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Executives

Rikard Lindqvist - IR

Svein Richard Brandtzaeg - President and CEO

Jorgen Rostrup - EVP and CFO

Arvid Moss - EVP, Energy and Corporate Business Developmen

Erik Fossum - Head of Commercial in Primary Metal

Hilde Merete Aasheim - Head of Primary

Johnny Undeli - Head of Bauxite and Alumina

Analysts

Hans-Erik Jacobsen - Swedbank

Bengt Jonassen - Carnegie

Tom O’Hara - Citigroup

Petter Nystrom - ABG

Norsk Hydro ASA (OTCQX:NHYDY) Capital Markets Day 2012 Analyst Call November 29, 2012 3:00 AM ET

Operator

Good morning ladies and gentlemen and welcome to Hydro’s Capital Markets Day. Welcome to those who joined us here in Oslo and those following us on webcast. Let me find this one. Let's first start with safety. In case of an emergency where we need to evacuate the room, please exit the room calmly, turn left and then emergency exits will be on both your left and right hand side. Then I would like to draw your attention to the cautionary notes in relation to forward-looking statements. It has been provided in the presentation material and is showed on the screen.

Let's then go to the agenda. 2012 has been an exciting year for Hydro, and I think we have put together an interesting agenda. We will start first with the overall Hydro perspectives by President and CEO Svein Brandtzaeg. He is followed by CFO Jorgen Rostrup, who will give a financial update. The second session is started off by Head of Energy and Corporate Business Development, Arvid Moss who together with Erik Fossum, Head of Commercial in Primary Metal. We’ll go through the markets our expectations and a deep dive on inventory premium and financing deals.

Market is followed by primary metal where Hilde Merete Aasheim, Head of Primary will take you through the status of the $300 program and how we bring those earnings into our joint venture portfolio. The third session is started by Head of Bauxite and Alumina, Johnny Undeli who will tell you what's going on in Bauxite and Alumina and focus on the improvement efforts going on.

After each session we will have opportunity to ask questions to the ones that have presented, and at one o'clock we’ll end the day with lunch. Then enough about the agenda; but before I turn to stage to President and Chief Executive Officer, Svein Brandtzaeg, let's have a look at this.

[Commercial]

So let's see if we have to look at this without sound this time. Maybe we can come back to it later. Okay. Then I turn over the stage to Svein Brandtzaeg.

Svein Brandtzaeg

Thank you very much. It’s very good to see you all here in Oslo today and also welcome to those that are following this through the webcam. We have a long day with several important topics and we will give you a deep dive into the world of aluminum and the world of Hydro. We will go to the market update. We will give you a stake list on the books at alumina on the $300 program, Qatalum and/or our financial situation and much more, and of course also give you an update on the new joint venture deal we did on Extrusion.

We will also try to answer some of the fundamental questions that I am sure that some of you have today. What are the main building books of Hydro going forward, how are we meeting the discrepancy between the current challenges in the market and the future opportunities in aluminum? How do we move towards being a performance benchmark in the aluminum industry and not at least also the direction and strategy of the company?

But let’s first take a look at what has happened during last year’s with Hydro as a streamline focus integrated aluminum company. We introduced the $300 program in 2010. That has been developed further. We have started the Qatalum after the construction was finished in 2010. Not at least we acquired Vale aluminum assets in Brazil, and just a few weeks ago, we announced the joint venture in Extrusion with Orkla, the new software company.

So for us, it has been exciting journey and the aim Hydro and for me as a CEO is to create Hydro as an industry leader in aluminum with opportunities and also as a resource rich company. I visited Qatalum last week and I am very happy to confirm that Qatalum is running at full speed in both name plate capacity and at very good performance at [power] metals.

We have a very good relationship with Qatar Qatalum. We have a very strong organization in more than 30 nationalities, strong leadership and we continue to drive Qatalum in the direction where it should be; one of the few best aluminum smelters in the world. It is already today operating in the lowest first quartile on a cost scale.

Some of you have been visiting our assets in Brazil and just a couple of weeks before you were there I also went to Brazil to have a look at it to prepare the ground for you. It was also for me interesting to see the development, because since we closed the deal in February, end of February, 2011 we had improved the bauxite production to more than 40%. Johnny Undeli will come back to that later today.

It’s also good to see that the huge aluminum refinery Alouette which is the biggest in the world is also operating at continuous higher level after we closed the deal and we see further potentials in that direction. The Sapa joint venture is another strategic move for Hydro where we after closing which hopefully will happen in the first half of next year subject to approval among the competition authorities. It’s a very good industrial solution, but first of all it will be the biggest and the most competitive extrusion company in the world. It will have strong [results] in the North America market in addition to the European market and also good position in emerging markets. The synergies is about NOK1 billion per year and we will have 60% ownership, there will be a 25,000 employees and the turnaround in this company will be almost NOK50 billion the regional.

Could you go to the construction which is important? It is at least and even more important to run our operations better and better everyday. That's why we have in addition to the $300 program introduced improvement programs in all parts of the value chain of Hydro. We introduced this year the B to A program in bauxite and alumina which John Undeli will come back to. Hilde Aasheim will talk further on the $300 program which is moving according to plan.

Coal products is continuing with the Climb 10 program, and Oliver Bell is responsible for all products. This is also moving according to plan and we continued Mission 1000 which is the improvement program in extrusion even the Sapa joint venture deal has been signed.

So we continue with improvements everyday in Hydro along the whole value chain. I know that you appreciate the companies that are setting high goals, but even more companies that are delivering on what we talked about, and just to make a recap of what we said last year, we can confirm that we have been improving our relative position with our improvement programs and we continue everyday to focus on operation excellence. We develop commercial opportunities, there are several examples, but I think one of the best examples is again what we do in bauxite and alumina that’s supporting the index pricing, commercializing that in a new direction.

We are also selling bauxite to China as it is today, but I will come back to that. And I know at least I think when you got to the management of the portfolio they are many smaller examples, but I think the joint venture Sapa example is the best one, the last year. So if you take a closer look at Hydro, we are now an integrated aluminum company with very strong positions along the value chain.

We have in terms of the balance sheet two things actually. But we should not forget that we also have leading positions downstream in both and all products and at least in extrusion, in connection with the joint venture. So we know that there are several stakeholders that appreciate this set up of the company and some of the most demanding aluminum customers in the world, the global companies they are really appreciating that they have a supplier that has integrated value chain. And we have a company that can see the customer all the way through the value chain and customers where we are sitting together and developing the next generation products where we have a direct feedback into the [existing part] where we can also react very fast according to the news in the downstream market.

Geographically we have a global position. We are participating in the global industry and metal is priced globally, so it is important for us to have this global position. We have of course strong (inaudible) in Norway, but we have more employees today in Brazil than in Norway and we have similar number of employees in Germany as we have in Norway. We have a world class asset base that we can develop to capturing more value, and in the field of development as we see in the market there also will be more and more aluminum, but we will also make sure that there aren’t several [hurdle] going forward.

So let's then take a look at the market which is challenging, but I remain positive with regard to the future outlook and the further opportunities in our business. The dilemma in this industry is first of all that the growth of aluminum is faster and higher than any other base metals. But at the same time, on the right side you see the red curve which is the price development of aluminum which is lagging behind the price development in other metals.

So all-in-all their price levels as it has been lately is not adequate to give returns according to their shareholder needs and also according to our ambitions. But looking at the growth curve, which will continue, it is clear that this is not a question about supply-demand balance. It has been a strong appetite for investments in capacity and for many years there has been higher appetite for investments in capacity than even the growth curve has been able to follow.

So for us it is very clear that we have to influence on what we can do and that is operational excellence and improvements of the assets we have today. Looking at world economy and the situation in the different regions like North America, Europe and China, we see today that there is momentum of growth in the American market, in North American market and we expect in fact next year to be fairly strong growth in the US market.

In Europe, we see obviously a low level. We expect to start this quarter on a low level. In Europe, of course, very weak situation in the south, better in Germany and in the North. China has shown lower growth rate lately, but still at a very high level compared to other regions. China is changing the economy from being very much dependent on export and on investments to be more consumption driven economy.

That is not necessarily a disadvantage for aluminum, because there are several aluminum applications that is also driven by consumption, and in a consumption driven economy we are not negative to that development on behalf of aluminum and we're not concern about that. But all-in-all, it’s a volatile situation; there are uncertainties in the market. But we see emerging markets as a positive drive and also North America moving out in the right direction. Europe is really the weak part as we see it going forward.

Let me go to aluminum prices. It is low level, below the level where we can give adequate returns to shareholders. It is volatile; also they give out signals in the macro economic environment. So what we saw in September the peak that we saw, the aluminum went up almost $400 per ton as a result of the quantitative easing in the US and European market, a signal that something could happen. But we all know that central banks can only sell time. They are not solving the underlying issues. So what we saw was the affect faded away after some weeks and month, and we are now still at the entry level for the aluminum industry between $1900 and $2000 per ton.

If you then take a couple of examples Europe and US are two market segments that are the most important one in aluminum, automotive and transport and building and construction. On the left side you see the indicators for automotive showing that the US automotive production and demand is back to pre-crisis level, while in Europe the situation is much weaker.

Germany has been supported by exports to Asia especially high exclusive costs to China. On the other side, if you take the construction indicators, there is improvements since the beginning of 2009 going forward specially in the US market and specially lately in the US market. But Europe also in that respect is weaker than what we see in the US market. So we see that North America and Europe is developing differently.

But longer term I am convinced that the world will need more and more aluminum, as millions of people will continue to climb off the poverty into the middle class. This will require more resources, more energy, and we know that growth is a very important part of the solution, but this growth has to be sustainable. And to meet the climate challenge aluminum will be an increasingly important part of the solution. So we see an emerging market, the drive for aluminum in infrastructure, we see in mature market drive of aluminum solutions to reduce energy consumption.

So our several projects that we are actively participating in market segments, where we see growth in again in electrical cables, packaging, construction, building in emerging markets, and the immature markets in the western world. We are focusing very much on energy efficient solutions. Of course we are also looking at ourselves and have a strong development in our energy efficiency targets and projects in smelting, for example where we are working to reduce energy consumption, but here also driving forward to development energy efficient building solutions.

We are supporting more and more aluminum to automotive in order to reduce fuel consumption and CO2 emissions, and we see very interesting opportunities in several other areas, and I will come back to some of them. But in general, we expect 4% to 6% growth going forward from 2012 to 2022, next 10 years. It will be slower growth outside China and higher growth in China. But in general both in China and outside China, we expect the significant growth going forward and for the next 10 years.

And then you can ask why is aluminum growing faster then any other based metals? The answer is of course the inherent properties of all metal. It is not only the fact that aluminum has a lower density then steel, copper and other metals, its about one-third of the density compared to steal and copper. It is corrosion resistant metal, and as you see on our cans outside, in fact there is thin bauxite layer that protects aluminum from further corrosion. It’s a non-[metallic] layer. And if you think about what is nano metal. I can tell you that it’s the length you fingernail is growing in one second. That is one nano metal.

And this is the protective layer that is outside that prevents corrosion. It is a metal with free electrons which means that it has good electrical connectivity and better electrical connectivity than most other metals, and materials with good electrical connectivity have also very good thermal connectivity which is the case with aluminum. So it’s also used in heat transfer application and in addition to electrical applications.

So there is a wide range of capabilities of the metal, and if you go down to the atomic level it’s a (inaudible) cubic structure, which means that aluminum can be formed into very complex shapes in a very cost efficient way. It can be rolled on to very thin layers like the thin gauge foil for flexible packaging which is six micro metal thick.

Oliver Bell is producing that at a speed of almost 2 kilometers per minute, and its oxygen barrier and its delivered to tetra pack in 2 meters wide and 300 kilometers length in one piece. So it is also production technologies that we have in our company that makes us very competitive in the aluminum industry.

If now take a look at some of the segments like automotive and transport, we see all Body-In-White as a very interesting segment. We have invested in that recently and we have a leading technology. We have also received the Technology Award in (inaudible) recently in that segment. The reason for the growth there is of course that the automotive producers have ambitions to reduce CO2 emissions. And as you see for each kilo of aluminum is substituting steel the CO2 emissions is going down and of course the fuel consumption is going down. This is one of the driving forces. This was mainly a product for the high cost exclusive cost, but we see now increasingly that there are also high volume costs that are using more and more Body-In-White components going forward. So this is a very important market for us.

Another interesting segment is the Heat Exchanger segment. 15-20 years ago you would find copper radiators and copper air condition systems in cars. Today you have to search very good to find copper, because aluminum has taken over most of it. And now we are looking also in the so-called non-automotive Heat Exchanger segment which is heat ventilation, air condition and refrigeration applications.

Aluminum has a big advantage in that segment due to our connectivity, but also very cost efficient and we are producing several products in this segment both getting off the extrusion products but also in the whole products clad in materials which is consisting of different layers of alloys which is altogether. The one layer is for heat transfer and two layers can for example be used for solidifying the metal in the Heat Exchanger production. So this is also advanced production technologies and advanced products with interesting margins for us.

So this is important substitution market going forward, and not at least construction and building. Of course in Europe, a weak market and US growing and also in emerging markets growing fast, but an underlying driving factor that we will support is the energy efficiency in buildings. We see that buildings are consuming almost 40% of the global energy consumption, 40% of the CO2 emissions coming from the building.

So this is an area where we can contribute and we have already developed the next generation building solutions in aluminum and glass, and the reason for aluminum in that respect is again the need for very complex shapes which is difficult to make in other materials than aluminum, because the permeability of aluminum is so good that they can make these form of complex shapes in very cost efficient way. And we have also not only developed energy neutral building solution, but also energy positive building solutions.

So we have today the technology for the future. And if you then take a look at the total view, the market has developed during the last year in to situation where we have a tremendous inventory. That was built after the financial crisis in 2008 and 2009 due to over supply. It was higher supply than demand for quite a long period.

The volatility continues but we also see a change in the market where the LME price is continuing at low level, but we have had increasing premium on (inaudible) based on our ingot. You can say this is artificial. It helps the (inaudible) so to say that we have LME and a very high standard ingot margin that could put pressure on some of our metal products that you are selling into the market.

But what is positive in this sense is the development that where see now during the last months that we are moving into a situation where it is much rather balanced between supply and demand and that is also what we expect going forward. It is of course due to the growth but also the fact that there has been some curtailments in the industry lately.

If you then take a look at bauxite alumina, it is very important to focus on the development in China, because China is now depleting their bauxite resources, they are very much dependent on import and they have been very much dependent on import from Indonesia. And there has been a significant reduction in the export of bauxite for Indonesia in May, June.

We have seen that the alumina import is increasing, as I mentioned we are selling all bauxite from some loads from Brazil to China, so China is now looking also in the Atlantic region for bauxite. And we see that the pricing of alumina is changing from being very dependent on LME, it has been a fixed percentage of LME previously and they are now moving into a index pricing. And in spite of the volatility where we have seen on the LME, that’s quite stable alumina prices during the last year.

And if you take alumina price today and convert it into the old method in percentage of LME, it is now around 17% of LME which is a fairly high level and which gives us quite interesting prospects with regard to the commercialization of alumina going forward. So how are we then meeting the current challenges that we have long term opportunities that short term challenges with low prices and level of LME, where we are not able to deliver adequate returns to the shareholders?

As I mentioned for us, it is about influencing what we can do and that is of course to look at the performance level, and I will show you now a couple of slides where we show over position compared to our competitors in books of alumina and smelting. This is taken from official reports. So there are of course some uncertainties in these figures, but still it gives us an indication where is our position in bauxite alumina and in the smelting industry.

So let's start with bauxite alumina which it shows here. First of all this is based on EBITDA margin per ton and we see that EBITDA margin per ton is going down since first half 2011 to first half of 2012, very much due to the market separation in general. But as you also see is that our position is among the best, it is the best as it shown here, and this is just confirming what dealers have said when we acquired the [all] assets in Brazil that we felt that these assets are among the best in the industry, and this figures shows that we have the highest EBITDA margin per ton in this industry.

If the go take a look at the smelting side, also there the EBITDA margin per ton is going down overtime in this period, but Hydro is strengthening our position. We have been close to the middle but we have ambitions of course also have to be among the best and this is reflecting again the result of the $300 program in primary metal that Hilde Aasheim will come back to later.

There's another dilemma of course and another reason for the low returns in aluminum and that is related to the raw materials. Whether we are talking about raw materials for bauxite aluminum or for aluminum production, the raw material has increased; the market price is going up significantly at the same time as the LME has been weakening.

So this is putting an even stronger pressure on the margins and gives us even stronger incentives to work on what we can influence on which is the operational performance of our current assets. So let's take a look at that. First of all bauxite aluminum introduced this year the BTA program which is very much about improving the cost position in our upstream business and our raw material business, improving the performance both in Paragominas bauxite mine and Alunorte refinery.

This is important productivity increases stabilizing production at higher levels, better maintenance systems that we have improved significantly since we closed the deal, but we still have potential and our several other factors on the production side. In addition, it is the commercial areas but there will also be contributions in bauxite alumina going forward.

Their mission is to deliver half of the target which is 1 billion in 2013 and the rest in 2014-2015. So there is ambitious program or so in the bauxite alumina business area. The $300 program that Hilde Aasheim will come back continues according to plan and we are now at the $235 per ton that we promised one year ago. This is last $65 per ton is to be delivered in 2013. This is also of course about operational excellence which is easy to say but it consists of hundred of (inaudible) improvements, it’s a new way of working in our fully owned smelters and we are definitely seeing that the operations are going better day by day and status quo has been established as no alternatives and additional level in each smelter to do the work better tomorrow than what it was done today.

We continue with our execution program, the Mission 1000 in spite of the signing of the joint venture with Orkla. So this will continue into the closing and also beyond closing. This is about also adapting the capacity to the market, productivity improvements; it’s about right sizing the organization. We have closed on several units and of course this is a process that will be very important to bring the profitability in this area back to where it should be.

It has been over several years’ business that had delivered returns above cost to capital and of course ambition going forward. In the whole products there's also interesting developments. We have done optimization of the portfolio some time ago where we divested in [ASA]. We have streamlined Malaysia or (inaudible) and we are continuing to high grade the portfolio in the plots. This is about moving the capacity over the products that gives us higher margins that for example automotive (inaudible).

It is definitely also optimization between the different plants that also has been ongoing for a while and continues. It is about cost reduction programs and capital initiative. The picture on the left side there is picture of battery with aluminum foil. This is the next generation battery for automotive and electrical cost. Interesting products but there are also many other interesting products.

Foil and litho (inaudible) materials I talked about foil and I talked about (inaudible) materials. Litho is quite interesting material also. The custom order is not caring very much about what metal it is, but they are caring the surface. What they pay for is the surface and if the surface is not perfect down to the atomic level, they will have problem with the printing. So they have extremely high quality requirements for these products and these are the kind of products that we like to produce because these are the high margin products. We have 50% ownership of Alunorf which is the biggest and most cost efficient rolling mill in the world.

We have 100% ownership in the biggest finishing mill in the world in Grevenbroich. These are I would say the best, but we also have the satellites which is supporting the (inaudible) market. Some other products we are producing is global products. So we are exporting, and some other products are for consumption in Europe like cna, flexible packaging, aluminum for flexible packaging and we see that consumption in Europe is in fact quite stable.

We continue to develop new products and applications together with customers and we see that our customers are appreciating that all products is still in area where we have technological leadership. We have a mission to strengthen this technological leadership, obviously a big advantage when we are talking about the most demanding customers in the market also in all products.

In energy, we continue to optimize the production. We have 9.5 terawatt hour nameplate capacity or that is a capacity on a normal level. We have been producing more than 11 terawatt hour when the precipitation has been high. We take of course around 7 terawatt hour into aluminum production and the rest we are selling in the market, and market optimization here is quite interesting for us, because there is some volatility in the market and our people in the energy working for Arvid Moss that will present also the market later today. He is very clever in running and optimizing the production according to the optimization of what is necessary to optimize the market position.

So we utilize the flexibility in our hydro power stations where it is possible to take hydro power station from (inaudible) to zero in 10 minutes. And opposite we can start up hydro power station from CRO to full speed in 10 minutes. So we dig off the fluctuation of prices over the day, it is good utilization of that flexibility to create even more commercial value, if it is a solid cash roll from this business of course irrespective of LME and it’s a very strong good assets for Hydro.

I will say that there are two tasks for Arvid Moss and his organization. It’s about running the power stations and optimizing the commercial opportunities in the best possible way, but also to make sure that we have cost efficient sourcing globally in all assets, whether it’s smelters or bauxite alumina assets or all in one. So the competence we have its unique in that respect that we have organization that is commercially active in the Nordic and then European market, but also have competence to make sure that we have competitive sourcing for our other assets globally.

And of course, we are continuing to developing our power assets. We have the upgrade of the Rjukan system, first stage very successfully. The project was operated by our own project people with (inaudible) possible and it was done in the very safe way. It was lost water then plant, it was better than planned and always and in all respects, and we are continuing with the next stage, next year.

We also expanded our production of hydro power with some minor projects, but significant projects in Holsbru and Vasstol and the target for us is to lift the normal production from 9.5 to 10 terawatt hours per year. Not at least, we also are focusing very much on the important factors like health safety environment, corporate social responsibility and compliance. We see very close relationship between this factors and operational performance, and of course the most important assets for us is our people that are operating different environments that also have to be operating in a safe manner in compliance with our regulations and also in the local societies and the challenge is that is related to the local requirements in the right way.

We are measuring this progress in different ways. One way to measure it is on total recordable injuries, but we have done substantial improvements and we are down to the industry benchmark levels today, but our ambition is of course to do even better next time. For those of you that visited Brazil lately probably also saw what we are doing in cooperate social responsibility supporting local communities, building competence locally so we can have competent local people that can operate in remote areas in Brazil.

And when I was there last time I felt being in Paragominas in 2012 was like probably similar challenges that actually we had in Rjukan and (inaudible) 100 years ago. But the society in Paragominas is developing very positively and we have very good relationship with local communities. Our growth agenda going forward is of course quite interesting in many respects. We have the car project in Brazil some of you have already visited the site. We have postponed the car project due to the supply-demand balance and the market situation. We have Qatalum 2 where we also are postponing the ramp up of the Qatalum smelter and we have partnerships and joint venture but also opportunities for expanding capacities.

We know that the industry is changing and the landscape in aluminum will be different in the years to come, and we will make sure that we have the freedom to participate if it creates value and also the freedom to sit on the fence and let the changes play out if that makes more sense for the company. We will also make sure that we will keep the financial strength and flexibility going forward and Jorgen will come back to that later today.

So finally the value proposition for Hydro going forward is very much linked to the assets we have that we have improvement programs in place and we have a track record also to deliver on what we promise on our improvement programs. We will definitely capitalize on our strong raw material position in bauxite aluminum. There's a positive development not only in volumes but also on opportunities in commercialization in that area.

We will maintain the financial strength and flexibility going forward, and of course we will work very hard to ensure improved shareholder return. And for those of you that are going to invest in aluminum, I will make sure that I will do everything I can to make sure that Hydro is the best alternative. Thank you very much for your attention.

Rikard Lindqvist

Thank you Svein. I will invite you back to the stage in half and hour or so but before that we will have a financial update by Chief Financial Officer, Jorgen Rostrup.

Jorgen Rostrup

Thank you Richard and let's then add some financial comments to Svein Richard’s comprehensive walk through of the status of Hydro and end markets. And first of all we will touch on the financial and shareholder policy and we believe we have a robust financial position and when we say that way, we believe that this provides the best building block for all our decisions and priorities going forward.

You will also see here that we have regularly reported to you the adjusted net debt number, taking that. We use to call it taking the rating company perspective on our responsibilities and debt positions. This is significantly down they way we look at it in Q3 compared to what it was at the beginning of the year. It’s down by more than 6 billion. The reason for this is that it is related to Qatalum, the joint venture smelter we have and what is considered to be our share of the project finance debt in Qatalum.

There has been completing guarantees on their owners on the two owners of Qatalum related to the project financing as natural it is. These are no longer in effect. The Qatalum smelter this summer met all criteria on the operational performance test related to project financing, and hence there are no completion guarantees anymore and hence we have taken this out of our view of adjusted debt according to also the perspective of rating companies.

We will of course going forward on an annual basis report on the debt situation on our joint-ventures, but we no longer regarded as relevant in an adjusted net debt context. If you look at cash flow in 2012, we had an underlying EBITDA of 5 billion for three quarters, then we have other adjustments which are predominantly [share] this is taxes and also the cash effect of restructuring programs where you have the P&L effect in 2011. These taxes are also coming from somewhat higher earnings levels than what we see today.

Then on the investments similar to the net cash flow of 2.4 from operations and then you have dividends and this is three quarters and not a full year equation. So if you look into more normalized picture for quarters and may be with the less cash effects on restructuring and also a somewhat different tax level or tax payments, we believe that our robustness is so that we are around the price level that we see today are able to service our investments. May be I will also come back to that below or next year than what is the estimate for this year and also the dividend level that we see today.

Then briefly address three elements of capital allocation for you. I think you have heard us say this before and you heard Svein Richard say it, we are very concerned about maintaining a solid balance sheet. We think that is very important for us being in such a cyclical industry as aluminum definitely is. And in spite of the challenging markets that we have seen in the last few years, we have been able to finance and to support the development of Qatalum. We have been able to do the acquisition in Brazil and we have been able to embark on creation of what we believe will become a leading extrusion company. So its fundamental for us in these markets to keep that flexibility as Svein Richard talked about and the building stone for that is to maintain a solid balance sheet and a solid liquid position.

At the same time, its obviously a step concern for us to create shareholder value, and I think it is fair to say that we believe we have not deliver sufficient shareholder return in the last few years and also as clearly as Svein Richard stated that earnings industry has not been good enough. This is on top of our agenda and we are as we said concentrating on what we can do, and we are getting some comfort in the fact that we believe we will see that we are improving our relative position.

Also we have exciting investment opportunities, we are interested in growing the company, but we will embark on very few very limited possibilities going forward in order to maintain those two other elements that we have been talking about. And we also think that in these kind of markets opportunities could arise as easily outside our portfolio as within our portfolio.

Let us talk a little bit more about this; balance sheet, good balance sheet, strong balance sheet and high and good liquidity is the most important tool we have against the volatility and for being able to act out of strength when that is relevant. We have $8.7 billion tuned at Q3 cash in the company. In addition we have the standby facility USD $1.7 billion. It’s not drawn on today. It is maturing in 2014 but its there. And we also this summer raised NOK1.5 billion in a bond issue.

You should not be surprised to see us looking for more long term financing going forward. Whether that is to continue and establish a new credit facility or it is to go into the US bond market with longer money that remains to be seen. But of course we are looking in that direction without any special urgency as we can understand due to the solidity that we feel today.

We have a stable triple B flat rating as a company. We feel this is at a comfortable level. We sometimes take and where by again I discuss and we say that well we actually deserve to have another shot we think, but we are obviously careful saying that in public. But we are comfortable at this level. We feel it gives us access to the relevant markets and we believe it should give us competitive turn in the bond market when that is the situation. So this was the pitch to the banks in the room.

We are striving to bring shareholders return and we are very firm on dividend policy of paying out 30% over the cycle of net income in dividend. We have exceeded this over the last few years in spite of no dividend in 2008. We are happy to have exceeded it, but of course we should exceed it in a situation where we are in low earning environments and where we are hopefully in the lower part of a longer cycle. We have a clear ambition to maintain this and bring shareholders values going forward.

You will see 71% over the five last year in payout ratio. Then you will see somewhat lower number in 2011, but please remember that we had a large revaluation gain on our old ownership of our Alunorte related to the Brazilian acquisition of $4.4 billion which is obviously making a significant impact on the earnings for that year so that is part of the reason why the 23% is kind of falling below.

We always think that the Board of Directors in Hydro are discussing the dividend issue throughout the year and whenever they feel like, but obviously maturing that discussion in the relationship with a Q4 preparations and then announcing their recommendation to the general assembly at the announcement of Q4 results. However, we would like to say that based on the situation as we see today our ambition is to maintain the absolute dividend level for 2012 compared to last year.

When we look at capital allocation you would see that we are approaching somewhat above NOK4 billion in CapEx for 2012. This is again one notch lower than what we guided on last capital markets day where we talked about between 4.5 billion and 5 billion. So we have decided and being able to bring it further down. This is after several years of focusing very concentrated on the sustaining CapEx level.

Obviously with two absolute admissions and that is to maintain the safety and the performance in our operations and not run continues maintenance investments to sustaining CapEx at such a way that you are building up an overhang. So, but we think that the plants are running maybe even better today than ever before and we have at the same time been able to change some of the philosophy around CapEx, investments and thereby getting that number down that has been high on the agenda.

3.5 billion of this is what we call sustaining CapEx and there are some growth money on top. For ‘13 we believe the CapEx number as we see it today will be around 3 billion. At least the sustaining CapEx there will be around 3 billion. We have so far not included any significant growth CapEx in our plants for next year. This is how we see it today. This might change. This is development depending on market development but also how we prioritize some good opportunities in the company according to also how we develop relationships and contracts with our customers.

So it might be a little bit adjusted, but basically right now we assume a 3 billion investment level and this is also significant, this is excluding extrusion products. That's important. This is also significant lower than the depreciation level that we have in Hydro which is for next year approximately 4.5 billion.

Then we need to move in to some technical aspects on the reporting side for a couple of minutes. First of all, we announced the joint venture with Sapa some weeks ago as Svein Richard said we believe it’s going to close during the next half year. And we are from Q4 reclassifying extrusion product as discontinued operation in our P&L and balance sheet reporting, this is as off Q4 2012 which means that we will only have one line of reporting and after tax number without depreciation included in our P&L statement in Q4.

This will also give us light but at a very minor reduction in net adjusted debt due to the reason that we take out operating leases and pension liabilities related to the change of the criteria. The criteria is that at balance sheet date it is highly probable that a deal will go through and the balance sheet date is Q4 and we think it is highly probably that the deal will go through.

After closing we have said that the transaction and the closing could result in a small gain for Hydro after NOK0.5 billion and we will then report it according to the equity method which means that we will take in 50% of net income into our EBIT, our operational result but that is also then including depreciation.

Then pension may be the toughest topic that exist for many of us, but obviously a very important topic, you can hardly open a pink paper these days without reading about pension in one way or the other. We address this every capital markets day and give the guiding on it and we will do that also this year, but we will start it from a discount rates perspective. We have used for the estimates that we are discussing with you here today a 2% discount rates for our Norwegian pension plans.

This is similar to the governmental bonds the risk free interest level. And we believe this is a conservative approach. First of all its conservative because 2 percentage points in itself is a very low discount rate. And second we believe its conservative because we believe there are other liquid interest rate references in the Norwegian market available that could and perhaps should be used. But as you know that is discussion ongoing right now and no conclusions have yet been made. So for this discussion with you here today, we used a governmental bond rate of 2%.

Based on this 2% discount rate which is notch down from last year, we assume that our pension liability will increased to 1 billion going from 8.5 billion to 9.5 billion and that would have a corresponding effect on net adjusted debt as you are used to. If we were to use a different discount rate and it could be in the range of up to 4% using converted bonds reference, you could see a decreased in our pension liability of more than for NOK4 billion. So discount rates are important and this shows something about the volatility and it also shows how rough it is to get a real feel for what is the pension liability at each point.

Then there are a couple of changes I have to take you a notch more. There are a couple of changes on the IFRS side that is important. There has been a corridor approach earlier where we have taken the unrealized gains and losses on pension from period to period off balance sheet. You haven't had to include that in the balance sheet. That has been named as the corridor approach. That one is renewed IFRS rules to be implemented 1 January, 2013 no longer the option, which means that all effects need to be taken over the balance sheet.

And this change we also will of course do and it will not change our net pension liability after tax the way we have reported it, and it will therefore not change our net adjusted net interest bearing debts, because we have always included this off balance sheet item in the way we have presented net adjusted debt for the market and the way we have discussed it.

But the effect here, there is a corridor number of 1 billion so on the balance sheet you will have to add that billion but on our adjusted debt it will have no influence due to the way we have reported adjusted debt since several years. And then lastly our net periodic pension costs. In last capital market area we said for 2012 approximately NOK750 million. This includes between 50 million and 100 million on excluded products so let's say 650 excluding excluded products.

There is again an IFRS change that will influence this. The rule going forward is that you cannot use return on your planned assets higher than the discount rate you are applying. So when we are applying 2% discount rates on the liability side we cannot use more than 2% return on our planned assets in the Norwegian portfolio for example. This is going to take down our assumed return on the planned assets and the effect of that on the periodic costs is approximately 150 million.

So we are then talking about 800 back to a little bit above where we have been but now excluding extrusion and then its going to be split two-thirds on the EBIT, on the operating results and due to IFRS three-quarters on the EBIT result and one-quarter on financial items. This is pension lecture for today.

We are changing the pricing formula for metal sales next year. We have today a three month forward pricing formula of our metal sales. This means that we are realizing the three months LME price with a lag and that lag is a little bit more than three months. It’s actually close to between three and a half to four months due to inventory effects in this picture. This has been done to match our customer pricing. They have historically mostly priced their metal on the three months forward basis and that has been the key reason for doing this. So by doing this pricing formula we have much to customer pricing and still be exposed to the LME but then with a time lag as you know.

And then we have also from you faced the questions about these timing wise, obviously it is a nice element when you look at us versus peers that might have a different exposure to the LME in particular in timing. And it has also to a certain degree created unrealized derivative effects which we will not get rid off but we probably reduce them somewhat.

Since 2009, customer pricing has gradually changed. The customer has preferred shorter durations in order to reduce the risk exposure. We have encouraged that, I think it’s a fair word in order to also decrease our counter party risk. So there has been easy to meet on that ambition, and therefore we're now changing our pricing formula to one month prior to production, bringing again our realized prices close to spot market, more aligned with current customer pricing patterns and it should be very comparable to peers.

We believe, we will then have the LME with 1.5 to 2 months per lag in realized prices. Second quarter 2013 will be the full quarter for this. First quarter will be a quarter of implementations. We also have every capital market day, talk about the updates and the guiding for the quarter we are in, since we meet so many people, it feels natural to do that. This time is fairly simple, it’s very much aligned and in balance with what we said in Q3 the way we see it today. The LME prices are about the same level, maybe a little bit pushed downwards but more or less at the same level that we commented on.

The [plots] alumina index is showing the same picture and we guided on the fact that we had sold 85% of our metal production at $1925 a ton in the third quarter. We guided that for fourth quarter and that is obviously still the case. We did comment on seasonal decline downstream as a normal development throughout the year and we put a special comment on it in third quarter which is still valid and that was that a [role] showed a fairly robust result in Q3 meaning, less seasonal downtick from Q2 to Q3 that what you normally would see.

So therefore we said in Q3 that you could expect that Q4 will be with a higher relative shift in the seasonal decline from Q3 than given the fairly good earnings that we saw in Q3 and that is still valid. We said energy production up Svein Richard commented on the Rjukan as very happy to see that in full production again and demand is good and the prices is about twice the level that we saw on an average for Q3 now in Q4.

So uncertainty micro picture the detailed guiding is about the same level as we talk about. Svein Richard and both Johnny and Hilde will take you through the improvement programs in a forward looking picture, and I would just give a status of the absolute effects very briefly now. As you can see this picture shouldn’t be any surprise to you, it’s not us we have seen the results the coming down the last few quarters. We believe it’s mainly due to reduced prices and the raw material squeezed that we have been in, but we have seen a negative trend in results which hopefully is flatting out soon. And this is in spite; we have seen significant improvements in our portfolio and in our performance programs.

Primary metal is well underway to deliver the $300 that will set out for the 100% owned smelters. We would say they are 75% dumb and have the remaining 25% setout for next year. And the affect of this is that in the 2012 numbers when you compare that program to 2009, its NOK1 billion in improvement all other things equal on the primary metal side.

And at the end of next year, assuming that Hilde and her group has concluded the program around US$300, the difference will be 1.4 billion in improvement from this program ’09 versus 2013, so it’s a significant program. Likewise on the extrusion side which started one year later and we are here saying EUR55 million at end of this year, and we are very confident that we will reach that number or even somewhat more this year, so its more than 400 million in improvement.

And then as you saw on previous slide, we don't see it in the numbers, and it is for the reasons of the very tough price picture that we are facing in on LME and significant weakening in the European markets on the downstream side in particular on extrusion, but at least and internally our comfort is that it would have been much worse if we hadn't done this in the right time and with the force that we have done it.

Capital discipline in all aspects is a focus. We have as we said reduced sustained capital levels, but are still very comfortable at those levels that we are spending. Net operating capital is obviously also a key focus for us. It’s difficult. It is really influencing the whole value chain and the way we do business but we have been able to gradually move this number down over the last few years and we will constantly work to try to continue to do that. It’s important its freeing our cash and then there is a constant balance with how we do the business and being able to serve our customers in a very, very good way. So its important work.

Then towards the end now let me touch on some sensitivities and then on EBIT scenario. We will present some numbers of sensitivities for you to build your understanding of Hydro and our earning capabilities. I need again to repeat a few disclaimers. Remember on sensitivity the starting point is crucial. If you are thinking about the metal LME price sensitivity of Hydro, its very important what dollar Norwegian kroner for example assumption you have and vice versa. So the starting point we need to be sensitive too. And models are highly simplified, its no accurate answer of all price movements of all currency movements, it’s one dimensional adjustments which also means that the negative correlations that historically have seen between dollar level and the LME metal price has not been taken into consideration in these models. And then the dilemma of course around the complexity versus making something that is useful.

And most of this will be in the handout for your reference. I'll just show you a couple very briefly. The largest impact of our earnings is of course the LME price and on the currency side the relationship between the Norwegian Kroner and US dollar. The LME total group sensitivity is on 10% around the existing price environment that we see, a 10% change in LME will have an effect of, an annual effect of in the order of 2.7 billion on our earnings.

And if you look at 10% change in the relationship between Norwegian kroner and dollar it is more in the range of 2.1 billion for a 10% move in that number. Also BRL is important as you know since we have, we are carrying a substantial cost base in Brazilian reals and the sensitivities are here as well and then we have some US dollar nominated loans predominantly associated with our Brazilian assets that are obviously giving an effect on the financial income side.

We are not very much exposed to euro in relative terms on the operating income side, but on financial items, several loans and inter company transactions are giving us an exposure. Bauxite alumina sensitivities is 1 billion for 10% move on the LME annual effect. This is obviously due to the fact that still most of our aluminum phase is related to contracts which has a reference to LME development.

We believe we will be realizing prices for the broader part of our portfolio in 2013 in a range of around 14% of LME. If you assume one percentage point higher price. So not 14% but 15%, the effect of that would be 800 million on an annual basis for bauxite alumina and then you would have a negative effect for approximately half that volume in the primary metal side. And then talking about primary metal, obviously the key here is the LME affecting the income side on the metal and the cost side on the alumina and the net of that is the 10% change in LME gives an order of 1.6 affect on their operating earnings.

Bringing all these together, we have just illustrated a couple of scenarios for you and this is a flavor of the EBITDA potential in three different scenarios. It’s not an estimate, it’s scenarios using the sensitivities that you have seen. We have used the last four quarters as a baseline which means Q4 2011 till Q3 2012. In this period, we saw prices around 2,200 on LME. We saw Norwegian Kroner to the dollar of 5.8 and we saw an EBITDA level of approximately 7.5 billion and then we have these three scenarios $2,000 $2,250 and $2,500 with the NOK6 going down to 5.7.

The way we look at it still using the last four quarter as a baseline is that this will generate EBITDA levels of plus, minus 6 billion to plus minus 11 billion, so in that range. And then there are important factors that will influence our earnings but not included in the scenarios a very obvious one is extrusion products accounting, the joint venture with Sapa coming through will obviously change the EBITDA it was included 0.5 billion in EBITDA and now we will include in these numbers 50% of net income including depreciations. So that will obviously have an influence.

Improvement programs should have a positive influence going forward, based on the fact that we assumed continued strong development in those programs. Raw material costs is always a question, and we have seen that going up and lately some relief and we would give the direction of may be somewhat relief for 2013 on these element.

And then we have all other elements, we have the EBITDA generation in the other businesses, metal markets, energy, rolled products. We have the fact that Alunorte and Paragominas still have a notch to grow on production, Jorgen will talk about that. But all in all these scenarios mixed with sustaining CapEx level that we have indicated of NOK3 billion and also including that working capital will may be free ups on cash on low price environments from today’s position, but all on the other hand tie ups on cash if you assume the higher pricing environment but all and all this should give you an indication of free cash flow potential going forward.

With this being said, Svein Richard maybe you will join me and the Richard join me on the stage.

Rikard Lindqvist

Okay, then we will open up for the questions to both Jorgen and Svein Richard. So we have the question here, please wait for the microphone and state your name and company?

Hans-Erik Jacobsen - Swedbank

Hans-Erik Jacobsen from Swedbank. A number of your competitors have announced that they want to sell capacity or even get out of the business due to the poor economics. So far we haven't seen much happening but year-over-year is that like that restructuring process going on some of your competitors is likely to end up with the higher rate of the capacity closures going forward and what you have seen over the past couple of years?

Svein Richard

That is of course a very important this days, as we see that there is ongoing restructuring and still it remains to be seen, how this is ending up and we know that we intend to establishing separate company and fairly see in the specific aluminum, we see that BHP Billiton is on the way to sell their assets. And of course there are also other companies out there that are struggling.

So I am not going to speculate how this will end up, but there are certain challenges related to some of these assets. So in the end it depends very much on which kind of power context that you almost could get again the cost position of these assets and the reason for across the ongoing restructuring is that the return from these assets is already as it is today below water. So again it is a big challenge to find or at least to see who is going to take over these assets. We are following carefully across the change in the landscape, but I cannot give you any conclusion of how this will spell out.

Rikard Lindqvist

Do we have any more questions? Yes one.

Unidentified Analyst

(inaudible) for Capital Markets. I have a couple of questions if I may. First one in relation to pricing of the alumina that you are selling my understanding is that approximately 15% of what you are selling today is sold without a link to aluminum. Is that a correct assumption also for 2013, ’14 and ’15 because my understanding is that contract is up for renegotiations in 2015 and then we will grab a little we see higher amounts selling into the spot market?

And the second question is related to the scenarios because one of the scenario this year is built on aluminum across 2000 and I understand why because of downstream and because of energy the EBIT level in that scenario is lower this year compared to last year. But the highest scenario this year is 2500 and that was not the scenario last year. But 2500 was also mentioned at that time. But that isn't so much changed so I find that a bit strange that why isn't that so much impacted because of the four latest quarters.

Jorgen Rostrup

First of all on the alumina side I think that for all practical purposes to use 15% and whether that is 17% or 18% for next year it’s a fair number. We have said its somewhere between 10% and 20% and we have guided towards the higher part of that, and it will gradually increase but with small numbers until what you are saying on the 250 and 260 and when it really changed in our portfolio.

But you can also test Johnny on that later on today, but I think that is what he will confirm. And then on the scenarios I'm not able spot on to take a change on 2500 maybe Richard will have a comment for you on that. But you are right they are dampened somewhat and in particular the case that you referred to simply because of development on all those other elements that you will have for every year, for every scenario on this basis and we have tested it on the loan scenario and we saw that by adding up some of the well known factors that we will have this year for example the ICMS tax and a few other things that we've had in the results. We were actually quite pleased with last year’s scenario. But why it is then maybe a mismatch, a parallel mismatch in the 2500 scenario maybe I believe it relates then to the assumptions used on the currency, but we can have a look at that afterwards in the break.

Okay. Any more questions yes we have one over here.

Bengt Jonassen - Carnegie

Bengt Jonassen with Carnegie. Two questions, the first one in different scenarios what kind of tax rate can we assume in different scenarios and on the second question Jorgen you said about the net debt that Qatalum will provide on an annual basis but could also with the net debt that Qatalum is today?

Jorgen Rostrup

Well, first of all, we're using around 30% tax right now and then second, on Qatalum, our share of net debt has been in the range of somewhat more than NOK6 billion, which adds up to financing, project financing debt of twice that magnitude and there hasn’t been much change as you all see. Its cash positive but with a low net income earnings due to the high interest rates and the low price that we are seeing, but it’s a solid basis and it will start paying off the loans now and it will also hopefully very soon start paying dividends to the owners.

Rikard Lindqvist

Any more questions?

Unidentified Analyst

(inaudible). Of the 75% of the $300 you achieved in cost savings in Primary Metal, how much of that is a functional lower aluminum prices versus reduction in fixed cost?

Svein Richard

It’s a no reduction in alumina prices. So this is not in that direction.

Jorgen Rostrup

This is purely our own program and the factors that we're focusing on internally. What we might add is in regard is we've seen our cash operating cost going down a couple of hundred dollars this year accumulated compared to last year. And we have said that if you say that’s $200 we will say that one-third of that is alumina, one-third of that is the inclusion of Qatalum in our numbers and one-third of that is the effect of the $300 program from last year till this year roughly.

Svein Richard

And (inaudible) again just repeat that $300 program is for the (inaudible) smelters and Hilde will come back to therefore which will be carried out in the joint ventures.

Unidentified Analyst

(inaudible) from UBS. Just wanted to check on your sustainable CapEx guidance and of the reduction from 3.5 to 3 and how much of that is just to the exclusion of extrusion products and of the underlying decrease and what are the drivers there?

Jorgen Rostrup

A significant part of that reduction is due to taking out extrusion from the numbers. Then if you go at the total guiding from last year and also the CapEx number this year, we estimate that as I said between 4.5 to 5 billion last capital markets day. We now see that coming down to slightly above four. And on top of the 3.5, which we call sustaining CapEx this year, than it’s obviously some growth CapEx.

There is always a sliding definition here and we have seen that in bauxite alumina because what is sustaining maintenance CapEx and what is what we have called internally betterment investments in order to make sure we are reaching those define capacities that we should so that the good part and the improvement part from the cash for serving perspective next year is the fact that also bauxite alumina has tightened further and are still having strong ambitions on reaching the production ramp up and that the other areas are not at least Primary Metal has done a tremendous job in changing their investments philosophy are able to another year to continue that program study with a good hand on operational aspects of assets. So there is a lot of improvement and real business change in the numbers but you’re right on dollar terms 3.5 to 3 the major effect is the exclusive and exclusive.

Rikard Lindqvist

We have a final question. It doesn’t look like that. Then we will have a 15 minutes break coffee, water, and so on served outside the room. Thank you.

[Break Session]

Welcome back. Let's start the second session with a look into the markets, presented by Arvid Moss, Head of Energy and Corporate Business Development and supported by Erik Fossum, Head of Commercial in Primary Metal. Arvid I'll leave the stage to you.

Arvid Moss

Thank you Rikard and good morning to all of you. What we will share with you today is overview on the bauxite and alumina market and the metal markets. And there are some few messages that we want to convey today. First of all is that as we see today the metal markets will be pretty much in balance in the year to come and we confirm as you also heard from Svein Richard our expectation of a strong growth for aluminum in the 10 years’ perspective.

We also discuss further with the [day] the Chinese situation and as we discussed with you last year we see an increasing upstream import into China and we see some encouraging result of that. And the last point here is what Erik will take you through the physical tightness that drives strong ingot premiums.

So let me first start with macro picture and look back in history first as to see the relation between the growth in industrial production vis-a-vis and aluminum. And if we start to the right here over the last 10 years GDP globally has grown by 3%, industrial production by 2% and primary aluminum demand by 6%. And if you exclude China in this picture it is 2%, 1% and 3%.

And remember that during these 10 years it was six years that was in growth mode and then we had the through ‘08, ’09, ’10, ’11 which had been pretty rough years. So even if we combine these two it’s a strong growth in aluminum, also outside China compared to industrial production and GDP. So therefore, always when we start to look forward on the market, we look at what are the perspectives on GDP and industrial production. And we do not do our own micro analysis of this. We build on external sources and for GDP, we expect and have used in our announces further here on the metal market that will take China. GDP will be at approximately same growth level next year as this year around 2% and China will go slightly up around little bit from 7.5% to 8%.

Industrial production outside China, 1% this year, 2% next year. Europe, from very low figure this year, still negative next year. And China then on industrial production, at around 10%. So, the implications of growth in different regions through aluminum consumptions. Svein Richard showed you this picture here, showing that aluminum is used in quite a number of applications and much more balanced applications areas than if you look at copper and steel.

Copper is 60% electrical wire and steel is 60% construction and 17% engineering. While aluminum is 25% transport, 25% construction and then foil, packaging etcetera. Of course this here is typical materials that are benefiting quite a lot from early growth in the economic developments in that country in the embryonic phase like China has been doing now with a lot of infrastructure investment, lots of construction etcetera, etcetera.

And we have also seen that in this period aluminum has more than 50% higher growth in China than industrial production, but the good thing is that even if we now see a transformation of the Chinese economy less driven by construction and infrastructure and more driven by private consumption, we will then see that aluminum will benefit from that due to its strong application that’s a market share in transport, but also here in packaging and foil and in consumer durables and so on.

So that’s why we when we look at China now for the next decade, yes the growth for aluminum will come down but it will still be at least in line with what see in industrial production. But it is important to understand the robustness of the aluminum growth going forward.

If we then move little bit closer into the application of products in Europe and in the North America. In short, in Europe extrusion will grow only by some 7% in the next four years and roll products approximately 10%. That is really for both it is transport that is the main driver now for growth in aluminum.

Construction, we do not see still that there are substantial change in the market with that way it’s quite opposite, it’s quite low and continues to be low. But aluminum is taking market share in cars as Svein Richard pointed to. The European car now has 145 kilo of aluminum. By 2020 the expectation is that will grow almost 25% that is some 180 kilo and of course combined with expected growth in car production is really is behind some of the growth here.

And in the US the picture is even clearer, but here is also a positive that we see more growth from construction and we see the building permits is coming out construction coming out. The transport look here on road projects is 63%, all of the growth in this period will come from transport.

Again the expectation there is that today, aluminum represent 9% other rate of the car and 2025 that is expected to increased to 16%, and what prices it is very much the regulation from governments to push down CO2 emissions so you have to have likely cars to use less fuel.

Also interesting to see that the absolute level in North American always 1.4 tons its half of Europe, a decade ago that was almost similar, and the reason out 25% growth here over the next four as expected, that is good, so little bit about America can come back again also when it comes to in the service station.

So let me then put t this together into a primary supply-demand picture. Where do we end then? Well as Svein Richard also read, let us remember what we said last year and last year we said that we expected demand to grow with 3% to 5% from 2011, 2012 and production to grow also, so that was we indicated some over supply or close to balance. This demand growth was based on industrial production growth in the western world of almost 3%, almost 3%. So it was more like a low figure here.

I said that Western world or the world outside China ended at 1% but still we got a little bit higher figure now on demand growth for aluminum. We expect now that the growth in aluminum demand outside China will be around 2% based on industrial production growth of 1%. So actually it’s a small positive signal in that. But what is more important is actually what happened to the production side. We've seen a reduction in production this year through some supply changes.

First there is a market response and that is most important. The market response represents approximately 1.3 million tons in annual capacity. It as about smelters in European being down, it is about closures in the US and its about the closures in Australia, like we did (inaudible). So these are responses to lower LME, higher product contracts and higher raw material prices. And then we've had 0.6 million tons in effect of disruptions that is hill side in South Africa which was a technical issue and it was (inaudible) in Canada which was a local situation and there are also some disruptions in Venezuela but that is more regular to go there.

So this is really what has now improved the situation, so that it actually looks like its more or it’s a balance situation this year. So what are we expecting then for 2013? Before we go through that let me remind you about where its actually primary aluminum used. This is the global picture and there are many figures under this pie chart, so I will, first say what this is actually showing. The pie chart here shows the share of global primary consumption. So the big share here is aluminum. The percentage points here are annual growth in the three year period to ’10 to ’11 to ’12. The growth is then coming from the low point in 2009.

Europe here is now only 15% of global primary consumption and US is even smaller. Asia outside China and the Middle East is now bigger than these two regions. So I think its important now yes the sentiment in Europe is important, yes it is important if there is zero growth in Europe. But I think from an aluminum consumption point of view where it’s a global, where it’s a global traded commodity and there is actually the global balance that is important we should not put too much emphasis when we put on the (inaudible) and next to Europe.

It is important in some aspects but its really not driving the total picture so much anymore. So what is the expectation that we see. Our base case is growth in demand outside China of 2% to 4%. That is of course based on that there is a reasonable solution to put it that way to the financial cliff in the States and to the European debt situation. Of course if there is a substantial negative development in one of these, it will have an influence on this as we have put here under the demand influences.

But the base case based on the GDP growth and IP growth shown earlier is this estimate. On the supplier side, of course there are same suspects as last year, what to look for, curtailments restart new projects but with the price levels we see now, we do not really see restart as a major contributor on the supplier side and on new projects as probably most of you recognize now already that the one project in Saudi Arabia which was expected to come in with 700,000 tons next year seems to be delayed for some time, for some at least 10 months or so was the last estimate.

So there will be less influence from that. I have not drawn here a blue line that is visible, but it is somewhere in between there. So it looks as if it is going to be roughly a balance next year in the Primary Metal market. But what we want to share with you is a little bit longer perspective on the supplier side because if the economy continues to move slowly in the right direction, with growth rates of 2% or whatever, we expect that the primary demand will follow in the years to come.

But if we look at supplier side developments over the next year up to 2015, what we see is now growth in new capacity of approximately 2.5 million tons. That is the model with 700,000 tons. It’s approximately the same figure in India and there is two project in Russia with approximately similar size and similar services and same volume. But I think, if you look at the execution rate in India it is not exactly all of it on time and as planned. So I think that a 2.5 year is a as I said that’s a fair estimate on what we think common stream and there is not much new now in the pipeline. Since 2009 the price level of LME has not really triggered any new projects in the primary metal area.

So 2.5 coming probably on screen, but we also see that there is approximately 3 million tons capacity at risk. That means capacity that can be shut down due to that power contracts are expiring or other high cost reasons. And this will be as we see it capacity risk is in Europe and in North America and in Australia and of course also in Russia west of Ural there should have shut down some capacity because that is now in fact we have not from result but they have not yet closed down the 300,000 - 400,000 tons that they said they should be.

But if we combine this there may not be so much net capacity added over the next years and that should leave room for now that the inventory starts to be build down that is our main hypothesis. China have been able to manage their metal balance in a very good way over the last six years and our main hypothesis is still that China will be balanced on the primary aluminum area.

The regulate this on the border with duties, taxes and whatever. With little bit more about development inside China on the metal side. You know costal regions here now they are becoming more and more expensive and over the next four years what is put down new capacity, most of it will come or put down here in the western regions.

Of course, you want big expect closures in this area, but we now see that there are subsidies given by local authorities in some of this regions to make, to keep this smelters alive. So what you see our subsidies in the range $40 to $200 per ton and even with that we now believe that one-third of the smelters in China are under water negative cash.

I think if you read the financial reports from Chinese aluminum companies these days you will find the red figures. So I think that also the integrated once in China have put the red figures, its high raw material cost, high power cost. But of course if you look at the distance here from this region here to the coast its almost 5000 kilometers and its represents the substantial logistical challenge and also the central government are trying out to avoid the two speed of development because of the pressure on water resources, on the grid, on the transport system and whatever, but I think our experience is that even if the central government are pointing out that the risk that local authorities are encouraging new capacity to build.

So I think we can expect that China will continue to build its primary capacity to keep a balanced situation and not start to import metal over the next years. That is our main hypothesis. But just as an illustration here you know through these 5000 kilometers and if they will build 5 million tons here up to 2015, you know it needs to go a truck every fifth minute over the whole year both ways because the railway system is not developed to carry this kind of load.

So it’s a fascinating logistical challenge but then the Chinese have also own tradition to sell that kind of things. So our base case is that they will continue to build capacity. Then I will leave to Erik to talk about the metal, the ingots and some issues there and we will revert to bauxite and alumina afterwards.

Erik Fossum

Thank you Arvid. I will talk a little bit about aluminum price, about the ingot markets and the stock developments and also a little bit about our product strategy and about our commercial agenda going forward. Let me start first with (inaudible) over the aluminum price and what has happened so far this year. We started a year at around $2000. We started from a fairly subdued situation at the end of 2011 where consumers built on the inventories and then in the first quarter of 2012 we saw good demand again and we saw consumers restock in the pipeline and this brought the price up to a high of 2346 in the first quarter.

And then the softer economic conditions set in, so I will explain industrial production has come in below expectations this year and we start to see softer market condition and a gradual decline and the price decline all the way down to low of 1830 in the third quarter. As I will explain, we then saw a supply kick in, in terms of reduction of supply. This will establish good support in the markets and would build a very strong base for aluminum price.

We then have the Q3 positive sentiment kicking in again, hope for resolution of the European Union and with that said we got a short covering rallying the price, taking the price all the way up to 2200, but as nothing changed on the fundamental side as the price then eased off and are pretty much the same place as when we started there at $2000.

Then a few words about the Chinese markets and LME. If we keep (inaudible) in our heads in terms of physical size of the market, production in China on an annual basis for 2012 around above 21 million tons. In rural China production is around 26 million tons so the two markets are pretty much even in size. And here we see the Shanghai price in blue and LME price in green and what we have seen is that's in 2011 and the Shanghai price is significantly more stable and moving sideways than the LME price that has declined.

However explaining the price differential between those two prices we have to take into account that the Shanghai price uses 17% VAT element hence we cannot directly translate and compare the LME price to Shanghai price. In addition the price differential we have between the Shanghai price and the LME price currently also includes some premium element of about $100 on top of the 17% VAT but that is not sufficient through defense imports as the Asian ingot price is around $250. So we still lag $150 to have imports in to China on a significant basis.

For those of you concerned about potential exports at China and that will only happen when of course the Shanghai price is significantly below LME. To calm you a little bit there is a 15% export tax on export of Primary Metal in China. You need the Shanghai price to be significantly below the LME price before you see any significant export.

As most of know, this Chinese sales authorities have also introduced stock piling all the strategic raw materials and base metals including aluminum. The projection that has set out in terms of how much aluminum they will purchase is around 400,000 for the coming six months or a year. So probably have only both under 100 tons of this and of course this is also supporting the market as the market is fairly balanced in terms of supply-demand in China.

What we also have to keep in mind is that the higher Shanghai price also reflects some concern about Chinese access to raw materials going forward and then on the bauxite side but (inaudible) will come back to this in next session.

Then moving on to the ingot stock and you all have seen in this picture before with very high ingot stocks with a balance supply and demand situation as we see now. That increased our stock. We still have to be at a very high level. This has happened at the same time as ingot premiums have gone to all time high levels and what's the logic in this, how can we explain this.

In order to start explaining we have to back track a little bit in time, in the sort of years ’09 - ‘10, with a significant (inaudible) patterns, warehouses, basically saw that they have the business model that could turn in to a (inaudible) machine. And warehouses make their money by charging a daily rent on aluminum and of course this physical constraint, how much metal you can deliver out to your warehouse per day and then also (inaudible) aluminum how much you can deliver out and if you manage to fill up the warehouse with significant amounts of aluminum, you basically have a (inaudible) machine that will take a very long time to empty the warehouse of the metal.

So basically what they did was to start to compete with consumers on a paying premium and then sort of basically said that I can keep the metal in the warehouse for 150 may be 200 days and after that everything is pure profit, so this started to beat up premiums in competition with consumers.

As it is basically, drove the first phase of the premium increase then they are now coming into situation where the market says much of a balance in terms of the supply and demand. And as premiums is priced on the marginal, consumers basically had to cannot get access on the metal being stored in warehouses and hence had to pay a fairly significant premium on ingot payment. So this is basically balanced market is supporting premium development going forward.

Then coming to the mechanics of warehouse deal I have to say a few words about that. In order to establish a warehousing deal had almost of the fiscal metal have to hedge the metal on the LME, meaning they have to sell future (inaudible) LME to create a short position, if you have a short position you can take advantage of the (inaudible) curve with low nearby prices and higher forward prices by selling low and buying high on the continuous basis.

So what we the need is that the some of the warehouse rents paid to the warehouses and the financing costs to present by interest rate need to be smaller than the LME (inaudible), and since 2009 we have seen the LME been up to a fairly (inaudible) for a sustained period of time and this is great that’s an arbitrage for all the owners of physical metal and they have they are very profitable to store metal and they are accessible for interest rate on the metal being stored. Of course the question you will have is when will this end and how will this end and as already pointed out you have the small deficit potential developing going forward, and what usually happens then is that we see some response in LME price, with increasing LME price. But usually what happens then is that we get the (inaudible) curve that flattens out a little bit more making it less attractive to whole metal (inaudible) needs.

And we can assume if that's an (inaudible) that will see gradually left out of metal from [arduously] going forward. That’s also of course continued on interest rates staying on for sustained period of time. Let me also pick up the schematic overviews of the different stakeholders in the warehousing game just for your explanation. I have the producers in this context you should look to [meet] the master balance sheet and/or flow the metal (inaudible) if its not allocated to consumers.

Our first time buyers is usually traders, they are in the game to make the premium profits and around home of quadrangle and usually take the metal that is not our dedicated customers of the producers sense, then we have the warehouses and the warehouses run warehouse rent that will also see the development now, that warehouses also are owning metal and also significant amount of metal, and then addition on the [quadrangle].

The consumers have a double role here, of course they are the final consumers on metal buying ingot for consumption, but also hedging forward on LME and by hedging forward they are basically sustaining the [quadrangle] and so and as supporting (inaudible). Then we have the financial investors on the banks and of course financial investors can be many groups, it can be players only going for directional debt on LME.

It can be placed looking to on the risk free to set, and it can the banks financing that aluminum stocks. The financial investors also are a group that are mutual funds and pension funds that usually buy aluminum as a part of the portfolio diversification and then you should also do aluminum quite far out on the curb and they are also upholding the current tangled situation in the market.

Then a little bit too on Hydro’s product strategy. If you look at global cost of production around 42% is ingot production. For a consumer an ingot has less value than a product because it has to be remelted to get into shape so that it can be consumed by the consumer. However our Hydro strategy is to focus on products being (inaudible) and which we believe over a long time period gives us significantly additional premium compared to being pure ingot player and a pure commodity player.

Our extrusion ingot having 21% market share in terms of cost subscription and seating ingot the second biggest products with 17% market share. Looking then at the long term picture for extrusion ingot premiums and standard ingot premiums. In time periods where demand is really driven by actual demand and not by financial yields from (inaudible) we see that producing extrusion ingots give significant earnings both standard ingots over a long period of time.

Currently we are in a very special situation where ingot premiums are at an artificial level. This will of course not last forever and then our strategy about producing extrusion ingot for instance there will be a more profitable strategy. So in terms of our commercial agenda going forward as premium element now as a relative portion of a sales price is at higher rate than previously and we are focusing on maximizing the ingot, the premium we are getting of our products to customers. Hence we are running a fairly short term pricing strategy on our premiums.

We are basically running a quarterly pricing negotiation with our customers for a significant part of our portfolio, and we are committing annual contracts to customers but are keeping premium fixing on a short term basis. We have also increased focus on productivity versus market share. As you know we have reduced our remit activity at Norwegian primary significantly this year taking it down by approximately 300,000 tons and this has significantly increase our product pricing power on premium.

We also are in a process of a long term shift towards higher premium alloy mix. This is basically going into harder alloys, a (inaudible) talked about the industry. That also gives us a higher earning over time. And in terms of (inaudible) this is being optimized towards Asia, US, Turkey and the Gulf region which are paying the highest premium and is the best place to optimize the (inaudible) in terms of logistics. Okay, then I will hand back to Arvid.

Arvid Moss

Thank you Erik. Then I will turn to the Alumina and bauxite markets, and as I will show you through this presentation this is very much about China, very much about how China will develop going forward and the influence from China has been very strong over the last years. Let me start with bauxite markets pricing and then alumina pricing. First on bauxite price; alumina is a commodity with a pretty similar quarter. You can talk about a few, few, very few dollars in spreads on quality, while on bauxite the difference could be up to plus or minus 30% based on different silica and alumina content in the bauxite. But it is pricing to China from Indonesia and from Australia and since 2009, we've seen the price from Australia delivered to China at some $55 and then from Indonesia, we will have, you will see them coming up from 30, up to now to 40 and then after the ban, it is up to about 50 delivered to China.

It was mentioned here that there are cargoes now being shipped from Australia, not many but then we have seen delivered prices China at a level around 80 and of course then you have also some inline freights. So then you can multiply that to 2.5 to get the bauxite cost in to alumina. So then we're talking about above $200 per alumina ton just in bauxite cost.

So that’s where the trade off starts to come in, what should be the import. On alumina, I will just give a few comments to what has happened after August 2010 because that was when the index was established and more and more used, and what is good to see is that, lets say, in nominal or relative to LME, the price level has been between 15% to 16%, which is clearly higher than historically and also more robust than historically at a nominal price level even you have a week period now for the last year. It has been stable at about $300. So it seemed to be an improved pricing when it comes to reflecting the fundamentals in this part of the value chain.

Fortunately one-third of alumina is traded to third parties and the same goes for bauxite. Before China that market was very small, but after China started import the bauxite market has expanded. And Hydro is a long player now both in the bauxite markets and in the alumina markets, (inaudible) is by far the largest company exporting to others and in alumina it is (inaudible) that has the most substantial loan position. And then you see here on the scale we see the Chinese import of alumina at around 35 million tons and Indonesia that is being estimated now around 20, it was more about 20 (inaudible) more than $40. I will give some more comments on that.

But when you then take the global picture of bauxite and alumina where is it produced and later I will show you where are the resources. It’s really you have Atlantic market and you have a Pacific market and you can see here that if you look to China as the driver here 40 million tons of alumina production and in alumina (inaudible) they could use 22 million tons of bauxite.

So what is on top here needs to be imported to feed the alumina production on top here, and that comes from Indonesia and it comes from Australia. So this has been a market that has functioned over the last years, demand from China, supply from Indonesia and Australia. If you look at the resource base globally, just a few comments on this one because it’s one country that really sticks out when it comes to total resources, estimate resources. But this is also including undeveloped resources also although this may not be a economically feasible.

But it’s really by far the largest is again the black columns here are research plus resources likely to become the reserves associated with operating mines, so those some are more secured that they will be utilized and taking into production.

But again let us look at the picture over here in the pacific. You can see that China compared to some of the other countries is not really having so much bauxite resources and quite a lot of it is already within let’s say the scope of what has been done today. And we have said earlier also that there is a, at the current speed of production of bauxite there is a limit to how far they can go in this direction.

At a certain time the quality will be so bad that it is not economically feasible to continue to develop, but of course if the price of bauxite goes further up, more resources will be feasible and the canals will be technological changes that we do not see today. But the point is that it’s hard to see that China will expand its bauxite production substantially and keep that for decades going forward.

Then we have Indonesia where we had export of almost averaging 30 up to the 35 to 40 million tons last year. As you know they introduced a temporary export brand in May this year and this has been very efficient, and they have a permanent ban for bauxite export after 2014. Many question whether this will really stick. And its been challenged, the temporary ban has been challenged by High Court and of course if they want to export they have to pay a high export tax, 20% this year if they get the license, 50% next year.

So at least they try to get more money out of it from a governmental point of view. But I think even if they let's say have to let go of the export ban there is a limited time period that Indonesia really can serve as the supplier of bauxite at the same level as they have done over the last years. And then Australia can expand and they will expand to serve this but it leaves us with some shortages in the bauxite market as we see it today that needs to be solved on a more global basis and not on the within the Pacific.

So just to a reminder of what has happened in China, first they imported alumina to cover the net needs then of course alumina prices went through the roof in these years and they have built lots of alumina capacity and started to import bauxite. So here last year they had the maximum import of bauxite and had taken down alumina import.

Now they are increasing alumina import again as its harder to get hold of the bauxite at the reasonable prices. And here we see a more detailed picture on the import of bauxite resource. The green line here is monthly import from Indonesia growing up to a level here we had during 2011 of around 3 million to 4 million tons per month and here in the first months of 2012 this is even more because of the ban that should come and then the ban was very effective so we dropped almost to zero during summer time and now the last month its up to 1 million ton again. So 12 million tons on an annual basis.

Australia is here rather flat at this level and there are no export mines in Australia that is ready to take on this challenge. (inaudible) is planning to expand the wafer mine in some years and that will add some million tons, but as of today its hard to see where this will come from. So it means that what has traditionally been more traditional at least over the last three years has been a local market here, we call it local. They’ll have to move into a more global market, and whether the flow from Jamaica, Brazil, Guinea, whether that will be bauxite or alumina or in what kind of mix that will be remains to be seen.

Of course from a transport cost point of view, you should shape alumina. But of course they have built a lot of alumina capacity that they also would like to use. So here in Guinea now we expect that more capacity will come on stream but also Guinea has actually set up the bauxite should be converted to alumina in the country and in Brazil we know the mining system pretty well. There is no export mine on 10 to 20 million tons standing there already. And to develop mine it takes five to 10 years.

So for us being long in bauxite alumina we are really that's a (inaudible) and see what kind of commercial opportunities comes out of this. And to try to summarize this and see where are the uncertainty. If we take to summarize the picture as it is now alumina in China, imports produced on domestic bauxite, alumina produced by import bauxite and the import here from Australia, Indonesia, and some small other. How will this look like in 2025?

If China continues to be balanced in metal production versus metal consumption, if we are at approximately on the growth rates, they will need more than double alumina in to the country. Yes, they may import more alumina. Yes, there may be also some increase in alumina based on domestic resources, as I said you never know. They may be more resources than we see today. They may be more feasible due to that the bauxite price in general goes up. But then how much will they produce based on imported bauxite.

Our main estimate is that Indonesia will go down, Australia will come up. But in the middle here there is a big gap, where new mines, new export mines will have to come somewhere in the world or there have to be more import of alumina. So this is very important to follow and we follow this very closely and of course the commercialization of (inaudible) is hands on this every day.

So what it means for China and I shared this graph with you last time we met, one year ago. If you start here below the line, is the export of (inaudible) fabricated from China and we see that over the last six or seven years, there is an increase but I think if you compare to some of the most dramatic scenarios that we could see some years ago, their export has not really taken off in a totally new speed than before.

And on the import side, the import scrap will be increased every year and the import bauxite and the import alumina and I think actually that this figure here is the wrong one so I think we need to send out the right one here, I am sorry for that. So, but I think the trend line that we are showing is the right one that they will be more and more dependent on import of raw materials and metal units China is going to be a larger and larger importer, but we have to send out that correction or is it correct and then I know it is correct, so then you will see that my comments are right.

So on the long-term outlook Svein Richard let’s say with his expertise within the material explain how this material is fabulous to solve some of the global challenges going forward and we see that what we see as growth expectation going forward is very much in line with also what others expect some 4% to 6% over the next decades.

And the main message that we want to deliver is that the there is a good or a reasonable balance in the foreign metal market outside China for the coming year and the demand size combined with a surprise side development of the next year should give room for a build down of some of the inventory. The strong long-term demand protections we confirm and the China story is incredibly interesting and we believe that the shortage will increase in the long-term perspective and as Erik explained there is also some the shortness of ingot has driven up the ingot premiums and we are presuming a commercial strategy that should take out value on the value added products going forward, so thank you.

Rikard Lindqvist

Thank you, Arvid. Then we will turn the page to the first business side of presentation, so I will invite Hilde Merete Aasheim to the stage to present primary metal.

Hilde Merete Aasheim

Good morning, everybody. In this session I will talk about the smelters and Hydro, and how we work in order to improve the business of the smelter portfolio. At the end of 2011, we were operating 12 smelters within the primary metal business area. In the beginning of 2012, we transferred the (inaudible) smelter in Germany to the role business area.

During 2012, we have curtailed the Kurri Kurri smelter in Australia. We closed the last spots in September and we casted the last metal in October. So at the end of this year, we have 10 smelters within this portfolio, 4 its early on it’s the Norwegian smelter exclusive Soral, and six joint ventures smelters. And now we see that we have more metal coming from the joint ventures, than the fully on smelters.

These 10 smelters represents approximately 2.2 million tons of electro license capacity, when we consolidate 100% of Slovalco and Albras and where we account for our share in Qatalum and Soral. Our main agenda in primary metal is about repositioning. Repositioning means to improve the cost position of each metal and working to increase the business of the total portfolio. Obviously to take out high cost capacity its about repositioning and the reason why we took out Kurri was simply because the cost was too high.

And the outlook of increased power costs obviously is a challenge. To bring in low cost capacity is also about repositioning and I will come back to Qatalum now confirmed in the first quarter position. But then it’s a work on the existing assets with improvement programs and I'll come back to tell you more about the $300 program which relates to the four Norwegian smelter fully owned, and I have also talked a little bit about the joint ventures and the improvement program that is taking place there.

When you are in this metal business power costs is extremely important. Power costs represent roughly 25% to 30% of the cost of the recent 1 ton of aluminum. That is why securing competitive power supply is also a very important part of the repositioning agenda, when power contract expires to make sure that we do have new competitive power contract to sustain this matter going forward.

And I will tell a little bit more about the power coverage that we have now for the production. During 2012 we have been successful in entering a long term contract for Alouette. A contract which goes up to 2014, which will sustain the Alouette for a long time. It will also allow for us to expand the capacity in the existing Alouette plant but also to mature the growth and expansion in Alouette when time is right.

Another milestone in the power area this year was that EU finally concluded on the compensation framework related to CO2 compensation while we are waiting for a global CO2 regime to come in place. We at Hydro are also very excited that the Norwegian government has committed to a similar compensation scheme for Norway and that's something that's very important basis for us being successfully signing a power contract for Soral which we signed in October-November this year.

An eight year contract making it now possible to sustain the operation in Soral. At the moment we are only operating one line. We curtailed one line in 2009 and we still are planning to operate one line next year and we have to wait for the market to come back in order to bring the next line back. But this is an all contract which is competitive compared to Soral also positive side for the Norwegian aluminum, for the other aluminum smelters in Norway where we now see that it is possible to enter into competitive power contract in Norway.

The next power contract in line is Slovalco, Slovalco has a power contract that expires at the end of 2013 and we are now basically working together with our partner in Slovalco to work on the new power contract for Slovalco. Hopefully being able to sustain Slovalco going forward. Here we work in close cooperation Svein Richard mentioned with Hydro energy to provide the necessary confidence and capacity to do these negotiations in [Slovakia]. We are also working with a power framework in Albras which I will come back to in some few moments.

We have now 90% of current production covered up to 2020 and beyond and it’s also good to say that two-third of this power is based on smelter power. Then let me talk about improvement programs and let me start with the $300 program, which relates to the fully-owned smelters. When we started the program, Terry was part of this. Now its the four Norwegian smelters, Ardal, Sunndal, Karmoy and Hoyanger.

We really felt their lack of robustness in 2009 when prices were down, really down to 15,000 and we recognize that this is the situation which we don’t want to see again and with this time, program for the fully owned Norwegian smelters, which would be based on the 2009, lets say operational level and cost level we have and we said that we should be able, which we set ourselves this target of achieving $300 per ton improvement at the end of 2013.

And we started in 2010 has been working on this last three years. The program is about working in areas where we can influence. It’s not about LME going up and down, its not about raw material prices going up and down. That is sort of normalize when we report in this program because we would like to isolate on what we can influence in the daily operation. It’s about productivity improvement in terms of how we work in the electrolysis and cap process. It's about fixed cost and it's about how we're capable of improving our margins from the (inaudible) losses.

At the end of 2011, we recognize an achievement on $200 per ton. We set our selves a target of 235 for this year and we are on track to delivering the 235 for this year. But we now are [worst] on the business front for next year, we are planning to achieve the full program at the end of 2013. It’s really encouraging to see how they organization has really brought into this program because this is not a primitive cost cutting program. We have started on the journey on the way of working which is based on systematic approach on this structured approach and engaging the whole organization and having leaders which are visible of driving these improvement efforts.

It’s also very encouraging to see that this way of working we also see this steps other areas also this is safe (inaudible) showing that we are improving in terms of safety, other environmental parameters are going in the right direction and we also get positive feedback from the customers meaning more predictable meaning more stable because this is our way of our working it’s not a primitive and [hot] program. While we are working with improvements we are also looking at new areas that could be explored. One area that we are working on right now is when within new organization where we have primary metal and metal market. We look for even more opportunities to capitalize on our capabilities in the (inaudible) process in the R&D competence environment going to the market with new products and upgrading, high grading on portfolio going to the market as Erik Fossum mentioned.

We are also worked quite extensively in to the carbon area, the black raw materials area where we have seen that (inaudible) prices has increased. We are now using our competence and R&D centering around to test new coke qualities to blend in other coke qualities and which additionally are used without jeopardizing the quality of the anode, because a good quality anode is a prerequisite to the operation in electrolysis. So that's a fine balance, but we have explore, we have to expand the universe of coke suppliers and also anode supplies.

And other interesting area is that we are working on the technology development over the next generation sale. We are now heavily involved in testing out the worlds most low energy active cells, but that is for the future, but we also are trying to take knowledge that we are developing in the technology program to these shifting assets.

And right now we are testing out larger amount on the shifting assets and we hopefully being able then to use our energy consumption even further, and at this movement we are also testing out new cathode designs at different smelters, hopefully being able to increase average and increase (inaudible).

And it is interesting to have that perspective because we are developing the top of the pot and we are developing the bottom of the pot and actually we are in lines and buildings which are more than 40 years old they are actually developing the sales continuously. Coming back to the content of the $300 program, I will look to questions on what is really your achievements and I made it real done of this NOK1.4 million in real tons that's Jorgen mentioned, which is the value of the $300 program, once it is achieved at the end of 2013.

The largest part of the $300 program is about fixed cost, it’s about reducing fixed cost of the plants and about plant. It’s about working on the full fledged agenda of fixed costs from labor costs, maintenance costs, administrative costs working in terms of demand management of improvement in a different way than we used to in the past.

It’s about the structured approach where we look at our work in processes and taking out waste in effective processes and that combines with a strong and strong cost discipline we have been able to take out NOK650 million in real terms in fixed costs over this year. In terms of product process improvement we are heavily using our production system to put confidence into standards into way of working using our highly skilled operators together with the best technology, working on first reducing variability, bringing us to a stable position because we are not able to improve anything if its not stable.

So to go through that journey of reducing variations, making us stable, take us to the next level where we have been able to improve the productivity in terms of increasing average, increasing efficiency which is about comps, more comps out of existing assets while at the same time working on cost effectiveness in terms of reducing the consumption factors like energy consumption and other consumption.

Then we have also looked at other areas on the cost curve, along the cost position. We have looked into an area of logistics. It’s a huge amount of volumes going in and out of these plants. We have particularly looked at the inbound flow of materials where we have worked together with a shipping department with bauxite alumina where we have looked at how could we use our long term contracts managing in these contracts using the flexibility also in this contract, optimizing the flow and we are using the merits where we have gained 250 million kroner.

I was mentioning that maintenance costs and the fixed cost area. Here we have really turned an (inaudible) introduced a new culture where we are much more focused on preserving what we have, really focusing on the technical integrity of the critical equipment we have, being ahead of time, reducing collective maintenance, more preventive, reduced [coals] substantially and really preserving our equipment. That has also had the side effect that we have reduced CapEx. And this is only sustaining CapEx related to maintenance but we've also in general which is not a part of this program reduced CapEx substantially.

We have also in this program worked on cash cost margins but as we have heard in a depressed market its hard to really achieve higher margin and in particular also with an extreme high ingot prices that we have seen where we here measure margins about ingot, the margins has really been squeezed. But I hope with the new set up we have now with primary metal and metal markets merged we would really have a new chance to look at how we could optimize the way we go to the market. So this is at least some examples of the build up in the $300 program. Its really an area where we can influence using our own organization and this is in fact what we have achieved or will achieve at the end of 2013 but as I said we have, we have at the end of this year, achieved 75% to 80% on this program at the end of this year.

Than let me move to the joint-ventures. I felt that we have four fully-owned smelters now and six joint ventures. Clearly, a large size of smelters, but it's quite different working with fully owned smelters and joint ventures. Somebody is competing with me.

I was starting to talk about the joint-ventures and it's quite different working with fully owned smelters and joint-ventures. Just for the reason that we have, we are in this plants with partners. So we have to be more formal. We cannot just have a meeting as a direction and then we all set. We have to work through the boardrooms. We have to align ourselves with the partners. So it takes a different way of working.

On the other hand, we had some good plants. They are relatively well positioned on the cost curve as of today, but it's important to make sure that this position doesn’t deteriorate. So we at Hydro has been quite active in these boardroom over the last months to make sure that we take the experience from the $300 program, from this way of working as we have worked in the fully owned and set the theme and set the agenda for also improvement program in these smelters.

So now all of these joint-ventures have improvement programs, let’s say based on the same methodology as we have used in the $300 program and on an average these improvement programs is around $150 per ton for these ventures if there is some are higher some are little bit lower the focus is a little bit different from plant to plant but it’s in that range. And we will make sure these improvements together with that partners will be joint ventures.

I would like to talk a little bit more about Qatalum in this portfolio or joint ventures. As you know we were at full capacity in September last year and we are now being operating the plant for more than a year at full speed. We are projecting an electrolysis production little bit higher than 600,000 tons for 2012. We have good operation, we have extremely good quality anodes which is a prerequisite for these operations so the anode part of the plant is also working very well and we have good products well very good feedback from the market producing in the (inaudible) 90% value added products.

As was mentioned we passed the technology test, Qatalum passed technology test in June this year, demonstrating the technology that has been stalled by Hydro and also relieving the owners for the guarantees. The technology test also demonstrated the capability of the technology even more than the nameplate capacity. I am also very happy to be able to report that we are now more or less in normal production or we are in normal production in the power plant we are all the six generators, the four gas turbines and the two steam turbines are working at full speed.

Last year I was in Qatar and then we installed the last section of the sea water cooling tower which unfortunately burned out in March this year. This has been rebuilt on the record time in the hottest season in Qatar in Ramadan six months and so taken to build up the full cooling water tower and the last section was put in last week and we are now producing all the power we need from our owner generators and nothing putting from the grid, as we have done in the rebuilding space.

Obviously they have a secured power supply for the smelter is the utmost important and we have been doing a lot of risk kind of the business testing and assessments during the year and this is progressing now very well and this obviously focusing onto the business also going forward in this huge power system in Qatar is on the top of new agenda.

As I said now the plant has been operating for more than a year and cost has come down. Just for the fact I think starting to come into normal way of operating, ramp up cost has come down has been taken out and we are now at the level of cash cost business operating cash cost level at around 1450 to $1500 per ton at current market conditions.

Obviously the organization is still busy in optimizing the plant, it’s a huge plants some of you have been there, it’s a huge plant you have to get to know the equipment, you have to know the plant, maintain intensity in this environment is extremely important. So there is a lot of work there to be done, that we are conforming the first quarter position and we are working to improve the plant even further and the technology test also gave us good basis to also work on pre potential beyond 2012.

I would like to mention Albras, because Albras came into our portfolio last year with Alouette transaction. It’s a large sized plant. It’s a 450,000 ton smelter and 900 (pots) and when I was standing here last year I was a little bit concerned about the business environment in Brazil, in particular the Brazilian real but also the power costs. Now we see positive development in both of these areas, the Brazilian real that's developed favorably and we also have got positive governmental announcements in terms of new power framework for this industry in Brazil.

Its still early days and the actual impact is still yet to be clarified and confirmed. But its good news in terms of the Albras smelter and the positioning of the Albras smelter on the cost curve. We have been happy to include the Albras in our portfolio and we are the primary metal organization is we see to assist Albras now to implement the production systems and this is the Albras in accelerating the improvement process going forward.

My last note would then be that we will continue the repositioning effort in terms of delivering on the $300 program, we will intensify the improvement work in the joint venture because the joint ventures means much more to us now than it did in the past. We will obviously work on the power sourcing in particular for Slovalco and for Albras and we hope to be able to next year talk about optimization between primary metal and metal market in terms of going to the market with even more advanced products, really high grading our portfolio to the market.

This work is really important for Hydro. Its really shaping Hydro for the future. Its obviously important short term because to improve the business of this metal makes us more robust in a volatile market with low prices but hopefully also giving their business will also accelerate our value creation once the markets come back. Thank you.

Rikard Lindqvist

Thank you Hilde and thank you despite the technical issues. Apparently somebody is preparing a wireless microphone for an interview later on so that is on the same frequency as the microphones we are using. But then I would like to invite also Arvid Moss and Erik Fossum to the stage for the Q&A session. Do you have any questions? No questions, oh we have one over here.

Tom O’Hara - Citigroup

On the recent trip to Brazil there was talk that the recent changes to the power tariff at Albras was still being quite complex and it would take some time to actually determine the savings but on average we could expect maybe 20% savings on power tariffs, are there anymore developments on that front.

Arvid Moss

No. It is no further development. It has to be implemented into contract and not their (inaudible) we are working on that.

Rikard Lindqvist

Okay, any more questions. We have one in the back.

Petter Nystrom - ABG

Petter Nystrom at ABG. Regarding the inventory level and the market balance, we now have some 60 days of supply. What do you see as a normal level to lets say support prices and given your projection of fairly limited supplies hitting the market over next year and that you expect a growth of 2% to 4%, when do you expect that to materialize? Thanks.

Rikard Lindqvist

Can you take the beginning?

Erik Fossum

I can take the beginning. Of course it’s normal level in terms of stock per days that would have capital level that we had prior to the financial crisis in 2008-09 in terms of stock per days. In terms of how long time it will take before it gets there, it is a difficult question. It could be only build down by 0.5 million tons per year, it would take quite some years but if you see any opportunities to look further, of course it would be shorter, and Arvid I hope you will take the last part.

Arvid Moss

I think that both way are pointing out is a direction that means there should be room for (inaudible) to build down, but I think it is also, you can go back 19 years in time, probably you were not working in the company at that time but when we start to build on stocks after the Russian flow of metal in the early 90s, it took a really short time to built it down because we also had some, pipeline effects. So when things start to move in the market, it tends to go a little bit faster than expected. So it's a combination. It was a combination of the supply demand balance in the current production supply and there would be pipeline effects.

Rikard Lindqvist

Okay, more questions.

Unidentified Analyst

I have one question related to the alumina inventories because today’s revelations is like you can take off 3,000 tons a day anywhere as long as it’s regulated by alumina and that leads to long queues you have to stand in the queue for 6 to 12 months still paying rent in that period. Do you expect now that it will be some significant change because I know it’s some changes going on in these revelations, but some more significant changes that you could probably change that system?

Erik Fossum

That’s a difficult question to answer because it’s basically decided by the LME, but as we know there is a process now with the Honk Kong Exchange have taken over the LME and in that context there will be a debate on what is the best way of LME to go forward and I think LME is supposed to be a market of last resort and that’s the price for both producers but also for consumers and of course this limitation 1500 tons (inaudible) clearly limits the market that’s a very limited that’s last resort for consumers.

Having said that, there are rules and regulations for the LME was known many years ago and the consumers have been aware that if the market if the metal went into the LME it will probably stay there for sometime. So it was consumers decision not to compete in a bidding war with the warehouses. Hydro of course is of the opinion that the market should be free and fair for everybody and we think that in the long term however this issue will resolve itself to see clearly what the outcome will be now in terms of potential changes in relations we don’t know, we know that potentially may be the EU will also look into this, but to sort of exactly say what the outcome will be and how to resolve potentially to change sometime in the future we cannot account it.

Rikard Lindqvist

Okay, more questions, one over here in front.

Hans-Erik Jacobsen - Swedbank

Hans-Erik Jacobsen with Swedbank. There are a couple of Chinese companies that had some intentions to construct alumina plans in Indonesia in order to take of alumina. And do you have any idea of how businesses come or timeframe?

Arvid Moss

No, we have also seen that there are at least sign one or two MOUs on that and I also saw that the plan the first one should be in operation in 2014 which I think should be at approximately 1 million ton aluminum every year. That's a pretty short notice and we will just have to watch this, of course some of this companies established this protects to be able to export, to continue to export multi for a while, and then they have this as a [cart] that the one day we will build.

So I think this Indonesia is really and the other thing to need to follow very closely and we have done the job on the resource side that's why we said that we believe whatever happens this is not a long term beat solution with China, but it’s of course important for Indonesia how that they treat their raw materials, but as a long terms decade solution big sort for China is nothing as we see.

Rikard Lindqvist

Okay. The final question maybe. Then we will go for a 10 minutes break refreshments are outside again.

[Breakout Session]

Okay, welcome back. Then we are down to the last session today. And I will invite to the stage Johnny Undeli, who is Head of Bauxite and Alumina [Technical Difficulty].

Johnny Undeli

Welcome to bauxite alumina. I'm [Technical Difficulty] very exciting place to be. The priority now is to deliver on our very (inaudible) at high attractive production levels. And not at least as you already have heard, successfully deliver on the commercial change process. How to go to market (inaudible) pricing? And as a basis for all of this, based on the Hydro values, the Hydro ways, with excellent performance in health safety [Technical Difficulty] environment and what is a pre-requisite for future success in Brazil, [Technical Difficulty] very ambitious improvement program.

Let me start by giving you some insights on where are we at [Technical Difficulty] the alumina portfolio, we have a ways two to one bauxite alumina compared to our internal needs in primary. [Technical Difficulty] very interesting strong and ambitions [Technical Difficulty] the active interface with market and customers. [Technical Difficulty] we are indicating here the attractive potential exposure to index [Technical Difficulty] some fundamental in the price becoming stronger and stronger, more and more attractive as an overall loan position, more and more priced on our own fundamentals [Technical Difficulty] bauxite alumina.

My additional comment to this graph which is very encouraging, let me say that customers and the market are more and more expecting that the index pricing is the arena where short and medium term contracts for alumina sales is taking place, and that is the fundamental trailer, but the fundamental content is being accepted by customers of the market. The liquidity of the volume is increasing and my observation is that to produce a smoother and faster [Technical Difficulty] most expected not long ago.

We have big shipments in alumina and bauxite, and of course when we are active on external sourcing and also swapping without the commercial agenda [Technical Difficulty] securing added overview bottom line. So the commercial strategy overall is first all, pursue to its utmost the future success of index pricing based on our role in the month in bauxite alumina and as I say a good start is always very valuable and we have it, its being accepted by customers on the market this is the arena to settle short and medium term alumina contracts.

[Technical Difficulty] that we have customers is added service, it’s an added opportunity also for us as a supplier to add some extra value and bottom line for ourselves. We can optimize logistics, we can make arrangements and we lead globally. In addition we you have also seen that we have an attractive long position in bauxite and with the reference to try in Indonesia and other let's say interesting potentials, we have seen increased at the type of bauxite recently.

It’s clear going to be a fight for resources on top quality going forward and we are already taking some advantage of utilizing an attractive market to secure some bauxite bottom line support going forward. So in summary the commercial agenda, to optimize on a shift basis the additional service to customers and bring bottom line effect to ourselves, and the increased attractiveness of top quality of treat like bauxite in the market [Technical Difficulty] already secured some cargos to China at new pricing levels but on a general basis a very proactive commercial agenda I believe is going to succeed.

Now let me focus on what is our top priority right now to deliver on our ambitious improvement program. A short state of (inaudible) and confidence of the local organization very well done. Some of you have been in Paragominas recently, we can discuss what time do we need for planned maintenance, for inspection of the pipeline and certain things, but in principal we are operating at (inaudible) capacity.

For Alunorte, we are working to build robustness on several topics and I will share with you some examples. We had a top quality alumina coming out of Alunorte. We have a benchmark energy consumption [Technical Difficulty] in Alunorte to lift up to nameplate capacity. This year we will deliver at [Technical Difficulty] we will reach a new level close to 6 million tons in 2012.

The improvement program will help me and my organization to secure a very strong relative position also going forward. In addition, it is a big challenge for the industry as such and that is why I started with a commercial change process, it has to [Technical Difficulty] succeed and the start is so good that we believe continuation in that respect will give some potential but that is a very good decision and it is also a key potential to help the situation going forward.

If you then put the [Technical Difficulty] Chinese and other elements on top of it, there should be some interesting considerations if I then go into the content of the program. [Technical Difficulty] The scope is with reference to 2011 to deliver a contribution by 2015 of 1 billion bottom line, 50% of it by the end of next year at those attractive levels. It’s about working smarter, more efficient, taking out cost and of course its all about what [Technical Difficulty] we can influence underlying performance.

[Technical Difficulty] working smarter, working more efficiently means normally [Technical Difficulty] mainly focusing on contractors and support part of the organizations that involves [Technical Difficulty] full organizations, the full value chain and 20% is a significant. Let me share with you a little bit, starting with Paragominas. What you [Technical Difficulty] see in blue here, we call materials, for example energy in protractors back in our service the green part. [Technical Difficulty] so our commitment is to take out 20% of the influencable cost in Paragominas, and that is the content and the framework for the improvement program. It's a small example but a very significant one. It doubles the productivity out in the mine, compared to the traditional grab and fill retractors, this surface (inaudible) working in an automatic fashion doubles the mining [Technical Difficulty] productivity out there.

In addition it's more accurate when you explore the ore with a surface. [Technical Difficulty] To start with a surface [miner] has basically you start with the gross volume out there with a surface [Technical Difficulty] out in the mine. We crush and we wash and we discharge the tailings in Paragominas [Technical Difficulty] this is what we call mass recovery.

And then you can imagine how significant an improvement in mass recovery we have the positive impact from the mining operations [Technical Difficulty] local people are now down these in Paragominas we have two parallel process lines beneficiation lines and by installing a simple cross over $20,000 that’s Mickey Mouse money.

We have been able to operate more flexible and to take the best of the two lines at any time during the day the mass recovery in Paragominas further. That’s a couple of small examples but supporting the main development and the direction in the mine extremely important. Let’s move 122 kilometers from Paragominas in direction of Alunorte and we get to the middle of the pipeline. By mid next year we will [Technical Difficulty] start up another number two pumping station for the pipelines, let's steer our way in side the pipeline [Technical Difficulty] and to optimize the overall operation, the pipeline we are starting up a second pumping station middle of next year.

What is the ultimate game, it’s to secure a long life of the pipeline [Technical Difficulty] materials like costly coal and fuel. That is the overall composition for bauxite alumina. If we then move [Technical Difficulty] this will be improvement program in Alunorte is to take out 20% of the influence of other cost.

We will strive desperately to take out 20% for the cost that we can influence, and let me share with you a couple of examples how to do it. Lines 1, 2, 3 in Alunorte they were the first lines to start up in mid 90s, and we could notice when we came in an attitude starting to develop [Technical Difficulty] that these are the old lines. We’d like to revitalize those lines to come back to the same capacity.

There is nothing like old lines. It’s about how we operate, how you maintain and plan the activities and then bring them up to where they should be. Just by attitude we already have some improvement in these so called old lines and now we are working more professional with Hydro discipline, Hydro structure, Hydro benchmark and we will bring them back to where they should be.

These are the so called [Technical Difficulty] old sea lines from mid-90s. Next year we expect have them where we want them. Another example, we need to build further robustness around Alunorte in case something happens to us from the outside. It has happened before and the reason with alumina refinery is that when you have an unstable energy supply you get cumulative challenges for the next few weeks to come if it happens.

So we have already done a lot on emergency generation capacity to prepare ourselves, but we are not fully there yet. So we are working even stronger internally to protect ourselves and of course we are working in dialogue with external stakeholders how to make the supply systems even stronger. Another example how we can build robustness around Alunorte so we can stabilize at higher levels.

In my opinion, this is the way we will secure with Alunorte would be in the best quartile cost position going forward. [Technical Difficulty] the port. We have now been dredging the port in Alunorte and we are about to introduce [Technical Difficulty] new ships transporting our bauxite from MRM to Alunorte. All these things make operations more efficient, reducing logistical costs and as indicated here these are some examples shared with you where we already see some gains and they have clear plans how to continue and if we look at 2013 the ambition is to take out 50% approximately of the total effect of 1 billion contribution on the bottom line. Then of course we are faced with some [Technical Difficulty] to keep that in mind.

Let me again touch upon what is the prerequisite for success in this program as well. Safe the Hydro way [Technical Difficulty] we know and we see that again and again. Those units that are able to operate with excellent and safety are normally also those units that have the most attractive bottom line as such. It is a key correlation so for me safety the Hydro way at clear prerequisite, we are on our way to get there. It’s about transparency, its about cultural development, but of course Brazilians also want to become winners in this context.

And not at least the corporate social responsibility. I think some of you have the pleasure of visiting a couple of our social projects. This is of course about stakeholder engagement. It's about transparent open dialog and it's clear that it's a pre-requisite also for business success going forward. A couple of topics that are of particular interest. There is a green municipality program in (inaudible) in Northern Brazil that are now very well known and benchmark in Brazil. It's becoming known even on broader political stages and it's references examples that we can be proud of. We're part of it. We're supporting it. But of course we're not managing it but we're are supportive and part of it. And I think that is the truth.

So we had a good start on the CSR agenda overall in bauxite alumina. We got good engagement dialog with all stakeholders and we feel as a company, very welcome and on good terms with those that we meet.

To sum up, this is very important and very ambitious improvement program that we call from B to A, and from B to A means our part of the full value train. It means stepping up to a new level performance wise and stabilize at those highly attractive levels, and it means that global reach including a successful commercial trade process. That’s the content of the improvement program; 1 billion up, 50% of it by next year. My final remark is this program is owned by the bauxite alumina organization and we are committed to deliver. Thank you very much.

Rikard Lindqvist

Thank you, Jorgen and you can actually stay on the stage because we will soon open up for questions, but first Svein Richard for a couple of concluding remarks.

Svein Richard

Thank you very much. We have now been through quite lot of presentations with contributions from many of my team members even the [tvtube] too wanted to contribute for couple of minutes here. The Norwegian television channel they come in to speakers, but I hope you had a very good value for the time you have spent there.

The summary of and the messages that we want to bring forward to you is we had a much related to the market situation, the growth that we expect 4 to 6% in the years to come 2 to 4% outside China still a challenging situation in aluminum industry with a volatile and low prices which means that we continue the improvement programs as you have seen along the whole value chain take also develop our commercial opportunities where we see good benefits especially (inaudible) new position in bauxite alumina and also again make sure that we have the financial strength to maintain the financial flexibility which is important in this market situation as the Jorgen also will touch in to. And again I would like to say that if one or some of you are going to invest further in aluminum, our task is to make sure that Hydro is the best alternative. So thank you very much. We are ready for more questions.

Question-and-Answer Session

Rikard Lindqvist

Okay, do we have any questions from the audience, yes if you have over there.

Bengt Jonassen - Carnegie

Yes, Bengt Jonassen, Carnegie. The $1 billion improvement program, how much is related to Paragominas and how much is related to Alunorte?

Svein Richard

First of all close to half way with this commercial agreement and then we split the rest between Paragominas and Alunorte, fairly equally share.

Rikard Lindqvist

Okay, any more questions, I don't see any hands. Okay, and I think that concludes our capital markets day. Thank you all for coming. We will be serving lunch outside, thank you.

END

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