Norway Aluminium innovations lead the way Christine Frogner Brath - PowerPoint PPT Presentation

Norway – Aluminium innovations lead the way Christine Frogner Brath Corporate Strategy & Analysis, Norsk Hydro ASA, November 7, 2017

Content of presentation 1. Aluminium applications, properties and growth 2. Technology development, energy efficiency and recycling as drivers for the circular economy 3. Briefly about Hydro (self reading) 2

1. Aluminium applications, properties and growth 3

Aluminium is found almost everywhere 4

Aluminium is the metal for the future Properties lead to increased market share 1/3 density of steel means lighter vehicles, lower energy consumption Lightweight and reduced emissions 5% of original energy consumption Recyclability 75% of all aluminium produced still in use Makes it possible to integrate different technologies into one solution, Formability e.g. in buildings A superconductor for heat and electricity, more cost efficient than copper, enabling energy-efficient systems for electrical transmission, such as Conductivity transfer components Natural oxide layer protects the metal against corrosion and makes it Corrosion resistant virtually maintenance free Aluminium can be made hard, soft, stiff, bendable, smooth, temperature resistant etc. depending on the actual need, by Alloying technology developing tailor-made alloys 5

The aluminium market development – at a glance Strong growth, in particular China has grown China’s recycling activity for recycling is limited 6

Within aluminium the power source is desisive for total emissions A Paradox: Gradually more of the world’s aluminium production is based on coal Global aluminium production split on power source Miliion tonn 90 80 70 60 50 40 30 20 10 0 2000 2005 2010 2015 2020 2025 Hydropower based Coal based aluminium Hydropower Nuclear Gas Coal aluminium production production Source: CRU 7

2. Technology development, energy-efficiency and recycling as drivers for a circular economy 8

Sustainability and responsibility requirements are increasing Governments and NGOs Markets and investors Customers and end users 9

Hydro’s aspiration for higher value creation Hydro aims to be climate neutral by 2020 (10)

From words to action: Circular solutions for Circular Economy Become carbon neutral by 2020, seen from a life cycle perspective Hydro’ s climate strategy Value adding, climate friendly investments: Karmøy technology pilot Primary Metal, Norway Climate- and energy- efficiency in production processes Alunorte Fuel Switch Project Bauxite & Alumina, Brazil Climate advantage in the user phase Automotive line 3 Recycling to bring more Rolled Products, Germany metal back to the loop UBC recycling line Rolled Products, Germany 11

At the Karmøy Pilot we will demonstrate the world’s most efficient aluminium production kWh/ kg Al 17,5 18 16 15 14,8 14,4 14,4-14,0 13,9 14 13,5 12,3 11,5 12 10 10 8 6 Karmøy Hydro Hydro Hydro Global Hydro HAL300 HAL4e HAL4e Hydro 1967 1993 1998 2003 2014* 2012 2013 Pilot Ultra Vision 12

Recycling is increasing in importance and sorting technologies becomes critical for closing the alloy loops Estimated recovery from post-consumed Recycling capacity of 3.3 billion cans a Recycling is becoming more important as the generation of post consumed scrap collected year at the UBC line in Germany scrap material gains momentum Million tonnes 35 Forecast 30 25 20 15 10 5 0 Building & Construction Transport Packaging Machinery & Equipment Electrical Consumer Durables Other 13

SAPA global extrusion champion – worldwide reach, local presence Clear leader in a fragmented industry where closeness to customers and markets are key success factors Strong global positions 22,400 people Present in 40 countries 1500 Unrivalled position as #1 extrusions 1000 provider globally 500 Extrusion volumes (2016), Aluminium design for e-car battery frames 0 in thousand mt Sapa Zhongwang Shandong Guangdong Xingfa Aluminium Guangdong JMA Constellium Guangdong Guangyin Asia Huajian Fenglu Aluminum Weiye Primarily serving domestic Chinese markets Source: CRU, Sapa Annual Report and Investor Briefing 2016 14

Climate challenges has no country borders Global solutions is the only way out of the global challenges in a low carbon society 15

Changed behavior demands new drivers in the world economy Rewards for doing the right things and punishment for doing the wrong … 16

Norwegian design shop: EXPO NOVA This ALUMINIUM chair is the first model - produced by Källemo (of Sweden) - together with designer Mats Theselius - …a big classic today … 17

The circular economy’s close fit with infinite aluminium «You are an important partner in making circular economy a reality. Aluminium is infinitely recyclable, and it doesn't lose any properties during the recycling process.» Karmenu Vella EU Commissioner for Environment Source: K. Vella keynote speech at EA event 2016 ‘’From a plan to reality: making the Circular Economy happen’ 18

3. Briefly about Hydro (For self-reading) 19

A resource-rich and customer-oriented aluminium company With robust positions across the value chain • Global provider of alumina, aluminium and Bauxite & aluminium products and solutions Alumina • Leading businesses along the value chain; raw materials, energy, primary metal, rolled Energy products, extruded solutions and recycling • 35,000 employees at more than 150 locations in Primary more than 40 countries on all continents Metal • Market cap ~NOK 110 billion/USD 14 billion Rolled Products • Annual revenues ~NOK 137 billion (2016)* Extruded • Included in Dow Jones Sustainability Indices, Solutions Global Compact 100, FTSE4Good *) The sum of Hydro’s and Sapa’s individual turnover In 2016 (20)

Engaged in the entire aluminium value chain Rolled products Extrusion Solutions Recycling Bauxite Alumina Energy Primary metal Casthouse Recycling Rolling Casting Products Bauxite Alumina Primary Energy Extrusion Recycling (21)

World-wide production network Primary Metal and Metal Markets 49% Norway, 1 015 000 tonnes • Sunndal (100%) : 390 000 tonnes • Årdal (100%): 190 000 tonnes 7 stand-alone remelters: 6% • Karmøy (100%): 190 000 tonnes • 2 in the US Canada, 120 000 tonnes • Høyanger (100%): 65 000 tonnes • 5 in Europe (UK, Luxemboug, France, • Husnes (100%): 180 000 tonnes • Alouette (20%): 120 000 tonnes Spain and Germany) • Expansion potential 11% Germany, 235 000 tonnes • Rheinwerk (100%): 235 000 tonnes Remelt/ Primary Recycling 1.0 2.1 4% Slovakia, 90 000 tonnes • Slovalco (55%): 90 000 tonnes million tonnes million tonnes 15% Qatar, 300 000 tonnes • Qatalum (50%): 300 000 tonnes • Expansion potential 11% Brazil , 235 000 tonnes 3% • Albras: (51%): 235 000 tonnes Australia, 70 000 tonnes • Tomago (12%): 70 000 tonnes Primary aluminium plants Recycling and remelt plants Attributable capacity: 2.1 million mt. Consolidated capacity: 2.4 million tonnes (Slovalco and Albras are consolidated). The smelters have an additional remelt capacity: 0.5 million tonnes. Consolidated casthouse capacity: 2.9 million tonnes. Qatalum is equity accounted in Hydro’s results. * Rheinwerk smelter is included in the Rolled Products division for logistical reasons 22

Global leader in offering full range of lightweighting solutions Car makers utilizing aluminium to reduce weight and increase fuel-efficiency Automotive and transport representing significant share of High-growth automotive segment with substantial further potential due to aluminium’s superior inherent properties Hydro’s total portfolio Casthouse Rolled Sapa products Products Sales volumes* Automotive and transport Other ‘* Sales volume 2016 for casthouse products and Sapa, estimate 2020 for Rolled Products 23

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