Boliden Ab · OMXSTO:BOL

Boliden Ab — Q1 2014 Earnings Presentation

34 slides from Boliden Ab's earnings presentation, May 6, 2014

  1. Slide 1: Interim report Q1 2014

    Interim report p Q1 2014 Lennart Evrell President & CEO Mikael Staffas CFO

  2. Slide 2: Summary Q1 2014

    Summary Q1 2014 R4Q,  Revenues 8 550 (9 249) MSEK MSEK MSEK 1 800 7 200  EBIT ex PIR* 385 (751) MSEK Quarterly EBIT excl PIR* 1 600 R lli Q EBIT Rolling EBIT, RHS 6 400 ‒ EBIT 265 (695) MSEK Rolling Q EBIT excl PIR*, RHS  Free Cash Flow -432 (-220) MSEK 1 400 5 600 1 200 4 800  Lower prices and

  3. Slide 3: Maturing economies compensate for slower growth in China

    Maturing economies compensate for slower growth in China  Global industry stable vs vs. Q4 ‒ Lower growth in China ‒ Improving in mature economies  Lower global Cu demand growth  Mine supply growth ‒ Limited in zinc ‒ High in copper  Benchmark TC ‒ Zn 223 (212) USD/ton ‒ Cu 92 (70) USD/ton  Spo

  4. Slide 4: Average zinc price increased

    Average zinc price increased 2 200 USD/t LME Inventory Shanghai Inventory Price Price Q avg USD/t Q2 Q3 Q4 Q1 5 000 1,8 2 100 Mi llions 4 500 1,6 2 000 1 900 4 000 1,4 1 800 3 500 1,2 1 700 3 000 1,0 1 600 2 500 0,8 1 500 02-apr 02-maj 02-jun 02-jul 02-aug 02-sep 02-okt 02-nov 02-dec 02-jan 02-feb 0

  5. Slide 5: Copper price decreased

    Copper price decreased Stabilised after drop in March 9 000 USD/t LME Inventory Shanghai Inventory COMEX Inventory Price Price Q avg USD/t Q2 Q3 Q4 Q1 11 000 1,6 8 500 Millions 10 000 8 000 1,4 9 000 7 500 1,2 8 000 7 000 7 000 1,0 6 500 6 000 0,8 5 000 6 000 02-apr 02-maj 02-jun 02-jul 02-aug 02-se

  6. Slide 6: Gold, silver and lead prices

    Gold, silver and lead prices Precious metals drop vs. Q1 13 USD/troy oz. 2 000 Gold USD/t 5 000 Lead 450 Thousands 1 800 4 500 400 1 600 4 000 350 1 400 3 500 300 1 200 3 000 250 1 000 2 500 200 800 2 000 600 150 1 500 400 100 1 000 200 50 500 0 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

  7. Slide 7: Mines

    Mines Boliden Group Q1 2014 7 2014-05-06

  8. Slide 8: Mines – Q1 2014

    Mines – Q1 2014  EBIT 147 (427) MSEK MSEK R4Q, MSEK ‒ 422 MSEK in Q4 2013 1 400 4 800  Capex 731 (802) MSEK Quarterly EBIT Rolling Q EBIT 1 200 4 200  Lower metal prices and terms 1 000 3 600 ‒ Definitive pricing 3 000  Lower metal production vs. Q4 800 2 400 ‒ Aitik – good Q1 vs. strong Q4 600

  9. Slide 9: Test production started in Garpenberg

    Test production started in Garpenberg  Start-up process ‒ Early test runs ‒ Progressed well ‒ Some issues  Test p production March  Trimming/rebuild April  Production start May  Production plan ‒ 2 Mton 2014 ‒ 2.5 Mton pace end 2015  On plan p ‒ Capex ‒ Slightly ahead of time Boliden Group Q1

  10. Slide 10: Mines – Production

    Mines – Production Milled ore, Copper Metal Milled ore, Zinc Metal mt content, kt mt content, kt 1,6 80 10 20 8 16 1,2 60 6 12 0,8 40 4 8 0,4 20 2 4 0 0 0,0 0 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 2011 2012 2013 2014 2011 2012 2013 2014 Milled ore (Aitik) Meta

  11. Slide 11: Smelters

    Smelters Boliden Group Q1 2014 11 2014-05-06

  12. Slide 12: Smelters – Q1 2014

    Smelters – Q1 2014 R4Q,  EBIT ex PIR* 199 (298) MSEK MSEK Quarterly EBIT excl PIR* MSEK 600 3 000 ‒ 149 MSEK in Q4 2013 Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, 500 RHS 2 500  Stable production  Lower costs 400 2 000  M t l and Metal d sulphuric l h i acidid prices i d down 300 1 500 vs. Q1

  13. Slide 13: Positive impact from action plan in Rönnskär

    Positive impact from action plan in Rönnskär Action plan  Process P stability t bilit ‒ Improved raw material planning ‒ Improved mix ‒ Changes in process control ‒ T ti process changes Testing h  Cost savings ‒ Costs for personnel including external ‒ Consumables Impact in Q1  Stable production

  14. Slide 14: Smelters – Production

    Smelters – Production Total feed, Metal Total feed, Cathode Zinc production, kt Copper kt production, kt kt 250 125 400 100 200 100 300 75 150 75 200 50 100 50 100 25 50 25 0 0 0 0 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 2011 2012 2013 2014 2011 2012 2013 2014 Z

  15. Slide 15: Financials

    Financials Boliden Group Q1 2014 15 2014-05-06

  16. Slide 16: Financial development – Summary

    Financial development – Summary MSEK Q1 2014 Q1 2013 Q4 2013 Revenues 8 550 9 249 8 653 EBITDA 989 1 377 1 212 EBIT 265 695 486 EBIT ex PIR 385 751 548 Investments 868 1 019 1 294 Free cash flow -432 -220 -206 Earnings per share, SEK 0.56 1.86 1.42 Net debt / equity ratio 40 27 38 Boliden Group Q1 2

  17. Slide 17: EBIT analysis Q1 vs. Q1

    EBIT analysis Q1 vs. Q1 Lower metal and sulphuric acid prices MSEK Q1 2014 Q1 2013 EBIT 265 695 Process inventory revaluation (PIR) -120 -56 EBIT excl. PIR 385 751 Deviation -365 Higher metal production, production Specification of deviation primarily Aitik Volume 255 Lower metal and sulphuric acid

  18. Slide 18: EBIT analysis Q1 vs. Q4

    EBIT analysis Q1 vs. Q4 Good production but lower than strong Q4 MSEK Q1 2014 Q4 2013 EBIT 265 486 Process inventory revaluation (PIR) -120 -62 EBIT excl. PIR 385 548 Deviation -162 Aitik strong Q4 Specification of deviation Tara rock conditions Volume -160 Prices and Terms (incl. hedges) -55 Final

  19. Slide 19: Cash flow

    Cash flow Seasonal increase in working capital MSEK Q1 2014 Q1 2013 Q4 2013 EBITDA including PIR* PIR 989 1 377 1 212 Inventories -190 -48 159 Payables -109 -157 -187 Receivables -122 -98 -3 Other 0 0 6 Changes in working capital -421 -303 -25 Cash flow from investments -874 -1 018 -1 295 Financial

  20. Slide 20: Capital structure

    Capital structure SEK bn 31 Mar 31 Dec Unless otherwise stated 2014 2013 MSEK % Total Asset 41.9 41.8 10 000 45 40 Capital employed 34.9 34.5 8 000 35 Shareholders' equity 23.1 23.1 6 000 30 25 Net debt 9.2 8.7 20 4 000 15 Gearing, g, % 40 38 2 000 10 Loan duration, years 2.4 2.6 5 0 0 Average inter

  21. Slide 21: Capex projection 2014 and 2015

    Capex projection 2014 and 2015 SEK bn 5 4 4 4 3 2 1 0 2014e 2015e Boliden Group Q1 2014 21 2014-05-06

  22. Slide 22: Project update

    Project update  Garpenberg test production in March  Silver recovery Kokkola test production in March  Decision to invest 600 MSEK as a first stepp towards Aitik 45 Mtonnes Boliden Group Q1 2014 22 2014-05-06

  23. Slide 23: Aitik45

    Aitik45  Decision to invest 600 MSEK 2014-2015, primarily for ‒ Crusher at surface ‒ Water management ‒ Electricity supply ‒ Smaller de-bottlenecking  A first step to enable 45 mton/y  Mine plan ‒ Reserves 1 085 (633) mton ‒ Life of mine 2040 ‒ Average reserve grade ‒ Cu 0,22 (0,24) % ‒ Au 0,14 (

  24. Slide 24: Summary going forward

    Summary going forward  Aitik ‒ Decision to invest 600 MSEK as a step to increase Aitik’s production to 45 Mtonnes ‒ Low grades through 2014, average reserve grade 2015-2016  Garpenberg ‒ Production start in May ‒ 2 Mton production plan 2014 ‒ 2,5 ,5 Mton to pace e endd 2015 0 5  Kokkola ‒ Silver

  25. Slide 25: Disclaimer

    Disclaimer  This presentation has been prepared by Boliden for information purposes only and as per the y obligation indicated date. Boliden does not undertake any g to correct or update p the information or any statements made therein. Certain statements in this presentation are forward-looking an

  26. Slide 26: Unit/Operation choose tab Insert/Header & F t

    Unit/Operation choose 26 tab Insert/Header & 2014-05-06 F t

  27. Slide 27: Appendix

    Appendix Boliden Group Q1 2014 27 2014-05-06

  28. Slide 28: Construction

    Construction Largest segment for Cu and Zn Activity, year on year % US housing starts and construction sentiment M units annual rate NAHB index 40 1,2 70 US Housing starts 30 US home builders sentiment 60 1,0 20 50 08 0,8 10 40 0,6 0 30 0,4 ‐10 20 EU27 construction IP 0,2 ‐20 0 10 USA - construction

  29. Slide 29: Economic development

    Economic development GDP growth, year on year % Industrial production, year on year % 14 25 China World 12 20 USA EU27 10 15 8 10 6 5 4 0 2 ‐5 0 ‐10 China World ‐2 USA EU27 ‐4 ‐15 ‐6 ‐20 Latest data: China Q1 2014, USA, EU27 and World Q4 2013 Latest data: China and USA March, World & EU27 February ‐

  30. Slide 30: Automotive

    Automotive Year on year % China - production of passenger cars 120 USA - IP Automobile & light duty motor vehicle 100 Europe - production light vehicles 80 60 40 20 0 -20 -40 -60 Latest data: Q1 2014 -80 2009 2010 2011 2012 2013 2014 Source: Reuters Datastream, European data from LMC Automotive Boli

  31. Slide 31: Market balance

    Market balance Zinc – global market Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Demand 2.3% 3.0% 3.7% 4.8% 6.0% Smelter production 1 2% 1.2% 4 4% 4.4% 8 2% 8.2% 3 7% 3.7% 4 5% 4.5% Metal balance, kt 42 27 -2 48 -8 Mine production 2.3% 0.2% 1.3% 0.9% -0.3% Concentrate balance,, kt -77 140 122 17 -154 Cop

  32. Slide 32: Zinc TC and premiums

    Zinc TC and premiums US$/t concentrate Treatment charges US$/t metal Metal premia 250 250 200 200 150 150 100 100 50 50 0 0 2011 2012 2013 2014 2011 2012 2013 2014 Delivered Premia US Midwest Ex-Works Premia Europe Spot TC outturn R li d contract Realised t t TC (i (incl.price l i participation) ti

  33. Slide 33: Copper TC and premiums

    Copper TC and premiums US$/t Treatment charges Metal premia concentrate US$/t metal 140 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 2011 2012 2013 2014 2011 2012 2013 2014 Standard grade spot TC Spot Copper premium CIF W. Europe Benchmark CIF Europe C t t TC - annuall and Contract d mid-year id

  34. Slide 34: Boliden Group

    i : aL a supsengeratOU UOYTEN UOVOEY Tai VY co SMUT EUEVOT TVET (TEL LS TT Metals for

Boliden — Q1 2014 Earnings Presentation on 6ix