SAPA GROUP ALUMINIUM IS PART OF THE SOLUTION
SVEIN TORE HOLSETHER
PRESIDENT & CEO
SAPA GROUP
1
WHAT DO WE DO?
CREATING THE JV
FUTURE OPPORTUNITIES
2
FIVE STAR RATING FOR TESLA MODEL S
3
THE PRINCIPLE OF ENERGY ABSORPTION WITH
ALUMINIUM PROFILES
4
ALUMINIUM HAS UNIQUE PROPERTIES
Low weight
High strength
Superior
malleability
Corrosion
resistance
Recyclable with low energy input
ALUMINUM IS PART OF THE SOLUTION
* ESTIMATE
8% of the Earth’s crust
consists of aluminum
75% of all aluminum ever
produced still in use
>50% of Sapa’s
Production*
based on
recycled
aluminum 5% of original energy
required when
recycling
6
OUR VALUE CHAIN –
MOVING TOWARDS CIRCULAR ECONOMY
SAPA WORKS ACROSS A BROAD PART OF THE ALUMINIUM VALUE
CHAIN AND WE CARE FOR ALL THE PARTS OF IT
ALL AROUND YOU
In your car When travelling In your office At home
8
ALUMINIUM WINDOWS
9
10
11
WHAT DO WE DO?
CREATING THE JV
FUTURE OPPORTUNITIES
12
ORKLA AND HYDRO FORM A WORLD-LEADING
ALUMINIUM SOLUTIONS PROVIDER
13
Strong combination of competence and culture
Through knowledge sharing of best practices, we will
improve our network, our offering and our entire
organization
We have global reach and local presence, in addition to
leading process capacity and industry knowledge
We will continue to strengthen R&D by merging the best
from both companies
1 BNOK synergy potential
Expansion
Asia
100 YEARS OF COMMON KNOWLEDGE…..
14
Sapa opens first production
facility in Vetlanda, Sweden
JV between
Sapa/Alcoa is
created
Indalex
acquired First foothold
in America
Enters South
America,
Brazil
Builds a tubing plant
in Suzhou, China
Acquires plants in
Europe from Alcan
1963
Hydro builds its first
aluminium operation in
Karmøy, Norway
2013 2005 1997 1971 2000 2007 2009 2010/11 1986
Builds first
extrusion
plant outside
Norway
Opens first extrusion
company outside
Sweden
Expansion
Asia
……MERGED INTO A NEW COMPANY CALLED SAPA
15
Sapa opens first production
facility in Vetlanda, Sweden
JV between
Sapa/Alcoa is
created
Indalex
acquired First foothold
in America
Enters South
America,
Brazil
Builds a tubing plant
in Suzhou, China
Hydro builds its first
aluminium operation in
Karmøy, Norway
Builds first
extrusion
plant outside
Norway
Opens first extrusion
company outside
Sweden
2005 1997 1971 2000 2007 2009 2010/11 1986 1963
Acquires plants in
Europe from Alcan
2013
16
With presence in more than 40countries
23,500employees
A TRULY GLOBAL PLAYER
With more than 100production units
46 Bn.NOK Sales
Integration Planning Team (IPT)
• Lene Trollnes, Hydro (Lead)
• Erika Ahlqvist, Sapa (Deputy)
• David Holden, Hydro
• Stener Finsrud, Sapa
• Liv Tvenge, Hydro
• Susanne Rothstein, Sapa
• Cathrine Øverli, assistant
• Legal counsel NewCo
• External resources
Profiles Europe Profiles
Americas
Profiles Asia Building Systems Tubes
Communication
HR & Org.
Legal
CFO area
Project Owner
• Svein Tore Holsether
Business area specific work streams Cross NewCo work streams
• Head of IPT
• Employee representatives
Sapa: Kenneth Hertz
Jan Hermansson
Hydro: Tor Egil Skulstad
Dietmar Gärtner
• Legal
• Selected members of NewCo mgmt
Reference group
Steering Committee
Appointed Members of NewCo management
Advisory board
Commercial Sourcing
Corporate functions & staff specific
R&D / Go to market
2 3 4 5 6 8 9
Restructuring support (Clean team)7 10
11 12
13 14
DEDICATED LEAD FOR INTEGRATION PLANNING
17
MANNING PROCESS
– STARTS WITH ORGANIZATIONAL DESIGN
Phase I Phase II Phase III
End of Year Closing Announcement (October) By February 15
18
Proposed organizational design
Nominated candidates for level 2
External assessment of
nominated candidates
Internal interviews of
nominated candidates
‘Select’ and communicate
Run similar process for
level 3
BEST FAIR
TRANSPARENT
COMPLIANT
OWNERSHIP
SYNERGY
BALANCE
GETTING THE LEADERSHIP RIGHT
19
The corporate management team was set already before the first announcement
The level below (L2) was chosen in a thorough and transparent process
Most L2 leaders were communicated well in advance of the closing
Clear process for level 3 and 4 established before closing and HQ level 3 and 4 were
in place already before closing
THE INTEGRATION PLANNING COMMUNICATION
20
Monthly newsletters translated into
17 languages
Integration Planning Site with all
relevant information (English)
Monthly union calls with European
union representatives (done
separately in Sapa/Hydro)
Reference Group: Two union Board
representatives from each side and
representatives from EWC
A new Sapa European Works Council
set up during planning period
SAPA’S EUROPEAN WORKS COUNCIL
21
DG4
documents
for review*
Controller
meeting
Redeployment process
Consultation
TRANSPARENT PROCESS WITH FACT-BASED
APPROACH
22
DG0 DG1
DG2
DG3 DG4
DG1
documents
drafted*
Business
case review
DG1
documents*
for review
DG0
documents*
for review
Full project
review
workshop
Final DG 3
document*
review
Pre –
announcement
communication
review
Ready to go
EWC WC information
Road Map
locking
Execution
Announcement
DG5
* Templates available
Info. to Chairman
of the Board
AUGUST 19 2013 WE FINALLY GOT AN APPROVAL FROM
CHINESE COMPETITION AUTHORITIES
23
SAPA’S BUSINESS PRIORITIES WERE CRYSTAL CLEAR
24
Retain Business
Extract Synergies
Improve margins
Clarify strategic direction
Build future organization
Year
1 P
rio
rity
Low
High
1
2
3
4
5
While never compromising on safety or compliance
100-DAY PLANS ALL DELIVERED ON BY END OF 2013
25
RESTRUCTURING DONE QUICKLY FOR THE BENEFIT OF
EMPLOYEES AND COMPANY
26
15 main restructuring projects have been announced:
1. Bedwas (UK)
2. Bolzano (Italy), divestment
3. Fossanova (Italy)
4. Guelph (Canada)
5. Hannover (Germany)
6. Harderwijk (The Netherlands)
7. Haticon (Germany), divestment
8. Miami (USA)
Divestment of MPE operations in Harderwijk (NL) and
extrusions in Raufoss (Norway) due to decision by EU
Competition authorities
THE LOCATIONS MARKED WITH RED ON THE MAP IS LOCATIONS THAT HAVE BEEN
CLOSED/SOLD
9. Pinon (France)
10. Seneffe (Belgium)
11. Vetlanda (Sweden)
12. Workington (UK)
13. X-docs (France)
14. Corporate overhead
costs
15. Salko (Finland)
Magnor
Finspång
Vetlanda
Sjunnen
Birtley
Tibshelf
Cheltenham
Bedwas
Feltre
Ornago
Bolzano
Atessa
Fossanova
Luce
Pinon
Chateauroux
Albi
Toulouse Puget
Perfialsa
Avintes
Pinto
Miranda Navarra
La Roca
La Selva
Raeren
Eupen
Lichtervelde
Hoogezand
Hardewijk
Drunen
Chrzanow
Uphusen
Rackwitz
Bellenberg
Nenzing
Offenburg
Trzcianca
Kofem
Ziar
Chișineu-Criș
Santa Oliva
Hannover
Seneffe Haticon
Tønder Workington
Salko
SAPA’S EBITDA IS MOVING IN THE RIGHT DIRECTION
27
1 091
1 916
0
500
1 000
1 500
2 000
2 500
2013 2014
MN
OK
WHAT DO WE DO?
CREATING THE JV
FUTURE OPPORTUNITIES
28
GLOBAL ALUMINIUM DEMAND EXPECTED TO GROW
ACROSS REGIONS AND SEGMENTS
STRONG DEMAND DRIVERS IN KEY ALUMINIUM SEGMENTS
29
SOURCE: CRU, HYDRO ANALYSIS
Urbanization
Substitution from copper
Urbanization
Housing market recovery in mature regions
Energy neutral buildings
Improving industrial sentiment in mature regions
Manufacturing activity and industrial growth in
emerging countries
Urbanization
Environmental friendly solutions
Transport
Building &
Construction
Electrical
Machinery &
equipment
Packaging
Growth in automotive vehicle production
Aluminium content in cars increasing
Growth in other transport modes, e.g. railway
25%
WE’RE PROUD SUB-SUPPLIERS IN NICHE MARKETS
31
KEEPING THE DESIGN, SHEDDING ~400 KG
32
LEONI HAS PARTNERED WITH SAPA IN REPLACING COPPER
WITH COATED ALUMINIUM IN ITS BATTERY CABLES AND
JAGUAR HAS DONE THE SAME
33
SAPA AND TESLA IN NORTH AMERICA
- GLOBAL OFFERING LOCALLY
34
100% committed to Aluminium
Tesla Model S • 5 Star Crash Rating
• 416 HP
• 482 km Per Charge
35
HIGH-END CAR BRANDS ARE LEADING THE WAY
36
SAPA AND FORD F-150, A MULTI-PLANT DELIVERY TO
THE AMERICA’S HIGHEST SELLING VEHICLE
37
PICTURE WITH COURTESY OF FORD MOTORS
LEGISLATION IS KEY DRIVER FOR GROWING INTENSITY
IN AUTO SEGMENT
US: CAFE TARGET EUROPEAN UNION: EMISSIONS TARGET
38
SOURCE: CRU, HYDRO ANALYSIS * CORPORATE AVERAGE FUEL ECONOMY (CAFE)
UTILITY TRAILER
– LIGHTWEIGHTING AMERICA’S TRANSPORTATION
39
100%
40%
WE WILL HAVE TO RE-THINK DESIGN TO MEET FUTURE
ENVIRONMENTAL REQUIREMENTS
41
UTILIZING OFFSHORE OIL AND GAS TECHNOLOGY TO
DEVELOP A NEW BRIDGE CONCEPT
42
ALUMINIUM SUBSTITUTING COPPER IN AIR CONDITIONERS
– PANASONIC DRIVING THE CHANGE
Sapa has developed a solution of aluminium
tubes with helical grooves
Panasonic awarded Sapa the ‘gold’ prize for
innovation in their Annual Supplier Awards
Sapa has entered into a significant supply
contract with Panasonic
43
EXTRUSION OUTLOOK IMPROVING
44
SOURCE: CRU AND HYDRO ANALYSIS
EXTRUSION DEMAND, SELECTED REGIONS
-10,0 %
-8,0 %
-6,0 %
-4,0 %
-2,0 %
0,0 %
2,0 %
4,0 %
6,0 %
8,0 %
10,0 %
2012 2013 2014 E 2015 E 2016 E
North America Europe
YoY-growth
EXPECTED MARKET DEVELOPMENT
65%
13%
12%
4% 3% 3%
Construction
Transport
Machinery & equipment
Consumer Durables
Electrical
Other
GLOBAL SEGMENT COMPOSITION,
EXTRUSION
• US housing market sustaining positive
momentum
• Construction activity in peripheral Europe
showing signs of recovering, although from
low levels
• Growth in transport segment
(2013)
45