Slide 1: Q2 2015 Interim Report
Q2 2015 Interim Report Lennart Evrell President & CEO Mikael Staffas CFO
Slide 2: Robust production and strong cash flow
Robust production and strong cash flow • Revenues 10,373 (9,438) MSEK MSEK R4Q, MSEK • EBIT ex PIR* 1,257 (374) MSEK 1 800 7 200 1 600 6 400 ‒ EBIT 1,090 (478) MSEK 1 400 5 600 • Free Cash Flow 1,557 (920) MSEK 1 200 4 800 1 000 4 000 • High production Mines 800 3 200 • Strong result Smelters 600 2
Slide 3: Metal demand – high level, low growth
Metal demand – high level, low growth Macro • Global economic growth below trend • Slower industrial production growth in China Base metals markets • Demand growth below trend • Mine supply higher than anticipated for Zn, lower for Cu • Balanced metal and concentrate markets Boliden Group Q2 2015 3
Slide 4: Boliden market term index
Boliden market term index Note: Graphs show period 1 January 2010 until 30 June 2015. Boliden Group Q2 2015 4 2015-07-17
Slide 5: Favourable currencies vs 1 year ago
Favourable currencies vs 1 year ago Note: Graph shows period 1 January 2005 until 8 July 2015. Boliden Group Q2 2015 5 2015-07-17
Slide 6: Volatile zinc price in Q2
Volatile zinc price in Q2 Zinc price, USD/t USD/t 2,500 Q2 Q3 Q4 Q1 Q2 5,000 2,400 4,500 2,300 2,200 4,000 2,100 2,000 3,500 1,900 1,800 3,000 1,700 1,600 2,500 1,500 Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15 2,000 1,500 Average price in Q2 vs period 1,000 Q1-15 Q4-14 Q3-14 Q2-14 500 +5% -2% -5% +6%
Slide 7: Volatile copper price in Q2 – negative trend
Volatile copper price in Q2 – negative trend Copper price, USD/t USD/t Q2 Q3 Q4 Q1 Q2 8,000 11,000 7,750 7,500 10,000 7,250 7,000 9,000 6,750 6,500 8,000 6,250 6,000 7,000 5,750 5,500 6,000 5,250 5,000 5,000 Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15 4,000 3,000 Average price in Q2 vs period 2,000 Q1
Slide 8: Gold and silver prices – negative trend
Gold and silver prices – negative trend Gold price, USD/troy oz. 2,000 Gold Lead price, USD/t Lead 5,000 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 20052006 2005 20062007 20072008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2
Slide 9: Mines
Mines Boliden Group Q2 2015 9 2015-07-17
Slide 10: High production and cost control
High production and cost control • EBIT 657 (336) MSEK MSEK R4Q, MSEK ‒ 482 MSEK in Q1 2015 1 600 4 800 • Capex 594 (657) MSEK 1 400 4 200 1 200 3 600 • High production 1 000 3 000 800 2 400 ‒ Garpenberg ramp-up on plan ‒ Kylylahti strong quarter 600 1 800 ‒ Production disturbances Aitik 400 1 200 •
Slide 11: 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2012 2013 2014 20
Slide 12: Smelters
Smelters Boliden Group Q2 2015 12 2015-07-17
Slide 13: Strong result despite maintenance shutdowns
Strong result despite maintenance shutdowns • EBIT ex PIR* 604 (174) MSEK MSEK R4Q, MSEK ‒ 681 MSEK in Q1 2015 800 3 200 • Capex 281 (250) MSEK 700 2 800 600 2 400 • Maintenance shutdowns on plan 500 2 000 ‒ -180 (-120) MSEK 400 1 600 • Strong production Odda, Harjavalta 300 1 200 • Improved USD vs
Slide 14: 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013
Slide 15: Financials
Financials Boliden Group Q2 2015 15 2015-07-17
Slide 16: Robust production and strong cash flow
Robust production and strong cash flow Financial development MSEK Q2 2015 Q2 2014 Q1 2015 Revenues 10,373 9,438 10,407 EBITDA 1,970 1,293 2,057 EBIT 1,090 478 1,205 Process inventory revaluation (PIR) -167 104 103 EBIT ex PIR 1,257 374 1,102 Investments 877 907 706 Free cash flow 1,557 920 19 Earnin
Slide 17: Higher production and metal prices vs Q1 2015
Higher production and metal prices vs Q1 2015 EBIT excl. PIR analysis Q2 2015 vs. Q1 2015 MSEK EBIT excl. PIR – Q1 2015 1,102 Specification of deviation High production Mines Volume 249 Higher metal prices Prices and Terms (incl. hedges) 86 Improved smelter terms Whereof currency effects -86 Weaker
Slide 18: Higher production and stronger USD vs. Q2 2014
Higher production and stronger USD vs. Q2 2014 EBIT excl. PIR analysis Q2 2015 vs. Q2 2014 MSEK EBIT excl. PIR – Q2 2014 374 Ramp-up Garpenberg Kylylahti Specification of deviation Volume 283 Stronger USD Improved smelter terms Prices and Terms (incl. hedges) 779 Lower metal prices Whereof currency
Slide 19: Higher profit and lower working capital
Higher profit and lower working capital Free cash flow MSEK Q2 2015 Q2 2014 Q1 2015 EBITDA excluding PIR 2,138 1,189 1,954 Changes in working capital 396 795 -1,017 Inventories 678 1,026 -981 Payables -165 207 23 Receivables -119 -438 -59 Other 3 0 0 Cash flow from investments -875 -898 -705 Financi
Slide 20: Capital structure
Capital structure SEK bn 30 Jun 31 Mar MSEK % (Unless otherwise stated) 2015 2015 10 000 45 Total Assets 43.4 44.5 40 8 000 35 Capital employed 35.2 35.8 30 6 000 25 Shareholders' equity 25.0 24.7 20 4 000 Net debt 7.0 8.2 15 10 Gearing, % 28 33 2 000 5 Loan duration, years 2.9 3.1 0 0 Q1 Q2 Q3 Q4 Q
Slide 21: Q2 2015 – Robust production and strong cash flow
Q2 2015 – Robust production and strong cash flow • Well positioned in the metal market ‒ Mines and smelters ‒ Base metals and precious metals ‒ High productivity • High production Mines • Good cost control • Favourable prices and terms • Strong cash flow Boliden Group Q2 2015 21 2015-07-17
Slide 22: Going forward
Going forward • Aitik ‒ Copper grade 0.21% in 2015-2016 ‒ 39 Mton ore 2015 plan • Garpenberg – 2.5 Mton pace end 2015 • Tara – improved production latter part of 2015 • Kokkola – working with process stability • Rönnskär – action plan under implementation • Nickel business on own books H2 2015 ‒ Inc
Slide 23: 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 24: Boliden Group Q2 2015
Boliden Group Q2 2015 24 2015-07-17
Slide 25: Appendix
Appendix Boliden Group Q2 2015 25 2015-07-17
Slide 26: Market balance
Market balance Zinc – global market Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Metals demand, kt 3,250 3,293 3,348 3,401 3,333 3,311 3,330 3,425 Year on year change 3.1% 4.3% 5.4% 6.0% 2.6% 0.5% -0.5% 0.7% Smelter production, kt 3,208 3,337 3,145 3,277 3,328 3,556 3,413 3,480 Year on year change 5.0% 1
Slide 27: 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: Reuters Datastream, Boliden calculations for world data Boliden Group Q2 2015 27 2015-07-17
Slide 28: 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 Q2 2015 28 2015-07-17
Slide 29: 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 Q2 2015 29 2015-07-17
Slide 30: 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 -2 -4 2011 2012 2013 2014 2015 Zinc demand Copper demand GDP Industrial production Source: CRU Ltd, Reuters Datastream Boliden Group Q2 2015 30 2015-07-17
Slide 31: 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 Delivered Premia US Midwest Realized TC, European contract Ex-Works Premia Europe Spot TC, China imports Premia Far East - Western •
Slide 32: Copper TC and premiums
Copper TC and premiums US$/t Treatment charges US$/t metal Metal premia concentrate 140 160 120 140 120 100 100 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 Average European premia CIF European benchmark premia Standard grade spo
Slide 33: Boliden Group Q2 2015
Boliden Group Q2 2015 33 2015-07-17