Slide 1: Q1 Interim report 2018
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Q1 Interim report 2018 Lennart Evrell President & CEO Håkan Gabrielsson CFO
Slide 2: Q1 Interim report 2018 – High grades in Aitik and Tara
Q1 Interim report 2018 – High grades in Aitik and Tara Expansion Acquisition Acquisition Aitik • Revenues 13,331 (12,730) MSEK Garpenberg Kylylahti Kevitsa high grades • EBIT ex PIR* 2,724 (2,061) MSEK MSEK R4Q, MSEK 3 400 10 200 • Free Cash Flow 1,431 (1,060) MSEK 3 200 3 000 9 600 9 000 • Net Debt
Slide 3: Market Q1 2018 – supportive macro, high metal prices
Market Q1 2018 – supportive macro, high metal prices Macro • Strong business climate ‒ Construction growth improved ‒ Auto production growth declined Base metals • High copper and nickel demand growth • Low zinc demand growth • Metal prices volatile • Zn and Ni metal deficit • Copper metal surplus •
Slide 4: 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 2008 2009 2010 2011 2012
Slide 5: High Cu and Zn prices relative to cash cost
High Cu and Zn prices relative to cash cost Zinc Copper Nickel USD/tonne USD/tonne USD/tonne USD/tonne USD/tonne USD/tonne 5 000 5 000 11 000 11 000 35 000 35 000 4 500 4 500 10 000 10 000 30 000 30 000 9 000 9 000 4 000 4 000 8 000 8 000 3 500 3 500 25 000 25 000 7 000 7 000 3 000 3 000 6 000 6 000
Slide 6: 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 Q1 2018 6 2018-04-27
Slide 7: Mines
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Mines Satellite pit in Aitik Boliden Group Q1 2018 7 2018-04-27
Slide 8: Q1 2018 Mines – High metal production, high prices
Q1 2018 Mines – High metal production, high prices • EBIT 1,931 (1,525) MSEK MSEK R4Q, MSEK 2 400 7 200 ‒ 2,179 MSEK in Q4 2017 2 200 6 600 • Capex 878 (755) MSEK 2 000 6 000 1 800 5 400 1 600 4 800 1 400 4 200 1 200 3 600 • Improved EBIT - High metal 1 000 3 000 production & market terms 800 600 2
Slide 9: Mines – Production
Mines – 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 10: Smelters
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Smelters Harjavalta nickel matte station Boliden Group Q1 2018 10 2018-04-27
Slide 11: Q1 2018 Smelters – Stable production
Q1 2018 Smelters – Stable production R4Q, • EBIT ex PIR* 640 (835) MSEK MSEK MSEK 1 300 3 900 ‒ 766 MSEK in Q4 2017 1 100 3 300 • Capex 231 (341) MSEK 900 2 700 700 2 100 500 1 500 • Weaker market terms despite higher 300 900 metal prices • Stable production and high free 100 300 metals in Copper Sm
Slide 12: Smelters – Production
Smelters – Production Copper Metal Total feed, production, Ktonnes Ktonnes 400 120 • Cu production 92 (89) ktonnes 350 105 ‒ Increased production in both smelters 300 90 250 75 ‒ Production record in Harjavalta 200 60 ‒ 46% (37) internal feed 150 45 100 30 • Zn production 120 (115) ktonnes 50 15 0 0
Slide 13: Financials
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level Financials ‒ Fifth level 4,5 ton gold produced in Q1 2018 Boliden Group Q1 2018 13 2018-04-27
Slide 14: 2018 Q1 – Earnings
2018 Q1 – Earnings MSEK Q1 2018 Q1 2017 Q4 2017 Revenues 13,331 12,730 13,619 EBITDA 3,941 3,241 4,332 EBIT 2,672 2,149 3,091 EBIT ex PIR 2,724 2,061 2,912 Investments 1,109 1,096 1,867 Free cash flow 1,431 1,060 2,382 Earnings per share, SEK 7.35 6.10 8.22 Net debt / equity ratio 6 27 11 Boliden Gr
Slide 15: 2018 Q1 vs. 2017 Q1
2018 Q1 vs. 2017 Q1 Group EBIT excl. PIR MSEK Q1 2018 2,724 Q1 2017 2,061 Deviation 663 Specification of deviation High grades in Mines, higher free metal in Smelters Volumes 944 Positive effect from metal prices, offset by Prices and Terms (incl. hedges) 9 negative FX & TC Whereof currency -796 Cos
Slide 16: 2018 Q1 vs. 2017 Q4
2018 Q1 vs. 2017 Q4 Group EBIT excl. PIR MSEK Q1 2018 2,724 Q4 2017 2,912 Deviation -187 Specification of deviation Higher grades, less milled production in Mines Volumes -169 Prices and Terms (incl. hedges) -125 Negative FX effect; USD lower and EUR stronger Whereof currency effects -151 Costs 114
Slide 17: Cash flow
Cash flow MSEK Q1 2018 Q1 2017 Q4 2017 EBITDA excluding PIR 3,994 3,154 4,152 Cash flow from working capital -823 -610 565 Inventories -974 316 -264 Operating receivables -224 -392 -149 Operating liabilities 378 -529 976 Other -3 -5 1 Cash flow from investments -1,108 -931 -1,875 Financial items -58
Slide 18: Balance sheet
Balance sheet SEK bn 31 Mar 31 Mar 31 Dec MSEK % 2018 2017 2017 12 000 45 Total Assets 60.1 53.3 55.9 40 10 000 35 Capital employed 44.3 43.1 42.9 8 000 30 Equity 37.7 31.0 35.1 6 000 25 20 Net debt 2.5 8.4 3.8 4 000 15 Net debt / equity ratio 6 27 11 2 000 10 5 Loan duration, years 2.7 3.1 2.4 0 0
Slide 19: Going forward
Going forward • Aitik ‒ New crusher ramp-up – volatile production ‒ Q2-Q4 2018: Cu 0.26% ‒ 2019: Cu 0.25% • Garpenberg ‒ Low Zn grades and high Ag grades in Q1 ‒ 2018: Zn 4.0%, Ag 115 g/tonne • High grades Q1 in Tara • Winter conditions, continued into Q2 • 2018 benchmark Zn TC not settled • Positiv
Slide 20: Conclusion Q1 report 2018
Conclusion Q1 report 2018 • Well positioned in the metal market ‒ Mines and smelters ‒ Base metals and precious metals ‒ High productivity • Strong balance sheet • High grades • Stable smelter production • New crusher in Aitik under commissioning World-class productivity in underground and open-pit
Slide 21: 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 22: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden Group Q1 2018 22 2018-04-27
Slide 23: Appendix
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Appendix Boliden Group Q1 2018 23 2018-04-27
Slide 24: Zinc price
Zinc price Zinc price, USD/tonne KTonnes USD/tonne 3 900 Q1 Q4 Q3 Q2 Q1 4 000 2 000 3 400 1 600 2 900 3 000 2 400 1 200 1 900 2 000 1 400 800 jan-17 apr-17 jul-17 okt-17 jan-18 apr-18 1 000 400 Average price in Q1 vs. period Q4-17 Q3-17 Q2-17 Q1-17 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 20
Slide 25: Copper price
Copper price Copper price, USD/tonne KTonnes USD/tonne Q1 Q4 Q3 Q2 Q1 7 500 12 000 2 400 7 000 6 500 10 000 2 000 6 000 5 500 8 000 1 600 5 000 4 500 6 000 1 200 4 000 jan-17 apr-17 jul-17 okt-17 jan-18 apr-18 4 000 800 2 000 400 Average price in Q1 vs. period Q4-17 Q3-17 Q2-17 Q1-17 0 0 2008 2009 2
Slide 26: Nickel price
Nickel price Nickel price, USD/tonne KTonnes 35 000 600 USD/tonne Q1 Q4 Q3 Q2 Q1 18 000 30 000 16 000 500 14 000 25 000 400 12 000 20 000 10 000 300 8 000 15 000 6 000 jan-17 apr-17 jul-17 okt-17 jan-18 apr-18 200 10 000 100 Average price in Q1 vs. period 5 000 Q4-17 Q3-17 Q2-17 Q1-17 0 0 2008 2009
Slide 27: 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 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 28: Market balance – zinc and copper
Market balance – zinc and copper Zinc – global market Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Metals demand, kt 3 459 3 417 3 437 3 462 3 565 3 520 3 482 3 514 Year on year change 3,0% 3,0% 2,6% 2,4% 3,1% 3,0% 1,3% 1,5% Smelter production, kt 3 327 3 373 3 549 3 293 3 289 3 268 3 515 3 378 Year on y
Slide 29: Market balance – nickel and lead
Market balance – nickel and lead Nickel - global market Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Metals demand, kt 517 495 525 513 508 551 572 574 Year on year change 9,3% 8,0% 13,2% 6,4% -1,7% 11,4% 8,9% 11,9% Smelter production, kt 506 490 512 485 482 530 545 542 Year on year change 1,0% 1,8% 3,8%
Slide 30: 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 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Realized TC - European contract" Ex-Works Premia Europe Spot TC - China imports Delivered Premia US Midwest Premia Far East
Slide 31: Copper TC and premia
Copper TC and premia US$/t Metal premia concentrat Treatment charges US$/t metal 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 CIF European benchmark premia Standard grade spot TC CIF Average Europe
Slide 32: 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: Thomson Reuters Datastream, world data calculated by Boliden Boliden Group Q1 2018 32 2018-04-27
Slide 33: 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 34: Automotive – modest growth
Automotive – modest growth Production of light vehicles, year on year, quarterly data 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 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 Q1 2018 34 2018
Slide 35: China – metals demand and economic growth
China – metals demand and economic growth Year on year growth % 25 20 15 10 5 0 -5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2014 2015 2016 2017 2018 Zinc demand Copper demand Nickel demand GDP growth % Industrial production growth % Source: CRU Ltd, Thomson Reuters Datastream Boli
Slide 36: • Click to edit Master text styles
• Click to edit Master text styles ‒ Second level ‒ Third level ‒ Fourth level ‒ Fifth level Boliden Group Q1 2018 36 2018-04-27