Q3 Interim Report 216 Lennart Evrell President & CEO Håkan Gabrielsson CFO
Strong earnings and high mine production Revenues 9,733 (9,764) MSEK EBIT ex PIR* 1,318 (1,55) MSEK EBIT 1,529 (88) MSEK Free Cash Flow 91 (953) MSEK MSEK 1 8 1 6 1 4 1 2 1 R4Q, MSEK 7 2 6 4 5 6 4 8 4 Improved market terms High production Mines Production disturbances zinc smelters Maintenance shutdowns in Smelters -5 (-85) MSEK Higher inventories Smelters 8 6 4 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 211 212 213 214 215 216 Quarterly EBIT excl PIR* Rolling 4Q EBIT Rolling Q EBIT excl PIR* 3 2 2 4 1 6 8 * PIR=Process Inventory Revaluation Boliden Group Q3 216 2 216-1-2
Market Slow demand growth, supply driven market Macro Low industrial production growth Base metals markets Cu, Zn demand growing slowly Stronger Ni demand Zn mine supply down, smelter supply down slightly Continued growth in Cu mine supply Ni supply down Boliden Group Q3 216 3 216-1-2
Zinc price Zinc price, USD/t 5 KTonnes 2 USD/t 2 6 Q3 Q4 Q1 Q2 Q3 2 4 4 1 6 2 2 2 3 1 2 1 8 1 6 2 8 1 4 jul-15 okt-15 jan-16 apr-16 jul-16 okt-16 1 26 26272728 28 29 292121211211212 212 213 213 214 214 215 215 216 216 LME inventory Shanghai inventory Price Price Q avg 4 Average price in Q3 vs. period Q2-16 Q1-16 Q4-15 Q3-15 18% 34% 4% 22% Note: Prices until 11 October 216 Boliden Group Q3 216 4 216-1-2
Copper price Copper price, USD/t 12 KTonnes 2 4 USD/t 7 Q3 Q4 Q1 Q2 Q3 1 2 6 5 6 8 1 6 5 5 5 6 1 2 4 5 4 8 4 jul-15 okt-15 jan-16 apr-16 jul-16 okt-16 2 26 26272728 282929212121121121221213213214214215215216 216 LME inventory COMEX inventory Shanghai inventory Price Price Q avg 4 Average price in Q3 vs. period Q2-16 Q1-16 Q4-15 Q3-15 1% 2% -2% -9% Note: Prices until 11 October 216 Boliden Group Q3 216 5 216-1-2
Nickel price Nickel price, USD/t 6 KTonnes 6 USD/t 13 Q3 Q4 Q1 Q2 Q3 5 5 12 11 4 4 1 9 3 3 8 7 2 2 6 jul-15 okt-15 jan-16 apr-16 jul-16 okt-16 1 1 Average price in Q3 vs. period 26 262727282829 29 21 21 211 211 212 212 213 213 214 214 215 215 216 216 LME inventory Price Price Q avg Q2-16 Q1-16 Q4-15 Q3-15 16% 21% 9% -3% Note: Prices until 11 October 216 Boliden Group Q3 216 6 216-1-2
Zinc, copper and nickel prices Normal C1 Zinc Normal C1 Copper Normal C1 Nickel USD/ton 5 5 USD/ton 11 11 USD/ton 35 35 4 5 4 5 1 1 4 4 9 9 3 3 3 5 3 5 8 8 25 25 3 2 5 3 2 5 7 6 7 6 2 2 2 1 5 2 1 5 5 4 3 5 4 3 15 1 15 1 1 5 1 5 2 1 2 1 5 5 Zn average price Zn min price 75th perc Zn max price 5th perc 9th perc Cu average price Cu min price 75th perc Cu max price 5th perc 9th perc Ni average price Ni min price 75th perc Ni max price 9th perc 5th perc Source: Wood Mackenzie October 216, Thomson Reuters Datastream Boliden Group Q3 216 7 216-1-2
Gold, silver and lead prices Gold price, USD/troy oz. 2 Gold 1 8 1 6 1 4 1 2 1 8 6 4 2 26 2627 27 28 28 29 29 21 21 211 211 212 212 213 213 214 214 215 215 216 216 Silver price, USD/troy oz. 6 5 4 3 2 1 Silver Lead price, USD/t 5 Lead 4 5 4 3 5 3 2 5 2 1 5 1 5 26 26 27 27 28 28 29 29 21 21 211 211 212 212 213 213 214 214 215 215 216 216 Average price in Q3 vs. period Q2-16 Q1-16 Q4-15 Q3-15 Gold 6% 13% 21% 19% Silver 17% 32% 33% 32% Lead 9% 7% 11% 9% 26 2627 27 28 28 29 29 21 21 211 211 212 212 213 213 214 214 215 215 216 216 Note: Prices until 11 October 216 Boliden Group Q3 216 8 216-1-2
Boliden market term index Boliden Group Q3 216 9 216-1-2
Mines Boliden Group Q3 216 1 216-1-2
Mines Strong quarter with high production EBIT 84 (26) MSEK 621 MSEK in Q2 216 Capex 748 (563) MSEK MSEK 1 2 1 8 R4Q, MSEK 4 8 4 3 2 Higher metal prices High production in most mines Kevitsa positive EBIT Good cost control 6 4 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 211 212 213 214 215 216 2 4 1 6 8 Quarterly EBIT Rolling 4Q EBIT Boliden Group Q3 216 11 216-1-2
Mines Production Milled ore, mt 12 Copper Metal content, kt 3 Milled ore, mt 2, Zinc Metal content, kt 1 1 25 1,6 8 8 6 2 15 1,2 6 4 1,8 4 2 5,4 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 213 214 215 216 Milled ore Metal content pro forma** Metal content 213 214 215 216 Milled ore Metal content Nickel Milled ore, kt Metal content, kt 2 8 3,5 2 4 3, 2 2,5 1 6 2, 1 2 1,5 8 1, 4,5, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 213 214 215 216 Milled ore pro forma* Milled ore Metal content pro forma** Metal content High production Aitik low crusher availability Boliden Area high milling, less favorable ore mix Garpenberg stable and high production Kevitsa high milled volume Kylylahti record milled production Tara stable production, high milled volume (*) Milled ore incl Kevitsa (**) Metal content incl Kevitsa Boliden Group Q3 216 12 216-1-2
Smelters Boliden Group Q3 216 13 216-1-2
Smelters Production disturbances at zinc smelters EBIT ex PIR* 613 (825) MSEK 397 MSEK in Q2 216 Capex 28 (315) MSEK 1 1 MSEK 9 R4Q, MSEK 3 3 2 7 7 2 1 Improved market terms Higher Zn TC vs Q2 Production disturbances zinc smelters Maintenance shutdowns -5 (-85) MSEK -21 MSEK in Q2 Higher inventories 5 3 1-1 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 211 212 213 214 215 216 Quarterly EBIT excl PIR* Rolling 4Q EBIT Rolling 4Q EBIT excl PIR* 1 5 9 3-3 * PIR=Process Inventory Revaluation Boliden Group Q3 216 14 216-1-2
Smelters Production Total feed, kt 4 Copper Metal production, kt 12 Total feed, kt 25 Zinc Metal production, kt 15 35 3 15 9 2 12 25 75 15 9 2 15 6 45 1 6 1 5 3 15 5 3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 213 214 215 216 Feed, total Metal production Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 213 214 215 216 Feed, total Metal production Stable processes at Harjavalta Maintenance shutdowns at Rönnskär Production disturbances Lower recoveries at Kokkola High feed in Odda Odda P2 test runs, project ahead of plan Boliden Group Q3 216 15 216-1-2
Financials Boliden Group Q3 216 16 216-1-2
Strong earnings Financial development MSEK Q3 216 Q3 215 Q2 216 Revenues 9 733 9 764 9 596 EBITDA 2 653 1 746 1 94 EBIT 1 529 88 912 Process inventory revaluation (PIR) 211-175 11 EBIT ex PIR 1 318 1 55 91 EBIT ex PIR pro forma 1 67 885 Investments 1 28 88 956 Acquisitions - - 5 979 Free cash flow 91 953-4 794 Earnings per share, SEK 4,15 2,36 2,26 Net debt / equity ratio 4 24 43 Boliden Group Q3 216 17 216-1-2
Q3 vs. Q3, Higher metal prices & production Mines EBIT excl. PIR pro forma* MSEK Q3 216 1,318 Q3 215 - pro forma 1,67 Deviation 251 Specification of deviation Volumes 164 Prices and Terms (incl. hedges) 59 Whereof currency effects 23 Costs -183 Depreciation -222 Items affecting comparability - Other -18 Deviation 251 Higher milled volume Mines Production disturbances Smelters Lower free metals Higher metal prices Higher volume Mines Production disturbances Smelters Higher volume Mines Aitik capital intensive areas Kevitsa *The comparison period includes Kevitsa that was acquired 1 June 216 Boliden Group Q3 216 18 216-1-2
Q3 vs. Q2, Higher metal prices and lower costs EBIT excl. PIR pro forma* MSEK Q3 216 1,318 Q2 216 - pro forma 885 Deviation 433 Specification of deviation Volumes -145 Prices and Terms (incl. hedges) 597 Whereof currency effects 89 Costs 36 Depreciation -9 Items affecting comparability -29 Other -26 Deviation 433 Less favorable ore mix Boliden Area Internal profit elimination Higher metal prices Seasonally lower costs Less maintenance Smelters Higher reclamation previous quarter Kevitsa Pensions Tara Q2 Acquisition costs Kevitsa Q2 *The comparison period includes Kevitsa that was acquired 1 June 216 Boliden Group Q3 216 19 216-1-2
Free cash flow impacted by inventory build-up Free cash flow MSEK Q3 216 Q3 215 Q2 216 EBITDA excluding PIR 2 442 1 921 1 929 Changes in working capital -1 117 36 837 Inventories -87-5 368 Payables -152 443 71 Receivables -151 92-233 Other -7 1 Cash flow from investments -981-879 -944 Cash flow from acquisitions -5 943 Financial items* -75-51 -95 Tax paid -125-69 -38 Other -54-5 -269 Free cash flow 91 953-4 794 Free cash flow excl. Kevitsa acquisition 91 953 1 148 * Q2 216 includes -39 MSEK cost for Kevitsa bridge financing Boliden Group Q3 216 2 216-1-2
Balance sheet SEK bn (Unless otherwise stated) 3 Sep 216 3 Jun 216 Total Assets 51.7 5.4 Capital employed 42.1 4.6 Shareholders' equity 27.6 26.2 Net debt 11.1 11.2 Gearing, % 4 43 Loan duration, years 3.4 3.6 Average interest rate, % 1.2 1.2 Interest duration, years.2.4 Net payment capacity 5.5 5.1 MSEK Net debt Gearing 12 1 8 6 4 2 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 212 213 214 215 216 % 45 4 35 3 25 2 15 1 5 Boliden Group Q3 216 21 216-1-2
Going forward Well positioned in the metal market Metal prices low macro visibility Mines Aitik: volatile production, Cu.21% (216),.25% (217-219) Garpenberg: Zn 4.5%, Ag 12 g/ton (until FY 217) Tara: lower Zn grade in Q4 vs Q3 Kevitsa & Boliden Area: soft ore Q3 Smelters No planned maintenance Q4 Odda P2: ahead of plan, ramp-up continues Q4 Capex 216: slightly above 4 BSEK 217: 5 BSEK Boliden Group Q3 216 22 216-1-2
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 Q3 216 23 216-1-2
Boliden Group Q3 216 24 216-1-2
Appendix Boliden Group Q3 216 25 216-1-2
Market balance zinc and copper Zinc global market Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Metals demand, kt 3 316 3 36 3 361 3 316 3 329 3 345 3 42 3 38 Year on year change % -1% -1% % % 1% 2% 2% Smelter production, kt 3 514 3 349 3 489 3 396 3 453 3 27 3 38 3 335 Year on year change 5% 7% 7% 1% -2% -2% -3% -2% Mine production, kt 3 349 2 881 3 328 3 252 3 14 2 632 2 91 2 916 Year on year change 9% 4% 4% 2% -1% -9% -13% -1% Metal balance, kt 198 43 128 8 124-75 -4-45 Concentrate balance, kt 82-231 85 113-188 -394-222 -159 Copper global market Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Metals demand, kt 5 539 5 2 5 489 5 529 5 78 5 67 5 583 5 585 Year on year change 3% % % 1% 3% 1% 2% 1% Smelter production, kt 5 584 5 46 5 518 5 558 5 631 5 567 5 671 5 684 Year on year change 7% 4% 3% % 1% 3% 3% 2% Mine production, kt 3 424 3 599 3 828 3 793 3 936 3 869 4 5 3 958 Year on year change -2% -1% 4% 2% 15% 8% 6% 4% Metal balance, kt -75 297-51 -73-18 35 38 99 Concentrate balance, kt -359-145 45-78 -65-95 36-37 Source: CRU September, October 216, Boliden calculations Boliden Group Q3 216 26 216-1-2
Market balance nickel and lead Nickel - global market Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Metals demand, kt 451 476 479 465 471 487 515 492 Year on year change -3% % -3% -1% 4% 2% 7% 6% Smelter production, kt 511 473 497 486 493 468 488 473 Year on year change -4% -5% 3% -5% -3% -1% -2% -3% Mine production, kt 452 452 545 558 492 448 519 548 Year on year change -34% 5% 4% 4% 9% -1% -5% -2% Metal balance, kt 59-3 18 22 23-19 -27-18 Lead - global market Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Metals demand, kt 2 852 2 75 2 734 2 818 2 934 2 775 2 88 2 866 Year on year change 1% % % 2% 3% 3% 3% 2% Smelter production, kt 2 852 2 75 2 734 2 818 2 934 2 775 2 88 2 866 Year on year change % -1% -1% 2% 3% 3% 3% 2% Mine production, kt 1 314 1 45 1 186 1 266 1 276 1 51 1 139 1 215 Year on year change 1% -4% -1% 1% -3% 1% -4% -4% Metal balance, kt 17-2 12 24 12 18 7 Concentrate balance, kt 119-131 16 133 139-187 -67 43 Source: CRU September, October 216, Boliden calculations Boliden Group Q3 216 27 216-1-2
Economic development Industrial production, year on year % 25 2 15 1 5-5 J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D 212 213 214 215 216 EU28 USA China World Source: Thomson Reuters Datastream, Boliden calculations for world data Boliden Group Q3 216 28 216-1-2
Construction largest segment for Cu and Zn Activity, year on year % 3 25 2 15 1 5-5 -1-15 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 212 213 214 215 216 EU USA China China: year on year based on cumulative investments at each point Source: Reuters Datastream Boliden Group Q3 216 29 216-1-2
Automotive Production of light vehicles, year on year, quarterly data 35% 3% 25% 2% 15% 1% 5% % -5% -1% -15% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 212 213 214 215 216 Europe USA China World Source: LMC Automotive Boliden Group Q3 216 3 216-1-2
China metals demand and economic growth Year on year growth % 18 16 14 12 1 8 6 4 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 21 211 212 213 214 Source: CRU Ltd, Thomson Reuters Datastream Zinc demand Copper demand GDP Industrial production Boliden Group Q3 216 31 216-1-2
Zinc TC and premia US$/t concentrate 3 Treatment charges US$/t metal 25 Metal premia 25 2 2 15 15 1 1 5 5 212 213 214 215 216 212 213 214 215 216 Realized TC - European contract Spot TC, China imports Delivered Premia US Midwest Premia Far East - Western Ex-Works Premia Europe Concentrate market tight, metal market fairly balanced Spot TCs in China down Higher Zn price, realized contract TC up Stable premia in Europe Source: CRU September 216 Boliden Group Q3 216 32 216-1-2
Copper TC and premia US$/t concentrate 14 12 1 8 6 4 2 Treatment charges 212 213 214 215 216 Contract TC - annual and mid-year benchmark Standard grade spot TC US$/t metal Metal premia 16 14 12 1 8 6 4 2 212 213 214 215 216 USD tonne Contract benchmark according to market sources including CRU Contract benchmark according to market sources including CRU Mine production ramp-up Spot TCs stable Spot premia up slightly from low level Source: CRU September 216 Boliden Group Q3 216 33 216-1-2
Boliden Group Q3 216 34 216-1-2