Norsk Hydro aims at cost cutting, restructuring and lifting of cash flow in Investor Day Presentation

Norsk Hydro, one of the leading aluminium producers in the world talked about cost cutting, restructuring and improving cash flow during the company’s Investor Day Presentation on September 24, 2019, in Oslo. The company will strategize moves to bounce back after the operational setbacks caused by the capacity cut and the cyber-attack that paralyzed networks and dented profit.

Hilde Merete Aasheim, President and CEO of Hydro shared the medium term and long term strategies of the company for profitability and sustainability. There was an update on the Alunorte situation, Rolled Products restructuring and market outlook. She talked about the company’s ambition to reduce CO2 emissions in own production and processes by further 30% by 2030.

“We are launching new improvement efforts across the company, representing NOK 6.4 billion in EBIT improvements over the next five years, in addition to NOK 0.9 billion targeted in Rolled Products over the same time period,” says Hilde Merete Aasheim, President and CEO.

Hydro will focus on cost-competitive assets, based on operational excellence and strong market positions. The company will capitalize on innovation and sustainable products and processes. Hydro aims to ensure a more stable earnings profile, while also strengthening sustainability positions.

While the company is looking at “sustain and improve” for upstream businesses, it has devised strategic review and restructuring for the extrusion and rolled product business.

Alunorte is expecting an extension of the civil decision to the criminal case from the Federal court, which has lifted the embargo on DRS2 bauxite disposal area under the civil lawsuit on September 20. Ramp-up at Alunorte and Paragominas is progressing well, aiming to produce at 75-85% capacity for the rest of 2019. Production will be further optimized towards full capacity in 2021. Albras is expected to complete the ramp-up in 2019.  Bauxite&Alumina and Primary Metal business costs are expected to return to the pre-curtailment levels once the ramp-up is completed.

Hydro has initiated a strategic review and comprehensive restructuring of the Rolled Products business area to mitigate the declining profitability the business has faced over the last years.  The company targets a NOK 0.9 billion improvement by 2023.

Hydro is launching a new climate strategy aiming to cut emissions in sourcing and own processes by 30% by 2030. Hydro’s new certified low-carbon product brands CIRCAL and REDUXA are setting a new standard for low-carbon and recycled aluminium, thereby commercializing the company’s sustainability position.

The company set out a target to release net operating capital by NOK 4 billion by end of 2020 compared to end of 2018.