Norsk Hydro (NHY) CMD 2024 summary

Strategic direction and execution towards 2030

• Accelerating the green aluminum transition with clear decarbonization targets: 10% emissions reduction by 2025, 30% by 2030, and net zero by 2050, supported by technology pilots and R&D in CO2-free production.

• Strategy is refocused on core activities: recycling, extrusions, and renewable energy, with battery and green hydrogen projects being phased out and capital reallocated to core segments.

• Integrated value chain from mine to component is emphasized as a competitive advantage, enabling traceability, supply security, and customer value.

• Strategic partnerships with major OEMs (e.g., Mercedes, Porsche, Siemens, VELUX) are advancing, supporting closed-loop recycling and greener product offerings.

• Strengthening operational improvements, automation, and digitalization to drive productivity and cost efficiency across the value chain.

Financial guidance and improvement programs

• New improvement program launched, targeting NOK 6.5 billion in savings by 2030, focusing on operational, procurement, and commercial excellence, with greater transparency and direct P&L impact.

• 85% of growth and return-seeking CapEx (2024–2027) will be allocated to strategic growth areas, with expected IRR between 10% and 35%.

• 2025 CapEx guidance is NOK 15 billion, with sustaining CapEx stabilizing and growth CapEx concentrated on recycling and extrusions.

• Shareholder returns remain a priority, with a strong dividend track record, ongoing buyback program, and payout policy to distribute at least 50% of EPS, maintaining a net debt target of NOK 25 billion.

• 2024 adjusted EBITDA at NOK 22.4 billion (LTM Q3), with 2025 adjusted EBITDA estimated at NOK 25–26 billion if market conditions remain as in the last 12 months; upside to NOK 34 billion if market prices improve.

Business area developments and market outlook

• Recycling: On track to reach 700 kt post-consumer scrap capacity by end 2024, with a 2030 target of 850–1,200 kt and EBITDA potential of NOK 5–8 billion, driven by increased capacity, cost efficiency, and advanced scrap sorting.

• Extrusions: 2025 EBITDA guidance is NOK 4.5–5.5 billion (down from NOK 8 billion), with recovery expected as market demand normalizes; long-term target remains NOK 10–12 billion, with NOK 1.7–2.0 billion in improvements by 2030.

• Bauxite & Alumina: Cost position improved to first decile, with fuel switch at Alunorte delivering $150–200 million annual savings and targeting 70% emission reduction by 2030.

• Energy: 1.7 GW of renewables in operation by 2024, 8.4 GW in development, and NOK 200–550 million in EBITDA improvements targeted by 2030.

• Commercial excellence: Green product premiums (CIRCAL, REDUXA) are growing, with a NOK 2 billion uplift ambition by 2030; customer demand for low-carbon products is increasing.