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)

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1. Aluminium applications,

properties and growth

3

Aluminium is found almost everywhere

4

Aluminium is the metal for the future

5

Lightweight

Recyclability

Formability

Conductivity

Corrosion resistant

Alloying technology

1/3 density of steel means lighter vehicles, lower energy consumption

and reduced emissions

5% of original energy consumption

75% of all aluminium produced still in use

Makes it possible to integrate different technologies into one solution,

e.g. in buildings

A superconductor for heat and electricity, more cost efficient than copper,

enabling energy-efficient systems for electrical transmission, such as

transfer components

Natural oxide layer protects the metal against corrosion and makes it

virtually maintenance free

Aluminium can be made hard, soft, stiff, bendable, smooth,

temperature resistant etc. depending on the actual need, by

developing tailor-made alloys

Properties lead to increased market share

The aluminium market development – at a glance

6

Strong growth, in particular

for recycling

China’s recycling activity

is limited

China has grown

Within aluminium the power source is desisive for total emissions

Source: CRU

0

10

20

30

40

50

60

70

80

90

2000 2005 2010 2015 2020 2025

Hydropower Nuclear Gas Coal

Global aluminium production split on power sourceMiliion tonn

7

A Paradox: Gradually more of the world’s aluminium production is based on coal

Hydropower based

aluminium production

Coal based aluminium

production

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2. Technology development, energy-efficiency and recyclingas drivers for a circular economy

Sustainability and responsibility requirements are increasing

9

Governments

and NGOs

Customers

and end users

Markets

and investors

(10)

Hydro’s aspiration for higher value creation

Hydro aims to be climate

neutral by 2020

Climate- and energy-

efficiency in production

processes

Climate advantage in the

user phase

Recycling to bring more

metal back to the loop

UBC recycling line

Rolled Products, Germany

Automotive line 3

Rolled Products, Germany

Karmøy technology pilot

Primary Metal, Norway

11

Alunorte Fuel Switch Project

Bauxite & Alumina, Brazil

Hydro’s climate strategy Value adding, climate friendly investments:

From words to action: Circular solutions for Circular EconomyBecome carbon neutral by 2020, seen from a life cycle perspective

At the Karmøy Pilot we will demonstrate the world’s most efficientaluminium production

12

17,5

1514,8

14,4 14,4-14,013,9

13,5

12,3

11,5

10

6

8

10

12

14

16

18

Karmøy1967

Hydro1993

Hydro1998

Hydro2003

Global2014*

Hydro2012

HAL3002013

HAL4ePilot

HAL4eUltra

HydroVision

kWh/

kg Al

Recycling is increasing in importance and sorting technologiesbecomes critical for closing the alloy loops

13

0

5

10

15

20

25

30

35

Building & Construction TransportPackaging Machinery & EquipmentElectrical Consumer DurablesOther

Forecast

Estimated recovery from post-consumed

scrap collected

Million tonnes

Recycling capacity of 3.3 billion cans a

year at the UBC line in GermanyRecycling is becoming more important as the generation of post consumed scrap material gains momentum

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500

1000

1500

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Asia

Alu

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SAPA global extrusion champion – worldwide reach, local presenceClear leader in a fragmented industry where closeness to customers and markets are key success factors

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Primarily serving domestic

Chinese markets

Unrivalled position

as #1 extrusions

provider globally

Extrusion volumes (2016),

in thousand mt

Strong global

positions

22,400 people

Present in

40 countries

Source: CRU, Sapa Annual Report and Investor Briefing 2016

Aluminium design for e-car battery frames

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

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

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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…

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The circular economy’s close fit with infinite aluminium

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Source: K. Vella keynote speech at EA event 2016 ‘’From a plan to reality: making the Circular Economy happen’

«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

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3. Briefly about Hydro

(For self-reading)

A resource-rich and customer-oriented aluminium company

• Global provider of alumina, aluminium and aluminium products and solutions

• Leading businesses along the value chain; raw materials, energy, primary metal, rolled products, extruded solutions and recycling

• 35,000 employees at more than 150 locations in more than 40 countries on all continents

• Market cap ~NOK 110 billion/USD 14 billion

• Annual revenues ~NOK 137 billion (2016)*

• Included in Dow Jones Sustainability Indices, Global Compact 100, FTSE4Good

Primary

Metal

Rolled

Products

Energy

Bauxite &

Alumina

Extruded

Solutions

With robust positions across the value chain

*) The sum of Hydro’s and Sapa’s individual turnover In 2016

(20)

Engaged in the entire aluminium value chain

Bauxite Alumina Energy Primary Casting Products

Rolling

Extrusion

Recycling

Recycling

(21)

Bauxite Alumina Energy Primary metal Casthouse Rolled products Extrusion Solutions Recycling

World-wide production networkPrimary Metal and Metal Markets

Qatar, 300 000 tonnes• Qatalum (50%): 300 000 tonnes

• Expansion potential

Germany, 235 000 tonnes• Rheinwerk (100%): 235 000 tonnes

Canada, 120 000 tonnes• Alouette (20%): 120 000 tonnes

• Expansion potential

Brazil , 235 000 tonnes• Albras: (51%): 235 000 tonnes Australia, 70 000 tonnes

• Tomago (12%): 70 000 tonnes

Norway, 1 015 000 tonnes• Sunndal (100%) : 390 000 tonnes

• Årdal (100%): 190 000 tonnes

• Karmøy (100%): 190 000 tonnes

• Høyanger (100%): 65 000 tonnes

• Husnes (100%): 180 000 tonnes

11%

49%

15%

3%

6%

11%

Slovakia, 90 000 tonnes• Slovalco (55%): 90 000 tonnes

4%

7 stand-alone remelters:• 2 in the US

• 5 in Europe (UK, Luxemboug, France,

Spain and Germany)

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1.0million tonnes

Remelt/Recycling

2.1million tonnes

Primary

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

‘* Sales volume 2016 for casthouse products and Sapa, estimate 2020 for Rolled Products

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Casthouse

products

Rolled

Products

Sapa

Automotive and transport representing significant share of

Hydro’s total portfolio

Sales volumes*

Automotive and transport Other

Global leader in offering full range of lightweighting solutionsCar makers utilizing aluminium to reduce weight and increase fuel-efficiency

High-growth automotive segment with substantial further

potential due to aluminium’s superior inherent properties

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