Leading the way: A groundbreaking partnership to accelerate net-zero transition for industries

EVP Arvid Moss & CFO Pål Kildemo October 24, 2023

Disclaimer

Certain statements included in this announcement contain forward-looking information, including, without limitation, information relating to (a) forecasts, projections and estimates, (b) statements of Hydro management concerning plans, objectives and strategies, such as planned expansions, investments, divestments, curtailments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro's markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, and (i) qualified statements such as "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream businesses; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro's key markets and competition; and legislative, regulatory and political factors.

No assurance can be given that such expectations will prove to have been correct. Except where required by law, Hydro disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Transaction details

Macquarie Asset Management has signed an agreement with Hydro relating to the future acquisition of 49.9 percent of Hydro's renewable energy company Hydro Rein.
Hydro and Macquarie Asset Management will form a joint venture (JV) where Hydro will own the remaining 50.1 percent of the company.
The transaction values Hydro Rein at USD 333 million per June 30, 2023.
Macquarie Asset Management intends to invest equity of USD 332 million over the coming years.
No further equity injections from Hydro are planned for, with the ambition to be selffunded for growth.
Onshore wind projects located close to Hydro's smelters in Norway are not part of the JV.
The JV will be accounted for as non-controlled investment using the equity method.
The transaction is subject to standard regulatory approvals and transaction terms required by both sides. This includes several conditions precedents (CPs) on both Hydro and Macquarie Asset Management which need to be satisfied, including related to funding of the transaction. Subject to satisfaction, closing of the transaction is expected in second quarter 2024.

Hydro Rein: A preferred supplier of renewable energy solutions to industrials

Hydro Rein is on track to deliver on its 2026 targets

Targets communicated at Hydro's Capital Markets Day 2022

3 GW Gross portfolio in operation and construction

>500 MW added gross capacity to pipeline on average annually

400 -450 MNOK1) Estimated EBITDA contribution from projects in construction

Key numbers1): portfolio under construction – as of Q3 2023

Delivering sustainable & attractive risk adjusted returns

Key value creation levers

Identifying, developing, constructing and operating attractive assets, utilizing core strengths of the two companies
Financial optimization and farmdowns
Scaling and synergies
Operational platform, project execution
Leveraging from the Hydro context; Markets competence, large power consumer, decarbonization strategy
Targeting eIRR of 10-20 % (total platform value)

PPAs as a driver for industrial competitiveness

price area

PPA volume gross (TWh) – projects in construction and secured

A key contributor to securing power for Hydro's portfolio

Long-term renewable power contracts ensure robustness Smelter business operating cost curve 2022, USD/tonne

Norway: Power sourcing for Hydro smelters1)

Brazil: Power sourcing for Hydro JV smelters2) and B&A3)

Source: CRU, Hydro analysis

1) Net ~8 TWh captive assumed available for smelters. 2) Albras (51%). 3) Total Alunorte and Paragominas – all consumption sourced through Hydro

Uniquely positioned for long term value creation

1

Become the preferred supplier of renewable energy solutions to industrial customers in core markets – key enabler for decarbonization of Hydro

Focus on growing in the Nordics and develop in selected markets in Europe, strong foothold in Brazil established

Safe and sustainable project execution in close collaboration with partners

Drive performance through organizational excellence and commercial expertise in renewables markets

Appendix

Joining forces to accelerate the growth of Hydro Rein and industrial decarbonization

118 years of experience in renewables and industry development
Industry scaling, project execution and safe operations are core capabilities
Among world's largest players in aluminium, leading the way in low-carbon products

Leading provider of renewable energy solutions to industrials
More than 35 renewable projects in the pipeline in the Nordics and Brazil
Trusted long-term partner for customers and local stakeholders

One of the world's largest green infrastructure developers and investors
Commercial strength and leading expertise in renewable project development globally
90 GW pipeline of renewable assets in more than 25 markets

The Joint Venture is an important step in executing on Hydro's 2025 strategy

Lifting profitability, driving sustainability

Hydro Rein's journey: Fast tracking portfolio development

Portfolio overview: Renewable energy projects in the Nordics and Brazil

	Project	Price area	# Projects	Ownership (%)	Partner(s)	Gross capacity (MW)	Production (GWh)	FID	COD
UNDER CONSTRUCTION	Stor-Skälsjön	SE2	1	25%		260	807	2021	2024
	Ventos de São Zacarias	Northeast	1	49.9%		456	1,957	2022	2024
	Mendubim	Northeast	1	33.3%		531	1,227	2022	2024
	Boa Sorte	Southeast	1	30%		438	964	2022	2024
SECURED	Vista Alegre2	Southeast	1	30%		902	2,102	2024	2025
PIPELINE1	Geisli Energi	NO1/NO2	16	49.9%		655	730	2027+	2028+
	SE3/SE4 portfolio	SE3/SE4	9	50%		672	2,000	2028-29	2030-31
	S140 &S148 (Kalmar & Skåne län)	SE4	2	100%	N/A	118	143	2027	2028
	M36 & M108 (Jylland)	DK1	2	50%		362	412	2025-27	2027-28
	M93A (Tønder)	DK1	1	100%	N/A	114	145	2025	2027
	M98 (Randers)	DK1	1	100%	N/A	296	374	2026	2027
	Fótons de Santa Conceição	Northeast	1	49.9%		133	290	2024	2026

Notes: (1) Excludes Irupé project, an early stage floating solar PV project in Brazil with up to 2 GW potential (2) Rein has secured an option to enter the project 14

Solar PV Onshore wind

Projects under construction

Plant Capacity: 260 MW Annual Production: 807 GWh REIN Ownership: 25% COD: Q1/2024 Workers at site: ~170 workers

Location: Sundsvall, SE2

Ventos de São Zacarias Boa Sorte

Location: Piauí, Northeast Plant Capacity: 456 MW Annual Production: 1957 GWh REIN Ownership: 49.9% COD: Q4/2024 Workers at site: ~1493 workers

Stor-Skälsjön Mendubim

Plant Capacity: 531 MWp Annual Production: 1227 GWh REIN Ownership: 33.3% COD: Q1/2024 Workers at site: ~1150 workers

Location: Rio Grande do Norte, Northeast

Location: Minas Gerais, Southeast Plant Capacity: 438 MWp Annual Production: 964 GWh REIN Ownership: 30% COD: Q2/2024 Workers at site: ~1315 workers