Boliden Ab · OMXSTO:BOL
Boliden Ab — Q3 2020 Earnings Presentation
35 slides from Boliden Ab's earnings presentation, Oct 28, 2020
Slide 1: Q3 Interim Report 2020
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Q3 Interim Report 2020 Mikael Staffas, President & CEO Håkan Gabrielsson, CFO
Slide 2: Q3 2020 – Improved earnings
Q3 2020 – Improved earnings Group EBIT ex PIR* • EBIT excl. PIR* 2,258 (1,635) MSEK MSEK R4Q, MSEK 3 400 10 200 3 200 9 600 3 000 9 000 • Free cash flow 1,878 (-653) MSEK 2 800 2 600 8 400 7 800 ‒ Capex 1,275 (1,834) MSEK 2 400 2 200 7 200 6 600 ‒ Working capital remains high 2 000 1 800 6 000 5 400
Slide 3: Q3 2020 Covid-19 response
Q3 2020 Covid-19 response Effects on Boliden • Increased short-term absence • Travel restrictions • Supply chain risks Boliden response • Intense effort to limit spread of Covid-19 • De-centralised responsibility • Close cooperation with unions • Rescheduled maintenance stops • Elevated working capi
Slide 4: Market Q3 2020
Market Q3 2020 General • The western world industrial activity recovered, still below 2019 • The industrial activity in China increased Metals • Strong recovery of global metal demand • Record imports in China Concentrate markets • Mine supply up after restrictions eased • Still tight concentrate ma
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 6 000 1 200 2 000 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 price, USD/tonne Lead Gold price, USD/troy oz. 2 500 4 000 2 000 3 000 1 500 2 000 1 000 1 000 500 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Silver price, USD/troy oz. Silver 50 A
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 Average price High price Ave
Slide 8: Boliden market term index
Boliden market term index Note: Index 100 = 1 January 2015 Boliden Group Q3 2020 8 2020-10-28
Slide 9: Mines
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Mines Aitik, view from the north Boliden Group Q3 2020 9 2020-10-28
Slide 10: Mines Q3 2020
Mines Q3 2020 Mines EBIT • EBIT 1,638 (1,091) MSEK R4Q, MSEK MSEK 2 600 7 800 ‒ 779 MSEK in Q2 2020 2 400 7 200 2 200 6 600 2 000 6 000 • Higher volumes 1 800 5 400 ‒ Record milled production in 1 600 4 800 1 400 4 200 Garpenberg and Kevitsa 1 200 3 600 1 000 3 000 • Improved prices & terms 800 600
Slide 11: Mines – Q3 Production
Mines – Q3 Production Milled ore, Milled ore, Metal content, Mtonnes Copper Metal content, Mtonnes Zinc Ktonnes 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 12: Smelters
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Smelters Kokkola, zinc foundry Boliden Group Q3 2020 12 2020-10-28
Slide 13: Smelters Q3 2020
Smelters Q3 2020 Smelters EBIT excl. PIR* • EBIT excl. PIR* 835 (716) MSEK MSEK R4Q, MSEK ‒ 914 MSEK in Q2 2020 1 300 3 900 1 200 3 600 1 100 3 300 • Higher production 1 000 3 000 900 2 700 ‒ Successful maintenance 800 2 400 ‒ Higher free metals 700 2 100 600 1 800 500 1 500 • Slightly weaker prices
Slide 14: Smelters – Q3 Production
Smelters – Q3 Production Copper Metal Total feed, production, Ktonnes Ktonnes • Cu production 92 (75) ktonnes 400 350 120 105 ‒ Less maintenance than in Q3 last year 300 90 ‒ Higher capacity due to expansion in 250 75 Harjavalta 200 60 150 45 100 30 • Zn production 117 (122) ktonnes 50 15 ‒ Record f
Slide 15: Financials
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Financials Boliden Group Q3 2020 15 2020-10-28
Slide 16: 2020 Q3 – Earnings
2020 Q3 – Earnings MSEK Q3 2020 Q3 2019 Q2 2020 Revenues 13,550 11,170 13,391 EBITDA 4,034 3,149 3,216 EBIT 2,622 1,873 1,801 EBIT excl. PIR 2,258 1,635 1,634 Investments 1,275 1,834 1,505 Free cash flow 1,878 -653 1,174 Earnings per share, SEK 7.44 5.14 4.92 Net debt / equity ratio, % 11 15 17 Boli
Slide 17: EBIT excl. PIR by segment
EBIT excl. PIR by segment MSEK Q3 2020 Q3 2019 Q2 2020 Mines 1,638 1,091 779 Smelters 835 716 914 Other / eliminations -215 -173 -60 The Group 2,258 1,635 1,634 Boliden Group Q3 2020 17 2020-10-28
Slide 18: Q3 2020 vs. Q3 2019
Q3 2020 vs. Q3 2019 Group EBIT excl. PIR MSEK Q3 2020 2,258 Q3 2019 1,635 Higher milled production in Mines Less impact from maintenance stops Deviation 623 Recoveries Harjavalta Specification of deviation Volumes 472 Higher Au, Ag and Cu prices Prices and terms 288 Whereof currency -464 Cost contro
Slide 19: Q3 2020 vs. Q2 2020
Q3 2020 vs. Q2 2020 Group EBIT excl. PIR MSEK Q3 2020 2,258 Q2 2020 1,634 Deviation 624 Lower grades in Aitik and Kevitsa Specification of deviation More maintenance in Smelters Volumes -302 Prices and terms 695 Whereof currency -569 Recovery of metal prices Costs 283 Seasonally lower costs & cost c
Slide 20: Cash flow
Cash flow MSEK Q3 2020 Q3 2019 Q2 2020 EBITDA excl. PIR 3,670 2,911 3,049 Cash flow from working capital -95 -1,267 -66 Inventories -875 -1,652 1,200 Operating receivables -447 417 16 Operating liabilities 1,248 -75 -1,229 Other -21 43 -54 Cash flow from investments -1,274 -1,821 -1,504 Financial it
Slide 21: Balance sheet
Balance sheet SEK bn 30 Sept 30 Sept 31 Dec 2020 2019 2019 Net debt & Gearing MSEK Total Assets 69.2 63.5 66.4 % 12 000 45 Capital employed 52.1 50.0 49.8 40 10 000 35 Equity 44.0 40.6 41.4 8 000 30 Net debt 5.1 6.3 5.5 6 000 25 20 Net debt / equity ratio, %* 11 15 13 4 000 15 10 Loan duration, year
Slide 22: Expansion investment – Nickel in Harjavalta
Expansion investment – Nickel in Harjavalta • Harjavalta well positioned to meet long term growing demand from the battery value chain in Europe • Highly profitable integrated Ni operations in Finland ‒ Ni feed increase from 310 to 370 ktonnes per year ‒ Capex 40 MEUR ‒ Mainly during 2021 Boliden Co
Slide 23: Going forward
Going forward • Aitik ‒ 2020: Cu 0.25% ‒ 2021: Cu 0.21%, Au 0.11 g/tonne • Garpenberg ‒ 2020: Zn 3.7%, Ag 100 g/tonne ‒ 2021: Zn 3.8%, Ag 110 g/tonne • Kevitsa ‒ 2020: Slightly below reserve grade • 2020: -330 (-745) MSEK maintenance stops* ‒ Q4: -85 (-70) MSEK • Capex ‒ 2020: Slightly below 7 BSEK
Slide 24: SAVE THE DATE! 2021 Capital Market Days
SAVE THE DATE! • Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level 2021 Capital Market Days • Boliden’s Capital Market Days 2021 will be held in Stockholm on 17 March, followed by a visit to our Harjavalta Smelter on March 18. • 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 Boliden coworker takes water samples Boliden Group Q3 2020 26 2020-10-28
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 • Strong balance sheet Boliden Co-workers • 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 October 23, 2020 Boliden Group Q3 2020 28 2020-10-28
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 October 23, 2020 Boliden Group Q3 2020 29 2020-10-28
Slide 30: Zinc TC and premia
Zinc TC and premia US$/t Treatment charges concentrate US$/t metal Metal premia 350 250 300 250 200 200 150 150 100 100 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 China: September 5 0 World: August -5 EU28: August USA: September -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 US
Slide 33: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn USA: August China: September EU: September Boliden Group Q3 2020 33 2020-10-28
Slide 34: Automotive
Automotive Vehicle production, year on year % 40% 20% 0% -20% -40% -60% -80% 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 China Germany Japan North America Source: Refinitiv Datastream, North America – estimate (data to and including August) Boliden Group Q3 2
Slide 35: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden 35 2020-10-27