NHYDY - Hydro Capital Markets Day 2023: Pioneering the green aluminium transition powered by renewable energy | Benzinga
Hydro is shifting gear to capture opportunities created by increased demand for low-carbon aluminium. Towards 2030, Hydro will step up growth in aluminium recycling and extrusions, and in its ambitions within renewable power generation. Hydro will execute on its decarbonization roadmap, and contribute to nature positive and a just transition, while shaping the market for greener aluminium. These are key topics for Hydro's Capital Markets Day 2023.
Key highlights
- Expecting up to NOK 2 billion greener earnings uplift by 2030
- Stepping up growth in Extrusions to NOK 10-12 billion EBITDA in 2030
- Stepping up growth in Recycling to NOK 5-8 billion EBITDA in 2030, partially driven by increasing post-consumer scrap to 850-1,200 kt by 2030
- Increasing CO2 reduction target until 2030, maintaining 30% target despite portfolio changes, and stepping up nature positive efforts through initiatives on biodiversity, waste handling and land use
- Increasing improvement program to NOK 14 billion in 2030, including additional potential from digitalization, and increasing commercial ambitions to NOK 6.1 billion in 2030, including the full potential for greener premium earnings uplift
- Updating 2024 and medium-term capex guiding to 15 billion annually from currency, inflation and 2023 carry-over, and adding annual flexibility up to NOK 1-2 billion, while estimating a NOK 2 billion net operating capital release in 2024
- Aiming to distribute 50-60 percent of adjusted net income to shareholders for 2023, in-line with capital structure target
"Based on our leading position we are now shifting gear. Towards 2030 we are stepping up growth ambitions in Extrusions, recycling and renewable power generation aimed at capturing market opportunities emerging from the green transition," says President and CEO Hilde Merete Aasheim.
In 2020, Hydro set out a forceful agenda towards 2025 to develop a more robust, higher-earning and more sustainable company. Hydro has delivered on this strategy through improved earnings and sustainability performance, and a more robust portfolio, positioning the company for strategic resilience in a world in transition.
"Hydro is uniquely positioned to pioneer the green aluminium transition. With our cutting-edge material and aluminium competence ranging from bauxite to extruded solutions, combined with our in-house competence in developing and operating renewable energy, and a concrete roadmap to zero, we are ready to change the game for aluminium," says Aasheim
Since 2020, the business environment has rapidly changed with geopolitical tensions affecting global trade, cooperation, and energy prices. Amid current market challenges, strong demands for key materials like aluminium, steel, and copper are expected due to the green transition. The shift to electric vehicles, escalating demand for solar and wind infrastructure, and stricter energy-efficiency regulations in construction, underscore the increasing need for aluminium. Achieving a sustainable green transition depends on producing these materials with the lowest possible carbon footprint and minimal impact on nature and communities, while adapting to new risks and opportunities.
In the 2030 strategic direction, Hydro is stepping up growth investments in Extrusions and recycling to capitalize on the green transition opportunities. Ambitions in renewable power generation are elevated to ensure affordable renewable energy in the aluminum value chain at attractive returns. In addition, Hydro will continue to focus on a forceful execution of its decarbonization and technology roadmap, contributing to nature conservation and a just transition, and shaping the market for greener aluminum in partnership with customers.
Stepping up growth investments in Recycling and Extrusions
In recycling, the recent acquisition of the Polish recycler Alumetal and investment in HyForge in Rackwitz, Germany enriches product outlets by utilizing different scrap types to cater for the growing market for recycled aluminium. In addition, the greenfield recycler Hydro Cassopolis in Michigan, US was officially opened on November 16, aiming to supply aluminium and Hydro CIRCAL to the automotive and US market. By the end of this year, Hydro is ramping up to 540 kt post-consumer scrap capacity (PCS), already achieving the 2025 target set out in last year's Capital ...