Hello and welcome to the Norsk Hydro ASA conference call. My name is Caroline, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen-only mode. However, you'll have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your questions. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand over the call to your host, Ms. Line Haugetraa, to begin today's conference. Thank you. Thank you very much, operator. Good morning and welcome to this conference call on a very short notice. We apologize for that. We will start with a presentation by our CEO, Hilde Merete Aasheim, followed by a Q&A session where our CFO, Pål Kildemo, will also attend. The presentation slides we will walk through can be seen on our webcast. The link to the webcast, as well as the slides, can be found on hydro.com. Please note that you will need to be dialed into the conference call to be able to ask questions at the end of this call. It will not be possible to ask questions over the webcast. If there are any media inquiries from one-on-one with Hilde or Pål after the presentation, please contact Hydro Media, Halvor Molland. With that, I turn the microphone to you, Hilde. Good morning to the ones joining us on this webcast on such a short notice. We are very pleased to announce today that we have signed an agreement with Glencore to further develop our Brazilian alumina refinery, Alunorte, together as partners. Glencore will acquire 30% of Alunorte and our 5% ownership of the Brazilian bauxite producer, MRN. Glencore will also acquire an additional 40% of MRN currently owned by Vale. The 40% stake will be acquired by Hydro from Vale and immediately sold to Glencore on a back-to-back basis. In today's presentation, I will in short go through the strategic rationale for our decision, the transaction details, as well as the operational and commercial impact of the transaction. Let's turn to page 2. The strategic rationale behind this transaction is that we, with this transaction, adjust our long position in bauxite and alumina to match our smelter capacity. Hydro will continue to be long alumina, but now more balanced in relation to the demand for alumina from our aluminum smelter portfolio. The proceeds from the transaction will be used for strategic growth investments according to our Hydro 2025 strategy, as well as for shareholder distribution. Additional information about this will be provided on closing of the transaction. It's important to say that Alunorte remains a core strategic asset for Hydro and will be the key source for low-carbon alumina supply, including to the adjacent Albras smelter and to the Norwegian primary aluminum smelters. Hydro's 2025 strategy, launched back in 2020, outlined a clear ambition to lift profitability and to drive sustainability throughout the company. Part of that strategy has been to develop Alunorte, allocating capital to sustain and improve operations, strengthening the refinery's first quartile cost and carbon position. This has included lifting and stabilizing Alunorte to nameplate capacity, reducing emissions through fuel switch and electrification, as well as eliminating landfilling of waste, protecting biodiversity, and increasing community engagement. We are now embarking on the next phase for Alunorte and look forward to bringing in Glencore as a partner with broad industrial experience within metals and mining to further strengthen the position of Alunorte. This will include continuing our ambitious improvement efforts to further position Alunorte as a leading supplier of greener alumina. We will together continue efforts to reduce carbon emissions from Alunorte through the fuel switch project that will substitute fuel oil with LNG and the electrification of the coal boilers, bringing Alunorte to the first decile on the global refinery carbon emission curve already by 2025, and with further improvements in the years to follow. In addition to the decarbonization of Alunorte, the partners are strongly committed to continuing the development of social projects to improve the lives and livelihoods in the nearby communities. Let me turn to page 3 and more details about the transactions. The transactions will have a total enterprise value of $1.11 billion, which shall be adjusted for Alunorte's net debt as of June thirtieth, 2023. Net debt for 30% of Alunorte as of March 31st, 2023, was $335 million. The enterprise value and the net debt exclude asset retirement obligations of $40 million on the 30% basis. The parties have also agreed to a post-closing price adjustment based on financial performance of Alunorte over a period of 21 months from June 30, 2023. Subject to Alunorte's performance, Hydro may make certain repayments to Glencore, but which are capped at $55 million. Hydro's bauxite contract with Vale to Alunorte is by this transaction terminated and replaced with a long-term supply agreement from Glencore. The transactions are subject to customary regulatory approvals. Closing of both transactions is expected in the second half of 2023. Let's move to page 4. After the transactions, Hydro will remain the largest shareholder of Alunorte with 62% ownership. Glencore will own 30% of Alunorte, while the remaining 4 minority shareholders shall collectively own 8%. With this transaction, Hydro will no longer have an ownership position in MRN, where Glencore will become the largest shareholder with 45% ownership. The remaining 55% shall be owned by South32, Rio Tinto and CBA. Bauxite from MRN will continue to supply around 1/3 of Alunorte's bauxite needs, while the remaining share are supplied from Hydro's fully owned Paragominas Bauxite Mine. This transaction will have no impact on the physical supply contracts or cost to Hydro aluminum metal. From an accounting perspective, Alunorte will continue to be consolidated in Hydro's financial accounts, and there will be no remeasurement or recognized gain related to this transaction. Let's move to my final slide. Alunorte has an exciting future, and we look forward to embarking on that journey together with our new partner, Glencore. Together, we will deliver, develop Alunorte to its full potential and ensure that Hydro continues to be the leading supplier of low carbon alumina and aluminum at a premium pricing. On that note, I would like to open for questions. Thank you, Hilde. Please note that you will need to be dialed into the conference call in order to be able to ask questions. It will not be possible to ask questions over the webcast. Operator, we're then ready for questions. Thank you. Sure. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the first question from line, Liam Fitzpatrick from DB. The line is open now. Please go ahead. Good morning, Hilde. 2 or 3 questions from my side, just in terms of, firstly, the use of proceeds. You mentioned it will be used for your broader growth plan. Can we safely assume that the investment and the CapEx guidance that you've given us for the next 2- 3 years is going to remain unchanged? Or could these proceeds be used to, you know, invest in, you know, new businesses, new ventures and so on? That's the first question. The second one, there's just a little bit of uncertainty in the market over the valuation. I wonder if you're able to confirm based on consensus data for, say, next year, 2024, what the transaction multiple is. Then the third question, just wanted to hear kind of strategically why you wanted to do this. Is this just about de-risking your exposure to a single asset? And will you be looking to increase exposure to alumina going forward? Thank you. Thank you, Liam, for this question. In terms of the evaluation, I leave that for Paul sitting next to me. When it comes to the strategic, for the first question in terms of proceeds, as I explained, we will use the proceed to pursue our Hydro 2025 strategy. If you recall, we have in the strategic notes that we have defined for each business areas, we have highlighted that we would like to explore growth in recycling and also selective growth in extrusion. The proceed will very, very much be used to proceed with our Hydro 2025 strategy. Other than that, I think we will, we'll stick to the guidance on the CapEx going forward. When it comes to your third question in terms of, why we do this, it's very much again, aligned with our Hydro 2025 strategy in terms of being, in sustain and improve mode in the upstream part. That has sort of been the strategic mode. Doesn't mean that we will not exclude to grow in the upstream part. At this point, we adjust our alumina capacity to the equity of the cement portfolio. I think the your question number three is very much again related to the rationale for adjusting the loan position that we have to the equity position we have in the cement portfolio. Liam, when it comes to valuation and market consensus, of course, you are the expert there. What's important for us to clarify and to be clear on is the enterprise value, as we would view it, including the ARO, et cetera, is $1.15 billion. If you look at, for example, the Alunorte earnings for 2021, which were around the $360 million mark, that would translate to a multiple of 10.5. As you know, there's a spread in consensus for 2024. 2021 was a very good year in a historical context. Sorry, Pål. Just very briefly to follow up. Did you say what was the EV? I think we're reading it as $1.1. Is that correct? Did you say a different figure? It's $1.15 billion. When we went out with the release, we decided with Glencore to communicate the same figure. We include the asset retirement obligations, et cetera, as part of the debt, they do not. You should add $1.11 billion plus $0.04 billion, and then you get $1.15 billion. Thank you. We will take the next question from Ian Rizzo from Barclays. The line is open now. Please go ahead. Yeah. Hi there, guys. It's Amos Fletcher actually here. I had a couple of questions. The first one was just around how much of the excuse me, how much of the proceeds from this transaction are you gonna be paying to Vale for their 40% stake in MRN? The second question is just, if you read the Glencore release, it alludes to the potential for Alunorte to grow over time. Would you look to sell down further equity interest in the refinery, as, you know, if and when Alunorte does grow, again, to keep your sort of net long position stable over time? Thanks. I can start with the first one, Amos. In the totality of this transaction, the valuation of MRN is very low and insignificant. When it comes to the opportunity to expand or to increase capacity in Alunorte, we that is good for Alunorte, and we would participate in that in the sense that it will strengthen the robustness of the cost position and to sustain Alunorte as an important asset in our portfolio to secure the alumina for the existing portfolio, but then to have the opportunity and the optionality going forward. Okay, thanks. Then excuse me, sorry. I guess just one quick follow-up was just around the contract that you're shifting obviously to acquire bauxite from MRN, the ownership shifting from Vale to Glencore. Is there any shift in the or change in the terms of those purchases that would see, you know, the cost position of the refinery change? No, no changes. Great. Very clear. Thank you. Thank you. We will take the next question from line Daniel Achim Cuero from Credit Suisse. The line is open now. Please go ahead. Thanks for taking my question. Actually, Amos just asked it, so no further questions from me. Thanks. Thank you. We will take the next question from line Ioannis Masvoulas from Morgan Stanley. The line is open now. Please go ahead. Great. Thank you. Hi, Hilde and Pål. Congratulations to the transaction. A few questions from my side. First of all, Pål, when you talk about EBITDA of $350 million for 2021, this is just Alunorte. This excludes Paragominas, right? Correct. This excludes Paragominas, and it excludes all commercial arrangements that we have in bauxite and alumina. Okay. Perfect. Very clear. Then just on the use of proceeds, I think on the press release you talk about both supporting your strategic growth plans, but also looking at shareholder distribution. Do you have an idea or any indication on what that split could be and the timeframe for the cash returns, I guess, would be with full year results given timing of the transaction? We haven't indicated a split between them, and we will get back to that when we close. As you say, it's expected in second half, depending on time of this. The later, the more likely it is that this becomes part of the annual distribution, the earlier, we will evaluate. Perfect. Okay. Just two more questions from me. When you talk about maintaining a net long position, I guess if I take the 70% equity stake, you're gonna be over 62% equity stake versus your smelter portfolio is to be effectively balanced from post the transaction, right? If you take equity to equity, we have a small short, but no small long, but it's largely balanced, yes, from 1,000 blocks. That makes sense. A very last one from me. When it comes to the court cases related to environmental pollution that have been brought to courts in Brazil and Netherlands, would Glencore have legal indemnity or, yeah, what's the arrangement there, please? No, that's correct. Perfect. Thanks so much. Thank you. We will take the next question from Krishan Agarwal from Citigroup. The line is open now. Please go ahead. Hi. Thanks for taking my question. Most of them have been asked. A final one. I mean, on a broader strategic basis, have you considered giving a thought that this is probably the start of your, you know, exit or rebalancing of the portfolio in Brazil? Is there any kind of option for the Glencore to acquire additional stake in Alunorte somewhere down the line say 2, 3 years? As I said in my presentation, Alunorte will be a core asset for Hydro, going forward, and so we have no plans to further reduce our exposure in Brazil. Okay. Thank you. There's no further question at this time. Thank you very much, operator. With that, thank you all for joining us today on short notice. If there are any further questions, please don't hesitate to contact us in IR. Wish you all a great day. Thank you.