Norsk Hydro: Shifting gear to capture opportunities in a new reality

2023 was a year marked by the consequences of wars, geopolitical rivalry and the battle against inflation, which led to challenging markets and weaker financial results. However, while managing the uncertainty in the short-term, Hydro is strengthened in its conviction about the long-term commercial opportunities arising from the green transition and the key role aluminium is set to play.

Hydro is determined to pioneer the green aluminium transition, powered by renewable energy. The green transition is progressing with full force and aluminium demand from sectors supporting it remains robust. To realize the low-carbon circular economy is not easy and requires bold moves, but Hydro considers the green transition a fundamental megatrend on which the company will build.

In 2023, Hydro delivered an adjusted EBITDA of NOK 22,258 billion, down from the record year of 2022, as metal prices fell on 4 percent lower primary demand in the world outside China. In European markets for extruded products, demand fell by 17 percent year over year. Even with these changes, Hydro Extrusions delivered their second highest adjusted EBITDA of NOK 6,480 million, as growth in high-margin segments offset a large share of the volume decline.

Hydro had an average return on capital employed of 11 percent over the last five years, above the target of 10 percent over the cycle. Reflecting the current volatile market environment, and a year with high growth and return-seeking investments, the ARoaCE for 2023 was 7.1 percent.

Improved earnings allow for competitive shareholder returns, and since 2019, Hydro has distributed NOK 30.7 billion to shareholders. The Board of Directors proposes to pay out NOK 7 billion in shareholder distribution for 2023, 81.5 percent of net income, where of NOK 2 billion in share buyback program.

Changing the aluminium game

The market for greener aluminium is growing at a high pace. Combined with the roadmap Hydro has set out towards 2030 to pioneer the green aluminium transition, the company believes in a significant value creation potential for Hydro. Hydro’s ability to utilize the company’s integrated value chain delivering low-carbon products with a strong sustainability profile, will create value for customers and shareholders alike.

Hydro is already a front-runner offering market leading low-carbon products. The new 2030 strategy has several paths leading towards net-zero by 2050 or earlier, stepping up the efforts to decarbonize its value chain, changing the game for aluminium. These include clear targets and tangible milestones addressing climate, nature and social impacts from mining, refining and energy generation, to electrolysis and extrusions as well as ambitious targets to increase the use of post-consumer scrap.

Hydro has delivered strong relative shareholder return since 2020 and the company is uniquely positioned to continue generating value in this new reality.

Investor contact: Martine Rambøl Hagen+47 [e-mail]

Media contact: Halvor Molland +47 [e-mail]

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

Attachments

• Norsk Hydro ASA Integrated Annual Report 2023_ENG
• Remuneration Report 2023 ENG