Norsk Hydro (NHY) Investor Day 2025 summary

Strategic direction, market outlook, and priorities

• Focus on strategic discipline, profitable growth in Recycling and Extrusions, and long-term value creation toward 2030, with adaptable pace and scale to reflect market realities and green transition.

• Geopolitical tensions, trade barriers, and climate change are shaping investment climate and customer priorities, especially for aluminum and low-carbon materials.

• Demand for greener aluminum is robust, with sales value and greener product earnings up over 50% year-on-year, supported by long-term offtake agreements.

• Supply of low-carbon aluminum remains limited, with regulatory and policy support for regional supply chains and decarbonization increasing.

• Market fundamentals for aluminum remain strong, driven by electrification, infrastructure, and defense spending, despite near-term headwinds.

Financial performance, guidance, and capital allocation

• Adjusted EBITDA for the past 12 months reached NOK 31 billion, with a five-year average RoaCE of 13.5%.

• Capital allocation for 2025 and 2026 reduced to NOK 13.5 billion per year, prioritizing investments with returns above cost of capital.

• Improvement program is ahead of plan, delivering NOK 1.2 billion in 2025 and targeting NOK 6.5 billion in annual improvements by 2030.

• Dividend policy remains stable, with a five-year average payout ratio of 67% and an average yield of 5.9%.

• Net operating capital guidance set at NOK 30 billion for 2026, with ongoing focus on inventory management and supply chain flexibility.

Operational adjustments and business area updates

• Major restructuring in European extrusions: closure of five plants, reduction of 730 FTEs, and 11% cut in extrusion capacity to restore profitability.

• Recycling and Extrusions divisions are ramping up investments and operational improvements, with margin recovery and growth driven by improvement initiatives and expanded product offerings.

• Automation, press replacement, and productivity projects in Extrusions to drive efficiency, safety, and FTE savings.

• Alumetal integration and new investments in recycling and sorting technology are progressing, with PCS capacity at the lower end of the 2030 target.

• Energy business focused on renewable generation, with the Illvatn pumped storage project as a major investment.