Boliden Ab · OMXSTO:BOL
Boliden Ab — Q1 2017 Earnings Presentation
36 slides from Boliden Ab's earnings presentation, Apr 25, 2017
Slide 1: Q1 Interim Report 2017
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Q1 Interim Report 2017 Lennart Evrell President & CEO Håkan Gabrielsson CFO
Slide 2: Q1 – Continued good mined production & better metal prices
Q1 – Continued good mined production & better metal prices MSEK R4Q, • Revenues 12,730 (8,849) MSEK 2 400 MSEK 7 200 • EBIT ex PIR* 2,061 (769) MSEK 2 200 6 600 2 000 6 000 ‒ EBIT 2,149 (888) MSEK 1 800 5 400 • Free Cash Flow 1,060 (210) MSEK 1 600 4 800 1 400 4 200 1 200 3 600 • Higher production C
Slide 3: Market Q1 2017 – supply constraints
Market Q1 2017 – supply constraints Macro • Positive global industrial production trend • Strong Q1 in China • Slower US auto and construction markets Base metals markets • Cu, Zn demand growth +2-3% • Ni demand growth +7% • Cu mine disruptions, concentrate market in balance • Zn concentrate shortag
Slide 4: Zinc price
Zinc price Zinc price, USD/t KTonnes USD/t 3 200 Q1 Q2 Q3 Q4 Q1 5 000 2 000 3 000 2 800 2 600 4 000 1 600 2 400 2 200 2 000 3 000 1 200 1 800 1 600 1 400 2 000 800 jan-16 apr-16 jul-16 okt-16 jan-17 apr-17 1 000 400 Average price in Q1 vs. period Q4-16 Q3-16 Q2-16 Q1-16 0 0 2007 2008 2009 2010 2011
Slide 5: Copper price
Copper price Copper price, USD/t KTonnes 12 000 2 400 USD/t 7 000 Q1 Q2 Q3 Q4 Q1 6 500 10 000 2 000 6 000 5 500 8 000 1 600 5 000 6 000 1 200 4 500 4 000 jan-16 apr-16 jul-16 okt-16 jan-17 apr-17 4 000 800 2 000 400 Average price in Q1 vs. period Q4-16 Q3-16 Q2-16 Q1-16 0 0 2007 2008 2009 2010 2011
Slide 6: Treatment Charges
Treatment Charges US$/t US$/t concentrate Copper concentrate Zinc 140 300 120 250 100 200 80 150 60 100 40 20 50 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Contract TC - annual and mid-year benchmark Realized TC - European contract Standard grade spot TC Spot TC - China imports Contract b
Slide 7: Boliden market term index
Boliden market term index • Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Note: Index 100 = 1 January 2012 Boliden Group Q1 2017 7 2017-04-25
Slide 8: Zinc, copper and nickel prices
Zinc, copper and nickel prices Normal C1 – Zinc Normal C1 – Copper Normal C1 – Nickel USD/ton USD/ton USD/ton 5,000 5,000 11,000 11,000 35,000 35,000 4,500 4,500 10,000 10,000 30,000 30,000 9,000 9,000 4,000 4,000 8,000 8,000 3,500 3,500 25,000 25,000 7,000 7,000 3,000 3,000 6,000 6,000 20,000 20,00
Slide 9: Mines
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Mines Boliden Group Q1 2017 9 2017-04-25
Slide 10: Mines – All time high quarterly result
Mines – All time high quarterly result R4Q, • EBIT 1,525 (242) MSEK MSEK 1 800 MSEK 4 500 ‒ 1,136 MSEK in Q4 2016 1 600 4 000 • Capex 755 (512) MSEK 1 400 3 500 1 200 3 000 • Good production in most mines 1 000 2 500 ‒ Lower than strong Q4 800 2 000 • Improved metal prices 600 1 500 400 1 000 • Lowe
Slide 11: Mines – Production
Mines – Production Milled ore, Metal content, Milled ore, Metal content, Mtonnes Copper Ktonnes Mtonnes Zinc Ktonnes 12 36 2,0 100 10 30 1,6 80 8 24 1,2 60 6 18 0,8 40 4 12 0,4 20 2 6 0 0 0,0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 2014 201
Slide 12: Smelters
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Smelters Boliden Group Q1 2017 12 2017-04-25
Slide 13: Smelters – higher prices, mixed production
Smelters – higher prices, mixed production R4Q, • EBIT ex PIR* 835 (655) MSEK MSEK 1 300 MSEK 3 900 ‒ 1,094 MSEK in Q4 2016 • Capex 341 (288) MSEK 1 100 3 300 900 2 700 • Higher metal prices 700 2 100 • Lower TC/RC, impact half of Q1 500 1 500 • Good stability Cu & Pb smelters • Some disturbances Zn
Slide 14: Smelters – Production
Smelters – Production Copper Metal Metal Total feed, Ktonnes production, Total feed, Zinc production, Ktonnes Ktonnes Ktonnes 400 120 250 150 350 105 200 120 300 90 250 75 150 90 200 60 150 45 100 60 100 30 50 30 50 15 0 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 15: Financials
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level Financials ‒ Fifth level Boliden Group Q1 2017 15 2017-04-25
Slide 16: Strong earnings
Strong earnings Financial development MSEK Q1 2017 Q1 2016 Q4 2016 Revenues 12,730 8,849 12,137 EBITDA 3,241 1,788 3,500 EBIT 2,149 888 2,353 Process inventory revaluation (PIR) 87 119 247 EBIT ex PIR 2,061 769 2,106 EBIT ex PIR pro forma 636 Investments 1,096 799 1,343 Acquisitions* -18 Free cash f
Slide 17: Internal Profit
Internal Profit • Profits in Mines eliminated in Group until metals are sold to external Customers • Price increases profit in Mines, higher internal profits • Strong production in Mines, disturbances in Smelters end of Q1 • Q1 Internal Profit Elimination -260 (-100) MSEK Mines Smelters Customers Bo
Slide 18: Q1 vs. Q1 – Higher metal prices and mine production
Q1 vs. Q1 – Higher metal prices and mine production EBIT excl. PIR pro forma* MSEK Q1 2017 2,061 Q1 2016 – pro forma 636 Deviation 1,426 Specification of deviation Higher production Cu mines Volumes 203 Good recovery in metal prices, combined Prices and Terms (incl. hedges) 1,591 with favourable cur
Slide 19: Q1 vs. Q4 – Better terms offset lower production
Q1 vs. Q4 – Better terms offset lower production EBIT excl. PIR MSEK Q1 2017 2,061 Q4 2016 2,106 Deviation -45 Strong Q4 Specification of deviation Internal profit elimination Volumes -639 Prices and Terms (incl. hedges) 440 Strengthened metal prices Whereof currency effects 25 Lower volume Mines Co
Slide 20: Free cash flow, higher working capital
Free cash flow, higher working capital MSEK Q1 2017 Q1 2016 Q4 2016 EBITDA excluding PIR 3,154 1,669 3,253 Changes in working capital -610 -449 -194 Inventories 316 -284 -651 Payables -529 -8 866 Receivables -392 -155 -424 Other -5 -2 14 Cash flow from investments -931 -799 -1,147 Cash flow from acq
Slide 21: Strong balance sheet
Strong balance sheet SEK bn 31 Mar 31 Dec MSEK Net debt Gearing % (Unless otherwise stated) 2017 2016 12 000 45 Total Assets 53.3 53.9 10 000 40 35 Capital employed 43.1 42.5 8 000 30 Equity 31.0 29.4 6 000 25 20 Net debt 8.4 9.3 4 000 15 Gearing, % 27 32 2 000 10 5 Loan duration, years 3.1 3.3 0 0
Slide 22: Update external process inventories
Update external process inventories External Process Inventory New Former Copper, tonnes 28 000 28 000 Zinc, tonnes 13 000 13 000 Lead, tonnes 0 0 Gold, kg 2 000 2 200 Silver, kg 45 000 60 000 Palladium, kg 500 500 • Gold and silver process inventory lower, higher share of internal material from Q2
Slide 23: Going forward
Going forward • Mines ‒ Aitik Volatile production, Cu 0.25% 2017-19 ‒ Garpenberg Lower reserve grades, no impact on mine plan next 5 years Zn 4.5%, Ag 120 g/ton 2017 ‒ Kevitsa Grades 2017-18 on June-Dec 2016 level ‒ Tara 5 days production loss April • Smelters ‒ TC 2017 full effect in Q2 ‒ Planned m
Slide 24: Q1 2017 summary
Q1 2017 summary • Well positioned in the metal market ‒ Mines and smelters ‒ Base metals and precious metals ‒ High productivity • Strong prices and favourable currencies • Higher production Cu mines • Stable production Cu smelters • Some disturbances Zn smelters Boliden Group Q1 2017 24 2017-04-25
Slide 25: 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 26: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden Group Q1 2017 26 2017-04-25
Slide 27: Appendix
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Appendix Boliden Group Q1 2017 27 2017-04-25
Slide 28: Nickel price
Nickel price Nickel price, USD/t KTonnes 60 000 600 USD/t Q1 Q2 Q3 Q4 Q1 13 000 12 000 50 000 500 11 000 10 000 40 000 400 9 000 8 000 30 000 300 7 000 6 000 jan-16 apr-16 jul-16 okt-16 jan-17 apr-17 20 000 200 10 000 100 Average price in Q1 vs. period Q4-16 Q3-16 Q2-16 Q1-16 0 0 2007 2008 2009 2010
Slide 29: 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 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 30: Market balance – zinc and copper
Market balance – zinc and copper Zinc – global market Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Metals demand, kt 3344 3307 3339 3356 3419 3403 3442 3450 Year on year change -1% -1% 1% 1% 2% 3% 3% 3% Smelter production, kt 3484 3411 3445 3277 3319 3335 3508 3265 Year on year change 7% 2% -2% -2% -5% -
Slide 31: Market balance – nickel and lead
Market balance – nickel and lead Nickel - global market Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Metals demand, kt 475 460 466 485 518 492 531 520 Year on year change -4% -2% 3% 2% 9% 7% 14% 7% Smelter production, kt 500 483 490 461 497 490 510 494 Year on year change 3% -6% -4% -3% -1% 1% 4% 7% Mine
Slide 32: Economic development
Economic development Industrial production, year on year % 12 10 8 6 4 2 0 -2 -4 J F MAM J J A S ON D J F MAM J J A S ON D J F MAM J J A S ON D J F MAM J J A S ON D J F MAM J J A S ON D 2013 2014 2015 2016 2017 EU28 USA China World Source: Thomson Reuters Datastream, Boliden calculations for world d
Slide 33: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn Activity, year on year % 25 20 15 10 5 0 -5 -10 J FMAM J J A S OND J F MAM J J A SOND J F MAM J J A S OND J FMAM J J A SOND J FMAM J J A SOND 2013 2014 2015 2016 2017 EU USA China China: year on year based on cumulative investments at each point Source: R
Slide 34: Automotive
Automotive Production of light vehicles, year on year, quarterly data 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 2015 2016 2017 Europe USA China World Source: LMC Automotive Boliden Group Q1 2017 34 2017-04-25
Slide 35: 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 2015 2016 2017 Zinc demand Copper demand Gdp growth % Industrial production growth % Source: CRU Ltd, Thomson Reuters Datast
Slide 36: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden Group Q1 2017 36 2017-04-25