Industria
Hydro Investor Day 2025: Strategic discipline securing long-term value creation
Hydro continues to execute on its 2030 strategy, delivering strong results over the last twelve months amid uncertain markets. The ability to create value from opportunities arising from the green transition is further strengthened by investments in new wire rod capacity to support Europe’s electric infrastructure development. This is complemented by the Illvatn pumped storage plant investment, which scales renewable power generation in Norway. Extrusions and Recycling are ramping up new investments and progressing on operational improvements, positioning themselves for profitable long-term growth amid green and geopolitical shifts. These topics will be key for Hydro’s Investor Day 2025.
In 2023, Hydro launched its strategy towards 2030 to pioneer the green aluminium transition, powered by renewable energy. This strategic direction remains essential as Hydro navigates increasingly uncertain markets and a more complex operating environment.
“ , says President and CEO, Eivind Kallevik
Hydro has proposed to consolidate the Extrusions operations and close five of its European plants. This move is made to optimize the extrusion footprint in Europe to strengthen competitiveness. The total restructuring cost is estimated to NOK 1.9 billion and the net cost savings are NOK 0.5 billion per year from 2027.
Amid heightened market uncertainty, Hydro is taking decisive actions to preserve financial flexibility and reinforce long-term competitiveness. In June 2025, the company launched a strategic workforce and cost reduction program, reducing the organization by approximately 750 white collar positions, and reducing travel and consultancy spend. Execution is ahead of plan, with annual net run-rate savings of around NOK 1 billion expected from 2026.
In 2024, Hydro launched a new NOK 6.5 billion improvement program to strengthen resilience and accelerate value creation toward 2030, targeting procurement, commercial, and operational efficiencies. Execution is ahead of plan, with NOK 1.2 billion in improvements expected in 2025, surpassing the earlier NOK 600 million target, and the full NOK 6.5 billion remains on track for delivery by 2030.
Hydro’s strategic agenda continues to drive capital allocation, with capital discipline remaining a core priority toward 2030. For both 2025 and 2026, capital allocation targets are set at NOK 13.5 billion, down from the previous NOK 15 billion, and the additional annual flexibility of NOK 1–2 billion has been removed. At the same time, Hydro reconfirms its medium-term annual CAPEX guidance of NOK 15 billion in 2024 real terms.
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Hydro continues to strengthen its position in Recycling, building on its strategic role in delivering greener aluminium solutions. Despite short-term headwinds from tighter scrap supply and softer downstream markets, the fundamentals for Recycling remain strong. Leveraging Hydro’s advanced capabilities in sourcing and processing complex scrap, the business is well positioned for profitable, sustainable growth. By the end of 2025, Hydro will reach 850 kt of post-consumer scrap (PCS) capacity, marking an important milestone on the path toward the 2030 target range of 850,000 - 1,100,000 tonnes and underscoring steady progress toward Hydro’s decarbonization ambitions.
Hydro has adjusted its Recycling 2030 earnings target from NOK 5–8 billion to NOK 5–6 billion, reflecting current market conditions and its impact on the near-term capital allocation. The company’s growth ambitions extend well beyond PCS capacity expansion, supported by solid operational execution. Aluminium Metal has already achieved USD 5 per tonne in hot metal cost reductions in 2025, and both Aluminium Metal and Extrusions remain on track to deliver USD 20–30 per tonne by 2030. Additionally, approximately NOK 100 million in Alumetal synergies have been realized in 2025, with full synergies expected by 2030.
Hydro Extrusions’ 2030 adjusted EBITDA ambition has been revised downward to NOK 8 – 10 billion, in line with the updated capital allocation. Despite a challenging market environment, the business continues to see strong potential for profitable earnings uplift.
Targeted upgrades and automation initiatives are enhancing productivity, safety, and efficiency, while generating full time equivalent (FTE) savings under a tighter investment frame. Strategic investments in press replacements and fabrication capabilities for customer solutions are further strengthening competitiveness. These initiatives, together with a sharpened commercial focus, are expected to deliver NOK 1.7–2.0 billion in operational and commercial improvements by 2030.
This year, Hydro approved its largest hydropower investment in more than two decades, the Illvatn pumped storage project in Luster, Norway. The NOK 2.5 billion pumped storage project will add 48 MW of capacity and deliver 107 GWh of annual renewable power dedicated to Hydro’s aluminium production. Through Norway’s cash flow tax scheme for hydropower investments, Hydro’s net investment after tax is estimated at NOK 1.2 billion. Illvatn underpins Hydro’s strategy to secure long-term, competitive renewable energy for Norwegian aluminium production, supporting industrial development, low-carbon operations and the company’s ambition to produce net-zero aluminium by 2050.
Hydro strengthened its long-term power portfolio this year by advancing key renewable power agreements, including new long-term contracts with Hafslund and NTE totaling approximately 4.16 TWh. In parallel, Hydro’s joint venture smelter, Alouette, achieved an important milestone by reaching an Agreement in Principle with the Government of Québec and Hydro-Québec to secure renewable power for 2030–2045.
Hydro is accelerating progress towards its 2050 net-zero ambition by decarbonizing operations from bauxite mining through to finished products and is now expected to achieve a 15 percent CO2 reduction by year end 2025, outperforming its 10 percent target.
This year the Corridor project in Brazil added three new partners, Belterra Agroflorestas, Mitsui & Co., and the Mitsui Foundation, strengthening its integrated climate, nature, and social impact agenda. Additionally, Hydro remains on track to halve non-GHG emissions by 2030 and is enhancing transparency through initiatives such as the World Economic Forum’s Alliance for Clean Air.
On the social side, Hydro remains focused on human rights, local development, education and supply chain standards. More than 300 community projects were supported in 2025, and progress toward the goal of educating 500,000 people by 2030 continues, with 250,000 already reached through programs such as Território do Saber, improving quality education for children and youth in Paragominas.
Hydro continues to make solid progress toward its NOK 2 billion greener earnings uplift potential by 2030, with earnings of greener products increasing by more than 50 percent year to date as of the third quarter. The strong momentum comes despite ongoing weakness in European and North American markets, and reflects Hydro’s growing commercial capabilities and close collaboration with partners.
The company is accelerating the commercialization of its low-carbon and recycled portfolio through strategic partnerships with forward thinking customers. A key milestone this year was the long-term offtake agreement with NKT for up to 274,000 tonnes of Hydro REDUXA, an estimated EUR 1 billion contract. Broader collaborations, including with Mercedes-Benz and Siemens Mobility, further demonstrate growing demand for sustainable materials, and reinforce Hydro’s leadership in low-carbon solutions across the value chain.
Hydro’s adjusted EBITDA Q4 2024 to Q3 2025 was NOK 31 billion, compared with NOK 22.4 billion in 2024, with weaker downstream results offset by stronger upstream results. Robust results and efficient capital structure support an adjusted RoaCE of 13.5 percent over the past five years, well above the 10 percent target. Hydro remains committed to delivering consistent shareholder distributions, aligned with the dividend policy and capital structure targets. Distributions will be proposed by the Board of Directors in the fourth quarter release in February 2025 and subject to approval by the Annual General Meeting in May 2025.
Hydro expects net operating capital to remain stable, with year-end 2025 guidance set at NOK 30 billion and the 2026 guidance at the same level.
Despite challenging market conditions, Hydro continues to deliver solid results. Building on a strong improvement culture, the company is reinforcing earnings resilience through the cycle with further cost reduction initiatives and tighter capital discipline in the near term. These proactive measures will ensure sustainable execution of the strategy and lay a solid foundation for attractive shareholder returns.
Investor contact:
Baard Erik Haugen
+47 92497191
Erik.Haugen@hydro.com
Elitsa Blessi
+47 91775472
Elitsa.Blessi@hydro.com
Media contact:
Halvor Molland
Halvor.Molland@hydro.com
+47 92979797
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