Norsk Hydro entered its 2025 Investor Day with a clear message: the company is prepared to navigate tougher markets while staying on course with its long-term plan for a greener aluminium value chain. Over the past year, Hydro has continued executing its 2030 strategy despite unpredictable demand patterns, relying on a mix of cost cuts, capacity reshaping and renewable investments to secure future growth.
The centrepiece of this year’s update is a major tightening of the Extrusions footprint in Europe. Hydro plans to close five plants across the region as part of a consolidation effort designed to improve capacity utilisation and trim operating costs. The move carries an estimated restructuring charge of NOK 1.9 billion ( USD 190 million) but is expected to deliver NOK 0.5 billion ( USD 48.5 million) in annual savings from 2027.
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In the words of Eivind Kallevik, the President and CEO of the company, “Hydro has an excellent position to succeed in a more unpredictable environment. Despite the macro environment becoming less predictable, aluminium’s role in the green transition gives support to our strategic direction. With an integrated value chain and a broad geographical footprint, we can navigate short-term challenges while pushing forward with pioneering the green aluminium transition and powering it with renewable energy.”
Workforce cuts, cost programmes and revised targets
A strategic workforce reduction announced in June 2025 has already progressed more quickly than planned. The programme, which removes around 750 white collar roles and reduces consultancy and travel overheads, is on track to generate about NOK 1 billion (USD 97 million) in annual net run-rate savings starting in 2026.
The broader improvement agenda, launched in 2024, is also performing ahead of expectations. The NOK 6.5 billion ( USD 636 million) programme aims to reinforce operational, commercial and procurement efficiencies through the decade. Hydro now anticipates NOK 1.2 billion (USD 118 million) of improvements in 2025, double the original annual target, while reaffirming the goal for 2030.
Capital allocation is also being tightened. Spending targets for both 2025 and 2026 have been reduced to NOK 13.5 billion ( USD 1.32 billion) from NOK 15 billion ( USD 1.47 billion), and Hydro no longer maintains the additional NOK 1–2 billion ( USD 100–200 million) annual flexibility previously included in its short- and medium-term guidance. Its medium-term CAPEX guidance of NOK 15 billion (USD 1.47 billion) per year, in 2024 currency terms, remains unchanged.
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Due to softer downstream markets and slower demand recovery, Hydro has lowered some of its long-term business ambitions. The 2030 EBITDA target for the Extrusions segment has been adjusted from NOK 10–12 billion (USD 1.0–1.2 billion) to NOK 8–10 billion (USD 0.8–1.0 billion), and the Recycling segment’s earnings range narrowed to NOK 5–6 billion ( USD 490–588 million), down from NOK 5–8 billion ( USD 490–784 million).
Recycling and extrusions: building towards growth despite uncertainties
Hydro still expects meaningful expansion in recycling capacity. By the end of 2025, the company will reach 850,000 tonnes of post-consumer scrap capability, the lower bound of its 2030 target range of 850,000 to 1.1 million tonnes. Although tightened scrap supply and weaker downstream demand have slowed momentum, Hydro says its technical strength in processing complex scrap streams will continue to underpin growth.
Operational improvements remain strong. Aluminium has already achieved USD 5 per tonne in hot-metal cost reductions for 2025, and both Aluminium Metal and Extrusions are progressing towards the USD 20-30 per tonne target for 2030. Alumetal, acquired in 2022, has delivered about NOK 100 million ( USD 9.8 million) in synergies this year, with full benefits expected by the end of the decade.
Within Extrusions, the company is prioritising automation, targeted upgrades and fabrication-linked investments that support customer-specific solutions. These initiatives are expected to yield NOK 1.7-2.0 billion ( USD 170–200 million) in operational and commercial gains by 2030, even under stricter capital constraints.
Major push into renewable power
Hydro’s renewable strategy took a significant step forward this year with the approval of the Illvatn pumped-storage project in Luster, Norway, its largest hydropower investment in more than 20 years. The NOK 2.5 billion ( USD 250 million) project will add 48 MW of capacity and generate 107 GWh annually, dedicated to Norwegian aluminium production. Under Norway’s cash-flow tax scheme, Hydro’s net investment falls to roughly NOK 1.2 billion (USD 120 million).
New long-term power contracts with Hafslund and NTE, totalling about 4.16 TWh, further strengthen the company’s power portfolio. In Canada, the Alouette smelter, a joint venture, has reached an Agreement in Principle with the Québec government and Hydro-Québec to secure renewable power for 2030-2045.
Progress on decarbonisation and social commitment
Hydro affirms to be on track to exceed its 2025 emissions target, projecting a 15 per cent CO₂ reduction by year-end, ahead of the 10 per cent goal. Non-GHG emissions are still expected to be halved by 2030.
In Brazil, the Corridor project expanded this year with the addition of partners Belterra Agroflorestas, Mitsui & Co., and the Mitsui Foundation, reinforcing its environmental and social ambitions. The company also reports progress on community development and education commitments: more than 300 local projects received support in 2025, and Hydro has now reached half of its target to educate 500,000 people by 2030. Its Território do Saber initiative alone has helped 250,000 students in Paragominas.
Greener earnings and commercial momentum
Hydro’s greener-product portfolio continues to show strong commercial traction. Earnings from lower-carbon and recycled products have risen by more than 50 per cent year-to-date, despite weak markets in Europe and North America. A long-term offtake agreement with cable-maker NKT for up to 274,000 tonnes of Hydro REDUXA, valued at roughly EUR 1 billion ( USD 1.08 billion), is a major highlight. Partnerships with Mercedes-Benz and Siemens Mobility further demonstrate the rising demand for low-carbon materials.
Financial performance and outlook
Hydro reported adjusted EBITDA of NOK 31 billion ( USD 3.04 billion) for the period covering Q4 2024 to Q3 2025, up from NOK 22.4 billion ( USD 2.19 billion) in 2024. Stronger upstream performance offset softer downstream results. Over the past five years, Hydro has delivered an adjusted return on average capital employed of 13.5 per cent, above its 10 per cent target.
Net operating capital is expected to remain steady at about NOK 30 billion ( USD 2.94 billion) at year-end 2025, with the same guidance for 2026. Shareholder distributions will continue to follow Hydro’s dividend policy and capital structure goals, with formal proposals from the board due in the company’s fourth-quarter report in February 2025 and subject to shareholder approval in May.
Kallevik said the company’s tighter cost control, disciplined investment approach and improvement culture serve as essential buffers in a volatile environment. These measures, he emphasised, will allow Hydro to continue delivering on its long-term strategy while securing the foundation for future returns.
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