Boliden Ab · OMXSTO:BOL
Boliden Ab — Q1 2016 Earnings Presentation
34 slides from Boliden Ab's earnings presentation, May 3, 2016
Slide 1: Q1 Interim Report 2016
Q1 Interim Report 2016 Lennart Evrell President & CEO Håkan Gabrielsson CFO
Slide 2: Q1 2016
Q1 2016 • Revenues 8,849 (10,407) MSEK MSEK R4Q, MSEK 1 800 7 200 • EBIT ex PIR* 769 (1,102) MSEK 1 600 6 400 ‒ EBIT 888 (1,205) MSEK 1 400 5 600 • Free Cash Flow 210 (19) MSEK 1 200 4 800 1 000 4 000 • Good result in Smelters 800 3 200 • Production good 600 2 400 • 400 1 600 Metal prices significan
Slide 3: Market – soft demand, lower production
Market – soft demand, lower production Macro • Low growth global industrial production Base metals markets • Unchanged metals demand from 2015 • Capacity reductions, mines and smelters • Most metal prices up from Q4 with the exception of Cu and Ni • Zn concentrate stocks down • Balanced Cu concentra
Slide 4: Zinc price
Zinc price Zinc price, USD/t Tonnes USD/t 2 600 Q1 Q2 Q3 Q4 Q1 5 000 1 800 000 2 400 4 500 1 600 000 2 200 4 000 1 400 000 2 000 3 500 1 200 000 1 800 3 000 1 000 000 1 600 2 500 800 000 1 400 2 000 jan-15 apr-15 jul-15 okt-15 jan-16 apr-16 600 000 1 500 400 000 1 000 Average price in Q1 vs period 5
Slide 5: Copper price
Copper price Copper price, USD/t Tonnes 12 000 1 800 000 USD/t 7 000 Q1 Q2 Q3 Q4 Q1 1 600 000 6 500 10 000 1 400 000 6 000 5 500 8 000 1 200 000 5 000 1 000 000 6 000 4 500 800 000 4 000 jan-15 apr-15 jul-15 okt-15 jan-16 apr-16 4 000 600 000 400 000 2 000 Average price in Q1 vs period 200 000 Q4-15
Slide 6: Nickel price
Nickel price Nickel price, USD/t Tonnes 60 000 500 000 USD/t Q1 Q2 Q3 Q4 Q1 16 000 450 000 15 000 50 000 14 000 400 000 13 000 12 000 350 000 40 000 11 000 10 000 300 000 9 000 30 000 250 000 8 000 7 000 200 000 6 000 jan-15 apr-15 jul-15 okt-15 jan-16 apr-16 20 000 150 000 100 000 10 000 Average pr
Slide 7: 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 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 20122013 2012 2013 20142015 2014 2015 2016 2
Slide 8: Boliden market term index
Boliden market term index Boliden Group Q1 2016 8 2016-05-03
Slide 9: Zinc and copper prices
Zinc and copper prices Normal C1 – Zinc Normal C1 – Copper USD/ton USD/ton 5,000 5000 11,000 11000 4,500 4500 10,000 10000 4,000 4000 9,000 9000 8,000 8000 3,500 3500 7,000 7000 3,000 3000 6,000 6000 2,500 2500 5,000 5000 2,000 2000 4,000 4000 1,500 1500 3,000 3000 1,000 1000 2,000 2000 500 500 1,00
Slide 10: Mines
Mines Boliden Group Q1 2016 10 2016-05-03
Slide 11: Mines – higher production & lower metal prices vs LY
Mines – higher production & lower metal prices vs LY R4Q, • EBIT 242 (482) MSEK MSEK 1 600 MSEK 4 800 ‒ 31 MSEK in Q4 2015 1 400 4 200 • Capex 512 (549) MSEK 1 200 3 600 1 000 3 000 • Production good 800 2 400 ‒ Seasonal low production Aitik 600 1 800 ‒ Garpenberg 2.5 Mton pace 400 1 200 • Lower met
Slide 12: Mines – Production
Mines – Production Milled ore, Metal content, Metal content, mt Copper kt Milled ore, mt Zinc kt 12 24 1,8 90 10 20 1,5 75 8 16 1,2 60 6 12 0,9 45 4 8 0,6 30 2 4 0,3 15 0 0 0,0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014 2015 2016 2012 2013 20
Slide 13: Smelters
Smelters Boliden Group Q1 2016 13 2016-05-03
Slide 14: Smelters – good result
Smelters – good result • EBIT ex PIR* 655 (681) MSEK R4Q, MSEK MSEK 1 100 3 300 ‒ 583 MSEK in Q4 2015 • Capex 288 (156) MSEK 900 2 700 700 2 100 • Improved process stability • New nickel business model 500 1 500 • Higher costs vs LY 300 900 ‒ Mainly volume related • Good market terms but lower vs LY
Slide 15: Smelters – Production
Smelters – Production Copper Metal Metal Total feed, production, Total feed, Zinc production, kt kt kt kt 400 120 250 150 350 105 200 120 300 90 250 75 150 90 200 60 100 60 150 45 100 30 50 30 50 15 0 0 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013
Slide 16: Financials
Financials Boliden Group Q1 2016 16 2016-05-03
Slide 17: Q1 2016 – good result in Smelters
Q1 2016 – good result in Smelters Financial development MSEK Q1 2016 Q1 2015 Q4 2015 Revenues 8,849 10,407 9,699 EBITDA 1,788 2,057 1,339 EBIT 888 1,205 416 Process inventory revaluation (PIR) 119 103 -181 EBIT ex PIR 769 1,102 596 Investments 799 706 1,187 Free cash flow 210 19 36 Earnings per shar
Slide 18: Higher metal prices & lower costs vs Q4 2015
Higher metal prices & lower costs vs Q4 2015 EBIT excl. PIR analysis Q1 2016 vs. Q4 2015 MSEK EBIT excl. PIR – Q4 2015 596 Seasonally lower production Aitik Specification of deviation Lower free metals volume Volume -41 Higher metal prices Prices and Terms (incl. hedges) 59 Weaker USD Whereof curren
Slide 19: Lower metal prices vs. Q1 2015
Lower metal prices vs. Q1 2015 EBIT excl. PIR analysis Q1 2016 vs. Q1 2015 MSEK EBIT excl. PIR – Q1 2015 1,102 Higher Smelter feed Specification of deviation Higher Mine production Volume 394 Lower metal prices Prices and Terms (incl. hedges) -610 Lower byproduct prices and mix effect Whereof curren
Slide 20: Cash flow
Cash flow Free cash flow MSEK Q1 2016 Q1 2015 Q4 2015 EBITDA excluding PIR 1,669 1,954 1,520 Changes in working capital -449 -1,017 -143 Inventories -284 -981 462 Payables -8 23 -873 Receivables -155 -59 265 Other -2 0 3 Cash flow from investments -799 -705 -1,211 Financial items -51 -59 -62 Tax pai
Slide 21: Strong balance sheet
Strong balance sheet SEK bn 31 Mar 31 Dec (Unless otherwise stated) 2016 2015 MSEK Net debt Gearing % Total Assets 43.7 43.0 10 000 45 Capital employed 35.6 35.1 40 8 000 35 Shareholders' equity 26.5 25.8 30 6 000 Net debt 5.6 5.8 25 20 Gearing, % 21 23 4 000 15 Loan duration, years 2.2 2.4 2 000 10
Slide 22: Going forward
Going forward • Aitik ‒ Copper grade 0.21% in 2016 • Garpenberg ‒ 2016-2017 grades: Zn 4.5%, Ag 120 g/ton • Cost control • Capex* ‒ 2016: slightly below 4 BSEK ‒ 2017: 4.5 BSEK • Planned Smelters maintenance EBIT impact ‒ Q2: -165 MSEK (Harjavalta, Kokkola, Rönnskär) ‒ Q3: -50 MSEK (Odda, Bergsöe, R
Slide 23: Q1 2016 Summary
Q1 2016 Summary • Well positioned in the metal market ‒ Mines and smelters ‒ Base metals and precious metals ‒ High productivity • Good production • Solid performance Smelters • Significant lower metal prices vs LY • Kevitsa acquisition announced 10 March ‒ Excellent fit ‒ Synergies ‒ Nickel feed ‒
Slide 24: 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 25: Boliden Group Q1 2016
Boliden Group Q1 2016 25 2016-05-03
Slide 26: Appendix
Appendix Boliden Group Q1 2016 26 2016-05-03
Slide 27: Market balance
Market balance Zinc – global market Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Metals demand, kt 3400 3322 3318 3326 3383 3343 3348 3325 Year on year change 6,1% 1,0% 1,4% -0,3% -0,5% 0,6% 0,9% 0,0% Smelter production, kt 3267 3356 3531 3373 3519 3421 3513 3150 Year on year change 4,0% 4,6% 9,6% 7,4% 7
Slide 28: Economic development
Economic development Industrial production, year on year % 14 12 10 8 6 4 2 0 -2 -4 -6 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 2012 2013 2014 2015 2016 EU28 USA China World Source: Thomson Reuters Datastream, Boliden calculations for w
Slide 29: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn Activity, year on year % 30 25 20 15 10 5 0 -5 -10 -15 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 2012 2013 2014 2015 2016 EU USA China China: year on year based on cumulative investments at ea
Slide 30: 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 2012 2013 2014 2015 2016 Europe USA China World Source: LMC Automotive Boliden Group Q1 2016 30 2016-05-03
Slide 31: 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 -2 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 Zinc demand Copper demand GDP Industrial production Source: CRU Ltd, Thomson Reuters Datastream Boliden Group Q1 2016 31 20
Slide 32: Zinc TC and premiums
Zinc TC and premiums US$/t concentrate Treatment charges US$/t metal Metal premia 300 250 250 200 200 150 150 100 100 50 50 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Realized TC - European contract Delivered Premia US Midwest Ex-Works Premia Europe Spot TC, China imports Premia Far East
Slide 33: Copper TC and premiums
Copper TC and premiums US$/t Treatment charges US$/t metal Metal premia concentrate 140 160 120 140 100 120 100 80 80 60 60 40 40 20 20 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Contract TC - annual and mid-year benchmark CIF European benchmark premia Standard grade spot TC CIF Average E
Slide 34: Boliden Group Q1 2016
Boliden Group Q1 2016 34 2016-05-03