Norsk Hydro aims at creating a global leader on Capital Markets Day 2012

Hydro is focusing its Capital Markets Day 2012 on the improvement efforts being made throughout the company, aiming to create a global leader in aluminium. Hydro is expecting world aluminium demand outside China of 2-4% in 2013 and solid global long-term growth of4-6% annually over the next 10 years.

In its value proposition, Hydro's targets are to:

* Deliver on ambitious improvement efforts along the value chain to improve relative industry position

* Capitalize on raw material positions through internal improvements and commercialization of bauxite and alumina markets

* Maintain financial strength and flexibility to mitigate weak and volatile Markets

* Ensure competitive shareholder return with the ambition to maintain absolute dividend level for 2012

"Hydro has delivered significant improvements, portfolio restructuring and transforming transactions in the five years since becoming a streamlined aluminium company, shaping Hydro into a company rich in both resources and opportunities and with strong positions throughout the value chain," says President and CEO Svein Richard Brandtzaeg.

In response to the uncertain economic environment, Hydro is presenting significant improvement efforts in all business areas. The USD 300 per tonne improvement program in Primary Metal, launched in2009, is developing in line with the 2013 completion target. Improvement efforts are also in place in all joint venture smelters to improve operations and cost positions of Hydro's part-owned smelters, now accounting for more than half of Hydro's primary aluminium production.

In Bauxite & Alumina, the recently launched "From B to A" improvement program is aiming at annual improvements of NOK 1 billion, while the ambitious improvement program in Extruded Products is continuing with full force, even after the announcement of the planned Sapa joint venture.

"The Sapa transaction will create value from day one for Hydro, establishing a global champion and increasing the global reach of Hydro's extruded products business," says CEO Svein Richard Brandtzaeg.

Qatalum, the 50/50 joint venture between Qatar Petroleum and Hydro, is producing above its annual nameplate capacity of 585,000 tonnes. Qatalum is a state-of-the-art smelter located in a logistically advantageous region. The smelter is in a first-quartile position, with a cash cost of USD 1,450-1,500 with today's market conditions.

World aluminum demand outside China is estimated to grow 2% in 2012and 2-4% in 2013. Aluminium fundamentals remain promising due to the metal's many positive qualities, including its light weight and recyclability, and the global aluminium market is expected to show solid long-term growth of 4-6% annually over the next 10 years.

Capital expenditures (capex) in 2013 are expected to be around NOK 3billion, down from an estimated NOK 4.2 billion in 2012. Sustaining capex are being further reduced from about NOK 3.5 billion in 2012 to about NOK 3.0 billion in2013.

Hydro is also presenting three earnings potential scenarios. These scenarios are based on sensitivities for selected aluminium prices and NOK/USD exchange rates, using the last four quarters underlying EBITDA as baseline. All three scenarios indicate EBITDA is significantly above sustaining capital expenditures, illustrating Hydro's cash generation ability.