Boliden Ab · OMXSTO:BOL
Boliden Ab — Q3 2015 Earnings Presentation
36 slides from Boliden Ab's earnings presentation, Oct 23, 2015
Slide 1: Q3 2015 Interim Report
Q3 2015 Interim Report Lennart Evrell President & CEO Mikael Staffas CFO
Slide 2: Robust cash flow and strong quarter for Smelters
Robust cash flow and strong quarter for Smelters • Revenues 9,764 (9,287) MSEK MSEK R4Q, MSEK • EBIT ex PIR* 1,055 (711) MSEK 1 800 7 200 1 600 6 400 ‒ EBIT 880 (858) MSEK 1 400 5 600 • Free Cash Flow 953 (728) MSEK 1 200 4 800 1 000 4 000 • Sharp fall in metal prices vs Q2 800 3 200 • Continued fav
Slide 3: Prices down, mine cutbacks
Prices down, mine cutbacks Macro • Soft global market • Level of economic development in China uncertain Base metals markets • Mine supply growth in copper • Zinc mines closures • Increase in official stocks • Metal prices down • Zn and Cu close to 90th percentile cash cost • Mine production cutback
Slide 4: Zinc and copper price vs cash cost
Zinc and copper price vs cash cost Normal C1 – Zinc Normal C1 – Copper USD/ton USD/ton 5000 5000 11000 11000 4500 4500 10000 10000 4000 4000 9000 9000 8000 8000 3500 3500 7000 7000 3000 3000 6000 6000 2500 2500 5000 5000 2000 2000 4000 4000 1500 1500 3000 3000 1000 1000 2000 2000 500 500 1000 1000 0
Slide 5: Boliden market term index
Boliden market term index Boliden Group Q3 2015 5 2015-10-23
Slide 6: Favourable currencies vs 1 year ago
Favourable currencies vs 1 year ago Note: Graph shows period 1 January 2005 until 15 October 2015. Boliden Group Q3 2015 6 2015-10-23
Slide 7: Zinc price
Zinc price Zinc price, USD/t Tonnes USD/t 2 500 Q3 Q4 Q1 Q2 Q3 5,000 1,800,000 2 400 4,500 1,600,000 2 300 2 200 4,000 1,400,000 2 100 2 000 3,500 1,200,000 1 900 3,000 1 800 1,000,000 1 700 2,500 1 600 800,000 1 500 2,000 jul-14 okt-14 jan-15 apr-15 jul-15 okt-15 600,000 1,500 400,000 1,000 Average
Slide 8: Copper price
Copper price Copper price, USD/t Tonnes USD/t Q3 Q4 Q1 Q2 Q3 12 000 1 800 000 7 500 7 000 1 600 000 10 000 6 500 1 400 000 6 000 8 000 1 200 000 5 500 1 000 000 5 000 6 000 800 000 4 500 jul-14 okt-14 jan-15 apr-15 jul-15 okt-15 4 000 600 000 400 000 2 000 Average price in Q3 vs period 200 000 Q2-15
Slide 9: Gold, silver and lead prices
Gold, silver and lead prices Gold price, USD/troy oz. 2 000 Gold Lead price, USD/t Lead 5 000 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 20052006 2005 20062007 2007 2008 2008 20092009 20102010 20112011 20122012 20132013 2014 2014 20152015 20
Slide 10: Mines
Mines Boliden Group Q3 2015 10 2015-10-23
Slide 11: Mines – Lower market terms & production disturbances
Mines – Lower market terms & production disturbances R4Q, MSEK • EBIT 260 (355) MSEK 1 600 MSEK 4 800 ‒ 657 MSEK in Q2 2015 1 400 4 200 • Capex 563 (603) MSEK 1 200 3 600 1 000 3 000 • Lower metal prices 800 2 400 • Production disturbances Aitik 600 1 800 • Continued strong performance in 400 1 200
Slide 12: Mines – Production
Mines – Production Milled ore, Metal content, Milled ore, Metal content, mt Copper kt mt Zinc kt 12 24 1,8 90 10 20 1,5 75 8 16 1,2 60 6 12 0,9 45 4 8 0,6 30 0,3 15 2 4 0,0 0 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 2012 2013 2014 20
Slide 13: Smelters
Smelters Boliden Group Q3 2015 13 2015-10-23
Slide 14: Smelters – Strong result through high production
Smelters – Strong result through high production • EBIT ex PIR* 825 (464) MSEK MSEK R4Q, MSEK ‒ 604 MSEK in Q2 2015 900 3 200 • Capex 315 (116) MSEK 800 2 800 700 2 400 600 • Lower metal prices 2 000 500 • High production 400 1 600 • New nickel business model 300 1 200 • Maintenance shutdowns on pla
Slide 15: Smelters – Production
Smelters – Production Copper Metal Metal Total feed, production, Total feed, Zinc production, kt kt kt kt 400 120 250 150 350 105 200 120 300 90 250 75 150 90 200 60 100 60 150 45 100 30 50 30 50 15 0 0 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013
Slide 16: Financials
Financials Boliden Group Q3 2015 16 2015-10-23
Slide 17: Robust cash flow and strong quarter for Smelters
Robust cash flow and strong quarter for Smelters Financial development MSEK Q3 2015 Q3 2014 Q2 2015 Revenues 9,764 9,287 10,373 EBITDA 1,746 1,709 1,970 EBIT 880 858 1,090 Process inventory revaluation (PIR) -175 146 -167 EBIT ex PIR 1,055 711 1,257 Investments 880 720 877 Free cash flow 953 728 1,5
Slide 18: Lower metal prices and lower costs vs Q2 2015
Lower metal prices and lower costs vs Q2 2015 EBIT excl. PIR analysis Q3 2015 vs. Q2 2015 MSEK EBIT excl. PIR – Q2 2015 1,257 Specification of deviation Higher Smelter feed Volume 114 Prices and Terms (incl. hedges) -624 Lower metal prices Lower smelter terms Whereof currency effects 54 Costs 312 Se
Slide 19: Higher production vs. Q3 2014
Higher production vs. Q3 2014 EBIT excl. PIR analysis Q3 2015 vs. Q3 2014 MSEK EBIT excl. PIR – Q3 2014 711 Higher production Mines Higher feed Smelters Specification of deviation Volume 549 Lower metal prices Stronger USD Prices and Terms (incl. hedges) -25 Improved smelter terms Whereof currency e
Slide 20: Strong cash flow
Strong cash flow Free cash flow MSEK Q3 2015 Q3 2014 Q2 2015 EBITDA excluding PIR 1,921 1,563 2,138 Changes in working capital 36 19 396 Inventories -500 -22 678 Payables 443 -138 -165 Receivables 92 178 -119 Other 1 0 3 Cash flow from investments -879 -718 -875 Financial items -51 -72 -62 Tax paid
Slide 21: Stronger balance sheet
Stronger balance sheet SEK bn 30 Sept 30 Jun MSEK % (Unless otherwise stated) 2015 2015 10 000 45 Total Assets 44.0 43.4 40 8 000 35 Capital employed 35.1 35.2 30 6 000 Shareholders' equity 25.6 25.0 25 20 Net debt 6.2 7.0 4 000 15 Gearing, % 24 28 2 000 10 5 Loan duration, years 2.7 2.9 0 0 Q1 Q2 Q
Slide 22: Nine months performance
Nine months performance • Revenues 30,543 (27,276) MSEK MSEK R4Q, MSEK • EBIT ex PIR* 3,414 (1,471) MSEK 1 800 7 200 1 600 6 400 ‒ EBIT 3,175 (1,601) MSEK 1 400 5 600 • Free Cash Flow 2,530 (1,217) MSEK 1 200 4 800 1 000 4 000 • Lower metal prices, improved 800 3 200 currencies 600 2 400 • Smelters
Slide 23: Robust cash flow & strong quarter for Smelters
Robust cash flow & strong quarter for Smelters • Well positioned in the metal market ‒ Mines and smelters ‒ Base metals and precious metals ‒ High productivity • Sharp fall in metal prices vs Q2 • Continued favorable currencies • Strong result Smelters • Production disturbances Aitik • Strong cash f
Slide 24: Going forward
Going forward • Aitik ‒ Copper grade 0.21% in 2015-2016 • Garpenberg – 2.5 Mton pace end 2015 • Tara – improved production latter part of 2015 • Rönnskär – action plan under implementation • Nickel business on own books H2 2015 • Odda expansion to 200 kton/year on plan • Capex 3.5 BSEK FY 2015 • Pla
Slide 25: Capital Markets Day on 16-17 March 2016
Capital Markets Day on 16-17 March 2016 • Stockholm 16 March • Odda site visit 17 March • More info will be posted on www.boliden.com Boliden Group Q3 2015 25 2015-10-23
Slide 26: 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 27: Martin wants to get the job done.
Martin wants to get the job done. e couldn't without metals. 7BOLIDEN
Slide 28: Appendix
Appendix Boliden Group Q3 2015 28 2015-10-23
Slide 29: Market balance
Market balance Zinc – global market Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Metals demand, kt 3327 3344 3392 3327 3306 3307 3363 3340 Year on year change 4,7% 4,3% 3,1% 1,7% -0,6% -1,1% -0,9% 0,4% Smelter production, kt 3333 3124 3250 3343 3531 3373 3514 3445 Year on year change 3,2% -0,2% 1,7% 4,2%
Slide 30: Economic development
Economic development Industrial production, year on year % 20 15 10 5 0 -5 2011 2012 2013 2014 2015 EU28 USA China World Source: Reuters Datastream, Boliden calculations for world data Boliden Group Q3 2015 30 2015-10-23
Slide 31: Construction – largest segment for Cu and Zn
Construction – largest segment for Cu and Zn Activity, year on year % 30 25 20 15 10 5 0 -5 -10 -15 2011 2012 2013 2014 2015 EU USA China China: year on year based on cumulative investments at each point Source: Reuters Datastream Boliden Group Q3 2015 31 2015-10-23
Slide 32: Automotive
Automotive Production of light vehicles, year on year, quarterly data 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 2011 2012 2013 2014 2015 Europe North America China World Source: LMC Automotive Boliden Group Q3 2015 32 2015-10-23
Slide 33: China – metals demand and economic growth
China – metals demand and economic growth Year on year growth % 18 16 14 12 10 8 6 4 2 0 2011 2012 2013 2014 2015 Zinc demand Copper demand GDP Industrial production Source: CRU Ltd, Reuters Datastream Boliden Group Q3 2015 33 2015-10-23
Slide 34: 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 0 2012 2013 2014 2015 2012 2013 2014 2015 Delivered Premia US Midwest Realized TC, European contract Ex-Works Premia Europe Spot TC, China imports Premia Far East - Western • L
Slide 35: Copper TC and premia
Copper TC and premia US$/t Treatment charges US$/t metal Metal premia concentrate 140 160 120 140 120 100 100 80 80 60 60 40 40 20 20 0 0 2012 2013 2014 2015 2012 2013 2014 2015 Contract TC - annual and mid-year benchmark CIF Average European premia CIF European benchmark premia Standard grade spot
Slide 36: Martin wants to get the job done.
Martin wants to get the job done. e couldn't without metals. 7BOLIDEN