Boliden Ab · OMXSTO:BOL
Boliden Ab — Q3 2019 Earnings Presentation
33 slides from Boliden Ab's earnings presentation, Oct 24, 2019
Slide 1: Q3 Interim Report 2019
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Q3 Interim Report 2019 Mikael Staffas, President & CEO Håkan Gabrielsson, CFO
Slide 2: Q3 2019
Q3 2019 Group EBIT ex PIR* R4Q, • Revenues 11,170 (12,510) MSEK MSEK MSEK 3 400 10 200 • EBIT ex PIR* 1,635 (2,020) MSEK 3 200 9 600 3 000 9 000 2 800 8 400 • Projects on plan 2 600 7 800 2 400 7 200 ‒ Capex 1,834 (1,457) MSEK 2 200 6 600 2 000 6 000 • Stable production in Mines 1 800 5 400 1 600 4
Slide 3: Market Q3 2019
Market Q3 2019 Macro • Weaker global manufacturing • Weak automotive • Flat construction Metals • Lower Zn demand, moderate Cu demand growth, strong Ni demand growth • Increased interest in precious metals Concentrate markets • Zinc mine supply growing • Copper mine disruptions and smelter Rönnskär,
Slide 4: Base metal prices
Base metal prices Copper price, USD/tonne Copper KTonnes Zinc price, USD/tonne Zinc KTonnes 12 000 2 400 4 000 2 400 3 500 2 100 10 000 2 000 3 000 1 800 8 000 1 600 2 500 1 500 2 000 1 200 6 000 1 200 1 500 900 4 000 800 1 000 600 500 300 2 000 400 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 5: Gold, silver and lead prices
Gold, silver and lead prices Gold Lead Gold price, USD/troy oz. Lead price, USD/tonne 2 000 4 000 1 800 3 500 1 600 3 000 1 400 1 200 2 500 1 000 2 000 800 1 500 600 1 000 400 200 500 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20
Slide 6: Zn, Cu and Ni prices relative to cash cost
Zn, Cu and Ni prices relative to cash cost Zinc Copper Nickel USD/tonne USD/tonne USD/tonne 5 000 11 000 35 000 4 500 10 000 30 000 4 000 9 000 3 500 8 000 25 000 7 000 3 000 6 000 20 000 2 500 5 000 15 000 2 000 4 000 1 500 10 000 3 000 1 000 2 000 5 000 500 1 000 0 0 0 Cu average price Cu max pric
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 2014 Boliden Group Q3 2019 2019-10-24
Slide 8: Mines
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Mines Tara, tailings pond Boliden Group Q3 2019 2019-10-24
Slide 9: Q3 2019 Mines
Q3 2019 Mines Mines EBIT • EBIT 1,091 (1,091) MSEK R4Q, MSEK MSEK 2 600 7 800 ‒ 1,149 MSEK in Q2 2019 2 400 7 200 2 200 6 600 • Better prices and terms 2 000 6 000 1 800 5 400 ‒ Higher USD, Ni and precious metal 1 600 4 800 prices 1 400 4 200 1 200 3 600 1 000 3 000 • Projects on plan 800 2 400 600
Slide 10: Mines – Production
Mines – Production Milled ore, Metal content, Milled ore, Metal content, Mtonnes Copper Ktonnes Mtonnes Zinc Ktonnes 16 48 2,0 100 14 42 1,6 80 12 36 10 30 1,2 60 8 24 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 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q
Slide 11: Smelters
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Smelters 10th million ton zinc in Kokkola produced in Q3 2019! Boliden Group Q3 2019 2019-10-24
Slide 12: Q3 2019 Smelters
Q3 2019 Smelters • EBIT ex PIR* 716 (589) MSEK MSEK Smelters EBIT excl. PIR* R4Q, MSEK ‒ 387 MSEK in Q2 2019 1 300 3 900 1 200 3 600 • Better prices and terms 1 100 3 300 1 000 3 000 ‒ Stronger USD, higher metal 900 2 700 prices and higher Zn TC´s 800 2 400 700 2 100 • Projects on plan 600 1 800 500
Slide 13: Smelters – Production
Smelters – Production Copper Metal Total feed, production, Ktonnes Ktonnes 400 120 • Cu production 75 (89) ktonnes 350 105 ‒ Major maintenance stop and process 300 90 disturbances in Rönnskär 250 75 200 60 • Zn production 122 (121) ktonnes 150 45 100 30 ‒ Higher concentrate feed in both Odda and 50
Slide 14: Financials
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Financials Aitik, visitors at the electric trolley Boliden Group Q3 2019 2019-10-24
Slide 15: 2019 Q3 – Earnings
2019 Q3 – Earnings MSEK Q3 2019 Q3 2018 Q2 2019 Revenues 11,170 12,510 12,747 EBITDA 3,149 2,988 2,749 EBIT 1,873 1,771 1,539 EBIT ex PIR 1,635 2,020 1,631 Investments 1,834 1,457 2,132 Free cash flow -653 822 789 Earnings per share, SEK 5.14 4.69 4.13 Net debt / equity ratio, % 15 10 14 Boliden Gro
Slide 16: Q3 2019 vs. Q3 2018
Q3 2019 vs. Q3 2018 Group EBIT excl. PIR MSEK Q3 2019 1,635 Q3 2018 2,020 Lower grades Deviation -385 Maintenance and process disturbances in Smelters Specification of deviation Volumes -980 Stronger USD Higher metal prices (Ni and precious Prices and terms (incl. hedges) 858 metals) Higher Zn TC’s
Slide 17: Q3 2019 vs. Q2 2019
Q3 2019 vs. Q2 2019 Group EBIT excl. PIR MSEK Q3 2019 1,635 Q2 2019 1,631 Deviation 4 Lower deliveries Mines Specification of deviation Maintenance stops and disturbances in Smelters Volumes -404 Prices and terms (incl. hedges) 106 Whereof currency effects 81 Costs 199 Seasonally lower costs Depreci
Slide 18: Cash flow
Cash flow MSEK Q3 2019 Q3 2018 Q2 2019 EBITDA excluding PIR 2,911 3,237 2,841 Cash flow from working capital -1,267 203 526 Inventories -1,652 -335 996 Operating receivables 417 650 135 Operating liabilities -75 -112 -608 Other 43 0 3 Cash flow from investments -1,821 -1,456 -2,115 Financial items -
Slide 19: Balance sheet
Balance sheet SEK bn 30 Sep 30 Sep 31 Dec Group Net debt & Gearing 2019 2018 2018 MSEK % Total Assets 63.5 57.0 58.7 12 000 45 Capital employed 50.0 44.4 44.4 10 000 40 35 Equity 40.6 37.3 39.0 8 000 30 25 Net debt 6.3 3.8 2.0 6 000 20 Net debt / equity ratio, %* 15 10 5 4 000 15 10 Loan duration, y
Slide 20: Aitik and Kevitsa – New Electric Trolley Investment
Aitik and Kevitsa – New Electric Trolley Investment • 300 MSEK capex mainly during 2020 and 2021 ‒ Included in 2020 capex guidance • Conversion of haul trucks and new electric trolley lines ‒ Aitik: 10 trucks, 3 km new trolley line ‒ Kevitsa: 13 trucks, 1.8 km new trolley line • Increased productivi
Slide 21: Going forward
Going forward • Aitik ‒ Coming 5 quarters: Cu 0.25 % ‒ 2020: 45 Mtonnes milled volume • Garpenberg ‒ Coming 5 quarters: Zn 3.7 %, Ag 100 g/t ‒ 2020: 3 Mtonnes milled volume • Kevitsa ‒ Coming 5 quarters: Slightly below reserve grade ‒ 2020: 9.5 Mtonnes milled volume pace • 2019: -745 (-200) MSEK mai
Slide 22: 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 23: Appendix
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Appendix Inauguration of Bergsöe’s plastic separation Boliden Group Q3 2019 2019-10-24
Slide 24: Boliden, key attractions
Boliden, key attractions • Well positioned in the metal market ‒ Mines and Smelters ‒ Base metals and precious metals ‒ High productivity/stable production ‒ High corporate responsibility ‒ Long life of key mines ‒ Stable jurisdictions • Strong balance sheet • Several growth opportunities ‒ Smelters
Slide 25: Metal prices and USD/SEK since Jan 1, 2018
Metal prices and USD/SEK since Jan 1, 2018 Source: Refinitiv Datastream, prices up to and including October 22, 2019 Boliden Group Q3 2019 2019-10-24
Slide 26: Zinc TC and premia
Zinc TC and premia US$/t Treatment charges US$/t metal Metal premia concentrate 300 250 250 200 200 150 150 100 100 50 50 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Contract TC - realized Ex-Works Premia Europe Delivered Premia US Midwest Spot TC imported concentrate to China Premia Far E
Slide 27: Copper TC and premia
Copper TC and premia US$/t Treatment charges US$/t metal Metal premia concentrate 120 60 100 50 80 40 60 30 40 20 20 10 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Contract TC - annual and mid-year benchmark CIF Average European premia Standard grade spot TC Contract benchmark according to
Slide 28: Economic development
Economic development Industrial production, year on year % 10 8 6 4 2 0 -2 -4 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 2016 2017 2018 2019 EU28 USA China World Source: Refinitiv Datastream, world data calculated by Boliden Boliden Group Q3 2019
Slide 29: 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 J FMAMJ J A S OND J FMAMJ J A S OND J FMAMJ J A S OND J FMAMJ J A S OND J FMAMJ J A S OND 2015 2016 2017 2018 2019 EU USA China China: year on year based on cumulative investments at each point. USA: constructio
Slide 30: Automotive
Automotive Car production, year on year, quarterly data 40% 30% 20% 10% 0% -10% -20% -30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019 China Germany Japan Source: Refinitiv Datastream Boliden Group Q3 2019 2019-10-24
Slide 31: Market balance – Zinc and Copper
Market balance – Zinc and Copper Zinc – global market Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Metals demand, kt 3 491 3 426 3 513 3 470 3 495 3 371 3 485 3 457 Year on year change 1,6% -0,8% -0,6% -0,4% 0,1% -1,6% -0,8% -0,4% Smelter production, kt 3 577 3 321 3 354 3 150 3 461 3 221 3 370 3 464 Yea
Slide 32: Market balance – Nickel and Lead
Market balance – Nickel and Lead Nickel - global market Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Metals demand, kt 575 564 577 572 576 579 603 595 Year on year change 9,7% 9,8% 13,6% 3,7% 0,1% 2,5% 4,6% 3,9% Smelter production, kt 543 516 538 535 563 558 588 602 Year on year change 5,9% 6,1% 11,6% 1,
Slide 33: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden Group Q3 2019 2019-10-24