Boliden Ab · OMXSTO:BOL
Boliden Ab — Q2 2020 Earnings Presentation
35 slides from Boliden Ab's earnings presentation, Jul 22, 2020
Slide 1: Q2 Interim Report 2020
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Q2 Interim Report 2020 Mikael Staffas, President & CEO Håkan Gabrielsson, CFO
Slide 2: Q2 2020 – Stable production and rescheduled maintenance stops
Q2 2020 – Stable production and rescheduled maintenance stops Group EBIT ex PIR* • Covid-19 MSEK R4Q, MSEK 3 400 10 200 3 200 9 600 • EBIT excl. PIR* 1,634 (1,631) MSEK 3 000 9 000 2 800 8 400 2 600 7 800 2 400 7 200 • Free cash flow 1,174 (789) MSEK 2 200 2 000 6 600 6 000 ‒ Capex 1,505 (2,132) MSE
Slide 3: Q2 2020 Covid-19 crisis management and response
Q2 2020 Covid-19 crisis management and response Effects on Boliden • Increased short-term leave • Logistical issues & travel restrictions • Challenges in sourcing • Delayed exploration • Supply chain disruptions • Less short-term demand from industrial clients Boliden response • Intense effort to li
Slide 4: Market Q2 2020
Market Q2 2020 General • Weak industry in western world • Improved activity in China Metals • Weak global demand, China improved • Smelter output down y-o-y but stable q-o-q • Base metal prices recovering from Q1 lows • Strong price trend for gold Concentrate markets • Mine disruptions impacting sup
Slide 5: Base metal prices
Base metal prices Copper price, USD/tonne Copper KTonnes Zinc price, USD/tonne Zinc KTonnes 12 000 2 400 4 000 2 400 3 500 2 100 10 000 2 000 3 000 1 800 8 000 1 600 2 500 1 500 2 000 1 200 6 000 1 200 1 500 900 4 000 800 1 000 600 2 000 400 500 300 0 0 0 0 2009 2010 2011 2012 2013 2014 2015 2016 20
Slide 6: Gold, silver and lead prices
Gold, silver and lead prices Gold Lead Gold price, USD/troy oz. Lead price, USD/tonne 2 000 4 000 1 800 3 500 1 600 3 000 1 400 1 200 2 500 1 000 2 000 800 1 500 600 1 000 400 200 500 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 7: 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 5 000 11 000 35 000 4 500 10 000 30 000 4 000 9 000 8 000 25 000 3 500 7 000 3 000 20 000 6 000 2 500 5 000 15 000 2 000 4 000 1 500 10 000 3 000 1 000 2 000 5 000 500 1 000 0 0 0 Ni average price Ni max pric
Slide 8: Boliden market term index
Boliden market term index Note: Index 100 = 1 January 2015 Boliden Group Q2 2020 8 2020-07-22
Slide 9: Mines
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Mines Kevitsa, midnight sun Boliden Group Q2 2020 9 2020-07-22
Slide 10: Mines Q2 2020
Mines Q2 2020 Mines EBIT • EBIT 779 (1,149) MSEK R4Q, MSEK MSEK 2 600 7 800 ‒ 318 MSEK in Q1 2020 2 400 7 200 2 200 6 600 • Higher volumes 2 000 6 000 1 800 5 400 ‒ Higher milled production in most 1 600 4 800 mines 1 400 4 200 1 200 3 600 ‒ Higher grades in Tara and Kevitsa 1 000 3 000 800 2 400 60
Slide 11: Mines – Q2 Production
Mines – Q2 Production Milled ore, Metal content, Milled ore, Metal content, Mtonnes Copper Ktonnes Mtonnes Zinc Ktonnes 16 48 2,0 100 14 42 1,6 80 12 36 10 30 1,2 60 8 24 6 18 0,8 40 4 12 0,4 20 2 6 0 0 0,0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q
Slide 12: Smelters
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Smelters Kokkola, coworker in front of zinc slabs Boliden Group Q2 2020 12 2020-07-22
Slide 13: Smelters Q2 2020
Smelters Q2 2020 Smelters EBIT excl. PIR* • EBIT excl. PIR* 914 (387) MSEK MSEK R4Q, MSEK ‒ 1,117 MSEK in Q1 2020 1 300 3 900 1 200 3 600 1 100 3 300 • Slightly weaker prices & terms 1 000 3 000 ‒ Lower base metal and sulphuric acid 900 2 700 prices 800 2 400 ‒ Lower premia 700 2 100 600 1 800 ‒ Hig
Slide 14: Smelters – Q2 Production
Smelters – Q2 Production Copper Metal Total feed, production, Ktonnes Ktonnes • Cu production 93 (72) ktonnes 400 350 120 105 ‒ No maintenance stops 300 90 ‒ Stable production 250 75 200 60 150 45 100 30 • Zn production 117 (120) ktonnes 50 15 ‒ Maintenance stop in Odda 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 15: Financials
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Financials Gold casting at Rönnskär Boliden Group Q2 2020 15 2020-07-22
Slide 16: 2020 Q2 – Earnings
2020 Q2 – Earnings MSEK Q2 2020 Q2 2019 Q1 2020 Revenues 13,391 12,747 13,210 EBITDA 3,216 2,749 2,693 EBIT 1,801 1,539 1,435 EBIT excl. PIR 1,634 1,631 1,504 Investments 1,505 2,132 1,823 Free cash flow 1,174 789 -845 Earnings per share, SEK 4.92 4.13 3.90 Net debt / equity ratio, % 17 14 15 Bolide
Slide 17: EBIT excl. PIR by segment
EBIT excl. PIR by segment MSEK Q2 2020 Q2 2019 Q1 2020 Mines 779 1,149 318 Smelters 914 387 1,117 Other / eliminations -60 95 69 The Group 1,634 1,631 1,504 Boliden Group Q2 2020 17 2020-07-22
Slide 18: Q2 2020 vs. Q2 2019
Q2 2020 vs. Q2 2019 Group EBIT excl. PIR MSEK Q2 2020 1,634 Q2 2019 1,631 Higher milled production in most mines Higher grades in Tara and Kevitsa Deviation 3 Rescheduled maintenance in Smelters Specification of deviation Volumes 516 Lower base metal prices Stronger USD Prices and terms -419 Higher
Slide 19: Q2 2020 vs. Q1 2020
Q2 2020 vs. Q1 2020 Group EBIT excl. PIR MSEK Q2 2020 1,634 Q1 2020 1,504 Deviation 130 Higher grades in most mines Higher milled production in Tara Specification of deviation Stable production in Smelters Volumes 591 Prices and terms -204 Whereof currency 47 Lower base metal and by-product prices C
Slide 20: Cash flow
Cash flow MSEK Q2 2020 Q2 2019 Q1 2020 EBITDA excl. PIR 3,049 2,841 2,762 Cash flow from working capital -66 526 -1,284 Inventories 1,200 996 -484 Operating receivables 16 135 -199 Operating liabilities -1,229 -608 -635 Other -54 3 34 Cash flow from investments -1,504 -2,115 -1,821 Financial items -
Slide 21: Balance sheet
Balance sheet SEK bn 30 June 30 June 31 Dec 2020 2019 2019 Net debt & Gearing Total Assets 67.1 61.3 66.4 MSEK % 12 000 45 Capital employed 51.7 47.7 49.8 40 10 000 Equity 41.9 39.0 41.4 35 8 000 30 Net debt 6.9 5.5 5.5 25 6 000 20 Net debt / equity ratio, %* 17 14 13 4 000 15 Loan duration, years 4
Slide 22: Green Zinc – Odda 4.0
Green Zinc – Odda 4.0 • Significant expansion project is being developed ‒ Environmental permit applied for but not obtained, 350 Ktonnes per year • New technology – digitalization and automation ‒ Increased productivity Boliden Co-workers • World leading climate performance ‒ Increased revenues fro
Slide 23: Going forward
Going forward • Aitik ‒ 2020: Cu 0.25% ‒ 2020: 45 Mtonnes milled volume pace by Q3 ‒ Elevated risk due to local Covid-19 situation ‒ Major planned maintenance stop in August • Garpenberg ‒ 2020: Zn 3.7%, Ag 100 g/tonne ‒ 2020: 3 Mtonnes milled volume • Kevitsa ‒ 2020: Slightly below reserve grade ‒
Slide 24: SAVE THE DATE!
SAVE THE DATE! • Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level 2021 Capital Markets Day • Boliden’s Capital Markets Day 2021 will be held in Stockholm on 17 March, followed by a visit to our Harjavalta Smelter on 18 March. • For more information please co
Slide 25: 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 26: Appendix
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Appendix Kevitsa midnight at the pit Boliden Group Q2 2020 26 2020-07-22
Slide 27: Boliden, key attractions
Boliden, key attractions • Well positioned in the metal market ‒ Mines and Smelters ‒ Base metals and precious metals ‒ High productivity/stable production ‒ High corporate responsibility ‒ Long life of key mines ‒ Stable jurisdictions Boliden Co-workers • Strong balance sheet • Several growth oppor
Slide 28: Metal prices and USD/SEK since Jan 1, 2018
Metal prices and USD/SEK since Jan 1, 2018 Source: Refinitiv Datastream, prices up to and including July 17, 2020 Boliden Group Q2 2020 28 2020-07-22
Slide 29: Metal prices and USD/SEK – year on year
Metal prices and USD/SEK – year on year Source: Refinitiv Datastream, prices up to and including July 17, 2020 Boliden Group Q2 2020 29 2020-07-22
Slide 30: Zinc TC and premia
Zinc TC and premia US$/t Metal premia Treatment charges US$/t metal concentrate 250 350 300 200 250 150 200 100 150 100 50 50 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Contract TC - realized Ex-Works Premia Europe Spot TC imported concentrate to China Delivered Premia US Midwest Contract
Slide 31: Copper TC and premia
Copper TC and premia US$/t Treatment charges US$/t metal Metal premia concentrate 120 60 100 50 80 40 60 30 40 20 20 10 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Contract TC - annual and mid-year benchmark CIF Average European premia Standard grade spot TC Contract benchmark according to
Slide 32: Economic development
Economic development Industrial production growth, % year on year 15 10 5 0 -5 -10 -15 -20 -25 -30 J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D 2016 2017 2018 2019 2020 EU28 USA China World Source: Refinitiv Datastream, Boliden estimat
Slide 33: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn China, USA – June EU - May Boliden Group Q2 2020 33 2020-07-22
Slide 34: Automotive
Automotive Q2 2020 Boliden Group Q2 2020 34 2020-07-22
Slide 35: Market balance – Nickel and Lead
Market balance – Nickel and Lead Nickel - global market Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Metals demand, kt 575 564 577 572 576 579 603 595 Year on year change 9,7% 9,8% 13,6% 3,7% 0,1% 2,5% 4,6% 3,9% Smelter production, kt 543 516 538 535 563 558 588 602 Year on year change 5,9% 6,1% 11,6% 1,