Boliden Ab · OMXSTO:BOL

Boliden Ab — Q1 2015 Earnings Presentation

35 slides from Boliden Ab's earnings presentation, May 5, 2015

  1. Slide 1: Q1 2015 Interim Report

    Q1 2015 Interim Report Lennart Evrell President & CEO Mikael Staffas CFO

  2. Slide 2: Summary Q1 2015

    Summary Q1 2015 R4Q,  Revenues 10 407 (8 550) MSEK MSEK MSEK 1 800 6 400  EBIT ex PIR* 1 102 (385) MSEK 1 600 5 600 ‒ EBIT 1 205 (265) MSEK 1 400 4 800  Free Cash Flow 19 (-432) MSEK 1 200 4 000 1 000 3 200  Favorable positioned 800 2 400 ‒ Stronger USD, improved smelter 600 1 600 terms 400 ‒ Ex

  3. Slide 3: Lower metal demand growth

    Lower metal demand growth Macro  Low global industrial growth continuous ‒ Slowdown in China Metals markets  Softer metal demand growth in China  Zn - deficit in metal and concentrate  Cu - slight surplus in metal and concentrate Exchange rates  Continued USD strength Boliden Group Q1 2015 3 20

  4. Slide 4: Metal price index, SEK

    Metal price index, SEK BOLIDEN PRICE INDEX, SEK (Index 100 per 2009-01-01) 250 225 200 175 150 125 100 75 50 25 0 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 Note: Graph shows period 1 January 2009 until 16 April 2015. Boliden Group Q1 2015 4 2015-05-05

  5. Slide 5: Currencies

    Currencies USD/SEK EUR/USD 10 1,00 9 0,90 1,11 8 0,80 1,25 7 0,70 1,43 6 0,60 1,67 5 2,00 0,50 4 2,50 0,40 3 3,33 0,30 2 0,20 1 0,10 0 0,00 20052005 20062006 20072007 20082008 20092009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 USD/SEK EUR/USD Note: Graph shows period 1 January 2005

  6. Slide 6: Zinc – price down vs Q4 2014

    Zinc – price down vs Q4 2014 USD/t Q1 Q2 Q3 Q4 Q1 5 000 4 500 4 000 3 500 3 000 2 500 2 000 1 500 Average price in Q1 vs period 1 000 Q4-14 Q3-14 Q2-14 Q1-14 500 -7% -10% 0% +2% 0 200520052006 2006 2007 2007 20082008 2009200920102010201120112012201220132013201420142015 2015 Price Price Q avg Boliden

  7. Slide 7: Copper – significant price drop

    Copper – significant price drop USD/t Q1 Q2 Q3 Q4 Q1 11 000 10 000 9 000 8 000 7 000 6 000 5 000 4 000 3 000 Average price in Q1 vs period 2 000 1 000 Q4-14 Q3-14 Q2-14 Q1-14 0 -12% -17% -14% -17% 2005 2006 2005 2006 2007200720082008200920092010201020112011201220122013201320142014 2015 2015 Price Pr

  8. Slide 8: Gold and silver prices stable while lead down vs Q4 2014

    Gold and silver prices stable while lead down vs Q4 2014 USD/troy oz. Gold USD/t Lead 2 000 5 000 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 2005 2005 20062007 2006 2007 20082009 2008 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 20

  9. Slide 9: Mines

    Mines Boliden Group Q1 2015 9 2015-05-05

  10. Slide 10: Mines

    Mines R4Q,  EBIT 482 (147) MSEK MSEK MSEK ‒ 461 MSEK in Q4 2014 1 600 4 800  Capex 549 (731) MSEK 1 400 4 200 1 200 3 600  Stronger USD 1 000 3 000  Lower metal prices 800 2 400 600 1 800  Garpenberg ramp-up on 400 1 200 plan  Good development in 200 600 Boliden Area 0 1 2 3 4 1 2 3 4 1 2 3 4

  11. Slide 11: Mines – Production

    Mines – Production Milled ore, Metal content, Milled ore, Metal content, mt Copper kt mt Zinc kt 12 24 1,8 120 10 20 1,5 100 8 16 1,2 80 6 12 0,9 60 4 8 0,6 40 2 4 0,3 20 0 0 0,0 0 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 2012 2013 2014 2015 2012 2013 2014 2015 M

  12. Slide 12: Smelters

    Smelters Boliden Group Q1 2015 12 2015-05-05

  13. Slide 13: Smelters

    Smelters  EBIT ex PIR* 681 (199) MSEK MSEK R4Q, MSEK ‒ 681MSEK in Q4 2014 800 2 400  Capex 156 (135) MSEK 700 2 100 600 1 800  Stronger USD 500 1 500  Improved smelter terms 400 1 200  Lower metal prices 300 900 200 600  Lower feed and costs vs Q4 100 300 0 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1

  14. Slide 14: 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 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 2012 2013 2014

  15. Slide 15: Financials

    Financials Boliden Group Q1 2015 15 2015-05-05

  16. Slide 16: Financial development

    Financial development MSEK Q1 2015 Q1 2014 Q4 2014 Revenues 10,407 8,550 9,614 EBITDA 2,057 989 2,044 EBIT 1,205 265 1,158 EBIT ex PIR 1,102 385 1,134 Investments 706 868 1,727 Free cash flow 19 -432 366 Earnings per share, SEK 3.27 0.56 3.06 Net debt / equity ratio 33 40 35 Boliden Group Q1 2015 16

  17. Slide 17: EBIT analysis Q1 2015 vs. Q4 2015

    EBIT analysis Q1 2015 vs. Q4 2015 Improved terms and lower volume  Internal profit elimination redistributed to Volume and Prices and Terms. MSEK Q1 2015 Q4 2014 EBIT 1,205 1,158 Process inventory revaluation (PIR) 103 24 EBIT excl. PIR 1,102 1,134 Aitik – winter impact, maintenance Deviation -32 G

  18. Slide 18: EBIT analysis Q1 2015 vs. Q1 2014

    EBIT analysis Q1 2015 vs. Q1 2014 Higher production and stronger USD  Internal profit elimination redistributed to Volume and Prices and Terms. MSEK Q1 2015 Q1 2014 EBIT 1,205 265 Process inventory revaluation (PIR) 103 -120 EBIT excl. PIR 1,102 385 Deviation Ramp-up Garpenberg 717 Kylylahti Specif

  19. Slide 19: Cash flow quarterly

    Cash flow quarterly MSEK Q1 2015 Q1 2014 Q4 2014 EBITDA excluding PIR 1,954 1,109 2,020 Changes in working capital -1,017 -421 96 Inventories -981 -190 -433 Payables 23 -109 572 Receivables -59 -122 -44 Cash flow from investments -705 -874 -1,716 Financial items -59 -55 -67 Tax paid -50 -156 3 Other

  20. Slide 20: Capital structure

    Capital structure SEK bn 31 Mar 31 Dec Unless otherwise stated 2015 2014 MSEK % Total Assets 44.5 43.9 10 000 45 Capital employed 35.8 35.1 40 8 000 35 Shareholders' equity 24.7 24.0 30 6 000 Net debt 8.2 8.3 25 20 4 000 Gearing, % 33 35 15 Loan duration, years 3.1 3.4 2 000 10 5 Average interest ra

  21. Slide 21: Capex projection 2015 and 2016

    Capex projection 2015 and 2016  Slightly above 4 BSEK in 2015  Slightly below 4 BSEK in 2016 Boliden Group Q1 2015 21 2015-05-05

  22. Slide 22: Updated external process inventories

    Updated external process inventories Metal New Former Copper , tonnes 28 500 29 000 Zinc, tonnes 15 000 17 000 Lead , tonnes 0 300 Gold, kg 2 200 2 200 Silver, kg 60 000 66 200 Palladium, kg 500 500  Total process inventory unchanged  More internal process inventory and less external ‒ Kylyahti an

  23. Slide 23: Project update

    Project update  Garpenberg ‒ Mine to ramp-up in 2015  Silver recovery Kokkola ‒ Ramp-up behind schedule  Aitik45 ‒ Production ramp-up on plan ‒ Permit appeal process ongoing  Odda ‒ Decision to increase to 200 (170) Kton/year  Laver ‒ Application for exploitation concession Boliden Group Q1 201

  24. Slide 24: Summary Q1 2015

    Summary Q1 2015  Well positioned in the metal market ‒ Strong smelter development ‒ Garpenberg well timed  Stronger USD and smelter terms  Lower metal prices  Lower volume vs strong Q4 Boliden Group Q1 2015 24 2015-05-05

  25. Slide 25: Going forward

    Going forward  Aitik ‒ Copper grade 0.21% in 2015-2016 ‒ 40 Mton ore 2015 plan, 45 Mton ore 2017 plan  Garpenberg – 2.5 Mton pace end 2015  Tara – normal production levels in latter part of 2015  Kokkola – working with process stability  Rönnskär – action plan under implementation  Nickel busi

  26. Slide 26: 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

  27. Slide 27: Metals steal the show

    Metals steal the show Oslo’s grand Opera House dips its toes into waters that were once part of Bjorvika dock. This is where Mother Nature meets hitech components. So now Figaro can celebrate his marriage before a real life - or cyber — audience. Our needs change. Ideas and materials are renewed. No

  28. Slide 28: Appendix

    Appendix Boliden Group Q1 2015 28 2015-05-05

  29. Slide 29: Market balance

    Market balance Zinc – global market Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Metals demand 4,2% 3,9% 4,4% 4,4% 3,5% 2,3% 0,8% 1,4% Smelter production 4,9% 8,4% 4,7% 1,2% 2,3% 3,8% 6,3% 2,7% Metal balance, kt -62 -64 39 -173 -101 -17 224 -135 Mine production 3,5% 2,0% -0,2% -3,6% -4,2% 0,1% 8,4% 9,2%

  30. Slide 30: Economic development

    Economic development Industrial production, year on year % 20 15 10 5 0 -5 2011 2012 2013 2014 2015 EU28 USA China World Source: Reuters Datastream, Boliden calculations for world data Boliden Group Q1 2015 30 2015-05-05

  31. Slide 31: Construction

    Construction Largest segment for Cu and Zn Activity, year on year % 30 25 20 15 10 5 0 -5 -10 -15 2011 2012 2013 2014 2015 EU USA China China: year on year based on cumulative investments at each point Source: Reuters Datastream Boliden Group Q1 2015 31 2015-05-05

  32. Slide 32: Automotive

    Automotive Production of light vehicles, year on year, quarterly data 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 2011 2012 2013 2014 2015 Europe North America China World Source: LMC Automotive Boliden Group Q1 2015 32 2015-05-05

  33. Slide 33: 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 2012 2013 2014 2015 Delivered Premia US Midwest Realized TC, European contract Ex-Works Premia Europe Spot TC, China imports Premia Far East - Western 

  34. Slide 34: Copper TC and premiums

    Copper TC and premiums US$/t concentrate Treatment charges US$/t metal Metal premia 140 160 120 140 100 120 100 80 80 60 60 40 40 20 20 0 0 2012 2013 2014 2015 2012 2013 2014 2015 Contract TC - annual and mid-year benchmark CIF Average European premia CIF European benchmark premia Standard grade spo

  35. Slide 35: The rail yard that changed tracks

    The rail yard that changed tracks At the turn of the last century, the harbour railway looped around the whole of Helsinki and ended here, in the rail yard. Hundreds of men directed and unloaded trains, their shouting heard over the din of clanging ) metal, The tracks are gone and the noise has died

Boliden — Q1 2015 Earnings Presentation on 6ix