Boliden Ab · OMXSTO:BOL

Boliden Ab — Q4 2020 Earnings Presentation

32 slides from Boliden Ab's earnings presentation, Feb 12, 2021

  1. Slide 1: Boliden - Metals for generations to come

    Boliden - Metals for generations to come Q4 Interim & Year-end Report 2020 Mikael Staffas, President and CEO Håkan Gabrielsson, CFO 2021-02-12 Q4 2020 Q4 INTERIM & YEAR-END REPORT 2020 1

  2. Slide 2: Q4 2020 – Strong earnings and cash flow in the quarter

    Q4 2020 – Strong earnings and cash flow in the quarter KEY HIGHLIGTHS PROJECTS  Overall stable production  Kevitsa and Garpenberg at designed  Successful exploration capacity, Aitik still ramping up.  On schedule: Rönnskär Cu expansion FINANCIAL PERFORMANCE and Harjavalta Ni expansion  EBIT exc

  3. Slide 3: Q4 EBIT development Group

    Q4 EBIT* development Group EBIT excl. PIR MSEK Rolling, MSEK  Group 3,043 (1,721) MSEK 4,000 12,000 3,500 10,500 3,000 9,000  Mines 1,858 (890) MSEK 2,500 7,500 2,000 6,000  Smelters 1,109 (759) 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 Q2 Q3 Q4

  4. 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 2020 0.8  Accidents (LTI)* 4.3 (6.6)  Sick leave 5.4 % (4.4) 0.6  Carbon dioxide intensity of 0.60 (0.62) 0.4 0.2 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 2019 2020 *Lost Time Injury, i.e. an i

  5. Slide 5: Boliden's weighted index on historic highs

    Boliden price index* Boliden´s weighted index on historic highs 150 125 100 75  Strong increase in base metals 50 ‒ Cu reached 8-year high 25 0  High precious metal prices  Weaker USD 150 125 100 75 50 25 0 *Index 100 = 1 January 2015 Q4 INTERIM & YEAR-END REPORT 2020 5

  6. 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 4,000 11,000 35,000 10,000 3,500 30,000 9,000 3,000 8,000 25,000 2,500 7,000 6,000 20,000 2,000 5,000 15,000 1,500 4,000 1,000 3,000 10,000 2,000 500 5,000 1,000 0 0 0 Source: Wood Mackenzie 2020 Composite C2

  7. Slide 7: Mines – Q4 production

    Metal content, ktonnes Copper Mines – Q4 production 50 40 30 Kevitsa 20  Record production 10  Milled volume 2.6 (2.0) Mtonnes and improved grades 0 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 Garpenberg  Stable production 2016 2017 2018 2019 2020  Milled volume 0.74 (0.72) Mtonnes  Zn grade 3.8 (

  8. Slide 8: Smelters – Q4 production

    Metal production, ktonnes Copper Smelters – Q4 production 120 100 80 60 Rönnskär 40 20  Planned maintenance 0  Stable production Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 2016 2017 2018 2019 2020 Harjavalta Zinc  Record Cu feed after expansion 150  Strong Au production 100 50 Kokkola 0  Planned

  9. Slide 9: Group 2020

    Group 2020 EBIT excl. PIR MSEK EBIT excl. PIR 8,438 MSEK (7,035) 10,000 Increased volumes 8,000 ‒ Higher milled volume in Kevitsa, Aitik and Garpenberg following expansions 6,000 ‒ Higher capacity & improved process stability in Smelters ‒ Less extensive maintenance stops 4,000 Improved prices & ter

  10. Slide 10: Mines 2020

    Mines 2020 EBIT EBIT 4,594 MSEK (4,484) MSEK Improved EBIT in Aitik and Kevitsa 2,500 ‒ Higher milled volume ‒ Improved prices & terms 2,000 ‒ Increased depreciation 1,500 Slightly lower EBIT in Garpenberg 1,000 ‒ Production at design capacity 500 ‒ Higher Zn TC´s 0 Strong EBIT in Boliden Area -500

  11. Slide 11: Smelters 2020

    Smelters 2020 EBIT excl. PIR MSEK EBIT excl. PIR 3,975 MSEK (2,716) 1,400 1,200 Low maintenance year 1,000 ‒ EBIT effect of -345 MSEK (-745) 800 600 EBIT records in Rönnskär and Harjavalta 400 ‒ Higher volumes and improved process stability 200 ‒ Favorable feedmix 0 -200 Rönnskär Harjavalta Kokkola

  12. Slide 12: Exploration 2020

    Exploration 2020  Exploration cost 504 (570) MSEK Kevitsa-Finnish Lapland – Cu, Ni, Au, PGM, Co ‒ Reduced activities due to Covid-19 ‒ Drift to Tara Deep 76% completed Aitik/Gällivare area – Cu, Au  New partnerships Skellefteå district – Zn, Cu, Au, Pb, Ag, Te ‒ Norden Crown Metals Corp. (Norway)

  13. Slide 13: Mineral Reserves & Mineral Resources end of 2020

    Mineral Reserves & Mineral Resources end of 2020  Aitik  Boliden Area ‒ New reserves covering full production until 2050 (2045) ‒ New reserves covering full production until 2027 (2026) ‒ Cu reserve grade 0.22 (0.23) % ‒ Nautanen, 21.4 (15.7) Mtonnes mineral resource  Garpenberg ‒ New reserves co

  14. Slide 14: Financial summary

    Financial summary MSEK Q4 2020 Q4 2019 Q3 2020 Revenues 16,170 12,972 13,550 EBITDA 4,685 3,053 4,034 EBIT 3,077 1,744 2,622 EBIT excl. PIR 3,043 1,721 2,258 Investments 1,703 3,255 1,275 Free cash flow 2,750 822 1,878 Earnings per share, SEK 8.60 4.97 7.44 Q4 INTERIM & YEAR-END REPORT 2020 14

  15. Slide 15: EBIT excl. PIR by business areas

    EBIT excl. PIR by business areas MSEK Q4 2020 Q4 2019 Q3 2020 Mines 1,858 890 1,638 Smelters 1,109 759 835 Other/eliminations 76 71 -215 The Group 3,043 1,721 2,258 Mines Smelters MSEK Rolling, MSEK Rolling, MSEK MSEK 2,500 10,000 1,500 5,000 2,000 8,000 1,200 4,000 1,500 6,000 900 3,000 1,000 4,000

  16. Slide 16: EBIT deviation Q4 2020 vs Q4 2019

    EBIT deviation Q4 2020 vs Q4 2019 EBIT excl. PIR MSEK Higher metal prices Q4 2019 1,721 Weaker USD Prices and terms 524 Stable production Whereof currency -878 Higher grades in Mines Higher free metals in Smelters Volumes 1,316 Reduced inventories Costs -257 Higher personnel costs Depreciation -318

  17. Slide 17: EBIT deviation Q4 2020 vs Q3 2020

    EBIT deviation Q4 2020 vs Q3 2020 EBIT excl. PIR MSEK Q3 2020 2,258 Higher base metal prices Weaker USD Prices and terms 157 Whereof currency -253 Higher grades in Mines Less maintenance and improved feed mix Volumes 1,134 in Smelters Costs -372 Reduced inventories Depreciation -199 Seasonally highe

  18. Slide 18: Cash flow

    Cash flow MSEK Q4 2020 Q4 2019 Q3 2020 EBITDA excl. PIR 4,651 3,030 3,670 Cash flow from working capital 397 1,685 -95 Cash flow from investments -1,698 -3,269 -1,274 Financial items -63 -77 -63 Tax paid -558 -603 -346 Other 21 55 -14 Free cash flow 2,750 822 1,878 Q4 INTERIM & YEAR-END REPORT 2020

  19. Slide 19: Capital structure

    Capital structure Net debt & Gearing SEK bn % SEK bn 31 dec 2020 31 dec 2019 30 Sep 2020 12 60 Total Assets 72.5 66.4 69.2 10 50 Capital Employed 51.0 49.8 52.1 Equity 45.6 41.4 44.0 8 40 Net debt 2.2 5.5 5.1 6 30 Net debt/equity, % 5 13 11 4 20 Net reclamation liability/equity, % 5 5 5 2 10 Average

  20. Slide 20: Process Inventory – changes from Q1 2021

    Process Inventory – changes from Q1 2021 External Process Inventory New Former Copper, tonnes 29,500 28,000 Zinc, tonnes 13,000 13,000 Lead, tonnes 0 0 Gold, kg 2,000 2,000 Silver, kg 45,000 45,000 Palladium, kg 500 500 Copper inventory higher after expansion in copper smelters Q4 INTERIM & YEAR-END

  21. Slide 21: Laver

    Laver  On December 23, 2020 the Swedish Government rejected Boliden's appeal of the Mining Inspector's decision regarding an exploitation concession for the Laver deposit.  Boliden intends to request a judicial review of the Government's decision that a Natura 2000 permit is required before applyi

  22. Slide 22: Application for membership in International Council on Mining and Metals (ICMM)

    Application for membership in International Council on Mining and Metals (ICMM)  Boliden has submitted an application for membership in the International Council on Mining and Metals (ICMM) ‒ Admission notice is expected during the second quarter of 2021  Boliden undertakes to follow ICMM's princi

  23. Slide 23: Outlook

    Outlook  Aitik ‒ 2021: Cu 0.21 %, Au 0.11 g/tonne ‒ Lower in Q1  Garpenberg ‒ 2021: Zn 3.8 %, Ag 110 g/tonne  Maintenance stops ‒ 2021: -550 (-345) MSEK  Capex ‒ 2021: Slightly above 7 BSEK Q4 INTERIM & YEAR-END REPORT 2020 23

  24. Slide 24: 2021 Capital Markets Day

    2021 Capital Markets Day Boliden’s Capital Markets Day 2021 will be held in Stockholm on March 17 For more information please contact: investorrelations@boliden.com Q4 INTERIM & YEAR-END REPORT 2020 24

  25. Slide 25: Our purpose Our vision Our values

    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 2020 25

  26. Slide 26: APPENDIX

    APPENDIX Q4 INTERIM & YEAR-END REPORT 2020 26

  27. Slide 27: Financing

    Financing Net Debt MSEK Q4 2020 Q4 2019 Q3 2020 Debt to credit institutions 5,951 5,503 6,355 Other interest bearing debt 203 268 221 Pensions 1,159 1,113 1,124 Interest bearing assets -18 -19 -19 Cash -5,060 -1,372 -2,627 Total 2,236 5,493 5,054 Net Payment Capacity MSEK Q4 2020 Q4 2019 Q3 2020 Not

  28. Slide 28: Loan structure

    Loan structure Maturity of which MSEK Reported value utilized < 1 year 1-5 years > 5 years Revolving credit facility 7,729 - - - - Bilateral loans 5,201 5,201 - 4,486 715 Bonds 750 750 - 750 - Commercial papers - - - - - Leases, other 203 203 50 153 - Total 6,154 50 5,389 715 Q4 INTERIM & YEAR-END R

  29. Slide 29: Copper and Zinc Treatment Charges

    Copper and Zinc Treatment Charges Copper TC Zinc TC USD/tonne USD/tonne concentrate concentrate 120 350 300 100 250 80 200 60 150 40 100 20 50 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Contract TC - realized Contract TC - annual and mid-year benchmark Spot TC imported concentrate to Chin

  30. Slide 30: 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

  31. Slide 31: Gold, silver and lead prices

    Gold, silver and lead prices USD/tonne USD/tr.oz. Lead Silver 3,500 60 3,000 50 2,500 40 2,000 30 1,500 1,000 20 500 10 0 0 Price Price Q avg Price Price Q avg USD/tr.oz. Gold 2,500 2,000 Average price in Q4 2020 vs period 1,500 Q3 2020 Q2 2020 Q1 2020 Q4 2019 1,000 Gold -2% 10% 18% 27% 500 Silver 1

  32. Slide 32: 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 subject to ri

Boliden — Q4 2020 Earnings Presentation on 6ix