Norsk Hydro Stock

Good morning, and welcome to Hydro's Second Quarter 2026 Presentation and Q&A. We will shortly begin with a presentation by President and CEO, Eivind Kallevik, followed by a financial update from CFO, Trond Olaf Christophersen.

We will then finish off with a Q&A session. Please note that if you would like to ask questions during the Q&A, you can do so at any time, and you do it by typing your question into the box on your screen. When we get to the Q&A, I will then ask your questions on your behalf directly to Eivind and Trond Olaf.

And with that, I turn the word over to you, Eivind.

Thank you, Erik, and good morning from me as well. I am pleased to present a strong set of results for the second quarter, supported by excellent operational performance across the company.

Overall, this is a solid quarter, but at the same time, the ongoing situation in the Middle East continues to impact the totality and affects the border picture. As always, we begin with what matters most, safety. Safe operations and a safe working environment are the foundation for everything else that we report today. Because without them, none of our other results would matter.

Keeping our people safe remains my highest priority and the highest priority for the entire management team. And wherever I travel across Hydro, one thing stands out, our people genuinely care about looking after each other. That commitment is one of our greatest strengths. And I am pleased to report that both of our HRIs and TRIs remain at historically low levels.

The challenge now is really to avoid complacency. Because strong performance should never lead to lower vigilance. Instead, we must continue learning, improving and moving steadily towards our ultimate ambition of 0 injuries. Because every serious incident has consequences that go far beyond the individual involved. It affects colleagues, teams, and the wider organization, and it consumes enormous amount of time and energy that should otherwise be spent on improving our business. Because when we operate safely, we can focus our efforts on performance, productivity, and creating value rather than managing crisis.

Now with that, let's have a look at the highlights for the second quarter. The second quarter was characterized by continued strong operational performance across our business areas as well as good progress on our strategic agenda.

The adjusted EBITDA for the quarter came in at NOK 8.9 billion, while free cash flow was a solid NOK 4 billion. Adjusted RoaCE came in at 10.9%, above our target of 10% over the cycle. Our upstream business delivered solid performance and production remained stable across most of the value chain, despite the volatile operating environment that we have.

Our Norwegian casthouses delivered an all-time high production supported by operational performance at a very high level. Also happy to see that recycling results also strengthened with an adjusted EBITDA reaching NOK 0.9 billion during this quarter.

From a market perspective, the realized all-in metal prices were 14% higher than in the first quarter, continuing to support earnings. Beyond the strong operational performance, another important milestone this quarter is the agreement that will enable the restart of Slovalco.

Now this is an important step, both for Hydro, but also for European industry more broadly. It demonstrates that with the right framework conditions, industrial capacity can return to Europe. We also continue to strengthen our renewable power position, securing a further 5 terawatt hours through the new long-term agreement with Eviny.

Access to competitive renewable energy remains one of Hydro's greatest competitive advantages. And strengthening that position is essential to support continued strong operational as well as financial performance for the future. So all taken together, I am pleased with both our operational execution and the progress we are making on our strategic priorities. And as I said, we also continue to deliver solid returns with an adjusted RoaCE of 10.9% over the last 12 months, above the target we have of 10% over the cycle.

Back in 2022, we curtailed production at our joint venture plant, Slovalco, because the framework conditions simply did not support competitive aluminum production. Unsustainable power prices and the lack of compensation for indirect carbon costs made continued operations impossible. Since then, we worked closely with the Slovak government to establish a framework that changes that. So earlier this month, we reached an agreement combining long-term access to competitive power with a more competitive framework conditions.

Pending final approval by the EU, this agreement will enable the restart of the first 75,000 tonnes of production since the curtailment. And I believe this is important well beyond Slovakia. It demonstrates that Europe's competitiveness challenges are not inevitable. They are solvable when policymakers are willing to strike the right balance between ambitious climate policy and industrial competitiveness.

And European industry has enormous strengths. And with the right framework conditions in place, there is every reason to believe that Europe can continue to thrive and compete globally despite the many pessimistic predictions. And the Slovalco case illustrates this well. Predictable policy, competitive energy, and a level playing field make a real difference. Because without them, Europe risk is becoming increasingly dependent on imported strategic materials. But with them, we can rebuild industrial capacity, strengthen resilience and compete globally.

And for Hydro, Slovalco is another example of how we are strengthening our integrated aluminum platform, while contributing to a greater European resilience and security of supply. It is an important milestone and one that we are incredibly happy to have reached.

Now let's have a look at a few highlights from our commercial agenda. Throughout this quarter, we have continued to strengthen Hydro's commercial position, both by building demand and enthusiasm for aluminum and by securing new long-term offtake agreements. We have showcased the potential of aluminum through projects such as the Aalto installation at 3 days of design in Copenhagen and a new aluminum bridge in Bergen here in Norway.

These projects demonstrate what low carbon and recycled aluminum can enable and help inspire future demand. And on the back of that, we continue to convert our position into larger commercial opportunities for low carbon and recycled products, and I will return to this in just a moment.

Operationally, we continue to execute well across the business. Our Norwegian smelters operated at near full capacity following the ramp-up of previously curtailed capacity, increasing production by 6% compared to the same period last year.

Total sales from the smelters reached all-time high, both in Q1 as well as in Q2. Across our operations, our teams continued to deliver strong performance while maintaining relentless focus on safety, operational excellence, and continuous improvements.

And finally, we continue to strengthen one of Hydro's greatest competitive advantages, which is access to renewable power. This quarter, we signed another long-term power purchase agreement, this time with Eviny, securing 0.5 terawatt hour of renewable power annually between 2031 and 2040 or 5 terawatt hours, if you like, over the life of the contract.

And this builds on the agreements we announced earlier this year with Statkraft and Alpiq. Altogether, we have now secured around 85% of the power need for our Norwegian smelter portfolio through the '30s. Long-term access to competitive renewable power is fundamental to Hydro's competitiveness, our low-carbon product offering and our future growth ambitions. While we are now in a much stronger position for the next decade, we will continue to pursue additional power sourcing opportunities to further strengthen our long-term competitive position.

So returning to the larger commercial opportunities that I mentioned before. The public discourse on decarbonization in nature may be overshadowed at the time by heightened geopolitical tensions. But commercially, the momentum continues. We still see strong demand for low carbon and recycled products as well as a willingness among our customers to pay the associated premiums.

In the automotive sector, we continue to develop our long-standing partnerships with Mercedes-Benz. Mercedes-Benz is one of our most demanding customers, not at least when it comes to sustainability. Their focus on decarbonizing their value chain continues. And we will soon be announcing some very exciting news about the next steps in our collaboration.

We've also signed a new 5-year agreement with power cable producer, Nexans, to supply approximately 85,000 tonnes of low-carbon aluminum wire rod between '26 and 2030. The aluminum wire rod will be produced at Karmoy and used in power cables for Europe's electricity grid, including medium voltage grids, overhead transmission lines as well as subsea infrastructure.

Now as Europe expands and modernizes its electricity networks, reliable access to critical materials is becoming increasingly important. This agreement then combines predictable long-term supply with low-carbon aluminum supporting both Europe's decarbonization and its energy security.

Both partnerships illustrate how we are working with leading customers to translate our low-carbon position into concrete commercial opportunities and long-term customer relationships.

Now then let's have a quick look at the alumina market. The alumina price started the quarter at $313 per tonne, and remained stable at this low level throughout the quarter. As we discussed in Q1, the smelter curtailments in the Middle East have increased the global oversupply in the alumina market. Adding to this, the Chinese market was also supplied in the second quarter, although we saw some refinery disruptions, both in China and in Indonesia, reducing the oversupply somewhat.

The PAX alumina price closely reflected the Chinese import parity price with Chinese refineries then enjoying relatively low raw material costs. The result was an average alumina price in second quarter of $308 per tonne compared to $307 per tonne in the first quarter of the year.

Towards the end of the quarter, alumina prices increased to $330 per tonne, and this is by most assumed to be driven by a more optimistic view of the Middle East restarts and smelter ramp-ups in Indonesia. The estimated global balance is now 1.6 million tonnes long in 2026 compared to the 3 million tonnes we showed in Q1.

We move on to the aluminum market. The factors impacting the alumina market have also continued to impact the aluminum market this quarter. As we discussed in Q1, the Middle East curtailments have made the market significantly undersupplied, and this pushed prices up. The 3-month aluminum price started the quarter at just above $3,500 per tonne and peaked at $3,750 in early June.

As we move towards the end of the quarter, expectations for the global supply banners shifted somewhat. External analysis now indicates a global deficit in 2026 of just under 1 million tonnes compared to the more than 2 million tonnes that was expected in first quarter. The revised balance reflects higher supply expectations, while demand continues to grow year-on-year.

Most of the additional supply is expected to come from Indonesia and from China. We still believe that the 45 million-tonne annual production cap in China will remain. However, production is currently running at a somewhat higher rate to address parts of the supply gap created by Middle East curtailments. The increased supply outlook led to a sharp downward correction in prices towards the end of the quarter with aluminum price closing at $3,085 at the end of the quarter.

However, thanks to the strong price development through mid-June, the quarterly average price still increased from $3,188 in Q1 to $3,519 in the second quarter. Product premiums were more stable though. The European standard ingot duty paid premium started the quarter at $587 per tonne and ended at $557 per tonne. The quarterly average was $582 compared to $391 in Q1.

The U.S. Midwest premium declined somewhat from $2,523 at the start of the quarter to $2,396 at the end. The average premium in the second quarter was $2,518 compared to $2,292 in the first quarter.

Then finally, let's have a look at the downstream market, where demand remains flattish at relatively low levels. In Europe, the market was marginally positive in the second quarter. I would say that one bright spot was automotive, where demand increased on growth on EV production. Other segments remained flat.

North America also saw flat growth in second quarter, recovering somewhat from the decline that we saw in the first quarter. Here, the strongest growth came from the electrical segment, supported by the data center investments.

Now looking ahead, both markets are estimated to see slight growth for the full year. In Q3, North America, we expect to see the fastest growth, compensating for the somewhat weaker start to the year compared to Europe.

And with that, let me give the word to Trond Olaf for the financial update.

Thank you, Eivind, and good morning, and welcome from my side as well. We will start with the financial highlights for the quarter, and all numbers will be presented in Norwegian kroner.

Comparing year-over-year, revenues increased by around 6% to NOK 56.5 billion for Q2. This was driven by higher all-in metal prices. For Q2, we delivered an adjusted EBITDA of NOK 8.9 billion and a reported EBITDA of NOK 11.6 billion.

Adjusting items for the quarter was around NOK 2.7 billion and it was mainly related to unrealized derivative gains on LME-related contracts of NOK 3.1 billion.

The adjusted EBIT for Q2 was NOK 6.3 billion, with reported EBIT of NOK 8.6 billion. In addition to the adjusting items to EBITDA, there was around NOK 300 million in adjusting items impacting EBIT related to impairments. The difference between the adjusted and the reported EBIT was therefore NOK 2.4 billion.

Net financial expense for Q2 was NOK 600 million, and this was mainly driven by interest and financial expenses of NOK 600 million. Interest and finance income of NOK 300 million and unrealized foreign exchange losses of NOK 300 million netted each other out.

The income tax expense was NOK 2 billion in Q2, impacted by strong earnings before tax. So the reported tax rate for Q2 was 25%. Overall, this resulted in an adjusted net income of NOK 4.6 billion with reported net income of NOK 6 billion.

The total adjusting items to net income was NOK 1.4 billion, which is the sum of the EBIT adjusting items plus the net foreign exchange loss of NOK 300 million and an income tax effect of NOK 700 million. Adjusted net income was up from NOK 3.6 billion in the same quarter last year and up from NOK 4.1 billion in Q1. Consequently, adjusted earnings per share was NOK 2.21 per share for Q2 '26, up from NOK 1.68 per share in Q2 2025.

Free cash flow ended at NOK 4 billion for the quarter, supported by the strong adjusted EBITDA. Adjusted net debt was NOK 22.8 billion as the strong cash flow was offset by the annual dividend payment in May.

Finally, I would also like to add on the financial highlights for Q2 that the full year CapEx guiding for 2026 of around NOK 13.5 billion remains.

Then moving to more details on the results. And when looking at the results, Q2 compared to Q1, adjusted EBITDA increased from NOK 8.7 billion to NOK 8.9 billion. And the key drivers were higher all-in aluminum prices and improved downstream results. This was partly offset by lower energy production, higher fixed costs, stronger NOK versus the U.S. dollar, and negative results in commercial activities in metal markets.

Realized all-in aluminum prices and premiums contributed positively with around NOK 2.6 billion, while alumina price development was neutral. Upstream volume development had a net negative impact of NOK 300 million from lower sales volumes in aluminum metal, mainly due to Qatalum curtailments. This was partly offset by higher sales in Bauxite & Alumina.

Raw material costs decreased by NOK 70 million, mainly due to lower energy costs in Bauxite & Alumina and Extrusions. And this was partly offset by higher energy and carbon prices in aluminum metal.

Extrusions had a positive development from increased sales volumes of about NOK 200 million. Recycling results from Metal Markets and Extrusions contributed positively with NOK 300 million, partly offset by lower margins in Extrusions by NOK 250 million.

Furthermore, we saw a net negative impact of NOK 300 million, mainly driven by lower production and less net spot sales in the Energy business area. Fixed costs increased in Q2 with an impact of NOK 300 million. This was mainly explained by seasonally higher fixed cost of NOK 250 million in Bauxite & Alumina. We also saw a negative NOK 400 million in currency effects, mainly driven by the stronger NOK compared to the U.S. dollar.

In the other category, there was a negative effect quarter-over-quarter of NOK 1.3 billion. And the largest effect was negative results in the commercial activities in Metal Markets. Eliminations of internal profits also turned from positive in Q1 to neutral in Q2, giving a negative delta.

Then moving to the debt side. And moving on the debt development through the quarter, net debt increased by NOK 3.4 billion from NOK 12.9 billion to NOK 16.3 billion from Q1 to Q2.

We delivered a very strong free cash flow of NOK 4 billion in Q2, driven by an adjusted EBITDA of NOK 8.9 billion.

Net operating capital remained stable through the quarter as CO2 compensation received was offset by higher sales revenues and pre-summer inventory build.

Other operating cash flow of negative NOK 2.4 billion, mainly comprised of income tax and interest payments on debt. We saw net investments of NOK 2.6 billion in Q2, reflecting normal investment activity level according to plan.

Ordinary dividend of NOK 3 per share was distributed to our shareholders in May, in total NOK 5.9 billion. Other changes to net debt of NOK 1.5 billion, mainly comprised of FX effects and new lease obligations during the quarter. In total, this gives a net debt position at Q2 of NOK 16.3 billion.

Moving on to adjustments to net debt. We saw a decline in hedging collateral and other by NOK 2.6 billion. This was due to lower prices and volumetric position at the quarter end. Our net positive pension positions decreased by NOK 300 million due to lower interest rates in Norway.

Other liabilities remained stable during Q2. All elements considered, we ended up at an adjusted net debt position at the end of Q2 of NOK 22.8 billion.

Moving then to the business areas and starting with the Bauxite & Alumina. In Bauxite & Alumina, adjusted EBITDA came in at NOK 550 million in Q2, down from NOK 1.5 billion in the same quarter last year. The main negative drivers were lower alumina prices and unfavorable currency effects. These effects were partly offset by lower LNG prices and lower raw material costs.

Compared to Q1, EBITDA declined from NOK 750 million to NOK 550 million. The result was down due to unfavorable currency effects and lower alumina prices, partly offset by lower LNG price. For Q3, we expect higher alumina production and sales. We estimate that the fully loaded raw material costs, fixed costs and energy costs to be flat.

Moving then to Aluminum Metal. In Aluminum Metal, adjusted EBITDA increased year-over-year from NOK 2.4 billion in Q2 last year to NOK 6.4 billion this quarter. Result was driven by higher all-in metal prices and lower alumina costs. This was partly offset by negative currency effects, reflecting the weaker U.S. dollar against Norwegian kroner.

Compared to Q1, adjusted EBITDA increased by NOK 1.4 billion. And the key drivers were higher all-in metal prices, including realized premiums. This was partly offset by somewhat lower sales volumes linked to the disruptions in the Middle East and unfavorable currency development.

This brings me then to the outlook for the next quarter. For Q3, Aluminum Metal has booked 62% of the primary production at USD 3,361 per metric tonne. And this includes the effect of our strategic hedging program.

Aluminium Metal has also booked 54% of the premiums affecting Q3 at USD 783 per tonne. And we expect realized premiums to end up in the range of USD 660 to USD 710 per tonne.

On the cost side, carbon costs are expected to increase NOK 50 million to 150 million. Energy costs are also expected to increase by NOK 50 million to NOK 150 million, driven by coal and LME-link in some of the power contracts. And finally, fixed costs are expected to decrease by NOK 100 million to NOK 200 million after a seasonally high level in Q2.

Then to the next segment, Metal Markets. And for Metal Markets, the adjusted EBITDA decreased from NOK 280 million in Q2 '25 to NOK 32 million in Q2 '26. The sourcing and trading activities had a negative result of NOK 250 million this quarter, and the recycling business delivered NOK 290 million in positive results.

Excluding currency and inventory valuation effects, the results for Q2 was negative NOK 170 million, down from positive NOK 310 million in the same quarter last year. Excluding the currency and inventory valuation effects, Metal Markets reported a negative result of NOK 170 million in Q2 '26 compared to NOK 310 million in the same quarter last year. Compared to Q1, adjusted EBITDA for Metal Markets came down from NOK 540 million in Q1 to NOK 32 million in Q2. The main driver was the lower results from the sourcing and trading offset by improved recycling results.

Recycling continues to improve in both the U.S. and in Europe, delivering adjusted EBITDA of NOK 290 million in the quarter. As we also highlighted last quarter, margins remained particularly strong in the U.S., where product premiums have increased faster than scrap metal input costs.

Then to the outlook for Q3. And for Q3, we expect strong results in recycling to continue. We expect normalizing results from sourcing and trading activities. And as always, we emphasize the inherent volatility of trading and currency fluctuations in the Metal Market segment.

Then to Extrusions. And in Extrusions, the adjusted EBITDA increased year-over-year from NOK 1.2 billion to NOK 1.5 billion in Q2 this year, driven by the strong recycling margins, in particular in the U.S. Compared to Q1, adjusted EBITDA improved from NOK 1.3 billion to NOK 1.5 billion in Q2. Again, the main driver was improved recycling margins but also seasonally higher volumes.

Despite the seasonal increase, volume development was a bit weaker than we expected due to the ongoing restructuring efforts, especially in Extrusion Europe. The restructuring and associated volume transfers had a negative impact on the cost level as well in the quarter.

And finally, negative currency translation effects also impacted results. For Q3 then and for Extrusions, we should underline that we always compare the coming quarter to the same quarter last year due to the strong seasonality. And looking at Q3, we expect high sales volumes. The current strong recycling margins in the U.S. and Europe are expected to continue also into Q3, and overall margins for the business area are stable.

In Q3 '25, we had an extraordinary metal effect from increased mid-year premium of NOK 420 million. The Q3 metal effect will depend on the mid-year premium development during the quarter. Should the current FX rate continues through the Q3, there will also be a negative currency translation effect in the Extrusion results.

And then moving to the final business area, Energy. In Energy, adjusted EBITDA came in at NOK 500 million in Q2, down from NOK 1.1 billion in the same quarter last year. The main driver was the dry hydrology, leading to lower production and lower spot sales, and also price area loss compared to the price area gain we had last year.

Compared to Q1 this year, the adjusted EBITDA fell from NOK 790 million in Q1 to NOK 500 million in Q2. The main driver was seasonally lower production. The price area loss was somewhat lower than in the previous quarter at NOK 170 million negative in Q2 compared to NOK 190 million negative in Q1.

Looking then into Q3. As always, we should be aware of the weather-driven inherent price and volume uncertainty in Energy. Hydrology remains the key driver of Nordic power prices and we continue to see a weak hydrological balance in the southern part of Norway compared to historical levels.

Finally, at the current outlook, we expect that the loss from price area differences should improve in Q3 compared to Q2. And this ends the business area presentation.

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

Thank you, Trond Olaf. Then to wrap up today's session, I'll briefly summarize our priorities.

Our #1 priority remains the safety, health and the well-being of our employees. Strong results are really only meaningful when everyone returns home safely, and we remain fully committed to our ambition of 0 injuries. Now against the backdrop of continued geopolitical turbulence and volatile markets, maintaining operational excellence and delivering reliably for our customers remain key priorities. This quarter demonstrated the strength of our integrated value chain with record high cathode production in Norway and stable production across most of our operations.

We also continue to strengthen the competitiveness of our portfolio across both primary aluminum and the recycling business. The framework agreement to restart Slovalco is an important milestone for European panel aluminum production, while our recycling business delivered another strong quarter.

Together with continued progress on renewable power sourcing, these are important steps in strengthening Hydro's long-term competitive position. At the same time, we do remain focused on executing our decarbonization and technology road map.

Our new agreement with Nexans and continued collaboration with Mercedes-Benz, demonstrate how we are translating our low carbon position into the long-term commercial opportunities with leading customers.

Overall, I am pleased with how we balanced strong operational and financial performance with a disciplined execution in the quarter characterized by significant market volatility. We remain firmly on track to deliver -- to deliver on our 2030 strategy as well.

So with that, thank you so much for your attention. And then over to you, Erik.

Thank you, Eivind, and thank you Trond Olaf. We will then commence the Q&A session. And again, as a reminder, if you do have questions, please type them into the box on your screen, and then I will read your questions to Eivind and Trond Olaf.

It looks like we have a few questions already, so we can get started. First one is from Liam. On Qatalum, can you discuss your expectations for volumes and the ramp up to full capacity over the next 6 to 12 months?

Thanks, Liam. I think our primary focus at the moment is to keep safe and stable operations given the volatile situation that we have in the Gulf at the moment. So our base case now is that we will continue to run around 60%. And then when situation stabilizes, we will come back in and normalize this, we will come back and update you in terms of ramp-up schedule.

Then we have a second one from Magnus in SEB. On Slovalco, what aluminum price roughly do you need for this restart to exceed the return requirements?

So we don't really guide on price specifically. What we can say is that it's relatively well placed on the cost curve, low on the third quartile or just north of the second quartile, if you like. So it's going to be a reasonably well-placed smelter going forward.

One more from Liam. On recycling, are spot spreads continuing to widen in Q3? Or is the drop in premiums putting some downward pressure? And how do you expect the recycling annualized EBITDA to trend in Q3 and Q4?

Liam, yes, so we don't really give an outlook for the full year and for the coming quarters. But as I said during the presentation, we expect the strong recycling results to continue also in Q3 as we have seen in Q2.

And then we have a few questions from Ahmed. I think I will do one-by-one. So this is on Qatalum. First question, alumina sourcing strategy. Can you provide an update on that?

So Qatalum has been continuing to source alumina in the period that we have behind us, and they will continue to source in the same way. As you will understand, quite -- it is a challenged situation at the moment to get raw materials in. They have established what seems to be a solid sourcing strategy. Part of it comes in big bags onshore. So they're doing a good job locally in Qatar.

And the second part of the question is the current operating rate and ability to sell aluminum.

Yes. So I can comment on the current operating rates. So we are operating around 60%. As we said, when it comes to sales, we have quite limited sales out of the Middle East in this quarter. And again, I mean, the volatility makes that it's very difficult to predict how this will evolve.

Then the third part of the question was on the expected time line for ramp-up that you have answered, so we can go to the fourth, which is the implications of the cancellation of the distribution agreement.

So as we have said, it's quite limited impact financially from that situation in the quarter. The biggest effect around Qatalum and our Middle East situation is on the curtailment and of course, in the price environment. When it comes to further sales, that is a discussion we're having. So we will come back on that when we have concluded on how this will go going forward.

And the final part of the question was your 2027 outlook for aluminum and alumina prices.

I guess the boring answer to that is that we don't really guide on prices as such. We are simple supply-demand people. For aluminum, as we said, we expect undersupply in 2026, which should lead to reasonably good prices for the rest of the year on the metal side and then on the alumina side, somewhat oversupply, and then we'll come back to 2027 later on in the year.

Then from [ Alan ] on Slovalco, will there be any restart costs associated with the restart? And what are the conditions that are needed for a full restart of the facility?

So we expect capital around NOK 400 million for the restart in addition to some operating capital that will come in. So not too significant. But I think it also important in the same sentence to say that we still stay within the totality of the capital guidance for the year. So we will see how to cover that NOK 400 million within the CapEx guidance.

Whether or not we will -- or at what time we will restart the remaining part of the plant with 100,000 tonnes in addition, we will come back to. That's also a part of the plant that needs a little bit more refurbishment than the first 75,000 tonnes that we do. So let's come back to that in due time.

And then as a follow-up on that one from Hans Erik. Do you believe you will be able to restart the last 100,000 tonnes later on?

Hans Erik, we are able to. But first and foremost, we would like to do the restart in a safe and sound manner of the first 75,000 tonnes. And then if we see the opportunity for the remaining 100,000 tonnes, we will come back to that at the later stage.

Then we have one more from Ahmed on Qatalum. I think you have answered already. Are you able to sell the 60% production at Qatalum?

So as I said, we have quite limited sales out of Qatalum this quarter. And I mean, you all follow the situation in the Middle East and the limitations of shipments through the Strait. So that definitely impacts the ability to get metal out.

And then from Marcus. On B&A, are you able to quantify the positive effect from lower LNG prices? Also, should we expect continued positive effects from improved bauxite quality into Q3?

So on the LNG price effect, we give a sensitivity on that in the package, and I don't have the sensitivity on the top of my head, but you will find the sensitivity there. And it's linked to then the development of the Henry Hub prices. So -- so based on the realized Henry Hub price this quarter and then your expectation for the coming quarter, you can find the effect on the LNG cost for Bauxite & Alumina.

When it comes to the Bauxite quality situation in B&A, that is a very exciting improvement project that B&A is running. And they're using a lot of new technologies to really get the best quality out of the area we are mining, and they are realizing quite a lot of improvements on that. So for the full year, we expect to continue to realize improvements when it comes to Bauxite quality.

And we see that both in terms of the cost for the bauxite, but also in terms of lower costs in the refinery because of a better bauxite quality coming into refinery. So this is a very exciting improvement project that Bauxite & Alumina is running.

Then two questions from Matt. Number one, aluminum markets have been more resilient than expected. How would you describe the physical market in Europe? Are you seeing or expecting to see tightness in any particular downstream products?

So typically, when we think about the physical market, I think we need to look at the two different price components. One is LME, which is a globally set price and also partly financially driven. There you've seen a larger decline in LME price during the quarter from $3,750 down to closer to $3,000.

More importantly, I think when we think about the physical market is to look at the regional premiums. And here, we see a much less change in price during the quarter, indicating that the physical market remains strong. And it remains strong, both when you look at foundry alloys or if you look at extrusion ingots or if you look at sheet ingots. Book premiums are still very strong in this area.

And then the second part of his question, has the Middle East conflict led to market share gains for your downstream business, particularly in Europe? Are customers looking to diversify supply away from the region?

So first to your last part of the question, I mean, it's a general trend, I would say, both in the U.S. market and the European market that customers are looking for more local suppliers, due to the overall uncertainty of overseas shipments. So that is supporting our operations.

When it comes specifically to Europe, yes, we have been able to produce more and sell more to the market both from the Norwegian smelter system, but also from our recyclers in Europe in this quarter. And as Eivind commented on in the beginning of the presentation, we have all-time high casthouse production from the Norwegian smelter system. And that is partly then driven by the market opportunities in the current situation.

Then we have a question from Jonas on Hydro Energy. Energy's adjusted EBITDA in the first half of 2026 decreased by 50%. And I quote from the report, this was mainly due to lower production and loss on price area differences compared to a gain in the same period last year, somewhat offset by improved commercial results. Can you elaborate on this?

Yes. So the main driver behind the Energy results is really the hydrological situation in Norway. And we have seen a very large shift from hydrological surplus last year to a very significant hydrological deficit, and we are close to the lowest level we have seen when it comes to water reservoirs and snow reservoirs in Norway in the current situation, as we also saw during Q1.

And the consequence for us is that we have the less water to produce, so it affects total production. But since energy is selling most of their production to aluminum metal, they also have less energy to sell in the spot market. So that is also impacting the financials.

The other effect that is also affected by hydrology is the area price differences in Norway. We do not have a perfect fit between where we have deliveries of PPAs in the Nordics and also our production compared to the consumption at the smelters. So when you have differences between the price areas, we will also either realize a gain on the price area differences or a loss. And last year and the last years, I would say, we have realized significant gains while this year, we have realized losses. So those are the main drivers behind the change in the energy results. But again, it's mostly weather-driven volatility and nothing about the underlying performance.

And then one more from Liam on cost inflation. Costs appear very contained with limited inflation in Q3 compared to Q2. Are there any major lags we should consider that could lead to higher costs later in the year? Or do you see raw material and energy cost as relatively stable?

I mean we only, again give a guiding on the coming quarter. And the outlook for the next quarter is that we see quite a flattish development when it comes to costs. And then we always have some seasonality when it comes to fixed costs. So that trend continues also this year. But that is for the time being we do not see any significant cost inflation overall for the company, but there are pluses and minuses in the total portfolio.

Then we have a final question from Ahmed on Qatalum again. How far are you from reaching the maximum aluminum storage capacity since you're not able to sell the production?

We're still okay from a storage capacity perspective. Of course, it's getting fuller and fuller day-by-day. But hopefully, we will also start to see some sales going forward from Qatalum also in the future. But we're still okay from a storage perspective.

And then we've got a follow-up question Jonas on Energy. You expect losses on price area differences to decrease in the next quarter. Why?

Well, again, this is an outlook based on the current realized prices. So of course, we do not know. But based on what we see of the different prices -- spot prices in the different price areas in the Nordics, that is our expectation that the losses will improve or much lower losses in the coming quarter compared to Q2.

And then we have one from [ Tanmay. ] Can you please quantify alumina oversupply, I guess that could be referring to the market oversupply we talked about?

Yes. We guided on 1.6 million tonnes something like that, in that range. I have it on my slide. I can't remember the number, but in that range.

Good. And that seems to have been the last question at least on my screen. So then I think we will round it off here. Thank you all so much for all the questions. And if you have further questions, please don't hesitate to reach out to us in Investor Relations. So thank you, and have a good day.

Good morning, and welcome to Hydro's First Quarter 2026 Presentation and Q&A. We will shortly begin with a presentation by President and CEO, Eivind Kallevik, followed by a financial update from CFO, Trond Olaf Christophersen. We will then finish off with a Q&A session. If you like to ask questions in the Q&A, you can do so at any time during the presentation and you do it by typing your question into the chat box on your screen. When we then get to the Q&A, I will read your questions on your behalf directly to Eivind and Trond Olaf.

And with that, I give the word to you, Eivind.

Thank you, Erik, and good morning, and welcome from me as well. As always, the first topic to cover is safety. And I would like to begin by saying that we are deeply saddened by the passing of a contractor at the Alunorte alumina refinery in Brazil on March 30. Our thoughts are with the family and loved ones at this very difficult time. Our priority is that they receive the necessary support and assistance going forward.

Now the root cause is currently under investigation, and we do not get to know what led to this tragic incident. And if the investigation concludes that inadequate safety measures contributed to this incident, we will, of course, take this extremely seriously. We will learn from it, and we will implement appropriate actions to prevent this from happening in the future. And incidents like these are a stark reminder of why we must continue to put safety first at all of our plants every day and at every shift.

Looking at Hydro as a whole, our overall safety performance remains strong with low injury and incident rates. And maintaining these levels requires continuous attention and commitment across the company. And let me underline, as I always do, the health, safety and well-being of our employees is our top priority.

Now let's then continue with some highlights. This quarter, the adjusted EBITDA came in at NOK 8.7 billion. Due to high prices and strong market activity, operating capital is also higher, resulting in a negative free cash flow of NOK 4 billion. Adjusted RoaCE over the cycle came in at 10.1%, which again is above our target of 10% over the cycle.

Looking more closely at the highlights behind these numbers. First, we saw continued strong operational performance upstream. Alumina production was up 3.4% and primary aluminum production was up 2.7% compared with the same quarter last year. On the other hand, power production and extrusion sales volumes decreased this quarter, driven by maintenance and hydrology in the energy area and continued soft markets within extrusions.

Recycling delivered its strongest results since 2023, supported by a widening spread between product premiums and standard ingot premiums. We also maintained strong momentum on power sourcing and the HalZero facility in Porsgrunn is now successfully commissioned, ramping up as we speak. And I will get into some more detail on these two on the next slide.

Looking back at the first quarter, we have to address the situation in the Middle East. Geopolitical tensions have impacted our market environment for quite a few years now and with the recent escalation in the Middle East directly impacting our operations in the region. Health and safety, of course, for our affected employees in the area is our top priority. And today, we have some 113 employees living in the GCC countries, and we are following up closely to support their safety as well as their well-being.

On the production side, Qatalum is running at reduced capacity with around 40% curtailment as announced on March 3. At the same time, we are working hard to continue serving our customers through our global casthouse portfolio. And despite this backdrop, we continue to progress on our 2030 strategy of pioneering the green aluminum transition powered by renewable energy.

First, on power sourcing, one of our key priorities is, of course, to secure long-term competitive renewable power. At the Investor Day in November, we highlighted the power sourcing gap expected in the coming years post 2030. Now closing that gap has been a key priority for us, and I'm pleased to report that our efforts are paying off.

The open power position post 2030 has narrowed significantly following new contracts signed since November. This quarter, we signed an agreement with Alpiq amounting to 1.75 terawatt hours for the years 2031 to 2038. And just this week, we entered into two new contracts with Statkraft running from 2029 to 2038, adding some 12.3 terawatt hours of renewable energy to our sourcing portfolio.

And finally, we are also happy to report that the HalZero test facility is now up and running and will be ramped up towards full test capacity in the third quarter of '26. And as we speak, structured testing activities are being conducted, including key safety systems, operational control systems, equipment designs and core production processes. While first metal is still to come some months ahead of us, I can confirm that we already produced our first droplet of aluminum. So not quite full production, but proof that we are on our way.

If we turn to bauxite and alumina markets. In the first quarter, our attention has been on the situation in the Middle East and its impact on the supply-demand balance. With the region being a net importer of alumina, the disruptions to aluminum production and shipping is expected to have a negative impact on the global alumina balance. In isolation, we estimate that the situation will increase oversupply outside China to around 2.7 million tonnes. If we include China, we expect global oversupply to be around 3 million tonnes. What remains to be seen is how much capacity will be curtailed in China, bringing the global oversupply down again.

Looking into 2027, the estimates are uncertain, depending not just on the supply situation in China, but also the ramp-up of smelter capacity in the Middle East. Also as Indonesia increases production from its refineries and smelters, it will add more supply to the global market, influencing prices, trade flows and overall supply-demand balances accordingly. And as such, the pressure on COGS continued in Q1 with prices averaging around $307 per tonne compared to $310 per tonne at the end of 2025. The Atlantic differential did decrease at the beginning of the U.S., Israel, Iran conflict. However, this is primarily caused by higher oil prices driving up shipping costs.

Then, if we move on to the aluminum market. This has clearly also been impacted by the situation in the Middle East. The region is a significant producer of aluminum, representing some 9% of global output, but it is also a major export region with some 4 million to 5 million tonnes exported on an annual basis. The combination of the announced curtailments in the region and the closure of the Strait of Hormuz severely impacts global metal supply.

Both China and the world ex-China are now estimated to be undersupplied in 2026. And as we have all seen, this has resulted in a sharp increase in the LME aluminum price. The 3-month aluminum price began the quarter at $2,995 per tonne and finished above $3,400 per tonne. In addition to LME, the standard ingot premiums have increased both in Europe, the U.S., as well as in Japan. And the U.S. Midwest premium continued to climb from already high levels that reflect the 50% import duty on the Section 232 tariffs. The Midwest premium rose from just over $2,000 per tonne at the end of '25 to north of $2,500 at the end of the quarter. European premiums also climbed with duty paid standard ingot premiums moving from $335 at the start of the quarter to $587 at the end of March.

Now speaking of premiums, the value-add product premiums and scrap prices also impacted the quarterly results. Hydro sells a high share of value-add products relative to the standard ingot sales. Following supply disruptions from the Middle East, the value-add premiums have increased even more than the standard ingot premiums. This positively impacts the cost of profitability, both at the smelters, but also importantly at our recyclers. So after a period of tough market conditions for our recyclers, we saw materially improved profitability in the first quarter. And the delta between the total sales price for extrusion ingots consisting of LME, ingot premium and billet up-charge and the metal input costs consisting of LME, some standard ingots and some scrap has continued to widen.

Now as you can see, this delta is now very favorable in the U.S., supporting strong recycling profitability. In Europe, the delta has also developed positively, but at a lower level. The energy cost has also increased somewhat in Europe, which eats into some of the increased metal spread. At the Investor Day in November last year, we showed that the spot recycling margins in the U.S. were already strong and would theoretically support a NOK 1.8 billion annual EBITDA. Since then, the U.S. margins have continued to strengthen and the annualized run rate EBITDA in Q1 was actually around NOK 2.4 billion.

If we move downstream, the extrusion market outlook remains uncertain. In Europe, the full year demand growth has been revised downwards since January with a flat Q1 estimate, declining markets in the second quarter and a modest recovery expected in the second half of the year. Full year growth is now expected at around 1%. In North America, the latest revised market figures indicate a poorer end to 2025 than what was reported in January, combined with a sharper market contraction in Q1. This is compensated for by a stronger recovery in the third and the fourth quarter, keeping the full year growth at 1%. Demand from building and construction was stable in the first quarter, but with some positive signs in Europe at the end of the quarter.

Automotive demand is starting to improve, thanks to production growth of electrical vehicles in Europe, while the U.S. automotive story is the opposite, where headwinds in the EV production is negatively impacting the demand development. Some of the key U.S. segments are seeing some demand weakness in part due to the high product prices. This negatively impacts the Transportation segment, where trailer builds remained low. The HVAC&R growth rates are also negative. We expect that some of this is demand disruption from the high all-in metal prices in the U.S., the high interest rates and the destocking effects will also curb the demand. One bright spot in the U.S. is the electrical segment, where data center demand seems to be very robust. Other industrial segments experienced also negative growth in the period.

And with that, let me give the word to Trond Olaf for the financial update.

Thank you, Eivind, and good morning, and welcome from me as well. We will start with the financial highlights for the quarter. In comparing year-over-year, revenues fell by around 12%, NOK 50 billion for Q1, driven by lower alumina prices. For Q1, we delivered an adjusted EBITDA of NOK 8.7 billion and a reported EBITDA of NOK 7.1 billion. Adjusting items for the quarter was around NOK 1.6 billion, where the main item was unrealized derivative loss, mainly on LME-related contracts of NOK 1.5 billion. The adjusted EBIT for Q1 was NOK 6.1 billion with a reported EBIT of NOK 4.4 billion.

In addition to the adjusting items to EBITDA, there was NOK 100 million in adjusting items impacting EBIT related to impairments, mainly in extrusions. The difference between the adjusted and the reported EBIT was, therefore, negative NOK 1.7 billion. Net financial expense for Q1 was a positive NOK 1.9 billion. This was driven by a foreign exchange gain of NOK 2.2 billion, mainly from unrealized effects on euro-denominated power contracts and debt, where a strong NOK gave a positive impact.

Interest and other financial income was NOK 230 million, and interest and financial expenses was NOK 570 million. The income tax expense was NOK 1.9 billion in Q1, impacted by strong earnings before tax. The reported tax rate for Q1 was 31%.

Overall, this resulted in an adjusted net income of NOK 4.1 billion with reported net income of NOK 4.3 billion. The total adjusting items to net income was NOK 280 million, which is the sum of the EBIT adjusting items plus the net foreign exchange gain of NOK 2.2 billion and an income tax effect of NOK 250 million. Adjusted net income was up from NOK 4 billion in the same quarter last year and up from NOK 1.7 billion in Q4. Consequently, adjusted earnings per share was NOK 2.07 per share for Q1 '26, up from NOK 1.63 per share in Q1 '25.

Then moving to EBITDA and looking at the results Q1 versus Q4. Adjusted EBITDA increased from NOK 3.1 billion -- increased by NOK 3.1 billion from NOK 5.6 billion to NOK 8.7 billion. The main drivers were higher alumina prices, improved downstream results and normalizing eliminations. This was partly offset by the energy results and stronger NOK compared to U.S. dollar. Realized all-in aluminum and alumina prices contributed positively with around NOK 1.2 billion, where higher aluminum prices was partly offset by lower alumina prices. Upstream volume development had a net negative impact of NOK 300 million with lower sales volumes in B&A, partly offset by slightly higher sales in aluminum metal.

Raw material costs increased by NOK 50 million, mainly due to somewhat higher energy and carbon prices in aluminum metal. Extrusions had a positive seasonal development from increased sales volumes of about NOK 650 million, combined with a positive margin effect of approximately NOK 500 million. In addition, recycling results in Metal Markets improved by NOK 100 million.

Furthermore, we saw a net negative impact of NOK 500 million, mainly driven by lower production and loss of price area differences in the Energy business area. Fixed cost development was strong with decreasing fixed cost in Q1 with an impact of NOK 550 million. This is mainly explained by NOK 300 million lower fixed cost in Extrusions and NOK 200 million lower fixed cost in Bauxite & Alumina. We also saw a negative NOK 700 million in currency effects, mainly driven by the strong Norwegian kroner compared to the U.S. dollar. The final contribution of NOK 1.6 billion was driven by NOK 900 million in net other effects, mainly commercial activities in Metal Markets and Bauxite & Alumina, combined with realization of some previously eliminated internal margins amounting to about NOK 600 million.

Then moving to the debt development. And when looking at the debt development through the quarter, net debt increased by NOK 3.2 billion from Q4 2025. Starting from Q4, net debt of NOK 9.7 billion, we had a positive contribution of NOK 8.7 billion in adjusted EBITDA in Q1. During Q1, we saw an increase in net operating capital of NOK 6.3 billion. The increase was driven by seasonal effects with increased sales at the start of the year and higher prices for our metal. Other operating cash flow was negative NOK 3.6 billion. This was mainly due to taxes paid and interest payments, and various other cash cost adjustments.

We had net cash effective investments of NOK 2.7 billion in Q1. This reflects both the investment activity level in the businesses and cash flow outflow due to settlement for CapEx incurred in 2025, but paid in Q1. Put together, these elements resulted in a negative free cash flow of NOK 4 billion in Q1. There were no shareholder distribution in Q1, and we saw a positive other effect of NOK 800 million. This was mainly driven by the positive FX effect on debt, partly offset by payments of some new leases.

Moving on to adjustments to net debt. We saw an increase in hedging collateral of -- and other by NOK 600 million, mainly due to higher prices. Our net positive pension position increased by NOK 400 million and other liabilities increased by NOK 100 million. All things considered, we ended up at an adjusted net debt position at the end of Q1 of NOK 21.6 billion.

Then moving to the business areas and starting with Bauxite & Alumina. Adjusted EBITDA for Bauxite & Alumina decreased from NOK 5.1 billion in Q1 '25 to NOK 750 million in Q1 '26. This was mainly driven by lower alumina prices, but partly offset by higher sales, supported by the good operational performance at the Alunorte refinery. Compared to Q4 '25, the adjusted EBITDA decreased from NOK 1.4 billion to NOK 750 million in Q1 '26, mainly driven by lower sales volumes and prices as well as normalizing commercial results. This was partly offset by lower fixed costs and raw material costs.

For Q2, we expect higher alumina production and sales. Realized alumina prices are estimated to decrease due to the Middle East supply disruptions impacting the commercial portfolio. We estimate that fully loaded raw material costs will increase, giving a negative impact of NOK 100 million to NOK 200 million. We expect lower energy costs of NOK 50 million to NOK 150 million based on lower Henry Hub gas prices and energy mix optimization. Fixed cost is estimated to increase by NOK 300 million to NOK 400 million from seasonal higher maintenance activities and social investments.

Then, moving to aluminum metal. Adjusted EBITDA increased from NOK 2.5 billion in Q1 '25 to NOK 5 billion this quarter. The main drivers year-over-year were higher all-in metal prices and reduced alumina costs, partly offset by negative currency effects due to the stronger NOK compared to the U.S. dollar. Compared to Q1 '26 to Q4 '25, adjusted EBITDA for aluminum metal increased by NOK 1.3 billion. This was driven by higher all-in metal prices, including realized premiums and lower alumina cost. Feed costs remained flat from Q4 '25, while raw material costs increased marginally due to energy costs. This brings me then to the guiding for the next quarter.

For Q2, aluminum metal has booked 67% of the primary production at USD 3,000 per metric tonne. This includes the effect of our strategic hedging program. Aluminum metal has also booked 51% of the premiums affecting Q2 at USD 571 per tonne. We expect realized premiums to end up in the range of USD 530 per tonne to USD 580 per tonne. Due to the Middle East situation, we expect lower sales volumes. On the cost side, carbon costs are expected to increase NOK 150 million to NOK 250 million, and energy costs are expected to increase by NOK 200 million to NOK 300 million, driven by coal and LME-links in some of the power contracts. Fixed costs are expected to be stable.

Then, moving to Metal Markets. And for Metal Markets, the adjusted EBITDA increased from a negative NOK 14 million in Q1 '25 to a positive NOK 540 million in Q1 '26 due to higher results from both recycling and sourcing and trading activities. Excluding the currency and inventory valuation effects, the result for Q1 '26 was NOK 590 million, up from NOK 62 million in Q1 '25. Compared to Q4, the adjusted EBITDA for Metal Markets increased from negative NOK 56 million to NOK 540 million due to higher results, both from recycling, and from sourcing and trading activities. Recycling delivered its strongest results since mid-2023 with an adjusted EBITDA of NOK 160 million.

As mentioned by Eivind earlier, we are, first and foremost, seeing the strong recycling margins in the U.S., where product premiums have increased more than the scrap metal input. For Q2, we expect the strong trend in recycling to continue with even better margins than in Q1. In our commercial segment, we anticipate a normalization of the contribution from sourcing and trading activities in Q2. And as always, we emphasize the inherent volatility of trading and currency fluctuations.

Then moving to Hydro Extrusions. And in extrusions, the adjusted EBITDA increased year-over-year from NOK 1.2 billion to NOK 1.3 billion, driven by strong recycling margins. Compared to the previous quarter, the adjusted EBITDA improved from negative NOK 63 million in Q4 '25 to a positive NOK 1.3 billion in Q1 '26, driven by higher recycling margins and lower fixed costs, partly offset by somewhat lower sales and higher variable costs. In particular, this quarter's result was driven by improved recycling margins in the U.S., but also supported by overall positive cash cost development and some stabilization in the extrusion markets.

For Q2, for extrusions, we should underline that we always compare the coming quarter to the same quarter last year due to the strong seasonality in this business. Looking at Q2, we expect higher sales volumes. The current strong recycling margins in the U.S. are expected to continue into Q2. And overall, margins for the business area are stable. Should the current foreign exchange rates continue through Q2, there will be a negative translation effect into the extrusion results measured in Norwegian kroner.

Then, moving to the final business area, Energy. The adjusted EBITDA for Q1 decreased to NOK 780 million from NOK 1.2 billion in Q1 '25. The decrease was mainly due to lower production, due to power plant maintenance as well as loss on price area differences. Compared to Q4, the adjusted EBITDA decreased from NOK 1.1 billion to NOK 780 million, mainly due to lower production, again due to the power plant maintenance that we flagged in Q4 and also the loss on price area differences. The price area difference loss was NOK 186 million in Q1 '26, down from a gain of NOK 37 million in Q4 '25.

Looking into Q2, as always, we should be aware of the inherent price and volume uncertainty in energy. For the next quarter, production is expected to fall well below historical Q2 levels due to the low water levels in the reservoirs and also the lowest snow levels seen in many decades in Norway. Price area differences are expected to improve somewhat compared to Q1.

And this ends the business area presentation. And with that, I end the financial update and give the word back to Eivind.

Thanks, Trond Olaf. And to wrap up today's session, I'll briefly summarize our priorities. Our #1 priority is, of course, safety, health and well-being for all our employees. The tragic incident at Alunorte has affected all of us, and we are following the investigation closely to understand what happened, learn from it and strengthen our work to prevent similar incidents for happening in the future if it is a work-related incident.

Against the backdrop of heightened geopolitical uncertainty, building resilience is a key priority for us. Throughout the quarter, we have monitored the escalating situation in the Middle East closely, both to safeguard our people and to maintain reliable deliveries to customers. Staying on top of both the direct and indirect impacts will remain important also in the period going forward. This quarter, we have also taken important steps in recycling and within renewable power sourcing. We delivered our strongest recycling results since 2023, and we're narrowing the power sourcing gap through the signing of new and long-term PPAs.

Finally, we continue to execute on our decarbonization and technology road map while capturing opportunities within low-carbon aluminum markets. And with the HalZero test facility now up and running, we have passed a significant milestone on our technology road map towards net zero aluminum by 2050 or before. Overall, we have made solid progress against the ambitions we have towards 2030 strategy in the first quarter, and we remain fully committed to delivering on it also going forward.

And with that, thank you so much for your attention, and over to you, Erik.

Thank you, Eivind, and thank you, Trond Olaf. We will then commence the Q&A. And again as a reminder, if you do have questions, please type them in the box on the screen, and I will be reading them to Eivind and Trond Olaf on your behalf. And it looks like we have a few ones already.

First one is from Liam on Q2 cost and FX. Can you run through the raw material, energy and FX cost uplifts for Q2 versus Q1 for B&A and aluminum? Over the last month, where have you seen the biggest upward pressure on spot input cost?

So I think I gave most of the numbers in my presentation on both B&A and aluminum metal. We've seen going into Q2, we actually see somewhat lower energy costs for Bauxite & Alumina, mainly because of the gas exposure to the Henry Hub price in the U.S., and we had quite high gas prices initially this year due to the cold winter in the U.S. So for B&A, not a strong or actually slightly lower energy cost. For aluminum metal, we do see higher energy costs. And this is then mainly driven, as I said, by the indices in some of the power contracts linked to coal prices and also aluminum prices. So I think those are the main moving parts, also increasing carbon costs going into Q2, and I also gave the numbers during the presentation.

Second question is from Patrick. Can you please provide some comments regarding pet coke and carbon anode inventory levels in aluminum metal? And can you comment on alumina inventory levels at Qatalum?

So I think overall, we're -- when it comes to pet coke and anodes, if that's sort of the question is general for the portfolio, we are quite comfortable. We have normal levels for that. When it comes to Qatalum, we have alumina in the silos. We haven't given any updates in terms of other types of production levels than roughly the 60% that we have today, which should give you an indication that we have sufficient alumina for the moment.

And that also answers Amos's question. So we'll jump to Marcus. Can you please comment on the expected ramp-up profile for Qatalum and what conditions would be required for that to commence?

So Qatalum is preparing for the ramp-up. We have a fantastic team in Qatalum working on this, and we will come back guiding on when that will restart and when -- how we see the ramp-up schedule when that has been confirmed. But again, the team is working hard on that locally.

Another question from Liam. On energy, could spot sales be negative in Q2? And how weak do you expect Q2 output to be?

So yes, spot sales can be negative in energy. But we will be very careful to say anything about the production in Q2 because this depends so much on the hydrology. So if we have a wet spring in Norway, production will increase and then vice versa with a very dry development. So this is so weather dependent, the production in Q2. So that's why we're not guiding on it. But the best thing we can say is to look at the reservoir levels in the southern part of Norway and then at historical references. And as I said, now especially the snow reservoirs are at a decade low level. So that at least gives some indications.

And then there's a question from Anup, which was partially covered by Eivind, excluding Qatalum, what is the magnitude of production loss in the GCC currently? Is Qatalum able to import alumina into its plant? Did EGA's recent announcement of alumina sale help?

So if you look at analyst expectations in terms of production loss in the GCC countries, that's estimated to be roughly 3 million tonnes in total. So if you deduct Qatalum's curtailment for [indiscernible] so 2.8 million tonnes roughly should be out of market per the analyst reports that we also can see from the external market. On the alumina side, I think I've covered it. The Qatalum team is working hard on getting alumina into the plant also for the more dated or times out ahead.

Then, we have two questions from Duncan. I think we do one at a time. Number one, it appears your alumina costs vary significantly throughout the year, particularly fixed cost, which doesn't appear to be fixed, as you say. Can you provide some clarity on your all-in cost for alumina so we can assess annual profitability better?

So when it comes to the fixed cost development in Bauxite & Alumina, and the situation in Brazil is that you have these wet seasons with -- where you have very heavy rainfall, and that impacts all the activity in the Bauxite & Alumina business area, both when we are able to do maintenance and also some part of the operations. So that's why you will see that we have the seasonal effects on the fixed costs, very much driven by the weather in Brazil and when we are able to do these type of activities. So -- but if you follow this all year, you will typically see that no activity in Q1 because that's when we have the wet season, and then you will see a catch-up through the rest of the year.

And then the second part of the question was, would you be able to share some thoughts how you expect the aluminum market to balance given the significant oversupply today and the wave of production coming? What are the tipping points?

So the typical part where you would see curtailment if you -- again, if you believe history is a predictor for the future, and China will be sort of the clearing part for any oversupply of alumina that we see in the market. And typically, historically, China has been the area where we see curtailments more rapidly than what we see in the Western part of the world.

Then, we have a question from Winston. Could you comment on why the hedging for aluminum price for Q2 is only at $3,000 per tonne, which is lower than the average for Q1 -- with a correction here, lower than the average LME aluminum price for Q1?

So as we have communicated to the market, we have this strategic hedging program, where we hedge roughly 25% of our primary production for roughly 2 years ahead. So that is also impacting the realized aluminum prices. So that is the main explanation for the difference between what you see in the forward market and the prices we are realizing.

And then from Alain, extrusions, the outlook is pointing to further improvements quarter-on-quarter, while CRU downgraded their outlook for Europe. What is driving this improvement for your business? Is it U.S. recycling or consumer prebuying restocking? Any color on how consumers are behaving across your end markets?

So for extrusions going into Q2, there are several drivers for the improved volumes as we see it. We have some more sales to automotive, which is really driven by contracts that we have announced earlier, and we see now start of production for many of these models, and this will drive higher sales volumes for us, but it's not really driving the underlying market demand. And, then other drivers as well is that -- I mean, there is certainly uncertainty in the markets of supply and as an integrated company, we have a strong position. And we are working a lot in the market to try to support our customers through this situation to support the overall market situation. But it's too early to say sort of the total consequences of this. But the main driver again is the automotive and higher sales to new models.

Then, another one from Liam, continuing on recycling. Did extrusions in the U.S. benefit from any one-off gains from higher premiums in Q1? And do you expect any gains in Q2? And also, can you provide a range for Metal Markets recycling EBITDA in Q2?

So when you look at the recycling in the U.S. or the results within extrusions, there is a little bit of what we call inventory gain, but predominantly, it's driven from the widening gap between billets being sold and the input cost for producing those billets at our recyclers. When it looks for recycling EBITDA targets in the second quarter, I think with the widening that we saw towards the end of the quarter, I'm not going to give you a specific number, but there is room for improvement also going into the second quarter compared to what we saw in the first quarter of this year.

And then a question from Bengt. Where are premiums today? And also looking further ahead, could you share some thoughts on the impact into Q3 based on your value-add exposure?

So typically, then in Europe, this depends very much on the product. But the billet premiums, extrusion ingots, that is a very important product for us where we have a significant share of our sales in Europe. We now see $1,100 per tonne in the market. We have given the guiding on the total booked premiums for Q2. So these are the premiums that we are booking for additional volumes in Q2, but also into Q3 and Q4.

Now also other products are up, but typically extrusion ingot market is the market, where we typically book quarterly contracts, while the other markets are more typically yearly contracts. So I think that is where you will see the biggest impact on the higher value-added products premiums in the market.

Then we have a question from [indiscernible]. Could you please share some thoughts on how you expect working capital to evolve from here? Will it follow the usual pattern? Or will it remain elevated given the war effects on prices and freight?

So remember, when we look at net operating capital and we look sort of at our physical inventories, the performance of controlling inventories are very good. So the big increase that we see is really driven by the increase in LME and the increase in billet premium, which in reality is a good thing because it reflects that we will also realize higher earnings going forward. Then looking forward, I think you should think about this as a more normal seasonal development, assuming that price levels stay around the levels where they are today.

Thank you, Eivind. And I think that covers the follow-up question from Alain as well. And there seems to be no further questions. So then we will say thank you for joining us here today. And if you have any further questions, then please don't hesitate to reach out to Investor Relations. Have a good day. Thank you.

Good morning, and welcome to Hydro's Fourth Quarter 2025 Presentation and Q&A. We will shortly begin with a presentation by President and CEO, Eivind Kallevik, followed by a financial update from CFO, Trond Olaf Christophersen. At the end, we will finish with a Q&A session. Please note that if you have questions you would like to ask in the Q&A, you can do so at any time by typing them in the box on your screen. When we get to the Q&A, I will then ask your questions on your behalf to Ivan and Trond.

And with that, I turn the word over to you, Ivan.

Thank you, Erik, and good morning, and welcome from me as well. As always, I will start with safety. Our top priority is to ensure the health and well-being of our employees. Now the positive development that we've seen over time continued into the fourth quarter. In fact, total recordable injuries and high-risk incidents are lower compared to last quarter, which was also a record low for Hydro. It is also worth mentioning that when looking at 2025 as a whole, we also had no fatalities or no life-changing injuries.

On the other hand, we do know that this situation can change quickly. So to sustain these low numbers, that requires continuous attention and strong commitment from all employees across all our locations. And by ensuring a safe work environment, we can maintain a stable operation, which in turn enable us to deliver on our strategic ambitions.

Now let's continue with the highlights of the quarter. EBITDA came in at roughly NOK 5.6 billion, with free cash flow of NOK 4.6 billion, yielding an adjusted RoaCE for the year at 10.2%. And that is above our target of 10% over the cycle. In short, the fourth quarter saw strong metal prices, high upstream production volumes and very healthy cash generation.

Looking closer at the highlights listed here. First of all, alumina production are above nameplate capacity for the fourth quarter and the smelter production was also up 2.5%. On the Energy side, we can report an increased power production of some 13.6% year-over-year. We are continuously working to secure more long-term power contracts, and we are pleased to report 2 new long-term power contracts as well as the power plant investment in Norway during the quarter.

Due to increased volatility driven by the global uncertainty, we have also made several difficult but also necessary restructuring decisions in the recent months during Q4. We've completed the strategic workforce reduction as planned, and we also proposed the closure of 5 European extrusion plants. And finally, the Board of Directors decided to propose a dividend of NOK 3 per share, and this is 60% of adjusted net income above the minimum threshold of 50% as decided by our distribution policy.

Now we've made good progress on the strategy this quarter with several key milestones achieved. On the upstream side, both Bauxite & Alumina and Aluminum Metal have delivered good production numbers. In B&A, the Alunorte refinery experienced improved flow through the plant and high equipment availability, resulting in production above nameplate capacity. In addition, we also saw one of the highest commercial sales volumes ever in Bauxite & Alumina in the fourth quarter. As a result, in the 2025, B&A delivered its second best EBITDA ever.

In Aluminum Metal, our smelter system also delivered stable performance and primary aluminum production increased some 2.5% year-over-year in the fourth quarter. As previously communicated, the Norwegian capacity that was curtailed back in 2022 is now being ramped up, and we expect to increase production by some 50,000 to 60,000 tonnes during 2026 and then comparing to '25. We expect to reach the production speed during the summer of '26.

Now moving to power sourcing. For our Norwegian smelters, one of our key priorities is to secure long-term and competitive renewable power to support competitiveness as well as our low carbon position. In Q4, we have made good progress in this regard, signing 2 power purchase agreements with Hafslund, one in November and one in December. Putting these agreements together cover the period between 2031 and 2040 with a total volume of 5.25 terawatt hours. The contracts are in the price area NO3, covering the Sundal and Hojangar assets that we have.

In addition to working actively on third-party sourcing, we are continuing to invest in our own hydropower system. And in Q4, we took the final investment decision on the Illvatn pumped storage power plant. And this is Hydro's biggest investment in the Norwegian hydropower system since 2004, with a gross investment of NOK 2.5 billion and net investment after tax of some NOK 1.2 billion. The Illvatn pumped storage plant will also contribute with increased power production, reservoir capacity as well as installed power capacity from our facilities in Fortun.

And then lastly, cost control. One of the things we talked a lot about in 2025 was uncertainty and the need to take proactive measures. So in Q3, we announced the strategic workforce reduction for white-collar employees on a global scale. This program concluded in fourth quarter with around 850 white-collar employees having either left or will leave the company within the first half of 2026. The FTE reduction, together with reduced spending on consultants and travel, will yield savings of roughly NOK 1 billion per year starting now in 2026.

Likewise, just before our Investor Day late in November, we did announce the proposed closure of 5 European extrusion plants. We have now confirmed the closure of 2 of the plants, Bedwas and Cheltenham in the U.K., and the process around the remaining 3 plants is still ongoing. As we all know, Extrusions has faced market headwinds also during 2025, which has negatively impacted their results. On the other side, the Extrusion organization has worked hard on cost control and mitigating actions, which enabled them to deliver a good and positive cash flow from the business area in 2025.

Now turning to Bauxite & Alumina. In the fourth quarter, oversupply in the alumina market put a continued downward pressure on PAX. And according to CRU, 2025 ended with a small surplus of around 700,000 tonnes. This is expected to narrow somewhat to about 500,000 tonnes in 2026 in the roughly 145 million global market for alumina. As a result, the market remains sensitive to any production disruptions or delays in ramp-up of new facilities.

During the quarter, new refineries in Indonesia continued to ramp up production, while alumina prices in China declined. This pushed the PAX index down to $306 per tonne at the quarter end from $321 in the third quarter. In China, bauxite import prices remained stable at around $70 per tonne on a CIF basis. Import volumes, on the other hand, increased by some 10% year-on-year, to 43.5 million tonnes imports from Guinea, increasing with 20%, while shipments from Australia declined by some 9%.

Then moving on to LME. Now looking at the global primary aluminum balance in 2025, external sources estimated a global deficit of primary aluminum at around 0.3 million tonnes. The 3-month aluminum price increased throughout the fourth quarter of 2025, starting the quarter at $2,688 per tonne and ending at $2,995 per metric ton. This rally was likely supported by a weaker dollar, news of a potential shutdown of the Mozal smelter in Mozambique and a broadly bullish sentiment across base and precious metals.

The U.S. Midwest premium continued to surge in the fourth quarter, moving from around $1,675 per tonne at the start of the quarter to just above $2,000 by quarter end. And this increase reflects the market fully pricing in the 50% import duty under the Section 232 tariffs, highlighting both the underlying structural aluminum deficit in the U.S. as well as the continued need to attract metal into the domestic market.

In Europe, duty paid standard ingot premiums ended the fourth quarter at $335 per tonne, up from $223 per tonne at the end of the third quarter. This is due to the tightening supply situation that we have and certainly some CBAM front-loading also going into 2026. As in previous quarters, Hydro's primary concern remains the risk of a broader global economic slowdown driven by tariffs and trade tensions, which could weaken demand and put pressure on the current price levels that we see today.

Now moving downstream. We see Extrusion demand ended in 2025 with a modest increase in Europe and a modest decrease in North America compared to the last year. In Europe, Extrusion demand is estimated to have been flat in the fourth quarter of 2025 compared to the same quarter last year but increasing 3% compared to the third quarter. Demand from building and construction and industrial segments have stabilized at historically low levels with some improvements in order bookings. Automotive demand has been negatively impacted by lower European light vehicle production but has been partly offset by increased production of electric vehicles. And CRU estimates that the European demand for extruded products will increase 1% in the first quarter of 2026 compared to the same quarter last year.

Overall, Extrusion demand is estimated to have increased by 1% in 2025 compared to '24, with current estimates for '26 as compared to 2025 coming in at 3%.

In North America, Extrusion demand is estimated to have been flat in the fourth quarter of '25 compared to the same quarter last year, but it did decrease 8% compared to the third quarter, which is partly driven by seasonality. Extrusion demand has continued to be very weak in the commercial transport segment, driven by lower trailer builds. Automotive demand in the U.S. has also been weak. Demand within building and construction has been positive as well as within certain industrial segments.

At the same time, Extrusion demand across segments is being subdued due to higher product prices resulting from tariffs and duties on aluminum in the U.S. CRU estimates that North American demand for extruded products will decrease some 1% in the first quarter of 2026 compared to the same quarter last year.

Overall, Extrusion demand is estimated to have decreased by 2% in 2025 compared to 2024, but there is an expectation of a growth of 1% in 2026 compared to '25.

And let me then give the word to Trond Olaf for the financial update.

Thank you, Ivan, and good morning, and welcome from me as well. We'll start my part with the financial highlights for the quarter. Comparing year-over-year, revenues fell by around 14% to NOK 47 billion for Q4, driven by lower alumina prices. For Q4, we have an adjusted EBITDA of NOK 5.6 billion and a reported EBITDA of almost NOK 2 billion, meaning that we have adjusting items of around NOK 3.6 billion. The main adjusting item is unrealized derivative loss, mainly on LME-related contracts of NOK 2.3 billion. We also have rationalization charges and closure costs of NOK 1.3 billion, mainly related to the restructuring of Extrusion Europe. There were also smaller positive adjusting items from FX and divestments.

The adjusted EBIT for Q4 was NOK 2.9 billion, with a reported EBIT of negative NOK 1.5 billion. In addition to the EBITDA adjusting items, there were NOK 700 million in adjusting items impacting EBIT related to impairments. The difference between the adjusted and the reported EBIT was therefore negative NOK 4.3 billion.

Net financial expense for Q4 was around negative NOK 600 million. Interest and other financial income was NOK 430 million, offset by interest and finance expense of NOK 470 million and foreign exchange losses of NOK 575 million, mainly reflecting a weaker BRL versus U.S. dollar. The income tax expense was NOK 57 million in Q4, impacted by negative earnings before tax, offset by higher power surtax.

Overall, this results in an adjusted net income of NOK 1.7 billion with reported net income of negative NOK 2.2 billion. The total adjusting items to net income was NOK 3.8 billion, which is the sum of the EBIT adjusting items plus a net foreign exchange loss of NOK 575 million and an income tax effect of negative NOK 1 billion. Adjusted net income is down from NOK 2.6 billion in the same quarter last year and down from NOK 1.9 billion in Q3. Consequently, adjusted EPS was NOK 0.7 per share.

When looking at results Q4 versus Q3, adjusted EBITDA decreased by NOK 400 million from NOK 6 billion to NOK 5.6 billion. The main driver was lower Extrusion results -- realized results. Realized all-in aluminum prices contributed positively by NOK 800 million, and alumina price contributed negatively by NOK 300 million, for a net effect of around positive NOK 500 million. Upstream volumes contributed positively by NOK 300 million, driven by alumina production above nameplate capacity and high commercial alumina trading volumes.

Lower raw material costs in Bauxite & Alumina and lower alumina costs in Aluminum Metal contributed positively by NOK 400 million. Extrusions and recycling margins and volumes had a negative impact of around NOK 1 billion, driven by seasonally lower volumes and lower margins in extrusion.

In Energy, higher production and prices were partly offset by lower gains on price area differences, with a net positive impact of around NOK 300 million for the quarter. Fixed costs were around NOK 400 million, higher compared to the Q3, mainly in Aluminum Metal and Extrusions and mainly driven by seasonal effects. Currency effects positively impacted results by around NOK 100 million. The final negative effect of NOK 500 million is mainly related to other and eliminations. The eliminations this quarter amounted to approximately NOK 300 million on the profits on the increased volume in B&A. And this concludes the adjusted EBITDA development from NOK 6 billion in Q3 to NOK 5.6 billion in Q4.

When looking at the full year EBITDA development from 2024 to 2025, adjusted EBITDA increased by NOK 2.6 billion, from NOK 26.3 billion to NOK 28.9 billion. The main drivers were higher aluminum price and normalizing eliminations, offset by stronger NOK versus U.S. dollar. Realized all-in aluminum and alumina price contributed positively with around NOK 2.3 billion, where higher aluminum price was partly offset by lower alumina price.

Upstream volume development had a net positive impact of NOK 500 million, with higher sales volumes in both B&A and Aluminum Metal. Raw material costs improved with NOK 500 million. B&A saw an improvement of NOK 1.1 billion, where the fuel switch savings were partly offset by higher costs for other raw materials. Raw material costs in aluminum metal increased by NOK 600 million on higher alumina costs.

The downstream segments contributed to -- continued to face headwinds in 2025, leading to a total negative effect of around NOK 400 million. Extrusions experienced headwinds of around NOK 700 million from reduced volumes and margins, while the recycling results in Metal Markets improved by NOK 300 million. Furthermore, we saw a net positive impact of NOK 800 million due to higher energy prices, production and gain on price area differences compared to 2024.

Fixed costs increased in 2025 with an impact of NOK 800 million, where increased fixed cost upstream, mainly related to inflation and salary adjustments, were partly offset by reduced fixed cost in Extrusions. We also saw a negative NOK 2.7 billion in currency effects, mainly driven by the stronger NOK versus U.S. dollar. The final contribution of NOK 2.4 billion was driven by NOK 2.6 billion in realization of previously eliminated internal margins. And this was partly offset by NOK 200 million in net other effects.

Then moving on to debt. And when looking at the debt development through the quarter, net debt decreased by NOK 3.9 billion since Q3. Based on the starting point of NOK 13.6 billion in net debt in Q3, we had a positive contribution in adjusted EBITDA of NOK 5.6 billion. During Q4, we saw a net operating capital release of NOK 1.4 billion, mainly driven by a release in net accounts receivable and accounts payable, partly offset by increased inventories and receivables related to CO2 compensation. Under other operating cash flow, we had a positive NOK 1.6 billion impact, mainly driven by dividend contributions from equity accounted investments and adjustment for noncash effective bonus accruals, partly offset by interest payments.

On the investment side, we had a net cash effective investments of NOK 4 billion, reflecting the typical high maintenance investment activity level at the end of the year. As a result, we had positive free cash flow of NOK 4.6 billion in Q4. We also had negative other effects of NOK 700 million, and this was mainly driven by negative FX effects on debt and new leases.

As we move on to the adjustment related to adjusted net debt, hedging collateral has increased by NOK 600 million since the end of Q3. Furthermore, during Q4, the net positive pension position increased by NOK 300 million. And finally, we had an increase of NOK 700 million in other liabilities during Q4, mainly explained by increased provisions related to restructuring in Extrusion Europe. And with those effects taken into account, we end up with an adjusted net debt position at the end of Q4 of NOK 18.2 billion.

Moving then to the business areas and starting with Bauxite & Alumina. Adjusted EBITDA for Bauxite & Alumina decreased from NOK 5 billion in Q4 '24 to NOK 1.4 billion in Q4 '25. This was mainly driven by lower alumina prices and negative currency effects caused by a weaker U.S. dollar against the Norwegian kroner. This was partly offset by higher sales volumes and strong trading results in B&A.

Compared to Q3 '25, the adjusted EBITDA increased from NOK 1.3 billion to NOK 1.4 billion in Q4 '25, mainly driven by higher sales volumes and strong commercial results. Production volumes ended the quarter above nameplate capacity following high equipment availability and improved refinery flow. Alumina realized prices declined during the quarter but remained above market prices indications, supported by intra-group pricing mechanisms. Raw material costs were lower compared with the Q3, driven by lower caustic soda and coal prices, and fixed costs remained roughly stable.

Moving then to the Q1 outlook. For Q1, we expect fixed and raw material costs to remain stable. Production volumes are expected to decline seasonally, reflecting fewer operating days in Q1 and scheduled maintenance activities. Realized alumina prices are anticipated to continue correcting in line with market trends, while trading results are expected to return to more normalized lower levels.

Moving then to Aluminum Metal. Adjusted EBITDA increased from NOK 1.9 billion in Q4 '24 to NOK 3.7 billion this quarter. The main drivers year-on-year were higher all-in metal prices and reduced alumina costs, partly offset by negative currency effects. Compared to Q3 '25, adjusted EBITDA for aluminum metal, increased from NOK 2.7 billion, and this was driven by higher all-in metal prices and lower alumina costs, partly offset by seasonally higher fixed costs. The alumina cost reduction of approximately NOK 200 million drove raw material cost savings above our Q3 guidance of a flat impact. The guided seasonal increase in fixed costs ended slightly above our guidance of around NOK 220 million.

And this brings me over to the Q1 outlook. For Q1, AM has booked 70% of the primary production at USD 2,803 per tonne. This includes the effect of our strategic hedging program. We have also booked 40% of the premiums affecting Q1 at USD 478 per tonne. We expect the realized premium to end up in the range of USD 380 to USD 430 per tonne.

On the cost side, raw material expenses are expected to increase by NOK 100 million to NOK 200 million, primarily driven by LME-linked energy costs in our joint venture portfolio. Fixed costs are expected to increase by NOK 50 million to NOK 150 million, driven by seasonality, and sales volumes are also expected to increase.

For Metal Markets, the adjusted EBITDA decreased in Q4 from NOK 319 million in Q4 '24 to negative NOK 56 million due to lower results from sourcing and trading activities and negative currency and inventory valuation effects. Those were partly offset by increased results from recyclers. Excluding the currency and inventory valuation effects, the result for Q4 was NOK 39 million, down from NOK 115 million in Q4 '24.

Compared to Q3, adjusted EBITDA for Metal Markets decreased from NOK 154 million due to lower results from recyclers and from sourcing and trading activities. Recycling results ended lower at NOK 48 million, down from NOK 93 million last quarter. Decrease was primarily driven by challenging market conditions for the European recycling operations.

For Q1, we expect stable recycling results. In our commercial segment, we also anticipate higher contribution from sourcing and trading activities in Q1. As always, we emphasize the inherent volatility of trading and currency fluctuations. And for 2026, we expect the commercial adjusted EBITDA, excluding currency and inventory valuation effects, to be in the range of NOK 200 million to NOK 400 million.

Moving then to Extrusions. For Extrusions, the adjusted EBITDA decreased year-over-year from NOK 371 million to a negative NOK 62 million, driven by lower margins and sales volumes. Still strong focus on cost control and portfolio optimizations have contributed to a full year 2025 positive cash flow. We saw 1% decline in sales volumes as well as strong pressure on sales margins across the portfolio.

Similar to the previous quarter, transport volume developments were negative, but headwinds are moderating compared to previous quarters. Shipments to the transport market were down 4%, negatively impacted by North America. Automotive sales in Q4 were still negative in both Europe and North America, driven by continued moderate production at some car manufacturers.

Sales volumes growth in the industrial segment ended 8% higher in Q4, while sales in the distribution segment increased by 6% in Q4, mainly driven by increased shipments in the U.S. After a significant increase in volumes in the HVAC&R segment previously in 2025, the trend turned negative in Q4 '25, mainly caused by tighter consumer spending and inventory offloading at customers. The metal effect for the quarter ended at NOK 160 million. Compared to Q3 '25, adjusted EBITDA for Extrusions decreased from NOK 1.1 billion in Q3 to negative NOK 62 million in Q4 due to seasonally lower sales volumes, partly offset by lower costs.

When looking at Q1, we always compare it to the same quarter last year, and this helps to capture the typical seasonal patterns we see in Extrusions. Looking at external market data, volumes in Europe are expected to increase moderately by 1%, while North America shows a slight decline of about 1%. We expect our European sales to be largely stable, while our North American sales are expected to decrease slightly more than the external market estimate due to our high exposure to commercial transport and distribution.

Margins are expected to remain more or less stable with some improvements expected in North America due to favorable scrap prices. On the metal side, we expect flat metal effect development compared with the same quarter last year. It is, however, important to note that the metal effect are highly dependent on movements in the Midwest premium.

Moving then to the final business area, Energy. The adjusted EBITDA for Q4 decreased to NOK 1.1 billion compared to NOK 1.2 billion in Q4 '24. The decrease was mainly due to lower gain on price area differences, offset by higher production and higher prices compared to Q3. Compared to Q3, adjusted EBITDA increased from NOK 828 million, mainly due to high seasonal production. Some of this increase is also due to planned maintenance that will be done during Q1. The price area gain was NOK 37 million in Q4, at significantly lower level than in Q3, following a seasonal convergence between the area prices.

Looking into Q1, as always, we should be aware of the inherent price and volume uncertainty in Energy. For the next quarter, production is expected to decrease due to power plant maintenance and to be below the normal seasonal levels. While price area while prices are expected to increase with the seasonality, price area gains are expected to decline further.

And then moving to the dividends. This year, the Board of Directors has proposed a distribution to shareholders of NOK 5.9 billion. This will be distributed as an ordinary cash dividend of NOK 3 per share. The dividend proposal represents a cash distribution of 60% of adjusted net income, a year-end yield of around 3.8% and a 5-year average payout ratio of 65%.

Hydro's capital structure policy to maintain an adjusted net debt target over the cycle of around NOK 25 billion at the year-end, including proposed shareholder distribution to be paid year after remains unchanged. As always, the final distribution for 2025 is subject to approval by the Annual General Meeting in May 2026.

And with this, I end the financial update and give the word back to Ivan.

So let me conclude today's session by outlining our priorities going forward. First and foremost, it's health and safety. This remains a nonnegotiable for Hydro. We see that building a strong safety culture has a positive impact on our performance metrics. And we need to continue learning and improving to keep these numbers low also going forward.

Secondly, through uncertain times, we are taking measures to improve our robustness. Cost control measures such as the strategic workforce reduction and restructuring in extrusions are helping us to grow with the right structure going forward. Our strategic growth areas remain recycling, extrusions and renewable energy. While we do recognize the current market challenges, we also see meaningful progress, including the new long-term power contracts secured in Q4 in addition to the upgrade of our own power plants.

Lastly, we continue to deliver on our decarbonization and technology road map while seizing opportunities in greener aluminum. One concrete example from Q4 is our new partnership with the University of Michigan, which is aimed at translating innovation rapidly from lab to production. This positions Hydro to support customers in reducing emissions and to future-proof their own supply chains.

So to sum up, we remain fully committed to our 2030 strategy, and the fourth quarter of 2025 demonstrated important steps in the right direction.

With that, I want to thank you all for your attention, and then over to you, Erik.

Thank you, Ivan, and thank you, Trond Olaf. We will then commence the Q&A. And just a remind, If you do have questions, please type them in the box on the screen, and I will then read your questions to Ivan and Trond Olaf. And I think we have a few questions already. So let's get started.

First one is from Marina from RBC. Based on the order book, how confident are you in a volume recovery in Extrusions in the second half of 2026?

So when we look at the extrusion order book, that is typically pretty close in time. Very seldom do you have extrusion companies booking into the second half. So we'll still need to see the economic growth coming in into the second half from orders as we get later on in the year. What's important, I think, for us, at least when we look at the automotive sales, for instance, several of the new contracts that we have talked about that we have booked in the last couple of years, they are now coming into production. But seen from an internal viewpoint in the company, it's too early to sort of conclude where we see the second half on the extrusion side.

Okay. Next one is from Liam from Deutsche, also on Extrusions. Can you clarify the guidance for Q1 '26 versus Q1 '25? Are you expecting broadly flat EBITDA year-on-year? What have been the cumulative one-off gains in Extrusions in 2025 from the high Midwest premiums?

Liam, so to comment on your question. So first, the last question. So in total, we had around NOK 700 million in positive metal effects in Extrusions in 2025. If you then look at the different parts of the extrusion guiding, you see that we guide on roughly flat metal effect, some pressure on volumes, but flattish development on the margin side.

Then we have another question from Marina. You are guiding for higher fixed and raw material costs in your Aluminum Metal division. Can you elaborate on the key drivers?

So let me comment on 2 things. So when you look at fixed cost, typically in Q4, you have the reversal of vacation accruals, which is done and then you don't have that into Q1. So that will drive fixed costs up somewhat. And then we have some of the power contracts within our joint venture portfolio that also has an LME link into it. So that will lift the Energy costs somewhat coming into first quarter and into 2026.

Okay. And then we have another one from Liam. Does the cost guidance for Q1 factor in a stronger NOK?

Yes. So the cost guidance is based on the currency assumption some weeks back. So then you need to factor in any development after that.

And then we have a question from Alain, Morgan Stanley. Q4 B&A beat expectations. Can you quantify the trading contribution in the quarter and indicate how much of this is sustainable into Q1 '26?

Yes. So we have around NOK 300 million in very strong commercial results in B&A in Q4.

And then another question from Alain on B&A. Alunorte ran above nameplate in Q4. Is this operationally sustainable? Or should we expect normalization in 2026 due to maintenance or any bottlenecks?

So I think when you look overall for the year, we still have a target to produce at nameplate capacity, which we showed also in the fourth quarter. Now when we look at first quarter of '26, you should expect volumes to come down somewhat, driven by 2 things. One is that there are fewer production days in Q1. And secondly, also that we will have some planned maintenance in the first quarter. So a little bit lower production speed in Q1. But over the year, we should be still targeting nameplate capacity.

And then there doesn't seem to be any other further questions. So if nothing else comes in, I think we will say thank you all for joining us here today. And if you do have any further questions, please don't hesitate to reach out to Investor Relations. Thank you.

Good morning, everyone, and welcome to Hydro's Investor Day 2025. My name is Baard Erik Haugen. And together with my colleagues, Martine Rambøl Hagen, Elitsa Blessi, Mathias Gautier, and Camilla Gihle, I'm responsible for Investor Relations in Hydro.

We are very happy to see so many of you here in the room with us in London and also a warm welcome to everyone following on the webcast. The topic for this year's Investor Day is strategic discipline, securing long-term value creation. And this, together with our strategic direction towards 2030 will be the key topic for the day.

Before we begin, I would like to direct your attention to the cautionary note on the screen. This relates to any forward-looking statements either in the presentation here today or in the published and printed materials. We will start the agenda with a presentation by CEO, Eivind Kallevik, who will give his insights and status on Hydro's 2030 strategic direction. Following Eivind, we will hear from EVP of Extrusions, Paul Warton. He will talk about how they are navigating the current market conditions. We will then have a short break before we get the financial update from CFO, Trond Olaf Christophersen. After Trond Olaf, we will get a summary from Eivind before we invite Eivind, Paul and Trond Olaf on stage for a short Q&A session.

And please note that the Q&A will only be available for those of you physically in the room when it comes to asking questions. We will then break for lunch, which will be served right outside in the piano bar. And after lunch, for those of you who have signed up, we will have the roundtable in the Lancaster suite just across the hallway.

So with that, I'm very happy to officially get started and to introduce President and CEO, Eivind Kallevik.

Thanks, Baard Erik, and a warm welcome, and good morning also from my side. So before we go into the numbers, I really want to start with what we always start with in Hydro, and that is with people. Our value and the way we create value is really from thousands of colleagues coming into our plants and our operations every day. They often come in, in challenging environments, but they do so with professionalism and taking care of each other. And for me, the health and safety is not just a priority. It is really the foundation that allows everything to happen for our people, for their families and for Hydro as a whole. Because when people feel safe, when work is carried out consistently and predictably, that is when an industrial company perform at its best.

So now we see that both total recordables as well as high-risk incidents are at the lowest levels that we've ever realized in our company. Now the primary objective is, of course, to keep our people safe but that also has a good impact on our operations because it gives us fewer disruptions, fewer unplanned stoppages and fewer hours spent on following up incidents. So safety for us is not something that we do out of routine. It is really fundamental to which company we want to be because value creation and our ability to deliver on our strategic agenda hangs together on this topic.

Now if we look at the world around us, we are now closing a year which has been full of unpredictability. In the United States, tariffs and trade tensions have created an unpredictable investment climate with ripple effects across many major markets, including ours, aluminium. Now at the same time, climate change continues to be present around us, even if it received somewhat less attention than what it would have done 12 or 24 months ago. We've really seen another year of extreme weather events and the physical impacts of this are here, and the policy discussions do continue. But also importantly, and I will come back to this also later is that our customers' commitment to decarbonizing their value chains and their supply chains also persist despite the political volatility that we see around this topic at the moment.

So momentum is still there, even as we are operating against the backdrop of increased geopolitical conflict. The war in Ukraine now well into its fourth year and the situation in the Middle East influence energy markets, trade flows and customer decisions in very real ways. And that's really where our focus is because we cannot control global events, but we can control how we run our operations, how we manage our costs and how we execute our strategy.

So let's have a look at what we've accomplished during 2025. First of all, financial discipline has really been on top of the agenda. And I'm pleased to report that return on capital employed over the cycle looks again to come above target this year. Our improvement program is running ahead of plan. And by year-end, we expect to have delivered NOK 1.2 billion in improvement, which is double the target that we set out for 2025. The main portion of the strategic workforce reduction is now finalized and that will result in an annualized saving of roughly NOK 1 billion for the year 2026. And finally, we have adjusted our CapEx guiding by NOK 1.5 billion in recent quarter that really reflects the slower market and the need to adapt the pace of growth to the market realities that we see around us.

And that is really the backdrop of how we execute our strategic priorities. The direction stays firm but the pace and the scale really needs to reflect the reality of the world that we see around us. And in this environment, discipline comes first. On strategy, we've had a solid progress across our key priorities. We continue to ramp up and execute on the investments we have decided on in recycling and extrusions. And in recycling, we have now reached an installed post-consumer scrap capacity of 860,000 tonnes, which meets already the lower end of our 2030 target at the end of 2025. Following a weaker market, the EBITDA targets for 2025, as you will have seen, were not reached.

And given that outlook, we have postponed some of the 2030 targets. And that, again, is fully aligned with the logic of our strategy. We will pursue profitable growth opportunities in recycling and extrusions when the time is right. In energy, we have refocused our portfolio, returning our priorities to the core activities within renewable power generation. We have now successfully phased out both Hydro and Northvolt and the battery initiatives that we had. And just 2 weeks ago, we made the final investment decision for the Illvatn pumped-power project in Norway. We continue to deliver ahead of plan when it comes to the decarbonization agenda. And we expect to realize roughly 50% -- 15% reduction in CO2 this year against the target of 10%, placing us well on track to reach the 30% target in 2030.

And then on the back of these achievements, we continue to shape the market for greener aluminium together with our customers and partners. In April of this year, we entered into a long-term offtake agreement with cable producer, NKT, covering an estimated 274,000 tonnes of Hydro REDUXA volumes through 2033. In the U.S., the introduction of CIRCAL is now gaining traction. We have delivered the first volumes to a company called Vode Lighting which are now marketing this in the U.S. We have also established the first supply contract for Hydro CIRCAL with a U.S. automotive customer. And the exciting point for me in all of this is that despite all the turmoil that we see around us, sales of greener products in 2025 in terms of value will be 50% higher than what we saw year-to-date 2024.

Now if we turn to Bauxite & Alumina for a minute. The overall picture, the way we see this is one of a balanced market, but there is some concentration risk when you look at it from the bauxite side. We expect alumina demand to continue its steady growth towards 2030. And most of this growth is expected to be met by new capacity in Asia. India is planning roughly 5 million tonnes of new alumina capacity by 2030. Likewise, we see Indonesia continuing to expand capacity, but the pace there, we believe, is slightly more uncertain. We also expect China to add some capacity in this period. But overall, on the alumina side, the markets are expected to remain reasonably balanced towards 2030.

Where we see more of a concentration risk is really around bauxite. Just around 1/3 of global bauxite is mined in Africa. And of that, roughly 95% is coming out of Guinea. And for me, this illustrates an industry wider risk. As global supply is really diversified when you look at it on paper, but it's also very, very concentrated when you look behind the numbers and the sources of where the bauxite is coming from. And in a world of increasing geopolitical unpredictability, disruption in one single region can really disrupt the entire market, pushing prices upwards if that were to happen. At the same time, the cost curve also shows that marginal refineries are under pressure at the current alumina prices as we see it. Prices now are just below the 80th percentile on the global cost curve. And that really means that high cost or higher cost refineries are really struggling to stay profitable, leaving them vulnerable for price hikes following disruptions or material cost increases.

For aluminium towards 2030, the fundamentals remain strong. They remain strong across regions and sectors. And we continue to see steady growth in semis demand driven by the same long-term trend that we have seen in the market for years. The energy transition alone is a major driver. We expect global investments in power grids to grow by around 30% between '25 and 2030. And that represents roughly $600 billion of annual investments. More electrification, more renewables, more transmission lines, all translate directly into higher aluminium intensity and demand.

Now despite EV growth forecast is -- forecast having come down lately, there's still an expectation that the global fleet of battery electric vehicles is expected to double between '25 and 2030. EVs requires significantly more aluminium than the conventional car and that, again, will continue to drive the demand increases in automotive as we look forward.

Defense and security, also very much back on top of the agenda. NATO has defined aluminium as a critical raw material. In fact, it's defined aluminium as the most critical raw material in 8 out of 9 defense categories. Dominant countries, or NATO members have decided to increase defense spending from 2% to around 5% of GDP by 2035. Again, there's a shift that will drive aluminium demand in a positive direction. Infrastructure is a part of this, but also on its own represents another major source of growth. Europe alone faces an investment backlog that will require more than a doubling of annual governmental spending towards 2040. In buildings, new EU efficiency requirements are expected to push higher use of circular materials and low carbon materials towards 2030.

And then HVAC&R, so heat, ventilation, air conditioning and refrigeration, we see a potential or continued potential for increased copper substitution with an anticipated market share growth of 4% towards 2030. On top of this, there is regulatory support, large public spending programs aimed at competitiveness and security are currently being rolled out in Europe. And as we all know, in Germany alone, they have allocated EUR 500 billion for infrastructure over the next decade. So when we bring all of this together, the outlook for aluminium as a critical raw material for the green transition and for European competitiveness remains strong.

On the supply side, we do expect low carbon aluminium to remain a scarce resource towards 2030. We will see new primary capacity coming into the market over the next couple of years, but that is expected to be largely high carbon material. Indonesia is based on rapidly expanding based on coal. China, of course, is shifting some of their capacity into renewable regions. The net effect of this is still that the most of the new capacity coming on stream will carry a very high carbon footprint.

On the customer side, we see continued persistence when it comes to decarbonizing their supply chains. We see leading companies across sectors, including our strategic partners, Mercedes, Siemens, VELUX, NKT have all reconfirmed their climate targets. And many of them also explicitly stated that aluminium is the way to reduce their Scope 3 targets. Demand signal, which all supports continued investments in decarbonization. The supply of low carbon aluminium on the other hand, is not expected to grow in line with anticipated demand. Aluminium produced below 4 tonnes of CO2 per tonne of aluminium will grow only marginally towards 2030. While production above that threshold will grow with several million tonnes. In other words, the part of the market where Hydro competes, low carbon, primary and recycle remains limited in supply and with demand going towards 2030.

Now if we look at 2025 as a whole, it's been a year of significant policy shifts, all pointing in the same direction. And what we see is that security of supply is becoming a major concern for governments as well as companies. In the United States, tariffs are now at historically high levels. While we still have to see the longer-term impacts on economic development and consumer confidence, it is clear that within defense, production will be favored going forward. In Europe, we also see strong political momentum to support industrial competitiveness. We see policies aimed at strengthening critical raw material supply chains as well as discussions on scrap export limitations, all point towards a regional approach. CBAM, of course, will also be another important element.

The export mechanism and discussions on closing remaining loopholes are progressing well. We also see that sanctions are shaping the landscape with military conflicts and geopolitical tensions limiting sourcing options. One example is, of course, the quota on Russian aluminium entering Europe will be reduced to 50,000 tonnes, February '26, down from 275,000 tonnes today. At the same time, we also see supply constraints outside Europe becoming clearer. China's capacity cap is expected to hold and potential smelter closures around us outside Europe may also affect the material flows into the European continent. So in sum, these developments create a more complex environment, but they also increase the value of regional, reliable supply chains. And that is an area where Hydro holds a strong position.

So if you turn to CBAM, we are now just a few weeks away from the mechanism to go live. Where we see this, this is already largely priced in by the market as uncertainty regarding implementation is diminishing and has diminished during the fall. Longer term, CRU expects CBAM to lift European premiums by around 40%, and that aligns pretty well with our own internal analysis and the emerging consensus that we see from our peers in our market. However, it's still crucial that some of the loopholes still needs to be closed to ensure the level playing field for domestic producers competing with players outside the EU or outside the EEA. So we do expect the commission to present proposals by the end of this year, covering the anti-circumvention measures and export solution and updates to the product scope and granularity.

And for Hydro, there are really 2 issues that stands out. First of all, the scrap loophole needs to be closed. Without that, there is a clear risk of circumvention and an uneven playing field between European recyclers and competitors outside the EU, EEA. Secondly, the scope needs to be extended to downstream goods to ensure that we don't get carbon leakage simply by shifting into finished products. Unfortunately, these things -- these processes take time and the earliest realistic inclusion of these elements, as we do expect, is 2028.

CBAM, the way we see this has the potential to level CO2 costs, putting Hydro in a favorable position. Because with fair CO2 pricing, at the border, producing low carbon in Europe becomes even more of an advantage. But as always, the devil will be in the details, and we are following these developments closely. And the final elements of the mechanism are rolled out from Brussels. We also continue to see large volumes of low-grade and mixed scrap leaving both Europe as well as the United States, and they are primarily flowing into Asia. China and India now are major net importers. And Asia, as a whole, imports now close to 3 million tonnes of scrap from Western markets every year. Europe is now clearly NATO exporter to China, India and the rest of Asia.

In the U.S., we see a similar trend with most low-grade scrap and mixed scrap ending up either in India or in China. If you speak to scrap yards during 2025, they also report that scrap generation is down some 30% to 40% during the year. So the combination of lower generation and continued exports keeps a tight supply situation for European recyclers and U.S. recyclers, giving us a margin squeeze as we've seen in the financial figures for the year. Fortunately, this dilemma and this challenge is now also acknowledged by policymakers in the U.S. and the European Union. And just last week, the commission communicated that their intention is now to introduce either a tariff or another mechanism to address this challenge. And then, of course, it's something that we will continue to monitor and discuss with the commission as the time goes on.

So in this challenging landscape, one of Hydro's strongest advantages is continue to be our integrated value chain. Very few, if any, companies in our industry can match the control and traceability that we have from mine to metal. We produce large amounts of our own renewable power. We mine our own bauxite. We find it into alumina. We make primary metal, we recycle scrap and we extrude profiles and solutions for our customers. And being present at every stage gives us something that matters, more and more to our customers. Low carbon and recycled aluminium on the one hand, but we can also give them transparency and traceability from mine to final product, which very few other companies can do. And in the world of increasing scrutiny on embedded emissions, value chain responsibility and environmental performance, providing that assurance, creates trust, which translates into value and customer commitments.

With that in mind, another layer which is proving its worth is the magnitude of the geographic diversification, which gives us also strategic flexibility. We have high-quality bauxite and alumina production in Brazil. We have smelters in Norway, Qatar, Slovakia, Brazil, Canada and in Australia. We are one of the largest recycling footprints in Europe and in the United States, and we are the world's largest extruder with operations across all major markets. And in particular, downstream, this footprint allows us to adapt quickly where the market and business environment shifts, whether it's tariff, energy markets, geopolitical disruptions or changes in demand. It also allows us to capture opportunities when they arise because when one region softens and other strengthens, we can rebalance flows, adjust volumes and maintain customer supply without overextending the system. And importantly, it gives us resilience. We can take down capacity when needed without losing market presence because the system as a whole can continue to deliver to our customers.

So when we bring this together, the integrated value chain and the global footprint really translate into a very clear value proposition for our customers. We offer the full range of aluminium products from extrusion ingot, sheet ingot, foundry alloys to precision parts, alloying systems or alloyed material, building systems and advanced alloys to our customers. And behind these products stands world-class R&D and close collaboration with customers and partners. And we are among the lowest in the world when it comes to carbon intensity. That matters because our customers are tightening their Scope 3 ambitions and because regulators are placing more emphasis on embedded emissions in the products that are to be used in the different regions. But part of our value proposition and part of our differentiation also goes beyond carbon because our customers also want confidence, not only in the carbon footprint, but in the integrity of the value chain and the transparency of the entire value chain, which we can offer.

And on that note, let me turn briefly to the business areas where the world -- where the words in the strategy that we deliver are converted into action day by day. And that is really the reason why we are delivering all the proof points that we do. Now if we start with Bauxite & Alumina, so we operate an integrated world-scale and long-term long-life assets in Brazil, supported by renewable and competitive energy supply, giving us very much a strong first quartile cost position for the activities in Brazil. These assets are really the foundation and the starting point of the low carbon position that we have in the value chain. In energy, the Hydro Power assets that we own remain a strategic strength for us. They are reservoir-based located in high-value power markets, providing Hydro with predictable renewable power for our smelter system as well as for B&A.

We also have attractive growth options in the existing portfolio and in our joint venture with Hydro Rein. We have a centralized commercial organization that ensures that we optimize our power portfolio and secure sourcing needs for the entire system in Hydro. In aluminium metal, our primary smelters operate with competitive cost positions and access to this renewable power. That gives us a leading low carbon and recycled products area that offer further key potential in markets where metal are in structural deficit. We continue to see good opportunities in this area for further investments, supported by the strategic partnerships that we've entered into in high-growth segments.

And finally, in Extrusions, Hydro Extrusion is the world leader in its field, delivering fast lead times, complex and certified profiles and solutions to tailor-made customer needs. So this business really combines technology leadership with modular investments that offer short payback and high returns. So it remains a strong performer relative to its peers and a key part of our low-carbon offering. So across all our business areas, we do have competitive assets. We have leading technology. We have a strong sustainability position and a portfolio that enables us to execute decisively on the strategy. And that is really the basis when we look at the strategic positioning that we have towards 2030.

Using these competitive advantages to position Hydro as the uncontested leader in what we continue to see as a high promise market for low-carbon aluminium solutions towards 2030 and beyond. But despite headwinds in the macro environment and volatility in the short term, we still firmly believe in the prospects for our material and Hydro's ability to differentiate early. That will give us the opportunity to capture market share as the world moves in a greener direction. So our direction stays firm, but we will adapt the pace and the scope of execution to market realities. So we will continue to drive profitable growth, both in recycle and in extrusions, and that we will do to support the competitiveness and the low carbon position, we will also scale the renewable power generation.

We will continue to execute on our decarbonization and technology road map and also contribute to nature positive as well as a just transition in the areas where we operate. And finally, we will intensify our efforts to shape the market for low-carbon aluminium through strategic partnerships and long-term commercial agreements for offtake. And going forward, these will be key to support the continued investments in decarbonization when we do it.

So let's then take a look at how we're doing and what adjustments we will make to reflect the realities in the market. So there's no doubt that the extrusion market has taken a bit of a hit over the last 2 years. And yesterday, we did communicate decisive actions to consolidate our European operations as a result of this. And Paul will walk you through more of the details on this project later on today. Because the reality that we face is that demand has been softer than what we expected. Recycling margins have been under pressure, and we have seen cost inflation in several parts of the system. That has been clearly visible in the numbers. And that is really why we have refocused our project pipeline towards productivity, automation and cost discipline. We will continue with press upgrades, automation initiatives and targeted capability investments, which will give us a clear line of sight for improved performance. These measures will strengthen our competitiveness. They will reduce FTE costs. They will improve ergonomics. They will improve safety in non-commoditized markets as the markets pick up.

So while near-term earnings are not where we want them to be, the underlying levers for return to good profitability are there. The commercial program -- the improvement program, the commercial uplift and the growth projects together give us a solid pathway back to healthy margins as we travel towards 2030. If we turn to recycling, where profitability has also been challenged in the short term. Margins are still weak in Europe, while in the U.S. at the moment, they are pretty healthy, largely due to lower scrap prices compared to the premiums that we sell our products for. In any case, the principle remains the same. We focus on the levers that we control. Improvements has to be a constant focus. The Alumetal integration is starting to yield results. We expect to deliver EUR 9 million of the synergies of the EUR 10 million to EUR 15 million synergy potential as we have identified when we did the acquisition already in 2025.

In addition, we are delivering hot metal cost improvements, as we talked about before, of roughly $5 per tonne across the entire portfolio. Also here, we are continuing our portfolio optimization. We are curtailing underperforming plants and increasing utilization of the top performing assets. In the U.S., our newest recycler in Cassopolis is continuing its ramp-up journey towards the final capacity of 120,000 tonnes, and we expect to be at the 90% speed out of 2026 for that ramp-up. Likewise, at Cressona, the largest and most profitable extrusion plant we have, we are currently increasing PCS capacity by some 30,000 tonnes annually with ramp-up continuing during '26. Supporting this, continued investments in sorting technology enables us to dive deeper into the scrap pile, utilizing more complex scrap types. In the U.S., the Padnos joint venture is up and running and it runs well. And we're also ramping up our investments in Poland in the Nowa Sól HySort sorting line.

And finally, with existing capacity and improved growth projects that we have already reached the lower end of the 2030 target of 850,000 tonnes to 1 million tonnes of PCS capacity across the portfolio. So with that backdrop, let's look at how this translates into earnings and an updated ambition level for our recycling operations. These recycling targets are then fully aligned with the requested or adjusted capital allocation. The revised ambitions reflect capital discipline and assumption that market dynamics, particularly in Europe, will normalize over time.

Now if we start on the left, the past 12 months delivered an EBITDA of NOK 0.7 billion, NOK 700 million. That really reflects the weak downstream environment that we've just walked through. But at the same time, there are some bright spots in this. If we update the last 12 months results using current spot prices, we see U.S. profitability coming in stronger than what we would assume for a normalized market, while Europe still remains a significant recovery need to return to normal margins. It is, of course, important to note that spot sensitivities cannot be taken as a guiding for 2026 because scrap prices are volatile. There are some volumes that are locked into longer-term contracts that doesn't reflect the current scrap prices, but it nevertheless gives an indication as to where we are.

From there, the adjusted road map shows the pathway back to a normalized run rate. installed capacity improvement initiatives and the improved creep and growth projects bring us to confirmed EBITDA potential of around NOK 5 billion in 2030. That, combined with lower CapEx in the near term, we have adjusted the range from NOK 5 billion to NOK 8 billion to NOK 5 billion to NOK 6 billion.

If we turn to energy and have a look at the operational and commercial improvements, we are now delivering a combined uplift of roughly NOK 550 million. Of that, NOK 350 million come from operational improvements and roughly NOK 200 million from commercial improvements. Most of this is then enabled by the phaseout of our batteries and hydrogen business units, which has allowed us to sharpen our focus on core activities that we have within renewable energy. And just weeks ago, we approved Hydro's largest Hydropower investment in more than 2 decades, the Illvatn pump storage project in Luster in Norway. It's a NOK 2.5 billion investment, adding 48 megawatts of capacity and delivering 107 gigawatts of renewable power annually. Construction is commencing as we speak, and we will have targeted completion by 2030.

But also important to note that through Norway's cash flow scheme for hydropower investments, the net investment after tax across the portfolio is estimated to NOK 1.2 billion. Thirdly, on Hydro Rein, it remains a growth vehicle for us and which potentially then will be able to source attractive renewable power to our Norwegian assets. And together with Macquarie Asset Management, we have a strong alignment on our core objectives and structure that will enable value creation for both parties over time. But to adapt to the rapidly changing market, Rein has also commenced a downsizing process, aiming to rightsize the organization and continue its path towards profitable growth. The key focus areas remains the same, strengthening their presence in the Nordics while maintaining a solid sourcing and production profile in Brazil, the 2 key regions for Hydro's long-term energy needs.

Speaking about energy needs, energy, of course, remains one of the strongest drivers for competitiveness within aluminium. Hydro strengthened its long-term power portfolio this year by advancing several key renewable power agreements, including new long-term agreements with Hafslund and NTE totaling around 4.16 terawatt hours. In parallel, our joint venture smelter Alouette in Canada has now reached an agreement in principle with the government of Québec on Hydro-Québec to secure more renewable power for the 2030 to 2045 period, again providing Alouette with stable and competitive energy in a tightening market.

At our joint venture, Tomago in Australia, the owners have now started the consultation process on the future of the smelter after failing to find an economically viable energy solution, again, highlighting the importance of competitively long-term power contracts. Since 2020, we have signed more than around 20 PPAs across hydropower and wind power, different risk profiles, different durations, including medium-term PPAs. And these agreements then support the smelter system with long-term renewable power, strengthening our position as an attractive counterpart in the PPA market. So all together, this is an active disciplined sourcing agenda that we have designed to secure renewable power at competitive prices.

As mentioned in the beginning, we have strong execution on the decarbonization road map also this year. By the end of 2025, we expect to surpass the '25 target by around 5 percentage points. Again, that puts us well on track to meet the 2030 target of 30%. Several milestones are already behind us. Fuel switch of Alunorte is completed and it's fully ramped up. We've installed 3 electrical boilers, and we are assessing the potential for an additional 4 boilers to be installed in addition to converting some of the coal usage we have to biomass by 2030. And when completed and if completed and if we find the market business cases for it, Alunorte will have reduced its CO2 footprint by 70%, 7-0. So across the value chain, we are pushing both large and small opportunities, always balancing the cost and the effect.

Now when we look forward, also some of the more complicated tonnes of CO2 remain. This is where our efforts shift more towards long-term technology changes. We are continuing to work with carbon capture to preserve the value of our existing smelters. HalZero is the solution for future greenfields. And then just in a couple of weeks, we will commence operations at our Stage 2 facility in Porsgrunn, the technology center for this development. That, of course, follows the successful lab test we had a couple of years ago. And as we speak, we are starting the planning and the engineering for the next phase of an industrial pilot, which is set to start operation and -- or construction around 2030.

Decarbonization of the casting operations, we are also exploring several pilot scale technologies. At Sunndal, we are testing and using biomethane for casting and direct electrification plasma technology for emission-free remelting will also be tested in 2026 also at Sunndal. At Høyanger the green hydrogen pilots will be ready for operation in the second quarter of 2026. So seen from our perspective, there is not one single silver bullet. We have to pursue different technologies, that will give us the optionality to apply it where it's best suited from a cost perspective and from a technology perspective site-by-site.

So let me then briefly turn to nature. As screener is a lot more than just low carbon. At Hydro Paragominas, we are strengthening our long-term nature strategy with a clear ambition to reach no net loss of biodiversity over the lifetime of the mine. We have now completed a preliminary baseline, and that really gives us a solid overview of the different habitat types and their condition. And it allows us to understand what it will require to reach the no net loss status at mine closure. The baseline will be refined over the coming years and as we integrate new field data and additional biodiversity studies. To ensure quality and credibility, we do, of course, work also closely with external research institutions to review and to improve the restoration practices that we have. That includes assessing positive effects from areas already under rehabilitation, where we see strong indications that recovering is moving in the right direction.

Today, we have more than 3,400 hectares on the rehabilitation. More than 400 species of fauna have been identified now in these areas as the mine continues to deliver also its one-to-one rehabilitation within 2 hydrological cycles for all available mined areas. So the direction for us is clear, a disciplined science-based approach to nature in line with international standards and embedded long-term partnerships with the communities around us. Our social impact agenda is also, of course, an ambition. And the ambition is to improve the lives and the livelihood where we do operate. We structured this around the just transition framework with 3 key priorities: leave no one behind, strengthen local communities and build skills for the future. First of all, you need to ensure that all the fundamentals are in place. That, of course, includes mandatory human rights due diligence across all our operations and value chain in line with OECD and UN standards as well as a strong focus on health and safety training in all the projects that we do.

Above these 3 requirements, we won a broad portfolio of local initiatives. Today, it's more than 150 ongoing projects. One of the recent examples that we have is the new partnerships with Red Cross in Norway, combining financial support with employee volunteering for the work that they do. We also contribute to long-term community development where our presence is significant. Last year, we launched what we call the corridor program in Para. A co-designed initiative with local communities, focused on economic and social development alongside biodiversity conservation. But also notably and importantly, this is the first time we see customers showing interest in engaging directly in development efforts linked to their supply chain. And of course, all of this, the direction is still the same. A responsible community anchored, long-term approach to social impact that supports both our operations and a just transition in the regions where we operate.

As I mentioned, we continue to see strong demand in the market for our long carbon products. Sales of Hydro CIRCAL and Hydro REDUXA are from a value perspective, up more than 50% year-to-date despite the weaker markets that we see overall in Europe and in North America. And that really tells us 2 things. One, the commercial teams that we have are executing well, and structural demand for certified low carbon remains strong. For 2025, we expect Hydro CIRCAL sales to reach some 58,000 tonnes and Hydro REDUXA to increase to 461,000 tonnes. And these are improvements, important proof points as we progress towards the NOK 2 billion green earnings uplift potential or ambition that we've set to 2030. To position ourselves for future growth, we are also investing in new capacity including the new wire rod casthouse at Karmøy supporting a long-term offtake agreement with NKT of EUR 1 billion.

CIRCAL is gaining traction in the U.S. with the first automotive project secured earlier this year. And this year, we also launched a CIRCAL-based foundry alloy from Alumetal, expanding the recycled content offering to the European automotive segment. So we continue to move where the market is moving, developing the capacity and the capabilities to serve a growing market for low carbon and recycled materials. So the success factor for us are quite clear: increasing volumes, strong customer engagement and that with a portfolio that is increasingly differentiated well above low carbon by itself. So the last years, we have worked deliberately to identify, develop and deepen the partnerships with the most ambitious players in our customer base. That helps us create a real market for greener aluminium, and that does not happen by itself. It requires customers who move early, commit commercially and co-develop their solutions with us.

Starting with VELUX, one of the first to join us on the partnership on low carbon and circular materials. In 2023, we entered into our partnership with Mercedes-Benz. The following year, we delivered the first batches of REDUXA 3.0, using some post-consumer scrap, developed through close technical collaboration between our teams. Since then, we have expanded the model. With Porsche, we have an industry-first offtake agreement, including capacity reservations and green premium structures, a methodology that really supports predictable demand, and we continue to work together on this joint roadmap. And with Brompton bikes, which everybody in London should know what is. CIRCAL-based wheel rims are now rolling off the line, and that's CIRCAL 100R based on 100% post-consumer scrap.

With Volvo Group, we partnered with one of the most ambitious players in heavy transports. A milestone in a sector where aluminium demand will continue to grow. We also broadened our reach beyond automotive and construction, engaging more actively in public infrastructure. Together with Siemens Mobility, we are developing a closed loop solution that turns aluminium from decommissioned trains into new high-speed rail in Germany. And in power transmission, the partnership with NKT is important. Long-term REDUXA offtake agreement will be supplied from the new Karmøy casthouse for major cable projects across Europe, 274,000 tonnes of aluminium. So these partnerships demonstrate the proven model, focused customers, deep technical collaboration and long-term commercial commitments that create a real market for low carbon and recycled aluminium. And as we advance on the decarbonization road map, future investments will increasingly depend on concrete offtake agreements like these, providing certainty for Hydro and for our customers' transition plans.

So with that, I will leave the stage for Paul Warton to take us through some of the details on Extrusions.

Very good. Thank you, Eivind. Good to see some of my customers up there on the screen. But now it's my turn to put some flesh on the bones with Hydro Extrusions and how we fit in and how we've navigated these extremely challenging markets across the globe is fair to say. So more of that later. But I don't want to lose sight of the fact it's been tough for 3 years now, but we still see opportunities for our business globally to follow strong markets, strong customers as they develop their business. But as usual -- usually we talk about safety first. Now here, this is Hydro Extrusions, safety performance.

You saw the group numbers there from Eivind and here, Hydro Extrusions with our 20,000 employees across the globe. In many plants, in many countries, we've contributed to this improvement. So on the recordable cases there, you see that's improved some 40% on the 12-month rolling average. And on the high-risk incidents, these are often injury-free. These incidents in plant that's improved some 80%. And then, of course, there's the other metrics that safety, environment protecting our people, protecting our business. And one example there is waste to landfill.

Target is zero, of course, but you see we made some good improvement trends there. And of course, we've got many other environmental metrics. We've got wastewater, we've got energy efficiency, and these are all trending in a good direction. And as Eivind said, this is, of course, about safety of our people and the predictable performance of our plants. But there's also many benefits. You manage safety in your business, you manage efficiency, productivity, compliance, quality, everything comes from this basic fundamental discipline. So I'm very pleased with the team's performance in this area.

Now then, our challenging headwinds in the market. If I think back to what we talked about 1 year ago, you're very aware of these oscillations in -- especially our Extrusions Europe and Extrusions North America market. This is a via movements of demand up and down. And if you remember, the numbers in the middle. We talked about forecast for the market, 2025, 3% in Europe and 5% in the U.S. And you see where we are today with what we see today. Far, far away from those projections. The good news is we've managed those headwinds in the way we run our business, the way we manage our costs, the way we work with our customers and the way we protect our margin. And that's very important going forward. Markets are tough, but you still have to maintain your margins and your profitability. Of course, we take actions on our capital expenditure. We have to be a cash positive business even in these tough times. But it's been a challenge. But overall, I'm happy with the performance, and I don't lose sleep over the markets. They will come back for sure in Europe and North America and rest of the world.

But of course, in Europe, we're now 3 years into this very tough environment in Europe, 3 years, 36 months. That's the longest slowdown in Extrusions we've ever seen -- mostly likely I've ever seen. If you look back COVID, COVID is like 10 months of downturn than recovery. If you look back to 2009, this was maybe 12 or 14 months, 36 months of a downturn. And we're still in that downturn today in Q4. So of course, our utilizations go down in our business, in our plants, in our extrusion presses and in our casthouses. There's the additional margin pressure from what was described earlier about scrap outflows from Europe. So scrap has become expensive, even in a soft market in Europe. And the pressure on the billet premiums through our recycling business has not been enough to make a decent return in our recycling businesses. So we have to cut the cloth, and this is a big decision. This, of course, is a very sad decision to have to make, but necessary.

Our utilization is too low. The profitability is too low. These plants here, these are loss-making plants on extrusions. So this tough action sadly was necessary announced yesterday and the consultation process, of course, begins with our representatives to find a solution and then hopefully come to this conclusion. So we will lose 5 plants. We will lose 8 presses and casthouse capacity in 3 locations but necessary actions. And this, of course, will affect subject to the conclusion of the consultation 730 FTE positions. So this is quite an adjustment in the European landscape. So this is tough. What does it mean for us in terms of getting through this process in terms of lost capacity in extrusions and recycling. There you see the numbers, 11% reduction in extrusions and more like a 29% reduction in casthouse capacity. This is significant, but you shouldn't worry about. Does that impact our ability to take advantage when markets turn. We still have enough installed capacity in our business in Europe through the casthouses to extrusions to follow the demand as it improves.

And what's the benefit of this? The financial benefit is the run rate improvements there of some EUR 45 million a year. We will exit 2026 at a run rate that's delivering those numbers. So that's in there for full year 2027. And of course, there's CapEx avoidance involved as well. So the money we invest in this restructuring, the payback is good. The IRR is good, and it's what we need to do to adjust our capacity in our market. So that's the action on Europe.

If I then look at the global picture for us on extrusions and also still convince you that this is a good market to be in. If you look at the numbers in the middle there, these are substantially down from 1 year ago, but still 3.8% and 3.1% growth in our core markets, Europe, North America, this is quite respectable growth rate to work on. And of course, we're working on subsegments within those markets to ensure we're capturing even upside opportunities in those markets. So you see the curves move to the right, unfortunately, third year running. And the biggest impact in terms of our markets is the BEV slowdown in Europe, but especially in North America. But we're still selling battery electric vehicles, and we're on these platforms in Europe and North America. So yes, it's less than we thought, but this is still good business for aluminium extrusions and aluminium generally.

And what does it mean? In Europe, this reduction, this means only 40% of vehicles in Europe will be BEV in 2030. It was 50%. In North America, it's something like it was 40%. It's now going to be 19%. So yes, it's down, but the trend is still coming. Peak ICE was achieved 8 years ago. So it's a slower trend than we would like to see with the aluminium intensity on these vehicles, but the trend is coming and it's irreversible trend. It's even coming in North America with everything you hear and see in North America. One of the reasons for the downturn, of course, has been the incentives. A lot of the incentives disappeared in Europe with some of the member states. These are slowly coming back. My own country, U.K., I've heard recently, there's incentive now you buy BEV, you get some GBP 3,700 discount on the vehicle. In Germany now with the money that's made available in Germany, there's also a scheme to give similar like 10% reduction savings on BEVs in Germany.

So I think the regulators are seeing they need still to incentivize this transition. So the transition will come. It is a little bit dependent on some of the incentives that go with it, but it's still coming. And this is good for our Extrusion business. There is many of our products in these markets. So then overall, looking at the different segments we operate in. We share here where we are as Hydro Extrusions globally with where the markets are. And this really illustrates we're very well represented in the markets that we'll go in extrusions, in fabricated components for extrusions. The big adjustment there is North America automotive, that number you see 2% to 3% last year, that was something like 9%. So that is a big adjustment in Europe -- in North America unless we deal with. So yes, it's less than we were expecting, but don't forget when we invest to make parts for our OEM customers, this is modular investment. So we only invest enough corresponding to the business that we do in those markets.

So we're still deploying that action on modular investments to support these markets. There's other ones there like commercial transport. This is very soft in North America, and that's an important market for us, where we have a big share and a growing share in North America. And of course, with tariffs, nobody wants to be the person buying Midwest transaction premium and then being stuck with the stock, the inventory, the products even when there's an adjustment. And still people believe there will be an adjustment. It's hard to predict when, where, why. Maybe it will never come, but there's still a belief it will come. So everyone is super, super tough on purchasing aluminium extrusions. So the supply chain from consumers to us is absolutely empty, especially as we go into a financial year-end close. But CT, you have to eventually replace truck trailers. So they're running on extended leases now. They are, of course, challenged on maintaining repair and so the time will come, they need to be replaced.

And just to give you an idea on a trailer. We visited a customer with the Board directors only a few months ago. Trailers are selling for, let's say, $1,500. Midwest transaction premium, this is maybe another $300, $400 premium on top of that. And when our customers order trailers, they order 150, 200. So this is a big delta for them to be nervous that I don't want to be the one over-procuring when there's suddenly an adjustment on the tariffs in the U.S. So this is stressed in the supply chain. Everyone is on short lead time. So this is manageable, but it does mean when these markets turn, there will initially be restocking to the supply chain as well as the consumption coming at the end.

So this will recover but it's a bit tough at the moment. And where we're less represented is in B&C. This is important for us, and this is extrusions to B&C customers. This is not our Hydro building systems company. That's a different story. But B&C does tend to be more the commodity end of the business, and there, we do less. So Hydro Extrusions is very well positioned globally to capitalize on these opportunities when the markets recover.

We talk a lot about automotive, and that's one that since I've been here, we've really invested a lot of time, effort, money in developing our position in this market. And before, I've talked about the nominations where we get awarded lifetime contracts with OEMs, we've shifted the business very much away from being a Tier 2 or Tier 1 supplier to be an OEM supplier and OEM supply of the components, the likes of which you see on the right-hand side. So these are finished complex components that is heavy in BEVs, but also in hybrids or ICEs and this is where we've committed some capital and we have projects. And now these are coming to the market. So you see we shaded the green bar chart there to show what's been up and running in production. It's only a small percent of these nominations that we've been given because it takes a couple of years before you're in serial production on these [ SRP ] automotive parts. And then as we go up there in 2026, some of the launches in '25 were delayed. They're coming in 2026. So this business is coming.

Some of it is less than what we anticipated. But like I said, we do modular CapEx to fit the demand as it comes. So it's slower than we would like, but it's coming for sure. And we still quite on a lot of new business now for similar components with OEMs globally. And that's why I put the point in the middle there. It's become more relevant that we're a global player in OEM automotive components. And we now develop with even Chinese OEMs in China where some of the OEMs in the West do partnerships now, develop business in China and even ship components from China into plants in Europe. And we do that.

One example is Leapmotor which is JV with Stellantis. So we'll develop a program [indiscernible] program in China. We'll supply in China, the complete unit will come to Europe and be built to cars in Spain. But eventually, especially if European Commission wakes up and insists on local content to get a discount or a subsidy on a BEV sale in Europe, that's the way it should work. Then we transfer the business that we've developed in China into our plants in Europe and supply often the same Chinese OEMs now operating construction plants in Europe.

So that's very important. We now get nominations with OEMs and these are global nominations in 3 continents producing the same part. And you see the way they manage their build depending on geopolitics or tariffs or customers, and we're able -- we're one of the only companies that can follow that trend. So this is slower, but it's still good. So moving on to some of our smaller business units within Hydro Extrusions. This is the Precision Tubing and also the Hydro Building System. So starting with Precision Tubing. This is the BU that's involved in the copper substitution in HVAC&R and also copper substitution in high-voltage cables for BEVs. And this trend continues. In fact, it accelerates because, of course, the delta now between copper prices and aluminium prices is far, far above the 3.5 ratio.

So we have a lot of opportunities, especially in North America, where these copper substitutions are coming. And once it's done, it's done. It's not going to go back to copper. And these HVAC&R customers are changing lines. It's quite a tough process for them to go through as well, as well as us supplying them. But once they change, they change. And there we've got HVAC&R customers in North America that planning to change all their lines from copper to aluminium substitution.

So this is a good growth rate, double-digit but then the aluminium penetration to copper within that growing market is also good for us in Precision Tubing. And then there's the Hydro Building Systems, operation. Some of you joined us in [ Talus ] recently to have a good look around the core plant in Europe for Hydro Building Systems, and they have the same headwinds in Europe, but it's a global offer, and we're very present in the Middle East with a strong reputation and history there for many decades. And this business, and if you visit Middle East recently, this business in the Middle East is really booming. And this is good for our business. We've not just followed the trend, but we've grown our market share in Hydro Building Systems Middle East.

I was there only this week, a couple of days in Dubai. And we're nominating a lot of the iconic projects. The one you see there, very flash building by Binghatti Developers, and that's the Bugatti Residences in Middle East. It's all pretty much sold out. It's been built at the moment. It's about halfway built. And Hydro Building Systems, they are the nominated supplier on that as well as many other huge projects in the Middle East. And it seems that, that momentum is there to continue.

So well done, Hydro Building Systems for growing their business in that environment. And then the other one is Europe at the moment, but this is the wall-to-wall recycling that we've talked about before. And this is where the construction products regulations in Europe on renovation is demanding lower carbon products as they replace windows, doors, facades, buildings. And here, we take away end-of-life windows. We do the recycling of -- we do the aluminium recycling, but also the glass and the gaskets is also recycled and the clients are demanding this high recycled content, CIRCAL 100R or 50R various recycled content delivery to come back with low carbon onto the project. And here, we do the multiples. So we take the aluminium comes back into our system. We cast, we extrude, we send the systems back for the client. So this is increasing in Europe, and I also like this because this keeps scrap in Europe because we take control of the end-of-life aluminium. So that's in the market. Like I said, there's plenty of reasons, it's tough at the moment, but there's plenty of areas where this will grow in the future.

But then what do we do ourselves to control cost efficiencies in our business. And you know about the improvement programs. This is our commitment within Hydro Extrusions. We've also overdelivered on that in 2025 and these numbers we're committed to going forward to 2030, and there's a whole range there of different activities that you should be familiar with. And we use the Extrusion business system, which is typical Toyota lean waste elimination across all these improvement activities to deliver on these ambitious savings targets. So I thought I'd just give a couple of examples.

This one is on automation, the next one on procurement, on the sort of things we do. I mean the message should be clear now on growth CapEx for additional capacity in cast and extrusions Europe and North America. This is off the agenda. Then you'll see from Trond Olaf's presentation, we reduced significantly our CapEx in Hydro Extrusions. So where do we spend our CapEx? We will still spend where we've got opportunities to get good projects, good IRRs, quick paybacks, helping our business to be more efficient, safer, but more profit into the company.

And this example, I think we've used this before. This is where we still have some old presses in the system, especially in the U.S., and this one is like a Cressona example. So these are very good payback projects where we multiple -- closed 2 presses, very old presses, some 80, 85 years old. We put in a new modern press. And this, if anyone is looking at the numbers, 35,000 tonne of 1 press, this is not a normal direct 8-inch press. These are bigger presses, often indirect presses, very specialized for the markets within North America, but this is big savings on manning, big savings on uptime and recovery. And then you can imagine the payback is very convincing.

So if we can squeeze that into our reduced CapEx numbers, that's the sort of project we go for now. So that's not really to generate more capacity in the market. That's just to make us super efficient on the installed capacity we have today. And then, of course, there's the automation of either fabrication sales, on the customer components or different elements of our business, upstream, downstream, just to invest on clever projects, demanding same benefits with a good return.

So then on procurement, procurement, we've done a lot of work on this, just to take it a little bit away from local plant procurement, make it much more a central category management upgrading, if you like, of our procurement processes. And this has been extremely successful for us over the last years by adopting a very analytical detailed approach in this example. This is about logistics in the U.S. and you think you're good at logistics, but if you do a real clean sheet approach on how you're working with suppliers, how you're working internally on your own processes, a lot of change management in this, but you end up with significant benefits every project we do we make savings on the procurement -- the unit prices, consolidating suppliers. We waste, eliminate a lot of the process and we change packing materials and then we get improvements in internal productivity. So these are convincing. That's one on logistics.

There's another one just to share on packaging, same methodology, same results. It happens to be the same EBITDA saving, USD 3.7 million. So we had numerous projects like this running around the globe with very well-defined procurement tools to deliver these savings. So we're very confident on the 2 middle numbers there. The improvement programs coming from internal actions, the commercial ambitions from what we do in the market to build our share in our core segments.

The unknown is a bit on the left, the gray one, where we still have to see normalized remelt margins, especially in Europe. And our current action in Europe will help that process. And it's a lower number now going forward to 2030 than it was 1 year ago. It was 30%. North America, it's now 20%. Europe is a similar number, 20% to 25%. So we do need that recovery in the market to give us a step up. And then on the right-hand side, we've reduced CapEx significantly this year and next year. And like I said, there's no growth CapEx until the markets turn. And there, of course, that's impacting our number. So the [ 10 to 12 ] you know about is now [ 8 to 10 ] with what we see to date.

So I'm just about out of time, and that's the end. So we're ready for a break, and I'm here on stage later with my colleagues to take questions.

Thank you, Paul. As Paul said, we are now past the halfway point. So we will break for 15 minutes, and we'll be back here for the financial presentation by Trond Olaf.

[Break]

Good morning also from my side, and welcome back, and great to see all of you here today. So my aim today is to translate all of what Eivind and Paul has been explaining earlier today into the numbers, for Hydro, for next year and also towards 2030. And then first, I'll start and looking at the past 12 months. And Hydro has delivered very solid results, driven by strong performance upstream and positive revenue development. Meanwhile, the pressure on our downstream businesses, as we have discussed before, continue from last year with both extrusions and recycling facing significant challenges to meet expectations. But as a result, Hydro has delivered RoaCE for the past 12 months of 10.9%, above our 10% target. Over the 5-year period, the RoaCE stands at a solid 13.5%, demonstrating our commitment to generating returns both the cost of capital above -- through the cycle.

And over the same 12-month period, Hydro has delivered an adjusted EBITDA of NOK 31 billion, benefiting again from strong upstream performance partly offset by the weak European and North American markets for our downstream segments. And looking at a recent history of Hydro, this adjusted EBITDA level for the past 12 months as of Q3 is at a very healthy level compared to the history. Given the headwinds in our downstream segments and with uncertainties around global politics and trade, we have taken steps to safeguard cash flow. And the capital allocation has been revised down and operating capital is continuous focus area. And as a result, I'm pleased to report free cash flow over the past 12 months above NOK 10 billion. And this is both a clear improvement over the last couple of years and also very strong in a historical perspective.

Turning then to the outlook. And then I would first like to remind you about our financial framework, which is designed to drive long-term shareholder value. We operate in industries where we see pronounced cycles and periods of volatility. So having a resilient financial framework is, therefore, crucial to staying on course and executing our strategy consistently regardless of market conditions. Our framework is anchored in 4 pillars. Firstly, Hydro has sustained a solid financial position underpinned by disciplined debt management, prudent capital allocation and clearly prioritized investments. This disciplined approach has enabled us to navigate another year of uncertainty while preserving the capacity to pursue opportunities with strong long-term value creation potential.

Our investment grade credit rating continues to validate the robustness of our financial profile and ensures access to competitive financing over time. Moreover, Hydro's average adjusted net debt to adjusted EBITDA ratio has remained well below the targeted maximum of 2x over the cycle. And this conservative leverage -- level, strengthen our financial resilience and provides the flexibility needed to manage market volatility while maintaining our commitment to strategic investments.

Secondly, our profitability road maps continue to serve as essential guides for driving the company forward. The cornerstone remains our improvement program targeting NOK 6.5 billion towards 2030. And this year, we have also introduced additional measures to strengthen performance. This includes the restructuring of Extrusion in Europe, as Paul has further described that we also announced yesterday and also the white collar FTE adjustment program we announced this summer to further manage our costs. And we are now fully benefiting from the energy savings in Brazil and continued progress on smelter ramp-ups and capacity agreement. And together, these actions reinforce our focus on operational excellence and long-term competitiveness.

The third pillar in the financial framework is that we maintain a firm commitment to clear and disciplined capital allocation. In line with our more focused strategic direction, we expect that approximately 60% of our growth and return-seeking CapEx for the period 2026 to 2029 will be directed towards the defined strategic growth areas. This prioritization ensures that our investments are concentrated where Hydro can generate the strongest long-term returns while supporting the transformation of our portfolio. And the fourth pillar in the financial framework is linked to strategic investments where we continue to uphold a robust and predictable approach to shareholder returns. Since 2021, Hydro has distributed a total of NOK 41 billion through dividends and share buybacks, consistent with our NOK 25 billion net debt target.

As demonstrated in our 2024 capital allocation, we remain committed to this balanced framework, supporting strategic growth while delivering stable and reliable cash return to our shareholders. And with the financial foundation in place, I will then move on to the first year of delivery under the new improvement program. Improvement programs have been, for many years, a key component of our strategy for resilience and for value creation. And in last year, we launched a new improvement program towards 2030, which aims to reinforce strong focus on performance and directly support the successful execution of our strategy. After 1 year, execution is ahead of plan with NOK 1.2 billion in improvements expected in 2025, well above the previously communicated NOK 600 million target. And the full NOK 6.5 billion is on track for delivery by 2030.

As part of the 2025 achievement, we have some areas that have delivered better than expected. Commercial improvements in the Bauxite & Alumina business area has been stronger this year as well as the procurement program, which also have delivered above target. At the same time, we have been behind plan in some of the areas. And to mention a few, the operational improvement program in aluminium metal has been somewhat behind due to temporary issues with anodes quality, which has now been sorted out. In addition, the commercial performance in Extrusions has also not lived up to the potential and expectation this year. But then to provide some more transparency on some of the key drivers behind the results in the operational improvement program, I will highlight some of the examples on the next page.

So despite a challenging market environment for recycling, then recycling operations, they have still delivered a positive hot metal cost reduction of around NOK 30 million in 2025. Part of the challenge this year has been that at times, the use of standard ingot has been more profitable than the use of scrap due to the relatively high scrap prices. And then it's been more difficult to capture the full value of our scrap capabilities. So against this backdrop, we are happy with the performance in the recycling operations and see this as a solid achievement. The next 2 improvements initiatives have been delivered by Bauxite & Alumina. And through targeted efforts to optimize mining transportation efficiency, the team has achieved a 13% reduction in fuel consumption per tonne kilometer. And this improvement translates into cost savings of approximately NOK 15 million, reflecting a meaningful step forward in operational performance and resource efficiency.

The team has also successfully improved bottlenecks in Alunorte, raising overall refinery flow by around 1%. And while this may appear quite modest, even a 1% increase at this scale in the refinery delivers meaningful value, contributing around an estimated NOK 85 million in operational improvements in 2025. Automation and technology are other examples and implementation remain vital enabler for long-term competitiveness. They allow us to streamline operations, improve reliability on HSE and also cost reductions. And the following examples from Aluminium Metal and Hydro Extrusions and also our global business service organization showcase some of those technology and automation opportunities. In Extrusions, automation initiatives have enabled a reduction of approximately 150 FTEs, translating into cost improvements of around NOK 60 million. And much of the automation in extrusion is implemented with in-house competence, making robotization both cost effective and also agile.

In Aluminium Metal, the rollout of smart breakers in the pots in the Årdal and Sunndal smelter is also delivering a further NOK 30 million in efficiency by improving electrolysis performance and enabling more stable production. And finally, the global business service organization have through process optimization and license consolidation generated approximately NOK 30 million in savings by redesigning and automating processes, reducing complexity and improving efficiencies. And together, these initiatives illustrate how the whole organization is working with numerous targeted improvement initiatives and delivering measurable recurring savings. And these are all the savings and initiatives that we add up in our improvement program.

Then moving on to some further profitability levers outside the formal improvement program. And the cases I would like to highlight here today includes the energy cost improvements at Alunorte, the capacity ramp-up in the smelters and also our strategic workforce adjustments. One of the most significant decarbonization initiatives we executed last year was the fuel switch at Alunorte. The chart on the left shows the quarterly unadjusted energy cost development for the refinery. And as shown, we have transitioned from an energy mix dominated by fuel oil to a mix based largely on LNG, where the other category represents coal, electricity and biomass consumption in the refinery. And the result is both a positive step change in reduced CO2 emissions and the cost reduction so far around USD 50 million per quarter.

We are also making solid progress on ramp-up of the curtailed smelter capacity. The volumes we curtailed in 2022 are expected to be fully back during 2026, where every tonne provides a positive contribution to the bottom line. In addition, we have highly attractive creep projects under execution as well as potential projects for future decisions. And the upside from these creep projects will be captured in the regular improvement program. On the people side, our strategic workforce adjustment is progressing ahead of plan, and we have already achieved the targeted white collar FTE reduction for 2025. At the same time, we have a clear plan to deliver on the reduced consulting and travel costs of approximately NOK 200 million in 2026. And the redundancy cost for 2025 is expected to be around NOK 400 million booked outside the adjusted EBITDA, and we expect little to no redundancy costs for 2026.

Let's then move to the outlook for 2026 based on our adjusted EBITDA of NOK 31 billion delivered over the last 12 months per Q3. The strategic white collar workforce reduction and cost efficiency measures is expected to generate savings of NOK 900 million when comparing to 2026 with the last 12 months. Furthermore, based on the current market conditions, ramp-up of curtail smelter volumes will contribute with additional NOK 300 million, although the ramp-up profile is dependent also on the market development. Next, the improvement program is expected to further boost results by an estimated NOK 1.2 billion. And this takes us to an estimated adjusted EBITDA for 2026 of approximately NOK 33 billion if markets stay as they have been for the last 12 months.

If we take the last 12 months from Q3 as a starting point, but use spot prices instead of the average last 12 months prices, we get a positive market impact, bringing the total EBITDA to around NOK 35 billion. Higher aluminium spot prices and high standard ingot premiums are the biggest positive contributions, while less favorable U.S. dollar to NOK currency rates and lower alumina spot prices have a negative impact on the consolidated level. We have also illustrated market sensitivities at the bottom of this slide for the main commodity drivers. There are many moving parts that are not included in this overview. And furthermore, this is not a guidance, but the high-level sensitivity analysis, which aims to cover the largest moving parts in the results for next year.

Moving then to capital allocation for the company. While the capital allocation framework remains consistent with previous years, the backdrop of a softer market and increased uncertainty has led us to sharpen our priorities even further. In this context, we have deliberately reduced return-seeking and growth CapEx to concentrate more tightly on the most value-creating opportunities across our portfolio. The upstream segments remain in sustained and improved strategic mode, meaning asset reliability is the core priority in the capital allocation. Despite the continued softness in the downstream markets, we remain a strong condition in the long-term fundamentals of extrusions and recycling. These areas, therefore, receive the highest share of the growth CapEx, although the absolute amount has been reduced this year and also next year.

And finally, securing access to competitive renewable energy remains essential to our strategy. And we are selectively allocating growth capital to the energy business area like the Illvatn pump hydro storage project that we announced this year. The capital allocation for both 2025 and 2026 has been reduced to NOK 13.5 billion, down from the previously guided NOK 15 billion. In addition, we have removed the NOK 1 billion to NOK 2 billion of annual flexibility from both our short- and medium-term guidance to provide greater transparency and predictability. The medium-term CapEx guidance of around NOK 15 billion remains unchanged, reflecting our commitment to the 2030 strategy. Sustaining CapEx remains stable, reflecting the continued importance of preserving the integrity of our assets and ensuring reliable and efficient operations.

And after several years of upward pressure, we are now seeing sustaining CapEx levels stable, supported by more disciplined planning and improvement execution. Growth and return-seeking CapEx continues to be allocated to key strategic focus areas as illustrated in the chart on the right. The expected returns for the investments reflect normalized market conditions and remain in line with previously communicated indications. And this underlies our confidence in the profitability outlook of the downstream segments longer term. At the same time, we recognize the current market softness and reduced investment amount downstream are now increasingly directed towards projects that give good payback based on cost and efficiency improvements alone and less towards expansion of capacity.

On the net operating capital side, our performance has improved over the last years and stabilized, and we continue to focus to get the net operating capital performance improving going forward. We expect the net operating capital days to improve by 2 days in 2026, driven mainly by mid and downstream stock improvements. The improvements are expected to come as a result of improved systems, supply chain flexibility and further strengthening of the recycling network. The NOK guidance of NOK 30 billion is in line with Q3 '25 -- year-end '25 guidance, reflecting underlying improvement expectations for Q4 '25 and also '26, partly offset by the higher premiums, especially in the U.S.

Then moving on to our profitability growth road maps, where we summarize everything that we have been through today. And what we present as a 2030 potential for EBITDA, RoaCE and cash flow are not forecasts, but simplified indications, long-term potentials based on sensitivities after we have delivered on the planned improvement programs and also the growth initiatives. We have used spot market price scenario in addition to the base case scenario where we keep prices constant on the last 12 months as of Q3. We start with adjusted EBITDA Q3 last 12 months at NOK 31 billion and RoaCE at 10.9%. If we add the planned improvements and growth potential, we get to adjusted EBITDA of NOK 43 billion and RoaCE of 16%. When we run sensitivities on spot prices, the adjusted EBITDA is lifted to NOK 45 billion and RoaCE to 17%. And this indicates strong profitability based on our current ambitions.

The cash flow potential illustrates the cash flow available for return-seeking and growth CapEx and shareholder distribution, which is at NOK 24 billion based on last 12 months assumptions and NOK 25 billion in the spot scenario. The delta between the EBITDA potential and the cash flow potential is largely the tax payment in addition to the annual sustaining CapEx. Then we see further drivers not included in the scenarios, both on the positive and the negative side. On the positive side, we could see some further upside potential due to positive market and macro development. And we have a higher greener volume potential than visualized here. Declining focus on greener products or unfavorable regulatory frameworks can have a negative impact. And these potential positive and negative drivers could also apply to all the business areas that I will present next.

Then moving to Bauxite & Alumina. And despite operating in the first quartile of the cost curve, Bauxite & Alumina experienced a period of challenging profitability in the years before 2024. Since then, the situation has fundamentally shifted and B&A delivered a remarkable last 12 months RoaCE of 29%, driven by high alumina prices in the last quarter of last year and also the beginning of this year, along with the full impact of the implementation of the fuel switch project. And this is well above the 10% return requirement for B&A, aligned with our long-term ambition for sustainable growth and value creation. Adding then planned improvements, the RoaCE increases by additional 2 percentage points to 31%. However, B&A is highly sensitive to the alumina price, which currently is significantly lower than what has materialized on average over the past 12 months. This, in turn, leads to a significant lower profitability in the spot scenario with a RoaCE of 4%.

We remain focused on enhancing B&A's profitability by further improving the cost position, strengthening operational reliability and advancing on the sustainability performance. And B&A also plays a pivotal role in terms of delivering Hydro's overall greener products to the market. And while we have made significant strides in mitigating risks through asset integrity improvements and fostering stronger community relationships, operational and country-specific risks remain, particularly in Brazil's volatile regulatory environment. Managing these challenges effectively, along with navigating operational complexity at the bauxite mine will remain essential to maintaining B&A's critical role in Hydro's value chain.

Then moving to Aluminium Metal. Similar to last year, we present Aluminium Metal and Metal Markets as separate reporting segments to provide transparency and clear understanding of the individual contributions to performance. Looking at Aluminium Metal Q3 last 12 months, RoaCE has been 11%. When adding contributions from the improvement programs, restart of curtailed volumes and growth initiatives, RoaCE increases to 14%, significantly exceeding the return target. Q3 last 12 months EBITDA is at NOK 10 billion. And after ramp-up of curtailed volumes, improvements and growth initiatives, we get to NOK 13 billion. While B&A's profitability is challenging in the spot market scenario, Aluminium Metal, on the other hand, would deliver remarkable returns in this scenario. Based on spot aluminium and alumina prices and currency rates, Aluminium Metal would deliver a RoaCE of 13%.

And then looking at the free cash flow, we see this ranging from NOK 7 billion to NOK 15 billion between the different scenarios. There are several further upside drivers for Aluminium Metal in the coming years in addition to those earlier mentioned. There are potential benefits in portfolio optimization and in continued to target high-value segments, like we have exemplified with our wire rod investments at Karmøy. Further potential and downside risk include operational and supply chain disruptions that could affect productivity and delivery time lines.

Then moving to aluminium to metal markets. Over the last 2 years, metal markets has faced profitability challenges due to persistently rising scrap prices and subdued demand. These pressures are evident in the last 12 months Q3 RoaCE of just 0.5%, significantly below the targeted 8%. However, looking ahead towards 2030, as market normalize, ongoing projects are completed and improvements are realized, we continue to anticipate a substantial recovery with a potential RoaCE of 13%. In the EBITDA bridge, the expected improvements become evident, illustrating the increase from the current Q3 last 12 months EBITDA of NOK 700 million to projected NOK 3 billion to NOK 4 billion and this trajectory reflects the impact of ongoing initiatives and market recovery, underscoring the long-term value potential in the recycling activities in metal markets.

Further upside potential for metal markets include increased scrap availability as well as technology development and deployment. Further downside risks include prolonged market downturn affecting both demand and scrap availability and increased competition also for scrap.

Then moving to Extrusions -- and challenging market conditions with significant demand reduction have impacted extrusions heavily over the last 2 years. For Q3 last 12 months, Extrusions achieved a RoaCE of 2%, far below the targeted level. Identified improvement measures, growth projects and market recovery are expected to lift these figures significantly, leading to a RoaCE of 12%. Our long-term EBITDA target is ranging from NOK 8 billion to NOK 10 billion with free cash flow projected around NOK 6 billion under this scenario. And further upside potential for Extrusions lies in driving higher growth, continuous portfolio optimization and accelerating improvement initiatives. Digitalization, in particular, presents a substantial opportunity within the Extrusion business and across the whole portfolio in Extrusions.

On the downside side, downside risks include inflationary pressure alongside the market and operational performance variability that we have seen. And these factors will require careful management to sustain long-term profitability. Then moving to the final business area, Energy. And Energy, when we present this, we have excluded the Rein joint venture, which is reflected in Hydro's financials as an equity accounted investment. For Q3 last 12 months, Energy, excluding Rein joint venture had an EBITDA of NOK 4.5 billion, which is a strong result compared to Energy's historical performance. In the normalizations and other category, assumed lower gain on price area differences long term is reducing EBITDA, which is partly offset by higher net spot sales based on a normalized production volume. After adjusting for improvement program and growth ambitions, we anticipate EBITDA of NOK 4.1 billion in Energy, excluding Rein joint venture.

And when using spot energy prices, the EBITDA remains stable at the same level with a corresponding free cash flow of NOK 1.4 billion. The key further upside driver is strong energy markets on the back of increasing demand for renewable energy. And on the downside side, energy markets remain volatile and are exposed to changes in regulatory frameworks, including tax regulations around power production.

Then moving to our dividend policy. Hydro remains focused on delivering competitive shareholder return, continuously benchmarking performance against comparable investment alternatives. The proposed distribution for 2025 will be presented with our Q4 results in February 2026 and put forward for approval at the Annual General Meeting in May 2026. Over the past 5 years from 2020 to 2024, Hydro has maintained a strong payout ratio, averaging 67%, excluding the share buybacks. From '20 to '24, we have consistently delivered on our dividend policy, achieving an average dividend yield of 5.9% over the 5-year period. And this was supported by notably strong yields of 9.9% for 2021 and 7.7% for 2022 earnings, reflecting substantial distributions in excess of the 50% adjusted net income guideline and which is also a standout level compared to an industrial context. Our capital structure policy remains unchanged with an adjusted net debt target of around NOK 25 billion over the cycle, which continues to include the current year's shareholder distribution.

And then as I conclude my part today, I would like to highlight the key parts of Hydro's financial strategy. First, we continue to uphold a strong financial position, supported by our investment-grade credit rating, which provides both flexibility and resilience through cyclical markets. We also maintain a solid shareholder payout ratio in line with our dividend policy, reinforcing our commitment to value creation and predictable returns. Thirdly, we are reinforcing the strong performance drive across the company, increasing resilience through market cycles. Our improvement initiatives are on track to exceed the 2025 target and remain firmly positioned to deliver on the 2030 target. And on top of this, we have initiated additional improvement initiatives this year to further strengthen operational excellence and long-term competitiveness.

On capital allocation, maintaining strict capital discipline remains central to our financial strategy. We have tightened our near-term investment plans in 2025 and 2026 to protect our flexibility to navigate changing market conditions. At the same time, we continue to focus the growth and return-seeking investments in key strategic priority areas, ensuring that capital is deployed where it can best support Hydro's long-term ambitions and deliver sustainable value. The proposed capital allocation and improvement targets supported by reduced investment levels, continued capital discipline and ongoing cost-cutting efforts strengthen Hydro's competitive position in challenging markets. And furthermore, this reinforced earnings resilience through the cycle and lay a solid foundation for sustained growth and attractive shareholder returns.

And with that, I would like to welcome Eivind back on stage for his final message and then our Q&A.

So thank you, Olaf. So let me close with a somewhat broader picture and summarize why we believe Hydro is well positioned to continue to create value in an ever more volatile world. First of all, we have a world-class asset base. And there are a few, if any, companies in our industry that can combine long-life bauxite and alumina resources, low emissions primary portfolio and the world's largest extrusion business. These are strategic long-term assets that give us scale, optionality and a very competitive cost base. Secondly, energy resilience. Aluminium production very often comes down to access to power. We have premium access to reservoir-based hydropower in high-value markets, but we also have strong sourcing capabilities that secures us predictable renewable power for our global smelter portfolio. And that's an advantage that few companies can replicate overnight.

Third, we have a low carbon advantage. Through Hydro REDUXA and Hydro CIRCAL, we have built credible, verified low-carbon brands with full traceability from mine to metal. These are commercially successful products that customers choose because they trust the data behind them. Fourth, a strategic supplier in Western deficit regions. The shifts that we see in trade policy, security of supply and regionalization all point in one direction. Reliable producers inside the U.S. and the European systems are becoming more valuable. Hydro is already embedded in these supply chains, close to customers, inside the tariff walls and positioned to deliver certified metal quickly. Fifth, capital discipline and predictable returns. We have, over time, shown that we can both grow and strengthen the company while protecting the balance sheet, delivering improvements and maintaining a solid and strong dividend track record.

And as you heard earlier today, we continue to prioritize disciplined capital allocation aligned with the market realities as we see them. And finally, we are positioned for growth. Long-term offtakes, framework agreements and deep technical partnerships give us clear visibility on demand in the fastest-growing green transition segments. And our integrated value chain from mine to metal to recycling to extrusion enables us to scale traceable, sustainable products with a strong customer pool.

So to conclude, in a more -- ever more volatile macro environment, the value of what Hydro already is only becomes more pronounced. And that is also why we're confident in our long-term position and why we continue to execute with discipline on the strategy that we set out towards 2030.

Thank you so much for the attention.

And then we please stay and we invite Trond Olaf and Paul back on stage for the Q&A. We have 2 microphones in the room, one in the front, one in the back. So raise your hand, and please wait until we get the microphone to make sure we get the sound also on the webcast.

[indiscernible] Arctic. You're maintaining a significant uplift on recycling. Does that include any potential restrictions on scrap exports from U.S. and Europe? Or will that come on top?

That would come on top. What we assume in the bridge is really a normalization of the prices that we've seen in the past over a certain period of time. So we're not taking the peak here, but the normalization of prices over time. What is, in a way, good is that there seems now to be more regulatory support on exports of scrap. So Safco, which was out last week, saying that they are working hard on this to find a mechanism to ensure that more of the valuable scrap stays onshore in Europe. And that, of course, comes from 2 angles. It comes from the fact that Europe is short what they define as a strategic raw material. But export of scrap is also export of energy in solid form, right? Remember, recycling scrap takes 5% of the energy as it takes when you produce it the first time. So it's really about strategic resilience for the European area as well.

Marina Calero from RBC. I have 2 questions on my side on Extrusions. Can you give us a bit more color on the internal rate of return that you're achieving with the reductions in capacity that you announced today? And then looking into 2026, how should we be thinking about Extrusions EBITDA? Is it fair to assume might be another flat year-on-year? Or how are you thinking about it right now?

Starting to fill in Paul.

Yes, you should start, yes.

So I think when you think about the internal rate of return, so NOK 0.5 billion in cost savings, be it out of '26, capital savings, avoid the CapEx on top of that. That combined with the restructuring cost of less than NOK 2 billion gives you a payback time somewhere between 2 and 3 years.

Yes, it's an attractive return on IRR for sure. So market next year, I mean, we're not guiding for 2026, given all the uncertainties that we see in the marketplace. So we'll refer you to the market commentators on what they're saying for 2026. But I think with what you've heard today, the current condition, geopolitics, inflation, energy, all the issues that are challenging us in the last few years, until some of those resolved, then it's challenging to look at the CRU forecast and say, okay, that's what's going to happen. And if you remember from previous years, this is very much a slower start in H1 and then recovering in H2. And this we need to watch, look, learn, listen and we'll adapt accordingly, okay? So yes, it's positive. It's second half loaded, but we're not going to spend money unless we see those numbers really coming through.

But I think it's also important to add, building on your comment earlier, Paul, pipelines from end consumer to our production seems to be pretty emptied out, meaning also that if there is a turnaround, you will probably get the multiplicator of demand, at least at the beginning as we start to replenish the pipeline.

Dan Major from UBS. First question, just looking at the cost performance in the Bauxite & Alumina business. On Slide 46, you show this USD 50 million run rate of reduction in energy costs relative to first half of 2024. When we look at your reported unit costs in B&A, they went up because of the third-party purchases of alumina and they've come down to around the same level as they were before the fuel switch project. Where is an additional USD 50 million per quarter of costs coming from in this business to offset the reduction in energy? And what's the outlook for that going forward?

Yes. So what we show in our presentation pack is the actual energy cost in Alunorte. So we actually do see that we deliver on the targets of around USD 200 million in energy cost savings in Alunorte. I think what makes it a bit more difficult for you to follow on the outside is, as you referred to, then, the part of what you're seeing is also including the profits from our third-party alumina portfolio. And although we don't present the contracts we have, I think it's well known in the market that we have LME-linked contracts in that portfolio. So then you will see sort of a different profitability on those contracts depending on the LME percentage for the alumina price and the actual alumina price in the market. So I think that is blurring the picture that you are following when you look at the sort of apparent cost level in Alunorte. But when it comes to the cost position in Alunorte, we do see the energy savings that we expected.

Okay. Sorry, just to follow up on that. If inputs stay the same as they are today in terms of LME, et cetera, would you expect that reported unit cost of about USD 340 to trend lower going forward? Or would it be at a similar run rate?

More or less, I would say that. I mean we always have the improvements and all that we're working on over time, taking down cost levels. And as always, in B&A, it's really the commodity price movements that will be the biggest drivers of the results. But if everything stayed flat, yes, more or less.

Okay. And a second question, if I could. You mentioned the cost of restructuring and the redundancies through the P&L being largely done by the end of this year. If we think about the gap between net income and cash flow or what other cash items we should expect for next year? Is there any other significant cash flow items that might impact the net debt bridge into next year as a consequence of that restructuring? Or is that all done by the end of this year?

For the shared programs, so the white collar restructuring that we've done.

Or any other items?

Yes. That will be mostly complete to any significance by the tail end of this year.

So no change in working capital, no other items like it should be a fairly clean year as you see it this year in terms of cash flow conversion.

That's what makes sense.

Ephrem Ravi from Citi. First question on the road map on the extrusions. There's the NOK 0.6 billion to NOK 0.9 billion commercial ambitions and NOK 0.6 billion to NOK 1 billion from uplift from growth projects. How much of those 2 are really dependent on a market recovery? So if there is no market recovery, should we just take those off from the road map?

So commercial ambitions, first of all, I mean, this is a market share development. So whether your markets are up or down, the share is always consistent. So that's one that because of what we do with components and OEMs and projects, this will build market share for us. So that's in the numbers in a soft market and a growing market. Of course, you would imagine it's a bit easier to achieve those in a high-speed growth market. And then on the growth, that's CapEx driven, of course. So this is, for example, this is the Cressona by zero investment. This is the Hungary casthouse investment. This is the automotive presses in Hungary and Tønder. Those will deliver on the projects we've already booked. So as long as the rollout of these platforms with the components is in line with our projections and the OEM projections today, then they will deliver no matter what's happening in the rest of the markets. But if that softens, then of course, that will impact the growth projects from those investments.

Related to that, if you look at the IRR chart, the pie chart on Page 40, the recycling projects supposed to have an IRR of 15% to 30% and extrusions is 20% to 35%. But your current RoaCE in that business is 0% and 2%, respectively. So again, what kind of assumptions of market recovery do you need for those IRRs to be met? And is there any flexibility on the CapEx spend to kind of stop it now and not destroy value?

I can comment on it. So yes, so the indicated IRRs are based on normalized market conditions. But what we do see from all the projects we have sanctioned for extrusions in the last 1.5, 2 years is that they deliver well above cost of capital even without any market growth. So they are above 10% if you assume that the market stays flat from now and forever. So they are still profitable projects because of the cost savings in this project and Paul showed one example with this press replacement, where we take out manning costs and reduce maintenance costs with the new presses and that more than compensate for no growth.

And last, just maybe this is a question for someone else, but Tomago smelter, you've -- obviously, the power contract goes off. What's the latest on that? And again, are you prepared to kind of go along with whatever your JV partner decides on that project in -- now, I suppose?

No. So the consultation process in Australia and Tomago is ongoing. We still have power until the end of 2028. Negotiations so far has not -- has been constructive. We -- as you know, we have not been able to find a good power contract until now. Now if that arises between now and the end of 2028, will we look at that? Yes, we would. But as of today, with the power contracts that we've had on the table, it's very hard to see that it's viable beyond '28. So a new contract would need to come.

Jason Fairclough, Bank of America. A bit of a market question for you. So if we think about metal flows into Europe, there's a couple of big smelters that are under pressure right now. So we've got Mozal turning off. That's not small. We've got a force majeure out of Century in Iceland. But then conversely, we've got this distortion in the U.S. because of tariffs, right? So how do we think about those metal flows? What does it mean for premiums? And do you feel like your markets business is being dynamic enough here?

So 2 potentially significant disruptions, right? So Mozal, roughly 0.5 million tonnes, typically, 300,000 tonnes of that comes into Europe. [ Hisal ] roughly 200,000 tonnes being out at least for the better part of 2026. These are typically what we would call greener standard ingots. So again, it comes into what kind of pressure does that actually give to European premiums because 0.5 million tonnes less and then 0.5 million tonnes less of green standard ingot. So there will be, again, less greener products in 2026 if these 2 still stay out or are closed after March 2026 in Mozambique. We'll see, but it should be a positive support. On top of that, of course, we also have the Russian sanctions where quantities will be taken down from 270,000-some tonnes in ' 25 down to 50,000 tonnes come February 2026, again, taking away metal that typically have been placed in Europe. So fundamentally, that should be good. It will change from trade flows if Europe still needs that metal and that will be attracting them either from the Gulf or from the Southeast Asian parts of the world.

And so again, to the second part, do you feel like your markets people are in a good position to harvest this?

We believe we are in a very good position to harvest on this, Jason.

It's Amos Fletcher from Barclays. First question was just regarding extrusions, Paul. I just wanted to ask what's the volume number underpinning the 2030 EBITDA target?

You asked that last time, I think -- it's different to what it was 1 year ago. So to be frank, I'll leave that to Investor Relations if they want to share that.

Okay. Next question was on Alunorte. You guide every quarter for it to operate at nameplate capacity, yet it basically never does. Is there anything you can do to make sure that it does deliver that and potentially pull down unit costs. So we're actually making a proper return on capital instead of 4%?

Do you have the answer to Alunorte?

Sorry, I didn't get your -- I was thinking about the volume, sorry.

This is also volume question. It was just a very different factory. It was Alunorte.

So Alunorte, so you guide every quarter for it to be at nameplate capacity. Very rarely, if ever, does deliver nameplate capacity. Is there anything you can do in terms of either spending, debottlenecking to actually deliver that and that could then potentially deliver quite possibly some proper return on capital instead of 4%, which is not acceptable in Brazil.

Yes, we do. And I mentioned with this -- in the improvement program, we are following very closely the bottlenecks. And that was the improvement I mentioned with the 1% increase in flow. So these sort of initiatives to really protect the bottlenecks is key to get up the production in Alunorte. In addition, we are also doing some minor investments also to improve the bottlenecks. So we do have initiatives to get the capacity back to the nameplate. But in reality, the actual throughput of the refinery will depend on the bauxite mix and the bauxite quality over time. And I think as in most mining operations, you will see a deterioration of bauxite quality compared to what the refinery was designed for. So this is the sort of the constant fight that we're having to compensate for the different bauxite quality over time.

Okay. And then last question was just on sensitivity of your long-term EBITDA targets to CapEx spend. So if we were to assume a scenario where markets don't recover, you keep spending NOK 13.5 billion, how much would that impact your 2030 targets? And is there a rough sort of knock-for-knock sensitivity you give us?

You mean if we see no growth for the...

Just if you spend NOK 13.5 billion on -- between now and 2030, how much would that impact your 2030 EBITDA?

That would also mean that the market recovery part of the bridge would be much smaller. So it's a bit difficult to digest exactly what's in which part of the bridge because it will hit both the market recovery and the growth part by how much will depend on how severe the market downturn is.

It's Liam Fitzpatrick from Deutsche Bank. First question is linked to that. We hope that European demand will recover. But if we're in the same situation in a year's time, is it safe to assume that NOK 13.5 billion is the level of CapEx that you'll continue to spend into 2027?

So we'll come back to whatever the number will be if the market doesn't recover. I think the important part that we've tried to convey today and which I believe we're actually showing in the numbers this year and indicating for next year is that we have a modular and incremental investment basis on how we do this, right? So if market doesn't recover, then we will, of course, not do the investments, capital investments. And then we can have a debate, is it NOK 13 billion or NOK 13.5 billion. But yes, we will not invest up to NOK 15 billion again unless we see market recovery and there is a market need for the products that we invest or production that we invest in.

Second one is on the shareholder returns. If we're looking ahead to the full year results, should we assume that you stick fairly rigidly to the NOK 25 billion? Or is there a bit of flexibility around that because we have seen that in prior years?

So we'll -- at least on this -- in this meeting, we'll stick to the commentary we have and the dividend policy that we have. So 50% of adjusted net income and then a net adjusted debt target of NOK 25 billion and then we'll see.

And then the last one for me. Just on this scrap policy, it sounds potentially very bullish for you. Is there a risk though that when we go through H1, if we start hearing a bit more around the policies that it could actually cause some dislocation and it could lead to higher exports in the short term and actually negatively impacting your business?

That would build on the assumption that there is a lot of scrap lying around in Europe that could just flow out, which I don't think is the case at the moment. Yes, there could be some short-term distortion, but I don't think that will be significant.

This is Alain Gabriel from Morgan Stanley. A follow-up on Liam's question on the CapEx for '26. How much flex do you have to cut CapEx if things do not improve at all from here onwards? And a follow-up on that one is, again, if we take a snapshot today and assume no improvement, how much working capital would you think you would reduce in 2026?

Yes. So on the CapEx side, of course, you always have some flexibility. But the NOK 13.5 billion really consists of sustaining capital because that is important to uphold over time. It's, of course, the easiest thing to cut, right? You can cut it in half and then everything runs fine for 6 months and then you have a lot of machines standing still and not able to operate, and that's expensive. So we want to keep the machines and our plants and operations up to speed. And then what comes on top of that is really, for the most part, already approved projects that we have. So some flexibility, but we will be careful adjusting it from that level.

And on the working capital?

So the working capital, we have been guiding on the NOK 30 billion this year and the same end of next year. I mean there are some price movements working against us when it comes to the total working capital level. But then on the performance side, we -- the plan is to compensate for that through the performance.

It's Matt Greene from Goldman Sachs. I just want to press on Alunorte and from Amos' question, Trond Olaf, I think you may have answered it a bit. But relative to 2023 or a few years ago, this bauxite quality issue that you just highlighted there. And sort of where have you seen your consumable costs go up? I'm not talking energy, I'm talking caustic, I'm talking bauxite. And also on the mining side because you highlighted downside risk here is operational complexity in the mine. So yes, can you just sort of touch on how the bauxite operations are going and where your consumables have gone up in Alunorte in the last few years?

So when you start the mining operation, you typically start in the best area and then you mine the best grades and then the quality deteriorates over time. And this is a trend in all mines, I think, as for us. The operation in itself is progressing well. No sort of operational issues in the Paragominas mine hitting our results this year. What we are working on is one of the examples I shown, how can we get down the unit cost for transportation because we have to drive longer distances as we continue to mine new areas and that we are trying to compensate for as part of our improvement program. So those are typically the initiatives we have to compensate for the natural cost increase due to the longer distances and the poorer quality, but then we have the improvement programs to compensate for that. So that's the way we're working on the Paragominas mine. So I can't provide any better sort of numbers to underpin and demonstrate it, but that's sort of the working mode to protect the operational performance and the profitability of the mine.

But there are several initiatives, but you say poor quality, but don't leave with the impression that it's that quality in Paragominas. It's still very good quality, but it's slightly less than what it was when we mined close to the beneficiation plant. But then there are a number of small but important improvement initiatives. I think we showed the truck on one of the slides, which is very much moving to larger trucks as we move to larger distances. And it's moving from diesel, it's moving into electricity also, which again takes down maintenance and takes down transportation costs.

We do the removal of the overburden in a different way in certain parts of the mine rather than excavating everything directly, we use a technique, which is called microfragmentation, which sounds complicated, it's basically a grid of small explosive charges, which makes removal much easier. We've done significant upgrades to the cyclones at the beneficiation plant, which also means that we pump less bauxite residue to Alunorte today compared to what we did 12 or 18 months ago, again, taking down operational costs. So there's a lot of activities ongoing.

Magnus Rasmussen, SEB. A question on CBAM. You mentioned that you are working to close some loopholes, hopefully from 2028. How do you see the impact on your business financially in '26 and '27, given what is currently within scope?

We will see very limited impact on our results next year. There will be some lower free allowances allocated to everyone in Europe as part of the CBAM. But then you get -- at least if you look at the forward markets for standard ingot in Europe, you see that some of the CBAM cost is then priced into the market. So in terms of our numbers, you will not really see a difference.

It's Dan from UBS again. Just to follow up on that question, like modeling the CBAM impact is quite tricky. We can see the spread between the duty paid and the duty unpaid as a sort of proxy for what the market is pricing in. Is it possible to provide some explicit guidance to us on what the cost impact would be of the reduction in free carbon credits like sequentially now up to 2032 to help us with that process?

I think we can come back on that. I mean, for the coming couple of years, it's very marginal, but we can come back on that.

Okay. No further questions? In which case, then we will finish off. Yes, please. Then that's it for this year's Investor Day. Some of us -- some of you will meet us in the Lancaster suite for the roundtable just across the hallway and before that, lunch in the Piano bar.

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. And as usual, we will finish off with a Q&A session. [Operator Instructions] When we get to the Q&A, I will then read your questions on your behalf to Eivind and Trond Olaf.

And with that, I turn the microphone over to you, Eivind.

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. And 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.

And 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're also well aware that good results and 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 billion. Now despite this, I'm also happy to report a solid free cash flow generation at NOK 2.2 billion, yielding an adjusted RoaCE 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. And 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 Dutch court dismissing all claims against Hydro filed by Brazilian Cainquiama and 9 individuals back in 2021, based on both legal as well as factual grounds.

And 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 the 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 included 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. And 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.

And 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-Quebec. This will ensure long-term competitive prices in a market where the energy balance is tightening.

As you 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. And 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 phaseout of Hydro Batteries, a decision driven by persistent market challenges. And I am pleased to report that we have made progress on the phase-out process. We have recently done 2 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 a 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 for 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. And 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 2 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 the last month where the new electric CLA cars produced with Hydro REDUXA 3.0 aluminum from Årdal, drove from Oslo to Årdal. Hydro can provide Mercedes-Benz low-carbon aluminum, ensuring a traceable and transparent value chain. And this is important for Mercedes to be able to deliver on their ambitious sustainability targets.

Another exciting collaborative initiative this quarter and in fact, a large milestone for us is a new bridge in Trondheim called Hangarbrua. This is the first aluminum bridge built in Norway since 1995. The pedestrian bridge is made entirely from recycled aluminum sourced from the decommissioned Gyda oil platform from the Norwegian continental shelf. It is built by Leirvik in collaboration with COWI, 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. And 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. So for me, these 2 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.

Thank you, Eivind, and good morning from me as well. So I'll start my part with the market side and starting with the bauxite and alumina markets. After an eventful 2024 dominated by refinery disruptions and bauxite supply challenges, the global alumina market balance has been normalizing since the start of 2025. Around 10 million tonnes of new alumina capacity is expected to come online from India, Indonesia and China this year with full impact expected in 2026.

After the drop in alumina prices we saw in Q2 this year, alumina traded around USD 360 per tonne for most of Q3. With more capacity ramp-up, especially in Indonesian refineries, we saw alumina prices falling to around USD 320 per tonne 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 alumina market, pushing back prices to a more normalized level. According to CRU, a small surplus of around 500,000 tonnes is expected in '25, down to a 300,000 tonne surplus in '26 in the 58 million tonne 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 '25. The 3-month LME aluminum price rose during the quarter, starting at USD 2,599 per tonne and ending at USD 2,681 per tonne.

The U.S. Midwest premium continued to surge in Q3, starting at USD 1,432 per tonne and ending the quarter at USD 1,631 per tonne, 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 ingot premium of USD 185 per tonne, increasing to USD 258 per tonne 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.

Then moving downstream. Extrusion demand stabilized at moderate levels in both Europe and North America during Q3 compared to the same quarter last year with light uptick in order intakes. In Europe, extrusion demand is estimated to have remained flat in Q3 '25 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 '25, CRU estimates that European demand for extruded products will increase by 1% year-over-year. Overall, extrusion demand is estimated to be flat in '25 compared to '24. In North America, extrusion demand is estimated to have increased 2% in Q3 '25 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 builds. Automotive demand has also been weak. Demand has been positive in the Building and Construction and Industrial segments, while the ongoing impact from the introduction of tariffs are still uncertain, order bookings have developed better for domestic producers due to lower imports so far this year.

In Q4 '25, North American extrusion demand is expected to increase by 5% year-over-year. Overall, extrusion demand is estimated to decrease 1% in '25 compared to '24. Looking at our own numbers, Hydro Extrusions sales volumes increased by 1% year-over-year in Q3 '25. 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 than 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&R segment previously in 2025, the trend turned negative in Q3 '25, 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.

Then moving to the financials. When looking at the results Q3 versus Q2, adjusted EBITDA decreased from NOK 1.8 billion -- from -- sorry, NOK 7.8 billion to NOK 6 billion. The main driver was normalization of eliminations. Realized all-in aluminum and alumina 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 alumina 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 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 U.S. dollar.

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. And 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 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 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 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. And this results in 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 1.02 per share.

And let's then go to the business areas and give an overview of each of the business areas, starting with Bauxite & Alumina. Adjusted EBITDA for Bauxite & Alumina decreased from NOK 3.4 billion in Q3 '24 to NOK 1.3 billion in Q3 '25. This was mainly driven by lower alumina prices, higher fixed costs from a low level in Q3 '24 and negative currency effects caused by a weaker U.S. dollar against the 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 '25, the adjusted EBITDA decreased from NOK 1.5 billion to NOK 1.3 billion in Q3 '25, mainly driven by negative currency effects caused by a stronger BRL versus the U.S. dollar and lower sales volumes. Alumina realized prices decreased but maintained above market prices 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 '24 to NOK 2.7 billion this quarter. The main drivers year-on-year were negative currency effects caused by a stronger NOK against the U.S. dollar, partly offset by higher sales volumes and lower alumina costs. Compared to Q2 '25, adjusted EBITDA for aluminum metal decreased from NOK 2.4 billion, and this was driven by lower alumina costs, partly offset by higher energy costs, currency effects caused by stronger NOK against U.S. dollar and lower all-in metal prices, mainly caused by a sales mix pushing premiums to the lower end of the guiding.

The raw material cost 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 intercompany alumina pricing mechanisms, where the opposite positive effect is realized in higher B&A alumina price and result. These effects cancel each other out on the group level. Decrease in fixed cost was above guidance at around NOK 200 million caused by currency translation effects.

And this brings me then over to the guiding for the next quarter. For Q4, AM has booked 72% of its primary production at USD 2,597 per tonne, and this includes the effect from our strategic hedging program. We have booked 40% [indiscernible] USD 423 per tonne, and we expect realized premiums to be in the range of USD 310 to USD 360 per tonne. On the cost side, we expect stable total raw material costs and increased fixed costs in the range of NOK 100 million to NOK 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 '24 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 results for Q3 was NOK 174 million, down from NOK 375 million in Q3 '24. And 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.

As always, we emphasize the inherent volatility of trading and currency fluctuations. And 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 million to NOK 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 margin primarily in Europe. Furthermore, lower recycling production negatively impacted the results with around NOK 100 million. And compared to Q2 '25, 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 million to NOK 150 million based on current spot Midwest premiums, reminding that metal effects are strongly dependent on the movements in the Midwest premium.

And then moving to the final business area, Energy. The adjusted EBITDA for Q3 increased to NOK 828 million compared to NOK 626 million in Q3 '24. 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, as always, 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 seasonal convergence between area prices.

And then 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 noncash 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. And finally, we also had negative other effects of NOK 300 million, and 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.

And furthermore, during Q3, the net negative pension position decreased by NOK 700 million, turning into a net asset position of NOK 600 million positive. And finally, we had no changes in other liabilities during Q3. And 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.

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

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 a clear evidence of our dedication.

We are navigating an increasingly volatile geopolitical situation that continues to affect our markets, but 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 phaseout 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 the Alouette 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 [ Tonya ].

We create growing markets through partnerships while we execute on our decarbonization and technology road map. And these concentrated efforts on growth and profitability ensure that Hydro continues to stay relevant. And 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.

Thank you, Eivind, and thank you, Trond Olaf. We will then move into the Q&A session. [Operator Instructions] And 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?

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

And then there's a second question from Liam. Is it possible or likely that you will underspend versus the NOK 13.5 billion CapEx guidance for 2025?

We are keeping the CapEx guidance at NOK 13.5 billion. Remember that Q4 is typically the quarter with highest maintenance and sustaining capital. Now 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.

Then 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?

So 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 costs 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 '28, but it is a challenging situation. And we will make sure that we update the market if and when there are news in this context.

And another one from Amos. Is there any change to guidance for Metal Markets trading and commercial EBITDA contribution for '25? I think that one was covered already.

Yes. So 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. So that is the reduction in the guiding.

And then a question from Matt. Considering the recent volatility in alumina prices and the increase in refinery capacity from Indonesia with potential developments in Guinea, how is Hydro approaching the balance between LME linked and PAX-based pricing for future alumina contracts? Also, could you please provide some more color on the Alba supply agreement in Q3?

Yes. So when it comes to pricing of alumina, PAX 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.

And then there's a question from Hans Erik. Any news regarding potential tariffs on scrap exports from Europe?

Yes. So the commission in the EU had planned for an announcement late in Q3. That has now been postponed until late Q4. So that is the latest information we have. So then again, we expect the news at the end of Q4.

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?

Yes. So Magnus, on the raw material costs, I think you need to look at bauxite and alumina and aluminum metal together. And we guided on NOK 1 billion to NOK 1.2 billion. We realized NOK 700 million. But if you add roughly NOK 200 million plus from B&A to that guiding due to the internal pricing mechanism, we are closer to the NOK 1 billion. And then with some slight increases in energy costs and less reduction of carbon costs, both below NOK 100 million. But if you add all that together, you are within the guiding. So that is basically the difference.

Then we have a question from Bengt. Looking at actual price changes for premiums during the quarter and your expected range of USD 310 to USD 350 per tonne, the midpoint implies lower realized premiums quarter-on-quarter, whereas premiums are up quarter-on-quarter. Are there a temporary change in sales mix that explains this?

So thanks, Bengt. And you are correct. When we've looked to 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. And that, of course, drags the average premium somewhat down.

Then there's a question from Ioannis. Market expectations were for a meaningful increase in extrusion volumes in 2026 from through levels. Q1 '26 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?

So 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 extrusion market for quite some time now. But again, as always, it's very difficult to tell when we will see the market turn.

Then we have a follow-up from Bengt. Follow-up on the standard ingot. Is that normal seasonality or changes in end-user demand?

So I think you need to look at this 2 ways. One is that demand in Europe has been relatively weak, as Trond Olaf has been through. That's part of it. Second part of it is that customers -- our customers is then also drawing down their inventories quite significantly, both in the U.S. and in Europe towards the year-end. And as such, we produce somewhat more standard ingots to get our operating capital also out the door.

Then there's a question from Magnus. Are we done 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.

Well, eliminations are unfortunately difficult to predict also for us internally. But if you look at the total accumulation of negative eliminations through the price increase for alumina, we accumulated roughly NOK 2 billion. And now we have released, I think, yes, around NOK 1.76 billion in total. But the remaining level we keep in the balance will fully depend on the development of the alumina price.

And I think sort of the positive twist on this is that since we now are generating much better cash flows in bauxite alumina compared to the situation before the alumina price surge we saw last year, we then will have a higher eliminations in the balance if the current market prices stay.

Then there's a question from Amos. What is your guidance for Q4 working capital movements?

Yes. So 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.

Okay. Then 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. And we wish you all a great day. Thank you.