Board of Directors' Report

board of directors group photo

Key developments

In 2011, Hydro completed the transformation of its business into a resource rich, fully integrated aluminium company with the integration of the Vale Aluminium operations. With a global business model based on measured performance, the company is well positioned among the leaders in the aluminium industry.

The establishment of our new Bauxite & Alumina business area secures the supply of key raw materials to Hydro's own operations and creates a strong platform for future growth. These assets, including the Paragominas bauxite mine and Alunorte alumina refinery, are technologically advanced, cost-competitive and integrated through a pipeline that delivers bauxite for processing into high-grade alumina. The completion of our new world-class smelter, Qatalum, and the integration of Albras in Brazil, has significantly increased Hydro's electrolysis capacity to 2.4 million metric tons.

Prepared for a challenging period ahead

There has been a significant increase in uncertainty regarding economic developments within certain countries and geographic regions in which Hydro operates. In Europe, the fiscal crisis has escalated resulting in deteriorating economic conditions in several countries and in Southern Europe in particular. Recovery has been weak in the US and growth has slowed in China and other major emerging markets. Cost pressure has increased for the aluminium industry in general. The negative effects have been exacerbated by a decline in LME prices to relatively weak levels. Due to the deteriorating market conditions and cost pressures, Hydro wrote down fixed assets by NOK 1.3 billion in the fourth quarter of 2011.

Hydro has concentrated on maintaining and reinforcing improvements achieved following the previous downturn. The company has a robust financial position and is prepared to meet the challenges ahead. Capital investments have been reduced and Hydro has maintained a strong focus on operating capital. Substantial cost reductions have been achieved throughout the organization.

Responding to market developments toward the end of 2011, Hydro reduced remelt production and strengthened its emphasis on improvement programs and financial discipline. Due to market conditions, the company decided not to restart the remaining 85,000 metric tons (mt) of curtailed capacity at our Sunndal smelter. In January 2012, Hydro also decided to curtail 60,000 mt of production at its Kurri Kurri aluminium smelter which has been negatively impacted by low aluminium prices, increased raw material costs and the strong Australian dollar. No restart of previously curtailed capacity is currently planned.

Due to a continued decline in market demand, Hydro has implemented measures to turn around its Building Systems business targeting cost improvements of EUR 40 million by the end of 2012, compared with 2010. Further production efficiency and cost reduction initiatives have been implemented across the company's downstream operations.

About Hydro's Board of Directors

Terje Vareberg (Chairperson)
Terje Vareberg

• Position: Independent businessman.
• Education: Master of Science in business, Norwegian School of 
  Economics and Business Administration (NHH).
• Current directorships: Chairperson of Bergli Rådgivning AS, TS Eiendom AS, T Stangeland Maskin AS, NorDan AS, Malthus AS, Ipark AS, Aarsland Møbelfabrikk AS, Fabrikkveien II AS, Aarsland Holding II AS, Solstad Trading AS and for the Electrion committee of innovation Norway. Board member of Solstad Offshore ASA, Energy Ventures IV AS, Lærdal Finans AS and Farsund Vekst AS. Member of the supervisory board of SpareBank 1 SR Bank ASA.

• No. of Hydro shares: 18,391.

Bente Rathe (Deputy chairperson)
Bente Rathe

• Position: Independent businesswoman.
• Education: Master of Science in business, Trondheim Økonomiske Høgskole (HIST); MBA from the University of Denver.
• Current directorships: Chairperson of Ecohz AS and Cenium AS. Board member of Powel AS, Nordic Choice Hospitality Group AS, Home Invest AS, Polaris Media ASA, Svenska Handelsbanken AB, and Innovation Norway. Member of Ethics of Council for the Government Pension Fund, Global.

• No. of Hydro shares: 29,000.

Finn Jebsen
Finn Jebsen

• Position: Independent businessman.
• Education: Master of Science in business from the Norwegian School of Economics and Business Administration (NHH); MBA from the University of California, Los Angeles.
• Current directorships: Chairperson of Kongsberg Gruppen ASA and Kavli Holding AS; deputy chair of KLP Forsikring; board member of A. Wilhelmsen Management AS, Berner Group AS, Future Subsea AS, Norfund and his wholly-owned company Fateburet AS.

• No. of Hydro shares: 53,406.

See CV

Tito Martins
Tito Martins

• Position: Chief Financial Officer and Investor Relations Executive Director, Vale S.A.
• Education: Bachelor's degree in Economics from the Federal University of Minas Gerais. MBA from IEAD at the Federal University of Rio de Janeiro.
• Current directorships: President of the Board of Directors of Mineração Rio do Norte S.A. (MRN).

• No. of Hydro shares: None. Vale holds 447,834,465 shares.

Eva Persson
Eva Persson

• Position: Executive Vice President and General counsel for the Volvo Group.
• Education: Master of Law from the University of Lund, Sweden.
• Current directorships: Board member of Handelsbanken region Western Sweden

• No. of Hydro shares: None.

Ove Ellefsen (Employee representative)
Ove Ellefsen

• Position: Project Supervisor / full-time union official representing the Central Cooperative Council (Sentralt Samarbeidsråd).
• Education: Certificate of apprenticeship in electrochemistry. 
  Work supervisor training.
• Current directorships: None

• No. of Hydro shares: 2,544

See CV

Liv Monica Stubholt
Liv Monica Stubholt

 Position: CEO and member of the board of Aker Clean Carbon AS
• Education: Master's degree in law (cand. jur.), University of Oslo.
• Current directorships: Board member of Aker Clean Carbon AS and the Norwegian-German Chamber of Commerce. Deputy chair of the Norwegian Review Committee for the European Economic Area.

• No. of Hydro shares: None.


See CV

Sten Roar Martinsen (Employee representative)
Sten Roar Martinsen

• Position: Process operator / full-time union official representing the Norwegian Confederation of Trade Unions (LO)
• Education: Certificate of apprenticeship in electrochemistry.
  Work supervisor training.
• Current directorships: None

• No. of Hydro shares: 3,215

See CV

Billy Fredagsvik (Employee representative)
Billy Fredagsvik

• Position: Process operator / full-time union official. Represents the Norwegian Confederation of Trade Unions (LO)
• Education: Trade school (mechanics)
• Current directorships: None

• No. of Hydro shares: 2,159

See CV

Inge K. Hansen
Inge K. Hansen

• Position: Independent adviser.
• Education: Master of Science in business, Norwegian School of Economics and Business Administration (NHH).
• Current directorships: Chairperson of Bertel O. Steen AS, Norsun AS, Gjensidige Forsikring ASA, Hotell og Restauranthuset Continental, Leonard Nilsen & Sønner AS, Core Energy AS and AIM Norway SF. Board member of Jiffy International AS, Master Marine AS, Johan G, Olsen AS and Sissener AS.

• No. of Hydro shares: 12,000.


Updated: October 11, 2016