Our energy

strategy going

forwardArvid Moss

EVP and Head of Energy and Corporate

Business Development

Attractively positioned world-class assets with global reach

North America• Alouette aluminium smelter in

Canada, expansion potential

• Remelting in the US

• 22 extrusion locations***

Brazil• World-class operations and

resource base

• Bauxite and alumina growth projects

• Albras aluminium smelter

Australia• Primary aluminium production

Norway• 1,015,000 tpy hydro-powered

aluminium capacity

• Technology and R&D centers

• 10 TWh normal hydropower production

• Rolled products, recycling and remelting

Continental Europe & UK• Leading midstream and

downstream positions

• Europe’s largest rolled products producer

• Technology and R&D centers

• Recycling network

• 25% extruded products marketshare***

Middle East• Qatalum in production

• Qatalum expansion opportunity

Europe’s

#1aluminiumcompany

World’s

largestaluminarefinery

World’s Largest*hot-rolling

mill

Extrudedproducts

30 %***market share

Top 10smelter

Norway’s

2nd largest hydropower

producer

2

Now in a first-quartile position on the industry cost curve

TwoHigh quality

bauxitemines

* Outside China

** Primary Foundry Alloys

*** Sapa JV

Market

LeaderPFA**

Leading performance compared to aluminium peersStrong relative position drives value-creation in challenging markets

Highest underlying payout ratio and dividend yield2010-2014

251 %

181 %

71 %

25 %11 %

Strongest balance sheet,Total Debt/Total Equity, 2010-2014

Peers

74 %

24 %

0 % 0 % 0 %

Hydro

2.5 1.1 0 0 0Dividend

yield, %

First-quartile aluminium producer

Source: ThomsonOne, CRU, company filings

Total debt/Total Equity= (Long Term Debt + Short Term Debt & Current Portion of Long

Term Debt) /Equity attributable to shareholders

Dividend yield = Dividend Per Share / Market Price at Year End

Underlying dividend payout ratio = Dividend Per Share / Underlying Earnings Per Share

500

1,000

1,500

2,000

0 10,000 20,000 30,000 40,000 50,000 60,000

First quartile alumina position

100

200

300

400

500

0 20,000 40,000 60,000 80,000 100,000 120,000

USD/t

USD/t

Aluminium peers included: Alcoa, Century, Chalco, Rusal

Energy represents ~ 1/3 of smelter cost and ~ 50% of the total value

chain cash cost

25%

Primary

Energy

35%

40%

Carbon

15%

Energy

35%

Bauxite

30%

Energy Energy

5%

Alumina

Illustrative figures

Source: CRU

Percentages indicate share of respective input costs globally

Total energy cost: ~50%

4

Energy strategic priorities

• Realize full potential of strong

asset base and competencies

• Further improve operational and

commercial performance

• Provide competitive global

energy sourcing and

competence

• Capitalize on strong climate

position over time

• Capture value of the green

certificate scheme in new growth

projects

• Promote responsible energy

policy in the regions where

Hydro operates

• Mature captive growth

opportunities

• Raise income potential from

market operations and

commercial optimization

• Leverage value from Nordic

power surplus

5

Energy has a dual mission in HydroStrong, sustainable value creator and energy provider throughout the value chain

To own, operate and maximize

value of Hydro’s energy assets

To provide competitive power sourcing

and global energy competence

6

Hydro is second largest hydropower producer in NorwayBut a net buyer of power globally

7

Production Consumption

Power production and consumption

in Hydro smelters**

TWh

Norwegian power producers*

ConsumptionProduction

Karmøy pilot

Consumption with full installed capacity

Current consumption

Norway Outside Norway

14 1910 5

~17 ~20

* Equity normal production

** Based on consolidated production in Hydro smelters, mid-2015

4

2

0

10

12

6

14

8

42

18

16

Peers Hydro

TWh normal production

20

Hydro energy needs are spread across the value chain, global

regions and energy carriers

8

North AmericaPower 1.7 TWh

Australia/AsiaPower 1.0 TWh

Middle EastPower 4.6 TWh

South AmericaPower 7.3 TWh

Coal 4.9 TWh

Fuel oil 8.2 TWh

EuropePower 19.6 TWh

Natural gas 3.2 TWh

Hydro’s energy consumption in alumina refineries, smelters and rolling mills

Based on consolidated figures mid-2015

Power Markets

019

Nordic power prices decline over the last yearsDownward trend also reflected in forward curve

0

10

20

30

40

50

60

2000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2022 2023 2024 2025

EUR / MWh

Historical systemprice Forward Market Jan 2008 Forward Market Jan 2011 Forward Market Jan 2014 Forward Market Jan 2015 Forward Market Jan 2016

Source: Nordpool Spot

Prices expressed in yearly averages

10

0

100

200

300

400

500

600

700

0

100

200

300

400

500

600

Jan/08 Jan/09 Jan/10 Jan/11 Jan/12 Jan/13 Jan/14 Jan/15

Import Wind Nuclear Thermal

Hydro Normal hydro Demand Price (PLD)

Interconnected Brazilian hydropower-based systemThermal power has increased in importance during recent dry years

Brazilian power balance and price developmentRolling 12 month data

TWh BRL/MWh

Interconnected power system, Brazil

11

N

NE

SE

S

Belo Monte

Rio Madeira Teles Pires

*Source: ONS, EPE, ANEEL.

Energy in Hydro

0212

Value creation in Energy dependent on wide array of factors

Power

Price

Expiring

and new

contracts

Sustaining

CAPEX

OPEX &

taxes

CAPEX and

Earnings for

new GWh

Commercial

and operational

competence

Volume

Drivers

13

Competitive production costs driven by economies of scale and

operational improvements

Taxes and fees account for a large share of costs, making sustainable framework conditions crucial

Total operating costs for Norwegian power producers*NOK/GWh

Hydro Peers

14%

6%

10%

22%

36%

12%

Property tax

Concession fees and other

Transmission costs

Sustaining capex

Resource rent tax

Opex

Average operating cost, incl. tax/fees, by category2007-2014

14

* Based on PA Benchmarking survey

Delivering value from growthDriven by capacity additions, debottlenecking and operating competence

• The normal production in Hydro’s power plants

raised from 9.4 in 2008 to 10 TWh in 2013

− New power plants since 2008

− Holsbru, Vasstøl, and Vigeland acquisition

− Improved power plant efficiency from replacement

of turbine runners

− Improved optimization through competence

− E.g. handling flooding situation to minimize water losses and

ensure safe operations

• Further potential

− New power plants under construction

− Midtlæger, Mannsberg

− Utilizing regulatory frameworks supporting

renewable power generation

− Turbine runners as part of rehabilitations

− Further improving long-term optimization

New power plants

Normal production 2008

Further potential

Normal production 2013

Upgrades and operational

improvements

9,4 TWh

10 TWh

15

Sell to a publicly-owned entity Merge into a larger publicly-owned asset with one

or several owners

7

3

Energy

production

with RSK

10*

7

21

7

3

Energy

production

w/o RSK

Sell 2/3

Sell 100%

RSK ~3 TWh

NewCo

>= 9 TWh

>= 6 TWh

• Retain full production as part of a larger asset

• Max 1/3 Hydro (private) ownership

• No reversion after such a transaction

• Need partner(s) with min 6 TWh to maintain equity volume

or

Production w/o RSK

Sourcing to compensate for RSK

RSK

The diagrams on this slide are simplified for illustration purposes

* Normal production

TWh

Broad optionality to maintain asset value within the reversion regime

16

Merge into a larger publicly-owned asset with one

or several owners

RSK ~3 TWh

NewCo

>= 9 TWh

>= 6 TWh

• Retain full production as part of a larger asset

• Max 1/3 Hydro (private) ownership

• No reversion after such a transaction

• Need partner(s) with min 6 TWh to maintain equity volume

The diagrams on this slide are simplified for illustration purposes

* Normal production

Broad optionality to maintain asset value within the reversion regime

• Law proposal from government on industrial ownership

published 9 November

• Proposal for hydropower JVs:

• Maximum 1/3 private ownership maintained

• Allow private owners access to physical power

• Pro-rata power offtake in line with ownership share

• The new law would allow Hydro to maintain access to

physical power through restructuring RSK assets into 1/3

ownership position in company with liability

17

Providing competitive global energy sourcing and competence Commercial competence, analytical capability and market insight

• Execution of hedging strategy

• New power contract secured for 2018-25 for

Rheinwerk smelter

• Gas/power sourcing for rolling mills

• 3.75 TWh power sourcing secured for the

Norwegian smelter portfolio 2021-30

• 330 GWh power sourcing for the Norwegian

smelter portfolio 2031-40

• Fuel switch evaluations

• New power contracts for B&A operations

• Overall energy matrix optimization

• Increased Energy presence in Brazil to lead the

sourcing processes and explore commercial

opportunities

• Norsk Hydro Energia Ltda established as a vehicle

for the power market operations

Lead power sourcing negotiations

Assist with energy sourcing strategies

Analyze energy markets and provide insight

B&A Primary Metal Rolled Products

Optimize power portfolio

Improve security of power supply and manage grid agendas

18

Improving smelter cost position with competitive power sourcing

0

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33

TWh

Statkraft 6.4 TWh

Other contracts

Current captive

Total consumption at full capacity

Total consumption at full capacity plus Karmøy pilot

Utilizing moderate pricing environment in Norway and abroad

* Net 8 TWh captive assumed available for smelters

0

5

10

15

20

25

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33

TWh

Rheinwerk Slovalco

Albras Tomago

Alouette Qatalum captive

Total power consumption in smelters at full capacity

** Albras and Slovalco on 100% basis

Sourcing platform for fully-owned smelters, Norway* Sourcing platform for JVs and Rheinwerk smelter**

19

Timeframe

• Improve safety performance – injury free environment

• Robust industrial ownership for RSK – maintain physical power offtake post 2022

• Deliver additional production volumes through upgrades/sustaining investments

• Secure new competitive sourcing contracts in Norway post 2020

• Support competitive energy supply as well as energy policy and framework

development for other business areas

TRI <2

3,0 TWh

~0,1 TWh

4-6 TWh

Progress

2020

2022

2020

2020

Continuous

Ambitions Target

Energy mid-term goalsCreating shareholder value by maximizing value of own hydropower assets and ensuring reliable and

competitive energy supply for Hydro

20