Mais conteúdo relacionado Semelhante a Norsk Hydro's value chain (20) Norsk Hydro's value chain2. The Hydro Way
Our talents Our Values
• Building businesses Hydro’s Mission • Courage
that matter is to create a more • Respect
• A passion for viable society by • Cooperation
social commerce • Determination
developing natural
• Always looking for • Foresight
resources and
commercial solutions
products in innovative
• Making the most of
what’s available and efficient ways
Page 2 © Hydro
3. Resource rich and fully integrated
Hydro underlying EBIT quarterly, NOK million
• Based in Norway with operations
9 930 6 009 (2 555) 3 351 in 40 countries
3 200
• 23,000 employees
2 800
2 400 • Operating revenues
2 000 • 2007: NOK 94 billion,
1 600
Euro 11.7 billion
• 2008: NOK 89 billion,
1 200
Euro 10.8 billion
800
• 2009: NOK 67 billion,
400
Euro 7.6 billion
0
• 2010: NOK 76 billion,
(400) Euro 9.5 billion
(800)
2007 2008 2009 2010 • Market capitalization
• End March 2011~NOK 95 billion,
Euro 12 billion
Page 3 © Hydro
4. Responsible business is our license to operate
Safety remains a top priority Commitment to sustainable operations
TRI rate
• Reducing specific energy consumption and
climate gas emissions
10.3
• Helping our customers reduce their climate
footprint
• Responsible restructuring
7.0 • Welcoming new colleagues from Vale
6.0 – drawing on their competence
5.4
• Recognized on key indexes
4.0 4.1 3.9
3.7
2.9
2002 2003 2004 2005 2006 2007 2008 2009 2010
Page 4 © Hydro
7. Today’s aluminium industry position
Production capacity for 2010 in aluminium equivalents, million metric tons per year
9 000
Alumina Aluminium
8 000
7 000
6 000
5 000
4 000
3 000
2 000
1 000
0
Alcoa Chalco Rusal Rio Tinto Hydro after Chiping Weiqiao BHP Vale Hydro East Hope China Dubal Xinfa Yichuan Aluminium Century Vedanta
acquisition Xinfa Billiton Group Power Group Power Bahrain
Source: CRU
Page 7 © Hydro
8. 1
Hydro’s
value chain
Page 8 © Hydro
9. Hydro’s value chain
Rolling
Primary Products
Bauxite Alumina Energy Casting
aluminium
Extrusion
Page 9 © Hydro
10. Bauxite & Alumina
• Bauxite capacity 12.2 million metric
tons per year
• Expansion potential to 17.2 million metric
tons per year
• Alumina capacity 6.9 million metric tons
per year
• Expansion potential to 14.5 million metric
tons per year
• Long-term sourcing contracts for
bauxite and alumina
Pro forma capacity for end 2010 after Vale transaction.
100% of volumes for assets that are fully consolidated
and pro rata volumes for other assets.
Page 10 © Hydro
11. New global Bauxite & Alumina business area
MRN Paragominas CAP alumina Alunorte alumina Alpart
bauxite mine bauxite mine refinery project refinery alumina refinery
• 5% ownership • 60% ownership, 100% • 81% ownership • 91% ownership • 35% ownership
• Signed volume by 2015 • CAP refinery (Phase I) • World’s largest alumina • Capacity 1.65 million
off-take agreement for • One of the world’s is planned to be refinery metric tons per year of
Vale’s 40% stake largest bauxite mines in operation in 2015 • 2010 production alumina
• Capacity 18 million • 2010 production 7.5 • Paragominas expansion 5.8 million metric tons • Fully integrated with
metric tons per year million metric tons per to be developed per year bauxite
year in parallel • Target to reach 6.3 • 100% curtailed since
• Target to reach 10 • Investment estimates million metric tons per mid-2009
million metric tons per and expansion concepts year
year under evaluation • Bauxite supplied from
• Possible expansion to • Full utilization of the Paragominas and MRN
15 million metric tons existing bauxite pipeline • First quartile integrated
per year cash cost position
• Reserve life of several
decades
Refining and mining External supply Sales contract
Bauxite licenses
competencies contracts portfolio
Page 11 © Hydro
12. Hydro long in bauxite and alumina
Aluminium equivalent equity capacity, million metric tons per year
• Hydro’s position
Hydro end-2010 Pro forma end-2010 Pro forma 2016 transformed from large
(Before Vale transaction) (60% Paragominas) (100% Paragominas)
share of long-term
4.2 contract sourcing to full
resource ownership
3.7
3.3 • Excess alumina sold
on standard industry
contracts until 2015
2.2 2.2
1.9 • Portfolio of bauxite
1.8
and alumina sourcing
1.4
contracts strengthens
equity position
0.5 • Hydro will annually purchase
6.8 million metric tons of
bauxite on an evergreen
contract from MRN
Bauxite Alumina Aluminium Bauxite Alumina Aluminium Bauxite Alumina Aluminium • Hydro’s current alumina
sourcing contracts will
remain in portfolio
Includes idled capacity. Assumed assets included on a pro rata basis. 2016 includes Paragominas at 15 million metric tons and CAP first phase.
Page 12 © Hydro
13. Energy
• Long-term power supply secured
• 9.4 TWh of renewable energy
production in Norway
Page 13 © Hydro
14. Substantial values in long-term
assets in Norway
• Stable and solid cash generation Power production capacity (TWh)
• Indicative annual EBITDA NOK 1.6 – 1.8 billion per region and reversion year
• Hydro’s power balance, normal year Telemark
• Normal production ~9.4 TWh
3.0 0.5
• Sourcing on long-term contracts ~7.0 TWh
• Consumption in Primary Metal* ~12.5 TWh 2044-
No reversion 2049
• Contract sales and concession power ~1.0 TWh
Normal
• Spot sales ~3.0 TWh production Sogn
• Value enhancement potential
• Growth opportunities in Norway
9.4 3.1
• Holsbru project to add 84 GWh from 2012
2051-2057
• Optimization of power value in market, and in
cooperation with smelters
Røldal-Suldal
2.8
2023
* Including Sunndal 3 line currently curtailed
Page 14 © Hydro
15. Solid long-term power coverage
for Primary Metal
GWh
35 000
• 90% of power needs secured until 2020
30 000 • High share of renewable energy
• More than two-thirds of power needs from
25 000 renewable sources
• Albras smelter in Brazil has hydropower-
20 000
based contracts through 2024
15 000 • High share of general inflation linked
and fixed-price contracts
10 000 • Limited commodity price exposure
5 000
• Securing acceptable power sourcing in
Europe requires CO2 compensation
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Self-generated Long-term
Medium-term C onsumption
Page 15 © Hydro
16. Primary Metal
Primary aluminium • 2.4 million metric tons per year primary
capacity
• High LME and USD sensitivity
• Improving cost position
• Leading in technology
Pro forma capacity for end 2010 after Vale transaction. 100% of
volumes for assets that are fully consolidated and pro rata volumes for
other assets.
Page 16 © Hydro
17. Attractive Qatalum fundamentals
• Joint venture (50/50) between
Qatar Petroleum and Hydro
• Capacity: 585,000 metric tons
• Smelter with world-class cash cost
position
• Ideally located to serve all major
markets in Asia, U.S. and Europe
• 2011 focus
• Ramp-up to be completed by June
2011
• Stabilize production and cost
optimization
Page 17 © Hydro
18. Improvement program: $300 per mt
Cost reduction target from 2009 level for ~1 million metric tons annual capacity
Operational improvements 300
• Improved current efficiency
• Reduced power consumption
• Reduced anode consumption
Fixed-cost reductions
and lean operations
200
125
Further operational improvements
Technology costs/spin-offs
$300/mt
Investments
100
Maintenance and relining
Procurement 50
Logistics
Organization and manning 0
Realized 2011 2012 2013
2010 onwards
Casthouse product margin
Page 18 © Hydro
19. Strong focus to further improve cost position
Estimated primary aluminium production Estimated business operating cost 2014 by CRU
cash costs USD/metric ton
First half 2010, USD/ton
2 800 2 800
Hydro
Peer companies
2 400 2 400
2 000 2 000
1 600 1 600
Hydro
1 200 1 200
Accumulated world capacity, 1,000 metric tons
800 800
Rio Tinto Rusal Hydro Alcoa C entury 0 10 000 20 000 30 000 40 000 50 000 60 000
Source: CRU, BOC
Page 19 © Hydro
20. Metal Markets
Casting • 3.8 million metric tons (primary,
remelt, recycling and cold metal)
• Expertise in materials
• Flexible system
• Strong marketing organization
• Risk management
Pro forma capacity for end 2010 after Vale transaction. 100% of
volumes for assets that are fully consolidated and pro rata volumes for
other assets.
Page 20 © Hydro
21. Leading metal products supplier in Europe
• Growing marketing position in U.S. and
Asia through Qatalum volumes
The preferred
partner in
casthouse • Enhance value of market system and
products and
services
Extrusion ingot optimize value on top of LME price
1,550,000 mt/year
• Capitalize on strong market position
through sourcing and trading strategies
• Firm operational LME risk management
Foundry alloys
450,000 mt/year
Casthouse production
Primary production
Remelting & recycling
Commercial agreements Sheet ingot
525,000 mt/year
Page 21 © Hydro
22. Rolled Products
• 1 million metric tons per year
Rolling • Regional business
• Close to customers
• Innovation
• Market leading in litho and foil
Page 22 © Hydro
23. No. 1 flat rolled products producer in Europe
• World leading positions in high-end
Packaging products: foil, litho and automotive
& building
Revenues:
NOK 11.3 billion
• Record results in 2010
• Technology leadership and
innovation
Automotive,
heat
exchangers • Strategy
and general
engineering • Focus production system on core
Revenues: assets
NOK 6.8 billion
• High-grading product portfolio
Litho
Revenues:
NOK 3.7 billion
Page 23 © Hydro
24. 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
Page 24 © Hydro
25. Extruded Products
Extrusion • 0.6 million metric tons/year
• Local business – Close to customers.
More than 40 locations in 19 countries
• Close to customers
• Innovation and design
• Market leading in Building Systems
Page 25 © Hydro
26. Strong position in Europe, U.S. and Brazil
Extruded Products
• Leading position in Europe in Extrusion
and Building Systems
• Strong position in the U.S. and Brazil
Extrusion Eurasia Building Systems
Revenues: NOK 8.8 billion Revenues: NOK 5.6 billion • Global leader in precision tubing
• Strategy
• Reinforce European extrusion base
• Specialist in energy-neutral building
solutions, including solar
Extrusion
Precision Tubing
North America • Selective acquisitions
Revenues NOK 2.4 billion
Revenues: NOK 2.5 billion • Entry into emerging markets
• Operating revenues ~NOK 19.4 billion
Strong Product
entrepreneur
-ship,
innovation
through • ~9,500 employees
management strong
culture and customer
Extrusion competence relations
South America
Revenues: NOK 0.8 billion
Page 26 © Hydro
27. A true entrepreneurial-driven enterprise
Extrusion Eurasia, Extrusion North America and Extrusion South America
Location • “Mastering” Europe/gaining
market share in the U.S.
• Close to customers due to
strong regional presence
• More then 40 locations
in 19 countries
• Top product innovation
and design
• Main segments
• Building and construction
• Automotive
• Transport
• Solar
• 2010 sales volume:
388,000 metric tons
Page 27 © Hydro
28. Building the future with aluminium
Building Systems
Aluminium
used for Energy saving
construction • Reduce materials
to double by • High insulation
2020
The future Energy
is energy- gaining
neutral • Active
buildings • Passive
100%
recyclable
• Design
• Limited types of,
and non-harming
materials
2010 sales volume: 73,000 metric tons
Page 28 © Hydro
29. Winning in a demanding market
Precision Tubing
• Competence - our proven resource
• Strike a new path
• Strong global presence
• 2010 sales volume: 67,000 metric
tons
Page 29 © Hydro
30. Aluminium products
Hydro innovation drives product demand
Consumer electronics
Lithographic plates
Automotive
Heat exchangers
Heat
Building & construction exchangers
Foil packaging
Beverage cans
Page 30 © Hydro
31. Recycling
• Release value of conserved energy
in the material
• Improve carbon footprint and raise
viability profile of Hydro
• Primary metal production is under
threat in Europe – restructuring and
consolidation of recycling industry
• Collected aluminium scrap volumes
will increase significantly
Page 31 © Hydro
32. 2
Strong performance
and healthy
financial position
Page 32 © Hydro
33. 2010: A stronger Hydro
• Underlying EBIT up NOK 6.1 billion Underlying EBIT
from 2009 NOK million
• Reduced costs 6,009 (2,555) 3,551
• Improved operational performance 2 100
• Higher prices and strengthened demand
1 800
• Secured long bauxite and alumina 1 500
position
1 200
• Maintained solid financial position
900
• Reduced operating capital days 600
• Qatalum ramp-up 300
• Stepped up cost improvement 0
program -300
-600
-900
2008 2009 2010
Page 33 © Hydro
34. Strong financial position
Net cash/(debt), NOK billion 11,0
Dec 31, Jun 30, Dec 31,
NOK billion 2009 2010 2010
Cash and cash equivalents 2.6 2.2 10.9
Short-term investments 1.5 1.3 1.3
Short-term debt (2.0) (1.5) (0.9)
Long-term debt (0.1) (2.1) (0.3)
Net cash/(debt) 2.0 (0.1) 11.0
Net int.-bearing debt in equity
(8.0) (9.1) (7.8)
accounted invest.
Net pension liability at fair value,
(5.6) (5.2) (5.6)
2,0 net of expected tax benefit
Other adjustments* (4.0) (3.8) (4.0)
(0,1) Adjusted net debt (15.6) (18.2) (6.4)
Dec 31, 2009 Jun 30, 2010 Dec 31, 2010 * Operating lease commitments and other
Page 34 © Hydro
35. 3
Outlook
Page 35 © Hydro
36. Aluminium is the metal of the future
• Lightweight • Formability
• One-third the density of steel • Extrusion, rolling, casting
• Low melting point vs. steel
• Recyclability
• 5% of original energy consumption • Excellent conductivity
• 75% of all aluminium produced still in use • Thermal – electrical
• Corrosion resistant • Alloying technology
• Gives a wide range of physical properties
• Oxide layer
Properties lead • Aluminium-intensive urbanization and infrastructure
to increased • Climate challenge – aluminium as part of the solution
market share • Recyclability more important with high energy prices
Page 36 © Hydro
37. Firm long-term demand for aluminium
World primary aluminium demand, 1,000 metric tons
80 000
+ 76%
70 000
Main future
growth expected Change in % per decade
60 000 in transportation
and construction
sectors
50 000 + 54%
40 000
+ 39%
30 000 + 18%
20 000
10 000
0
1980 1990 2000 2010E 2020E
Source: CRU, Oct 2010
Page 37 © Hydro
38. Innovation drives aluminium demand
The new trend: “Aluminium cars”
New Audi A6 contains a large amount of aluminium and aluminium
solutions – making it lighter, safer and more environmentally sustainable
EU: Stricter emissions limits
Aluminium: Part of the solution
Hydro has developed new multilayer sheet materials which enable car
makers to greatly reduce nitrogen oxide emissions from vehicles
Aluminium tubing for solar collectors
Hydro is taking the lead in Europe in the introduction of aluminium tubes
to the solar thermal industry, replacing traditional copper tubes
Page 38 © Hydro
39. Strategy for further value creation
Bauxite & Alumina
• Integrate
• Expand
• Commercialize
Primary Metal
• Reposition
• Keep solid cash flow in current assets
• Expand in high-class assets
Energy • Increase value of business and competence
• Focus on operation and commercialization of
current assets
• Implement global approach to power sourcing
Mid- and downstream • Continue proven high-end product strategy
• Pursue profitable life-cycle investments:
recycling, energy-efficient building systems,
aluminum in transport
• Expand selectively in emerging markets
Page 39 © Hydro
40. Priorities 2011
• Successful integration of Vale’s aluminum assets
• Upstream repositioning through $300 program and Qatalum ramp-up
• Solid operations with firm cost control and strong market focus
Page 40 © Hydro