Slide 1: Q3 Interim Report 2017
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Q3 Interim Report 2017 Lennart Evrell President & CEO Håkan Gabrielsson CFO
Slide 2: Q3 – Extensive maintenance in Mines, production disturbances
Q3 – Extensive maintenance in Mines, production disturbances • Revenues 11,628 (9,733) MSEK MSEK R4Q, MSEK 2 800 8 400 • EBIT ex PIR* 1,744 (1,318) MSEK 2 600 7 800 2 400 7 200 ‒ EBIT 1,860 (1,529) MSEK 2 200 6 600 • Free Cash Flow 1,715 (91) MSEK 2 000 1 800 6 000 5 400 1 600 4 800 1 400 4 200 • Lo
Slide 3: Market Q3 2017 – Zn deficit, Cu and Ni in balance
Market Q3 2017 – Zn deficit, Cu and Ni in balance Macro • Strong global industrial production growth ‒ High growth in China but lower than in Q2 ‒ High growth in Europe, Japan • Improved European construction market Base metals • Cu, Zn demand growth 1-2% • Strong Ni demand growth • Cu metal market
Slide 4: Base metal prices
Base metal prices Copper price, USD/tonne Copper KTonnes Zinc price, USD/tonne Zinc KTonnes 12 000 2 400 5 000 2 000 10 000 2 000 4 000 1 600 8 000 1 600 3 000 1 200 6 000 1 200 2 000 800 4 000 800 1 000 400 2 000 400 0 0 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010
Slide 5: High Zn price, good Cu price, low Ni price
High Zn price, good Cu price, low Ni price 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 4,000 4,000 9,000 9,000 3,500 3,500 8,000 8,000 25,000 25,000 7,000 7,000 3,000 3,000 20,000 20,00
Slide 6: 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 Q3 2017 6 2017-10-24
Slide 7: Mines
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Mines Boliden Group Q3 2017 7 2017-10-24
Slide 8: Mines – Extensive maintenance, production disturbances
Mines – Extensive maintenance, production disturbances R4Q, MSEK MSEK • EBIT 1,421 (804) MSEK 2 000 6 000 ‒ 1,555 MSEK in Q2 2017 1 800 5 400 1 600 4 800 • Capex 815 (748) MSEK 1 400 4 200 1 200 3 600 • Lower production Mines vs strong Q2 1 000 800 3 000 2 400 ‒ Maintenance in all concentrators 600
Slide 9: Mines – Production
Mines – Production Milled ore, Metal content, Milled ore, Metal content, Mtonnes Copper Ktonnes Mtonnes Zinc Ktonnes 14 42 2,0 100 12 36 1,6 80 10 30 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 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2015
Slide 10: Smelters
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Smelters Boliden Group Q3 2017 10 2017-10-24
Slide 11: Smelters – Disturbances at Zn smelters
Smelters – Disturbances at Zn smelters R4Q, • EBIT ex PIR* 568 (613) MSEK MSEK 1 300 MSEK 3 900 ‒ 563 MSEK in Q2 2017 • Capex 425 (280) MSEK 1 100 3 300 900 2 700 • Low process stability Kokkola 700 2 100 • Roaster disruptions Odda 500 1 500 • -50 (-50) MSEK maintenance shutdowns Smelters, on plan 3
Slide 12: 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 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q
Slide 13: Financials
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level Financials ‒ Fifth level Boliden Group Q3 2017 13 2017-10-24
Slide 14: Lower EBIT ex PIR vs Q2, lower production Mines
Lower EBIT ex PIR vs Q2, lower production Mines Financial development MSEK Q3 2017 Q3 2016 Q2 2017 Revenues 11,628 9,733 11,554 EBITDA 2,987 2,653 3,058 EBIT 1,860 1,529 1,916 Process inventory revaluation (PIR) 116 211 -280 EBIT ex PIR 1,744 1,318 2,196 Investments 1,240 1,028 1,385 Free cash flow
Slide 15: Q3 vs. Q3 – Higher metal prices
Q3 vs. Q3 – Higher metal prices EBIT excl. PIR MSEK Q3 2017 1,744 Q3 2016 1,318 Deviation 426 Specification of deviation Higher production Cu mines Volumes 66 Higher base metal prices Prices and Terms (incl. hedges) 437 Whereof currency effects -218 Costs -72 Depreciation 1 Other -5 Deviation 426 Bo
Slide 16: Q3 vs. Q2 – Lower production Mines
Q3 vs. Q2 – Lower production Mines EBIT excl. PIR MSEK Q3 2017 1,744 Q2 2017 2,196 Deviation -452 Specification of deviation Lower production Mines Volumes -774 Prices and Terms (incl. hedges) -9 Higher metal prices Lower FX Whereof currency effects -419 Internal profit Costs 341 Lower production Mi
Slide 17: High free cash flow, lower working capital
High free cash flow, lower working capital MSEK Q3 2017 Q3 2016 Q2 2017 EBITDA excluding PIR 2,871 2,442 3,338 Cash flow from working capital 404 -1,117 541 Inventories 241 -807 416 Operating receivables -39 -151 261 Operating liabilities 209 -152 -125 Other -6 -7 -10 Cash flow from investments -1,2
Slide 18: Strong balance sheet
Strong balance sheet SEK bn 30 Sep 30 Sep (Unless otherwise stated) 2017 2016 MSEK % Total Assets 53.1 51.7 12 000 45 Capital employed 42.3 42.1 10 000 40 35 Equity 32.5 27.6 8 000 30 Net debt 6.0 11.1 25 6 000 20 Gearing, % 19 40 4 000 15 Loan duration, years 2.6 3.4 10 2 000 5 Average interest rat
Slide 19: Going forward
Going forward • Mines ‒ Aitik Unchanged guidance ‒ Volatile production ‒ Cu 0.25% 2017-19 ‒ H2 2017 mine plan in similar areas as Q2 2017 ‒ Garpenberg Revised guidance ‒ Slightly lower Zn grades than indicated for 2017, compensated partly by slightly higher Ag grades ‒ Kevitsa Unchanged guidance ‒ G
Slide 20: Q3 2017 summary
Q3 2017 summary • Well positioned in the metal market ‒ Mines and smelters ‒ Base metals and precious metals ‒ High productivity • Lower production Mines vs strong Q2 ‒ More maintenance ‒ Production disturbances, lower grades • Disturbances Zn smelters • Higher metal prices Boliden Group Q3 2017 20
Slide 21: Capital Markets Day on 21-22 November 2017
Capital Markets Day on 21-22 November 2017 • Stockholm 21 November • Kevitsa site visit 22 November • More info available on www.boliden.com Boliden Group Q3 2017 21 2017-10-24
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: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden Group Q3 2017 23 2017-10-24
Slide 24: Appendix
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Appendix Boliden Group Q3 2017 24 2017-10-24
Slide 25: Zinc price
Zinc price Zinc price, USD/tonne KTonnes USD/tonne 3 900 Q3 Q4 Q1 Q2 Q3 5 000 2 000 3 400 4 000 1 600 2 900 2 400 3 000 1 200 1 900 1 400 2 000 800 jul-16 okt-16 jan-17 apr-17 jul-17 okt-17 1 000 400 Average price in Q3 vs. period Q2-17 Q1-17 Q4-16 Q3-16 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2
Slide 26: Zinc TC and premia
Zinc TC and premia US$/t concentrate Treatment charges US$/t metal Metal premia 300 250 250 200 200 150 150 100 100 50 50 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Ex-Works Premia Europe Realized TC - European contract Delivered Premia US Midwest Spot TC - China imports Premia Far East -
Slide 27: Copper price
Copper price Copper price, USD/tonne KTonnes USD/tonne Q3 Q4 Q1 Q2 Q3 7 500 12 000 2 400 7 000 6 500 10 000 2 000 6 000 5 500 8 000 1 600 5 000 4 500 6 000 1 200 4 000 jul-16 okt-16 jan-17 apr-17 jul-17 okt-17 4 000 800 2 000 400 Average price in Q3 vs. period Q2-17 Q1-17 Q4-16 Q3-16 0 0 2007 2008 2
Slide 28: Copper TC and premia
Copper TC and premia 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 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Contract TC - annual and mid-year benchmark CIF European benchmark premia Standard grade spot TC CIF Average Eur
Slide 29: Nickel price
Nickel price Nickel price, USD/tonne KTonnes 60 000 600 USD/tonne Q3 Q4 Q1 Q2 Q3 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 jul-16 okt-16 jan-17 apr-17 jul-17 okt-17 20 000 200 10 000 100 Average price in Q3 vs. period Q2-17 Q1-17 Q4-16 Q3-16 0 0 2007 2008 2
Slide 30: Gold, silver and lead prices
Gold, silver and lead prices Gold price, USD/troy oz. 2 000 Gold Lead price, USD/tonne 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
Slide 31: Market balance – zinc and copper
Market balance – zinc and copper Zinc – global market Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Metals demand, kt 3 349 3 377 3 452 3 414 3 438 3 495 3 515 3 460 Year on year change 1% 2% 3% 3% 3% 3% 2% 1% Smelter production, kt 3 446 3 281 3 335 3 356 3 556 3 337 3 273 3 260 Year on year change -2% -
Slide 32: Market balance – nickel and lead
Market balance – nickel and lead Nickel - global market Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Metals demand, kt 467 485 519 495 527 518 509 536 Year on year change 3% 2% 9% 8% 13% 7% -2% 8% Smelter production, kt 494 466 504 490 512 484 478 531 Year on year change -3% -2% 1% 2% 4% 4% -5% 8% Mine p
Slide 33: Higher scrap availability
Higher scrap availability Boliden Group Q3 2017 33 2017-10-24
Slide 34: Economic development
Economic development Industrial production, year on year % 10 8 6 4 2 0 -2 J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND 2014 2015 2016 2017 EU28 USA China World Source: Thomson Reuters Datastream, world data calculated by Boliden Boliden Group Q3 2017 34 2017-10-24
Slide 35: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn Activity, year on year % 20.0 15.0 10.0 5.0 0.0 -5.0 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 2014 2015 2016 2017 EU USA China China: year on year based on cumulative investments at each point Source:
Slide 36: Automotive
Automotive Production of light vehicles, year on year, quarterly data 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2015 2016 2017 Europe North America China Global Source: LMC Automotive Boliden Group Q3 2017 36 2017-10-24
Slide 37: China – metals demand and economic growth
China – metals demand and economic growth Year on year growth % 25 20 15 10 5 0 -5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2014 2015 2016 2017 Zinc demand Copper demand Nickel demand GDP growth % Industrial production growth % Source: CRU Ltd, Thomson Reuters Datastream Boliden Group Q3 2017
Slide 38: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden Group Q3 2017 38 2017-10-24