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(1)
Svein Richard Brandtzæg, Executive Vice President and Head of Aluminium ProductsSeptember 25, 2008
Aluminium Products
(2)
● Major restructuring completed
● Improvements despite weaker markets
● Growth based on competitive advantage
● Leading through technology
Key messages
(3)
Underlying RoaCE last 12 months 5.3%
Underlying RoaCE
-8
-4
0
4
8
12
16 July 2007-June 2008
Extrusion Rolled Products
Capital employed June 30, 2008: NOK 17.0 billion
Automotive
(4)
Aluminium Products seasonality
905765
529
991
361
0 200 400 600 800
1 000
H1 2006 H2 2006 H1 2007 H2 2007 H1 2008
837798
872
833871
700
750
800
850
900
H1 2006 H2 2006 H1 2007 H2 2007 H1 2008
Underlying EBIT (NOK million)*
*Including EBIT and volumes from divested activities
Volume (1 000 mt)*
(5)
Extrusion
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Solid market position in Europe
0 %
4 %
8 %
12 %
16 %
20 %
24 %
Hydro APA* Alcoa Sapa
Best estimates shown for competitor market share.
* Alcan/ Pechiney/ Alusuisse
** Market share Hydro ~15% included extruded products from Automotive. Hydro ~13% for EE/HBS
0 %
4 %
8 %
12 %
16 %
20 %
24 %
Sapa Hydro** Alcan Aleris
Market share
1997 2007
(7)
2007 TRI*
Industry leadership in safety
16.0
5.9
4.53.3
0
2
4
6
8
10
12
14
16
18
Sapa (old) Alcan Alcoa Extrusion Eurasia
* Total recordable injuries per million hours worked
Comparison with Extrusion Alcan, Alcoa and SAPA in 2007
(8)
Safety focus helps operational performance
EfficiencyTonnes/man-year
* Total recordable injury - recorded per million hours worked
SafetyTRI*
Correlation between HSE and manufacturing performance
(9)
Excellent productivity development
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Jan-Jun
Tonnes/man-year Cost/kg
Extrusion Eurasia
(10)
Efficiency improvement
1 500
1 700
1 900
2 100
2 300
2 500
2 700
2 900
Q1 0
6
Q2 0
6
Q3 0
6
Q4 0
6
Q1 0
7
Q2 0
7
Q3 0
7
Q4 0
7
Q1 0
8
Q2 0
8
FTEs*
Extrusion Americas
* FTE= full-time employees
(11)
Business development
Expral, Spain
● Spanish market share increased from 6% to 9%*
● Strong growth potential in industrial segment
● Successful integration ongoing
* internal estimates
(12)
Growth opportunities
Extrusion Eurasia
Extrusion Americas
(13)
CHELSEA Customer INTERCOM, NY CHELSEA Customer INTERCOM, NY
Building Systems
Foch 94, BeirutLarnaka Airport, Cyprus Q-Tower, Manila
DIQUE IV – Puerto Madero
(14)
Three strong brands
(15)
Business development
Alumafel, Spain● Spanish market share from 7%
to 12%*● Lift to leading position in Spain
Alumetal, Italy● Efficient logistics and commercial
network ● Strengthen Italian market position● Closer to the customer
* internal estimates
(16)
Encouraging new opportunities
(17)
Development in energy efficiency
InventSkin® multiple layer façade concept
● Several energy-efficiency functions●Reduces primary energy and CO2
emissions ●Our next step is …
(18)
Great outlook
(19)
Rolled Products
(20)
● Flexible packaging and technical applications
Packaging & Building
Foil
Litho
Automotive, Heat Exchanger
& General Engineering
Four strong business units
● Transport, heat exchangers and special industry
●Offset plates for the printing industry
●Cans, packaging and architecture
(21)
0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Alcoa* Hydro Rolled Products Elval Novelis
Competitive performance
*Source: Annual Reports and Hydro analysis; Internal calculation for the rolled segments
2007 RoaCE*
(22)
Upgrading product portfolio
Continuous annealing lineStart-up: November 2008
(23)
Automotive
(24)
●Global leadership in Precision Tubing
● Structures in a leading position within crash management systems
Precision Tubing
Global player and advanced technology
Structures
(25)
Leading throughtechnology
(26)
Meeting the climate challenge
0
1
2
3
4
5
6
7
1990 1995 2000 2005 2010**
Kg CO2e / Kg aluminium*
* Average specific emissions from Hydro’s Norwegian smelters
Significant reduction in emissions since 1999 Increased recycling competence
** Qatalum
(27)
Focus – Nevada Solar 1● 64 MW solar field●Now being duplicated at La Risca, Spain
(28)
AutomotiveRolled
Products Extrusion
R&D – focus and integration
Energy
R&DRolling
R&DExtrusion
R&DPrecision Tubing
R&DSolar
(29)
Summing up
(30)
Key messages• Executing further growth potentials in Extrusion Eurasia and Building Systems• Achieving margin leadership in European Rolled Product industry • Taking advantage of fast-growing market for energy-efficient buildings
www.hydro.com