Slide 1: Q4 Interim and Year-end Report 2015
Q4 Interim and Year-end Report 2015 Lennart Evrell President & CEO Mikael Staffas CFO
Slide 2: Profits affected by falling metal prices
Profits affected by falling metal prices • Revenues 9,699 (9,614) MSEK R4Q, MSEK MSEK 1 800 7 200 • EBIT ex PIR* 596 (1,134) MSEK 1 600 6 400 ‒ EBIT 416 (1,158) MSEK 1 400 5 600 • Free Cash Flow 36 (366) MSEK 1 200 4 800 1 000 4 000 • Lower metal prices 800 3 200 • Higher Cu feed and higher mine 600
Slide 3: FY 2015
FY 2015 R4Q, • Revenues 40,242 (36,891) MSEK MSEK MSEK 1 800 7 200 • EBIT ex PIR* 4,010 (2,605) MSEK 1 600 6 400 ‒ EBIT 3,590 (2,759) MSEK 1 400 5 600 • Free Cash Flow 2,565 (1,583) MSEK 1 200 4 800 1 000 4 000 • Lower metal prices, improved 800 3 200 currencies 600 2 400 • Favorable smelter terms 4
Slide 4: Prices down, mine cutbacks – Q4 2015
Prices down, mine cutbacks – Q4 2015 Macro • Lower global industry growth • Low market visibility Base metals markets • Low demand growth • Prices further down • Tighter Zn concentrate market • Mine cut backs globally • Smelter cut backs in China Boliden Group Q4 2015 4 2016-02-11
Slide 5: Low zinc and copper prices
Low zinc and copper prices Normal C1 – Zinc Normal C1 – Copper USD/ton USD/ton 5 000 5000 11 000 11000 4 500 4500 10 000 10000 4 000 4000 9 000 9000 8 000 8000 3 500 3500 7 000 7000 3 000 3000 6 000 6000 2 500 2500 5 000 5000 2 000 2000 4 000 4000 1 500 1500 3 000 3000 1 000 1000 2 000 2000 500 500
Slide 6: Boliden market term index
Boliden market term index Boliden Group Q4 2015 6 2016-02-11
Slide 7: Zinc price
Zinc price Zinc price, USD/t Tonnes USD/t 2,600 Q4 Q1 Q2 Q3 Q4 5 000 1 800 000 2,400 4 500 1 600 000 2,200 4 000 1 400 000 2,000 3 500 1 200 000 1,800 3 000 1 000 000 1,600 2 500 800 000 1,400 2 000 Oct/14 Jan/15 Apr/15 Jul/15 Oct/15 Jan/16 600 000 1 500 400 000 1 000 Average price in Q4 vs period 5
Slide 8: Copper price
Copper price Copper price, USD/t Tonnes USD/t Q4 Q1 Q2 Q3 Q4 12 000 1 800 000 7 000 6 500 1 600 000 10 000 6 000 1 400 000 5 500 8 000 1 200 000 5 000 1 000 000 4 500 6 000 800 000 4 000 okt-14 jan-15 apr-15 jul-15 okt-15 jan-16 4 000 600 000 400 000 2 000 Average price in Q4 vs period 200 000 Q3-15
Slide 9: Gold, silver and lead prices
Gold, silver and lead prices Gold price, USD/troy oz. 2 000 Gold Lead price, USD/t 5 000 Lead 1 800 4 500 1 600 4 000 1 400 3 500 1 200 3 000 1 000 2 500 800 2 000 600 1 500 400 1 000 200 500 0 0 20062007 2006 2007 2008 2008 2009 2009 2010 2010 20112011 2012 2012 20132014 2013 20142015 2015 2016 200
Slide 10: Mines
Mines Boliden Group Q4 2015 10 2016-02-11
Slide 11: Mines – higher production, lower metal prices
Mines – higher production, lower metal prices R4Q, MSEK • EBIT 31 (461) MSEK MSEK 1 600 4 800 ‒ 260 MSEK in Q3 2015 1 400 4 200 • Capex 688 (1,458) MSEK 1 200 3 600 1 000 3 000 • Higher production 800 2 400 • Lower metal prices 600 1 800 • Higher costs 400 1 200 ‒ Seasonality and higher volume 200 6
Slide 12: Mines by unit – full year
Mines by unit – full year Business Area • Higher production, lower market terms MSEK EBIT Aitik 1600 • Milled volume 36 (39) Mton 1452 1429 • Cu grade 0.21 (0.20)% 1400 1299 • Energy tax cost (-212 MSEK**) 1200 Boliden Area 1000 919 • Good production • Higher costs and depreciation 800 600 558 Garpe
Slide 13: Mineral Reserves & Resources
Mineral Reserves & Resources Boliden Group Q4 2015 13 2016-02-11
Slide 14: Mineral Reserves & Mineral Resources
Mineral Reserves & Mineral Resources Mineral reserves up in Aitik, Garpenberg and Tara ‒ Higher Cu grade in Aitik ‒ Lower grades in Garpenberg and Tara Significant increase in mineral resources ‒ Garpenberg +9.3 Mton Two new satellite deposits ‒ Nautanen (Aitik) ‒ Rävliden (Boliden Area) Exp
Slide 15: Aitik and Boliden Area
Aitik and Boliden Area Mton Aitik kton Boliden Area 2 500 25 000 2 000 20 000 1 500 15 000 1 000 10 000 500 5 000 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Proven/Probable Measured/Indicated Proven/Probable Measured/Indicated Inferred Pro
Slide 16: Garpenberg and Kylylahti
Garpenberg and Kylylahti kton Garpenberg kton Kylylahti 80 000 8000 70 000 7000 60 000 6000 50 000 5000 40 000 4000 30 000 3000 20 000 2000 10 000 1000 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Proven/Probable Measured/Indicated Proven/Pr
Slide 17: Tara
Tara kton Tara 30 000 25 000 20 000 15 000 10 000 5 000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Proven/Probable Measured/Indicated Inferred Production*10 • Reserves increased but lower grade ‒ Resources converted into reserves ‒ Zn grade: 6.3 (6.6) % ‒ Pb grade:1.5 (1.5) % • 6 years of r
Slide 18: Smelters
Smelters Boliden Group Q4 2015 18 2016-02-11
Slide 19: Smelters – solid profits
Smelters – solid profits • EBIT ex PIR* 583 (681) MSEK MSEK R4Q, MSEK 900 3 200 ‒ 825 MSEK in Q3 2015 • Capex 496 (268) MSEK 800 2 800 700 2 400 600 • Higher volume, lower market 500 2 000 terms vs Q3 15 1 600 400 • Lower volume, stable market 300 1 200 terms vs Q4 14 200 800 • Items affecting compa
Slide 20: Smelters by unit – full year
Smelters by unit – full year Business Area • Favorable market terms EBIT ex PIR • Stable production MSEK 2692 2800 Rönnskär • Improved process stability– higher free metal 2300 Harjavalta 1800 • High feed of nickel concentrate 1518 • High production 1300 Kokkola • Increased zinc production 800 727 7
Slide 21: Financials
Financials Boliden Group Q4 2015 21 2016-02-11
Slide 22: Profits affected by falling metal prices
Profits affected by falling metal prices Financial development MSEK Q4 2015 Q4 2014 Q3 2015 Revenues 9,699 9,614 9,764 EBITDA 1,339 2,044 1,746 EBIT 416 1,158 880 Process inventory revaluation (PIR) -181 24 -175 EBIT ex PIR 596 1,134 1,055 Investments 1,187 1,727 880 Free cash flow 36 366 953 Earnin
Slide 23: Lower market terms & higher costs vs Q3 2015
Lower market terms & higher costs vs Q3 2015 EBIT excl. PIR analysis Q4 2015 vs. Q3 2015 MSEK EBIT excl. PIR – Q3 2015 1,055 Specification of deviation Higher Smelter feed Higher Mine production Volume 180 Prices and Terms (incl. hedges) -242 Lower metal prices Lower smelter terms Whereof currency e
Slide 24: Lower metal prices vs. Q4 2014
Lower metal prices vs. Q4 2014 EBIT excl. PIR analysis Q4 2015 vs. Q4 2014 MSEK EBIT excl. PIR – Q4 2014 1,134 Specification of deviation Lower feed Smelters Volume -100 Lower metal prices Prices and Terms (incl. hedges) -346 Stronger USD Whereof currency effects 534 Improved smelter terms Costs -65
Slide 25: Cash flow
Cash flow Free cash flow MSEK Q4 2015 Q4 2014 Q3 2015 EBITDA excluding PIR 1,520 2,020 1,921 Changes in working capital -143 96 36 Inventories 462 -433 -500 Payables -873 -572 443 Receivables 265 -44 92 Other 3 0 1 Cash flow from investments -1,211 -1,716 -879 Financial items -62 -67 -51 Tax paid -7
Slide 26: Stronger balance sheet
Stronger balance sheet SEK bn 31 Dec 30 Sept (Unless otherwise stated) 2015 2015 MSEK % Total Assets 43.0 44.0 10 000 45 Capital employed 35.1 35.1 40 8 000 35 Shareholders' equity 25.8 25.6 30 6 000 Net debt 5.8 6.2 25 20 Gearing, % 23 24 4 000 15 Loan duration, years 2.4 2.7 2 000 10 5 Average int
Slide 27: Full-year financial development – Summary
Full-year financial development – Summary MSEK (Unless otherwise stated) FY 2015 FY 2014 Revenues 40,242 36,891 EBITDA 7,112 6,035 EBIT 3,590 2,759 EBIT ex PIR 4,010 2,605 Investments 3,650 4,222 Free cash flow 2,565 1,583 Earnings per share, SEK 9.65 6.94 Net debt /equity ration 23 35 Boliden Group
Slide 28: Higher production & improved smelter terms vs 2014
Higher production & improved smelter terms vs 2014 MSEK EBIT excl. PIR – FY 2015 4,010 Garpenberg ramp-up Specification of deviation Kylylathi acquisition Volume 989 Improved smelter terms Prices and Terms (incl. hedges) 1,183 Lower metal prices Stronger USD Whereof currency effects 3,089 Costs -573
Slide 29: Strong FY 2015 despite a turbulent market
Strong FY 2015 despite a turbulent market • Well positioned in the metal market ‒ Mines and smelters ‒ Base metals and precious metals ‒ High productivity Boliden Group Q4 2015 29 2016-02-11
Slide 30: Going forward
Going forward • Aitik ‒ Copper grade 0.21% in 2016 ‒ Winter conditions in Q1 2016 • Garpenberg ‒ 2016-2017 grades: Zn 4.5%, Ag 120 g/ton ‒ Lower grade in Q1 2016 due to rock falls • Cost control • Capex 2016 guidance unchanged despite lower level 2015 • Planned Smelters maintenance EBIT impact ‒ -21
Slide 31: Capital Markets Day on 16-17 March 2016
Capital Markets Day on 16-17 March 2016 • Stockholm 16 March • Odda site visit 17 March • Registration available on www.boliden.com Boliden Group Q4 2015 31 2016-02-11
Slide 32: Disclaimer
Disclaimer • This presentation has been prepared by Boliden for information purposes only and as per the indicated date. Boliden does not undertake any obligation to correct or update the information or any statements made therein. Certain statements in this presentation are forward-looking and are
Slide 33: Boliden
;BOLIDEN
Slide 34: Appendix
Appendix Boliden Group Q4 2015 34 2016-02-11
Slide 35: Mines – Production
Mines – Production Milled ore, Metal content, Milled ore, Metal content, mt Copper kt mt Zinc kt 12 24 1,8 90 10 20 1,5 75 8 16 1,2 60 6 12 0,9 45 4 8 0,6 30 2 4 0,3 15 0 0 0,0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2013 2014 2015 Milled
Slide 36: Smelters – Production
Smelters – Production Copper Metal Metal Total feed, production, Total feed, Zinc production, kt kt kt kt 400 120 250 150 350 105 200 120 300 90 250 75 150 90 200 60 100 60 150 45 100 30 50 30 50 15 0 0 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013
Slide 37: Market balance
Market balance Zinc – global market Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Metals demand, kt 3 337 3 400 3 322 3 318 3 326 3 383 3 343 3 348 Year on year change 5,0% 6,1% 1,0% 1,4% -0,3% -0,5% 0,6% 0,9% Smelter production, kt 3 126 3 253 3 345 3 523 3 367 3 512 3 414 3 432 Year on year change -3,2%
Slide 38: Economic development
Economic development Industrial production, year on year % 20 15 10 5 0 -5 2011 2012 2013 2014 2015 EU28 USA China World Source: Thomson Reuters Datastream, Boliden calculations for world data Boliden Group Q4 2015 38 2016-02-11
Slide 39: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn Activity, year on year % 30 25 20 15 10 5 0 -5 -10 -15 2011 2012 2013 2014 2015 EU USA China China: year on year based on cumulative investments at each point Source: Reuters Datastream Boliden Group Q4 2015 39 2016-02-11
Slide 40: Automotive
Automotive Production of light vehicles, year on year, quarterly data 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 2011 2012 2013 2014 2015 Europe North America China World Source: LMC Automotive Boliden Group Q4 2015 40 2016-02-11
Slide 41: China – metals demand and economic growth
China – metals demand and economic growth Year on year growth % 18 16 14 12 10 8 6 4 2 0 2011 2012 2013 2014 2015 Zinc demand Copper demand GDP Industrial production Source: CRU Ltd, Thomson Reuters Datastream Boliden Group Q4 2015 41 2016-02-11
Slide 42: Zinc TC and premiums
Zinc TC and premiums US$/t concentrate Treatment charges US$/t metal Metal premia 300 250 250 200 200 150 150 100 100 50 50 0 0 2012 2013 2014 2015 2012 2013 2014 2015 Realized TC - European contract Delivered Premia US Midwest Ex-Works Premia Europe Spot TC, China imports Premia Far East - Western
Slide 43: Copper TC and premiums
Copper TC and premiums US$/t Treatment charges US$/t metal Metal premia concentrate 140 160 120 140 100 120 100 80 80 60 60 40 40 20 20 0 0 2012 2013 2014 2015 2012 2013 2014 2015 Contract TC - annual and mid-year benchmark CIF European benchmark premia Standard grade spot TC CIF Average European pr
Slide 44: Boliden
;BOLIDEN