Norsk Hydro ASA (NHY) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, at Royal Gardens Hotel. My name is Alan. I'm the Operations Manager. I'm just going to go through a few fire regulations. As you can see, we've got 4 fire exits in this room -- one sec, sorry. One over there -- one minute, sorry about that, a few technical issues. As I was saying, fire exits: one to your left, 2 behind you, one to the right. The meeting point is outside the hotel to your left, just on Palace Drive. For your information as well, today at 5:30, we have a fire alarm test. So if you hear the fire alarms going off at 5:30 today, it's just the test, okay? Enjoy your meeting.

Everyone, and welcome to Hydro's Capital Markets Day 2025 -- 2024. My name is Martine Rambøl Hagen, and together with my colleagues, Elitsa Blessi, Mathias Gautier, Kirsten Margrethe Hovi and Camilla Gihle, we are responsible for Investor Relations in Hydro. So we are very happy to see so many joining us here in London today, and also a very warm welcome to everyone joining us on the webcast. So the headline for this year's Capital Markets Day is accelerating the green aluminum transition. And this, together with our strategic direction towards 2030, will be the key focus in today's presentation. And then before we continue, I would also like to draw your attention towards the cautionary note related to forward-looking statements that you will see both in the presentation up on the screen and also in the presentation that has been published and printed on your tables. And then let's move over to the agenda for the day. So we will start with the presentation by our President and CEO going through our strategic direction towards 2030, also focusing on execution. We will, after the CEO presentation, move over to business area presentations, starting with EVP of Extrusions, Paul Warton, going through the Extrusions story; followed up by the EVP of Aluminium Metal, Hanne Simensen, taking through both the primary part and the recycling part and the totality that is Aluminium Metal. After that, we will have a Q&A session around 9:30, followed by a break before we start again at 10. And then our EVP of Bauxite & Alumina, John Thuestad, will take us through the storyline for B&A; followed by EVP of Energy, Kari Ekelund Thørud going through the Energy storyline; before we end the presentation with our CFO, Trond Olaf Christophersen, taking you through the financials on the group level. We will then end the presentation session, again with a Q&A before we go into lunch. And I hope as many as possible will join us for lunch right outside of this room afterwards. And then starting from 12:30, we will have one-to-one meetings with the CEO, CFO and the EVPs for sell-side analysts and investors that have signed up and received a schedule. We'll get back to that later on. So with that, having this agenda in the back, we are ready to officially kick off the day. So we will start with a film before our President and CEO, Eivind Kallevik, will enter the stage. Thank you so much. [Presentation]

So first and foremost, a warm welcome from me as well. It's really good to be back at Capital Markets Day. It's not my first Capital Markets Day, but it's certainly the first one as a CEO. So from that perspective, it's, I would say, slightly exciting day. But let's get started and get on the way. And as always, we should start and need to start with what is the most important part of what we do in Hydro. And that is safety, to make sure that our people get home in the same way as when they started, either in a shift or in the offices where they work. Over the years, we've seen good improvements on the statistical side, both when it comes to high-risk incidents as well as the total recordable injury rate. But I have to say, over the last 18 months, we've learned the hard way that statistics is one thing. And then sometimes, we are awakened with brutal realities. So on July 9 this year, the same day as we signed the new agreement with Porsche, we had a fatality in Albras, our joint venture smelter in Brazil, where a young man died and was not able to go home that day. What is particularly disappointing when you look back at this incident is that it took good engineers a very short time of figuring out a new solution on how to do that operation without putting people in harm's way. And we need to find solutions, and we need to continue to work to discover these risks and fix the risks before we have these incidents that happen. So we have a very ambitious agenda towards 2030. But I have to say, if we cannot fix and we cannot manage the safety issues, then the strategy will always be at risk because we cannot execute on the strategy if we cannot keep our people and environment safe. So if we look back to 2024, we -- or '23, we did launch a new ambitious strategy towards 2030 at the last Capital Markets Day. And this year has been all about execution. We are very much on track to deliver the NOK 9.9 billion from the improvement program, surpassing the NOK 9.5 billion that we set as a target last year. In addition, we have good progress on the commercial side. So we have generated some NOK 3 billion in commercial value over the year. Also very happy on June 24, we closed the transaction with Macquarie, launching Rein as a full-fledged renewables company in its own right with its own balance sheet and a very strong growth portfolio going forward. We also made good progress, and we'll come back to this, both on the Recycling side as well on the Extrusions growth agenda. That being said, with the market headwinds we've had, there has been challenges to meet the EBIT target -- EBITDA targets of NOK 8 billion in Extrusions and NOK 3 billion for Recycling by 2025. If we look at the sustainability agenda, we are clearly on track to reach the 10% emissions reduction by 2025, and we have good progress towards the 30% reduction by 2030. And these efforts are, of course, an important baseline for us when we talk about and we deliver our impact on the emerging markets for greener aluminum. The strategic partnerships that we talked a lot about also have entered some quite new and interesting phases, both when it comes to the Mercedes contract as well as with the Porsche contract, quite some important milestones during the year. Finally, when it comes to financial returns, we are committed and we are still delivering more than 10% RoaCE over the cycle, and we will continue to deliver good shareholder returns in the periods ahead. So we are well suited for the journey towards 2030. But still, to be competitive, we need to constantly adapt to the ever-changing and evolving geopolitical and macroeconomic landscape that we see around us. So 2024 has been, in many ways, a landmark year. More than 3.7 billion in 72 countries, representing more than half the global population, has been heading to the polls. It's truly been an eventful or an election year. From our perspective, we see that despite the economic headwinds, climate policy remains relatively healthy and unchanged, and it's a key priority in many of the regions where we operate. So obviously, in the U.S., there is some federal uncertainty that still persists. But what we see on the state level is that policies are, to a large extent, expected to continue regardless of the new federal administration. So our impression is quite clear. The global push to meet the climate ambitions are quite clear and quite alive and well also today. At the same time, and when we see this in Europe, there is a clear need and a growing focus not only on the green transition but also to remain competitive on the industrial side. So both the U.S. and the European Union are quite clear that the green transition needs to create or at least sustain the industrial activity that we have in order to succeed in the times to come. In addition, the geopolitical tensions that we see are elevating the awareness around security of supply and the strategic resilience around us, making reliable access to key materials and minerals a growing concern in the market. For Hydro, this evolving landscape both presents opportunities and reinforces our strategic direction towards 2030. With our strong position in low-carbon and recycled aluminum, proximity to key markets in Europe and North America, renewable power assets and the integrated value chain, we should be ideally positioned to navigate and safely create substantial value on this basis going forward. What we've said and what we see now over time is that aluminum is a key part of the green transition that we see around us. Now according to Bloomberg New Energy Finance, demand is set to rise substantially. And it's driven by sectors such as electrical vehicles, energy storage, grid, infrastructure and development of renewable power. In fact, in all scenarios that they have, demand is expected to grow significantly towards 2050, reaffirming aluminum's critical role in the green transition. Now while long-term prospects remain strong, there are certainly some short-term challenges in key markets. The European extrusion market is currently soft, with demand below historical averages. But we do expect to see recovery in key markets [Audio Gap] 7 million tonnes. If you look at the volumes below 4 kilos, that is only expected to grow with roughly 1 million tonnes, and that is predominantly coming from restart of old curtailed or partly curtailed capacities. And that should, and possibly should, create an interesting supply cap towards the early movers who demand low-carbon aluminum. And Hydro, of course, should be well positioned to catch that opportunity. The close cooperation we have with our customers do ensure that we stay aligned with this evolving demand, supported by the decarbonization agenda that we have, which is already delivering results. Likewise, the low-carbon products we have, Hydro REDUXA and CIRCAL, have already made a large impact in the market for certified low-carbon materials. Over the years, we've often been asked about the strategic rationale for maintaining a fully integrated company. So for me, this is quite simple. First of all, it gives us an unmatched ability to operate efficiently and sustainably, with every step from mine to components, including energy, under one roof. We can optimize them and control all the levers along the value chain. And in a world where the Scope 1 scrutiny continues to expand, covering emissions, nature impact, social responsibility and more, the integrated approach allows us to meet all these expectations for traceable actions and gives our customers then a full insight from mine to components. Even further, in today's unpredictable world, supply risk and security concerns are top of mind of most people in the industry. And this integrated model mitigates these risks, ensuring access to all the critical raw materials and a reliable supply chain under any external pressures that you may see. So put simply, we offer customers more than just the aluminum. We provide certified, traceable and low-carbon metal along with a stable and predictable supply and offering that delivers real and measurable added value to our customers. So Hydro's strength is then further bolstered by the strategic positions that we have across the entire aluminum chain. Globally, we are a top 3 player in the third-party bauxite and alumina market. In North America, we are leaders in extrusion ingots and recycled extrusion ingots, and we are the top player in extrusions, serving nearly 25% of the North American market. In Europe, we hold a dominant and competitive position. We're #1 when it comes to value-added products. We have strong positions when it comes to recycled products, and we have the leading position when it comes to extrusion market. And to top that off, the presence we have in the Nordic power markets further amplifies our competitive advantage. And if you match that with the technology and the R&D organization that we have, Hydro has the structure, the global presence and the capabilities to capitalize on the long-term opportunities in the aluminum market. Last year, we launched an ambition to deliver greener earnings uplift in the range of roughly NOK 2 billion by 2030. And I'm really happy to stand here today to say that we are progressing towards that target. For Hydro CIRCAL, we are projected to reach 60,000 tonnes this year, which is up 20% since 2023. For Hydro REDUXA, we are aiming for sales of roughly 425,000 tonnes, again reflecting the increasing demand that we have for low-carbon products. And remember, this is growth in volumes in Europe, in North America, which structurally has seen a decline compared to 2023 in terms of volumes, a proof point. This also includes then the first batches of REDUXA 3.0 to Mercedes. And that's just one example of achievement where we can match our competencies in recycling with the primary production. We add postconsumer scrap into one of our smelters in Europe, delivering 3.0 metal to Mercedes. So we are building further capabilities for future contributions across the 3 main areas. In production, the fuel switch and installation of the el-boilers at Alunorte are enabling a lower primary carbon footprint. Likewise, we will also expand the CIRCAL capabilities in Europe and in the U.S. And we will continue to develop different types of alloys for Hydro REDUXA 3.0 for automotive applications also going forward. Commercially, extremely happy with the industry-first capacity booking agreement we did with Porsche in July and the new partnerships that we will start to talk about with Siemens Trains for closed-loop recycling, representing another significant milestone of the greener transition. So these initiatives are setting us on a solid path towards the 2030 ambition, positioning us well to accelerate the greener earnings uplift from an expected growing share of low-carbon primary and recycled aluminum expected to bring value in the years to come. So capturing the market opportunities emerging from the green transition was fundamental for the strategic direction we launched last year. So if you look beyond the current market downturn, the long-term trend is clear. The demand for greener materials and renewable energy is expected to remain high. Hydro today is already a leading player in these markets. And this strategy is all about widening the gap to our competitors for the race -- as the race for the greener transition and greener positions continues. So to achieve this, we are stepping up and focusing on the growth in Recycling, in Extrusions and to capture market opportunities for the green transition, in addition to stepping up investments within renewable power generation as a basis and an enabler for the decarbonization that we do. We will continue to advance the decarbonization technologies and the road maps while increasing the efforts to contribute to nature positive and just transition in the world around us. So leveraging these efforts, that will shape the market for greener aluminum in partnerships with customers. So if we then have a quick look at how we are progressing. So if we start with the Recycling. There is no question that there are challenges in this market for the time being. But the conviction we have is that the opportunities and the profitability will come back in the recycling market. Recycling in 2024 has really been squeezed on both ends. Low economic activity drives low scrap generation that drives up the price. On the other hand, low economic activities in the market where we operate also leads to a depressed billet premium. So you hit both on the cost side as well as on the pricing side of the material that you produce. Still, when you look forward, we do expect economic activity to come back both in Europe and in the U.S. Pinning exactly in which quarter that will happen is, of course, incredibly difficult and impossible. But we do suspect and do anticipate that European and U.S. growth will come back, leading to more scrap generation, leading to better premiums. The capabilities we have in sorting and sourcing and utilizing complex scrap is a continuous advantage when we look for profitable growth. Here, we are making good progress in -- towards our 2030 targets, supported by a clear road map to improve cost efficiency and to capture growth also for the going forward. On the cost side, we do expect to reduce what we call hot metal costs, so the scrap coming in, with some $20 to $30, and Hanne will come back to this as well, per tonne of recycled aluminum produced. We also expect to deliver some EUR 10 million to EUR 15 million in terms of synergies from the Alumetal acquisition we did last year. And here, we are progressing well, and we do expect to deliver the first EUR 4 million to EUR 5 million during 2025. Strengthening the scrap sorting capabilities remains a top priority for us. As I said, it helps lowering the metal costs and improves the relative cost position that we have. And then when delivering high PCS content, we can also produce more 75R CIRCAL and create an additional premium of that. And CIRCAL has really been a tremendous success in the market. And moving forward, we will continue to create a focus on diversifying this CIRCAL offering also into other markets within automotive, in addition to where we've been very successful so far within the building and construction market. So by 2030, we are well on the track to achieve the PCS capacity targets, having added significant capacity since 2023, aiming for between 850,000 to 1.2 million tonnes of installed capacity by 2030. The Recycling EBITDA potential is projected still to increase towards NOK 5 billion to NOK 8 billion by 2030, driven by the market normalization, increased installed capacity and strategic growth initiatives. With the announced growth projects we already have talked about, we are already at the lower end of the 2030 potential, so we are well on the way. If we look to Extrusions. Despite the growth -- or the market downturns that we have seen over the last 12 to 18 months, we are continuously improving, modernizing and optimizing the flexibility of the globally leading extrusion network that we do have. Staying competitive requires focused improvement efforts across the network. These efforts are centered around automation, operational enhancements and procurement excellence. In addition, we are continuing to invest in present fabrication consolidation, which boosts the capacity that we have and also increases our value-added offerings in a market. And we are confident that these investments will reinforce the competitive edge that we have, enabling Hydro to deliver more value and meet the expectations for advanced customers. So to capitalize on this, we are strategically targeting noncommoditized segments. Here, we see untapped potential to grow the market share in profitable high-growth areas. So looking ahead, the EBITDA guidance for 2025 is going to be in the range of NOK 4.5 billion to NOK 5.5 billion, so not the NOK 8 billion that was estimated some time back, based on the current CRU forecast as we see it today. So to achieve the 2030 target, it will require an additional demand growth of some 30% in North America and 20% in Europe, so bringing us back to more normal levels, if you like, along with the normalization of the remelt margins that we just talked about. Execution towards 2030 is driven by increasing improvement efforts and targeting commercial activities. Additionally, we see further potential uplift from the growth [ projects ] that we have announced and those we have in the pipeline. In renewable energy, we are executing well. Hydro Energy is actively upgrading, and it's expanding its hydropower assets. Together with Lyse, we are looking at an investment adding some 650 megawatts capacity to the portfolio. Here, Hydro owns roughly 25%. In addition, we are doing an investment in Illvatn, adding some 48 megawatts of capacity. Important part of that, it gives us more value from the flexibility in the hydropower assets in a more volatile pricing world for the energy. Following the closing of the transaction with Macquarie, Hydro now is well positioned to continue its profitable growth journey. So far, Rein has delivered some 1.7 gigawatt of renewable projects, and they have another 8.4 gross gigawatt hours of development opportunities in the portfolio which they're working on, both in Brazil and in Nordics. An important clarification is that in the current market environment that we see, the further development of hydrogen and battery materials would require significant capital going forward, in addition to having quite a bit of risk attached to it. So in alignment with the strategy that we have, which is back to focusing more on the core, we have decided to phase out the green hydrogen business and the battery strategy that Hydro has had, with no new capital being allocated to these businesses going forward. So executing on the road map towards 2050 is certainly a key element in Hydro's strategy for 2030. This year, we've hit key milestones to achieve the 2025, 2030 and 2050 targets: fuel switch at Alunorte, transitioning from heavy fuel oil to natural gas, converting coal boilers to el-boilers gives us significant improvement potentials. For 2030, we also have the opportunity to convert all the 7 boilers to el-boilers, which will give us a 70% reduction at Alunorte. Across the portfolio that we have, we are pushing every lever that we can, whether it's within casting, we're testing plasma, we're testing biomethane; whether it's changing from what we do with new -- or new PPAs to get to more renewable power than we had in the past in some of our assets. When it comes to hydrogen, we are currently concluding the green hydrogen project in Høyanger. That's probably less to do with the production of hydrogen -- not probably, has less to do with the production of green hydrogen. It actually has more to do with how do you introduce hydrogen into an industrial production facility over time to see how that impacts your equipment and how you're able to continue to operate that safely and measuring impacts on materials. Longer term, very ambitious agenda going forward, both when it comes to carbon capture and when it comes to the HalZero technology that we developed in Norway. Industrial pilot still planned by 2030. First metal, we do expect to be produced at Stage 2 by the end of 2025. The green transition goes beyond carbon. It also has very much to do with social and nature. The strategy that we have very much requests and asks us to contribute to the global nature positive goal, and we have made progress in many areas. We are advancing on the no net loss of biodiversity at Paragominas. This includes the collaboration with leading experts to develop comprehensive strategy, parallel work on creating metrics, which is important to measure progress as well as the monitoring frameworks. While Brazil remains very often the focal point of these activities, we're also starting to focus on this in other areas. The first area where we will focus on no net loss outside Brazil is in connection with the Illvatn pumped storage capacity or plant upgrade we would do in Luster in Norway. This is also creating interest from our customers, and it's very exciting then to have Mercedes signing up to what we call the Corridor Project, which is part of the just transition projects that we do along the pipeline in Brazil between Paragominas and Alunorte, together with several of the large and important NGOs in that area. So to be green, the transition also needs to be just. So Hydro is also committed to improving the lives and livelihoods in the communities where we do operate for workers and for the people around us and our own employees. So our just transition framework consists of 4 parts. Human rights, of course, is the foundation of the social impact work. Through continuous due diligence, we identify and mitigate potential risks in the operations, value chain and surrounding communities. We also very much support the local positive developments. And in 2024, we launched our own just transition program, engaging employees -- or engaging employees in more than 40 different projects alongside the ongoing community investments that we do, charitable donations and sponsorships totaling some NOK 123 million in 2023. Education is a key part. We have a target of 500,000. And by the end of this year, we will have surpassed 200,000, an important step forward. As a significant purchaser, we do -- we have the ability to drive change in supply -- one second. As a significant purchaser, we do have the ability to drive change also in the supply chain, setting high standards for human rights, working condition and the environmental stewardship in our suppliers. In Brazil, the supply development program over the past 5 years has focused on HSE, human rights and supplier support. And this is not only a statement. We as a management team and I, as the CEO, is also measured in this and will be part of CEO KPI chart also for 2025 when it comes to human rights and supply chain due diligence. So you can all follow this also when we publish the annual reports going forward. Finally, collaborating with customers, developing an early market for our leading products is a crucial part of the strategy. For the past years, we have entered into strategic partnerships with some of the world's leading companies, and they are yielding results. We've talked about the Porsche agreement, a first of its kind. Capacity reservations, they are committee money to this. Mercedes-Benz, we are delivering REDUXA 3.0, and they've signed up to the Corridor Project, also participating in the social work that we do. Brompton Bikes, which everybody sees when they are in London, we have signed an agreement with them. So when you buy a new bike today, you can also buy wheel rims which is based on 100% postconsumer scrap, first wheel rims in the world. Together with VELUX, a well-known Scandinavian company, we are also now exploring a potential long-term commercial group -- commercial opportunities to supply them with low-carbon aluminum globally. So the business areas is on the forefront of what we do, and the cost positions are important. When it comes to Bauxite & Alumina, we are well within the 90th percentile on the cost curve when the fuel switch is fully implemented. In Energy, our resource spend is highly competitive compared to our other Norwegian hydropower players. In Aluminium Metal, we maintain a robust cost position, with smelter portfolio well within the first quartile. And when you look to Extrusions, they outperform most of the peers that we have in terms of EBITDA per tonne, and they have done quite an impressive journey in the last few years. All in all, well positioned and on the journey ahead. But the market will be what the market is. And for us, it's important also to talk about the improvement program, and I'm very happy to stand here today to launch a new improvement program. If you look over the last 15 years, we've delivered more than NOK 17 billion in improvements, with NOK 9.9 billion coming from the current program. And that is part of the Hydro DNA, to continue to focus on what we control ourselves. Now if we look forward, the new program is designed to be even more effective but probably also quite a lot more visible at the bottom line, enabling you to tie back the savings we report to the financial figures being reported. So we'll have a more focused picture. We will target key value buckets and stop tracking smaller improvements, focused on areas where we have a large impact. It will have more detailed insights so you can follow and track the drivers and the impact of the improvements that we do, creating more accountability and transparency of the savings programs. And there will be a stronger link to the P&L bottom line. It will have a baseline for 2024. And quite importantly, it does not include, for instance, the restart of 100,000 tonnes in Norway. It's not included in the improvement program. It does not include the fuel switch that we're doing in Brazil. So although I've seen some of the reports earlier today that it looks like the same number as we've discussed before, actually, this is quite a lot more ambitious and should give you a lot more opportunities to track also going forward as we do deliver. When we deliver on this, that also gives us even more room to focus on the growth areas that we have, which is to continue to grow in Recycling, in Extrusions and within renewable energy. And at the same time, it should give us then the opportunity to continue to pay out good and attractive shareholder returns. With that said, I will thank you all for the attention so far. And then let's go through the different business areas and the deep dives and how all of this is tied together. Thank you.

Good morning, ladies and gentlemen. First business area, Extrusions. I'm a Brit, clearly, between the Norwegian sandwich here before and after. And of course, the Brits will know that we had a tough weekend. A bit worried about this event and people coming to this event. We had Storm Bert, strange name for a storm, but that's the name chosen. Storm Bert was vicious. I can tell you. It was a really tough weekend. Lots of damage, lots of floods, lots of illustrations of global climate change. It was pretty tough. But Hydro managed to organize the weather for you to get here safely today. But it's a useful introduction to some storms and headwinds we've had in the extrusions world globally. And these 2 charts really illustrate this for me and for you. Extrusions Europe, Extrusions North America, huge adjustments. And I remember 1 year ago in Oslo in the Capital Markets Day, having the same discussion, H2 '24 recovery. That's what I'm going to talk to you about today because those are the forecasts next year. We will see a recovery, 3% Europe, 5% North America, mainly second half, so a slow first half of 2025. Look at those numbers. Europe is below 2020 post-COVID recovery, down to levels lower than even the years of COVID when factories shut for weeks and weeks on end. Same in U.S. So you look now, volumes we see today are where we were in 2014. So when we talk about performance, a miss in the big red cross, NOK 8 billion next year. This is the reason we will, sorry to say, miss the NOK 8 billion. These are severe adjustments in our market. But on the right-hand side, you see there where we play, the growth forecast to 2030 in those market segments. And remember, Extrusions, we seek segments within segments that creates high value for us and high growth opportunities for us and the returns that you expect. So this has been tough, but we remain confident that these growth opportunities will be there for us, especially us as Hydro Extrusions, because of our unique position in our market, fully integrated as a group, but also globally representing our business and able to follow our customers as they develop their solutions, particularly on their decarbonization routes. So very tough at the moment. It will recover, and we're in the markets well positioned to capitalize on that recovery. So here, I've added the EBITDA per tonne margin on the left-hand side to show you where we are today versus 2014 when we last worked on this level of activity in our markets. And you see we're 3.5x more profitable EBITDA per tonne than where we were in 2014. So we've really lowered the breakeven point in that business and really developed our customers and our markets to be in a much stronger position to deliver return in this global extrusion industry. And even if you adjust the note there for FX, for real value of money, we're still 70% better on margin. So a little bit in the next few slides about how we do that, where we do that, which markets we're going to continue to seek value from. And the first one there, mentioned by Eivind, building and construction. It's not as important as it used to be certainly in 2014. It's still important for us going forward. And the trends in this market, despite the headwinds, is still strong. And within our business area, we have one business unit, Hydro Building Systems. The focus is particularly in this unit, mainly European centric but also growing around the world, especially Middle East, even in China, also U.S. And of course, Hydro Building Systems have really capitalized on Hydro's low-carbon offer, 75R, 75% postconsumer scrap. And they have successfully developed a strong position in this business. And frankly, we are short of 75R for our customers because of the opportunities. And this business unit is producing very similar volumes this year to 1 year ago despite some of their markets being 30% down, especially in Central Europe, especially in Germany. And they're making quite similar EBITDA this year to last year. So clear evidence in our Building Systems business with our product offerings and our low-carbon solutions for our customers, we are growing our market share. Then we talk about copper substitution. And you all know about the trends on copper availability and pricing. And we have more and more opportunities as aluminum extrusion solutions suppliers to substitute copper with the customers who are demanding it. And HVAC&R now is certainly one of those markets. And here, especially in North America, with our infrastructure there in Precision Tubing, even in China, we're really now capturing these opportunities on copper substitution in HVAC&R but also in automotive. As the BEV trend rolls out, lots of applications now used to be copper becoming aluminum, especially in low-voltage, high-voltage cabling. And you see there how, in Precision Tubing, that percentage of sales coming from substitution opportunities is increasing to our benefit. In Precision Tubing, #2 out of 4 business units, also this year is similar volume to prior year and actually more EBITDA. So again, showing when we're specific about markets and customers and segments and product solutions, we can still perform well despite the headwinds. And then automotive. We are dependent on automotive continuing the growth story, and this is a double-digit opportunity for us in Extrusions. You know from before we've communicated the extrusions -- Ducker has communicated the extrusions content in BEV is 3x more than ICE in a market that is growing. And of course, we can always question these steep curves going upwards on BEV penetration. '24 was a very tough year, actually negative in Europe on BEV figures. Nobody expected that 1 year ago. But we still continue. And these curves will move in that direction. There may still be some bumps in the road and some instability. But at the moment, the OEMs have to perform against the requirements -- the emission requirements. And you know the number is building up and up and up on what the penalties will be for these OEMs if they don't comply with 2025 emission regulations. So these curves are going to go up even in North America, and there can be a lot of speculation about that, but we still see BEV penetrating in the markets where we are present. The partners, you've heard about. I think the other thing to mention for Extrusions globally in automotive, nobody else does what we do, #1 for sure, but strongly represented on casting, extrusion, particularly value-added components for these OEMs, mainly in 3 continents but also even in South America. And this is important for us and important for our customers, especially as they're rolling out their decarbonization requirements and expectations. We're the only one who can offer the solutions they're looking for. And then the nominations. If you remember last year, these numbers were roughly EUR 1 billion more lifetime sales nominations with OEMs. You see that is like 90% OEM-booked business. And you can do the numbers, EUR 1 billion, how that converts into our EBITDA over time. And as a reminder, this is where we're nominated as sole supplier on typically 7-year platforms. And these are components. These are systems for the OEMs. And we've managed to jointly develop these solutions with the OEMs, plus the low carbon story. And also what's becoming more and more value, not just with automotive but many of our customers, is the transparency, traceability, the CSDDD compliance. And as Hydro fully integrated, we can really clearly demonstrate certified solutions, and that is increasingly valued in the marketplace. But it's not all about automotive. Talking about VELUX, which was mentioned earlier, I mean they are frankly onshoring back to Europe their supply lines. This has typically been in Asia. They want low carbon. So Hydro is the partner. So we're doing their business in Europe. And also now they challenge us in North America. And we know North America is much slower in this decarbonization trend, even in B&C. But increasingly, we're seeing signs that our customers and our customers' customers, this is what they are demanding. And Hydro Extrusions can deliver. So we will deliver for VELUX, North America, low-carbon recycled content solutions for VELUX in North America. And in the middle of that, we try to explain how we differentiate in our marketplace. So this is a program at the moment rolled out in Europe. It's very much copy-pastable around our other business areas. And this is where we take customers from, of course, being partners to being partner plus and to being innovative partners. And when you're a Hydro Extrusions and, therefore, group innovative partner, you have access for everything we can do. And as they go for their decarbonization stories, we can help them go faster with this certified transparency, which is important. We have more and more customer migration now move into this innovative partner solution with us as a key supplier. And then also rail. Rail was very, very slow coming to the table on recycled content, low carbon. But Siemens, as you saw earlier, they have their 2050 net-zero ambition. So where do they come? They come to us. And what they need to do in their industry is take responsibility, like many industries now, for end-of-life solutions for their materials and their products. So their problem on Scope 3 is buying new steel, new aluminum for their carriage and train solutions. So with Hydro, we will develop a closed-loop solution at the end-of-life rail carriages to bring that back into our system, probably through Hanne's sorting, shredding facilities, then into extrusion, then solutions back to the rail customers. And this, we see more and more of in the building and construction. We call it window to window, where even some customers now and certainly architects and specifiers are saying, okay, this refurbishment, those windows, you take them back. You physically take them back. You turn that into new windows for the refurbished development with all the low-carbon certification that comes with it. So this is an increasing trend we see. Even on bikes, reshoring of the bike frame industry to Europe. That's typically been migrated to Asia over time. And for all the reasons you know about, people are reshoring this back to closer to home. And then the final one there, one of our innovative partners in Sweden, LED lighting, mainly for office, retail developments, a market leader. And they also want low-carbon extruded solutions from Hydro. So plenty of examples to demonstrate this is where it's going, and Hydro is best positioned to deliver on these requirements. And then, of course, looking closer to home, what are we doing across our 80 locations in 40 countries to do our Scope 1, Scope 2 reductions and Scope 3 and what we purchase externally? And all I'll say here without going into the details, we are on track to meet those commitments we made some time ago for 2030. And we have to do that. Otherwise, our customers' Scope 3, we will not deliver on. And then a few examples that's in the pack. The green press in Poland with its own solar park, providing extrusions off this press at less than 1 tonne of CO2 per tonne of aluminum, best-in-class. We've got casthouse in Belgium there at Ghlin, putting a second wind turbine in to decarbonize our casting operations in Belgium. The Atessa one in Italy, where we -- one of our investments is to put capacity to do this window-to-window recycling in Southern Europe, and here, that's an additional 20,000 tonnes of CIRCAL capacity that comes on stream in 2026. And again, we need that. We don't have enough to date. We will certainly need that at that point in time. So many examples where we are getting our Scope 1, Scope 2 numbers down. And then whilst we're on the topic of investments, this is what we've been doing in the last few years, not investing in capacity and then chasing business. We invest in extrusion capacity in the middle there, in the purple box. You take the Hungary automotive press coming onstream next year, the Tønder press in Denmark coming on stream next year. These are the presses that will be doing the work you saw earlier on the nomination slide. So they're fully booked. That's important in our marketplace. We're not speculating on capacity. We're only installing modular investments and capacity when the market is there. And in fact, if I look back last 18 months, we've taken a haircut on our previous CapEx expectations to achieve the 2030 ambition. And until we get the business, we don't do the CapEx. And then finally, Eivind referred to improvement programs, cost reductions, this project pipeline we have now on automation to reduce our costs in the business. We're putting more focus into this automation, digitalization in different areas, 2 examples here, to get the cost down in our business. And these are very strong IRR return projects, not on any creep capacity that we may create by doing this. This example on the left, we get some of that. This is a press 19 coming on stream as we speak today in Cressona, Pennsylvania. And this, we replaced 2 presses, can you believe, 80-year old extrusion presses. So it's about time. They've done their bit. And 2 presses becomes 1 state-of-the-art modern extrusion press. And you see there the labor saving is 40%. The scrap saving is significant. The downtime, the quality, the productivity is all driving these improvement numbers. So we still have plenty of scope within this global network of extrusion and casting facilities to seek value from some of these automation and replacement investments. Same for fabrication sales or anything post press or surface treatment, robotics, AI, AGVs, guided vehicles to take cost out of our business, plenty of these opportunities to drive shareholder value. So summarizing improvement programs. Out the NOK 6.5 billion, we will contribute between NOK 1.7 billion and NOK 2 billion in those areas you see: commercial, then operations, and also procurement has been a big win for us. And this is not just reducing prices with suppliers. This is redefining relationships. Like customers do with us, we do it with suppliers. It's about total cost of ownership, lean operations between suppliers and us as a customer, in this case. And this really drives a lot of value in our operations around the globe. So the 2 slides you really want to focus on, NOK 8 billion, 2025. Sorry, red cross, we don't like that, but that's where we are. But a little bit about the waterfall on where we are today and the guiding now for 2025 and then this gap to the NOK 8 billion because NOK 8 billion will come but not next year. So first of all, there between '21, '23. In 2023, Europe was down 16%. North America was down 13%, and we still delivered those numbers in 2023, NOK 6.5 billion. And there, we were able to compensate for quite a dramatic volume shift, holding on to extrusion margins and also continuing with margins on extrusion ingot on the value-added premium for billets, in this case. So that was fine. But as we went into '24, more volume challenge. Another 9% down in Europe. At the moment, CRU says 4% down in North America. It may be tougher than that. And yes, we've got improvement programs again. And yes, we held on to extrusion margins quite well, but the margin on the value-added premium billet frankly disappeared. And therefore, we have this gap now. So NOK 4.5 billion, NOK 5.5 billion, this is where we're looking for next year. And the gap, frankly, is the market, the volume. This will come back. I'll come on to that in the next slide, and also normalization of this value-added premium on billet because at the moment, it's underwater. So the NOK 8 billion will come between now and 3030 -- 2030. And this is how we'll get to what we're still declaring as achievable ambition for 2030 in the markets we operate with the forecast we see, which is 20% up in Europe on extrusions and 30% up in North America, plus the normalization of the billet shape premium. This takes us then into the improvement programs with our NOK 1.7 billion to NOK 2 billion, which we will deliver; and then finally, the NOK 1.5 billion to NOK 2.5 billion on the returns coming from these growth projects that I've just been summarizing. So to finish, NOK 10 billion to NOK 12 billion is still achievable. NOK 8 billion will appear. And Hydro Extrusions, I hope I've explained how well positioned we are globally with our fully integrated offer within the Hydro Group and the way our customers are going to decarbonize their own operations. We are the go-to for their solutions. Thank you very much. So I will now hand over to my favorite supplier, Hanne Simensen.

Okay. So hi, good morning. Happy to be here. Happy to be the preferred supplier. My first Capital Markets Day, looking forward to present to you Aluminium Metal business and also to have a dialogue with you -- some of you afterwards. First of all, Aluminium Metal right now is delivering very strong EBITDA from upstream operation. But as we heard, we're also facing a dip in the demand for some of our aluminum products in key market segments. However, the fundamentals for aluminum still stay very strong. The world needs aluminum, and we see that the demand specifically for low-carbon aluminum is very strong. So looking at the total market, you see that over the next 5 years, we do expect an average 20% increase for demand for low-carbon aluminum coming globally. Then this will come as primary metal and -- or/and as recycled metal or as a combination, and I'll come back to that. So the low-carbon demand we see specifically coming from Europe, from North America and also from Japan. In total, these markets are demanding approximately 18 million tonnes of aluminum, whereas 9 million is coming from Europe. If we then compare to the supply of low-carbon, which we are showing on this graph, it depends a little bit how you calculate. Many of our peers, they are looking at emissions from the process, the electrolysis process in itself, plus the electricity being used. But if you ask our customers, the market, what they are concerned about is the emission in the product in itself, meaning that you have to look from mine to metal. And when we do this calculation, we see that globally, below 4, which is what we define as low carbon, we have only a supply of approximately 8 million tonnes. So it will be a scarcity for low-carbon aluminum going forward. We believe we are strong positioned and that we have a unique proposition towards the market. So I wanted to say a little bit how do we go to market. We have, of course, a variety of different aluminum shapes and forms. We are going to different markets with different alloys. And obviously, all customers are expecting us to deliver the highest, best quality at competitive terms, clearly. But also we see now, lately specifically, that customers are, especially now in the geopolitical situation we are in, also more and more preferring suppliers which could offer reliability and traceability in the value chain, so responsible value chains and traceability. So having transparency in what we do, being able also to sell -- come to the market with certified products like we've heard about, CIRCAL and REDUXA, and offering a variety of primary and recycled low-carbon products, where we could be seen as a kind of a one-stop shop, we see is also having a very positive effect in the market. In addition to that, I could also mention competence. Our R&D and customer technical support people are really busy at the moment because what we do see is that a number of these end customers, they would like support from us to also see how could they actually implement the right alloys with the right scrap types into their applications. So just a couple of examples. We're working with NKT, it's a wire rod producer, a market which is growing, to how do we find the best optimal low-carbon solutions for wires going forward. Another project is with Mercedes-Benz. We have also with other OEMs, where we're working alongside with our R&D team and also dedicated team from their side to look into from the new applications in the cars, how could you replace higher-carbon metals with lower carbon. And increasingly also they are interested in recycled metal. So a combination of that. So we are working, for example, with Mercedes-Benz on how to qualify CIRCAL into new applications. Very promising. So we are saying that we have a unique value proposition. And this is enabled by our production network, which is actually 2 complementary business models behind. You have the primary value chain, and then you have the recycling value chain, which is different, although we have a full offering in the market, sometimes with more or less the same products. Whereas also in the primary system, we have other products, in recycling, we could offer something else. But it's complementary. But behind there, on the primary side, it's characterized by big volumes, focus on productivity. It's cost driven. It's, of course, a value chain which starts in the mine. Whereas in recycling, it's -- we are close to the customers. So it's a local business, it's flexible, it's more complex. And you have a value chain of different size, different scrap types, where you need also competence on the chemistry on those scrap types. And still, this is giving us a lot of flexibility. I mentioned already that we have a full market offering which is, in a way, complementing each other. But also, it gives us a lot of flexibility in volatile markets. It's about how do we optimize now between prime and recycled. How do we make all these streams of scrap most valuable? And there, we have great opportunities having 2 value chains. Also when it comes to growth opportunities, of course, we have flexibility now in pursuing growth opportunities where we see it makes sense. So that's -- to have the robustness in those 2 value chains, we see as a very good advantage to have it like this. I wanted to go a little bit deeper into the primary production, where the target is to accelerate competitiveness and to maintain our leading position. So the primary system is already in a unique position. We are leading, as I already said, on low-carbon offerings, where we have 82% of our primary smelters being delivered with renewable energy. We have a long track record on delivering on our promises when it comes to improvements. I think that's embedded in our culture. It's a way of working with a business system approach where we also delegate responsibility out in the line to the first operators, making us into a world-class operator. And this means that over time, we have been able to move our cost position to the first quartile, and it doesn't stop there. When we are now on the first quartile, we have also opportunities. I will talk about some examples now to further enhance that. And we are delivering a solid return on capital, high cash position. And obviously, going forward, we would like to strengthen our position, further improve and then also securing a solid cash flow going forward. So I will come a little bit back to that. Here, just to say, we are working now on securing the power to our smelters. And I'm very happy that recently, we have secured power to Albras, the smelter in Brazil, now almost fully covered to 2030. And we're working with our colleagues in Hydro Energy also to securing power for the Nordic system. We have announced 3 contracts which is giving us support on the shorter position towards 2035, continue to work on that. When it comes to strengthened competitiveness, we have a number of different initiatives being now worked on. First category, I will talk about is creep. And creep is really about where you increase the amperage and current efficiency in all the pot lines. So over the last 10 years, we have been able to deliver additional 100,000 tonnes with a quite competitive CapEx. And looking through our full portfolio, we see further potential. 80,000 tonnes is what we have identified. So that is really something we look forward now to get out. On the technology side, it's a number of different initiatives. We're talking about battery recycling. We're talking about new potroom, control systems, et cetera, which is really about increasing the efficiency, taking down the cost and the CO2 footprint. One concrete example right now is Husnes Hall A, a smelter in Norway. We're now doing a technology upgrade. We used, in a way, the market dip where we also had some curtailments to use that to do that upgrade. And Husnes is planned to be up in operation now second half next year. Then we have also a number of smaller initiatives, which is in the category digital, automation and robotization. And specifically, we see great opportunities on maintenance using sensor technology, artificial intelligence actually to also take down the cost on maintenance work. More to come on that area. We have heard about how we have a leading position on sustainability. I think that's -- also a main reason is that we have a quite ambitious road map for how we work with that, a number of different initiatives, which is also a key reason why customers want to partner up with us. They want to be part of this journey. So we will hear more about the Alunorte fuel switch. But for me, it means that we get alumina with a lower footprint, which we'll bring into this Norwegian smelters. And therefore, we will have a REDUXA footprint which is going down, which we will use in the market. So that's very concrete. We have a number of different initiatives on casthouse decarbonization. It was mentioned that we have biogas coming into Sunndal now any day and with the potential of maximum 20,000 tonnes of CO2 reduction. And then we have the hydrogen pilot, which is up running next year. We will test out in industrial scale. And we're also looking at electrification of the casthouses and have R&D projects on that as well, like plasma. On the more step change technology development, talk about HalZero. And Eivind mentioned it already, we are now moving from lab scale into building a test facility in Porsgrunn in Norway. And hopefully, next year on the same event, I will have the first metal from that operation. The plan is then to go to industrial scale by the end of this decade. Quite promising. Then on -- but of course, with a lot of technology risk, I must add. On CCS, we continue to work on a number of different partners and technologies. And unfortunately, we are not as mature as we hope to be today. But we also have some promising development, which means that we hope to announce some development quite soon. And in addition, we are using postconsumer scrap not only in the recyclers but also as part of the prime portfolio. So to add PCS is, what I mentioned also, being worked with customers to add PCS in the products. And therefore, we have invested also in the Norwegian system in Ardal and Høyanger in recycling facilities. So a number of things ongoing on the primary side. Let's now move to recycling, where the focus is to work on improving the margins and then execution on our growth path and plans. So customer demand for recycling is accelerating. I think almost all our customers now, even though they are customers of the primary smelters, they ask how much scrap can we possibly get into the product. So this is really strong trend. And I think we are well prepared for meeting that demand. We have, over many years, developed the competence, which is about scrap procurement, really about knowing the different scrap types, whether it's [ soda bar ], taint tabor, different kind of chemistry, different opportunities, and mix that with a competence on material management. So it's really about matching the right scrap with the right product. That's how you get out the margins. And then we have also now invested in -- developed and invested in sorting capabilities, HySort, which we're now implementing in a number of different plants where we could take that into industrial scale. And all that is giving us some good opportunities now to improve the margins going forward. We have increased the PCS usage over the last years around 200,000 tonnes from 2020. So we're now at 450,000, and -- which again have a positive effect on the hot metal cost. And we see opportunities to reach 850,000, and I will show you why in a few minutes. So by having more PCS into the portfolio instead of standard ingot, you are also able to take down the hot metal cost. Less linked to LME, the more advanced and complex scrap, the better you could actually remove the cost and, therefore, increase the margins. And with the PCS in our portfolio, it also means that we could increase the volume of CIRCAL. And I think you heard here that CIRCAL is something we sold out. We could have done much more. So as you see here, we have going from 20,000 in 2020 to 60,000 this year, with a potential now at minimum 250,000 in 2030, and that's what we're working on. So the market right now is challenging. And one of the reason is that the current market is in what we call a cyclical downturn. It's not structural because right now we have a weakness in the building and construction, which means that less scrap is being generated. So we have it, on the billet side, lower demand. And you also see that the scrap prices have gone up. So it has been quite volatile. But if you look at the cycle, you see that the margins for every cycle has increased. And we think that coming through this cycle, we will also see again an increase in the margins because the megatrends are clear. I talked about the customers. The regulators is also clear. And when you look at how now also the society is looking into recycling, you will -- we do expect that as the economy mature, the scrap generation, the recovery rates will increase but also the collection rates, which means that sorting technologies will be developed and will be even more important going forward. And then why do we see the higher scrap prices? Well, there are less scrap available, I already talked about. But we also see that scrap is leaving Europe and leaving coastal part of North America. It goes mainly to China. And you could say it's a kind of a both a push and a pull effect here. The push effect is that in Europe, we haven't really had the sorting capability to utilize that more complex scrap. And in Asia, it's a pull effect in a way that they have been able to take in the scrap and hand-sort it. And therefore, we see that unbalanced. What we are doing is that we are working, of course, on the technologies around sorting. We do see that over some years, and analysts are showing that in some years, the Chinese will have a more balanced approach because also more scrap will be generated in China. We expect, therefore, that it will be self-sufficient by 2030. But we're also working here with the regulators as aluminum is being identified as a critical raw material in Europe. Why do we see that much scrap being -- leaving Europe? That's a question we have. So what is our plans for the -- road map for the next few years? It's a focus on improving the margins. It's about realizing the full potential of the completed investments, and it's about driving profitable growth. I just have one example here, how we work on improving the margins. I talked about it in the way that all recyclers are facing more or less the same market conditions. And we believe still that we are in a good position. The biggest cost in a recycler is linked to the metal, 80%. And then we have focused on that. In one specific plant in Spain, Azuqueca, they have been working very structured in a way now to take down the hot metal cost by replacing standard ingot, more expensive scrap, with a more complex postconsumer scrap. And by doing that, they have been lifting both the competence on scrap, on chemistry. They have been able to match that with more CIRCAL products, which means that Azuqueca right now is the leading plant in our portfolio. This competence we're now spreading out to all our recyclers, and we're adding also machine learning and building some operational tools, including also some casthouse equipment, which means that we are confident that hot metal cost, it's a huge potential to reduce that. We have put up a target of USD 30 by 2030, and we are confident we will reach that. When it comes to strategic growth, so what is guiding our investments? It starts with the customer approach, what is happening with the market. We see the trends in the U.S., for example, where we have now -- we are now ramping Cassopolis, a plant which is more advanced, specialized products into automotive, and also CIRCAL. And we're working with customers to see also what is the specific needs going forward and also with new ways of working, as we heard from Extrusion here about this window to window as an example. Focus right now is on scrap sorting. It's about the further develop and implement the technologies we have. The HySort as an example, where we have now implemented HySort in the U.S. in a new joint venture we have there, with potential also to further grow. And we're using also the HySort in Poland, in Alumetal in Nowa Sól. So then what's going to happen going forward? It's about -- still about implementing more of these sorting technologies, and it's also about further enhancing our competitive advantages. I talked about the more specialized casthouses like Cassopolis. We also have Szekesfehervar. And we see a lot of potential now also with Alumetal, which is the company we acquired and where we see potentials for synergies. We are on track to deliver on those synergies. [Audio Gap] You could say that by normalizing -- that's what we put in the assumption here. By normalizing the utilization of the recyclers, we have also used the last 10 years average of the margins, which you could call is a little bit conservative. We will then reach another NOK 1 billion. If we add the newly installed capacity, we can add [Audio Gap] So then I will round off. Just again confirming that Aluminium Metal has a leading market offering, and that is enabled by the value chain transparency but also the flexibility we have in the 2 complementary business model. So our focus now is [Audio Gap]

Yes, yes. I think Jason has a question.

It's Jason Fairclough of Bank of America Merrill Lynch. First, congratulations on refocusing the business on the core. Glad to see that some of those side projects are being wound down. Just a question about the place of Extrusions, and sorry to your British friend there. I mean bottom line is the returns are lousy. And if we look at most other aluminum companies globally, they've shed the extrusions business. When Svein Richard bought in the business, a few people really raised eyebrows. And to be honest, it's been okay, but it hasn't been fantastic. So there's a chance here that you're really committed to Extrusions. Do you really want to put growth capital into a business that isn't achieving its cost of capital?

Thanks, Jason. So the short answer is, yes, we are committed to Extrusions. And let me explain it in 2 angles. If you look at this from how we -- the sort of the value [Audio Gap] value chain that they see. So when we do these transactions with the large companies, they don't only look at the embedded footprint. They go to Brazil. They look at the mine that we have. They go through the pipeline, all the way to Alunorte. They look at how we operate Alunorte, how do we work with the communities. They look at the smelters that we have, how we operate those. All of that transparency goes into the product that Paul can produce. No other competitors can do that. That gives us a competitive advantage in the market. So yes, we can look at Extrusion in isolation, but you have to look at what this gives us, a value in the entirety of the value chain, and that, I think, is quite significant. And it's a differentiator in the market. So yes, we're committed to Extrusion going forward.

So just as a follow-up then. Is it then an issue of transfer pricing, and so ultimately, we have to be a bit more holistic and think about returns in the wider business? So fine, Extrusion returns look lousy, but well, that's the cost for the wider business to sort of deliver the model that you've chosen.

So every part of the value chain, there is a -- it's not a subsidized transfer price, so it's a business-related transfer price. So they pay according to whatever the market is. That's what the Aluminium Metal pays to John and B&A. They pay on PAX. So when Paul buys aluminum from Hanne, it's also based on whatever market price there is. And of course, these markets doesn't swing entirety in parallel, right? So it also gives you a little bit of a cash flow protection, and some of these markets also doesn't move in tandem in terms of profitability. But it's the value chain in totality that gives us what we believe is a preferred market position today as a value chain.

Dan Major from UBS. A couple of questions. The first one, just looking at the continuation or the iterations of your improvement kind of programs. I'm looking back at last year's Capital Markets Day presentation, Slide 103. You got NOK 8.7 billion of identified improvement targets in 2024 to 2030, split NOK 5.4 billion improvement, NOK 3.3 billion commercial. And then I look at Page 79 of today's presentation, it's NOK 6.5 billion. I guess the question is, have you realized all of the difference between the NOK 8.7 billion and the NOK 6.5 billion in the last 12 months? And when we think about how the market looks at these kind of programs, I mean, it feels to me that the sort of cost normally doing business requires continuous improvement. It's not necessarily quite just add NOK 6.5 billion to the EBITDA in 2030, all else equal. Is that the wrong way of looking at it?

So Trond Olaf will go through a lot on the improvement program in his presentation. In a way, everybody in the business works on improvement projects, and they should. I think one of the big differentiators between us and many of the others is that we work on this continuously. I think what you see in parts of the business is that they start working on it when times are tough. So for us, this is really a key part of the DNA that we are and have been over time in terms of delivering this. There are some differences between the improvement programs that we had and the new one. So we've shed the small of the smaller activity -- shed a lot of the smaller activities, so they are excluded. We don't count those. A lot of the activities that were in the old one were also sort of more ambitions in a way that were not backed by concrete actions. What you will see and what you will hear in the NOK 6.5 billion that we announced today is that they are backed by very concrete actions in what we're doing. And for me, it's important when we do these improvement programs, that to the extent that we can show it to the market that there's actually a link between the P&L and the improvement program that we report on, that's where we can create value and create trust that we actually are doing the right things. Because there are I think, in general, too many improving programs with very high [Audio Gap]

And again, maybe I hope they're not front running the future parts of the presentation. But similar kind of question on the commercial program with specific reference to the green premiums. This time last year, you targeted NOK 2 billion upside by 2030. It's now NOK 2 billion. Does that imply that you've embedded -- what have you embedded this year? Is it an upgrade to the number? Or have you just not really achieved the huge amount of incremental upside this year because the number is actually the same?

So we are progressing quite well. And again, I will let Trond Olaf go through the details. But we are progressing quite well, as you saw from both my presentation and from Hanne's and Paul's. Despite the challenging market in Europe and the U.S., we are selling more CIRCAL, and we're selling more Hydro REDUXA 4.0 than we did in 2023. We're selling more REDUXA and more CIRCAL than we did in 2022. So there is a continued progress despite the challenging market in terms of selling more greener products, and we do so at an increasingly larger premium. So the ambition -- and we said last year, there was an ambition of NOK 2 billion. It wasn't a target. So of course, that's the difference. So still an ambition, and that's what we're working to get to. But there will be a gradual development over time towards 2030.

Ioannis Masvoulas from Morgan Stanley. A couple of questions from my side. First, if we look at Norsk Hydro, it's been a leader in extrusions, in greener aluminum. But if we take a step back and we look at what's happening in Europe, a lot of the decarbonization projects and green initiatives are being rolled back. As you indicated today, and we've seen that across the broader industries, customer industries are not as keen to adopt and pay for greener metals, still aluminum at least not yet. And yet, if we look at your slide deck with the bridge to 2030, you pretty much reiterated the targets around extrusions and recycling. And if we look at the extrusion specifically, half of the delta from the NOK 5 billion midpoint to the NOK 11 billion midpoint is really coming from market normalization. Is there a risk that some of this market normalization doesn't happen because some of the capacity migrates out of Europe? CBAM is a question mark here. Why wouldn't you come up with a more conservative estimates and wait and see how the market recovers? Where is that confidence that the targets from a year or 2 ago are still valid despite what's happening in the broader European space? And that's the first one.

Do you want to start, Paul?

It's a long question. So first of all, on the customer developments on the decarbonization, we still see that as very, very strong. You see all the headlights about the BEV stalling, which it clearly did in 2024. But I still speak to a lot of customers who are still on that journey. They're not softening their own targets on 2050, 2030. They're cautious, of course, on some of the new models, BEV. So we do see some delays on some of the platform launches, but they're still going to come. So for me, I still see good traction on the minus 55% European green deal and still momentum in all the markets I'm operating in, the pull is still significant. So yes, some delays, but directionally, it's still going in the same direction for me.

I think to add to that. I mean, if you listen to the voices out of Brussels for the moment, right? With the Draghi airport, there is a clean industrial deal coming up 100 days after the new cabinet takes place in January. There's a lot more talk about competitiveness of Europe. There's a lot more concern around is Europe going to be competitive? Or are we going to be squeezed between China on the one side and the U.S. on the other side? So at least there is more focus on it. And then, of course, there's always a chance when does the focus translate into real actions in a way out of Brussels. So we're still confident that it's going to come back. I think parts of the market is probably lost when you look to OEMs, for instance. It's hard to see that Chinese EV suddenly are going to leave Europe. They seem to be hovering around 30%, 35% market share. That's probably going to stay. We're mostly exposed to the larger and more premium brands of cars than the small to medium sized. And of course, the bigger brands also use a lot more aluminum for car than the smaller to medium-sized cars. So we're still quite confident this will happen. CBAM is a big discussion. There are some quite glaring, big loopholes in it, both when it comes to what we define as the scrap loophole, but also when it comes to the product range of products that's under the CBAM. Because there is a risk that if they don't update, if they don't expand the product categories, there's also a risk of some industries moving out of Europe due to CBAM. And I don't think that was the intention of the European Commission when they introduced the CBAM. So it's in the reporting phase. There are ample opportunities to improve that structure, and we would see where they come now in 2025/'26.

Could I add -- just one thing on demand for greener. What we see over the last couple of years, including now the last 12 months is an increasing number of customers willing to pay for low carbon. It's not anymore just a front runners, even in a weak market.

Just a second question on, again, the market backdrop. You showed in the slides that we are below COVID levels when we look at extrusion demand, recycling under a lot of pressure. Typically, this type of environment offers opportunities for players with strong balance sheets and synergistic potential. But you only tend to talk about organic growth. So how does M&A fit into your growth ambitions? And where do you see areas geographically in terms of products where you could look at inorganic options?

So M&A will always play part of the -- at least in the beginning, the internal discussions when we talk about growth. We bought Alumetal in June '23, which was part of entering into a new market for recycled foundry alloys, also giving us very different scrap sorting opportunities than what we had in the portfolio. The whole market for us is predominantly in Europe and the U.S. So that's where we would look for those type of opportunities. And then I think for us, the way we have our strategy, both organically and inorganically in extrusions and in recycling, these are discrete decisions, right? It's smaller investments, which you can decide to do and not to do it. That gives us a lot of CapEx flexibility going forward. And that's probably also how we should think about M&A going forward. Bolt-on acquisitions, certainly something that we would do. But these massive investments or massive M&A transactions is probably not that attractive, and certainly a lot more complex to do than the smaller bolt-on discrete decisions.

It's Amos Fletcher from Barclays. A couple of questions. I suppose, first one for Paul. Quite often when we chat, we're always expecting an improvement in market demand 12 months out. Are there any genuine green shoots visible as yet in any of the end markets?

I'd say certainly recycle content low carbon, yes, and that can be in the markets I described there, B&C. As I said, to grow your share and do similar volumes this year to prior year. That demonstrates there's a serious market pull for this solution. So yes, I see 1 or 2 shoots, but I'm not confident enough with what I see today. And bear in mind, we're in Q4, we're heading to end of year. People will be closing up shop, reducing their inventory. So now it's not the time to see it. I think the real testing time for us on extrusions will be as we come back, mid-January to February. That will really start to tell us if B&C in particular, is starting to shape up the normal building positive cycle in the spring time. So nothing I see today is giving me enough confidence to commit to, I see it, frankly, in most of the segments we operate in Europe. In North America, I would be more optimistic, some of the trends I see there. And of course, some of the regulation people talk about at the moment. I mean, that can be good for our business in North America. Whether it's on premiums or whether it's on local demand, this would be a more optimistic area for me.

Okay. And then as a follow-up, I just wanted to ask, Norsk Hydro is very exposed to the European auto industry and Chinese competition going into that, as you mentioned. Have you got any plans to reduce that over time, for example, to shift more capacity investment towards the U.S., where it's been more of a protected market?

On the extrusion side, Paul, do you want to?

Personally, yes. And this is really on the radar screen. There's the global territory at the moment. I would prefer to spend my investment dollars, especially growth investment. So we have a lot of good internal discussions on the opportunities in North America, and I don't see enough in Europe to really generate the same enthusiasm on growth investments. Like I say, the automotive press investments we make, that's on nominations. If those nominations come, then I'll put more on the table for sign-off. But the haircut I referred to, we haven't signed off an automotive press in Europe, the ones I talked about for 2 years. And really in my ambition for 2030, we would have been talking about 1 or 2 additional ones in that last 18 months, 2 years. But North America, I see more prospects for investment dollars there.

It's Matt Greene from Goldman Sachs. Hanne, maybe perhaps 2 questions for you, if I may. The first one, you just highlighted 80,000 tonnes of production creep in the primary business. Over what time frame is this? And is this just amperage creep across the business? Or is this sort of isolated in particular parts? And then secondly, on the secondary recycling the USD 30 per tonne by 2030, I suspect a big chunk of that is on the success of your HySort technology. But just can you give us a sense as to just how far down the post-consumer scrap chain you can go? I mean, is this allowing you to perhaps take Zorba and upgrade there?

Okay. On the first one, 80,000 tonnes. It's -- I talked about amperage. It's -- we have concrete projects using longer anodes, for example, in some of the plants, which will give extra volumes. So the time line we're talking about here is towards 2030. But there are concrete plans and projects behind 80,000. When it comes to the USD 30, what kind of scrap, well, depends a little bit on the plant and what kind of scrap types and the mix on the products you could offer. Hopefully, then with the technology, with the competence, we could dig really deep into it, and therefore, also target some sort of buffer for example.

But if you look at the example that you mentioned, Hanne, [indiscernible] plant, they do not have the HySort technology. So it is really about understanding which scrap you get in from an experience perspective versus the products that you intend to do produce. Today, that's very much sort of a competence sitting in people's hands and heads in some of these plants. So part of the technology enablement that Hanne talks about is also how do you transport that personal competence into a digital tool that can be used in more plants. So that's also part of it in addition to the HySort. So again, using technology based on people's competence will enable part of that $30 improvement.

Any further -- yes.

Hans-Erik Jacobsen, Nordea. A question for Hanne. You mentioned that you're lobbying governments in order to reduce scrap exports out of Europe. How successful do you think you are going to be? And if you are successful, what do you aim for? A total ban or export taxes? Or how do you see this will work out?

That's a complicated question. As I said, 2 million to 3 million tonnes is leaving Europe and U.S. And as Europe has identified aluminum as a critical raw material, this is something we at least bring to the attention of politicians. It's not going to be easy. And I can't promise that we will be the one that actually make that change to regulations. But it's something we are addressing in different forums, through associations, through our contacts, also to make sure that people understand that this raw material that Europe needs.

Yes. So I sit on the European Aluminum Association, and I can tell you this is a very, very hot topic, not for us as just extruders, but also the recyclers, the rollers and the upstream. And there's an awful lot of lobbying to find some way of retaining the scrap in Europe. And not just because it's critical raw material, it's stored energy. So it's much better to use a scarce, expensive energy to recycle scrap than, sorry to say, more primary upstream. So I think there's a lot of momentum. There's a lot of support. It's just moving the politics in Europe. But if U.S. moves quicker than Europe on this, like they tend to do, especially on antidumping tariffs, if they do the same on their scrap exports from U.S., that's going to be even more important that Europe move the needle. Otherwise, these fish are going to be after even more of the European scrap. So this is a very good question. We work extremely hard on that.

And then I think also, if you look at a little bit bigger picture, right, because it's not only aluminum that leaves Europe and the U.S. as scrap, it actually leaves in combination with what we call red materials, so copper, for instance. So we have about 800,000 tonnes of copper that leaves Europe. [Audio Gap] place to start, both from an energy and from a material perspective.

Any further questions from the room? No. Then we will have a short break. So everyone needs to be back here 5 minutes past 10, and then we continue with the presentations. Thank you. [Break]

Okay. We still have a good morning, I hope. So now we are going to the more exciting part of the value chain. So we've talked about this Chinese stuff with Paul. But also this red bauxite and alumina is, to me, an extremely important part of this value chain. And of course, like Eivind have talked about, it's not only about the operational excellence, it's not only about cost. It's also about social. It's about our footprint on environment and our footprint on climate. And that's kind of what I think we need to keep in mind and we are keeping in mind. Because last year, when I came, I was a bit less optimistic. My financial numbers were not so great. Market was not so supportive. Today, we see that PAX is at all-time high. The world is smiling to us in the B&A business. But of course, this is something which is flavor of a market situation which we know over time in our commodity business. This is the first time in my 35 years that I have had some help from the market. Timing is not so bad because we have actually spent a lot of money to reposition Alunorte and our Bauxite & Alumina business. So we have this a bit special situation on bauxite and alumina with a PAX price of $700, $800, of course, supports kind of a short-term type of profitability. But if you look more at the fundamentals, I think we are seeing that the closure of Kwinana, some hardship around bauxite supply into China and into EGA, there are elements that we know over time most probably will be reset and we will have a more normalized development of the price. But we also see that even though we have a special situation on the [Technical Difficulty], raw materials with caustic, oil, coal, and gas is more on a more average normal average kind of cost level. But that said, I think what we have since last year, we have delivered on those promises that we said. We would work on cost improvements. We would reset in a way our energy mix. And what I can say is that we have delivered on that. We are running our operations in Brazil at capacity. And we are doing that even during a transition on the energy mix. We are -- we have implemented a fuel switch change, where 13 of our assets are changing from oil to gas, calcination and steam production. We are introducing the electric boiler [Audio Gap] energy costs going forward. At the same time, we have also improved the asset integrity of the plants to reduce these surprises that we had. And you have seen that and you have discussed that with us. We have spent quite a bit of cash -- sustainable CapEx on improving the operational stability. But we have also the tailings system. So we have actually removed creating new tailings dams by actually develop this dry backfill process. And that, again, has given us a stable and less evasive kind of situation relative to having to use new areas for tailing dams. And then on the asset side, we have certified as the first refinery and mine in the world, the asset integrity by ISO 55001. It's 33,000 assets that we now have registered and we know exactly how and when to either replace or maintain. And we have also driven this maintenance program by introducing digital transformation, where we have created savings of NOK 200 million on a more stable operation and better maintenance program with new tools. In our industry, generally, even if we have 50 to 80 years of bauxite reserves, it's generally a trend that contained alumina goes a bit down and reactive silica goes a bit up, which also means that you have more overburden and generally you move further away from the beneficiation. What we have been able to do in our mind is actually to compensate both, the overburden cost increase by actually neutralizing it, and we have also been able to actually compensate cost increases because of these increased volumes by improving the fleet that we're operating in the mine by moving to bigger and the more robust equipment and also combining diesel and electric vehicles. This gives both the benefit on carbon emission, but also a safer operations. And as an example, one of these trucks are consuming 400 liters of diesel per day. And we see that the cost benefit of electricity -- or electric vehicles is also a way of modernizing the whole mining area. In Alunorte, like we talked about the transition to renewable energy and gas has driven a cost improvement of $25 per tonne or between $160 million and $200 million. And that, I think, combined with a good market situation we have, is showing that we are focusing on what we can affect. We are driving every day down cost. And on top of that, we also by introducing the partnership with Glencore, we lost 2 million tonnes of equity alumina. But our team in Switzerland have then been working this year to reestablish a commercial position similar to the one we had before the partnership, also to drive profitability through knowledge in the industry and trades. So if you then look at the improvement program, it's kind of part of our DNA, dedicated teams. We have a program called [ Connect ] where the whole organization is actually engaged. We just did a Hydro Monitor, we call it a survey among employees. We had 98% participation and 95% in a way -- of the people are, in a way, happy with the way we are working and the way Hydro was taking care of both people and the environment, the whole business. But that means that we also have a huge benefit involving these guys in the improvement program. So driving these bigger changes with the energy mix, but also the day-to-day stuff and introducing more modern ways of working is giving us -- and a procurement program of $0.8 billion of cost improvements as a target for 2030. And we are on the way to deliver on that. And then you also see that by '25, we will have a movement on to the first decile on the cost curve. So yes, short term, help from the market, but the DNA of us in B&A in Hydro is work with what you can affect, reduce the consequences of the quality of the bauxite, improve the mining operations, increasing the efficiency of the fleet and then work on the logistics and transportation because there's a lot of logistics in mining and refining operations. And then, of course, asset integrity is extremely important. Because we have, like I said, 33,000 assets. So if you have surprises here, you will also lose your operational stability and your capacity. So that's what we have been focusing over the last few years, and we are getting -- reaping the fruits a bit of this now by also improving the competence of the organization. I started out saying that to me, it's safety priority 1, 2 and 3. Then operational excellence. But we also has this kind of operational license that we need to care about, and we learned our lessons in 2018. So reduce environmental footprint, reduce climate footprint and increased social reach. But when we then go to the climate part, we are already at a good starting point with a 0.65 tonnes of carbon per tonne of alumina in Alunorte. But by now introducing fuel switch in 3 el-boilers, we will move down to one of the leading positions in industry by 0.44 tonnes of carbon per tonne of alumina. And this journey can be continued if the market kind of supports it and people start actually valuing the carbon reductions. Then we can add more electric boilers, reduce dependency on coal and end up more or less at 0.2 by 2030 and there's no technical challenges. It's more whether the market actually appreciates or there's a carbon tax. So we are ready to move, and we are ready to deliver on this, but it needs to be jointly with our customers. And that also already drives us down to the first decile, on the carbon kind of comparison curve in the industry. So a very good starting point for capturing value. And we already do, both Hanne and Paul have talked about an Eivind, but more to come. And then if you then move over to the other building blocks, climate is not kind of carbon, it's also SOx, NOx and particulates, which are kind of being reduced with these initiatives on the energy mix. But we have a social focus because I think we learned without driving society around the plans we have. Hydro will not succeed in Brazil. So we have joined partnerships with the government. We have built so-called peace houses. These houses have services from the government. They have doctors, they have education, they have sporting events. They have an array of offers to the people that are less fortunate in a way and it drives down criminality, and it's more or less the 1,500 people per day going through these facilities. And we have built one -- we are building one in Paragominas, one in Barcarena and 2 smaller ones on the pipeline based on the test we did over the last 3, 4 years in Belem. So this is one of those bigger initiatives. We also have the sustainable Barcarena initiative and the Corridor Project that Eivind talked about, which is a big program where we are actually trying to attract also other investors to be part of this journey on Just Transition and our social journey in Brazil, which is also encompassing focus on nature and our contribution to nature positives. So it's the people, that is how people work and live in the region. And on nature, we are also having a very strong focus, like I said, on reducing the footprint. And here, we have in the mining area already introduced dry backfill, which means that when we actually take out the bauxite year 1, we are already reforesting year 3, and we are putting back the tailings into the mine. And that's a new license process that we have been using for the last 2, 3 years and we are now sharing that in the industry. But that gives us no more tailings dams and a reduced footprint. And this is also an example of how we are practically translating our focus on nature positive and trying -- for the existing dams, we have a strong focus on following global standards, and we are potentially one of the first mining companies to be verified following the GISTM standard for tailings monitoring with a third-party verification at the end of this year. So in a way, making sure that there's no surprises and that we have good governance and standards for the way we're operating is also key. What we have seen now is that, of course, we don't do this only because we think it's right. We also do it to try to differentiate ourselves. Because we think that we said that this transparency and the value chain is so critical. And now we are becoming one of the few companies that came from bauxite all the way to the end product or the semi end product actually document, that we have human rights, we have nature -- contribution to nature positive, all in a setup which is transparent. Mercedes-Benz came and visited. They audited us. And they are one example of saying, "Hey, we like what we see. We know that we depend on the aluminum for the transition and the greener transition, and Hydro has a good solution." So they have signed up to join us in our efforts in the Amazon on our Corridor project, which is kind of improving the livelihood of the people in the region. So this, to me, is also a differentiator that gives us a unique position in the market and creates value. So it's kind of -- sometimes you see this as cost. I see it more as part of doing business, but also as a value differentiator going forward. The other part of this industry is that there is a huge bauxite residue. So you take out the bauxite. It's 4 units of bauxite, becomes 2 units of alumina, becomes 1 unit of aluminum. But the residue then is a big, big challenge. It's 3 billion tonnes already stored. That's 450 million every year added. So we have introduced a focus on how could we get [Audio Gap] residue over the next 10 to 15 years. And here, we have a partnership with [ The Laurent Tech Group ] in Brazil. They have a company called NewWave, and we have now developed an industrial process to actually extract the pig iron from the bauxite residue. There is between 35% and 40% pig iron in that residue, and we have industrially now tested it. And as we speak, we are building an industrial plant in Barcarena for 50,000 tonnes, which can be scaled and could create a new industry in the region but would also then give us a product with high value. And whatever's left will be an in a building material type of slag, which can also be introduced in different value chains. So I think that shows a bit that as you put focus on something which we saw as a challenge, it starts to become a new opportunity. And hopefully, this will also be scalable, so you can use it other places in the world. And the Wave Aluminium, of course, is the one doing it. We are refurbishing the -- or giving them the access, setting up the pilot, confirming the industry, also confirming a concept. But -- and we have an option to be part of it, but this is kind of a bit that we are not going to be pig iron producers, but we are going to try to create a circular opportunity. So all in all, I think that what you see then is that, yes, the market is there. Our profitability is better this year than last year. And we also foresee that in '25, we have a good start of '25. We think that most probably during '25, there will be somewhat of an adjustment and the supply demand might be more normalized. But so far, I think it shows a bit that by moving down to the first decile on the cost curve, we have repositioned Alunorte and alumina business. Thank you.

Hi, and good morning, everyone. Very happy to be here. This is my first Capital Markets Day in Hydro. I joined as EVP of Energy from July 1 this year. Long background in the energy industry, former CEO of Nord Pool, a physical power exchange. And I can tell you what is happening in the energy markets now and what we've seen in the last 5 years, I would say, is very exciting. The green transition is really happening now. If we look at on a global scale, massive investments are going into this space, and it's double the amount that goes into the fossil fuel space. This is mainly driven by China, Europe and the U.S. And this growth -- this tremendous growth is expected to continue. According to the International Energy Agency, the world is set to add more than 5,500 gigawatt of new renewable capacity between the years '24 and '30, and that is 3x the increase we saw in the 5 previous years. The chart to the right shows solar and wind development in China, U.S. and the EU. And according to the Chinese government, China will reach their 2030 targets in renewables already this year, and that's 6 years ahead of schedule. And then China will be home actually too of half of the world's total renewable power capacity in the world. China also dominates the key components within renewable technologies. As mentioned by Eivind, a lot of aluminum goes into especially producing Chinese solar panels. And -- but also in the U.S., in EU, we see rapid growth in renewables, and we expect that to continue. It's driven by climate, energy, security goals, ambitious policy investments and improved technology and, of course, lower cost levels. The solar model prices have almost decreased in half since early '23. Looking forward, when looking at the technology, we believe will continue. It's solar across all geographies. Moving to Norway. Norway on the other hand, investments within the renewable space has slowed down. We all know that we're familiar with the onshore wind development, that sort of really slowed it down in 2019. But when we look across technologies, we see very little improvement. The Norwegian power balance is weakening, and it will be tight until we have some sizable offshore wind volumes in the mid-30s in the system. And this is a big challenge, and it's a big concern for Norwegian industry. The demand for renewable power is growing due to electrification of society and decarbonization of existing industry, as well as potential new industries. And this is the desired outcome, Norway want to be part of this. However, we will not succeed. We will not get to see new investments with the space if we don't have a power surplus and competitive power prices. And we have some amazing hydropower assets in Norway, and some of Europe's best wind resources. So if we manage to develop these resources in a sustainable way over the next coming years, we will really get an efficient and balanced power system with competitive prices. The chart to your right shows how then hydropower and wind power play together in the system. This is 1 week in the price area NO2 in Norway, and just see how perfectly it plays together. When there's a lot of wind blowing and coming into the system, the hydropower producers take down their production. And vice versa, when there's little wind, the hydropowers can turn up their production. Therefore, this balancing of this intermittent wind power is less costly in the Nordics than in regions with less hydropower, meaning to balance out the system in the Nordics is less costly, for example, than in Germany. And with all this more wind and solar coming into the system, as well as shutting down the coal and the nuclear, just in the U.K. in September this year, last coal -- the last coal is out of the system for use for electricity. So even U.K. now, it's no more coal for electricity. But taking out all this nuclear and coal increases volatility. And if you look to the graph, you see that there are some really high spikes. That's the energy crisis. But also after the energy crisis, we see a whole different level of volatility in the market than we saw before the energy crisis. And that means that within hours, it can change from abundance to a very tight system, meaning peak prices to 0 prices, and even a lot of negative prices. This year, we've seen a lot of hours with negative prices in different price areas. And this volatility, it increases the need for flexibility and also the value of flexibility. And there, the reserve-based hydropower comes into play, because that is an excellent technology to add flexibility to a lower -- at a lower cost than the alternatives. So by investing into hydropower, flexible hydro power, we contribute both to more efficient power system, but we also get the opportunity to move the flexible production to the right price hours. And in practice, you can say that this flexibility acts as a big battery in the system, shifting energy production between hours and seasons. So analyzing, optimizing and acting on these markets is key going forward and commercially very interesting. And that brings me to our production platform and commercial ambitions. Energy has a strong production platform. And I must say I'm very impressed by seeing the energy organization and how they work and act on continuously making sure that we are industry leader in terms of cost and operational performance within the hydropower operations. And the reason why we do this and have this position is we have the standardized processes. We have one control room. We have efficient resource planning and a strong cost focus. Looking towards 2030, we'll continue to shape our portfolio and organization to deliver on our ambitions. And today, we also launched NOK 200 million improvement program as part of Hydro's overall improvement program. And this program will target both the restructuring that Eivind mentioned, but also reducing organizational costs. One of Hydro's key priorities towards 2030 is growth in the renewal power generation. And we will also shape our organization to fit that agenda. And a part of that is also to develop our market organization going further. As you can see to the right, we have a commercial ambition of NOK 550 million towards 2030. And that has to do with monetizing on this volatility that we see in the market. It has to do with short-term operational handling, and it has to do with long-term trading positions. That's closely linked with digital initiatives and investments, including target use of AI. And our market organization is closely linked to our sourcing activities, ensuring a stable supply at power of competitive prices to our aluminum operations. And if you look to your left, you can see Hydro's captive power and PPA, so power purchasing agreement strategy, that ensures the robustness and contributes to place Hydro at the lower end of the cost curve for our aluminum business. Here, you see the Norwegian smelters. We are one of Norway's largest consumers, with average consumption of 17 terawatt hours, and then we have our captive power. We are quite well covered towards 2030 with about 50-50 with our captive power and external suppliers with PPAs. And we saw during the energy crisis that was quite challenging to get new PPA deals at the right level. But however, now we see things are moving in the right direction. We just signed a PPA contract with Skellefteå Kraft, which is 2 terawatt hours for in 7-year -- 5-year period. And we have several good leads in the pipeline. In Brazil, we are fully covered towards '28. And this is sourcing from Hydro Rein solar and wind parks, as well as external suppliers. We are working on several routes to secure power at competitive prices within -- for our aluminum operations. Within our hydropower portfolio, I'd like to mention 2 projects. One is Røldal-Suldal upgrade mentioned, I think, by Eivind, this is with our partner, Lyse. This is both to upgrade and expand. So both new annual production of 800 gigawatt hours and a huge increase in capacity 650 megawatts. So using that flexibility. So this total investment is estimated to NOK 7 billion to NOK 8 billion, with a possible construction known earlier than '27. Then on the other project Illvatn Pumped Storage is in song. It's another very interesting project. This is a smaller project. It will generate 84 gigawatt hours of more annual production and 48 megawatts in capacity. Total investment is set to be NOK 1.2 billion. And the final investment will -- decision will be later -- will be second quarter of '25, with a construction starting later that year. We're also developing -- working hard on developing onshore wind and solar project in the Nordics and Brazil. Wind project close to our smelters are fully owned by Hydro, while all of the projects in the Nordics and assets in Brazil are owned by the joint venture, Hydro Rein. The aim is, of course, to get more renewable power into the market, but also to conclude PPAs between these projects and our industrial activities, all the time preserving prevailing market conditions. And also, the energy sourcing team in Hydro has a strong track record in continuously being out there in the market, finding a price competitive contract for the other business areas as well. And just on transfer pricing, note that our internal contracts mirror the external contracts and are thus market based. Then over to Hydro Rein. Hydro Rein is an important contributor to Hydro's renewable growth ambition, and we are very proud how far they've come in a few years' time. The company has now 1.7 gigawatt in operations, 8.4 gigawatt of gross capacity in the total portfolio and more than 60 renewable projects across various maturities in the pipeline. They have secured more than 5 terawatt annually of long-term contracts to customers. And also in the Energy Solutions space, which is behind the meter, looking at energy efficiency. We also have -- are at the operational stage for our first project there. And we closed the deal with Macquarie in June, and we're very happy about that. We see that their commercial strengths and their expertise within working on renewable projects is key to develop Hydro Rein further. Hydro Rein put 4 projects into operation this year. Stor-Skälsjön Sweden as a PPA with Telenor. Ventos de São Zacarias, powered to supply Norsk's bauxite mine, Paragominas, and also the alumina refinery, Alunorte. Then we have Mendubim, solar park northeast of Brazil, is a partnership with Equinor and Scatec. And Boa Sorte, southeast in Brazil, a partnership with Atlas. So very good traction here. And these are huge projects. They are developed in remote areas with a total of 5,000 workers on site. And having, of course, safety as #1 priority, they were completed best-in-class with HSE indicators on time and budget. And some of the most notable achievements on the sustainability track record were the aim for no net loss of priority biodiversity features, and several program bringing benefits into the local communities. And for example, in the solar project in Brazil, a training program was put in place to hire and educate local women to electrical and mechanical expertise, so they could be hired and take part in the project. And local women were constituting to 15% of the workforce in the projects. Going in for landing, energy is pioneering the green aluminum transition across Hydro's value chain. Two examples, if we go to Høyanger, we are maturing a 1 terawatt hour onshore project with Snøheia, together with partners, securing power to our smelter. And in the same area, also maturing a 5-megawatt hydrogen pilot in Hydro's new recycling facility, building on the test we did in Extrusions in Navarra. In Alunorte, we have, through the solar park Mendubim, it's a 531-megawatt solar park. So it's huge. It looks like a sea of solar panels. We are reporting B&A on their Fuel Speeds Project, Alunorte. Summing up. This is how we're creating value towards 2030. Industry leader on HSE performance and sustainable renewable energy development and operations. High performance and profitability ambitions. Energy classic ROACE with over 50% average. The Rein joint venture platform with an equity IRR 10% to 20%. And a commercial ambition of NOK 550 million. We have an active sourcing agenda and a robust portfolio supporting all business areas. And we would like to grow Nordic captive portfolio with new renewable energy projects within hydropower, wind and solar. We are upgrading existing hydropower assets to capture this value of flexibility. And we continue to develop innovative energy solutions and contribute to decarbonizing the full aluminum value chain. Thank you.

So good morning, everyone also from my side. And thanks a lot, Kari. Very good to see all you here today. So last year, I had the pleasure of presenting our Hydro 2030 strategy, at that time as EVP for Corporate Development. And this year, I've been very much looking forward to presenting how our strategy translates into financial performance and priorities into my new role as CFO. And this is particularly so now that we have a more focused strategy, where we aim to grow in areas where we have strong capabilities and strong market positions, and we see that the global megatrend supports us. The title for my presentation today is Focused Growth and Strong Performance Drive, emphasizing the execution part of our strategy. So the overall goal for me is to try to summarize everything that we have been through to date and translate that into a meaningful figures and numbers into the analysis. But let's begin with the last 12 months. So despite very challenging markets in Europe and North America, Hydro has delivered solid results carried by our upstream operations with positive revenue drivers and also solid performance. In this market environment, our downstream segments have been under pressure, and both Extrusions and recycling activities have faced significant challenges in meeting expectations. As a result, Hydros ROACE over the last 12 months has fallen below our cost of capital, reaching 7.2%. But nonetheless, we have delivered a 5-year average ROACE of 11.8%, reflecting our commitment to delivering returns above the cost of capital, above the economic cycle. Over the past 12 months, AEBITDA has been boosted by robust upstream performance, but again, partly offset by the challenges in the downstream segments. Despite these headwinds, we have remained steadfast in our commitment to positioning Hydro for the future. And hence, 40% of our total CapEx has been invested over the last year in growth and return-seeking initiatives to continue to execute on our transformative ambition of pioneering the green aluminum transition. Let's then start looking forward and start with the financial foundation, our resilient financial framework to drive long-term shareholder value. Hydro operates in a cyclical and, at times, volatile market environment. And hence, we strongly believe that the resilient financial framework is a key foundation to execute on the strategy through the cycles. And by that, creating long-term value. Our framework has 4 components. Firstly, Hydro has, over the years, a strong financial position driven by a disciplined approach to debt management, strategic investments and capital allocation. And this prudent financial strategy has positioned the company to navigate market volatility effectively while continuing to invest in high-growth -- high-potential growth areas. Furthermore, Hydro's investment-grade credit rating underscores the company's ability to manage financial risks efficiently while also providing access to more favorable financing. Also to support financial strength in the lower part of the cycle, we have the integrated hedging program, where we now have secured 25% of our primary production's integrated margins for 2025 and '26. And this strategy supports margins at levels that are accretive to our return ambitions, providing stability in the face of market volatility. Secondly, profitability road maps are key guides to drive the company forward. And the most important new initiative here is the new improvement program aimed at delivering a total NOK 6.5 billion towards 2030, and more on that later. Thirdly, we remain committed to a clear and disciplined capital allocation. With a more focused strategy, we estimate that 85% of our growth and return-seeking CapEx will be directed towards the strategic growth areas for the period 2024 to '27. And finally, in parallel, with the strategic investments, we are aiming for a robust approach to shareholder payouts. Since 2020, Hydro has distributed a total of NOK 39.1 billion through dividends and buybacks in alignment with our NOK 25 billion debt target. As reflected in our allocations for 2023, we remain committed to this balanced approach, ensuring we can advance our strategic growth initiatives and distribute cash to shareholders in a predictable way. So now with the foundation covered, I'm very excited to move on to presenting our new improvement program. And as Eivind already has covered, improvement programs have been for many years a key component of our strategy for resilience and for value creation. And since 2009, Hydro has successfully implemented a series of improvement programs, building a strong record -- track record for driving operational efficiency and other improvements. For the existing program, we have exceeded our initial ambition, achieving NOK 9.9 billion in improvements by the end of 2024, surpassing the original target of NOK 7.3 billion. We are now launching a new improvement program towards 2030, which will reinforce strong focus on performance and directly support the successful execution of our strategy. To further elevate our performance agenda, there are several key changes in the new program. Firstly, the new program will prioritize high-value areas, targeting the initiatives with the largest potential for impact and aligning efforts where they can deliver the most value. Second, the program will provide more visibility and transparency into the improvements made, highlighting how these enhancements contribute to specific value drivers across the business. And this approach will allow us to track progress more effectively. And lastly, it will aim to directly tie the improvements to financial and operational outcomes, providing a transparent link between the program's activities and our results. The new program is built around 3 core pillars: operational improvements, procurement and commercial excellence. The operational program is focused on driving improvements in key operational metrics with significant potential for value creation. And this will be achieved through a combination of targeted initiatives and our business system that supports continuous improvement. The expected impact from this program by 2030 is NOK 2.5 billion, reflecting its crucial role in enhancing operational efficiency and delivering long-term growth. The procurement program focuses on maximizing value through targeted procurement initiatives, with the potential of NOK 1 billion. This is achieved by driving improvements in procurement processes and sourcing savings. The commercial excellence program, focusing on driving top line growth through enhanced commercial strategies, with a significant portion of this growth supported by the greener product offerings. The total potential here is at approximately NOK 3 billion in total for the commercial excellence program. Digital enablement plays a pivotal role across all our improvement programs, with a strong emphasis on supporting transformation through our dedicated digital transformation office. And this ensures that digital advancements are seamlessly integrated into our processes, driving efficiency, innovation and overall value creation throughout the organization. And notably, initiatives, such as predictive maintenance and production optimization are central to this effort, enhancing operational performance and reducing costs. A continuous drive to increase productivity and mitigate the cost pressure in operation is at the core of our business. And the operational improvement program is targeting improvements in operational metrics, where we see the biggest potential towards 2030. As many of you familiar with the mining industry will recognize mining operations typically have a structural cost escalation challenge driven by gradually deteriorating ore quality and higher logistics costs. Hence, in our B&A business area, our focus is to more than offset this cost pressure through optimizing the mining fleet and taking steps to manage bauxite quality, that John already mentioned. In the alumina refinery, important initiatives are digital monitoring of assets to support reduced maintenance costs and optimizing the energy mix as well as the port operations. Hydro is continuously focusing on improved operational efficiency across the portfolio. And an example is in Aluminum Metal, where the primary volume Creep program, where we also reduce energy and raw material consumption. Extrusions are targeting reductions in scrap rates and reduced downtime at the presses. And these improvements will be achieved through a mix of continuous improvement efforts as well as targeted initiatives, where automation and digital initiatives will be important levers. Reduced hot metal costs in the cost assets is another important area, both in Aluminum Metal and Extrusions, and a significant part of the savings will be driven by increased recycling of low-grade scrap. To deliver the savings, it will be important to leverage our expertise in production optimization and scrap sourcing, and where technology and advanced analytics will be key enablers. We also aim to continue improving the efficiency in our support functions, and improvements in these areas will partly be achieved through consolidation of services into the global business service organization, which allows us to reduce costs through process improvements and digitalization. Part of the cost reductions will also be achieved by optimizing the service offering and application landscape. Then to the procurement program. Towards 2030, we aim to deliver around NOK 1 billion in savings from procurement activities. The program will include procurement initiatives that offset inflation or reduce the spend as well as additional value that are created through the procurement activities. The additional value can be related to improved specifications, quality and services that has an impact on the productivity in the business. To deliver value in the procurement program towards 2030, there will be a strong focus on more cross-plant and cross-functional projects. That led us increasingly leverage the size of Hydro to optimize the spend. Further, we are putting additional emphasis on targeting specific categories where we see potential. And in the following years, we will cover a broad set of categories across maintenance, operations, raw materials and logistics. Hydro aim to deliver NOK 3 billion in commercial excellence improvements, which include ambition to achieve and uplift from greener premiums on NOK 2 billion annually by 2030. A significant driver of the commercial impact is to increase the market share in Extrusions, which will be supported through greener offerings and high service level. We will also work to leverage our strong market capabilities in the alumina market, as John mentioned, to grow the commercial alumina portfolio, where we generate margins through the alumina trading. We have an ambition to increase the value generated from the flexibility of the hydropower portfolio, as Kari mentioned. And we will also use our expertise in the power market to increase value from market activities. The potential in the commercial program also includes increasing the commercial value from aluminum metals portfolio, where we aim to -- with the main driver is the new aluminum products like HyForge. And lastly, we have the greener premiums ambition of NOK 2 billion in the uplift. Let's then move to 2025 and the sensitivities into 2025 based on our adjusted AEBITDA of NOK 22.4 billion delivered over the last 12 months per Q3. Next year, we will get the full impact from the Fuel Switch Project in Alunorte, which was fully implemented this year in '24. And this effect is around positive NOK 1.6 billion, including Q4 2024. Based on CRU expectations, downstream demand will start to recover next year. However, the AEBITDA impact is expected to be relatively small and up to NOK 1 billion. Based on the current market conditions, ramp-up of the curtailed smelter volumes will start, although the ramp-up profile is highly dependent on the demand development. We also include some changes in the energy contract mix in this bucket. And both elements have an effect of between NOK 0.3 billion to NOK 0.5 billion in total. The new improvement program will have a tangible impact on our results already next year, where the estimated impact is NOK 0.6 billion. And this takes us to an estimated adjusted AEBITDA for 2025 of approximately NOK 25 billion to NOK 26 billion if markets stay as they have been for the last 12 months. If market prices realized at current forward curve, and we take the last 12 months from Q3 as a starting point, we get a positive market impact of NOK 8 billion. And this takes us to NOK 34 billion, where the main impact is coming from higher aluminum price and more favorable U.S. dollar to NOK currency rate. Also to note in this scenario, as there is no forward market for alumina, we have derived PAX price based on the current forward LME price and historical relationship to PAX as a proxy for the PAX price. Similarly, market prices at the last 5-year average would reduce adjusted AEBITDA to NOK 20 billion. And finally, a market scenario based on market prices from CRU would give an adjusted AEBITDA of NOK 27 billion. Yes, we have also illustrated market sensitivities at the bottom of this slide for the main commodity drivers with LTM Q3 as a base. There are many moving parts here that are not included here. Furthermore, this is not the guidance, but the high-level sensitivity and try to cover the largest moving part. Then moving on to capital allocation. And capital discipline and strategic allocation of resources remain a top priority in my role and the wider Hydro finance organization to translate our strategy into action through capital allocation. Our overarching capital allocation framework presented here is consistent with previous years. But our capital allocation priorities have been distinctly refocused towards the most value-creating portfolio opportunities this year, following the establishment of the Rein joint venture, which is set up now with the self-funding ambition from now on and the announcements regarding batteries and aluminum today. In the Upstream segment, we are dedicated to enhancing the stability and resilience of production, while advancing our decarbonization efforts that will drive value creation by enabling green premiums throughout the value chain. And despite challenges in the current downstream markets, we continue to see compelling long-term potential in Extrusions and recycling. Therefore, these areas receive a significant share of Hydro's growth CapEx, reflecting our confidence in their ability to drive future value. Lastly, it is fundamental to Hydro's ambition of pioneering the green aluminum transition to secure access to renewable energy at competitive prices. And consequently, we are selectively allocating growth capital to bolster our equity power sourcing capabilities, ensuring the resilience and sustainability of our portfolio in the years to come. For 2025, we guide on the total CapEx level of approximately NOK 15 billion, in line with the guidance we gave last year. Sustaining CapEx levels are now stabilizing and also showing a downward trend compared to the increases observed in recent years. In contrast growth and return-seeking CapEx remains heavily concentrated on the identified strategic growth areas, as illustrated in the pie chart on the right. And this allocation reflects Hydro's clear focus on projects that drive long-term value creation and align with our strategic priorities. Additional growth and return-seeking cuts may be considered if market conditions are favorable, with a particular emphasis again on Extrusions and recycling investments. This demonstrates Hydro's commitment to capitalize on the long-term attractiveness of the downstream segment, which continues to deliver promising potential. The expected internal rate of return for these investments is shown on the right side and remains consistent with previous indications, reflecting steady confidence in the segment's profitability outlook over time. And to give some more meat on this, we have an example here on the Torija Recycling Project. So when discussing the attractiveness of potential returns, it's essential to base capital allocation decisions on strong proof points. And having a clear, measurable basis to support investment choices not only strengthen the case for those decisions, but also ensures that capital is deployed efficiently in areas that drive the greatest value. A prime example is again, this investments in the Torija recycler in Spain. And this next-generation extrusion ingot casters strategically located in the Iberian market, offers a compelling business case driven by a combination of low-carbon offerings, hot metal cost savings and synergies that significantly enhance margins. The plant is strategically positioned to produce superior product mix with a high proportion of low carbon advanced products including those for the automotive sector. Its low hot metal costs are enabled by a share of scrap, coupled with access to lower-grade scrap in Iberia. And in addition, the synergies with our existing Azuqueca facility in the Iberian portfolio further strengthen the project's economic viability and operational efficiency. And compared to our current portfolio, this investment adds considerable value, aligning with our sustainability and growth targets. Over the last years, Hydro has put a lot of efforts into improving our net operating capital performance in all business areas. And these efforts have paid off. And as a result, we have been able to reduce NOC days from 56 in Q3 '23 to 48 in Q3 '24. And we further estimate to reduce NOC days towards year-end 2024 to 47. In 2025, we will further step up with new targeted stock reduction initiatives, with the aim to take out further 2 days through 2025. In the last 3 to 6 months, the alumina price has increased to historically high levels and also providing support to higher aluminum prices. And both are impacting Hydro's results positively, but also increasing the value of the net operating capital. And as a result, we have raised our year-end 2024 guidance on net operating capital from NOK 28 billion to NOK 29 billion, largely driven by the higher upstream prices and the weaker NOK. For 2025, we are expecting a further net operating capital value increase of NOK 1 billion. And in the forward market price scenario, this results in the net operating capital guiding of 45 days and NOK 30 billion by year-end 2025. Now moving over to our profitability growth road maps, where we summarize everything that we have been through today in the road maps. And we present 3 different pricing scenarios for AEBITDA, ROACE and cash flow for 2030. And those scenarios are not forecasts, but simplified indicative long-term potentials based on sensitivities after we have delivered on the planned improvement programs and growth initiatives. We have 3 different market price scenarios, namely the current forward market prices, prices last 5 years or external price and currency assumptions. And we start with adjusted EBITDA Q3 LTM at 7.2% ROACE. If we add the planned improvements, commercial ambitions, growth and greener premium potential, we are at 13%. The ROACE remains stable at 13% when we adjust to external market expectation. And at last 5-year average prices, we see ROACE of 10%. However, when we run the sensitivities on the forward prices, we see ROACE reaching 15%, indicating satisfactory profitability based on our current ambitions, but still dependent on the market and with a 1% spread on greener premium realization. The cash flow scenarios show the cash flow availability for return-seeking and growth CapEx and shareholder distribution, which ranged from NOK 15 billion to NOK 22 billion in the different scenarios. We see possible further drivers not included into the scenarios both on the positive and the negative side. On the positive side, we could see some further upside potential due to positive market and market developments, and we have a higher greener volume potential than visualized here. Declining focus on greener products or unfavorable regulatory frameworks can have a negative impact. And these potential positive and negative drivers could also apply for all the business area scenarios that I will present next. In recent years, profitability in B&A has been challenging, unsatisfactory returns persisting due to the challenging alumina market despite the fact that we are operating in the first quartile of the cost curve. However, the situation has shifted fundamentally this year, driven by record high alumina prices, nearing USD 800 per tonne, and the implementation of our fuel switch project. These changes have led to a remarkable turnaround, with an LTM ROACE improving from negative 3% last year to positive 9% this year, and LTM AEBITDA rising from NOK 1.4 billion to NOK 6 billion. We remain focused on enhancing B&A's profitability by further improving our cost position, strengthening operational reliability and advancing on the sustainability performance. B&A also plays a pivotal role as the largest medium-term enabler or low carbon greener products, which are key driver of Hydro's overall profitability. As a main enabler of our greener value creation road map, B&A is projected to achieve a ROACE of 15% in 2030, well above its 10% return requirement, aligning with our long-term ambitions for sustainable growth and allocation. In an LME forward-based market scenario, ROACE reaches 16% and AEBITDA of NOK 10 billion, reflecting high alumina prices. Additionally, with the commercial ambitions and projected improvements, free cash flow ranges from NOK 1 billion to NOK 6 billion. Looking at external expectations and the last 5-year average market prices, all the metrics are significantly lower. And while we have made significant strides in mitigating risks through asset integrity improvements and fostering a stronger community relationships, operational and country-specific risks remain, particularly in Brazil's volatile regulatory environment. And managing these challenges effectively will be essential to maintaining B&A's critical role in Hydro's long-term strategy. This year, we have decided to present Aluminum Metal and Metal Markets as separate reporting segments to enhance transparency and provide a clear understanding of their individual contributions to performance. And despite the market volatility we have seen this year, Q3 LTM ROACE is 13% for the Aluminum Metal reporting segment. When adding contributions from improvements, restarts of curtailed volumes and commercial initiatives include greener premiums, ROACE will increase to 14%, significantly exceeding the return targets. Q3 LTM AEBITDA is at NOK 10 billion. And after ramp-up of curtailed volumes, improvements and commercial initiatives, we get to NOK 12 billion. Going forward, in different price market scenarios, the ROACE for Aluminum Metal is ranging between 14% at last 5-year prices to 24% using earn long-term assumptions. And the free cash flow ranges from NOK 6 billion to NOK 10 billion in different scenarios. There are several further upside drivers for Aluminum Metal in the coming years, in addition to those I mentioned earlier. Highlighting one, portfolio optimization efforts are expected to unlock further value by refining asset performance and aligning operations with high growth, high return areas. Further potential downside risks include operational and supply chain disruptions that could affect productivity and delivery time lines. This year, Metal Markets has faced profitability challenges due to the persistently rising scrap prices and subdued demand. These pressures are evident in the LTM Q3 ROACE of just 1%, significantly below the target of 8%. However, looking ahead to 2030, as markets normalize, ongoing projects are created and green premiums are realized, we anticipate a substantial recovery with a potential ROACE of 14%. In the AEBITDA bridge, the expected improvements becomes more apparent, illustrating the increase from the current Q3 LTM AEBITDA of NOK 1 billion to a projected NOK 4 billion to NOK 5 billion. This trajectory reflects the impact of the ongoing initiatives and market recovery, underscoring the long-term value potential of the recycling activities in Metal Markets. Further upside potential for Metal Markets includes increased scrap availability as well as technology development and deployment. And further downside risks are prolonged market downturn affecting both demand and scrap availability and increased competition. The targeting economic conditions have impacted Extrusions heavily with double-digit reductions in the market. For Q3 LTM, Extrusions has achieved a ROACE of 4%. And with identified improvement measures, we are expected to lift these figures significantly, targeting a ROACE of 14%. And we remain confident in achieving our long-term adjusted EBITDA target of NOK 10 billion to NOK 12 billion, with free cash flow projected at NOK 8 billion under this scenario. Further upside potential for Extrusions lies in driving higher growth, continuous portfolio optimization and accelerating the improvement initiatives. And digitalization, in particular, presents substantial opportunities across the Extrusions portfolio. On further downside risk, key challenges include inflationary pressure alongside market and operational performance variability. These factors will require careful management to sustain long-term profitability. Finally, moving to our Energy business area, where we here have excluded the Rein joint venture, which is reflected in Hydro's financials as an equity accounted investment. For Q3 LTM Energy, excluding Rein joint venture, has delivered an AEBITDA of NOK 3.4 billion. In the normalization and other categories, higher net spot sales are more than offset by lower gain on price area differences. After adjusting for improvement program and commercial ambitions, we see AEBITDA lifted to NOK 3.5 billion for Energy, excluding Rein joint venture. At last, 5-year average prices that illustrate an upside with an AEBITDA of NOK 3.9 billion, and corresponding free cash flow of NOK 1.4 billion. And the main further upside risk drivers are strong energy markets on the back of increasing demand for renewable energy. On downside risk, energy markets remain volatile and are exposed to changes in regulatory framework conditions, including tax. Integration serves as a cornerstone of our strategy, delivering resilient financial results while enhancing access to growth opportunities and elevating the customer experience. Even amid the fluctuations of the business cycles or the performance variability of individual areas, our integrated approach ensures stability and adaptability. This resilience is further bolstered by dynamic capital allocation, which targets the most compelling opportunity across our value chain, aligning investments with market demands and priorities. By consolidating operations with the unified value chain, we are not only provides unparallel traceability, but also solidify our position as a trusted partner on the path to net zero. This approach strengthened our role as a preferred supplier offering sustainable solutions that resonate with the evolving needs of customers and the stakeholders. And moreover, our integrated value chain fosters deep partnerships with customers, enabling collaboration that drives innovation and unlocks transformative opportunities with the green transition. Together, we turn sustainability into a catalyst for growth and shared success. Then moving on to our dividend policy. So Hydro continues to prioritize competitive shareholder returns, benchmarking our performance against alternative investments in comparable companies. And distribution for 2024 will be proposed at the release of our Q4 results in February 2025, and proposed approved by the Annual General Meeting in May 2025. Over the past 5 years, 2019 to 2023, Hydro has maintained a strong payout ratio, averaging 74% excluding share buybacks. And when we include the 3 share buyback programs from '21 to '23, the total payout ratio is increasing to 87%. From 2017 to 2022, we have delivered on the policy and returned an average share dividend yield over the past 7 years of 4.9%. And this is lifted by the yield of 9.9% for '21 earnings and the yield of 7.7% for '22 earnings, reflecting significant distributions on the top of the 50% adjusted net income. These distributions also stood out in an industrial context. Our capital structure policy remains unchanged with an adjusted net debt target of around NOK 25 billion over the cycle, which continues to include the current year's shareholder distribution. And as of November 20, 2024, we have repurchased approximately 32% of the share buyback program, further demonstrating our ongoing commitment to enhancing shareholder value. So then closing my part of the presentation. So as I conclude this, I would like to highlight some of the key messages from my side that are central in Hydro's financial strategy. Firstly, we maintain a strong financial position backed by our investment-grade credit rating, which ensures both flexibility and resilience in the face of market fluctuations. Our robust shareholder payout continues in line with the established dividend policy, reaffirming our commitment to value creation and predictable shareholder payouts. Looking ahead, we aim for strong performance drive, demonstrated by a new improvement program, which targets NOK 6.5 billion in improvements by 2030. This program, along with our profitability road maps, supports that we stay on track to deliver sustainable growth and operational excellence. Capital discipline remains a core priority, and we aim to allocate around 85% of our growth and return-seeking CapEx for the period 2024 to '27, towards strategic growth areas that align with Hydro's long-term growth objectives. These clear capital allocation priorities will support that we continue to generate attractive returns, while maintaining financial flexibility. And together with these elements from the foundation of Hydro's continued success, I'm confident that we are well positioned to achieve our long-term goals and create value for our shareholders. And with that, I conclude my part, and then I would like to welcome Eivind back on stage for the final messages, and then our last Q&A.

Thank you. And let me round off this day with some key takeaways from today's presentation. First of all, we are firmly reaffirming the strategy on execution of Recycling, Extrusions and renewable growth. As market conditions improve, the investments in strategic initiatives are positioning us for further value creation from these opportunities. Likewise, we are refocusing our efforts back to our core activities in our strategy, phasing out both batteries and the green hydrogen efforts, with no more capital to be allocated going forward. Secondly, we are making significant progress towards our decarbonization targets in the territories that we have. We are on track to deliver the 10% reduction target for '25, the 30% target in 2030 and towards net zero in 2050. Thirdly, we are launching a new improvement program aimed at enhancing the transparency, focusing of the scope and ensuring a clear impact on the bottom line. Capital discipline will remain a cornerstone of the strategy that we have. We are allocating and will be allocating 85% of the nonsustaining CapEx to the strategic growth areas, with expected returns, as Trond Olaf said, between 10% and 35% internal rate of return. Progressing on the green earnings is a key fundament for the strategy we have going forward and a key part of the success in terms of reaching our targets in 2030. And finally, we are committed to deliver a competitive return to our shareholders, maintaining the solid dividend track record that we have, with distribution plans aligned to the policy that remains in place. All of this will be detailed out in the fourth quarter release as Trond Olaf said. So with that, I would just like to say thank you so much for the attention for spending the day with us. And then hopefully, I'll get to speak to some of you during lunch as well. Thank you so much.

Then it's time for the last Q&A session. So Trond Olaf, Kari and John, welcome back on stage. So raise your hand, if you have any questions. Yes?

I'll go with the first one, I guess.

Yes.

It's Jason Fairclough of Bank of America. Just a question, I guess, on capital allocation and cost of capital. I don't know if it's for Kari or for Trond Olaf, but how do we think about financing renewables out of the cash flows of a metals and mining company? It feels like there's a bit of a disconnect there on cost of capital.

You want to start, Trond Olaf?

Yes. So I think when it comes to our core captive energy production, that is really the core of Hydro and an integrated part of our total business. When we look at renewable energy projects that we have in our portfolio, we are, of course, pushing for the high returns. And the Illvatn project that we have announced is, for example, a project significantly above the cost of capital for the energy business area. So I mean that is the way we are looking at and trying to develop very good projects, of course in competition with all the other good projects we have in the portfolio.

So I can add to that, Jason, just a second. So we have differentiated cost of capital, right, between the different business areas. But I think importantly, disconnection is the Rein, Hydro Rein joint venture. That's an outright renewables company. They will have their own cost of capital. They will have their own funding or their own balance sheet. And that's why this is a great opportunity and a great vehicle for Hydro also to continue to grow as a joint venture partner in the renewable space. And that's where you will see most of the growth projects also going forward.

Just a follow-up, if I could. So I think people like the buyback you did last year, this year. How does buyback sort of figure into your capital allocation framework? Are you going to benchmark every investment against buying back your own shares?

Our buybacks is part of the dividend policy that we use. And we have an ongoing buyback now that was approved the AGM in May this year. And we have some 30% now already bought, and we will continue to execute on this program.

So more buybacks.

We have the program ongoing.

It's Liam Fitzpatrick from Deutsche Bank. First question on Alunorte. You sold the stake to Glencore, but we haven't seen any distributions yet. So can you just shed some light on when and how those cash flows are going to be distributed to the minorities?

Yes, I think there will be strong cash flow now. And we'll start out with actually paying down some debt. As we know, there's high debt levels in Alunorte. We'll pay down some debt. And then gradually, that will be then a discretion among the partners when and how we pay dividends.

Do you think we'll see dividends next year?

Let's come back to that when we past 2024.

Fair enough. And then just on the alumina market. Obviously, very extreme prices at the moment. Any kind of color you can give us in terms of how long you think this could persist for? What could be some of the drivers to see prices normalize?

I think if you look at how it's been going up, it's been kind of -- we've been waiting to see some adjustments of the capacity. It's been an area with performance relative to financial performance over the years where I think there's been on investments. There's been surprises relative to operational stability and you've seen closures. Now all of a sudden, there's a shortage of bauxite from Guinea into China, and there's a reduced supply with Guinea going down. Also quite a bit of capacity being -- not curtailed, but not performing in the different refineries. So there's a pretty tight situation for now. What you also see is there is some adjustments to smelter capacity. We just heard in China, we heard in Russia that there is some uncertainty. So what we foresee is that it will be a good start of the year, '25. But most probably, when we get into the year, the new capacities in India and Indonesia on alumina must probably create more of a normal situation going forward. So we are -- it's hard to say, but that's kind of where we take a pretty a conservative outlook.

It's Ioannis Masvoulas from Morgan Stanley again. On the same topic around bauxite and alumina, you showed the slide with the market scenarios. And if ignored the current sort of development and we look at either the 5-year average pricing or the CRU forecast, it's clearly a business that is dilutive to return capital employed for the overall group. What else do you need to do to get it towards the 7%, 8% or high returns structurally? And on the flip side, at peak alumina prices, is there an opportunity to sell potentially another stake to someone else?

I'll leave that last one to you, Eivind.

I think from a structural perspective, we're quite happy with having 62% of Alunorte. It gives us a good coverage internally. It gives us a good security of supply. And it's back to what we talked about earlier today, it gives us very good transparency of the products that we produce and sell to our customers, which can follow then all the way from the mine to a finished component. So that, I think, is quite important from a value perspective. So we're quite happy with that. From a market price perspective, I think it is, as John said, we see elevated prices at the moment. If you look to the market balances assumed next year, I think the analysts talked about a long position of some 400,000 to 600,000 tonnes in the global market of 140 million to 150 million tonnes. That's very precise science in a very big market. So let's see where it takes us. It doesn't take a lot of disruption to get back into deficit. It means all the ducks need to fall in a row to get into a surplus situation. So let's see. The important part for me is that we work on what we control ourselves, and then we're back to the improvement programs. That's what we control. And then when we have a very good cost position on the cost curve, which we do in Alunorte, it also leaves us as one of the most competitive players in that market, irrespective of what the market price is. And then normally, that should give us an adequate return on cost of capital.

And maybe also adding that the no regret moves on the energy mix gives us a unique position on the carbon side. And if you think that this green shift continues with some momentum, there is an upside, most probably also on capitalizing on this. But like Eivind said, I think what we do in Alunorte and in Paragominas is to drive what we can affect, and that's cost down. And I think this movement on to the 10% best on the cost position is the best thing we can do.

And remember, there was a structural shift on the cost base. When John finishes the fuel switch from fuel oil to LNG, that gives us $150 million to $200 million annual cost improvement, which obviously wasn't there in the old days when we didn't have a good return. So $150 million to $200 million is still a meaningful improvement, which is not part of the improvement program that we talked about to NOK 6.5 billion.

Very clear. And a question, I guess, for Trond Olaf. Just on the shareholder returns. Typically, at the past 3 CMDs, the company provided a payout range. And then that was confirmed at the full year results. Why is it different this time? And shall we just assume a 50% payout?

No. So we have decided this year that we stick to the different elements that we have. We confirm the dividend policy that we have. We confirm the capital structure that we have, and then I think you have the pieces to make your assessment and your estimates on dividends. And of course, then the Board will make a final recommendation that we will present at the Q4 results in February.

Dan Major from UBS. The first one is a slightly different way of asking Liam's question. Within your NOK 25 billion of net debt, how much is sitting in Alunorte?

Yes. We have quite a share in Alunorte. And I don't think we display or report on the individual debt level in Brazil in total. But at the group level, we have, I believe, around NOK 18 billion in Norsk Hydro ASA long-term debt at that level. And then we have all the debts around in the company, which then in total is the NOK 25 billion roughly that we reported at Q3.

Okay. So sorry, just to clarify, the NOK 18 billion is at the parent company and then the remainder is subsidiaries?

That is the long-term debt in terms of bonds, et cetera, in Norsk Hydro ASA.

Okay. That gives some color. And then second question, just looking at the sort of earnings bridge out to 2030. You've got recycling growing from NOK 1.1 billion to NOK 5 billion EBITDA contribution and extrusions from NOK 5 billion to NOK 10 billion to NOK 12 billion. How much within the recycling is embedded in the metal markets number that you report to the market and how much is in other business units and which business units will that incremental EBITDA be reflected in?

Yes. So in the bridge, as we have presented today, if you look at my part of the presentation, then you will see the metal markets reporting segment, and that is what will be in the recycling business unit. So if you look at that bridge, you will get the NOK 4 billion to NOK 5 billion, which is in the metal markets recycling activity of that business unit. Then in addition, we have in the NOK 5 billion bridge that Hanne showed. You will have part of that in extrusions and you will have part of that also in aluminum metal at the smelters. So that is the difference.

Okay. Then just final one. You've got 100,000 tonnes of spare capacity to restart in Norway. Is it end demand or the high alumina price that's kind of the main variable that's keeping that capacity off the market as we stand today?

So this has really been about the demand situation. Obviously, we have the power secured for these plants. So they are ready to restart when we believe that there is a firm enough demand for those value-added products because what I don't want to do is that we are producing metal, which we cannot sell out of the market. I don't want to build inventory in the parking lot. So we have ramped up some capacity during second half of 2024, and then we will continue to do so as we see the market evolve in 2025.

Bengt Jonassen from ABG Oslo. I just wanted to double check on your improvement program of NOK 6.5 billion, what is included and potentially not included. Does it include the further growth potential within post-consumer scrap from 850 to 850 and 1,200 in capacity? And does it include the 1.5 to 2.5 in uplift from growth projects in Extruded Solutions?

No, those are not included in the improvement program. So what you will see in the improvement program is the hot metal cost part that is included in the operational improvements. And that will be for the existing operations we have. So the growth in new capacity is a different bucket that we also show in the waterfall.

Okay. Good. And that leads me to the CapEx guidance. How much of that potential growth in extruded and the post-consumer scrap is included in your NOK 15 billion CapEx guidance by the end of this decade?

Yes. So to achieve the full potential on the upper level, both in extrusion and recycling, we would need to allocate more than the NOK 15 billion per year. And that's why we show this 1 to 2 potential on top. So we will need to do that in order to deliver on top part of that range. But on the lower part, we should be okay with the NOK 15 billion in guiding annually.

Any further questions? Amos, yes.

I just wanted to ask a question on green premiums in alumina. Has there been any progress, thanks to your partnership with your friends in Switzerland, on getting those? And are they included? I saw on one of the slides, Page 60, what looked like about NOK 0.6 billion uplift in EBITDA from commercial ambitions in alumina. Is that what they are? And are those included in the NOK 2 billion 2030 target?

Yes. I think this is in progress. So if you look at how this is all linked, like we said, in the value chain. So I'm getting my fair share of the premiums, but of course, this is work in progress. So I don't think we've split it out exactly enough.

We haven't split it out between the different business areas, but there would be green premiums on the alumina side as we are able to progress on the REDUXA 3.0 in aluminum metal. That's an internal pricing. So we will report on what we make as a company. The NOK 0.6 billion, a commercial improvement in B&A, has much more to do with building book after we sold about 2 million tonnes to Glencore.

Okay. And that NOK 0.6 billion is included in the NOK 2 billion 2030 target?

That is included in the commercial program, all in total, [ the 2 ], yes.

Magnus?

Yes, Magnus Rasmussen, SEB. Another question on -- just a clarification on the dividend policy. You're stating that you will comply with your dividend policy. It seems to me like there's a bit of a conflict between the NOK 25 billion net debt and the 50% minimum EPS -- minimum distribution of EPS. Can you say anything about how high above NOK 25 billion you might be willing to go in parts of the cycle?

I think for now, we're quite comfortable with where we are and quite comfortable with staying with the 50% of EPS. And then I will not guide for the future where how far can you stretch that rubber band, in a way, but we're quite comfortable at the current stage.

So you're comfortable that you can pay 50% of EPS for 2024?

So again, we're not guiding on the range, but I think 50% is a good starting point when you do your valuation.

Yes.

Matt Greene at Goldman Sachs. I have a couple of questions on your raw material costs at Alunorte. There's been a couple of comments, minor comments on ore quality in silica. You touched on this as an issue in China. We're seeing it in Western Australia. Do you foresee the quality of bauxite materially, whether it's grade or silica, therefore, caustic soda consumption stepping up over the medium term? And then just secondly on bauxite as a cost input. I think we're seeing some numbers out of Guinea, spot numbers suggesting bauxite now exceeded iron ore price for the first time ever. So can you just remind us of the linkage between MRN and Paragominas on your cost base on bauxite into your alumina costs?

Yes. The bauxite going into Alunorte is a market-based price. And then generally speaking, MRN is working on their cost and we are working on our cost. And like you said, I think generally, all of the bauxite mines are facing a bit of a challenge over time. In our case, it's the overburden part going a bit up and then a slightly reduction on contained alumina. If you think about in the beginning, you were at 49% to 50%, now you're going down maybe to 48%, 47%. And of course, this is a bit a mix because we have some flexibility and caustic is low, then you, of course, try to maximize. So we have like a model kind of optimizing the cost levels. So I don't see drastic changes, but it's generally an erosion on the 2 increased reactive silica and reduced alumina, but not huge, but step by step.

But just on the market price, yes, there is a market price reference but it doesn't mirror the spot prices that you think you're seeing out of Guinea.

No.

So what does it link to then?

So I don't think we've ever disclosed that price formula, but it's trailing in a way and that results in, I think, for Alunorte competitive bauxite price, so to speak.

Any further questions? Yes.

Can I just come back to the cost savings program? And maybe it's a bit of a philosophical question here, but I was looking at your historic programs here. And I think in total, you've saved NOK 17 billion or NOK 18 billion a year, which on forecast, that's half your profitability on a go-forward basis, right? So your profitability would be 50% lower without these cost savings programs. So I guess my question is, what you've announced today, do we actually see this? Or is this really just offsetting inflation?

So I think what we -- part of the target is going forward, Jason, is really to ensure that we have transparency on the cost saving programs that we're running. So that will be part of how we're going to report on this going forward. Because for us, it's important that all the hard work that we actually put into the improvement program, but that's also actually recognized in external markets. You will see more transparency on this going forward in terms of what we're doing and how we should sort of be able to find this back into the P&L. This has been a part of the DNA for Hydro for a long, long time, and that needs to continue, but with some more transparency going forward than what you necessarily have seen in the past in these big buckets that we presented.

Any further questions? No? And I think that concludes the Capital Markets Day 2024. Just a friendly reminder that we will have one-to-one meetings starting at 12:30 for those that have signed up and received schedules for that. And if you have any further questions, please reach out to Investor Relations. Thank you so much for listening today, also on the webcast, and I wish you all a continuous nice day. Thank you.