recycling matters matters matters matters matters (36)
Slide 37: Infinite Aluminium
INFINITE ALUMINIUM HYDRO