Norsk Hydro ASA (NHY) Earnings Call Transcript & Summary

Welcome to the Annual General Meeting of Norsk Hydro ASA, which this year is conducted as a hybrid meeting, where shareholders can choose whether they want to participate digitally or attend in person here at [ Vaekero ]. I'd like to thank all shareholders who have logged in as well as all of you who have joined us here today. My name is Dag Mejdell, and I'm the Chair of the Board of Directors pursuant to Section 512 of the Public Limited Liability Companies Act, the PLLC Act. It's therefore, I -- who also call the meeting to order. With me on the podium today are President and CEO, Hilde Merete Aasheim; CFO, Pal Kildemo, Hedvig Bugge Reiersen, layer. Furthermore, the external auditors, KPMG are present as well as the Chair of the Nomination Committee, Berit Ledel Henriksen; [indiscernible], from the company's Secretary will be taking minutes. Today, the general meeting will be moderated in Norwegian, but proceedings will be simultaneously translated into English. Before we move to deal with the items on today's agenda, I want to start by giving you some practical information. All votes today will be conducted digitally and all items on today's agenda were open for voting at 9 a.m. When the general meeting has finished dealing with an item and voting starts on the item in question, I will ask you to cast your vote quickly. If you haven't already voted before we close the vote on that item. Once voting under an agenda item has been closed, it will no longer be possible to cast your vote. I will clearly inform you when it's time to vote under the individual item. And to make sure that everyone who wants to vote gets to cast their vote, we will take some brief pauses along the way to make sure everyone follows -- items to be voted on will automatically come up on your screens. Press vote at the top of your screen. If you happen to click on something else and lose sight of the image. If you wish, you can also change your vote under an item until the vote is closed. Shareholders who want to ask questions or give comments relating to the items on the agenda can do so in writing by selecting the messaging icon at the top of your screen, type where it says ask a question and then click on the arrow on the right-hand side. If we receive any questions that we can't respond to during this meeting, we will revert as soon as possible after today's meeting. I believe I have given all the practical information necessary, and we are now ready to start addressing today's agenda. In my capacity as moderator, it's my duty under Section 5-13 of the Public Limited Liability Companies Act to make a list of the shares that are legally represented at this AGM. The Secretariat along with DNB security services are about to draw up the list of participating shareholders and proxies. The list will be accounted for as soon as it's ready and presented to me. Before we move on, I also wish to inform you that in line with the notice, proxies have been given partly with bound instructions. Electronic advanced votes have also been cast in accordance with Section 58B of the PLLC Act and the company's articles of associations. I have now received a list of participating shareholders from the Secretariat. And it needs some correcting. So we will revert to this matter. What I propose is that we now move to deal with item 2 on the agenda, the election of a meeting chair, and the Board of Directors propose that the general meeting elect lawyer, Hedvig Bugge Reiersen to chair today's general meeting. Are there any questions or comments to this item on the agenda. That does not seem to be the case, and we therefore move on to the vote. And while we make -- when we conduct the vote, it will be closed soon. I will also inform you during the brief pause about the participation at this general meeting. First, [ 9,22,402 ] open proxies have been registered and 331,542,000 and 26 proxies to the Chair of the Board with Bond instructions. Furthermore, advanced votes for 129,660,407 shares. And at this general meeting, [ 22 ] shareholders attend, which represents 709,632,517 shares. In total, 1.179958,000 shares represented, which is equivalent to 57.59% of the votes that carry voting rights. Let me see if a meeting chair has now been elected. Yes, this has been done. We have a meeting chair, and I therefore, give the floor to Hedvig. Thank you. We will move straight on to Item 3, the minutes of the -- from this general meeting or to be signed by the Chair of the meeting and at least one other person elected by the general meeting from among those present. The Board has proposed that Morten Strmgren be elected to cosign. Are there any objections or any other proposals? No, this does not seem to be the case. Let's move to the vote. I now ask everyone who has not yet voted or who wants to change the vote to do so now. And we'll also wait a moment to give everyone the chance to cast the vote. And the vote will soon be closed. [Voting]

The vote on this item has now been closed, and the general meeting has adopted the Board's proposed resolutions. Now move to Item 4 on the agenda, the approval of the notice and the agenda. The notice along with the proposed agenda was sent to all shareholders with a known address on 17th of April 2023. On the same day, the notice and the other documents referred to in the notice we published electronically through the stock exchange bulletin and on the company's website, namely the 2022 annual report containing the financial statements for Norsk Hydro ASA and the group, the Board of Directors report, the Board's statements on corporate governance and the auditor's report. Also the recommendation of the Nomination Committee dated 29th of March 2023, the Board's report on executive remuneration, the company's Articles of Association with the proposed amendments that the general meeting will discuss today. Consequently, the Annual General Meeting has been convened in accordance with the Articles of Association and the PLLC Act. Are there any comments to the notice or the agenda -- that doesn't seem to be the case, and we can now move to the vote. The Annual General Meeting has approved the notice and the agenda. And if you want to cast your vote or if you want to change your vote, please do so now. We'll wait a moment to give everyone the chance to cast the vote. We will soon close the vote. [Voting]

The vote has now been closed, and the general meeting has approved the Board's proposed resolution. The AGM has now been legally convened and we can address the other items. I also want to note that the result of the vote on the individual item where the votes for against abstained will generally not be read out unless shareholders particularly request that we do so. Votes cast for, against and abstained will also be presented in attachment to the minutes and they will also be posted on the website immediately after the general meeting. We have now come to Item 5, namely the point where we will deal with the annual accounts and Board of Directors' report for the year for Norsk Hydro ASA and the group, including the Board's proposal for distribution of dividend, and it is also available on the website. Before we move to deal with this item, we will hear 2 reports. First, Chair of the Board, Dag Mejdell will account for the Board's work and priorities throughout 2022. And then CEO, Hilde Merete Aasheim will account for the highlights in the company's developments in 2022 and the first quarter of 2023. After their reports, we'll open the floor for questions and comments. You have the floor, Dag. Yes, dear shareholders. First of all, again, thank you to all of you for such a good turnout, both to those of you here at [ Vaekero ] and to all attending online. These are trying times. World events, financial and others challenge us all, both as individuals and for Hydro as a global Aluminum and Energy Corporation. [ Hydro ] entered last year on the back of the strongest aluminum markets in decades following, among other things, the aftermath of the COVID-19 pandemic. However, the year would soon be dominated by devastating and meaningless war in Europe and energy crisis, spiking inflation and a global economic slowdown, including a significant fall in aluminum demand. The past year, therefore, showed us how fast things can change in our business environment. The fight against inflation, the near financial crisis this spring, China is awakening after the COVID-19 pandemic and increased rivalry between superpowers are important examples. Against this backdrop, we must be pleased that Hydro achieved its best financial result ever in 2022. An adjusted EBITDA of nearly [ NOK 39 billion nearly ] NOK 40 billion and the corresponding return on capital of 22.2% is well above our target of 10% over the cycle. This success was mainly due to the high prices for aluminum and energy. But above all, I would like to highlight the importance of Hydro's strong cost efficient and continuous improvement drive. As you know, this is a long-term effort. The targets -- targeted at all factors over which Hydro has some control precisely to ensure resilience in an unpredictable world economy. Since 2019, Hydro has exceeded the annual improvement target of NOK 7.3 billion by this year. We, therefore, decided to increase our improvement ambitions to NOK 10 billion by 2025 and NOK 11 billion by 2027. So these are permanent improvements raising the bottom line every single year independently of market developments. In addition, we have raised our commercial target already bearing fruit in the form of greener products, a better product mix, higher margins and market share growth. The aim is increased by NOK 0.5 billion and will strengthen results by NOK 3 billion annually by 2027. This market strategy illustrates how even in trying times, there are opportunities -- many opportunities and that the energy transition keeps moving forth despite cyclical fluctuations. Amid all this uncertainty, one thing appears certain. We see higher climate ambitions and greater attention to sustainability and how these being turned into stronger regulations and business commitments and higher expectations to the industry among politicians and regulators. And this is most noteworthy among customers, investors and financiers and current and potential new employees. The current energy crisis has demonstrated how crucial access to affordable renewable energy is for society and industry to succeed with the green transition. Markets are increasingly concerned about how products are made. And we expect sustainability front runners to be appreciated and preferred. In Hydro, we are not only committed to contributing to change, but we are also committed to drive the change. More importantly, we increasingly see sustainability as our path to profitability. We continue to pursue our strategy to strengthen our position in low-carbon aluminum as well as growing in new energy solutions. And Board of Directors has focused on this as well. In 2022 [ too ], safety, health and environment has been an utmost priority as will always be the case here in [ Hydro ]. Our employees need to have a safe workplace to go to for us to succeed as a company. And the people of Hydro, they are our most valuable asset. Furthermore, the Board has focused on last year, a follow-up of the strategy towards 2025. And we've also spent a lot of time on monitoring the work with sustainability, compliance planning and risk management to mention a few things. Now in 2023, the Board is well into the strategy work of this spring. And this has been well started as it is usually in every annual cycles for the Board of Hydro. In our work, we study how Hydro will shape and serve the market for greener products. How to reach our commitment to zero-emission aluminum and how to grow in -- within renewable energy. We will bring this solid basis into the further strategy work for Hydro towards 2030 and beyond. On behalf of the Board of Directors, I would like to also take this opportunity to thank our company's 32,000 employees through their daily expertise and dedication show that they are the heart and [ motor ] of Hydro. A competitive shareholder return is important to ensure that Hydro remains attractive to investors while supporting the long-term financial basis of Hydro's ambitions. The Board of Directors thus proposes to the AGM to allot 62% of adjusted net income in 2022 as a combination of dividends and share buybacks. It is important to be robust and resilient while not losing sight of long-term opportunities. Facing a more uncertain global economy and an acute need to implement the green transition Hydro is well-positioned to navigate through short-term turbulence without losing sight of our strategic positioning and long-term opportunities. And with that, I leave the floor to President and CEO, Hilde Merete Aasheim. Thank you.

Thank you, Dag. [ Honored ] General Meeting. 2022 was an exciting and very good year for Hydro, but also earmarked by great uncertainty and huge fluctuations. The past year has showed us how fast things can change and how important it is to be robust and resilient, so that we don't end up in a crisis situation and that we lose focus of the long-term opportunities. We have, through the past year, delivered a record result, yes, the best in our time as a company of aluminum and energy. But we've also spent this time at strengthening the company and creating value for the shareholders with strengthening profitability also by operating in a sustainable manner, and that's what my report will -- or my account will be concern. But let me start by what is most important, and it is health and safety of our employees. Health and safety is of the utmost priority and is the foundation good and secure and safe operations. That is what's -- that's our foundation. I'm very proud to stand here and show how through the past year, we have reduced the total recordable injuries including contractors working for us by 30%, and we're at a level which is the best that we have seen as an aluminum and energy company. But what is perhaps even more pleasing is that we have halved the high-risk incidents in the company. Those are incidents where we previously have had serious and fatal incidents with incidents that ended up with life lasting changes in how one can live one's life and that we've had a special focus area on that. So these results don't come by themselves. This has been a result of focus by the management, focus from every employee that is required to ensure that every day that we may do our work in a safe manner and that we create a safe and secure working environment. Now we cannot rest on our [ laurels ] with these results. This needs to be our focus every hour of the day because our aim is, of course 0 or very harmless working environment. So let me now comment on 2022 as a record year despite our restless times. So we reported on an EBITDA of NOK 9.7 million for the year, which is also reflected in the ROIC of 22.2%. That's a result which is marked as the Chairman of the Board said of extreme prices in metals and energy. We came out of 2021, the opening of COVID. After COVID helped us to see good growth rates in metal, and we have saw very high prices. But then the invasion of Ukraine happened. And we saw this energy crisis in that the Russian gas disappeared from the European market. And that later impacted on inflation and disruption and an increased demand for aluminum. We've also seen this into the first quarter of this year, we announced the first quarter results 2 years -- 2 weeks ago, with a result of NOK 7.5 million in adjusted EBITDA and adjusted ROCE of about 18%. That is, nevertheless, a robust result in a situation where we've had 15% to 20% lower volumes than what we had in the first quarter of 2022. So the result is marked by the external circumstances, but I'm also very proud standing here and again, be able to report that we deliver on our improvement plans according to the target that we had also for 2022. And in accumulation, we have now delivered NOK 7.8 million compared to 2018, which was the starting point when we set these targets for 2019, we were going to deliver NOK 7.3 million in 2023. And now we are 1 year ahead of schedule. And this shows the involvement and the strength that we have in all of our organization with all of this, which constantly interested in doing a little bit better than yesterday. It's also a great pleasure to be able to say, despite a drop in demand that the green transition is driving the demand for aluminum. More aluminum is now going into the electric vehicles and more aluminum is used into more energy-efficient buildings and more into infrastructure construction with the green transition, more aluminum in cables, we replace copper to some extent, but also in solar [ cell ] panels and in turbines. But what is also very exciting to observe is that not only to replace the fossil fuels in the vehicles, but also that we produce the materials that it takes to produce the electrical vehicles with lower carbon content. And we are in a very good position for low carbon products, and we see an increasing demand for these products. I will tell you more about that in a while in my presentation. So we deliver on the direction that we set towards 2025 which concerns strengthening our position, which is in the decarbonization agenda. So along with our customers in the downstream area, we are increasing our [ press ] capacity, and we recently acquired a company in Germany to strengthen our presence in Northern Europe and not the least, we're investing in recycling capacity because that's what is so fantastic with aluminum. It may be recycled and recycled without losing its properties and qualities and the more aluminum is in use, the more we'll return after a while. And here, we have a huge system, 26 [ remakers ] in Europe and in U.S. able to take back this material and that's an exciting perspective in the world that we are facing now. And we've taken out of this planet -- the planet is at a tipping point and to taking back materials after use and recycle them, that is a fantastic opportunity to regenerate our planet and not continue to pass the tipping point where we're at. And that also, along with the interest that we see in the market, not only our moral responsibility to be part of this planet and to take the moral responsibility, but also what stimulates us now is that this is moving forward in the market. And this strengthens us in our decarbonization agenda where we have more force to move forward there with more low carbon products. And then we can also establish that we -- that the Board has presented a proposal to return [ 62% ] return to our shareholders with dividends and share buybacks. And we, as management, it's important for us to create profits for our shareholders and to create interest as for Hydro as a company. I would like to return to these volatile markets. Here, we can see just the curves shows this tremendous volatility and how it's been swinging through the past year with extreme price changes over dollars per tonne that we haven't seen in many, many years in the beginning of the year. And then later, they dropped or they were reduced with a reduced demand as we see by the middle of the curve here, where we saw good growth in the beginning of the year. And then we saw drop in demand in the last 2 quarters and also in the first quarter of this year. In the global balance, we can see China, which is struggling with returning to growth as we saw it before and after COVID, we thought that it would come after they opened up their very strict lockdowns, but they haven't come back yet. And then we need to reduce our capacity due to the energy capacity in China. In Europe, we see -- and in the U.S., we see that there's a reduced demand, but we also see that they've taken down a lot of capacity in Europe due to the higher electricity costs. Therefore, the market in total is basically in balance and that also supports that the prices haven't dropped too much and they're well above the level that we've seen in recent years. I mentioned the extreme electricity prices that we saw in Europe after the Russian gas disappeared, but we also saw a drought in Norway that also contributed. We saw the effect from the European market, but also extremely high prices in Norway. And we also saw the price differences between the South and North also gave a positive effect on our results. But what truly bites are the high electricity prices in Europe. And this figure to the left shows the pie chart showing the energy supply to the primary aluminum plants in Europe, including Norway and Iceland. We are #1 in Europe and if we take out our capacity, we can see that half of the European capacity is based on a short-term contract which leads to that European primary capacity is shut down by 50% in the recent 18 months. For Hydro, we have a very different situation. We've always been out to ensure our power supply long-term because when we invest, especially in these primary plants, we invest for many years ahead. And so now we have coverage well into 2030 for our -- all of our capacity based on hydropower but also quite a bit on wind power. And in that sense, we haven't ended up in a crisis situation since we have been planning long-term and with very different prices than what we've seen now in the extreme prices recently. I would like to take the opportunity to the general meeting to say that we are -- it's important to us now to see that we can manage to get power contracts for 2030 to ensure that we have renewable power for the new region capacity also after 2030. And because of that, we've been quite vocal in the Norwegian market saying that it's urgent to get more power, if we're going to be able to maintain this industry, which is a global leader worldwide and precisely because we've had competitive energy prices, but also because we're basing this on renewable power with a low carbon footprint. And when we produce, for instance, at [indiscernible] soda, we have approximately 4-kilo CO2 per kilo produced aluminum, and that is 75% lower than the global average of the industry. And that makes that we have low carbon products in the market today. I also need to comment upon this improvement program a little bit more. And here, we can see that we have 2 initiatives, one is the improvement program, which is to constantly work and optimizing our operations and see how we can gradually improve, and this is not primitive cost cuts. These are systematic structure improvement work. And looking at business systems and understanding the critical processes and keeping them under control. And it's only once the processes are stable at we're able to produce. If you're in a firefighting mode, you are not able to improve anything. And I'm very proud to see the structured work that's going on here. I travel around a lot for Hydro. And I -- this is what stimulates me a lot to see how each different unit is working on improving. And it adds up company like Hydro. It adds up to NOK 7.8 billion by the end of 2022. And in addition to that, we also have -- this if not in the market, but it's how we go to the market and which products we use our total expertise. We are a conglomerate of aluminum expertise in Hydro. And we constantly work on using that expertise to improve our operations and to grow with our customers and to grow market shares, and we now see increasingly a green premium because we can produce with a low-carbon footprint. So in total, we have contributed with [ NOK 9.6 billion ] from the organization itself to make us more robust. And the Chair of the Board said that we've decided to go forward with the -- or improve the improvement program. So we placed further NOK 4 billion into that program for new initiatives. And they are coming from below from the organization itself because we are constantly looking at how can we improve and how can we get better and being robust when the markets turn towards us. And that we have this competitive power supply in these countries and that we have good improvement programs that enables us to be well-positioned also on the cost curve when we compare ourselves to our competitors, both in alumina, but also in primary metals. In alumina, we're at 30% percentile. And in the small multiple work plant we are all -- were helped by a very favorable exchange rate. And that provides robustness resilience. But we're working on delivering also at the strategic direction that we placed in 2020, marked by the trends that we saw then decarbonization circular economy, electrification. And we saw that this was a very good match with our portfolio, and we decided that we need to continue to strengthen our low carbon positions, and we need to take advantage of the expertise we have in this area to ensure the energy transition that the green transition depends on. And this is not less relevant now in 2023 than it was then. Now I've talked about the excellence of aluminum and that how the green transition drives the demand for aluminum, but what's especially interesting that has happened -- just in recent years, is this thing that our customers -- we are in a system shift. The whole industry is working on decarbonization being part of the solution to the right, we're listing. And these are the most advanced customers who are starting first, but we can see here, customers in various market segments, which are demanding more greener. We have Porsche, Mercedes-Benz, Volvo and BMW and Renault, we could also add Polestar. They have clear ambitions to produce a vehicle in 2013, which is carbon neutral. We also see in the construction industry, we're collaborating with [ Velox ], they're working on creating almost zero-carbon footprint window. And we also see in packaging, such as [indiscernible] and those who produce for beer cans, for instance, they're also now going into the low carbon segment. And here we also see Vesta, which is a representative of infrastructure investments. They also want low-carbon products and just before our Capital Markets Day in December last year, we had a study which was done by Dr. [indiscernible] which looked at our main markets in Europe and the U.S. and in Northern America. And we see there in the lower -- the growth in low carbon primary is up 20%. And the growth in recycle is increased from 5% to 7%. So this shows that we are in the right image. We are -- we have the right strategy, and we also have already the best position because if we look at the 2 low carbon products that we have, REDUXA that we produced in [indiscernible] in Norway, which is produced for almost 100 years. But it's only now that the market is interested and also them -- in paying for it. And in the recent year, we've increased the sales of REDUXA by 68%, and we're not doing that without getting a green premium. And this is good business. obviously. And as regards to this CIRCAL product, when we used a lot of scrap materials that have been in use that we're taking back. We sort it. We removed the paint and other components. And then now we are even able to, with Spectrograph distinguish with its hard or soft alloy. There, we are sold out. We increased by 20% just in the past year. That's the reason why we're now increasing our capacity take back more of this. What is also very exciting is that the customers are now coming to Hydro. [Audio Gap] I'm sitting with Mercedes [indiscernible] in December. I'm signing a letter of intent. So that Hydro shall deliver low carbon aluminum for Mercedes cars, and they come to Hydro because they have set a target for themselves to manufacture carbon-free car. And therefore, they are looking to other cooperation partners that they can collaborate with. And we also had the top executives of Porsche a couple of weeks ago and we signed a similar contract. But what is also interesting is that because I feel that when I'm signing these contracts, I feel that I have the support of all of Hydro. What is unique about Hydro is that we can offer the whole value chain from the mine to the end product before it's sent to the consumers under one roof, a Hydro roof. And we can demonstrate how we work throughout the chain 2 weeks ago. Mercedes went to Brazil with a big team to see how we work both in the mine and the refinery in Brazil. It's not only the carbon emissions is our values, it's our code of conduct and everything that comes with being a responsible player in this value chain. And this is also an example to prove that whole chains are changing, where you work in collaboration with the partners to be part of the solution. This is a business it also stimulates us to ensure a good progress for the zero-emission map. And if we also look at the production at [indiscernible] with 4 [ kilos ] of emissions, 2 of them come from the raw material in Brazil. And therefore, we are also now in the midst of energy shift in Brazil. We want to remove [ fuel ] oil and coal and replace it by electricity and natural gas. And in [indiscernible], we will also completed the plant there is bit delayed but 15th of December, we will have gas coming in by vessels. The second thing is to electrify the boilers. And our energy company [ Rein ] that has set the goal to be an active driver of energy-friendly solutions they also focus on major wind and solar projects in Brazil, and they have entered into a PPA to deliver to Alunorte. These are 2 of the 4 that we should have taken out we have 2 remaining. We need to work on the electrolysis. We have 1.5 kilo left. We have a carbon that is consumed over 30 days in the box. And now we're looking at 2 options to remove it. One thing could be carbon capture and storage. We have also acquired a stakes in the company that can also capture this from the air. And we've also seen good results after testing. We have a testing facility at Sunndal, and we will continue it and we hope that we will see that we can capture this by the end of this year. And we also -- we continue to work on the getting it up to industrial scale. And we are also initiating a new process. We start with aluminum chloride and then we also keep the chlorine and the CO2 and the close process. We have also some exciting testing, and we will now be also constructing a new testing plant at [indiscernible] with our other test facilities to test that is really possible. What is associated with CCS is that if we can succeed, we can also keep our plants for much longer. We have now taken a lot out, and there's less than 1.5 kilo left, and we're looking at hydrogen. And the easiest way to get to zero -- that is by recycling. And with the CIRCAL product, we are down to 2.3 kilos. But last year, we also used 100% scrap that returned. And we were able to sell it. The demand was high. And we also sold it for facade plates and buildings. And people are really interested in working in a carbon-free building. And this also helped us to believe in the coming change because this will come at a cost. It will cost if we are to remove all sales -- and of course, if we had a footprint of zero and was not paid for it, that would be bad. But our recycling strategy is important. And it's important throughout the global aluminum industry because it promotes aluminum as a future-oriented material. To the left, you also see the global aluminum consumption that will be increasing by 2.7% according to current projections. But we also see that aluminum will also take up a bigger percentage than primary. And that is because the whole industry is looking for ways to manufacture, a carbon-free aluminum product. And we are taking out a course by keeping the primary capacity more or less as it is today. But we are increasing on recycling, both when it comes to taking back post-consumer scraps also aluminum that have been used. And our goal is to double that consumption, and we are well underway. We have also invested [indiscernible] we are building a brand-new recycling part in Michigan in the United States, and we are well-positioned there vis-a-vis the automotive industry, and we've also submitted a bid for the biggest recycling company in Europe listed on the Polish Stock Exchange, and that will be very interesting for us. This is a good business, and we also see that the return on these investments are good. And we also believe that we will be able to double the EBITDA from recycling operations by achieving the rate that we have set for ourselves. We see that profitability and sustainability go hand in hand. And as the Chair of the Board said that we don't believe that we will be able to be profitable over time if we are not sustainable. I've been talking a lot about carbon for climate and the environment is about a lot more and of course, if we take out forest to extract the bauxite in [ Amazon's ], our ambition is to [ replant forest ] 2 years after we've taken it out. We are studying the [indiscernible] before we move the forest and we also have cooperation with the universities in [ Para ] and also to make sure that we can replant forest as quickly as possible. And we also studying the flora and fauna, how it actually is able to come back -- another goal was set is that we will not send anything to landfill by 2040. This means that we're also now working on the ways to bring that back into the value chain, too. Last year, we decided to build a pilot within the sense to look at our [indiscernible] slam deposits because we're looking to bring it back into the chain. But it's not only about climate and environment that we're doing this for. We also want to be a good force in local communities to be a good neighbor and create a sense of positivity. [ Coffee almond ] said it business will not thrive if societies fail. And Hydro has been working along these lines for 70 years. That's how we built [indiscernible] in Norway. We have a number of plants around the world. Some are more challenging than others. And in Brazil, we have really faced challenges when it comes to being seen as a good force. And we have spent NOK 500 million in various types of initiatives to demonstrate and prove that we are good force and that we are a positive contributor in a local community with weak with weak institutions and they don't have the same sanitary systems that we normally take for granted. Last year, we also donated technical school -- and there was a grandmother who shook my hand and said that please employ my grandson. And last year, we delivered a technical vocational school that enable us to employ locals into our systems. I also need to comment a bit about the Brazil transaction that we announced last week, we are divesting a 30% stake, and we are also leaving the MRM. We have one mine [ Paragominas ], we had a 5% stake in MRM. We have had more aluminum than we needed and we have, therefore, adjusted portfolio were a bit long, but we are closer to the capacity that we know. We've also completely divested our stake in MRM, but we will still be a majority stake in Alunorte. And we've sold the MRN position and a 30% position in Alunorte to Glencore, which is also acquired Vale [indiscernible] and they sold their assets to Hydro some years ago with the exception of MRN. We had an option to take over that position. We acquired it from Vale, but we sold it back to Glencore. And we're looking forward to collaborate as a partner with Glencore in Alunorte. They also share our view to continue working on low carbon alumina and to be a good force [ NOK 1.15 billion ], almost NOK 2 billion is the price and the revenue from the sale will be spent on strategic growth strategies in line with the 2025 strategy to grow in low carbon areas and also to pay back to our shareholders. And we are expecting that the deal will be finalized in the second half of this year, and then we will start on implementing this. We have also started to look for new energy areas I mentioned Rein, and their ambition is to be an active developer of renewable power. And we're seeing on the good progress. We are also working to raise capital because we have said that the goal is to be capital light. We want to attract collaboration partners. We have developed renewable solutions that can help decarbonize our own activities, but also for others. And we have 4 projects going now, almost 2 [ gigawatts ] of installed capacity, 3 in Brazil, 1 in Sweden. And the 3 in Brazil has PPA with Alunorte and Petrobras. Our hydrogen company, Hydro Havrand, we haven't come that far yet. But we have focused to see that if we want to reach an emission-free product, we need to have a different structure. And we've seen how we can replace gas, we -- no one has done it. So we now have 5-megawatt test plant, a pilot project, to see how hydrogen can impact on the quality and the cost outs. It's still challenging in terms of profitability, both when it comes to get enough renewable power to renewable projects. So far rather small plants have been constructed. And we need to increase the scale of this. And we will be monitoring that market closely because we want to ensure that we can do this in an environment friendly way. We've also been looking at the battery area. We also went into battery cell production. And we also went to other manufacturers who were good at this. This has given us a good uplift but we have concluded that, that is not where we see that we have our competence and strategy. We want to focus on the raw materials that are required to build a renewable change. We have entered into a collaboration with AL2 and Aluchemie to see if we can also manufacture synthetic graphite because we are dependent on China, and we also want to manufacture the products with a 95% reduction in footprint compared to what China can. And here it's a matter of who can have it or will have it and can they pay? And also recycling batteries post consumptions are very important here. You see a plant in Fredrikstad that receive used batteries and they take back the black mass. And this can also be really interesting where we can scale it up to be applied in Europe and also the United States because we've seen and there's a big increase in EVs. And we also see that there will be regulatory requirements applied when it comes to where the batteries go post use. All right, the clock is ticking. I will soon conclude, but I have one message for you, and the Chair also mentioned it. The people are our most important assets. This is where we stand out from our competitors. Yes, we have excellent plants, good equipment, but creating value based on competence. That's what it is. We're dealing with high tech. And therefore, I want to focus on sending a clear signal throughout our organization. And like I started by saying, the safety of our employees is the number 1 priority, but also to create a sense of engagement in the organization to use all our 32,000 employees to create value and also value for our shareholders are so important. We have many people who have a long tenure in Hydro. And that is all well and good, but we also need to attract new talent. We need to create an exciting organizations that can attract new talent and also to show young people that they have the opportunity to develop competence and skills here. And therefore, we have also set a very ambitious agenda about diversity, inclusion and a sense of belonging. Because if we want to create a new Hydro, we need to focus on the people. And that's also important in leadership. We invite people. We've taken interest in the individual contribution. That's important to ensure creativity and that we also have a diversity, a diverse workforce and that everyone feels well working for Hydro. And we've thus set a target to increase the women's ratio. I mean that is self-evident. That is also a way of achieving results. We have increased by 16% -- we have increased from 19% to 20%, and the goal is 22%. And I hope that we can also deliver on this goal. I will conclude now. I believe that we are well positioned in the new world that we are now facing after what we've been through. The priorities for 2023 is health and safety first and also to maneuver the organization in the new global and geopolitical everyday life. And also the fact that we have the whole value chain on the one roof. And our ambition to supply green energy to the market at premium prices. And if we are to succeed, we need to deliver on climate, the environment. But also to contribute to the just transition, we need to deliver on our improvement products, safe operations, develop it further. And if we do that, I believe we can also deliver on the goals we have set for 2023. And as the Chair said, we are now also on cruise to our regional ambitions for 2030.

Thank you for your report. Are there any questions, any comments?

All right. There's a question from the floor. Please step forward and go to the [indiscernible] and you have 3 minutes at the maximum. And please also introduce yourself by name.

[indiscernible] thank you for an extremely interesting and very -- presentation. And it's very interesting for those of us who've been in the company before that you're truly responding to the challenges so that I've learned a lot. Thank you. I had a few questions that perhaps you could comment upon regarding what concerns the global competitiveness of the company. As you mentioned, there are quite strict regulations with the climate targets, et cetera. And you mentioned that, that requires investments, but maybe some of it has also recovered in terms of pricing. But how do you look at that with respect to China, for instance, which is one of the large players and where there aren't strict regulations and therefore, they have a competitive advantage. So that was one question. The next one is talking about electricity prices. It's very -- this is an energy-intensive company and production and Hydro has a lot of own production. So we're well covered, but a lot also needs to be acquired. And we see now that the price setting that happens in Norway is very linked to Europe. And so this means that perhaps we won't have the same advantage that we've had before in electricity prices. If you could please comment upon how you look at that? And the last question regarding what you also mentioned briefly, Brazil, things appear to be going well there. Any new cases come up, if you could comment on that as well?

Yes. I think I can answer the questions. China was the first question. We have paid close attention to China for a long time, and they've been building up their capacity which is more than half of the total aluminum industry. And all of this capacity was built up based on coal. And while we, in the green transition in Europe, have where Europe has set a clear attitude to pricing of CO2, which has been on the increase. While, at the same time, being attentive to ensuring that European industry needs to be competitive, it's threatened now by the extreme energy prices that we saw for our competitors. But since there's no fair level playing field, the commission has also given the opportunity to have CO2 compensation. As long as you don't have a global CO2 price and the CO2 compensation is meant to compensate for us needing to pay a CO2 price in an interest regime where price per kilo of CO2 is set. But there's also been an ongoing discussion in Europe about CBAM, which is customs rate for entrants into Europe for materials taken from China to defend European industry. And the EU has presented the CBAM for -- both for cement, which is also very carbon-intensive, for steel and aluminum. But for aluminum, there's only a customs rate for the direct emissions, but not for the energy source. And therefore, we claim and we try to be very active, both in European aluminum and I've talked myself to Mr. -- Ms. [indiscernible] about this. But as long as we don't have CBAM, which also covers this indirectly, we need to have protection. Otherwise, the whole European aluminum industry will drop, and you'll have this carbon leakage where this excellent material that we produce with zero CO2 emissions from source would be at risk. And so we are monitoring China closely in the time ahead as well. We can see that they have a great extension in construction of renewable energy, but the question is whether it's enough to actually make a difference in terms of all the China needs in terms of power. But we also see that the Chinese are now starting to recycle. And in many ways, that is good for aluminum as material, but we are not losing sight of China, since China has affected this industry so much. And only a few years ago, we had a weak profitability for a number of years in Hydro precisely since China came up with huge capacity and sort of put a lid on the aluminum price. I think I need to stop there to get to your next question. Then we have electricity prices. And that's a topic which is extremely important to us and also towards Norwegian authorities that we need to state what we want in terms of this country to be a nation of energy and industry. And we could spend a lot of time on these market mechanisms, but our message is that the only thing that can solve this is to have more renewable power into the equation. And to speak up in favor of -- not leave it to each municipality to decide whether they wish to expand or not, but to have a narrative in Norway that this industry is important to Norway as a nation and then we also make our own initiatives. We have a project now at [indiscernible] along with -- we need to look at if we can build wind power plant. And so we have held a public meeting with the local population at -- to see whether we can gain acceptance to have windmills build as the basis of welfare in these local communities. But this is a topic which we need to keep very high up on our agenda. And the last question was about Brazil. And the stories that we hear now are very much the same topics that came up back in 2018 when we had the rainfall that created restless that there had been leakages from our deposits, and we have a case pending in the Brazilian courts. And sometimes, things move slowly in the judicial system there, and there's a place called Cainquiama that has filed a lawsuit in Dutch courts against Hydro. There's a huge organization with many people not living in our areas, but that need -- they want to show and point out the injustice. But in the case from 2018, we have 90 reports indicating that there was no overrun, but that there was a flooding in the local community. There's no doubt of that and that people had health challenges in that situation. Yes, we are not disputing that, but we are disputing that there was an overrun. And so then it's unfortunate to have that type of attention. We need to just move forward and show that we can be a positive force in their communities. And that is my point of view on that case. And then these cases need to be run in the judicial systems with our facts and our arguments presented and let's hope that over time that we will be able to create. But we have -- let me say this we have a different relationship in the local community now than we had in 2018. Of course, there will always be somebody who said -- who will say that we should have been there. And the local community -- local populations would not like us to be there at all. We have a different relationship with the authorities, where I have also had a direct contact with the governor, and I've been -- I think I'll stop there.

There appears to be no further questions. So Monica Hansen has issued the auditing report. It's been included on Page 186 in the English report. We have the auditor present, and we will hear the key highlights of this report.

Thank you, General Meeting. My name is Monica Hansen and along with [indiscernible], who is the responsible audit partner in KPMG for the audit of Norsk Hydro ASA. I have completed the audit of the company for the financial year 2022. I will shortly go through the main features of the auditor's report. In our opinion, the financial statements are prepared in accordance with the law and regulations. We also confirm that the parent company's consolidated financial statements are in accordance with simplified application of International Accounting Standards according to the Norwegian Accounting Act and that the consolidated financial statements are in accordance with International Accounting Standards. We do also discuss the key audit matters. Key audit matters are those that are now professional adjustments, were most significant in our audit of the financial statements. Key audit matters on Hydro's report are as follows: provisions for environmental cleanup costs and asset retirement obligations and an assessment of impairment of goodwill, intangible and noncurrent assets. These matters were addressed in the context of our audit and informing our opinion on the annual financial statements as a whole. We don't provide a separate opinion on these matters. The Board and the CEO are responsible for the other information in the annual report in connection with our audit of the financial statements. Our responsibility is to read the other information accompanying the financial statements. Based on our knowledge obtained in the audit, it is our opinion that the information presented in the annual report concerning the financial statements required by the Accounting Act, Sections 3-3 A, B, C and D. That is the Board of Directors' report, the statements on corporate governance and environment and social responsibility and the report on payments to governments is consistent with the financial statements and contains the information required by applicable statutory requirements. We also report on compliance with the regulation on The European Single Electronic Format, the so-called ESEF regulation. Where it is our opinion that the financial statements have in all material respects being prepared in accordance with the ESEF regulatory requirements. So to sum up, we have given a so-called clean auditor's report, which is dated 13th of February 2023.

Thank you. Are there any questions or comments to the auditor? There is none. The Board of Directors has proposed that the general meeting adopt the following resolution. The Annual General Meeting approves the annual accounts for the financial year 2022 for Norsk Hydro ASA and the group. Based on the approved annual accounts for 2022, the Annual General Meeting approves that a dividend of NOK 5.65 per share is distributed. Are there any questions, any comments to this resolution? All right. That is not the case. We move to the vote. If you -- I ask everyone who has not yet voted or who would like to change the vote, to do so now, and we'll wait a moment to give everyone the chance to cast their vote. [Voting]

All right. We will soon close the vote. The vote has now been closed, and the general meeting has adopted the Board's proposed resolution. So we'll now move on. The general meeting will process Items 6 and 7 concerning capital reduction by cancellation of own shares and by redemption and cancellation of shares held on behalf of the Norwegian state by the Ministry of Trade, Industry and Fisheries and authorization to the Board of Directors to acquire our own shares, respectively. Before we proceed with this, Exec VP and CFO, Pål Kildemo, will provide us on information about the background for the decisions. Please go ahead, Pål.

Thank you, Hedvig. On our General Meeting, on September 20, 2022, the Extraordinary General Meeting of Norsk Hydro ASA authorized the Board of Directors to acquire up to NOK 109,800,000.00 shares in the market and from the Ministry of Trade, Industry and Fisheries. Within this authorization, Norsk Hydro ASA has acquired 18,268,564 shares with an aggregate nominal value of NOK 20,058,883.272. So in accordance with section (c) of the granted authorization, the shares acquired will be subsequently canceled. Furthermore, Norsk Hydro ASA will redeem 9,521,091 shares with an aggregate nominal value of NOK 10,454,157.918 owned by the Norwegian State by the Ministry of Trade, Industry and Fisheries which has committed itself to participate on a pro-rata basis in the capital reduction to keep its ownership interest of 34.26% unchanged. The Board of Directors, therefore, proposes to reduce the share capital of Norsk Hydro ASA by NOK 30,513,041.190 by redemption and cancellation of in total 27,789,655 shares. The total consideration for the buyback and redemption of the Norwegian State's shares amounts to NOK 2,000,038,814.4 excluding interest and adjustment for paid dividend to the Norwegian state. With respect to matters that should be taken into account in connection with the share capital decrease, reference is made to the annual accounts for 2022 available on the company's website. And so the Board also proposes that the General Meeting proposes that it grants the new authorization to acquire own shares for an amount up to NOK 2 billion to replace the existing authorization. The purpose of such an authorization is to allow the Board of Directors to optimize the company's section. And the authorization is limited to 4.83% of the total share capital of the company as per the date of this notice. And back to you, Hedvig.