Financial Overview

(in million NOK)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	Rate of change (%)	Factors
Net Sales	64,880	64,181	1.1	-
Net Income	(839)	(1,331)	-	-

Restructuring

Divestiture of Malaysian rolling mill
-The Company announced that it has entered into a binding agreement to sell Hydro Aluminium Malaysia Sdn. Bhd., its aluminum rolling mill in Malaysia, to Nippon Foil Mfg. Co., Ltd., a wholly owned subsidiary of UACJ Corporation, based in Japan. The purchase price was estimated at approximately USD 20 million. The rolling mill has approximately 170 employees and produces approximately 12,000 metric tons of aluminum products annually. The plant is one of the largest aluminum foil producers in the Asia-Pacific region. The transaction was expected to close by the end of 2013. (From a press release on October 30, 2013)

Divestiture of extrusion operations in Norway and Sweden
-The Company announced that Sapa AS has signed an agreement with Norwegian company SKA Invest AS to sell its Hydro Aluminium Profiler AS extrusion operations in Raufoss, Norway, which includes its affiliated fabrication plant in Vetlanda, Sweden. Sapa AS is a 50/50 joint venture formed from the Company's former Extruded Products segment and Orkla ASA's subsidiary. Sapa AS manufactures aluminum extrusions for a variety of markets. The Raufoss extrusion plant consists of three extrusion presses with a total capacity of approximately 30,000 metric tons. The unit has administration, sales, extrusion, and surface treatment operations and employs roughly 170 people. The affiliated plant in Sweden employs around 40 people, with functions for sales, customer support, and a unit for fabrication and processing of aluminum extrusions. (From a press release on September 11, 2013)

Divestiture of Extruded Products segment into a separate joint venture
-The transaction to combine the Company's Extruded Products business area and Orkla ASA's Sapa into a 50/50 joint venture was completed as planned. Sapa AS, the new supplier of extruded aluminum solutions, was established on September 1. The Company and Orkla agreed in October 2012 to combine their respective profiles, building systems and tubing operations in a 50/50 joint venture. Sapa has 23,000 employees and is headquartered in Oslo, Norway. The new joint venture has leading positions in Europe and North America and strong footholds in emerging markets such as Brazil, China, India and Vietnam. (From a press release on September 2, 2013)

R&D Expenditure

(in million NOK)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011
Overall	216	247	248

R&D Facilities

-The Company's primary research and development centers are located in the following locations:

• Ardal, Norway: Primary aluminum technology
• Sunndal, Norway: Alloys and casting
• Bonn, Germany: Rolled products

Technical Alliance

-Kobe Steel, Ltd. announced on June 11 that it has entered into a technical cooperation agreement with Hydro Aluminum Rolled Products GmbH, a subsidiary of the Company, to start providing aluminum sheets for automotive body panels mainly to Japanese automakers. The agreement covers the exchange of technical information regarding the use of aluminum in automobile bodies and structural parts, the licensing of intellectual property and manufacturing knowledge, and technical assistance. The agreement with the Company will strengthen Kobe Steel's ability to meet the needs of its customers by securing a local supplier of high quality materials anywhere in the world. (From an article in the Nikkan Jidosha Shimbun on Jun 13, 2013)

R&D Activities

-The Company is studying the potential for testing next-generation aluminum electrolysis technology at a pilot plant. This pilot plant has an annual production capacity of about 70,000 metric tons and is located in Karmoy, Norway. (From a press release on March 7, 2013)

Capital Expenditure

(in million NOK)

	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011
Overall	2,701	3,256	3,386

Investment Outside Norway

<Germany>
-The Company announced that it inaugurated a new aluminum laser-cutting facility in Dormagen, Germany together with a local operator, Alu-Laser-Service (ALS), and its supplier Schuler. With a capacity of up to 20,000 metric tons per year, the new facility transforms the Company's site at Dormagen into a modern cut-to-size center for automotive strip and sheet applications, including body-in-white parts. The stock comes from the Company's rolling mill in nearby Grevenbroich, where the capacity of the annealing line for automotive strip applications is being doubled to 50,000 metric tons per year. (From a press release on June 25, 2013)

-The Company announced that it has decided to nearly double the capacity of a continuous annealing line at its aluminum rolled products plant in Grevenbroich, Germany, to serve growing demand. After the expansion, the annealing facility AL2 will be able to produce up to 50,000 metric tons of aluminum car body strip annually for aluminum car body components in the European market. The aluminum car body component market is expected to boom by 15 to 20 percent each year between 2011 and 2018. The expanded AL2 will be commissioned before the end of 2014. AL2 produces finished aluminum strip for body-in-white applications such as car bonnets, roofs and doors. (From a press release on March 12, 2013)