Boliden Ab · OMXSTO:BOL

Boliden Ab — Q2 2021 Earnings Presentation

29 slides from Boliden Ab's earnings presentation, Jul 22, 2021

1. Slide 1: Boliden – Metals for generations to come

   Boliden – Metals for generations to come Q2 Interim Report 2021 Mikael Staffas, President and CEO Håkan Gabrielsson, CFO 2021-07-22 Q2 2021

2. Slide 2: Q2 2021 – strong earnings and cash flow

   Q2 2021 – strong earnings and cash flow KEY HIGHLIGTHS PROJECTS  Strong prices and terms  Decision to invest 700 MEUR in  Stable production Green Zn Odda 4.0  Record EBIT in Mines  Aitik still ramping up, Rävliden initiated  Rönnskär Cu expansion and Leach FINANCIAL PERFORMANCE plant ramping u

3. Slide 3: Q2 EBIT development Group

   Q2 EBIT* development Group EBIT excl. PIR MSEK Rolling, MSEK  Group 2,616 (1,634) MSEK 4,000 12,000 3,500 10,500 3,000 9,000  Mines 2,192 (779) MSEK 2,500 7,500 2,000 6,000  Smelters 789 (914) MSEK 1,500 4,500 1,000 3,000 500 1,500 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 20

4. Slide 4: ESG is key in our purpose, vision and values

   ESG is key in our purpose, vision and values CO2 Intensity 1.0 Q2 2021 0.8  Lost Time Injury* 3.5 (5.2)  Sick leave 4.8 (5.2) 0.6 ‒ Improved Covid-19 situation 0.4  Carbon dioxide intensity of 0.65 (0.59) ‒ Lower grades 0.2 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019

5. Slide 5: Boliden weighted index on historic highs

   Boliden price index* Boliden weighted index on historic highs 225 200 175 150 125  Increased base metal prices 100 75 50  High precious metal prices 25 0  Slightly weaker USD 225 200 175 150 125 100 75 50 25 0 *Index 100 = 1 January 2016 Q2 INTERIM REPORT 2021 5

6. Slide 6: Copper, zinc and nickel prices relative to cash cost

   Copper, zinc and nickel prices relative to cash cost Copper Zinc Nickel USD/tonne USD/tonne USD/tonne 12,000 4,000 25,000 3,500 10,000 20,000 3,000 8,000 2,500 15,000 6,000 2,000 1,500 10,000 4,000 1,000 5,000 2,000 500 0 0 0 Source: Wood Mackenzie 2021 Composite C1 cash cost* data, Refinitiv Datast

7. Slide 7: Mines – Q2 production

   Metal content, ktonnes Copper Mines – Q2 production 50 40 Aitik 30  Q1 production issues solved 20 10  Still impact from Covid-19 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2  Milled volume 10.3 (10.5) Mtonnes 2017 2018 2019 2020 2021  Cu grade 0.21 (0.25) % Zinc 100 Garpenberg 80  S

8. Slide 8: Smelters – Q2 production

   Metal production, ktonnes Copper Smelters – Q2 production 120 100 80 60 Harjavalta 40 20  Strong production 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2  Lower grades in incoming materials 2017 2018 2019 2020 2021 Zinc Rönnskär 150  Strong feed 100  Lower metal production and free pre

9. Slide 9: Financial summary

   Financial summary MSEK Q2 2021 Q2 2020 Q1 2021 Revenues 17,891 13,391 17,083 EBITDA 4,197 3,216 4,100 EBIT 2,785 1,801 2,779 EBIT excl. PIR 2,616 1,634 2,449 Investments 1,393 1,505 1,087 Free cash flow 2,013 1,174 2,165 Earnings per share, SEK 8.00 4.92 7.96 Q2 INTERIM REPORT 2021 9

10. Slide 10: EBIT excl. PIR by business areas

    EBIT excl. PIR by business areas MSEK Q2 2021 Q2 2020 Q1 2021 Mines 2,192 779 1,631 Smelters 789 914 949 Other/eliminations -364 -60 -131 The Group 2,616 1,634 2,449 Mines Smelters MSEK Rolling, MSEK Rolling, MSEK MSEK 2,500 10,000 1,500 5,000 2,000 8,000 1,200 4,000 1,500 6,000 900 3,000 1,000 4,00

11. Slide 11: EBIT deviation Q2 2021 vs Q2 2020

    EBIT deviation Q2 2021 vs Q2 2020 EBIT excl. PIR MSEK High metal prices, mainly Cu & Zn Q2 2020 1,634 Weaker USD Lower TC Prices and terms 1,743 Whereof currency -926 Lower grades in Aitik Maintenance shutdowns and lower free metals Volumes -584 Increased inventories of copper concentrate Kylylahti

12. Slide 12: EBIT deviation Q2 2021 vs Q1 2021

    EBIT deviation Q2 2021 vs Q1 2021 EBIT excl. PIR MSEK Q1 2021 2,449 High metal prices, mainly Cu & Zn Prices and terms 446 Lower Zn TC Whereof currency -12 Higher milled volume and grades in Mines Maintenance shutdowns and lower free metals in Volumes 8 Smelters Costs -188 Increased inventories of c

13. Slide 13: Cash flow

    Cash flow MSEK Q2 2021 Q2 2020 Q1 2021 EBITDA excl. PIR 4,029 3,049 3,769 Cash flow from working capital -109 -66 -122 Cash flow from investments -1,393 -1,504 -1,076 Financial items -58 -75 -60 Tax paid -466 -296 -359 Other 11 68 13 Free cash flow 2,013 1,174 2,165 Q2 INTERIM REPORT 2021 13

14. Slide 14: Capital structure

    Capital structure Net debt & Gearing SEK bn % SEK bn 30 Jun 2021 30 Jun 2020 31 Dec 2020 9 30 Total Assets 73.6 67.1 72.5 8 25 Capital Employed 51.7 51.7 51.0 7 Equity 46.3 41.9 45.6 6 20 Net debt 2.0 6.9 2.2 5 15 Net debt/equity, % 4 17 5 4 Net reclamation 3 10 liability/equity, % 5 5 5 2 5 Average

15. Slide 15: Boliden Odda

    Boliden Odda  Zinc smelter established in 1924  Annual production capacity of 200 Ktonnes of casted Zn  One of the most climate friendly zinc smelters globally  Third quartile cash margin position* *Wood Mackenzie Q2 INTERIM REPORT 2021 15

16. Slide 16: Significant improvement in productivity while maintaining leading environmental footprint

    Significant improvement in productivity while maintaining leading environmental footprint Zinc Smelter Cash Margin Zinc Smelter Scope 1 & 2 Emission Intensity Odda 4.0* Cash Margin Increase in Odda Cash Margin today Weighted Average Cumulative Zinc Production * Boliden estimate  The expansion will

17. Slide 17: Green Zinc Odda 4.0 – Leveraging existing advantages

    Green Zinc Odda 4.0 –  Leading environmental footprint Leveraging existing advantages ‒ World class CO2-intensity reduced even further ‒ Long term sustainable waste solution  State of the art efficiency ‒ New metal recoveries and byproducts ‒ High capability to handle complex concentrates ‒ Scale,

18. Slide 18: Green Zinc Odda 4.0 – Expansion highlights

     Strong local support Green Zinc Odda 4.0 – ‒ Environmental permits granted ‒ Strong local support, including 39 MEUR Expansion highlights investment grant from Norwegian governmental bodies  Full production during project  Expansion summary ‒ New roaster ‒ New acid plant ‒ Expansion and moderniz

19. Slide 19: Green Zinc Odda 4.0 – Key financials

    Green Zinc Odda 4.0 –  Investment 700 MEUR Key financials ‒ Major cash outflow in 2022 and 2023  Improved cash margin ‒ 35% reduction of operating cost per tonne ‒ Economies of scale ‒ Automation and digitalization ‒ New Hydro power agreement ‒ 40 Ktonnes new leach product/year ‒ Metal content; Pb

20. Slide 20: Outlook

     Aitik ‒ 2021: Cu 0.21 %, Au 0.11 g/tonne Outlook  Garpenberg ‒ 2021: Zn 3.8 %, Ag 110 g/tonne  Maintenance shutdowns ‒ 2021: -510 (-345) MSEK  Increase in inflation pressure  Minor fire in Harjavalta ‒ Q3, 2021: -6 MEUR EBIT effect  Concrete supply risk in Swedish underground mines ‒ Major su

21. Slide 21: This is Boliden

    This is Boliden Our purpose To provide the metals essential to improve society for generations to come Our vision To be the most climate friendly and respected metal provider in the world Our values Care, Courage, Responsibility Q2 INTERIM REPORT 2021 21

22. Slide 22: APPENDIX

    APPENDIX Q2 INTERIM REPORT 2021 22

23. Slide 23: Financing

    Financing Net Debt MSEK Q2 2021 Q2 2020 Q1 2021 Debt to credit institutions 5,970 7,588 5,994 Other interest bearing debt 178 237 193 Pensions 1,172 1,124 1,165 Interest bearing assets -8 -19 -8 Cash -5,312 -1,984 -7,211 Total 1,999 6,946 132 Net Payment Capacity MSEK Q2 2021 Q2 2020 Q1 2021 Not uti

24. Slide 24: Loan structure

    Loan structure Maturity of which MSEK Reported value utilized < 1 year 1-5 years > 5 years Revolving credit facility 7,604 - - - - Bilateral loans 5,220 5,220 - 4,770 450 Bonds 750 750 - 750 - Commercial papers - - - - - Leases, other 178 178 45 133 - Total 6,148 45 5,653 450 Q2 INTERIM REPORT 2021

25. Slide 25: Preliminary priced volumes

    Preliminary priced volumes Preliminary priced volumes in Mines* 30 Jun 2021 Copper, ktonnes 8.4 Zinc, ktonnes 22.2 Nickel, ktonnes 3.0 Lead, ktonnes 3.3 Silver, kg 54,134 Gold, kg 703 Palladium, kg 270 Platinum, kg 403 * Preliminary priced volumes of metal in concentrate in Mines Q2 INTERIM REPORT 2

26. Slide 26: Copper and zinc treatment charges

    Copper and zinc treatment charges Copper TC Zinc TC USD/tonne USD/tonne concentrate concentrate 120 350 100 300 250 80 200 60 150 40 100 20 50 0 0 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Contract TC - annual and mid-year benchmark Contract TC - realized Standard grade spot TC Spot TC impor

27. Slide 27: Base metal prices

    Base metal prices USD/tonne ktonnes USD/tonne ktonnes Copper Nickel 12,000 2,400 30,000 1,200 10,000 2,000 25,000 1,000 8,000 1,600 20,000 800 6,000 1,200 15,000 600 4,000 800 10,000 400 2,000 400 5,000 200 0 0 0 0 LME inventory Shanghai inventory Comex inventory LME inventory Price Price Q avg Pric

28. Slide 28: Gold, silver and lead prices

    Gold, silver and lead prices USD/tonne USD/tr.oz. Lead Silver 3,000 40 2,500 30 2,000 1,500 20 1,000 10 500 0 0 Price Price Q avg Price Price Q avg USD/tr.oz. Gold 2,500 2,000 Average price in Q2 2021 vs period 1,500 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Gold 1% -3% -5% 6% 1,000 Silver 2% 9% 10% 63% 500 L

29. Slide 29: This presentation has been prepared by Boliden for information purposes only

    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 subject to ri

Boliden — Q2 2021 Earnings Presentation on 6ix