Hydro trims capex targets, adjusts EBITDA ambitions amid market challenges

Hydro announced a strategic recalibration of its 2030 targets and financial outlook, reducing capital allocation for 2025 and 2026 to NOK 13.5 bn, down from NOK 15 bn, with the removal of an additional NOK 1-2 bn in annual flexibility. The company will maintain its medium-term annual CAPEX guidance of NOK 15 bn in 2024 real terms. These adjustments reflect current market conditions and geopolitical volatility, aiming to reinforce financial flexibility and long-term competitiveness. The 2030 EBITDA target for Extrusions has been revised downward from NOK 10-12 bn to NOK 8-10 bn, while the Recycling segment’s lower range EBITDA of NOK 5 bn is confirmed, with the potential range narrowed to NOK 5-6 bn.

The company is implementing significant operational improvements, including a proposal to close five Extrusions plants in Europe to consolidate footprint, leading to an estimated restructuring cost of NOK 1.9 bn and annual cost improvements of NOK 0.5 bn from 2027. Its strategic workforce adjustment program is ahead of schedule, expected to deliver annual net run-rate savings of approximately NOK 1 bn from 2026. The broader NOK 6.5 bn improvement program remains on track for delivery by 2030, with NOK 1.2 bn in improvements expected in 2025, surpassing the earlier NOK 600 m target.

Hydro continues to drive its green aluminium transition, with the Illvatn pumped storage project representing its largest hydropower investment in over two decades, adding 48 MW of capacity and 107 GWh of annual renewable power. The company is accelerating decarbonization efforts and is projected to achieve a 15% CO2 reduction by the end of 2025, exceeding its 10% target. Renewed power purchase agreements and growing demand for low-carbon products, exemplified by a €1 bn NKT offtake agreement for Hydro REDUXA, underscore Hydro's commitment to sustainable growth.