Slide 1: Interim report January – Sept 2012
Interim report January – Sept 2012 Lennart Evrell President & CEO Mikael Staffas CFO
Slide 2: Q3 Summary
Q3 Summary Msek Market uncertainty 2 500 6 000 Quarterly EBIT Revenues 9,123 (10,553) MSEK Quarterly EBIT excl PIR* 5 000 EBIT ex PIR* 974 (1,397) MSEK 2 000 Rolling Q EBIT ‒ EBIT 1,146 (1,180) MSEK excl PIR* Free Cash Flow 310 (820) MSEK 4 000 Lower head grades in zinc mines 1 500 Cost
Slide 3: The Market
The Market Boliden Group Q3 2012 3 2012-10-25
Slide 4: Industrial production
Industrial production Year on year % 25 25 20 20 15 15 10 10 5 5 0 0 -5 -5 -10 -10 -15 -15 -20 -20 -25 -25 USA Euro Area China World Brazil Russia India China BRIC Total Boliden calculation of world IP Boliden calculation of BRIC IP Boliden Group Q3 2012 4 2012-10-25
Slide 5: Construction
Construction Year on year % 40 30 20 10 0 -10 -20 USA: construction spending value EU27: Index construction production China: fixed asset investments - cumulative value -30 USA EU27 China Boliden Group Q3 2012 5 2012-10-25
Slide 6: Car production
Car production Year on year % 40 30 China 20 Germany 10 USA 0 -10 -20 -30 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Source: Reuters Datastream, Wards Automotive USA: light vehicles Boliden Group Q3 2012 6 2012-10-25
Slide 7: Industrial production China
Industrial production China Year on year % 80 60 40 20 0 -20 -40 -60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 Steel wire rod Power cable Galvanized steel sheet Steel sections Motor vehicles Cement Railway steel Total construction production volume Source: Thomson Reuters Datastream, Bolide
Slide 8: Zinc price and inventories
Zinc price and inventories USD/t LME Inventory Shanghai Inventory Price Price Q avg Tonnes 5 000 1 600 000 Zinc price (LME average) 4 500 Q3-12 vs 1 400 000 USD/t period 4 000 1 200 000 Q3 11 2,224 -15% 3 500 Q4 11 1,897 -1% 1 000 000 3 000 Q1 12 2,025 -7% 2 500 800 000 Q2 12 1,928 -2% 2 000 Q3 12 1
Slide 9: Zinc TC and premiums
Zinc TC and premiums USD/t concentrate USD/t metal 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 Realised TC (including price participation) Europe ex-works US Midwest Delivered Spot TC - outturn Far East (Western) Source: © CRU (www.crugroup.com) Source: © CRU (www.crugroup.com)
Slide 10: Copper price and inventories
Copper price and inventories USD/t LME Inventory Shanghai Inventory COMEX Inventory Price Price Q avg Tonnes 11 000 1 600 000 Copper price (LME average) 10 000 Q3-12 vs 1 400 000 USD/t period 9 000 1 200 000 Q3 11 8,982 -14% 8 000 Q4 11 7,489 +3% 7 000 1 000 000 Q1 12 8,310 -7% 6 000 800 000 5 000 Q
Slide 11: Copper TC and premiums
Copper TC and premiums USD/t USD/t metal concentrate 120 140 100 120 100 80 80 60 60 40 40 20 20 0 0 Standard grade spot TC US$/dmt Spot Copper premium CIF W. Europe TC annual and mid-year benchmark contract Benchmark CIF Europe Spot TC improving Copper premium down Low volumes, single trades
Slide 12: Gold, Silver and Lead prices
Gold, Silver and Lead prices Gold Silver USD/oz USD/oz 2 000 60 1 800 50 1 600 1 400 40 1 200 1 000 30 800 600 20 400 10 200 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 USD/t Lead Tonnes 5 000 Inventory Price Price Q avg 450 000 Average pri
Slide 13: Market situation – summary
Market situation – summary Metal demand Concentrate market ‒ China slowing ‒ Europe hit by general lackluster YoY % Q1-12 Q2-12 Q3-12 macro development Zinc Metal supply Supply 7,7 7,3 2,2 ‒ Copper output increasing but continue to face challenges Demand -1,7 -3,6 -3,7 ‒ Zinc supply in surplus C
Slide 14: Mines
Mines Boliden Group Q3 2012 14 2012-10-25
Slide 15: Mines – Summary
Mines – Summary Msek 1 400 5 000 EBIT 842 (1,047) MSEK Quarterly EBIT 4 500 1 200 Rolling 4Q EBIT ‒ 726 MSEK in Q2 2012 4 000 ‒ Write-down in Tara, -79 MSEK 1 000 3 500 Lower average prices 3 000 800 ‒ End-of-period price effect positive 2 500 Easing cost pressure 600 2 000 CAPEX 701 (505) M
Slide 16: Mines – Production
Mines – Production Milled ore, Copper Metal Milled ore, Zinc Metal mtonnes content, mtonnes content, ktonnes ktonnes 10 24 100 1,5 20 8 80 1,2 16 6 60 0,9 12 4 40 0,6 8 2 0,3 20 4 0 0 0,0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 2012 2010 2011 2012 Mi
Slide 17: Smelters
Smelters Boliden Group Q3 2012 17 2012-10-25
Slide 18: Smelters – Summary
Smelters – Summary 1 400 Msek EBIT excl. PIR* 292 (356) MSEK Quarterly EBIT ‒ 240 MSEK in Q2 2012 1 200 Quarterly EBIT excl Positive TC impact 1 000 PIR* Lower costs 800 Maintenance stops ‒ EBIT effect 40 (45) MSEK 600 CAPEX 172 (458) MSEK ‒ 274 MSEK in Q2 400 200 Kokkola silver recovery
Slide 19: Smelters – Production
Smelters – Production Total feed, Cathode Metal Copper production, Total feed, Zinc production, ktonnes ktonnes ktonnes ktonnes 400 100 250 140 350 120 80 200 300 100 250 60 150 80 200 40 100 60 150 100 40 20 50 50 20 0 0 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 20: Financials
Financials Boliden Group Q3 2012 20 2012-10-25
Slide 21: Financial development – Summary
Financial development – Summary MSEK Q3 2012 Q3 2011 Q2 2012 Revenues 9,123 10,553 10,363 EBITDA 1,760 1,672 1,315 EBIT 1,146 1,180 769 EBIT ex PIR 974 1,397 931 Capital expenditures 874 965 1,029 Free cashflow 310 820 79 Earnings per share, SEK 2.99 3.06 1.89 Net debt / equity ratio, % 26 27 29 Bol
Slide 22: EBIT analysis Q3 vs Q2
EBIT analysis Q3 vs Q2 MSEK Q3 2012 Q2 2012 EBIT 1 146 769 Process inventory revaluation (PIR) 172 -162 EBIT excl. PIR 974 931 Deviation 44 Lower mined volumes and copper feed Specification of deviation Volume -113 Price improvements end of period Prices and Terms (incl. hedges) 268 TC improved Curr
Slide 23: EBIT analysis Q3 vs Q3
EBIT analysis Q3 vs Q3 MSEK Q3 2012 Q3 2011 EBIT 1 146 1,180 Process inventory revaluation (PIR) 172 -216 EBIT excl. PIR 974 1,397 Deviation -422 Specification of deviation Copper volumes Volume 126 Prices and Terms (incl. hedges) -250 Lower prices and terms Currency effects 46 except copper TC Cost
Slide 24: Capital structure
Capital structure SEK billion 30 Sep 30 Sep MSEK % Net debt & Gearing 2012 2011 10 000 60 Total assets 38,0 37.0 30.5 29.7 50 Capital employed 8 000 Shareholders equity 21.9 20.4 40 6 000 Net debt 5.7 5.6 30 Net debt /equity ratio, % 26 27 4 000 20 Equity/assets ratio, % 58 55 2 000 10 Loan duration
Slide 25: Project update
Project update Kankberg Rönnskär E-recycling ‒ Mine production started ‒ New furnace on full capacity ‒ Some gold processed Silver recovery Kokkola ‒ Tellurium leaching start end of year Laver drilling completed Garpenberg Aitik feasability under way ‒ Underground infrastructure, shafts,
Slide 26: Conclusion
Conclusion Market uncertainty Stable operations Easing cost pressure Boliden area mix change ‒ Maurliden East depleting, copper ‒ Kankberg mine started, gold Garpenberg in low grade areas Boliden Group Q3 2012 26 2012-10-25
Slide 27: Disclaimer
Disclaimer This presentation has been prepared by Boliden for information purposes only. Nothing in this material shall be construed as an offer or solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This presentation has been prepare
Slide 28: Metals for modern life
Revisioner Under 2011 gjordes två revisioner en av dom I Indien. Metals for modern life Bilden visar en medarbetare från AVA Chemicals i Indien samtala med revisorn Camilla Ottosson. Till vänster i bilden syns den indiske tolken. 28 2012
Slide 29: Cash flow
Cash flow MSEK Q3 2012 Q3 2011 Q2 2012 EBITDA* (Operating profit before depr.) 1,760 1,672 1,315 PIR -172 216 162 Change inventories -579 591 -465 Change payables 274 -516 248 Change receivables -2 -79 205 Other 5 5 -5 Change in working capital -475 217 145 CAPEX -843 -968 -1,027 Financial items -41