The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: It's Jason Fairclough of Bank of America, Merrill Lynch. Thanks for the presentation. 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 -- are you really committed to extrusions? Do you really want to put growth capital into a business that isn't achieving its cost
of capital?
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: 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 oh, well, that's the cost for the wider business to sort of deliver the model that you've
chosen.
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: Okay, thank you.
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NOVEMBER 27, 2024 / 8:00AM, NHY.OL - Norsk Hydro ASA Capital Markets Day
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: I'll go with the first one, I guess.
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: It's Jason Fairclough of Bank of America. Thanks for the presentation, folks. 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.
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NOVEMBER 27, 2024 / 8:00AM, NHY.OL - Norsk Hydro ASA Capital Markets Day
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: 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?
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: So more buybacks?
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: Thank you.
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: 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 NOK17 billion or NOK18 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?
Question: Jason Fairclough - BofA Securities Inc. - Analyst
: Perfect. Thank you.
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