Interim report Q3 2014

Transcription

1 Interim report Q3 214 Lennart Evrell President & CEO Mikael Staffas CFO

2 Summary Q3 214 Revenues (8 471) MSEK EBIT ex PIR* 711 (63) MSEK EBIT 858 (681) MSEK MSEK 1,8 1,6 Quarterly EBIT excl PIR* Rolling Q EBIT, RHS R4Q, MSEK 7,2 6,4 Free Cash Flow 728 (436) MSEK 1,4 Rolling Q EBIT excl PIR*, RHS 5,6 1,2 4,8 Higher zinc prices and TC 1, 4, Weaker SEK 8 3,2 Low grade Aitik 6 2,4 Production ramp-up Garpenberg 4 1,6 Odda at full production 2 8 Internal profit -95 (-27) MSEK * PIR=Process Inventory Revaluation Boliden Group Q

3 Firm metals demand but weaker macro Macro Lower global economic growth Uncertainties going forward Metals markets Metals demand firm, Zn prices up Metals; Zn deficit, Cu in balance Concentrates; Zn surplus, Cu in balance Exchange rates Weaker SEK and stronger USD Boliden Group Q

4 Market balance Zinc global market Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Metals demand 2.9% 2.8% 2.5% 2.9% 2.7% Smelter production 8.5% 4.%.2% 1.5% 1.5% Metal balance, kt Mine production 1.7%.5% -3.6% -4.7% 3.5% Concentrate balance, kt Copper global market Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Metals demand 6.6% 9.% 2.9% 4.1% 4.2% Smelter production 3.1% 3.6% 2.5% 6.% 4.% Metal balance, kt Mine production (concentrates) 1.1% 12.9% 5.5% 4.2% -2.8% Concentrate balance, kt Zn mine disruptions first half, normalized in Q3 Cu mine production compared with a strong Q3 213 Firm metals demand Source: CRU Sept and Oct 214, Boliden calculations Boliden Group Q3 214

5 Currencies USD/SEK EUR/USD Boliden Group Q

6 USD/t Zinc price up USD/t Price Price Q avg 5, 4,5 2,5 2,4 2,3 Q3 Q4 Q1 Q2 Q3 4, 2,2 2,1 3,5 2, 3, 1,9 1,8 2,5 1,7 1,6 2, 1,5 Jul/13 Oct/13 Jan/14 Apr/14 Jul/14 Oct/14 1,5 1, Average price in Q3 vs period Q2-14 Q1-14 Q4-13 Q % +14% +21% +24% Boliden Group Q

7 USD/t Copper price stable USD/t Price Price Q avg 11, 1, 9, 8,5 Q3 Q4 Q1 Q2 Q3 9, 8, 8, 7, 7,5 6, 7, 5, 6,5 4, 3, 2, 1, , Jul/13 Oct/13 Jan/14 Apr/14 Jul/14 Oct/14 Average price in Q3 vs period Q2-14 Q1-14 Q4-13 Q % -1% -2% -1% Boliden Group Q

8 Gold, silver and lead prices stable USD/troy oz. 2, 1,8 1,6 1,4 1,2 1, Gold USD/troy oz Silver USD/t 5, Lead 4,5 4, 3,5 3, 2,5 2, 1,5 1, Average price in Q3 vs period Q2-14 Q1-14 Q4-13 Q3-13 Gold % -1% +1% -3% Silver +1% -4% -5% -7% Lead +4% +4% +3% +4% Boliden Group Q

9 Mines Boliden Group Q

10 Mines Q3 214 EBIT 355 (372) MSEK 336 MSEK in Q2 214 Capex 63 (947) MSEK 1,6 1,2 MSEK Quarterly EBIT Rolling Q EBIT R4Q, MSEK 4,8 3,6 Higher zinc prices and weaker SEK Negative TC development 8 2,4 Low grade Aitik Higher zinc and silver production 4 1,2 Production ramp-up Garpenberg Ore mix change Boliden area Increased depreciation Production start Garpenberg Aitik Union agreement in Tara Boliden Group Q

11 Mines Production Milled ore, mt 12 Copper Metal content, kt 24 Milled ore, mt 1.8 Zinc Metal content, kt Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Milled ore (Aitik) Metal content Milled ore Zinc metal content Aitik lower grade Boliden Area negative ore mix Garpenberg ramp up Tara unplanned stop and low grade Boliden Area positive ore mix Boliden Group Q

12 Smelters Boliden Group Q

13 Smelters Q3 214 EBIT ex PIR* 464 (262) MSEK 174 MSEK in Q MSEK Quarterly EBIT excl PIR* Rolling Q EBIT, RHS R4Q, MSEK 2,7 7 Rolling Q EBIT excl PIR*, RHS 2,1 Stronger USD 5 1,5 Higher zinc prices TC 3 9 Free metals Lower costs 1 3 Rönnskär actions on plan Full production Odda Maintenance shutdowns -85 (-25) MSEK Leaching tank accident Kokkola -5 MSEK * PIR=Process Inventory Revaluation Boliden Group Q

14 Smelters Production Total feed, kt 4 Copper Cathode production, kt 12 Total feed, kt 24 Zinc Metal production, kt Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Copper feed, total Cathode production Zinc feed, total Zinc metal production Delayed deliveries of concentrates Maintenance shutdown in Rönnskär Lower secondary feed Leaching tank accident in Kokkola Odda All leaching tanks in place Boliden Group Q

15 Financials Boliden Group Q

16 Financial development Summary MSEK Q3 214 Q3 213 Q2 214 Revenues EBITDA EBIT EBIT ex PIR Investments Free cash flow Earnings per share, SEK Net debt / equity ratio Boliden Group Q

17 EBIT analysis Q3 vs. Q3 Favorable currencies, higher zinc prices and lower production MSEK Q3 214 Q3 213 EBIT Process inventory revaluation (PIR) EBIT excl. PIR Deviation 18 Specification of deviation Volume -197 Prices and Terms 522 Lower grade Aitik Accident Kokkola Lower secondary feed Ramp-up Garpenberg positive Currencies and zinc prices Whereof currency effects 242 Costs 14 Depreciation -142 Internal profit -68 Other -2 Garpenberg start Aitik push back Internal profit -95 (-27) MSEK Deviation 18 Boliden Group Q

18 EBIT analysis Q3 vs. Q2 Lower costs, improved prices and terms, lower production MSEK Q3 214 Q2 214 EBIT Process inventory revaluation (PIR) EBIT excl. PIR Deviation 337 Specification of deviation Volume -272 Prices and Terms (incl. hedges) 313 Whereof currency effects 198 Costs 346 Depreciation -32 Internal profit -11 Other -7 Grade Aitik Accident Kokkola Secondary feed mix Currencies and zinc prices Less maintenance Lower mine production Rönnskär action plan Seasonal effects Garpenberg production start Aitik push back Deviation 337 Boliden Group Q

19 Cash flow Higher EBITDA and lower investments MSEK Q3 214 Q3 213 Q2 214 EBITDA including PIR PIR adjustment Inventories Payables Receivables Other -9 Changes in working capital Cash flow from investments Financial items Tax paid Other incl. translation differences Free cash flow In Q3 213, PIR was included in the item Inventories. Boliden Group Q

20 Capital structure SEK bn Unless otherwise stated 3 Sept June 214 Total Asset Capital employed Shareholders' equity Net debt Gearing, % Loan duration, years Average interest rate, % Interest duration, years.6.7 Net payment capacity MSEK Net debt Gearing 1, 8, 6, 4, 2, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q % Boliden Group Q

21 No 1 annual report Concise, dense, well-structured and well-balanced document. Reports most outstandingly on strategic aspects often unclear or even neglected in many annuals: market and pricing trends (and cyclical patterns), market and cost position, income model, business process Boliden Group Q

22 Project update Garpenberg Ramping up Silver recovery Kokkola Initial production in Q2, limited production Q3 Aitik45 Aitik45 permit granted Early stage on budget and on time Laver Exploitation concession application submitted in Q3 Boliden Group Q

23 Summary going forward Aitik Below average reserve grades 214 Garpenberg 2.1 Mton production plan Mton pace end 215 Tara Implementation of new organisation Kylylahti Consolidated from Q4 214 Kokkola silver project Full production from November 214 Rönnskär Action plan under implementation Capex 214 Lower than previous guidance Boliden Group Q

24 Welcome to Capital Markets Day 1-11 November 214 Monday 1 November 12.3 Registration, buffet lunch and Exhibition 9 years of knowledge 13.3 Presentations by Strategy and market Lennart Evrell Corporate Responsibility Henrik Östberg Mines update Jan Moström Smelters update Kerstin Konradsson Financial update Mikael Staffas 18. Dinner and Exhibition Tuesday 11 November Garpenberg Mine site visit More info posted on Boliden Group Q

25 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 risks and uncertainties. Nothing contained herein shall constitute any representation or warranty as to accuracy or completeness. Boliden has not made any independent verification of the information obtained from third parties. Nothing in this material shall be construed as an offer or solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. Boliden does not accept any liability whatsoever arising from or in connection with the use of this information. Save as by prior approval in writing, this material may not be copied, transmitted or disclosed, whether in print, electronic or any other format. All rights to the material are reserved. Boliden Group Q

26 Boliden Group 26 Q3 214

27 Appendix Boliden Group Q

28 Economic development GDP growth, year on year % Industrial production, year on year % 2 USA China USA China 1 EU27 World 15 EU27 World Data: Q2 214 USA, Europe, Q3 214 China Data: August, China September, Boliden estimates for certain countries/regions to calculate August world data Source: Reuters Datastream, Boliden calculations for world data Source: Reuters Datastream, Boliden calculations for world data Boliden Group Q

29 Construction Largest segment for Cu and Zn Activity, year on year % 4 3 EU27 construction IP USA - construction expenditure China - fixed assets investment China: year on year based on cumulative investments at each point Source: Reuters Datastream Boliden Group Q

30 Automotive Production of light vehicles, year on year % China North America 3 Europe Global Latest data: Q Source: Reuters Datastream, data USA and Europe LMC Automotive Boliden Group Q

31 Zinc TC and premiums US$/t concentrate Treatment charges US$/t metal Metal premias Spot TC China imports Realized, annual European contract Ex-Works Premia Europe Delivered Premia US Midwest Premia Far East - Western Spot and contract TCs up, more concentrates available European premia softer Source: CRU Sept and Oct 214 Boliden Group Q

32 Copper TC and premiums US$/t concentrate Treatment charges US$/t concentrate Metal premias Contract TC - annual and mid-year benchmark Standard grade spot TC Spot Copper premium CIF W. Europe Benchmark CIF Europe Contract benchmark according to market sources including CRU Contract benchmark according to market sources including CRU Balanced concentrate market but higher availability in spot market Spot premium down Source: CRU Sept and Oct 214 Boliden Group Q

33 Boliden Group Q