Boliden Ab · OMXSTO:BOL

Boliden Ab — Q3 2013 Earnings Presentation

30 slides from Boliden Ab's earnings presentation, Oct 22, 2013

  1. Slide 1: Interim report January – September 2013

    Interim report January – September 2013 Lennart Evrell President & CEO Mikael Staffas CFO

  2. Slide 2: Q3 Summary

    Q3 Summary  Revenues 8 471 (9 123) MSEK MSEK Quarterly EBIT excl PIR* R4Q, MSEK Rolling Q EBIT, RHS  EBIT ex PIR* 603 (988) MSEK 1 800 7 200 Rolling Q EBIT excl PIR*, RHS ‒ EBIT 681 (1 160) MSEK 1 600 6 400  Vs Q2: ‒ Smelters improved 1 400 5 600 ‒ Mines flat 1 200 4 800  Free cash flow 436 (310

  3. Slide 3: The Market

    The Market Boliden Group Q3 2013 3 2013-10-22

  4. Slide 4: Economic growth

    Economic growth GDP growth, year on year % Industrial production, year on year % 14 25 Latest data: August 2013, China September China World 12 20 USA EU27 10 15 8 10 6 5 4 0 2 -5 0 -10 China -2 World -4 -15 USA -6 Latest data: Q2 2013 -20 EU27 -8 -25 Source: Thomson Reuters, Boliden calculations fo

  5. Slide 5: Automotive

    Automotive Quarterly car production, year on year % 120 China-cars 100 US (auto IP) 80 Europe - light vehicles 60 40 20 0 -20 -40 Latest data: Q3 2013 -60 -80 2008 2009 2010 2011 2012 2013 Source: Thomson Reuters, Boliden Q3 2013 estimate for USA, Europe -Western & Eastern data from LMC Automotive B

  6. Slide 6: Construction

    Construction Activity, year on year % US housing starts and construction sentiment M units annual rate NAHB index 40 2,5 90 30 80 2,0 70 20 EU27 construction IP USA - construction expenditure 60 China - fixed assets investment 1,5 10 50 0 40 1,0 30 -10 0,5 20 -20 US Housing starts 10 US home builder

  7. Slide 7: Metal Market

    Metal Market Metal demand  Global macro moving sideways  China drives metal demand Metal/Concentrate supply  Global mining industry cutting capex  Junior project financing drying up Copper  Mine strikes and disruptions kept markets in balance  Copper supply increasing going forward  Copper sp

  8. Slide 8: Zinc price and inventories

    Zinc price and inventories 2 300 USD/t LME Inventory Shanghai Inventory Price Price Q avg USD/t Q1 Q2 Q3 2 200 5 000 1,8 Millions 2 100 4 500 1,6 2 000 4 000 1,4 1 900 3 500 1 800 1,2 1 700 3 000 1,0 1 600 2 500 1 500 0,8 31-dec 31-jan 28-feb 31-mar 30-apr 31-maj 30-jun 31-jul 31-aug 30-sep 2 000 0,

  9. Slide 9: Zinc TC and premiums

    Zinc TC and premiums $/t conc Treatment charge (TC) Metal premium $/t metal 300 250 250 200 200 150 150 100 100 50 50 0 0 2010 2011 2012 2013 2010 2011 2012 2013 Realised TC (including price participation) Europe ex-works US Midwest Delivered Spot TC - outturn Far East (Western) Source: © CRU (www.c

  10. Slide 10: Copper price and inventories

    Copper price and inventories 9 000 USD/t LME Inventory Shanghai Inventory COMEX Inventory Price Price Q avg USD/t Q1 Q2 Q3 11 000 1,6 8 500 Millions 10 000 8 000 1,4 9 000 7 500 1,2 8 000 7 000 7 000 1,0 6 500 6 000 0,8 6 000 5 000 31-dec 31-jan 28-feb 31-mar 30-apr 31-maj 30-jun 31-jul 31-aug 30-se

  11. Slide 11: Copper TC and premiums

    Copper TC and premiums Treatment charge (TC) Metal premium $/t conc $/t metal 120 140 100 120 100 80 80 60 60 40 40 20 20 0 0 2010 2011 2012 2013 2010 2011 2012 2013 TC annual and mid-year benchmark contract Spot Copper premium CIF W. Europe Standard grade spot TC US$/dmt Benchmark CIF Europe Source

  12. Slide 12: Gold, Silver and Lead prices

    Gold, Silver and Lead prices USD/oz Gold USD/t 5 000 Lead 450 2 000 Thousands 1 800 4 500 400 1 600 4 000 350 1 400 3 500 300 1 200 3 000 250 1 000 2 500 200 800 2 000 600 150 1 500 400 100 1 000 200 50 500 0 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004 2005 2006 2007 2008 2009 2010 20

  13. Slide 13: Market development

    Market development Zinc – global market Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Demand 0% 3% 4% 3% 4% Smelter production -7% -4% 1% 4% 6% Metal balance, kt -124 8 25 31 -50 Mine production 2% -2% 1% -1% -3% Concentrate balance, kt 323 70 -52 150 99 Copper – global market Q3 2012 Q4 2012 Q1 2013 Q2 2

  14. Slide 14: Mines

    Mines Boliden Group Q3 2013 14 2013-10-22

  15. Slide 15: Mines – Summary

    Mines – Summary  EBIT 372 (858) MSEK MSEK R4Q, ‒ 376 MSEK in Q2 2013 Quarterly EBIT MSEK 1 600 4 800  Prices and Terms flat vs Q2 Rolling Q EBIT 4 400 ‒ Positive price impact 4 000 ‒ Negative currency impact 1 200 3 600 ‒ Hedge program ended 3 200  Stable production 2 800  Cost control 800 2 400

  16. Slide 16: Mines – Production

    Mines – Production Milled ore, Metal Milled ore, Zinc Metal Copper content, content, mt mt kt kt 10 24 100 1,5 Thousands Thousands 20 80 8 1,2 16 6 60 0,9 12 4 40 0,6 8 2 20 4 0,3 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 2011 2012 2013 2011 2012 2013 Mi

  17. Slide 17: Smelters

    Smelters Boliden Group Q3 2013 17 2013-10-22

  18. Slide 18: Smelters – Summary

    Smelters – Summary  EBIT ex PIR* 262 (281) MSEK MSEK R4Q, Quarterly EBIT excl PIR* MSEK ‒ -30 MSEK in Q2 2013 Rolling Q EBIT, RHS  Limited maintenance stops 900 Rolling Q EBIT excl PIR*, RHS 1 800 ‒ EBIT impact -25 (-40) MSEK ‒ -305 in Q2 2013 ‒ Higher volumes vs Q2 700 1 400  Sulphuric acid mark

  19. Slide 19: Smelters – Production

    Smelters – Production Total feed, Copper Cathode Metal kt production, Total feed, Zinc kt production, kt kt 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 Q3 2011 2012 2013 2

  20. Slide 20: Financials

    Financials Boliden Group Q3 2013 20 2013-10-22

  21. Slide 21: Financial development – Summary

    Financial development – Summary MSEK Q3 2013 Q3 2012 Q2 2013 Revenues 8,471 9,123 8,035 EBITDA 1,380 1,862 664 EBIT 681 1,160 -59 EBIT ex PIR 603 988 370 Investments 1,151 971 1,510 Free cash flow 436 310 -1,477 Earnings per share, SEK 1.81 3.02 -0.37 Net debt / equity ratio 38 29 41 Boliden Group Q

  22. Slide 22: EBIT analysis Q3 vs Q2

    EBIT analysis Q3 vs Q2 MSEK Q3 2013 Q2 2013 EBIT 681 -59 Process inventory revaluation (PIR) 78 -429 EBIT excl. PIR 603 370 Deviation 233 Maintenance stops in Q2 Specification of deviation Smelters positive mines negative Volume 56 Prices and Terms (incl. hedges) -4 Better prices and terms Currency

  23. Slide 23: EBIT analysis Q3 vs Q3

    EBIT analysis Q3 vs Q3 MSEK Q3 2013 Q3 2012 EBIT 681 1 160 Process inventory revaluation (PIR) 78 172 EBIT excl. PIR 603 988 Deviation -385 Specification of deviation Volume 10 Lower metal prices and lower impact from hedges Prices and Terms (incl. hedges) -394 Currency effects -79 Strong SEK Costs

  24. Slide 24: Cash flow

    Cash flow MSEK Q3 2013 Q3 2012 Q2 2013 EBITDA including PIR* 1,380 1,862 664 PIR -78 -172 429 Inventories -633 -579 387 Payables 602 273 -838 Receivables 31 -2 -108 Other -9 5 -2 Changes in working capital -86 -475 -132 Cash flow from investments -1,152 -843 -1,507 Financial items -52 -43 -58 Tax pa

  25. Slide 25: Capital structure

    Capital structure MSEK % 30 Sep 30 Jun Net debt & Gearing SEK bn Unless otherwise stated 2013 2013 10 000 45 Total Asset 40.7 40.0 40 8 000 33.6 33.3 35 Capital employed 30 Shareholders' equity 22.5 22.0 6 000 25 Net debt 8.5 9.0 20 Gearing, % 38 41 4 000 15 Loan duration, years 2.8 3.1 10 2 000 Ave

  26. Slide 26: Project update

    Project update  Aitik mine production R4Q 34,9 Mt - 37,0 pace in Q3  Silver recovery Kokkola on plan ‒ Start-up Q3 2014  Garpenberg on plan ‒ Underground infrastructure, shafts, concentrator ‒ Start-up first half 2014, full production end 2015  Aitik45 feasibility study ‒ Environmental permit ap

  27. Slide 27: Project timeline

    Project timeline Capex Project Purpose 2006 2010 2011 2012 2013 2014 2015 2016 (MSEK) Aitik Capacity 6,200 increase Rönnskär Expanding 1,200 e-scrap capacity Kankberg* New gold & 1,000 tellurium mine Garpenberg Capacity 3,900 increase Kokkola Silver recovery 250 12,550 *Capex includes Decision and c

  28. Slide 28: Summary going forward

    Summary going forward Market Boliden  Global macro sideways  Aitik  Demand grows – China drives ‒ Low grades through 2014  Growing copper mine supply  Garpenberg on lower grades in Q4  Zinc supply limited growth  Rönnskär stability still an issue  Prices flat  Strategic hedges expired  Str

  29. Slide 29: 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

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