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.
Key highlights
* Hydro Extrusions propose to close five plants in Europe to consolidate the
footprint, improve capacity utilization and reduce the cost base. Total
restructuring cost is estimated to NOK 1.9 billion, with annual cost
improvements of NOK 0.5 billion per year.
* Strategic workforce adjustment ahead of target in 2025. The program is
expected to deliver annual net run-rate savings of approximately NOK 1
billion from 2026.
* Hydro's improvement program remains on track to deliver NOK 6.5 billion by
2030. NOK 1.2 billion is expected in 2025, far exceeding the annual target
of NOK 600 million.
* Capital allocation targets for 2025 and 2026 are reduced to NOK 13.5
billion, down from NOK 15 billion. Annual flexibility of the NOK 1-2 billion
is removed from both short and medium-term guidance. The medium-term annual
CAPEX guidance of NOK 15 billion is maintained.
* The 2030 EBITDA target for Extrusions has been reduced from NOK 10-12
billion to NOK 8-10 billion, due to delayed market recovery and near-term
reduced capital allocation.
* The recycling 2030 target lower range EBITDA of NOK 5 billion is confirmed,
but the potential range has been reduced to NOK 5-6 billion due to reduced
capital allocation.
* Shareholder distribution target aligned with dividend policy and capital
structure targets.
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.
"Hydro has an excellent position to succeed in a more unpredictable environment.
Despite the macro environment becoming less predictable, aluminium's role in the
green transition gives support to our strategic direction. With an integrated
value chain and a broad geographical footprint, we can navigate short-term
challenges, while pushing forward with pioneering the green aluminium transition
and powering it with renewable energy," 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.
"With a backdrop of challenging markets and geopolitical volatility,
strengthening Hydro's robustness is our best line of defense. Focusing on
safety, continuous improvement, and efficient operations, we are well equipped
to continue to navigate volatility in the short-term while positioning the
company for the long-term opportunities in low-carbon aluminium solutions," says
Kallevik.
Executing and positioning for growth in Recycling and Extrusions
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.
Delivering on ambitions within renewable power generation
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.
Progressing on decarbonization and technology roadmap
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.
Executing on greener earnings uplift
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.
Focused growth and strong performance drive
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
___________________________________________________________
The information was submitted for publication from Hydro Investor Relations and
the contact persons set out above. Certain statements included in this
announcement contain forward-looking information, including, without limitation,
information relating to (a) forecasts, projections and estimates, (b) statements
of Hydro management concerning plans, objectives and strategies, such as planned
expansions, investments, divestments, curtailments or other projects, (c)
targeted production volumes and costs, capacities or rates, start-up costs, cost
reductions and profit objectives, (d) various expectations about future
developments in Hydro's markets, particularly prices, supply and demand and
competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk
management, and (i) qualified statements such as "expected", "scheduled",
"targeted", "planned", "proposed", "intended" or similar. Although we believe
that the expectations reflected in such forward-looking statements are
reasonable, these forward-looking statements are based on a number of
assumptions and forecasts that, by their nature, involve risk and uncertainty.
Various factors could cause our actual results to differ materially from those
projected in a forward-looking statement or affect the extent to which a
particular projection is realized. Factors that could cause these differences
include, but are not limited to: our continued ability to reposition and
restructure our upstream and downstream businesses