Norsk Hydro: Capital Markets Day 2017 - Adding value across the value chain
November 30 2017 - 1:03AM
During 2017, Hydro became the global market's only fully
integrated aluminium company, acquiring full ownership in extrusion
champion Sapa and further extending its value chain. At the Capital
Markets Day 2017, Hydro will present priorities for further value
creation, based on global leadership, growth and optionality, and
sustainable solutions:
- Managing cyclicality through continued financial strength and
flexibility
- Strengthening competitiveness, based on improvements,
high-grading, technology and innovation
- Capitalizing on being integrated, adding value through
combining competencies
"With Sapa becoming our new Extruded Solutions business area,
Hydro is now integrated across the value chain from mining to
advanced products and solutions and with leading positions within
most markets and regions," says President and CEO Svein Richard
Brandtzæg.
"We have 35 000 dedicated, motivated and competent people
across 150 production facilities in around 40 countries, and more
than 30 000 customers worldwide that are now benefitting from
an improved customer offering and even stronger capabilities within
technology, R&D, innovation and product development," Brandtzæg
says.
Hydro remains committed to ensuring capital discipline and a
strong balance sheet, and the inclusion of the new Extruded
Solutions business area will further strengthen the company's cash
flow.
Positive long-term outlook The long-term outlook for
aluminium as a light, strong and infinitely recyclable material
continues to be positive, with global demand growth for primary
aluminium estimated at 2-3 percent per year for the next 10 years.
Global semis demand growth is projected at 3 percent and recycling
at 3-4 percent per year over the same period.
"We see the global aluminium supply and demand for 2017 and 2018
to be fairly balanced, with the deficit in the world outside China
accelerating while China continues to be in oversupply.
Consequently, a main uncertainty in this scenario relates to what
extent China will act on its stated intention to reduce output over
the winter due to environmental concerns," Brandtzæg says.
Within this continued demand growth for aluminium, Hydro
continues to focus on advanced, high-margin segments and product
innovation downstream, while upstream the focus remains on cost
efficiency and process technology - in line with the strategic
direction Better, Bigger, Greener, now updated with even more
ambitious targets.
A new chapter for HydroIn 2017, Hydro delivered on
several key ambitions, confirming the integrated model, increasing
competitiveness and strengthening the capability for further
growth. In addition to adding Extruded Solutions as a new business
area in October, Hydro inaugurated Rolled Products' new automotive
line in Germany in May and is on track for first metal from Primary
Metal's Karmøy technology pilot in Norway by year-end.
Hydro is also launching today two new certified low-carbon
products - 4.0 and 75R - as an extension to its industry-leading
climate ambition of becoming carbon neutral from a life-cycle
perspective by 2020.
"We are delivering on our strategy for high value creation
across our long value chain, while at the same time remaining
committed to our ambitious improvements drive, where we are
increasing our overall improvement ambition for the period
2016-2019 to NOK 3 billion," Brandtzæg says.
The upwards adjustment of Hydro's overall improvement target is
a result of Bauxite & Alumina lifting its ambition level by NOK
300 million while Rolled Products is lowering its 2019 target by
NOK 200 million, caused by operational challenges and delayed
ramp-up of the new automotive line and recycling facility for used
beverage cans that are now being corrected.
Hydro is committed to disciplined capital allocation throughout
the business cycle of aluminium, and the long-term sustaining capex
guidance remains below depreciation even after being adjusted to
around NOK 5.5-6.0 billion per year, with the inclusion of Extruded
Solutions.
Shareholder returns continue to be a Hydro priority, with a
dividend policy of returning 40 percent of net income over the
cycle.
Investor contactContact Stian HasleCellular +47 97736022E-mail
Stian.Hasle@hydro.comPress contactContact Halvor MollandCellular
+47 92979797E-mail Halvor.Molland@hydro.com
Attachments:
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