Alf Bjarne Kaasen

Finance

SAP S4 HANA ProjectNorsk Hydro

A resource-rich, global aluminium company

• Global provider of alumina, aluminium and aluminium products

• Leading businesses along the value chain; raw materials, energy, primary metal production, aluminium products and recycling

• 13,000 employees involved in activities in more than 40 countries

• Market cap ~NOK 100 billion/USD 11 billion

• Annual revenues ~NOK 82 billion (2016)

• Included in Dow Jones Sustainability Indices and FTSE4Good

PrimaryMetal

RolledProducts

Energy

Bauxite &Alumina

Extrusion joint venture

With robust positions across the value chain

(4)

Engaged in the entire aluminium value chain

Bauxite Alumina Energy Primary Casting Products

Rolling

Extrusion

Recycling

Recycling

(3)

Bauxite Alumina Energy Primary metal Casthouse Rolled products Extrusion Solutions Recycling

A resource-rich, global aluminium company

(4)

A complete aluminium company

• Primary aluminium production in Norway, Germany, Qatar, Slovakia, Brazil, Canada, Australia

• 10 TWh captive hydropower production

• European #1 in rolled products

• 50% partner in Sapa, world leader in aluminium extruded profiles

•Remelting in the US, European recycling network

• Technology and R&D centers

Primaryaluminium

2.1million tonnes

Robust positions along the entire value chain

Europe’s

#1aluminiumcompany

World’s

largestaluminarefinery

Highqualitybauxite

10 TWhhydropowerproduction

Global

top 10aluminium

smelter

Largesthot rolling

mill outsideChina

Marketleader Asiain primaryfoundryalloys

Longposition in bauxite and

alumina

Bauxite & Alumina

Primary aluminium

Rolling mills

Remelters

The vision of One – S/4 HANA Enterprise ManagementFuture SAP solution harmonization can be viewed in 3 layers

5

TCO driven

Business driven

Business driven

SAP Solution layersValue

Hydro Business requirements

Current processes /System setup

SAP IndustryBest practice

• Efficiency

− Transform to value-added work

− Business planning improvement / Rolling forecast

− Process simplification and harmonization

• Insight & analytics

− Improve reporting capabilities, also for end users

− Information on mobile devices – anywhere, anytime

• Compliance & security

− ICFR improvements

− Segregation of duty

6

Expected benefits from Finance stream

Assumption: Greenfield will allow to realize higher value in long term, while

brownfield investments can be allowed given positive business caseHigh level recommended roadmap approach

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High

Time

Low

Busin

ess V

alu

e

2017 2025

AS IS

“Brownfield”

“Greenfield”

• Investments in AS IS solutions acceptable provided positive

business case within remaining timeframe

• Business Case = + immediate business value + reusability in greenfield – investment in brownfield

Lost value

• Reduced harmonization and

simplifications• Lost efficiencies of common

business processes

• Lower flexibility in responding to

business changes• Higher cost of future changes due

to lower standardization

• Reduced alignment with

Digitalization and Industry 4.0 initiatives

• “History luggage” and compromises

on TO BE due to brownfield approach limitations

• IT operations costs savings

Main phases in SAP S4 roadmap

(8)

Plan & Prepare

Principles

2016

Pre-Study

Finance and

Roadmap

Foundation

Analysis & design

Proof of Concept

(PoC)

PilotImplementation

Template

To be decided Planned

TCMSImplementation

Foundation & Structures

2017 �

Plan & Prepare

Implementation

TCMSUpgrade

Template Roll-out

202X

High level plan

BCM CM BAM IHC

TRM BI FI

Strategic alignment process

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Technology

People

Processes

Prestudy Design Implement Roll out Realize benefits

Business Area Vision

Realized

Run change management

Optimize processes

Build digital tools

(10)

• Continue improvements drive.

• Capture commercial opportunities

• Extend technology and innovation lead

• Turn leading HSE/CSR position into competitive advantage

• Deliver on fast-developing

customer demands

• Capitalize on strong climate position over time

• Further strengthen relative industry position

• Enhance market positions and

high-grade portfolio

• Mature selective growth projects for when time is right

Hydro’s aspiration for higher value creation

Hydro improvement drive

continues at full pace

A solid platform for building

an even stronger HydroHydro aims to be climate

neutral by 2020

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