Boliden Ab · OMXSTO:BOL
Boliden Ab — Q4 2018 Earnings Presentation
43 slides from Boliden Ab's earnings presentation, Feb 13, 2019
Slide 1: Q4 Interim and Year-end Report 2018
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Q4 Interim and Year-end Report 2018 Mikael Staffas President & CEO Håkan Gabrielsson CFO
Slide 2: Stable production, lower grades & metal prices
Stable production, lower grades & metal prices MSEK Group EBIT R4Q, MSEK • Revenues 12,543 (13,619) MSEK 3 400 10 200 3 200 9 600 • EBIT ex PIR* 2,001 (2,912) MSEK 3 000 9 000 2 800 8 400 2 600 7 800 2 400 7 200 • Metal prices lower than Q4-17, but 2 200 2 000 6 600 6 000 stable compared to Q3-18. 1
Slide 3: Full Year 2018 vs 2017
Full Year 2018 vs 2017 • Revenues 52,454 (49,531) MSEK MSEK EBIT excl PIR* • EBIT ex PIR* 9,074 (8,913) MSEK 10 000 • Free Cash Flow 5,692 (7,309) MSEK 9 000 ‒ Investments 6,076 (5,428) MSEK 8 000 7 000 6 000 • Record profit 5 000 4 000 • Stable production 3 000 ‒ Maintenance Smelters -200 (-415) MS
Slide 4: Market Q4 2018
Market Q4 2018 Macro • Lower industrial production growth Metal markets • Prices and terms lower than last year but in line with previous quarter • Copper and nickel demand grew • Zinc demand declined • Increased interest in precious metals Concentrate markets • Zinc concentrate output higher • Spot
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 2 000 10 000 2 000 1 600 3 000 8 000 1 600 1 200 6 000 1 200 2 000 800 4 000 800 1 000 400 2 000 400 0 0 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011
Slide 6: Gold, silver and lead prices
Gold, silver and lead prices Gold price, USD/troy oz. 2 000 Gold Lead price, USD/tonne 5 000 Lead 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 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015
Slide 7: Zn, Cu and Ni prices relative to cash cost
Zn, Cu and Ni prices relative to cash cost Zinc Copper Nickel USD/ton USD/ton USD/ton USD/ton USD/ton USD/ton 5 000 5 000 11 000 11 000 35 000 35 000 4 500 4 500 10 000 10 000 30 000 30 000 4 000 4 000 9 000 9 000 3 500 3 500 8 000 8 000 25 000 25 000 7 000 7 000 3 000 3 000 20 000 20 000 6 000 6 00
Slide 8: Boliden market term index
Boliden market term index • Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Note: Index 100 = 1 January 2013 Boliden Group Q4 report 2018 8 2019-02-13
Slide 9: Mines
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Mines Kevitsa mill house Boliden Group Q4 report 2018 9 2019-02-13
Slide 10: Mines - Q4 2018
Mines - Q4 2018 EBIT Mines R4Q, • EBIT 1,384 (2,179) MSEK MSEK 2 600 MSEK 7 800 ‒ 1,091 MSEK in Q3 2018 2 400 7 200 2 200 6 600 2 000 6 000 1 800 5 400 • Lower metal prices 1 600 4 800 1 400 4 200 1 200 3 600 • Lower grades 1 000 3 000 800 2 400 600 1 800 400 1 200 • Throughput stable in Aitik, lowe
Slide 11: Full year - 2018 vs 2017
Full year - 2018 vs 2017 Aitik MSEK EBIT • Milled production 38.5 (39.0) Mtonnes • Cu 0.29% (0.28) 8 000 7 000 6681 6451 Boliden Area 6 000 • Milled production 1.9 (2.1) Mtonnes 5 000 • Maurliden depletion 4 000 Garpenberg 3 000 2494 2606 • Milled production 2.6 (2.6) Mtonnes 2073 2225 2 000 • Zn 4.
Slide 12: Mines – Q4 Production
Mines – Q4 Production Milled ore, Metal content, Milled ore, Copper Metal content, Mtonnes Zinc Ktonnes Mtonnes Ktonnes 16 48 2,0 100 14 42 1,6 80 12 36 10 30 1,2 60 8 24 0,8 40 6 18 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 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 13: Mineral Reserves & Mineral Resources
Mineral Reserves & Mineral Resources • Exploration cost 520 (470) MSEK ‒ Drifts in Tara and Boliden Area • Long life-of-mine in Aitik, Kevitsa and Garpenberg ‒ Limited new additions ‒ Aitik remaining life-of-mine Cu reserve grade 0.22% (0.23) • Increased inferred mineral resources in Tara Deep ‒ Inc
Slide 14: Aitik and Boliden area
Aitik and Boliden area Aitik Boliden Area Mtonnes Ktonnes 2 500 20 000 2 000 15 000 1 500 10 000 1 000 500 5 000 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Proven/Probable Reserve Measured/Indicated Resource Proven/Probable Reserve Measure
Slide 15: Garpenberg and Kevitsa
Garpenberg and Kevitsa Garpenberg Kevitsa Mtonnes Mtonnes 90 180 80 160 70 140 60 120 50 100 40 80 30 60 20 40 10 20 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2016 2017 2018 Proven/Probable Reserve Measured/Indicated Resource Proven/Probable Reserve Measured/Indicated Resource Inferred R
Slide 16: Kylylahti and Tara
Kylylahti and Tara Kylylahti Tara Ktonnes Ktonnes 9 000 30 000 8 000 25 000 7 000 6 000 20 000 5 000 15 000 4 000 3 000 10 000 2 000 5 000 1 000 0 0 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Proven/Probable Reserve Measured/Indicated Resource Proven/Probabl
Slide 17: Smelters
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Smelters New sulphuric acid plant at Harjavalta Boliden Group Q4 report 2018 17 2019-02-13
Slide 18: Q4 2018 Smelters
Q4 2018 Smelters MSEK EBIT Smelters R4Q, MSEK • EBIT ex PIR* 575 (766) MSEK 1 300 3 900 ‒ 589 MSEK in Q3 2018 1 100 3 300 900 2 700 • Lower metal prices and TCs, stronger USD 700 2 100 500 1 500 • Stable production 300 900 • No maintenance shutdown 100 300 EBIT effect in Q4 0 (-105) -100 1 2 2013 3
Slide 19: Full year - 2018 vs 2017
Full year - 2018 vs 2017 Rönnskär MSEK EBIT ex PIR • Cu production 225 (219) Ktonnes 3 000 • Improved process stability 2732 2 500 2435 Harjavalta • Cu production 139 (133) Ktonnes 2 000 • Ni in matte production 31 (25) Ktonnes 1 500 • Start up of Acid Plant 1043 1 000 900 Kokkola 756 707 688 • Zn p
Slide 20: Smelters – Q4 Production
Smelters – Q4 Production Copper Metal Total feed, production, Ktonnes Ktonnes • Cu production 93 (89) Ktonnes 400 120 350 105 ‒ Improved process stability in Rönnskär 300 90 250 75 • Zn production 121 (111) Ktonnes 200 150 60 45 ‒ Improved process stability in Kokkola 100 30 ‒ Maintenance in Odda la
Slide 21: Financials
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level Financials ‒ Fifth level Copper cathodes Boliden Group Q4 report 2018 21 2019-02-13
Slide 22: 2018 Q4 – Earnings
2018 Q4 – Earnings MSEK Q4 2018 Q4 2017 Q3 2018 Revenues 12,543 13,619 12,510 EBITDA 3,314 4,332 2,988 EBIT 2,093 3,091 1,771 EBIT ex PIR 2,001 2,912 2,020 Investments 2,013 1,867 1,457 Free cash flow 1,721 2,382 822 Earnings per share, SEK 6.82 8.22 4.69 Net debt / equity ratio 5 11 10 Boliden Grou
Slide 23: EBIT ex. PIR by segment
EBIT ex. PIR by segment MSEK Q4 2018 Q4 2017 Q3 2018 Mines 1,384 2,179 1,091 Smelters 575 766 589 Other / eliminations 42 -34 340 The Group 2,001 2,912 2,020 Boliden Group Q4 report 2018 23 2019-02-13
Slide 24: 2018 Q4 vs. 2017 Q4
2018 Q4 vs. 2017 Q4 Group EBIT excl. PIR MSEK Q4 2018 2,001 Q4 2017 2,912 Deviation -911 Lower grades Specification of deviation Volumes -518 Lower metal prices Prices and Terms -414 Stronger USD and higher by-product prices Whereof currency 542 Costs -62 Depreciation 48 Items affecting comparabilit
Slide 25: 2018 Q4 vs. 2018 Q3
2018 Q4 vs. 2018 Q3 Group EBIT excl. PIR MSEK Q4 2018 2,001 Q3 2018 2,020 Deviation -20 Specification of deviation Volumes 7 Prices and Terms 229 Higher metal prices Whereof currency 46 Costs -305 Depreciation -9 Seasonally higher costs Maintenance Items affecting comparability 37 Other 21 Sale of P
Slide 26: Full-year financial development
Full-year financial development MSEK (Unless otherwise stated) FY 2018 FY 2017 Revenues 52,454 49,531 EBITDA 13,933 13,617 EBIT 9,004 9,015 EBIT ex PIR 9,074 8,913 Investments 6,140 5,588 Free cash flow 5,692 7,309 Earnings per share, SEK 26.32 25.06 Net debt / equity ratio 5 11 Boliden Group Q4 rep
Slide 27: EBIT excl. PIR 2018 vs. 2017
2018 vs. 2017 EBIT excl. PIR MSEK FY 2018 9,074 FY 2017 8,913 Deviation 161 Higher free metals and less maintenance in Specification of deviation Smelters Volume 747 Prices and Terms (incl. hedges) 237 Higher metal prices Whereof currency effects 46 Costs -607 Inflation, mainly energy and chemicals
Slide 28: Cash flow
Cash flow MSEK Q4 2018 Q4 2017 Q3 2018 EBITDA excluding PIR 3,222 4,152 3,237 Cash flow from working capital 686 565 203 Inventories 122 -264 -335 Operating receivables 149 -149 650 Operating liabilities 413 976 -112 Other 2 1 0 Cash flow from investments -1,957 -1,875 -1,456 Financial items -52 -61
Slide 29: Balance sheet
Balance sheet Net debt & Gearing BSEK 31 Dec 31 Dec 30 Sep MSEK % 2018 2017 2018 12 000 45 Total Assets 58.7 55.9 57.0 10 000 40 35 Capital employed 44.4 42.9 44.4 8 000 30 Equity 39.0 35.1 37.3 6 000 25 20 Net debt 2.0 3.8 3.8 4 000 15 Net debt / equity ratio 5 11 10 2 000 10 5 Loan duration, years
Slide 30: Dividend proposal
Dividend proposal • Ordinary dividend 8.75 (8.25) SEK, 33.2% of net profit • Redemption of shares 4.25 (5.75) SEK • Total distribution to shareholders ‒ 13.00 (14.00) SEK/share ‒ 3,556 (3,829) MSEK • Financial targets ‒ Dividend shall correspond to one third of net profit ‒ The sum of the net debt a
Slide 31: Going forward
Going forward • Q4 production above reserve grade • Aitik ‒ 2019: Cu 0.25% ‒ 2020: 45 Mtonnes milled volume • Garpenberg ‒ 2019: Zn 4.0% ‒ 2020: 3 Mtonnes milled volume • Kevitsa ‒ 2019: Mining below reserve average ‒ 2020: 9.5 Mtonnes milled volume pace World-class productivity in underground and o
Slide 32: Conclusion
Conclusion • 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 • Strong balance sheet • Several growth opportunities ‒ Smelters well position
Slide 33: 2019 Capital Markets Day
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level 2019 Capital Markets Day • Boliden’s Capital Markets Day 2019 will be held in Stockholm on 13 March, followed by a visit to the open-pit copper mine in Aitik on 14 March. • For more information please contac
Slide 34: Appendix
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Appendix Silver from Boliden Rönnskär Boliden Group Q4 report 2018 34 2019-02-13
Slide 35: Zinc TC and premia
Zinc TC and premia US$/t concentrate Treatment charges US$/t metal Metal premia 300 250 250 200 200 150 150 100 100 50 50 0 2014 2015 2016 2017 2018 0 2014 2015 2016 2017 2018 Realized TC - European contract" China spot TC Ex-Works Premia Europe Delivered Premia US Midwest Premia Far East - Western
Slide 36: Copper TC and premia
Copper TC and premia US$/t concentrat Treatment charges US$/t metal Metal premia e 120 160 100 140 120 80 100 60 80 40 60 40 20 20 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Contract TC - annual and mid-year benchmark Standard grade spot TC CIF Average European premia Contract benchmark a
Slide 37: Economic development
Economic development Industrial production, year on year % 10 8 6 4 2 0 -2 -4 J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND 2015 2016 2017 2018 EU28 USA China World Source: Reuters Datastream, world data calculated by Boliden Boliden Group Q4 2018 37 2019-02-13
Slide 38: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn Activity, year on year % 20 15 10 5 0 -5 J F MAM J J A S ON D J F MAM J J A S ON D J F MAM J J A S ON D J F MAM J J A S ON D J F MAM J J A S ON D 2014 2015 2016 2017 2018 EU USA China China: year on year based on cumulative investments at each point. USA:
Slide 39: Automotive
Automotive Production of light vehicles, year on year, quarterly data 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018 Europe North America China World Source: LMC Automotive Boliden Group Q4 2018 39 2019-02-13
Slide 40: Market balance – Zinc and Copper
Market balance – Zinc and Copper Zinc – global market Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Metals demand, kt 3 464 3 555 3 501 3 488 3 458 3 532 3 486 3 459 Year on year change 2,3% 3,1% 2,5% 1,5% -0,2% -0,6% -0,4% -0,8% Smelter production, kt 3 307 3 298 3 271 3 577 3 342 3 330 3 256 3 468 Year
Slide 41: Market balance – Nickel and Lead
Market balance – Nickel and Lead Nickel - global market Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Metals demand, kt 514 508 552 575 564 568 568 579 Year on year change 6,6% -1,7% 11,9% 9,8% 9,7% 11,9% 2,8% 0,6% Smelter production, kt 489 485 530 546 515 536 534 556 Year on year change 4,4% -4,3% 7,8%
Slide 42: 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 43: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden 43 2019-02-12