Norsk Hydro Investor Day 2025 Summary Company Overview - **Company**: Norsk Hydro (OTCPK:NHYD.Y) - **Event**: Investor Day 2025 - **Date**: November 27, 2025 - **Location**: London Key Industry Insights - **Strategic Focus**: The theme for the day was "Strategic Discipline: Securing Long-Term Value Creation" with a focus on Hydro's strategic direction towards 2030 [2][3] - **Market Conditions**: The company is navigating unpredictable market conditions influenced by geopolitical conflicts, climate change, and trade tensions, particularly in the aluminum sector [6][7][8] Financial Performance - **Return on Capital**: Hydro expects to exceed its target for return on capital employed for the year [9] - **Cost Savings**: The strategic workforce reduction is projected to yield annual savings of approximately NOK 1 billion starting in 2026 [9] - **CapEx Adjustment**: CapEx guidance was adjusted down by NOK 1.5 billion due to a slower market [10] Strategic Developments - **Recycling Capacity**: Hydro has achieved an installed post-consumer scrap capacity of 860,000 tons, meeting the lower end of its 2030 target ahead of schedule [10] - **Decarbonization Efforts**: The company anticipates a 15% reduction in CO2 emissions for the year, surpassing its 10% target [12] - **Long-term Agreements**: Hydro entered a long-term offtake agreement with NKT for 274,000 tons of Hydro REDUXA through 2033 [12] Market Dynamics - **Alumina Demand**: Steady growth in alumina demand is expected, primarily driven by new capacity in Asia, particularly India and Indonesia [13] - **Bauxite Supply Risks**: There is a concentration risk in bauxite supply, with 95% of African bauxite coming from Guinea, which poses a geopolitical risk [14] - **Aluminum Demand Drivers**: The energy transition and increased defense spending are expected to drive aluminum demand significantly [17][18] Regulatory Environment - **CBAM Impact**: The Carbon Border Adjustment Mechanism (CBAM) is expected to increase European premiums by around 40%, which could benefit Hydro if implemented effectively [22][23] - **Supply Constraints**: Supply constraints outside Europe are becoming clearer, with China's capacity cap and potential smelter closures affecting material flows [22] Operational Challenges - **Market Volatility**: The extrusion market has faced significant downturns, with demand softer than expected, leading to necessary operational consolidations [35][60] - **Recycling Margins**: Recycling margins have been under pressure, particularly in Europe, while the U.S. market remains healthier due to lower scrap prices [36] Future Outlook - **Growth Potential**: Hydro aims to capture market share in low-carbon aluminum solutions, with a focus on strategic partnerships and long-term commercial agreements [34][55] - **Investment in Technology**: Continued investments in sorting technology and recycling capabilities are expected to enhance operational efficiency and profitability [38] Conclusion - **Integrated Value Chain**: Hydro's integrated value chain from mining to recycling positions it favorably in a market increasingly focused on sustainability and low-carbon solutions [26][27] - **Commitment to Decarbonization**: The company remains committed to its decarbonization roadmap and aims to exceed its 2030 targets, reflecting a strong alignment with market demands for greener products [45][51]

Hydro continues to execute on its 2030 strategy, delivering strong results over the last twelve months amid uncertain markets. The ability to create value from opportunities arising from the green transition is further strengthened by investments in new wire rod capacity to support Europe’s electric infrastructure development. This is complemented by the Illvatn pumped storage plant investment, which scales renewable power generation in Norway. Extrusions and Recycling are ramping up new investments and pro ...

Financial Performance - Hydro's adjusted EBITDA for Q1 2025 was NOK 9,516 million, a significant increase from NOK 5,411 million in the same quarter last year, driven by higher alumina and aluminium prices, along with positive currency effects [1][17] - The net income for Q1 2025 amounted to NOK 5,861 million, which included a NOK 1,324 million unrealized derivative gain and impairment charges of NOK 282 million [18] - Adjusted EBITDA for Bauxite & Alumina rose from NOK 804 million to NOK 5,135 million, primarily due to higher alumina prices and lower raw material costs [12] - Adjusted EBITDA for Aluminium Metal increased from NOK 1,965 million to NOK 2,546 million, supported by higher all-in metal prices and lower carbon and energy costs [14] Market Dynamics - Global primary aluminium consumption increased by 1.5 percent year-over-year in Q1 2025, with a 1.7 percent rise in demand outside China [4][14] - The automotive sector faced challenges with lower light vehicle production in Europe, impacting aluminium demand, although this was somewhat offset by increased production of electric vehicles [4][16] - The U.S. trade policy has expanded Section 232 tariffs, but Hydro's exposure to aluminium tariffs is limited due to domestic sourcing and pass-through pricing [3][4] Strategic Initiatives - Hydro is revising down its 2025 annual adjusted EBITDA outlook due to uncertain markets, with estimates ranging from NOK 3.5 billion to NOK 4.5 billion [5] - The company is implementing firm measures to optimize its portfolio and cut costs, including restructuring efforts and the closure of certain facilities [5][6] - Hydro is investing NOK 1.65 billion in a new wire rod casthouse at its Karmøy smelter, expected to begin production in 2028, alongside a long-term offtake agreement with NKT valued at approximately EUR 1 billion [10][11] Recycling and Sustainability - Hydro is committed to cutting hot metal costs by USD 20–30 per tonne by 2030 in its recycling segment, with one-third of the targeted reductions expected to be realized in 2025 [8] - A new EUR 180 million recycling plant is under construction in Torija, Spain, which will enhance the company's capacity to recycle post-consumer scrap [8] - Hydro is accelerating the commercialization of low-carbon and recycled aluminium, collaborating with customers to integrate these materials into their products [9]