Earnings call transcript: Norsk Hydro Q3 2025 sees revenue growth, strategic shifts

Norsk Hydro ASA, with a market capitalization of $13.9 billion, reported a modest increase in revenue for the third quarter of 2025, despite facing challenges in the aluminum market. The company’s strategic focus on low-carbon aluminum and operational efficiency initiatives were highlighted during the earnings call. With a beta of 1.19, the stock shows moderate market sensitivity, while InvestingPro analysis indicates the company maintains a GREAT overall financial health score of 3.32.

Key Takeaways

• Revenue increased by 1% year-over-year to NOK 51 billion.
• Adjusted EBITDA dropped to NOK 6 billion from NOK 7.8 billion in the previous quarter.
• Norsk Hydro is focusing on low-carbon aluminum, partnering with Mercedes-Benz.
• Workforce reduction plans aim for annual net savings of NOK 1 billion by 2026.
• Aluminum market faces a small surplus, with prices dipping to $320 per ton.

Company Performance

Norsk Hydro’s Q3 2025 performance reflects a strategic pivot towards sustainability and operational efficiency. While revenue saw a slight increase, adjusted EBITDA fell compared to the previous quarter, indicating pressure on profitability. The company’s commitment to low-carbon solutions and partnerships, like the one with Mercedes-Benz, positions it well in a market increasingly focused on sustainability. However, the global aluminum market’s normalization and surplus present ongoing challenges.

Financial Highlights

• Revenue: NOK 51 billion (up 1% YoY)
• Adjusted EBITDA: NOK 6 billion (down from NOK 7.8 billion in Q2)
• Adjusted Net Income: NOK 1.9 billion (down from NOK 3.5 billion in Q3 2024)
• Adjusted EPS: NOK 102 per share
• Free Cash Flow: NOK 2.2 billion
• Adjusted ROIC: 11%

Outlook & Guidance

Norsk Hydro maintained its capital expenditure guidance of NOK 13.5 billion for 2025. The company expects stable production volumes and raw material costs but has reduced its Q4 EBITDA guidance for metal markets to NOK 200-400 million. With a strong current ratio of 1.92 and robust revenue growth of 13.38% over the last twelve months, InvestingPro analysis suggests the company is well-positioned to execute its 2030 strategy, emphasizing decarbonization and technological advancements. For comprehensive valuation analysis and detailed financial projections, subscribers can access the exclusive Pro Research Report.

Executive Commentary

CEO Eivind Kallevik emphasized the company’s strategic focus, stating, "We are not pulling the brakes on our strategy, but we are ensuring that when we grow, we do it with the right structure and with the right priorities." He also highlighted Hydro’s commitment to decarbonization, saying, "We are committed to our decarbonization strategy, and we will continue to pursue our 2030 ambitions with unwavering determination."

Risks and Challenges

• Global aluminum market surplus could pressure prices further.
• Workforce reduction may impact employee morale and productivity.
• Uncertain recovery in the extrusion market could affect future demand.
• Changes in environmental regulations may increase operational costs.
• Macroeconomic factors, such as currency fluctuations, could affect financial performance.

Q&A

During the earnings call, analysts questioned the implementation timeline for the Carbon Border Adjustment Mechanism (CBAM), expected in 2026, and the ongoing evaluation of the TOMAGO smelter’s energy contract. The company also addressed uncertainties in the extrusion market recovery and its focus on PACS-based pricing for aluminum contracts.

Full transcript - Norsk Hydro ASA S (NHY) Q3 2025:

Erik, Moderator/Host, Hydro: Good morning and welcome to Hydro’s third quarter 2025 presentation and Q&A. We will begin shortly with a presentation by President and CEO Eivind Kallevik, followed by a financial update from CFO Trond Olaf Christophersen. As usual, we will finish off with a Q&A session. Please note that if you would like to ask questions in the Q&A, you can do so at any time, and you do this by typing your questions into the chat on your screen. When we get to the Q&A, I will then read your questions on your behalf to Eivind and Trond Olaf. With that, I turn the microphone over to you, Eivind.

Eivind Kallevik, President and CEO, Hydro: Thank you, Erik, and good morning and welcome from me as well. Safety, as always, is our key priority. It’s the most important metric in our quarterly reporting. The health and well-being of our employees is fundamental to the success of the company. We have had positive development and lowered the number of injuries and incidents for a long period of time. The downward trend continued also over the last few years, has continued also this quarter. I’m pleased to report that both the total number of recordable injuries and the number of high-risk incidents are lower compared to the last quarter. However, we are also well aware that good results in safety cannot be taken for granted. This situation can change rapidly. Maintaining these low numbers demands continuous attention and commitment from all employees across all our locations.

Our strong safety culture is rooted in genuine care for our people, ensuring everyone remains healthy and safe while working for Hydro. The commitment to safety is also essential for keeping our operations stable and efficient 365 days a year. By fostering a safe work environment, we are able to achieve our strategic targets and to increase our long-term value creation. Now let’s have a look at the key highlights this quarter. We will get back and dig deeper into this also later on in today’s presentation. Challenging markets are affecting the results this quarter, leading to an adjusted EBITDA coming in at NOK 5,996,000,000. Despite this, I’m also happy to report a solid free cash flow generation at NOK 2.2 billion, yielding an adjusted ROIC of 11%, which is above our target of 10% over the cycle.

Measures have been taken to meet the uncertainty in the market, and many initiatives are being executed to further increase robustness. We can already now report progress on our strategic workforce adjustment and the cost reduction initiative announced back in June. On the energy side, we are pleased to have added another long-term power contract to our sourcing portfolio. Alouette has signed an agreement in principle for continued long-term power supply. This quarter, we also received a final judgment in the Rotterdam Court dismissing all claims against Hydro filed by Basilian Concama and nine individuals back in 2021, based on both legal as well as factual grounds. Lastly, we can report concrete results coming from our targeted strategic approach to partnerships. We continue to advance our low carbon and circular solutions through close customer collaborations.

Executing on strategic workforce and cost reductions as a response to market uncertainty, we did launch a new cost cutting measure in addition to strategic workforce adjustment measures back in June. The workforce adjustment project aims to reduce white-collar manning by 600 people in 2025 and another 150 people for 2026. In addition, we introduced a hiring freeze and limitation on travel and consultancy expenditures. The estimated gross redundancy cost is estimated to be around NOK 400 million this year, and estimated cost savings are NOK 250 million. This gives us a net cost of around NOK 150 million in 2025. As we can see from the graph, annual net run-rate savings, including travel and consulting cost reductions, are estimated to be NOK 1 billion from 2026. This gives an adjusted EBITDA improvement altogether for the improvement programs for 2030 of NOK 7.5 billion.

Processes like these are always challenging, and we are doing our best to be considerate and to be transparent towards all our employees. To ensure a professional process, we work in close collaboration with employee representatives. I do want to emphasize that this project is done in parallel with other ongoing performance and capital discipline measures. We still conduct our improvement program with undiminished strength. There is also a parallel restructuring process in extrusions with large reductions in employees already taking place. Lastly, we have reduced our CapEx guidance announced last quarter. These initiatives aim to strengthen Hydro’s ability to navigate global uncertainty. We’re not pulling the brakes on our strategy, but we are ensuring that when we grow, we do it with the right structure and with the right priorities. Moving on to some good news on Alouette, where Hydro holds a 20% ownership stake.

This quarter, Alouette has signed an agreement in principle to secure supply of power from 2030 to 2045. The agreement is signed with the Government of Quebec as well as Hydro-Québec. This will ensure long-term competitive prices in a market where the energy balance is tightening. As we can see from the graph, our total power consumption in the years to come requires us to constantly explore alternatives for renewable power sources in order to maintain our energy resilience. This agreement is an important step to ensure stability for Alouette and to further strengthen Hydro’s global portfolio of long-term renewable power. Now let’s move to another strategic priority. It’s been almost a year since we announced the phase-out of Hydro batteries, a decision driven by persistent market challenges. I am pleased to report that we have made progress on the phase-out process.

We have recently done two battery portfolio transactions in line with Hydro’s strategic ambitions for 2030. Earlier this month, Hydro Energy Invest entered a transaction to exchange its minority stake in Lithium de France for minority shareholding in the listed company, Arverne Group. In addition, Hydro signed an agreement to divest its entire ownership stake in a maritime battery company, Corvus Energy, and the closing is expected to happen early November. Hydro continues to remain engaged in the energy transition, but these transactions help us concentrate on core business within energy and step up our ambitions within renewable power generation in line with the 2030 strategy. Another important event this quarter was the final judgment issued by the Rotterdam Court in the case brought against Norsk Hydro ASA and its Dutch subsidiaries on September 24.

The court fully dismissed all claims, including claims of pollution caused by Alunorte following the heavy rainfalls in the region in February of 2018. The court’s dismissal was based on both legal and factual grounds. During the proceedings, Hydro presented extensive evidence, including expert analysis as well as empirical data. On this basis, the court confirmed an established fact that there was no overflow from the bauxite residue deposits back in 2018, and consequently, no harm was caused to the environment. This is an important confirmation supporting our position throughout the years since the lawsuit was filed. Lastly, I will round off my part of the presentation with two customer cases from the past quarter. A key priority in our 2030 strategy is to shape the market for greener aluminum in partnership with customers. We are pleased to see the results of our increased efforts in this area.

Our strategic partnership with Mercedes-Benz has continued to accelerate over the years, aiming to decarbonize their value chain. This picture is from last month where the new electric CLA cars produced with Hydro REDUXA 3.0 aluminum from Odda drove from Oslo to Odda. Hydro can provide Mercedes-Benz low carbon aluminum, ensuring a traceable and transparent value chain. This is important for Mercedes to be able to deliver on their ambitious sustainability targets. Another exciting collaborative initiative this quarter, in fact a large milestone for us, is a new bridge in Trondheim called Hangar Brua. This is the first aluminum bridge built in Norway since 1995. The pedestrian bridge is made entirely from recycled aluminum, sourced from the decommissioned Gyta oil platform from the Norwegian Continental Shelf. It is built by Larvik in collaboration with Kovi, partnered with Hydro, Aker Solutions, and Stena.

This project demonstrates that aluminum can be used in producing bridges of tomorrow, contributing to innovative solutions for the infrastructure sector. It shows how end-of-life aluminum can be transformed into durable and valuable building materials. Although this project is relatively small, it’s a tangible example of the significant potential for aluminum in public infrastructure development, a sector where demand is expected to grow substantially in the years ahead. For me, these two partnerships illustrate the growing demand and potential for low carbon aluminum and our success in expanding the market for circular and sustainable solutions. With that said, let me give the word to Trond Olaf for the financial update.

Trond Olaf Christophersen, CFO, Hydro: Thank you, Eivind, and good morning from me as well. I’ll start my part with the market side, starting with the bauxite and aluminum market. After an eventful 2024 dominated by refinery disruptions and bauxite supply challenges, the global aluminum market balance has been normalizing since the start of 2025. Around 10 million tons of new aluminum capacity is expected to come online from India, Indonesia, and China this year, with full impact expected in 2026. After the drop in aluminum prices we saw in Q2 this year, aluminum traded around $360 per ton for most of Q3. With more capacity ramp-up, especially in Indonesian refineries, we saw aluminum prices falling to around $320 per ton at the end of the quarter. The excess supply is putting pressure on global refiners. If prices stay at the current level, we could see curtailments for high-cost refineries, especially in China.

We would then expect a future tightening of the aluminum market, pushing back prices to a more normalized level. According to CRU, a small surplus of around 500,000 tons is expected in 2025, down to a 300,000-ton surplus in 2026 in a 58 million-ton world ex-China market. Consequently, the market would remain sensitive to any production disruptions. Moving to the primary aluminum market. Despite the rate increase to 50% of U.S. Section 232 tariffs on aluminum coming into effect in Q2, the LME and premiums continued to digest its consequences in Q3. Looking at the global primary aluminum balance, external estimates suggest that the market will remain roughly balanced in 2025. The three-month LME aluminum price rose during the quarter, starting at $2,599 per ton and ending at $2,681 per ton. The U.S.

Midwest premium continued to surge in Q3, starting at $1,432 per ton and ending the quarter at $1,631 per ton, driven by 232 tariffs, the structural aluminum deficit, and the need to attract metal into the U.S. In Europe, the quarter opened with a duty paid standard income premium of $185 per ton, increasing to $258 per ton at the end of Q3. As in previous quarters, Hydro’s main concern remains the broader risk of a global economic slowdown from tariffs, which would weaken demand and challenge current price levels as a consequence. Moving downstream, extrusion demand stabilized at moderate levels in both Europe and North America during Q3 compared to the same quarter last year, with a light uptick in order intakes.

In Europe, extrusion demand is estimated to have remained flat in Q3 2025 compared to the same period last year, but decreased by 20% from Q2 due to seasonality. Demand for building and construction and industrial segments has stabilized at historically low levels, with some improvements in order bookings. Automotive demand has been negatively impacted by lower European light vehicle production, partly offset by increased production of electrical vehicles. For Q4 2025, CRU estimates that European demand for extruded products will increase by 1% year over year. Overall, extrusion demand is estimated to be flat in 2025 compared to 2024. In North America, extrusion demand is estimated to have increased 2% in Q3 2025 compared to the same quarter last year, but decreased 2% compared to Q2. Extrusion demand has continued to be very weak in the commercial transport segment, driven by lower trailer bills.

Automotive demand has also been weak. Demand has been positive in the building and construction and industrial segments, while the ongoing impact from the induction of tariffs is still uncertain. Order bookings have developed better for domestic producers due to lower imports so far this year. In Q4 2025, North American extrusion demand is expected to increase by 5% year over year. Overall, extrusion demand is estimated to decrease 1% in 2025 compared to 2024. Looking at our own numbers, Hydro Extrusion’s sales volumes increased by 1% year over year in Q3 2025. Similar to the previous quarter, transport volume developments were negative, but headwinds are moderating compared to previous quarters. Shipments to the U.S. transport market were down 5% in Q3 compared to minus 11% in Q2. Automotive sales in Q3 were still negative in Extrusions Europe, driven by continued moderate production at some car manufacturers.

Automotive sales in North America increased 5% in Q3 from a low base in the same quarter last year, as negative overall market development was offset by increasing volume to key customers. Sales volume growth in the industrial segment was stable in Q3, while sales in the distribution segment increased by 8% in Q3, mainly driven by increased shipments in the U.S. After a significant increase in volumes in the HVAC and R segment previously in 2025, the trend turned negative in Q3 2025, mainly caused by tighter consumer spending and an inventory offloading at customers. For Q4, total sales volumes in Hydro Extrusions for EU and the U.S. are expected to be in line with underlying market growth expectations. Moving to the financials, when looking at the results Q3 versus Q2, adjusted EBITDA decreased from NOK 7.8 billion to NOK 6 billion. The main driver was normalization of eliminations.

Realized all-in aluminum and aluminum prices contributed negatively with around NOK 300 million. Upstream volumes had a net neutral impact, where somewhat higher volumes in aluminum metal were offset by somewhat lower volumes in bauxite and alumina. Raw material costs contributed positively by approximately NOK 700 million, mainly driven by lower aluminum costs in aluminum metal. This was partly offset by higher energy costs and a slight increase in other raw material costs. Extrusions and recycling margins and volumes had a negative impact of around NOK 300 million. 85% of the effect came from extrusions and the remaining 15% from recycling in metal markets. The negative development in extrusions was largely driven by lower sales, partly offset by a positive impact from the metal effect through the higher Midwest premium.

In energy, lower production and lower prices impacted results for the quarter with a net negative impact of around NOK 100 million. Furthermore, fixed costs were around NOK 200 million lower compared to Q2, with positive extrusions. Currency effects negatively impacted the results by around NOK 400 million, with 70% of the effect related to aluminum metal and 30% to bauxite and alumina. This was mainly due to a stronger NOK compared to USD. The largest negative effect this quarter was normalization of eliminations, which amounted to NOK 1.4 billion. In the second quarter, realization of previously eliminated internal profit had a positive contribution of the same size. Finally, net other elements had a net negative impact of around NOK 100 million. This concludes the adjusted EBITDA development from NOK 7.8 billion in Q2 to NOK 6 billion in Q3.

If we then move to the key financials for the quarter, comparing year over year, revenue increased by around 1% to NOK 51 billion for Q3. Compared with Q2, revenue decreased by around 5%. For Q3, around NOK 200 million positive effects were adjusted out of EBITDA, mainly related to a NOK 206 million unrealized derivative loss, mainly on LME-related contracts, and a net foreign exchange gain on risk management instruments of NOK 66 million. The result also included NOK 116 million in rationalization charges and compensation for termination of a power contract, of which NOK 251 million is related to future periods. This results in an adjusted EBITDA of NOK 6 billion. Depreciations were around NOK 2.5 billion in Q3, resulting in an adjusted EBIT of NOK 3.5 billion. Net financial income for Q3 was around negative NOK 450 million.

This was largely driven by net interest and other finance expenses of around negative NOK 730 million. This was partly offset by an unrealized currency gain on around NOK 380 million, mainly reflecting a stronger NOK versus euro, affecting embedded euro currency exposures in energy contracts and other euro liabilities. Furthermore, we have an income tax expense of around NOK 900 million for Q3, and the quarter was mainly impacted by a high power surtax. Overall, this provides a positive net income of around NOK 2.1 billion, and foreign exchange gains of approximately NOK 380 million are adjusted out, together with the EBITDA adjustments mentioned earlier, and partly offset by income taxes of around NOK 120 million. This results in an adjusted net income of NOK 1.9 billion in Q3.

Adjusted net income is down from NOK 3.5 billion in the same quarter last year and down from NOK 3.6 billion in Q2. Consequently, adjusted EPS was NOK 102 per share. Let’s then go to the business areas and give an overview of each of the business areas, starting with bauxite and aluminum. Adjusted EBITDA for bauxite and aluminum decreased from NOK 3.4 billion in Q3 2024 to NOK 1.3 billion in Q3 2025. This was mainly driven by lower aluminum prices, higher fixed costs from a low level in Q3 2024, and negative currency effects caused by a weaker USD against NOK. This was partly offset by higher sales volumes and positive year-on-year effects from the full implementation of the fuel switch to natural gas.

Compared to Q2 2025, the adjusted EBITDA decreased from NOK 1.5 billion to NOK 1.3 billion in Q3 2025, mainly driven by negative currency effects caused by a stronger BRL versus the USD and lower sales volumes. Aluminum realized prices decreased but maintained above market price indications due to intra-group pricing mechanisms. Raw material costs were slightly higher Q3 versus Q2, and fixed costs remained stable. For Q4, we expect the production volume at nameplate capacity, and compared to Q3, we expect stable fixed costs, and raw material costs are also expected to remain relatively stable. Moving then to aluminum metal. Adjusted EBITDA decreased from NOK 3.2 billion in Q3 2024 to NOK 2.7 billion this quarter. The main drivers, year-on-year, were negative currency effects caused by a stronger NOK against the USD, partly offset by higher sales volumes and lower aluminum costs.

Compared to Q2 2025, adjusted EBITDA for aluminum metal decreased from NOK 2.4 billion, and this was driven by lower aluminum costs, partly offset by higher energy costs, currency effects caused by stronger NOK against USD, and lower all-in metal prices, mainly caused by a sales mix pushing premiums to the lower end of the guiding. The raw material costs release was around NOK 700 million, which was lower than we guided for in the Q2 reporting. The reduction was lower than expected, mainly due to intra-company aluminum pricing mechanisms, where the opposite positive effect is realized in a higher BNA aluminum price and result. These effects cancel each other out on the group level. The decrease in fixed costs was above guidance at around NOK 200 million, caused by currency translation effects. This brings me then over to the guiding for the next quarter.

For Q4, AM has booked 72% of its primary production at $2,597 per ton, and this includes the effect from our strategic hedging program. We have booked 40% of 2023 at $2,023 per ton, and we expect the realized premiums to be in the range of $310 to $360 per ton. On the cost side, we expect stable total raw material costs and increased fixed costs in the range of NOK 100 to 200 million, and sales volumes are expected to remain stable. Moving to metal markets. Adjusted EBITDA for metal markets decreased in Q3 from NOK 277 million in Q3 2024 to NOK 154 million due to lower results from sourcing and trading activities, and those were partly offset by increased results from recyclers. Excluding the currency and inventory valuation effects, the result for Q3 was NOK 174 million, down from NOK 375 million in Q3 2024.

Compared to Q2, adjusted EBITDA for metal markets decreased from NOK 276 million due to lower results from recyclers and from sourcing and trading activities. Recycling results ended lower at NOK 93 million, down from NOK 136 million last quarter. The decrease was mainly due to seasonally lower volumes, partly offset by positive premium development. For Q4, we expect lower recycling results following continued margin pressure. In our commercial segment, we also anticipate a lower contribution from sourcing and trading activities in Q4. We emphasize the inherent volatility of trading and currency fluctuations. Given the realized results year to date, we have adjusted down the guidance for the commercial area adjusted EBITDA, excluding currency and inventory valuation effects, to NOK 200 to 400 million for the full 2025.

Moving to extrusions, the adjusted EBITDA increased year over year from NOK 880 million to NOK 1.1 billion, driven by positive metal effects from increasing Midwest premiums, partly offset by pressure on sales margins. We saw 1% higher sales volumes, as well as somewhat weakened sales margins, primarily in Europe. Furthermore, lower recycling production negatively impacted the results with around NOK 100 million. Compared to Q2 2025, adjusted EBITDA for the extrusions decreased from NOK 1.2 billion due to seasonally lower sales volumes, partly offset by positive metal effects and lower costs. Looking into Q4, we should always look towards the same quarter last year to capture the seasonal developments in extrusions. External market estimates suggest a positive volume development year over year of 1% for Europe and 5% for North America. However, we foresee increasing pressure in both extrusions margins and recycling margins.

We expect further metal effects year over year of NOK 50 to 150 million based on current spot Midwest premiums. A reminder that metal effects are strongly dependent on the movements in the Midwest premium. Moving to the final business area, energy. The adjusted EBITDA for Q3 increased to NOK 828 million compared to NOK 626 million in Q3 2024. The increase was mainly driven by higher gain on price area differences, partly offset by lower production. Compared to Q2, adjusted EBITDA decreased from NOK 1.1 billion, mainly due to lower production and lower commercial results. The price area gain was NOK 330 million in Q3, at a similar level as in Q2. Looking into Q4, we should be aware of the inherent price and volume uncertainty in energy. For the next quarter, production volumes and prices are expected to increase, mainly due to seasonality.

Furthermore, price area gains are expected to be lower following a seasonal convergence between area prices. Let’s move to the final financial slide this quarter. Net debt decreased by NOK 1.9 billion since Q2. Based on the starting point of NOK 15.5 billion in net debt from Q2, we had a positive contribution in adjusted EBITDA of NOK 6 billion. During Q3, we saw a net operating capital build of NOK 1.4 billion, mainly driven by increasing inventories and receivables related to indirect CO2 compensation, partly offset by a release in net accounts receivables and accounts payables. Under other operating cash flow, we have a negative NOK 200 million impact, mainly driven by net interest payments, settlement of taxes, and reversal of net income from equity accounted investments, partly offset by positive mark-to-market reversals and adjustments for non-cash effective bonus accruals.

On the investment side, we have net cash effective investments of NOK 2.2 billion. As a result, we had a positive free cash flow of NOK 2.2 billion in Q3. We also had negative other effects of NOK 300 million. This was mainly driven by payments of new leases, partly offset by positive net currency effects on cash debt. As we move to the adjustments related to adjusted net debt, hedging collateral has increased by NOK 400 million since the end of Q2. Furthermore, during Q3, the net negative pension position decreased by NOK 700 million, turning into a net asset position of NOK 600 million positive. We had no changes in other liabilities during Q3. With those effects taken into account, we end up with an adjusted net debt position at the end of Q3 of NOK 21.1 billion.

With that, I end the financial update and give the word back to Eivind.

Eivind Kallevik, President and CEO, Hydro: Thank you, Trond Olaf. Now, as we conclude today’s session, I’d like to summarize our continued priorities going forward. As always, health and safety remain our top priority, and we are fully committed to safeguarding the well-being of our employees. While we recognize that strong performance metrics can shift in just a moment of inattention, the ongoing positive trend in this area stands as clear evidence of our dedication. We are navigating an increasingly volatile geopolitical situation that continues to affect our markets. In response to these uncertainties, we are proactively refining our operational structure to target our most critical strategic priorities. This quarter, we have taken steps to execute on the phase-out of our battery operations in accordance with our strategy. We have several performance and capital discipline programs ongoing to help us better navigate global uncertainty and keep up the attention on profitability.

We are seeing positive outcomes in our power sourcing portfolio, highlighted by Alouette’s recent long-term contract, which strengthens our energy resilience. Continuing to identify and pursue new opportunities in power sourcing remains essential to secure our future energy needs. Achieving tangible results on our 2030 strategy remains critical, and we are proud to see that we are taking steps in the low carbon aluminum transition. Our market for recycled low carbon products continues to advance, exemplified by the partnership with Mercedes-Benz and the infrastructure project in Trondheim. We create growing markets through partnerships while we execute on our decarbonization and technology roadmap. These concentrated efforts on growth and profitability ensure that Hydro continues to stay relevant. We are committed to our decarbonization strategy, and we will continue to pursue our 2030 ambitions with unwavering determination.

Thank you so much for your attention, and with that, I hand it over to you, Erik.

Erik, Moderator/Host, Hydro: Thank you, Eivind, and thank you, Trond Olaf. We will then move into the Q&A session. As a reminder, if you do have questions, please type them into the chat, and I will read them for you. We have a few already, so let’s get started. First one is from Liam. Can you please give your latest thoughts on CBAM? Do you expect implementation from early 2026 or potential delays?

Eivind Kallevik, President and CEO, Hydro: Thanks, Liam. The way we look at this today, we do expect CBAM to be implemented from 2026. What we are, I will say, excitingly awaiting is any changes or adjustments to CBAM, for instance, around the scrap liquid. That remains to be seen as we get towards the tail end of this year.

Erik, Moderator/Host, Hydro: There is a second question from Liam. Is it possible or likely that you will understand versus the NOK 13.5 billion CapEx guidance for 2025?

Eivind Kallevik, President and CEO, Hydro: We are keeping the CapEx guidance at $13.5 million. Remember that Q4 is typically the quarter with highest maintenance and sustaining capital. If we have any updates to that, we will certainly be sure to give it at the Investor Day that we have in late November.

Erik, Moderator/Host, Hydro: There’s a question from Amos. Can you discuss the state of play with the TOMAGO’s energy contract? Is it reasonable to assume that the smelter shuts in 2029?

Eivind Kallevik, President and CEO, Hydro: TOMAGO is, of course, placed in an area where renewable power is hard to get in Australia, and the power situation is pretty tight, leading to high energy cost. Currently, today, energy cost is roughly 40% of operational costs for the TOMAGO smelter. We continue to work with the stakeholders to see if there are any opportunities to get renewable power post the end of 2028, but it is a challenging situation. We will make sure that we update the market if and when there are news in this context.

Erik, Moderator/Host, Hydro: Is there any change to guidance for metal markets trading and commercial EBITDA contribution for 2025? I think that one was covered already.

Trond Olaf Christophersen, CFO, Hydro: Yes, as I said, we have reduced the guiding to NOK 200 million to NOK 400 million, down from NOK 300 million to NOK 500 million, as we said in the Q2 report. That is the reduction in the guiding.

Erik, Moderator/Host, Hydro: A question from Matt. Considering the recent volatility in aluminum prices and the increase in refinery capacity from Indonesia, with potential developments in Guinea, how is Hydro approaching the balance between LME-linked and PACS-based pricing for future aluminum contracts? Also, could you please provide some more color on the Alba supply agreement in Q3?

Eivind Kallevik, President and CEO, Hydro: When it comes to pricing of aluminum, PACS remains the predominant pricing parameter, and that I suspect you should also expect going forward for the new contracts that we enter into. When it comes to the Alba contract, it’s a contract that we are very happy to enter into. It’s a long-term partner in the Gulf. Other than that, I really cannot comment on specific commercial details of any contract.

Erik, Moderator/Host, Hydro: There is a question from Hans-Erik. Any news regarding potential tariffs on scrap exports from Europe?

Trond Olaf Christophersen, CFO, Hydro: Yes, the Commission in the EU had planned for an announcement late in Q3. That has now been postponed until late Q4. That is the latest information we have. We expect the news at the end of Q4.

Erik, Moderator/Host, Hydro: Question from Magnus. There seems to be a miss versus guidance of NOK 300 million on raw material costs, looking at the group combined. Can you explain the drivers here?

Trond Olaf Christophersen, CFO, Hydro: Magnus, on the raw material costs, I think you need to look at bauxite and alumina and aluminum metal together. We guided on $1 billion to $1.2 billion. We realized $700 million. If you add roughly $200 million plus from BNA to that guiding due to the internal pricing mechanism, we are closer to the billion. There were some slight increases in energy costs and less reduction of carbon costs, both below $100 million. If you add all of that together, you are within the guiding. That is basically the difference.

Erik, Moderator/Host, Hydro: We have a question from Bengt. Looking at actual price changes for premiums during the quarter and your expected range of $310 to $350 per ton, the midpoint implies lower realized premiums quarter on quarter, whereas premiums are up quarter on quarter. Are there temporary changes in sales mix that explain this?

Eivind Kallevik, President and CEO, Hydro: Thank you, Bengt. You are correct. When we looked at the value-added products market both in Q3 and when we look into Q4, we do expect to produce somewhat more standard ingots compared to what our normal product mix would be. That, of course, drags the average premium somewhat down.

Erik, Moderator/Host, Hydro: There is a question from Jannis. Market expectations were for a meaningful increase in extrusion volumes in 2026 from three levels. Q1 2026 outlook suggests just 2 to 4% improvement year on year. Can you provide some color on end markets and whether you are seeing any uptick in automotive and HVAC going into next year?

Trond Olaf Christophersen, CFO, Hydro: I would say that the overall extrusion market is the market where we see a lot of uncertainty. It is difficult to give sort of additional flavor on the expected volumes going into next year. We use the external CRU as a reference, and as we said this quarter, we roughly followed the development for CRU, which we also expect for the coming quarter. We have been expecting a recovery in the extrusion market for quite some time now. Again, as always, it’s very difficult to tell when we will see the market turn.

Erik, Moderator/Host, Hydro: We have a follow-up from Bengt. Follow-up on the standard ingot. Is that normal seasonality or changes in end-user demand?

Eivind Kallevik, President and CEO, Hydro: I think you need to look at this two ways. One is that demand in Europe has been relatively weak, as Trond Olaf Christophersen has been through. That’s part of it. The second part of it is that our customers are also drawing down their inventories quite significantly, both in the U.S. and in Europe, towards the year-end. As such, we produce somewhat more standard ingots to get our operating capital also out the door.

Erik, Moderator/Host, Hydro: There is a question from Magnus. Are we then seeing significant positive eliminations? Our impression was that there was more to come as the Q2 release was smaller than the buildup in the year before.

Trond Olaf Christophersen, CFO, Hydro: Eliminations are unfortunately difficult to predict, also for us internally. If you look at the total accumulation of negative eliminations through the price increase for aluminum, we accumulated roughly NOK 2 billion. Now we have released, I think, yeah, around NOK 1.76 billion in total. The remaining level we keep in the balance will fully depend on the development of the aluminum price. I think the positive twist on this is that since we now are generating much better cash flows in bauxite aluminum compared to the situation before the aluminum price surge we saw last year, we then will have higher eliminations in the balance if the current market prices stay.

Erik, Moderator/Host, Hydro: There is a question from Amos. What is your guidance for Q4 working capital movements?

Trond Olaf Christophersen, CFO, Hydro: Yeah, we maintain our guiding that we gave at the Capital Markets Day last year, that we will deliver the NOK 30 billion at year-end.

Erik, Moderator/Host, Hydro: Okay, there seem to be no further questions, in which case we will round it off here. Thank you all for joining us here today. Please don’t hesitate to reach out to Investor Relations if you have further questions. We wish you all a great day. Thank you.

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