Boliden Ab · OMXSTO:BOL
Boliden Ab — Q4 2021 Earnings Presentation
37 slides from Boliden Ab's earnings presentation, Feb 11, 2022
Slide 1: Boliden – Metals for generations to come
Boliden – Metals for generations to come Q4 Interim & Year-End Report 2021 Mikael Staffas, President and CEO Håkan Gabrielsson, CFO 2022-02-11 Q4 2021 Q4 INTERIM & YEAR-END REPORT 2021 1
Slide 2: Q4 2021 – Strong result despite disruptions in production
Q4 2021 – Strong result despite disruptions in production KEY HIGHLIGHTS PROJECTS ▪ Strong prices & terms ▪ Ni capacity expansion in Harjavalta ▪ Inflation pressure commissioned ▪ Strong production in Mines excluding Tara ▪ Key Odda 4.0 supply contracts signed ▪ Water inflow in Tara and explosion in
Slide 3: Q4 2021 EBIT development Group
Q4 2021 EBIT* development Group EBIT excl. PIR MSEK Rolling, MSEK ▪ Group 2,835 (3,043) MSEK 4,000 12,000 3,500 10,500 3,000 9,000 ▪ Mines 3,002 (1,858) MSEK 2,500 7,500 2,000 6,000 ▪ Smelters 553 (1,109) MSEK 1,500 4,500 1,000 3,000 500 1,500 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q
Slide 4: ESG is key in our purpose, vision and values
ESG is key in our purpose, vision and values CO2 Intensity 1,0 Q4 2021 0,8 ▪ Lost Time Injury* 6.9 (4.3) 0,6 ▪ Sick leave 5.6 (5.4) 0,4 ▪ Carbon dioxide intensity of 0.66 (0.60) 0,2 0,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2019 2020 2021 *Per million hours worked, in
Slide 5: Boliden price index close to historic highs
Boliden price index* Boliden price index close to historic highs 225 200 175 150 125 ▪ Continued strong increase in base 100 75 metal prices 50 25 0 ▪ Precious metals stable at a high level ▪ Stronger USD 225 200 175 150 125 100 75 50 25 0 *Index 100 = 1 January 2016 Q4 INTERIM & YEAR-END REPORT 202
Slide 6: Copper, zinc and nickel prices relative to cash cost
Copper, zinc and nickel prices relative to cash cost Copper Zinc Nickel USD/tonne USD/tonne USD/tonne 12,000 4,000 25,000 3,500 10,000 20,000 3,000 8,000 2,500 15,000 6,000 2,000 1,500 10,000 4,000 1,000 5,000 2,000 500 0 0 0 Source: Wood Mackenzie 2021 Composite C1 cash cost* data, Refinitiv Datast
Slide 7: Mines – Q4 2021 production
Metal content, ktonnes Copper Mines – Q4 2021 production 50 40 30 Aitik 20 10 ▪ Record milled volume 11.2 (10.5) Mtonnes 0 ▪ Cu grade 0.23 (0.25) % Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 2017 2018 2019 2020 2021 Garpenberg Zinc ▪ Milled volume 756 (735) Ktonnes 100 ▪ Zn grade 3.7 (3.8) %, Ag grade
Slide 8: Smelters – Q4 2021 production
Metal production, ktonnes Copper Smelters – Q4 2021 production 120 100 80 60 Harjavalta 40 20 ▪ Planned maintenance stop and delayed ramp-up in Ni line 0 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 ▪ Negative raw material mix 2017 2018 2019 2020 2021 ▪ Explosion in the Ni line ▪ Strong Cu production Zi
Slide 9: Group – Full Year 2021
Group – Full Year 2021 EBIT excl. PIR MSEK EBIT excl. PIR 10,318 (8,438) MSEK 12,000 Improved prices & terms 10,000 ‒ Strong development of base metal prices ‒ Lower USD and treatment charges 8,000 Decreased volumes 6,000 ‒ Lower grades in Mines ‒ Production disturbances; Aitik, Tara and Harjavalta
Slide 10: Mines – Full Year 2021
Mines – Full Year 2021 EBIT MSEK EBIT 8,761 (4,594) MSEK 3,500 3,000 Strong development of base metal prices 2,500 2,000 Record milled volumes in Garpenberg and Kevitsa 1,500 1,000 Production disturbances in Aitik and Tara 500 0 -500 Kylylahti closed 2020 Aitik Boliden Garpenberg Kevitsa Kylylahti T
Slide 11: Smelters – Full Year 2021
Smelters – Full Year 2021 EBIT excl. PIR MSEK EBIT excl. PIR 2,903 (3,975) MSEK 1,400 1,200 Prices & terms stronger for Cu smelters but weaker for Zn 1,000 smelters 800 ‒ High metal prices 600 ‒ Lower Zn treatment charges 400 200 Stable production across most units 0 ‒ Disturbances in Ni production
Slide 12: Exploration 2021
Exploration 2021 ▪ Exploration cost 629 (504) MSEK Kevitsa-Finnish Lapland – Cu, Ni, Au, PGM, Co Aitik/Gällivare area – Cu, Au ▪ Garpenberg ‒ Major increase in Mineral Resources Skellefteå district – Zn, Cu, Au, Pb, Ag, Te ▪ Kevitsa ‒ Decline in Mineral Resources Central Finland – Cu, Ni, Au, Co, Zn
Slide 13: Mineral Reserves end of 2021
Mineral Reserves end of 2021 ▪ Aitik* ‒ Reserves covering full production until 2050 (2050) Reserve life (years)*** ‒ Cu reserve grade 0.22 (0.22) % 35 ▪ Boliden Area 30 ‒ Reserves covering full production until 2028 (2027) 25 20 ▪ Garpenberg* 15 ‒ Reserves covering full production until 2049 (2050)
Slide 14: Mineral Resources end of 2021
Mineral Resources end of 2021 ▪ Aitik ‒ No major update ▪ Boliden Area ‒ Strömfors ‒ Addition in Mineral Resources 26.6 (25.7) Mtonnes ▪ Garpenberg ‒ Major increase in Mineral Resources 79 (62) Mtonnes ▪ Tara ‒ Tara Deep ‒ Inferred Mineral Resource 28.1 (26.2) Mtonnes ‒ Zn grade 8.4 (8.4) % ‒ Pb gra
Slide 15: Financial summary
Financial summary MSEK Q4 2021 Q4 2020 Q3 2021 Revenues 17,755 16,170 15,906 EBITDA 4,722 4,685 3,684 EBIT 3,214 3,077 2,305 EBIT excl. PIR 2,835 3,043 2,419 Investments 1,971 1,703 1,538 Free cash flow 2,008 2,750 962 Earnings per share, SEK 9.27 8.60 6.57 Q4 INTERIM & YEAR-END REPORT 2021 15
Slide 16: EBIT excl. PIR by Business Area
EBIT excl. PIR by Business Area MSEK Q4 2021 Q4 2020 Q3 2021 Mines 3,002 1,858 1,936 Smelters 553 1,109 611 Other/eliminations -721 76 -129 The Group 2,835 3,043 2,419 Mines Smelters MSEK Rolling, MSEK Rolling, MSEK MSEK 3,500 10,000 1,500 5,000 3,000 8,000 1,200 4,000 2,500 2,000 6,000 900 3,000 1,
Slide 17: EBIT deviation Q4 2021 vs Q4 2020
EBIT deviation Q4 2021 vs Q4 2020 EBIT excl. PIR MSEK Higher base metal prices Q4 2020 3,043 Stronger USD Prices and terms 1,655 Whereof currency 363 Lower grades Water inflow in Tara, Kylylahti closure Volumes -1,555 Improved milled volumes in other mines Unfavorable raw material mix Costs -366 Low
Slide 18: EBIT deviation Q4 2021 vs Q3 2021
EBIT deviation Q4 2021 vs Q3 2021 EBIT excl. PIR MSEK Q3 2021 2,419 Higher metal prices Stronger USD Prices and terms 876 Whereof currency 235 Higher milled volume and grades Volumes 221 Negative impact from internal profit elimination Costs -539 Depreciation -132 Higher production Production distur
Slide 19: Cash flow
Cash flow MSEK Q4 2021 Q4 2020 Q3 2021 EBITDA excl. PIR 4,343 4,651 3,798 Cash flow from working capital 351 397 -841 Cash flow from investments -1,986 -1,698 -1,540 Financial items -64 -63 -61 Tax paid -634 -558 -404 Other -1 21 9 Free cash flow 2,008 2,750 962 Q4 INTERIM & YEAR-END REPORT 2021 19
Slide 20: Capital structure
Capital structure Net debt & Gearing SEK bn % SEK bn 31 Dec 2021 31 Dec 2020 30 Sep 2021 10 30 Total Assets 80.5 72.5 75.4 25 8 Capital Employed 53.4 51.0 52.8 20 Equity 50.9 45.6 48.3 6 15 Net debt -0.9 2.2 1.1 4 10 Net debt/equity, % -2 5 2 2 Net reclamation 5 liability/equity, % 5 5 5 0 0 Average
Slide 21: Updated discount rate for Reclamation Reserves
Updated discount rate for Reclamation Reserves ▪ Discount rate adjusted at year-end 2021 ‒ Reduced to 0.5 % from 2.0 % ‒ Real interest rate (excluding inflation) ‒ Reflects current view on forward long-term interest rates ▪ Q4 2021 financial effects ‒ Increased reclamation liability and correspondin
Slide 22: Low Carbon Zinc – Boliden takes the next step
Low Carbon Zinc – 6.0 Zinc Mine Scope 1 & 2 Emissions Intensity 2021 Boliden takes the next step 5.0 4.0 t CO2e / t Zn 3.0 2.0 1.0 Garpenberg Tara ▪ Zn with a low carbon footprint, verified by 0.0 Boliden Area third party 0 2,000 4,000 6,000 Zinc (kt) 8,000 10,000 ▪ Produced from own zinc concentrat
Slide 23: World's first verified Low-Carbon Zinc now available!
World’s first verified Low-Carbon Zinc now available! Boliden Low-Carbon Zinc <1 kg CO2/kg Zn Produced from zinc concentrate mined in our own mines ▪ First contracts signed ‒ Agreements with Zinkpower and Everzinc ▪ First volumes to customers in February 2022 ▪ Boliden invests in more low carbon sme
Slide 24: Tara Q4 2021 disturbances in production
Tara Q4 2021 disturbances in production ▪ Water inflow from pilot hole for ventilation shaft, starting Nov. 20 ‒ Production partially resumed Dec. 10 ▪ Fire in underground conveyor Dec. 27 ▪ 250 MSEK EBIT impact in Q4 2021 ▪ Q1 2022 production at reduced capacity ‒ Milled volume ~10 % lower than 202
Slide 25: Harjavalta, Q4 2021 disturbances in production
Harjavalta, Q4 2021 disturbances in production ▪ Delayed start-up following maintenance stop and expansion ▪ Explosion in Ni electric furnace slag tapping system on Dec. 24 ‒ Production resumed Jan. 19, 2022 ‒ 50 MSEK EBIT impact each in Q4 2021 and Q1 2022 Harjavalta Nickel line: Some damaged produ
Slide 26: 2022 Capital Markets Day
2022 Capital Markets Day Boliden’s Capital Markets Day 2022 will be held in Stockholm on November 15, followed by a site-visit on November 16. For more information please contact: investorrelations@boliden.com Q4 INTERIM & YEAR-END REPORT 2021 26
Slide 27: Outlook
▪ Aitik Outlook ‒ 2022: Cu 0.20 %, Au 0.10 g/tonne ▪ Garpenberg ‒ 2022: Zn 3.6 %, Ag 110 g/tonne ▪ Kevitsa ‒ 2022: Cu slightly below reserve grade ▪ Tara ‒ Q1 2022: Affected by the Q4 2021 water inflow ▪ Harjavalta ‒ Q1 2022: -50 MSEK EBIT impact due to Q4 2021 explosion ▪ Maintenance shutdowns ‒ 20
Slide 28: This is Boliden
This is Boliden Our purpose To provide the metals essential to improve society for generations to come Our vision To be the most climate friendly and respected metal provider in the world Our values Care, Courage, Responsibility Q4 INTERIM & YEAR-END REPORT 2021 28
Slide 29: APPENDIX
APPENDIX Q4 INTERIM & YEAR-END REPORT 2021 29
Slide 30: Financing
Financing Net Debt MSEK Q4 2021 Q4 2020 Q3 2021 Debt to credit institutions 5,993 5,951 5,987 Other interest bearing debt 169 203 183 Pensions 1,180 1,159 1,178 Interest bearing assets -9 -18 -9 Cash -8,251 -5,060 -6,258 Total -918 2,236 1,081 Net Payment Capacity MSEK Q4 2021 Q4 2020 Q3 2021 Not ut
Slide 31: Loan structure
Loan structure Maturity of which MSEK Reported value utilized < 1 year 1-5 years > 5 years Revolving credit facility 7,875 - - - - Bilateral loans 5,243 5,243 - 4,902 341 Bonds 750 750 - 750 - Commercial papers - - - - - Leases, other 169 169 38 131 - Total 6,162 38 5,783 341 Q4 INTERIM & YEAR-END R
Slide 32: Preliminary priced volumes
Preliminary priced volumes Preliminary priced volumes in Mines* 31 Dec 2021 Copper, ktonnes 13.0 Zinc, ktonnes 20.6 Nickel, ktonnes 3.1 Lead, ktonnes 5.1 Silver, kg 48,129 Gold, kg 1,313 Palladium, kg 231 Platinum, kg 345 * Preliminary priced volumes of metal in concentrate in Mines Q4 INTERIM & YEA
Slide 33: Q4 2021 Internal profits
Q4 2021 Internal profits ▪ Relates to timing of revenue recognition ▪ Strong production in Mines, disturbances ‒ Group recognizes revenue when at external sales in Smelters ‒ Mines recognizes revenue at sales to Smelters ▪ High inventories of internal Cu and Ni ▪ Q4 2021 EBIT impact -660 MSEK concen
Slide 34: Copper and zinc treatment charges
Copper and zinc treatment charges Copper TC Zinc TC USD/tonne USD/tonne concentrate concentrate 120 350 100 300 250 80 200 60 150 40 100 20 50 0 0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Contract TC - annual and mid-year benchmark Contract TC - realized Standard grade spot TC Spo
Slide 35: Base metal prices
Base metal prices USD/tonne ktonnes USD/tonne ktonnes Copper Nickel 12,000 2,400 30,000 1,200 10,000 2,000 25,000 1,000 8,000 1,600 20,000 800 6,000 1,200 15,000 600 4,000 800 10,000 400 2,000 400 5,000 200 0 0 0 0 LME inventory Shanghai inventory Comex inventory LME inventory Price Price Q avg Pric
Slide 36: Gold, silver and lead prices
Gold, silver and lead prices USD/tonne USD/tr.oz. Lead Silver 3,000 40 2,500 30 2,000 1,500 20 1,000 10 500 0 0 Price Price Q avg Price Price Q avg USD/tr.oz. Gold 2,500 2,000 Average price in Q4 2021 vs period 1,500 Q3 2021 Q2 2021 Q1 2021 Q4 2020 1,000 Gold 0% -1% 0% -4% 500 Silver -4% -13% -11% -
Slide 37: This presentation has been prepared by Boliden for information purposes only and as per
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 subject to ri