Boliden Ab · OMXSTO:BOL
Boliden Ab — Q1 2019 Earnings Presentation
31 slides from Boliden Ab's earnings presentation, May 3, 2019
Slide 1: Q1 Interim report 2019
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Q1 Interim report 2019 Mikael Staffas President & CEO Håkan Gabrielsson CFO
Slide 2: Q1 Interim report 2019 – Stable production but lower grades
Q1 Interim report 2019 – Stable production but lower grades Group EBIT R4Q, • Revenues 13,047 (13,331) MSEK MSEK MSEK 3 400 10 200 • EBIT ex PIR* 2,048 (2,724) MSEK 3 200 3 000 9 600 9 000 2 800 8 400 2 600 7 800 2 400 7 200 • Lower grades 2 200 2 000 6 600 6 000 1 800 5 400 1 600 4 800 • Stable pro
Slide 3: Market Q1 2019
Market Q1 2019 Macro • Slowdown in global industrial production Base metals • Cu and Ni demand increased • Zn demand stable • Metal prices in USD down from Q1 2018, but up from Q4 2018 Concentrate markets • Increased availability of Zn concentrate • Zinc benchmark TC at 245 (147) Kokkola zinc bars U
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 6,000 1,200 2,000 1,200 1,500 900 4,000 800 1,000 600 2,000 400 500 300 0 0 0 0 2008 2009 2010 2011 2012 2013 2014 2015 20
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 9 000 30 000 4 000 8 000 3 500 25 000 7 000 3 000 6 000 20 000 2 500 5 000 2 000 15 000 4 000 1 500 3 000 10 000 1 000 2 000 500 5 000 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 Q1 2019 7 2019-05-03
Slide 8: Mines
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Mines The pilot facility for electrification in Aitik Boliden Group Q1 2019 8 2019-05-03
Slide 9: Q1 2019 Mines – Stable production, lower grades
Q1 2019 Mines – Stable production, lower grades Mines EBIT • EBIT 1,353 (1,931) MSEK MSEK R4Q, MSEK 2 600 7 800 ‒ 1,384 MSEK in Q4 2018 2 400 7 200 2 200 6 600 2 000 6 000 • Capex 1,153 (878) MSEK 1 800 5 400 ‒ Capex projects on plan 1 600 1 400 4 800 4 200 1 200 3 600 1 000 3 000 • Lower EBIT y-o-y
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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 11: Smelters
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Smelters Rönnskär winter view Boliden Group Q1 2019 11 2019-05-03
Slide 12: Q1 2019 Smelters – Better prices and terms
Q1 2019 Smelters – Better prices and terms R4Q, MSEK Smelters EBIT MSEK • EBIT ex PIR* 853 (640) MSEK 1 200 3 600 ‒ 575 MSEK in Q4 2018 1 000 3 000 • Capex 436 (231) MSEK 800 2 400 ‒ Capex projects on plan 600 1 800 400 1 200 • Higher EBIT y-o-y 200 600 ‒ Better prices and terms ‒ Limited impact fro
Slide 13: Smelters – Production
Smelters – Production Copper Metal Total feed, production, Ktonnes Ktonnes 400 120 • Cu production 87 (92) ktonnes 350 105 ‒ Lower metal production in both smelters 300 90 ‒ Reduced concentrate feed in Harjavalta 250 75 200 60 150 45 • Zn production 122 (120) ktonnes 100 30 ‒ Increased concentrate f
Slide 14: Financials
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level Financials ‒ Fifth level Zinc bars in Odda Boliden Group Q1 2019 14 2019-05-03
Slide 15: 2019 Q1 – Earnings
2019 Q1 – Earnings MSEK Q1 2019 Q1 2018 Q4 2018 Revenues 13,047 13,331 12,543 EBITDA 3,737 3,941 3,314 EBIT 2,441 2,672 2,093 EBIT ex PIR 2,048 2,724 2,001 Investments 1,606 1,109 2,013 Free cash flow -323 1,431 1,721 Earnings per share, SEK 6.91 7.35 6.82 Net debt / equity ratio, % 6 6 5 Boliden Gr
Slide 16: 2019 Q1 vs. 2018 Q1
2019 Q1 vs. 2018 Q1 Group EBIT excl. PIR MSEK Q1 2019 2,048 Q1 2018 2,724 Deviation -676 • Lower grades Specification of deviation Volumes -556 • Lower metal prices, offset by FX Prices and terms (incl. hedges) 72 • Limited impact from new Zn TC’s • Higher by-product prices Whereof currency 739 Cost
Slide 17: 2019 Q1 vs. 2018 Q4
2019 Q1 vs. 2018 Q4 Group EBIT excl. PIR MSEK Q1 2019 2,048 Q4 2018 2,001 Deviation 48 • Lower grades Specification of deviation • Higher milled production • Higher free metals Volumes -146 Prices and terms (incl. hedges) 322 • Better prices and terms Whereof currency effects 82 • Limited impact fro
Slide 18: Cash flow
Cash flow MSEK Q1 2019 Q1 2018 Q4 2018 EBITDA excluding PIR 3,345 3,994 3,222 Cash flow from working capital -1,507 -823 686 Inventories -1,231 -974 122 Operating receivables -815 -224 149 Operating liabilities 551 378 413 Other -11 -3 2 Cash flow from investments -1,603 -1,108 -1,957 Financial item
Slide 19: Balance sheet
Balance sheet Group Net debt & Gearing SEK bn 31 Mar 31 Mar 31 Dec MSEK % 2019 2018 2018 12 000 45 40 Total Assets 61.7 60.1 58.7 10 000 35 Capital employed 47.2 44.3 44.4 8 000 30 25 Equity 41.2 37.7 39.0 6 000 20 Net debt 2.6 2.5 2.0 4 000 15 10 Net debt / equity ratio, %* 6 6 5 2 000 5 Loan durat
Slide 20: Going forward
Going forward • Q1 2019 production above reserve grade in Aitik and Garpenberg ‒ Aitik ‒ 2019: Cu 0.25% ‒ 2020: 45 Mtonnes milled volume ‒ Garpenberg ‒ 2019: Zn 4.0% ‒ 2020: 3 Mtonnes milled volume ‒ Kevitsa ‒ 2019: Mining below reserve average ‒ 2020: 9.5 Mtonnes milled volume pace • New proposed S
Slide 21: Conclusion
Conclusion • 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 well position
Slide 22: Appendix
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Appendix Copper cathodes from Boliden Rönnskär Boliden Group Q1 2019 22 2019-05-03
Slide 23: Zinc TC and premium
Zinc TC and premium US$/t Treatment charges US$/t metal Metal premium concentrate 300 250 250 200 200 150 150 100 100 50 50 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Ex-Works Premia Europe Contract TC - realized Delivered Premia US Midwest Spot TC imported concentrate to China Premia Far
Slide 24: Copper TC and premium
Copper TC and premium US$/t Treatment charges US$/t metal Metal premium concentrate 120 60 100 50 80 40 60 30 40 20 20 10 0 0 2015 2016 2017 2018 2015 2016 2017 2018 2019 Contract TC - annual and mid-year benchmark CIF Average European premia Standard grade spot TC Contract benchmark according to ma
Slide 25: 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 Q1 2019
Slide 26: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn Activity, year on year % 16 14 12 10 8 6 4 2 0 -2 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: const
Slide 27: 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 Q1 2019 27 2019-05-03
Slide 28: Market balance – Zinc and Copper
Market balance – Zinc and Copper Zinc – global market Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Metals demand, kt 3 539 3 484 3 494 3 424 3 525 3 468 3 495 3 417 Year on year change 2,6% 1,9% 1,6% -0,8% -0,4% -0,5% 0,0% -0,2% Smelter production, kt 3 298 3 271 3 577 3 349 3 333 3 164 3 431 3 414 Year
Slide 29: Market balance – Nickel and Lead
Market balance – Nickel and Lead Nickel - global market Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Metals demand, kt 508 552 575 564 575 572 584 599 Year on year change -1,7% 11,9% 9,8% 9,8% 13,2% 3,7% 1,5% 6,2% Smelter production, kt 482 527 543 516 534 531 565 565 Year on year change -4,9% 7,2% 5,8%
Slide 30: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden Group Q1 2019 30 2019-05-03
Slide 31: 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