SAPA GROUP ALUMINIUM IS PART OF THE SOLUTION

SVEIN TORE HOLSETHER

PRESIDENT & CEO

SAPA GROUP

1

WHAT DO WE DO?

CREATING THE JV

FUTURE OPPORTUNITIES

2

FIVE STAR RATING FOR TESLA MODEL S

3

THE PRINCIPLE OF ENERGY ABSORPTION WITH

ALUMINIUM PROFILES

4

ALUMINIUM HAS UNIQUE PROPERTIES

Low weight

High strength

Superior

malleability

Corrosion

resistance

Recyclable with low energy input

ALUMINUM IS PART OF THE SOLUTION

* ESTIMATE

8% of the Earth’s crust

consists of aluminum

75% of all aluminum ever

produced still in use

>50% of Sapa’s

Production*

based on

recycled

aluminum 5% of original energy

required when

recycling

6

OUR VALUE CHAIN –

MOVING TOWARDS CIRCULAR ECONOMY

SAPA WORKS ACROSS A BROAD PART OF THE ALUMINIUM VALUE

CHAIN AND WE CARE FOR ALL THE PARTS OF IT

ALL AROUND YOU

In your car When travelling In your office At home

8

ALUMINIUM WINDOWS

9

10

11

WHAT DO WE DO?

CREATING THE JV

FUTURE OPPORTUNITIES

12

ORKLA AND HYDRO FORM A WORLD-LEADING

ALUMINIUM SOLUTIONS PROVIDER

13

Strong combination of competence and culture

Through knowledge sharing of best practices, we will

improve our network, our offering and our entire

organization

We have global reach and local presence, in addition to

leading process capacity and industry knowledge

We will continue to strengthen R&D by merging the best

from both companies

1 BNOK synergy potential

Expansion

Asia

100 YEARS OF COMMON KNOWLEDGE…..

14

Sapa opens first production

facility in Vetlanda, Sweden

JV between

Sapa/Alcoa is

created

Indalex

acquired First foothold

in America

Enters South

America,

Brazil

Builds a tubing plant

in Suzhou, China

Acquires plants in

Europe from Alcan

1963

Hydro builds its first

aluminium operation in

Karmøy, Norway

2013 2005 1997 1971 2000 2007 2009 2010/11 1986

Builds first

extrusion

plant outside

Norway

Opens first extrusion

company outside

Sweden

Expansion

Asia

……MERGED INTO A NEW COMPANY CALLED SAPA

15

Sapa opens first production

facility in Vetlanda, Sweden

JV between

Sapa/Alcoa is

created

Indalex

acquired First foothold

in America

Enters South

America,

Brazil

Builds a tubing plant

in Suzhou, China

Hydro builds its first

aluminium operation in

Karmøy, Norway

Builds first

extrusion

plant outside

Norway

Opens first extrusion

company outside

Sweden

2005 1997 1971 2000 2007 2009 2010/11 1986 1963

Acquires plants in

Europe from Alcan

2013

16

With presence in more than 40countries

23,500employees

A TRULY GLOBAL PLAYER

With more than 100production units

46 Bn.NOK Sales

Integration Planning Team (IPT)

• Lene Trollnes, Hydro (Lead)

• Erika Ahlqvist, Sapa (Deputy)

• David Holden, Hydro

• Stener Finsrud, Sapa

• Liv Tvenge, Hydro

• Susanne Rothstein, Sapa

• Cathrine Øverli, assistant

• Legal counsel NewCo

• External resources

Profiles Europe Profiles

Americas

Profiles Asia Building Systems Tubes

Communication

HR & Org.

Legal

CFO area

Project Owner

• Svein Tore Holsether

Business area specific work streams Cross NewCo work streams

• Head of IPT

• Employee representatives

Sapa: Kenneth Hertz

Jan Hermansson

Hydro: Tor Egil Skulstad

Dietmar Gärtner

• Legal

• Selected members of NewCo mgmt

Reference group

Steering Committee

Appointed Members of NewCo management

Advisory board

Commercial Sourcing

Corporate functions & staff specific

R&D / Go to market

2 3 4 5 6 8 9

Restructuring support (Clean team)7 10

11 12

13 14

DEDICATED LEAD FOR INTEGRATION PLANNING

17

MANNING PROCESS

– STARTS WITH ORGANIZATIONAL DESIGN

Phase I Phase II Phase III

End of Year Closing Announcement (October) By February 15

18

Proposed organizational design

Nominated candidates for level 2

External assessment of

nominated candidates

Internal interviews of

nominated candidates

‘Select’ and communicate

Run similar process for

level 3

BEST FAIR

TRANSPARENT

COMPLIANT

OWNERSHIP

SYNERGY

BALANCE

GETTING THE LEADERSHIP RIGHT

19

The corporate management team was set already before the first announcement

The level below (L2) was chosen in a thorough and transparent process

Most L2 leaders were communicated well in advance of the closing

Clear process for level 3 and 4 established before closing and HQ level 3 and 4 were

in place already before closing

THE INTEGRATION PLANNING COMMUNICATION

20

Monthly newsletters translated into

17 languages

Integration Planning Site with all

relevant information (English)

Monthly union calls with European

union representatives (done

separately in Sapa/Hydro)

Reference Group: Two union Board

representatives from each side and

representatives from EWC

A new Sapa European Works Council

set up during planning period

SAPA’S EUROPEAN WORKS COUNCIL

21

DG4

documents

for review*

Controller

meeting

Redeployment process

Consultation

TRANSPARENT PROCESS WITH FACT-BASED

APPROACH

22

DG0 DG1

DG2

DG3 DG4

DG1

documents

drafted*

Business

case review

DG1

documents*

for review

DG0

documents*

for review

Full project

review

workshop

Final DG 3

document*

review

Pre –

announcement

communication

review

Ready to go

EWC WC information

Road Map

locking

Execution

Announcement

DG5

* Templates available

Info. to Chairman

of the Board

AUGUST 19 2013 WE FINALLY GOT AN APPROVAL FROM

CHINESE COMPETITION AUTHORITIES

23

SAPA’S BUSINESS PRIORITIES WERE CRYSTAL CLEAR

24

Retain Business

Extract Synergies

Improve margins

Clarify strategic direction

Build future organization

Year

1 P

rio

rity

Low

High

1

2

3

4

5

While never compromising on safety or compliance

100-DAY PLANS ALL DELIVERED ON BY END OF 2013

25

RESTRUCTURING DONE QUICKLY FOR THE BENEFIT OF

EMPLOYEES AND COMPANY

26

15 main restructuring projects have been announced:

1. Bedwas (UK)

2. Bolzano (Italy), divestment

3. Fossanova (Italy)

4. Guelph (Canada)

5. Hannover (Germany)

6. Harderwijk (The Netherlands)

7. Haticon (Germany), divestment

8. Miami (USA)

Divestment of MPE operations in Harderwijk (NL) and

extrusions in Raufoss (Norway) due to decision by EU

Competition authorities

THE LOCATIONS MARKED WITH RED ON THE MAP IS LOCATIONS THAT HAVE BEEN

CLOSED/SOLD

9. Pinon (France)

10. Seneffe (Belgium)

11. Vetlanda (Sweden)

12. Workington (UK)

13. X-docs (France)

14. Corporate overhead

costs

15. Salko (Finland)

Magnor

Finspång

Vetlanda

Sjunnen

Birtley

Tibshelf

Cheltenham

Bedwas

Feltre

Ornago

Bolzano

Atessa

Fossanova

Luce

Pinon

Chateauroux

Albi

Toulouse Puget

Perfialsa

Avintes

Pinto

Miranda Navarra

La Roca

La Selva

Raeren

Eupen

Lichtervelde

Hoogezand

Hardewijk

Drunen

Chrzanow

Uphusen

Rackwitz

Bellenberg

Nenzing

Offenburg

Trzcianca

Kofem

Ziar

Chișineu-Criș

Santa Oliva

Hannover

Seneffe Haticon

Tønder Workington

Salko

SAPA’S EBITDA IS MOVING IN THE RIGHT DIRECTION

27

1 091

1 916

0

500

1 000

1 500

2 000

2 500

2013 2014

MN

OK

WHAT DO WE DO?

CREATING THE JV

FUTURE OPPORTUNITIES

28

GLOBAL ALUMINIUM DEMAND EXPECTED TO GROW

ACROSS REGIONS AND SEGMENTS

STRONG DEMAND DRIVERS IN KEY ALUMINIUM SEGMENTS

29

SOURCE: CRU, HYDRO ANALYSIS

Urbanization

Substitution from copper

Urbanization

Housing market recovery in mature regions

Energy neutral buildings

Improving industrial sentiment in mature regions

Manufacturing activity and industrial growth in

emerging countries

Urbanization

Environmental friendly solutions

Transport

Building &

Construction

Electrical

Machinery &

equipment

Packaging

Growth in automotive vehicle production

Aluminium content in cars increasing

Growth in other transport modes, e.g. railway

25%

WE’RE PROUD SUB-SUPPLIERS IN NICHE MARKETS

31

KEEPING THE DESIGN, SHEDDING ~400 KG

32

LEONI HAS PARTNERED WITH SAPA IN REPLACING COPPER

WITH COATED ALUMINIUM IN ITS BATTERY CABLES AND

JAGUAR HAS DONE THE SAME

33

SAPA AND TESLA IN NORTH AMERICA

- GLOBAL OFFERING LOCALLY

34

100% committed to Aluminium

Tesla Model S • 5 Star Crash Rating

• 416 HP

• 482 km Per Charge

35

HIGH-END CAR BRANDS ARE LEADING THE WAY

36

SAPA AND FORD F-150, A MULTI-PLANT DELIVERY TO

THE AMERICA’S HIGHEST SELLING VEHICLE

37

PICTURE WITH COURTESY OF FORD MOTORS

LEGISLATION IS KEY DRIVER FOR GROWING INTENSITY

IN AUTO SEGMENT

US: CAFE TARGET EUROPEAN UNION: EMISSIONS TARGET

38

SOURCE: CRU, HYDRO ANALYSIS * CORPORATE AVERAGE FUEL ECONOMY (CAFE)

UTILITY TRAILER

– LIGHTWEIGHTING AMERICA’S TRANSPORTATION

39

100%

40%

WE WILL HAVE TO RE-THINK DESIGN TO MEET FUTURE

ENVIRONMENTAL REQUIREMENTS

41

UTILIZING OFFSHORE OIL AND GAS TECHNOLOGY TO

DEVELOP A NEW BRIDGE CONCEPT

42

ALUMINIUM SUBSTITUTING COPPER IN AIR CONDITIONERS

– PANASONIC DRIVING THE CHANGE

Sapa has developed a solution of aluminium

tubes with helical grooves

Panasonic awarded Sapa the ‘gold’ prize for

innovation in their Annual Supplier Awards

Sapa has entered into a significant supply

contract with Panasonic

43

EXTRUSION OUTLOOK IMPROVING

44

SOURCE: CRU AND HYDRO ANALYSIS

EXTRUSION DEMAND, SELECTED REGIONS

-10,0 %

-8,0 %

-6,0 %

-4,0 %

-2,0 %

0,0 %

2,0 %

4,0 %

6,0 %

8,0 %

10,0 %

2012 2013 2014 E 2015 E 2016 E

North America Europe

YoY-growth

EXPECTED MARKET DEVELOPMENT

65%

13%

12%

4% 3% 3%

Construction

Transport

Machinery & equipment

Consumer Durables

Electrical

Other

GLOBAL SEGMENT COMPOSITION,

EXTRUSION

• US housing market sustaining positive

momentum

• Construction activity in peripheral Europe

showing signs of recovering, although from

low levels

• Growth in transport segment

(2013)

45