Norsk Hydro ASA

Rikard Lindqvist – Investor Relations Svein Richard Brandtzæg – President and Chief Executive Officer Eivind Kallevik – Executive Vice President and Chief Financial Office

Luc Pez – Exane BNP Paribas SA Rob Clifford – Deutsche Bank Terrence S. Ortslan – TSO & Associates Jatinder Goel – Citigroup Amit Pansari – Société Générale

Thank you. Welcome to Hydro’s First Quarter 2013 Results Conference Call.

With me here to present is President and CEO, Svein Richard Brandtzæg; and Executive Vice President and CFO, Eivind Kallevik. With that introduction, I’ll leave the floor to you Svein Richard.

Thank you, Rikard. The underlying result in the quarter was NOK 1.77 billion, which is up NOK 900 million from the fourth quarter and approximately NOK 0.5 billion from the first quarter last year.

The result was impacted by higher realized alumina and aluminum prices and seasonally higher sales for most of the segments. The result in energy was up driven by higher production and prices.

And although we got help from seasonality, we continue to see a challenging markets and also in general weak development for commodities. And we have questions of course about the development in the global economy and especially uncertainties related to the growth in the U.S.

Of course the consequences of the continued debt crisis in Europe, and also the development of the growth in China going forward. If you take a look at the supply demand balance, we had as I said stronger demand in the first quarter and somewhat higher production, but in general a balanced market in the first quarter.

We maintain growth in 2013 of 2% to 4% outside China and we expect the balance market given the closures and new production that will come on stream during this year. So a balance market going forward in 2013.

If you now take a look at reported inventories, there has been some increases, but that is related to overproduction in China that is same situation as we said previously in the first quarter related to Chinese New Year and some lower demand for some a shorter period during the quarter, but in the world outside China we don’t see any increases its fairly stable inventory development outside the China. On ingot premiums, we have seen the trend sideways at this typical high level.

Ingot premiums have come down some dollars in Europe, while more or less been changed in U.S and Asia. However, the increases in premiums that we have seen recently is this quarter positively influencing our realized product premiums in extrusion ingot and primary foundry alloys.

The aluminum price was gone to $2,040 per tonne in the quarter hence from $1,940 in the fourth quarter last year. The realized price was $2,043 per tonne, 6% the reduction LMEs during the quarter in Norwegian Krone due to weakening of the Norwegian currency minus 3% from LME in the quarter.

The alumina price increased in the first half of the quarter on the back of temporary supply concerns mainly in Australia. These concerns are now [east] in combination with the increased macro uncertainty the price has reflected to a level of $320 to $330 per tonne.

What is interesting to see here is that alumina prices rolling up relatively to LME and is now at a level of 17% of the aluminum price. The next slide shows the import export balance of China and starting from the bottom fairly stable export of semis and fabricated products from China.

We have a balanced situation on primary metal meaning there is no net export on our net import. We see a similar development on scrap as we have seen previously imported scrap is fairly stable.

We see a reduction in alumina import, but the record high bauxite import during the quarter. And, of course, the bauxite import is again showing the tendency of external support or external sources to China to keep at the aluminum production at the level they need there.

But we also have seen that tendency previously, and Indonesia has been the key exporter to China, and we have seen removable of temporary export restriction from Indonesia this quarter. We maintain our strong focus in our bauxite and alumina assets in Brazil.

In Paragominas we have a stable production around 9 million tonnes as early run rate in the quarter. In Alunorte, Alunorte satisfied with the situation, we have a similar production volume as we had in the previous quarter, but our ambition is to increase the production.

And, we have from effects from power voltage in the end of 2012, which caused some instability of power sourcing into Alunorte, and there also some operational issues with (inaudible) we are working with in Alunorte. So, we are now focusing in to get more resources into that and especially operations and maintenance progress in Alunorte that has to be improved.

We have introduced an improvement program on cost, and the B2A program that has been announced previously has a target to reach $1 billion by the end of 2015, compared to 2011 and half of that we have ambition to deliver on this year. The $300 program is (inaudible) and is said to be completed by the end of this year with additional saving of $65 per tonne.

In addition, what has already been delivered, we delivered $235 per tonne improvement to the end of last year. And the program is developing according to plan.

For the joint ventures, we have improvement programs in place. We should improve the cost positions the other half of our portfolio.

Looking at the cash costs, it is trending downwards and in first quarter of this year apparent cash cost was $1,625 per tonne with a margin of approximately $435 per tonne. The cash position was in the quarter positively impacted by casthouse margins primarily through the ingot premiums and also increased contribution from Qatalum.

And Qatalum was positively impacted by LME, premium and somewhat of reduction in cost. On the rolled products we have 5% higher sales in the first quarter compared to the fourth quarter last year.

It was from the reduced export of can out of Europe that lead to automotive and general engineering had the good development of about the 10%. Compared to the first quarter last year, we have 4% higher sales in fact lower sales in cost and heating general compared to last year due to lower car volumes, lower production of cars and we have positive volume development in Litho in can and general engineering compared to last year in rolled products.

In addition to the volume effect, increased productivity and good relations are impacting our results in this business area. On the energy side, the Nordic spot prices increased in particular to about the end of the first quarter due to cold and dry weather conditions.

Water reservoir levels declined sharply in Norway resulting and somewhat constrained due to logical situation in Western Norway. However, weak coal and CO2 prices combined with low German power prices, partly limited the increase in the Nordic power prices.

The Nordic hydrological balance ended first quarter 26 terawatt hours below normal levels. In Norway, the hydrological balance was about 15 terawatt hour below at the end of the quarter.

So with the challenging market situation, we continue to work on the things that we can influence and the improvement efforts is our main priority. As you know we have improvement efforts across the whole value chain in (inaudible).

The Sapa transaction is one of the measures we are taking to improve our business by creating a stronger Extrusion Company. The European Union Commission has raised some concerns and as a response (inaudible) to divest some assets.

The transaction has been improved in the U.S. and several other jurisdictions.

Closing of the transaction is subject to approval in China and European Union and we expect closing of the transaction in the first half of this year. We also adjust our remelt production and we took it down last year with 200,000 tonnes this is very flexible production system that we can use to meet the demand and see to improve the margins on our products.

The recent announcement is related to portfolio adjustment in all products that we are adjusting our capacity towards markets with higher margins and improved demand in automotive body-in-white. So with this review, I’ll give the floor to Eivind Kallevik, the new CFO in Hydro.

Thank you, Svein Richard and good afternoon everybody who is on the call. As you all have noted.

Hydros underlying EBIT improved from a NOK 172 million in the fourth quarter of last year to NOK 1.077 billion this quarter, an improvement of like NOK 905 million between the quarters, this basically reflects better results in all our business areas. From an overall perspective this quarter has been impacted by seasonally stronger volumes in all business areas with the exception of bauxite and alumina.

In addition, we have also realized higher prices within most of our business areas. I will get back to some more details on each of the areas later on in the presentation.

Now, let me draw your attention to the line called other and eliminations. We have an underlying EBIT of a negative NOK 38 million versus a negative of NOK 275 million in the previous quarter, a difference of NOK 237.

The quarter-on-quarter change mainly relates to changes in eliminations of internal gas and losses on inventories. Adjusting for these internal eliminations the result is roughly NOK 150 million in charges for common services and other businesses, this is pretty much in line with what we have guided as a normal run rate in the past.

If we take a closer look at this quarter’s main result drivers, as I said, the underlying EBIT improved with roughly NOK 900 million to close to NOK 1.1 billion for the first quarter compared with the fourth. If we first look down at the energy volume and price effects, one-third of that is coming out of higher positive price effects in the quarter while two-thirds of that improvement is coming from seasonally increased volumes.

On the alumina and aluminum volume and price that is up NOK 400 million. This quarter it’s primarily all related to our primary metal activities.

We see LME currency – LME is up with roughly $100 between the quarters giving us a positive effect of about $200 while 36,000 tons of increased production – increased sales in the periods gives us an additional $100. We have good contributions from our joint ventures, increasing the results from NOK 140 million between the periods.

This is partly offset by somewhat higher variable costs of a negative NOK 70 million, which is primarily driven by higher alumina costs for this (inaudible) in this period. The last block on this slide is called other and it’s positive variation of NOK 300 million or NOK 0.3 billion, that is primarily driven by the explanation I gave on the previous slide, which is the change in other and eliminations.

If we then move to key financials, we see that revenues are up approximately NOK 0.5 billion between the quarters of 3%. This is driven by increasing prices and volumes in most of the areas with a major revenue increases coming from metal markets and energy.

The underlying EBIT as I said landed on NOK 1.077 billion, up NOK 900 million from the last quarter. We have excluded negative effects of NOK 372 million from the underlying EBIT, and I will get back to it that in more detail on the latest slide.

Financial items for this quarter was a negative of NOK 171 million, this includes currency losses of NOK 115 million, which is more or less stable from Q4. For the first quarter the net currency losses primarily related to U.S.

dollar debt. Income taxes for this quarter, income before tax for this quarter is a positive NOK 535 million with a calculated tax expense of NOK 281 million for the quarter that gives us an effective tax rate of 53%.

This, of course is relatively higher, but also reflects the relatively higher share of earnings from more energy segment, which as you know is also a positive hydropower (inaudible). This gives us an underlying reported net income of NOK 263 million, up from NOK 87 million in the last quarter.

The net financials was as I said, a negative NOK 171 million for the quarter. We commented on the Forex part.

And, I would say, what is may be worth drawing your attention to this quarter is the net interest on pension liability. We have started in the first quarter of 2013 to report according to IAS19R the International Accounting Standards under IFRS.

Under this implementation Hydro has decided to split out the interest components of the net periodic pension cost and moved out to the financial items. And this is what you see on the line called net interest on pension liability.

If you look at the 2012 figure you see NOK 280 million, if you divide that by four you get NOK 70 million, somewhat higher cost recorded in 2012 compared to 2013. This, of course, is due to the reduced pension liabilities that we did talk about in the fourth quarter reporting which are driven by change assumptions using covered bonds instead of government bonds in Norway, where we calculate the pension obligations.

The other effects are relatively stable between the quarters. Moving down to items excluded from underlying EBIT, as we have mentioned before we do exclude certain elements when we discuss underlying performance to give us a better understanding of the underlying business.

In this quarter, we have excluded negative items of about NOK 370 million from the underlying result versus roughly NOK 530 million positive in the previous quarter. If we try to work down our way down the table, we see a negative unrealized effect on embedded derivatives and power and raw material contracts this period.

This quarter, the effect is mainly driven by the developers of LME, however we also see some minor changes from currency. On the second line, unrealized derivative effects on LME related contracts, the effects from the various areas are relatively small in the period and that partially offset each other.

But in general, this is the combination of positive effect, short positions due to falling LME prices nearby, which are offsets by some reversal of realized profits, as well as negative effects or net long positions of decline. The third item of any size is the rationalization and closure costs, which in this quarter is primary related to the corporate restructuring program in Oslo.

In fourth quarter, the rationalization charges were approximately twice the size, and related to the closure of our smelter in Australia, Kurri, Kurri. Moving into the business areas, and let’s talk about bauxite and alumina, the underlying EBIT was a negative $63 million, which is pretty much in sideways development compared to fourth quarter 2012.

The realized alumina price improved somewhat between the quarters, while this is more than offset by higher energy and sourcing costs of third party alumina. The daily alumina production adjusted for the fewer production days in Q1 is relatively stable from the fourth quarter, but it remains that the weak level that we are not satisfied with as somebody can explain as well.

(Inaudible) on the other hand is also operating at a stable yearly run rate of 9 million ton, which is quite good given the first quarter of the year, is typically the rainy season in the Northern Brazil. The realized prices for alumina has the federal up about 4% this quarter, which had a positive impact, as most of you know close to 20% of the portfolio now is sold on index prices, but the majority of the contract of our volumes is now sold – is sold on contracts linked to LME.

We do expect that the shares sold on index will gradually increase going forward until after 2016 when the larger part of the contract portfolio will be renewed and it can be renewed with different pricing structures. The positive impacts from prices were more than offset by increasing operational cost largely as a result of the issues that I (inaudible) mentioned earlier in part of secured and by higher energy costs for the period.

In addition to the evolve effects this quarter also included an insurance compensation related to a historic business introduction case in Brazil. If we look into the next quarter we do expect stable production volumes, but somewhat increased maintenance activity in the period.

Let me also remind you that realized prices will mainly follow LME with one month like, meaning that the current pricing environment represents a downside to this quarter's realized prices. We had – moving to primary metal, we saw a good increase in profitability coming from an underlying EBIT of NOK 58 million fourth quarter to NOK 364 million this quarter.

As I’ve already explained, we saw an increase in LME of roughly $100 per tonne, from 1940 to 2043. Sales volumes increased by $36,000 tonnes due to some sales out of inventory as well.

Together these effects increased our result by approximately NOK 300 million. Qatalum results were improved by a NOK 100 million and I will rework in more detail on that on the next slide.

Offsetting this is a cost increase is about NOK 70 million higher variable of fixed cost were approximately half of this was relating to increase alumina cost (inaudible). At the end of first quarter, we have sold approximately 50% of the primary aluminum production for second quarter forward at the price of around $1975 per metric tonne excluding Qutalum.

As you will be aware, Q1 was the first quarter where we partly started our new pricing regime. For second quarter, the whole quarter will be covered by this, and this means that we will sell our liquid production according to the one month forward pricing formula.

Thus due to inventory and other timing effects, Hydro's realized prices will link LME spot prices with approximately 1.5 to 2 months. We are very happy to see stable and high production volumes in Qutalum.

We are at the above maintained capacity at around 600,000 tonne on a yearly basis for the first quarter. The underlying net income for this period improved by NOK 103 million for our share of Qutalum compared to fourth quarter.

This reflects higher sales price, higher premiums in addition somewhat less maintenance cost compared to Q4.

Metal markets delivered an underlying EBIT of NOK 146 million versus NOK 70 million in the previous quarter. Excluding currency and inventory evaluation effects, which were relatively stable between the quarters, we had a result of a NOK 110 million, a sizable increase from the fourth quarter’s NOK 40 million result.

The result improvements are primarily driven by a 30% improvement in volumes, in addition to stronger margins in this business, and we will also have good contribution from our sourcing and trading activities. Looking at the second quarter, we expect the continued stable re-melt volumes, but at the same time please remember that results from our trading activities due to its hedging currency effect by nature can be volatile between the quarters.

In rolled products we a saw good, we saw an improvement in the financial results from NOK 70 million in the fourth quarter to NOK 153 million in this, primarily helped by increased seasonality in sales in all business segments with the exception of countries which saw somewhat lower export sales out of Europe compared to last quarter. Average margins are somewhat higher for the period, but the pressure on margin still remains in this business in particular in the standard statement or general engineering.

We saw positive developments in productivity as well as on the cost side in the first quarter measured through kilos per man-hour and the cost per tonne respectively. If you look into second quarter, we do you expect relatively stable volumes and as always it is a margin business and we do expect to see continued pressure also in this going forward.

Energy increased underlying EBIT with NOK 195 million compared to fourth quarter giving us the total result for the period of NOK 570 million. Prices were up in the energy pricing area with roughly 40 kroner per megawatt hour where we have two-thirds of our production situated.

The price increase was driven by cold and dry weather which has also led to somewhat constrained hydrological situation in the Western Norway at the end of the quarter. We had seasonal higher production by 456 gigawatt hours, and also an increase in net spot sales with 419 gigawatt hours.

For second quarter, we expect seasonally lower production, which is further impacted by low snow levels in mountains in Norway. And on prices we have so far realized higher average prices in the second quarter than what we realized for the first quarter as an average.

As we did explain in fourth quarter, extruded products will be treated as discontinued operations on to closing of the Sapa transaction, which are concern we do still expect to take place in the first half of 2013. All previous periods are restated to reflect this.

The underlying income from extruded products was NOK 49 million for this period. If we adjust the depreciation financial items and taxes to negative NOK 71 million, this leads us to a pro forma underlying EBIT of the negative NOK 22 million for the business area.

This is the NOK 50 million improvement compared to Q4. We have seen so much higher seasonal sale volumes compared to Q4 and margins remained relatively stable.

Well if we do compare back to first quarter of 2012 this quarter is weaker in terms of volumes and gives us some inside into the challenges of this market. Looking into second quarter, we expect continued weak markets from a volume perspective for this business.

Then if we take a quick look at the net cash and debt development in Q1, as you will remember, we started the quarter with a net cash position of NOK 1.7 billion. In this period we have generated an underlying EBITDA of NOK 2.2 billion, which is up NOK 900 million from the fourth quarter.

We have in this period had a normal seasonal increase in operating capital partly driven by increased sales, but also driven by prices of NOK 700 million. We have a negative development in what we call other adjustments of NOK 1 billion, this is partly driven by taxes that’s been paid in the period, but is also used to back out non-cash effects, which are part of the underlying EBITDA.

This gives us net cash flow from operations of 0.5 billion positive. On investments, we have spent or invested 0.5 billion for the period, this is very much in line with the early guidance of keeping a tight shift in capital discipline or guiding for 2013 of 3 billion is very much in line with this.

We have a negative development on discontinued operations, this is comprising of two things, it is poor results in the period reflecting operations, but it’s also a build-up reflecting the higher volumes for the period. Financial lease is also a negative 0.5 billion, we have transferred a lease (inaudible) on to the balance sheet, which includes now a net debt, and for the fourth quarter this used to be a part of the adjusted net debt, so the effects on Hydro on totality is neutral.

Last part is, what we call other which is basically negative currency translation effect due to the weakening of the NOK versus the U.S. dollars between the quarter that gives us some what reduced net cash position, but it’s still positive of NOK 0.4 billion for Hydro.

Thank you. Operator that concludes the presentation, we can open up for questions.

Hi gentlemen, I would have two questions if I may. First of all in primary metal, whether you could provide a bit more color on any guidance for cash costs going into Q2, and how you would expect premiums to continue impacting the cash cost basis so you re-bought there going forward?

And, second question would be with regards to metal markets, which was very good surprise for this quarter and how you would see next quarters coming in? I know it’s very well at time, but if you could provide a bit more color from what are pointing to in the presentation?

Thank you.

Maybe, I can start commenting on the cash cost for the primary metals. The $300 program, as you know is for the fully owned smelters.

We delivered our target last year $235 per tonne and the remaining $65 per tonne will be delivered and through the end of this year. So, we should have additional improvement in the second quarter compared to the first quarter, but this, of course, is also depending on several other factors and premium on our metal products is one factor that is influencing on these [resale].

And, what we see in the first quarter is that we finally have seen the impact of the very strong ingot premiums on the extrusion ingot premium and from [load] premium. These products are priced on LME basis plus the premium, while sheet ingot has been priced on LME plus the ingot premium, plus the conversion premium for sheet ingot.

So sheet ingot has benefited already from the increased sheet ingot premium levels, that primarily foundry alloys and extrusion ingots has been lagging behind. So we expect that the positive development that we have seen in the first quarter will also be maintained in the second quarter with regard to premiums and metal products that we are selling into the market.

On the question on metal markets, it is that you say it’s a relatively volatile area for many reasons. What we have said in the past, if you exclude inventory valuation effects and the likes is that we guide on roughly a NOK100 million as a going performance number for that business area over time.

So I think that is a good single of how you can estimate for second?

Thank you.

Hi, gentleman. Thanks for the call.

Just got a simple question really looking at the cash slide, which was the second last slide that – the other adjustments, the 1 billion knock, bit of a tricky question. Can you give us the guidance, roughly where is that, where do you see that going to the second and third quarter’s, even though a little bit pressure on the underlying EBITDA (inaudible) statements?

Well, Rob, this is a volatile part of the cash flow or the net cash bridge I mean – as I mean mentioned, we do have some taxes in particular related to the power of surtax from the energy business area, but you might also recall that we had a positive effect on this line in fourth quarter, so there is some periodic effects going from quarter-to-quarter. So it’s really hard to guide on that topic as such, but of course as long as we make money, there will be some tax element in the other adjustment line.

Yeah. Okay, I mean your cash, as it is this quarter effectively cash negatives, so your net cash position dropped, is it fair to assume that you will remain cash negative with the decline we have seen in the aluminum price so far, is that a fair assumption or are there things you can do the address that?

I think Rob I mean, clearly we work quite hard on optimizing things like net operating capital and investments and all the other issues that we do control work on a daily basis. On this slide please remember, that there is a financial lease of half of billion, which has a negative effect on this slide, but then last quarter was included in the net adjusted debt, that we also talked about the fourth quarter, meaning that it’s neutral for the totality.

Looking into second quarter – whether we will be positive cash, please remember that we will also do a dividend payment in the second quarter of 2013, roughly $1.5 billion so that is more likely than not on a stake of below negative line for the net cash position.

So, okay sorry, it was a bit of a tricky question, sorry about that. Thanks for that.

Yes, good morning. The investors seemed to be shifting towards looking into the cost levels and asset realization and as well as the asset realignments.

Question one is that these are the times whereby companies go through the whole emotions and rationalizations (inaudible) major companies haven’t see your changes and obviously directions will also be realigned. My question is that, Norsk, how do you see yourself along in the lines of the competitors, number one.

And number two, there are assets on the table and available, where are your priorities with respect to assets realignment primary sector and the development products, flat-rolled whatever and/or how to go next level thereby Norsk can be a bigger player and more profitable player. It’s a philosophical question, I think, it’s importantly you should address it at this moment in time?

Thank you.

Good morning, Terrence, and thank you for the good question. First of all, we will continue to work our self down the cost curve both on the alumina and on the aluminum cost curve.

The fact that we will finalize the $300 program this year doesn’t mean that (inaudible) we are finished with our cost continue exercises in primary metal. And I also mentioned earlier today that we are now attacking our joint ventures because we also see good potentials to reduce cost even further down.

So what we do here is a combination or build-up the confidence, use our technology and also simplify our organization, so we can get the sustainable cost reductions in our operations along the value chain. We have also introduced improvement programs in the rolled products that are also showing a good effects, but in general for us it’s about improving operations continuously in the market situation that are quite challenging.

I should also mention that we continue to high grade the product portfolio. We have a lot of programs on the metal markets and also on – we are also targeting higher margin products.

But in general, this is a tough competition and our target is to be among the best in those vehicles and we feel that what we have done with the improvements is helping us. I can also mention that we have cost reduction program in the head office of Oslo where we are getting down the headquarter with 30% on cost, which is second time in to an obvious we are doing that.

We took it down in 2010, 2011 and with 30% and now we (inaudible) quarter again with another 30%. So we have efforts along the whole value chain and of course when we looking at opportunities in the market there will be anything on in the way any sort of consolidation or assets that could be of interested.

The main focus for us is in fact now to improve our existing assets and improve our operational performance.

Yes, it’s actually organic noting outside from a primary or the resource in the bauxite side alumina or the primary [factor]. You not interested in building that portfolio up?

Well, if you look at the main target for us this is of course to improve our position, competitive position, if there was any opportunities coming up. We will come back to that, but with what we have done lately is of course to strengthen our position upstream and that will be a very important strategic development for (inaudible) also going forward.

Okay, perfect. Thank you very much for your attention.

Hi good afternoon John. I’ve got two questions, firstly on the Bauxite sourcing, the volumes look pretty low for the quarter 1.26 million ton.

I can see 1Q remains a seasonally weak quarter, but is there something else we need to be aware of? And secondly on discontinued business cash outflow, it’s been NOK 600 million cash used in this quarter.

And it was NOK 665 million in the first quarter of last year. How do we look at this business, once the JV is up and running?

Thank you.

If we look at the on the Bauxite side first, here I think there is timing differences as to when ship leaves the emerald mine and the rigs (Inaudible) so you have to look at this from, not only from a single quarter, but you have to look at on an average over several quarters, and there is nothing, if you do that, we are still comfortable with what’s the shift in first quarter of 2012, 2013. We think this is relatively normal.

On the discontinued operations, you are right I mean there is cash out in both of these quarters. It is in many ways to soon to and we are not in a position to comment on the combined cash out for the Sapa joint venture when it does merge.

That is something that we have to talk about after the sanction actually has been completed. But, it is as we said before, I mean this is industry, a part of our industry which is quite a challenge in terms of cost and business and it needs to be restructured and improved, and that is also part of the plan behind the whole merger between the Sapa and Hydro’s extruded products business area.

Okay, great. Thank you very much.

Hello.

Hi.

Yes, hi. So, I’ve just two questions.

First one on the alumina division; now, you planned to save like reduce close to 50% of the NOK 1 billion cost reduction in 2013. So with – would you be able to explain where do you see the cost improvements?

And, that will be my first question, and second one would be on the Sapa JV. I think the management has earlier guided for a one-off benefit of NOK 0.5 billion from closing of the JV.

So what is the status on this and, when do you expect it to reflect in the P&L?

I will try and answer your question if I understood correctly it was about the improvement program in the bauxite and alumina business area.

Yes.

It is really a program that takes many levers into consideration. It is about operational stability, it is about procurement, it is about manning and cost efforts and notably it’s for the operational efficiency at the plant.

So, it is really a program that has [bent] off by many, many smaller activities that is aggregated up to this NOK 1 billion. So it’s everything from cost to operational improvements and higher productivities.

Okay. And when do you see the bulk of it in the second quarter, third quarter, I mean just to have a sense on that?

We haven’t commented specifically on the quarter. What we’ve said is that we’ll realize and target to realize half of that NOK1 billion during the year 2013.

Okay, fair enough.

With this question about software joint venture when gain is coming, we have said that, the closing will be within the first half of this year. We will come back details afterwards, but there is substantial synergies here that we’ll take out of the closing.

Okay. Thank you.

Okay, thank you. Thank you for your questions, and thank you for listening in.

That concludes the conference call.