Boliden Ab · OMXSTO:BOL
Boliden Ab — Investor Presentation (November 2022)
40 slides from Boliden Ab's investor presentation, November 2022
Slide 1: Boliden – Metals for generations to come
Boliden – Metals for generations to come Post Q3 2022 General Presentation
Slide 2: Table of contents
Table of contents ▪ Boliden: Introduction ▪ Performance up until Q3 2022 ▪ The metals market - Key slides ▪ Boliden’s value creation strategy - Key focus areas GENERAL PRESENTATION POST Q3 2022 2
Slide 3: 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 GENERAL PRESENTATION POST Q3 2022 3
Slide 4: Boliden – Metals for modern life
Boliden – Metals for modern life EBIT ex. PIR* MSEK 12 000 10 000 8 000 6 000 4 000 2 000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 ▪ Founded in 1924 ▪ ~6,000 employees ▪ Mines & Smelters ▪ Most exposure to Zn and Cu ▪ Industrial customer base in northern Europe * PIR (Process Inventory Re
Slide 5: Boliden’s contradictions are key to our success
Boliden’s contradictions are key to our success… Small Large ~6,000 employees Listed on OMX Large Cap Local Global Strong link to local communities Global network and smelter sourcing Conservative Cutting edge in technology Preserving and valuing its culture Highly automated Co-worker at the Boliden
Slide 6: Along decentralized management
… along decentralized management* Thomas Jenny Gotthardsson, Peter Bergman, Henrik Grind, Gunnar Nyström, Sundqvist, Boliden Garpenberg Boliden Area Boliden Kevitsa Boliden Tara Boliden Aitik Linn Andersson, Timo Rautalahti, Antti Kontiainen, Helen Seim, Fredrik Kanth Boliden Rönnskär Boliden Harjav
Slide 7: Q3 2022 – Strong results despite high inflation
Q3 2022 – Strong results despite high inflation KEY HIGHLIGHTS PROJECTS ▪ Favorable currencies ▪ Good progress in Odda, Kristineberg ▪ Strong production in Mines but lower and Aitik dam projects grades ▪ Improved ramp-up of ▪ Lower zinc production, but positive Harjavalta Ni-line contribution from s
Slide 8: EBIT excl. PIR by Business Area
EBIT excl. PIR by Business Area MSEK Q3 2022 Q3 2021 Q2 2022 Mines 1,964 1,936 2,727 Smelters 1,564 611 1,404 Other/eliminations -44 -129 401 The Group 3,484 2,419 4,532 Mines Smelters MSEK Rolling, MSEK Rolling, MSEK MSEK 4,500 12,000 1,800 6,000 4,000 10,000 1,500 5,000 3,500 3,000 8,000 1,200 4,0
Slide 9: Cash flow
Cash flow MSEK Q3 2022 Q3 2021 Q2 2022 EBITDA excl. PIR 4,946 3,798 6,079 Cash flow from working capital -1,696 -841 -1,204 Cash flow from investments -2,516 -1,540 -2,242 Financial items -147 -61 -94 Tax paid -628 -404 -539 Other 137 9 38 Free cash flow 97 962 2,038 GENERAL PRESENTATION POST Q3 202
Slide 10: Capital structure
Capital structure Net debt & Gearing SEK bn % SEK bn 30 Sep 2022 30 Sep 2021 31 Dec 2021 8 20 Total Assets 91.5 75.4 80.5 7 6 15 Capital Employed 63.1 52.8 53.4 5 Equity 55.1 48.3 50.9 4 10 Net debt 3.7 1.1 -0.9 3 Net debt/equity, % 7 2 -2 2 5 1 Net reclamation 0 0 liability/equity, % 5 5 5 -1 Avera
Slide 11: Strong funding base
Strong funding base ▪ Syndicated bank loan facilities MSEK Maturity profile September 2022 ‒ RCF MEUR 400 (unutilized) 5 500 ‒ RCF MEUR 450 (unutilized) 5 000 ▪ Bilateral loans 4 500 4 000 ‒ NIB MEUR 310 (utilized) 3 500 ‒ SEK AB MSEK 3 100 (utilized) 3 000 ▪ Commercial paper program MSEK 4 000 2 50
Slide 12: 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 5,000 30,000 4,500 10,000 25,000 4,000 3,500 8,000 20,000 3,000 6,000 2,500 15,000 2,000 4,000 10,000 1,500 1,000 2,000 5,000 500 0 0 0 Source: Wood Mackenzie 2022 Composite C1 cash cost* dat
Slide 13: Copper and zinc treatment charges
Copper and zinc treatment charges Copper TC Zinc TC USD/tonne USD/tonne concentrate concentrate 120 350 300 100 250 80 200 60 150 40 100 20 50 0 0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Contract TC - annual and mid-year benchmark Standard grade spot TC Contract TC - realized Spo
Slide 14: Boliden price index
Boliden price index* Boliden price index 225 200 175 150 ▪ Strong, but deteriorating, average prices 125 and terms 100 75 ‒ Strong USD 50 ‒ Weaker metal and by-product prices vs. Q2 2022 25 0 ▪ Increasing spot TCs towards end of Q3 2022 225 ‒ Average spot TCs lower Q3 vs Q2 200 175 ‒ Large announced
Slide 15: Long-term commitment to financial targets and dividend policy
Long-term commitment to financial targets and dividend policy Return on Dividend policy: Net Debt/Equity investments 1/3 of at about 20% ≥ 10% net profit at economic peaks* *The target also includes net reclamation liability GENERAL PRESENTATION POST Q3 2022 15
Slide 16: Mineral Reserves end of 2021
Mineral Reserves end of 2021 ▪ Aitik* ‒ Reserves covering full production until 2050 (2050) Reserve life (years)*** ‒ Cu reserve grade 0.22 (0.22) % 35 ▪ Boliden Area 30 ‒ Reserves covering full production until 2028 (2027) 25 20 ▪ Garpenberg* 15 ‒ Reserves covering full production until 2049 (2050)
Slide 17: Mineral Resources end of 2021
Mineral Resources end of 2021 ▪ Aitik ‒ No major update ▪ Boliden Area ‒ Strömfors ‒ Addition in Mineral Resources 26.6 (25.7) Mtonnes ▪ Garpenberg ‒ Major increase in Mineral Resources 79 (62) Mtonnes ▪ Tara ‒ Tara Deep ‒ Inferred Mineral Resource 28.1 (26.2) Mtonnes ‒ Zn grade 8.4 (8.4) % ‒ Pb gra
Slide 18: World leading productivity in open pit and underground mines
World leading productivity in open pit and underground mines Copper - Open Pit Mines* Zinc - Underground Mines* 35 4.0 Garpenberg 30 Aitik 3.5 3.0 Tonnes per manhour Tonnes per manhour 25 2.5 20 Tara Kevitsa 2.0 15 Boliden Area 1.5 10 1.0 5 0.5 - - - 20 40 60 80 100 120 140 160 - 2 4 6 8 10 Million
Slide 19: Enhanced cash cost position in zinc mines
Enhanced cash cost position in zinc mines Copper Mines Cash Cost (USc/lb) Zinc Mines Cash Cost (USc/lb) 400 150 350 Boliden Area 300 100 Tara 250 Garpenberg 200 Aitik 2021 150 50 Tara 100 Boliden Area Garpenberg 50 Aitik 2011 0 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 20% 40% 60% 80% 100% -5
Slide 20: Enhanced cost margin position in copper smelters
Enhanced cost margin position in copper smelters Copper Smelters Cash Margin (USc/lb) Zinc Smelters Cash Margin (USc/lb) 75 75 Rönnskär 2011 50 50 Harjavalta 2011 Rönnskär 2021 Kokkola 2021 Odda 2021 25 25 Harjavalta 2021 0 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70%
Slide 21: ESG is key in our purpose, vision and values
ESG is key in our purpose, vision and values CO2 Intensity 1.0 Q3 2022 0.8 ▪ Lost Time Injury* 6.7 (6.8) 0.6 ▪ Sick leave 4.6 (3.9) 0.4 ▪ Carbon dioxide intensity of 0.59 (0.64) 0.2 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 2020 2021 2022 *Per million hours worked, inclu
Slide 22: It starts with our people
It starts with our people ▪ A strong company culture as a foundation for safety and wellbeing ▪ Proactive risk management ▪ Best technology and processes available ▪ A 50% reduction in the accident rate over the past 10 years ▪ Aiming for zero workplace accidents GREEN BOND PRESENTATION 2022 22
Slide 23: Improved earnings through sustainable business practices
Improved earnings through sustainable business practices ▪ Stringent emission standards lower environmental risk ▪ Expertise in development methods for decommissioned mines ▪ Responsible operations through supply chain control ▪ Dialogs and long-term collaborations with local communities ▪ Ambitious
Slide 24: Responsible tailings management of highest priority
Responsible tailings management of highest priority ▪ Boliden is a member of the International Council on Mining and Metals (ICMM) ‒ Adherence to ICMM's principles to ensure a safe, fair, sustainable and transparent mining and metals industry ▪ We are committed to implement the Global Industry Stand
Slide 25: Roadmap to further strengthen our climate performance
Roadmap to further strengthen our climate performance ▪ Reduce CO2 intensity by 40% 2012-2030 ‒ 2012: 0.77 ‒ 2021: 0.66 ‒ Target 2030: 0.46 ▪ Net-zero carbon emissions in Scope 1 and 2* by 2050 ▪ We will achieve this by ‒ Increased electrification ‒ Optimized ventilation ‒ Energy efficiency ‒ Altern
Slide 26: Aitik dams
Aitik dams ▪ Static liquefaction need to be included ‒ Global tailings standard ▪ New geotechnical information ‒ Layers prone to static liquefaction detected ▪ Dams E-F and G-H affected ‒ Raising of dam and depositing stopped ▪ Continued production with deposits in other areas ‒ 24 months ▪ Need to
Slide 27: Dam section principle
Dam section principle GENERAL PRESENTATION POST Q3 2022 27
Slide 28: Low Carbon Zinc
Low Carbon Zinc 6.0 Zinc Mine Scope 1 & 2 Emissions Intensity 2021 5.0 4.0 t CO2e / t Zn 3.0 2.0 1.0 Garpenberg Tara ▪ Zn with a low carbon footprint, verified by 0.0 Boliden Area third party 0 2,000 4,000 6,000 Zinc (kt) 8,000 10,000 ▪ Produced from own zinc concentrate Zinc Smelter Scope 1 & 2 Emi
Slide 29: Boliden’s Green Metals
Boliden’s Green Metals ▪ Copper and zinc with low carbon footprint, verified by third party ▪ Produced from Boliden concentrates and recycled raw materials 4.5 >4 kg 4.0 ▪ All significant emission categories 3.5 3.6 kg kg CO2eq / kg metal from cradle-to-gate included 3.0 2.5 ▪ Well positioned compar
Slide 30: Electrifying the open pits
Electrifying the open pits ▪ Successful trolley expansion in Aitik ▪ Kevitsa trolley ramp-up ▪ Next steps supplemented by battery power ‒ Dynamic recharge with trolley ▪ Liikavaara ‒ Ambition to be fossil free satellite to Aitik Electric trolley line, Aitik GENERAL PRESENTATION POST Q3 2022 30
Slide 31: Electrifying the Boliden Area
Electrifying the Boliden Area ▪ Kristineberg extension – Boliden’s first fossil free mine ▪ 1.25 BSEK Capex ▪ Planned production start 2023 ‒ 200 kt increased annual milled volume from the Boliden Area ‒ Highly automated production ▪ Development of fossil free transports between mine and mill Batter
Slide 32: Odda 4.0 – leveraging existing advantages
Odda 4.0 – leveraging ▪ Leading environmental footprint 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 materials ‒ Scale, digitalizatio
Slide 33: Harjavalta Ni Expansion
Harjavalta Ni Expansion ▪ Nickel feed capacity from 310 to 370 ktonnes ▪ Lower CO2 intensity by up to 20% ▪ Improving safety by increasing automation ▪ Greater raw material flexibility ▪ Capex: 40 MEUR ▪ Production started Q4 2021 Harjavalta Ni Matte station GENERAL PRESENTATION POST Q3 2022 33
Slide 34: Rönnskär Leach Plant
Rönnskär Leach Plant ▪ Extracting additional value from intermediates ‒ 25 kt lead sulphate ‒ 25 kt copper/zinc sulphate ▪ 80% decrease in waste volume ▪ Unique underground repository solution below smelter ▪ Capex: 750 MSEK ▪ Production started Q2 2021 Rönnskär Leach Plant GENERAL PRESENTATION POST
Slide 35: Green Framework supporting Boliden’s climate roadmap
Green Framework supporting Boliden’s climate roadmap High level use of proceeds: ✓ Investments in Odda for the increased production of low carbon Zink ✓ Investments to improve energy efficiency and reduce pollution to water and air ✓ R&D including piloting of alternative reduction agents and CCS ✓ R
Slide 36: Second Party Opinion
Second Party Opinion ✓ Framework aligned with the Green Bond and Loan Principles “…minerals and metals are needed in ✓ Boliden has received an Excellent the clean energy transition that is necessary in a low carbon 2050 Governance score perspective” ➢ ”The excellent governance score reflects “…a typ
Slide 37: 2022 Capital Markets Day
2022 Capital Markets Day Boliden is pleased to invite investors, analysts Tuesday 15 November 2022 11.30 CET Registration, refreshments and exhibition and financial media to our Capital Markets 12.30 CET Presentations by Group Management: Day on Tuesday 15 November 2022 at IVAs Mikael Staffas, Presi
Slide 38: Boliden – Investment Case
▪ Stable value chain Boliden – Investment Case - Technical know-how - Mines and Smelters - Base metals and precious metals - High corporate responsibility - Stable jurisdictions ▪ Strong capability to deliver results - High productivity - Solid financials - Long cultural heritage - Own project devel
Slide 39: Outlook
▪ Aitik Outlook ‒ 2022: Cu 0.20 %, Au 0.10 g/tonne ‒ 2023: Cu 0.17 %, Au 0.07 g/tonne ▪ Garpenberg ‒ 2022: Zn 3.6 %, Ag 115 g/tonne ‒ 2023: Zn 3.6 %, Ag 100 g/tonne ‒ 2023: 3.3 Mtonnes milled production ▪ Kevitsa ‒ 2023: Grades slightly below average ‒ 2023: 10 Mtonnes milled production ▪ Maintenanc
Slide 40: 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 subject to ri