Q3 215 Interim Report Lennart Evrell President & CEO Mikael Staffas CFO
Robust cash flow and strong quarter for Smelters Revenues 9,764 (9,287) MSEK EBIT ex PIR* 1,55 (711) MSEK EBIT 88 (858) MSEK Free Cash Flow 953 (728) MSEK MSEK 1 8 1 6 1 4 1 2 R4Q, MSEK 7 2 6 4 5 6 4 8 Sharp fall in metal prices vs Q2 Continued favorable currencies Strong result Smelters Production disturbances Aitik Strong cash flow 1 8 6 4 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 3 2 2 4 1 6 8 21 211 212 213 214 215 Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS * PIR=Process Inventory Revaluation Boliden Group Q3 215 2 215-1-23
Prices down, mine cutbacks Macro Soft global market Level of economic development in China uncertain Base metals markets Mine supply growth in copper Zinc mines closures Increase in official stocks Metal prices down Zn and Cu close to 9 th percentile cash cost Mine production cutbacks announced Boliden Group Q3 215 3 215-1-23
Zinc and copper price vs cash cost USD/ton 5 Normal C1 Zinc 5 USD/ton 11 Normal C1 Copper 11 45 45 1 1 4 4 9 9 35 35 8 8 3 3 7 7 25 2 15 25 2 15 6 5 4 3 6 5 4 3 1 1 2 2 5 5 1 1 Zn average price Zn max price Zn min price 5th perc 75th perc 9th perc Cu average price Cu max price Cu min price 5th perc 75th perc 9th perc Source: Wood Mackenzie Q3 215, Reuters Datastream Boliden Group Q3 215 4 215-1-23
Boliden market term index Boliden Group Q3 215 5 215-1-23
Favourable currencies vs 1 year ago Note: Graph shows period 1 January 25 until 15 October 215. Boliden Group Q3 215 6 215-1-23
Zinc price Zinc price, USD/t 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 25 26 27 28 29 21 211 212 213 214 215 LME inventory Shanghai inventory Price Price Q avg Tonnes 1,8, 1,6, 1,4, 1,2, 1,, 8, 6, 4, 2, USD/t Q3 Q4 Q1 Q2 Q3 2 5 2 4 2 3 2 2 2 1 2 1 9 1 8 1 7 1 6 1 5 jul-14 okt-14 jan-15 apr-15 jul-15 okt-15 Average price in Q3 vs period Q2-15 Q1-15 Q4-14 Q3-14 -16% -11% -17% -2% Boliden Group Q3 215 7 215-1-23
Copper price Copper price, USD/t 12 Tonnes 1 8 USD/t 7 5 Q3 Q4 Q1 Q2 Q3 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 215 LME inventory COMEX inventory Shanghai inventory Price Price Q avg 1 6 1 4 1 2 1 8 6 4 2 7 6 5 6 5 5 5 4 5 jul-14 okt-14 jan-15 apr-15 jul-15 okt-15 Average price in Q3 vs period Q2-15 Q1-15 Q4-14 Q3-14 -13% -1% -21% -25% Boliden Group Q3 215 8 215-1-23
Gold, silver and lead prices Gold price, USD/troy oz. 2 1 8 1 6 1 4 1 2 1 8 6 4 2 Gold 25 2526 2627 27 28 28 29 29 21 21 211 211 212 212 213 213 214 214 215 215 Silver price, USD/troy oz. 6 5 4 3 2 Silver Lead price, USD/t 5 Lead 4 5 4 3 5 3 2 5 2 1 5 1 5 25 25 26 26 27 27 28 28 29 29 21 21 211 211 212 212 213 213 214 214 215 215 Average price in Q3 vs period Q2-15 Q1-15 Q4-14 Q3-14 Gold -6% -8% -6% -12% Silver -9% -11% -1% -25% Lead -12% -5% -14% -21% 1 25 25 26 26 27 27 28 28 29 29 21 21 211 211 212 212 213 213 214 214 215 215 215 Boliden Group Q3 215 9 215-1-23
Mines Boliden Group Q3 215 1 215-1-23
Mines Lower market terms & production disturbances EBIT 26 (355) MSEK 657 MSEK in Q2 215 Capex 563 (63) MSEK MSEK 1 6 1 4 1 2 R4Q, MSEK 4 8 4 2 3 6 Lower metal prices Production disturbances Aitik Continued strong performance in Garpenberg 1 8 6 4 2 3 2 4 1 8 1 2 6 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 21 211 212 213 214 215 Quarterly EBIT Rolling Q EBIT Boliden Group Q3 215 11 215-1-23
Mines Production Milled ore, mt 12 Copper Metal content, kt 24 Milled ore, mt 1,8 Zinc Metal content, kt 9 1 2 1,5 75 8 16 1,2 6 6 12,9 45 4 8,6 3 2 4,3 15 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 212 213 214 215 Milled ore Metal content, Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 212 213 214 215 Milled ore Metal content Aitik production disturbances, higher grade Kylylahti lower grade Boliden Area increased slag production Garpenberg lower grade, unfavorable rock conditions Tara low milled tonnage Boliden Area increased slag production Boliden Group Q3 215 12 215-1-23
Smelters Boliden Group Q3 215 13 215-1-23
Smelters Strong result through high production EBIT ex PIR* 825 (464) MSEK 64 MSEK in Q2 215 Capex 315 (116) MSEK Lower metal prices High production New nickel business model Maintenance shutdowns on plan -85 (-85) MSEK MSEK 9 8 7 6 5 4 3 2 1 R4Q, MSEK 3 2 2 8 2 4 2 1 6 1 2 8 4-1 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 21 211 212 213 214 215 Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS -4 * PIR=Process Inventory Revaluation Boliden Group Q3 215 14 215-1-23
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 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 212 213 214 215 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 212 213 214 215 Feed, total Metal production Feed, total Metal production Rönnskär improved process stability, maintenance shutdown Harjavalta stable process Odda high and stable production, maintenance shutdown Kokkola improved process stability, lower silver grade Boliden Group Q3 215 15 215-1-23
Financials Boliden Group Q3 215 16 215-1-23
Robust cash flow and strong quarter for Smelters Financial development MSEK Q3 215 Q3 214 Q2 215 Revenues 9,764 9,287 1,373 EBITDA 1,746 1,79 1,97 EBIT 88 858 1,9 Process inventory revaluation (PIR) -175 146-167 EBIT ex PIR 1,55 711 1,257 Investments 88 72 877 Free cash flow 953 728 1,557 Earnings per share, SEK 2.36 2.24 2.96 Net debt / equity ratio 24 35 28 Boliden Group Q3 215 17 215-1-23
Lower metal prices and lower costs vs Q2 215 EBIT excl. PIR analysis Q3 215 vs. Q2 215 MSEK EBIT excl. PIR Q2 215 1,257 Specification of deviation Volume 114 Prices and Terms (incl. hedges) -624 Whereof currency effects 54 Costs 312 Depreciation 16 Other -2 Deviation -22 Higher Smelter feed Lower metal prices Lower smelter terms Seasonally lower costs Less maintenance Smelters EBIT excl. PIR Q3 215 1,55 Boliden Group Q3 215 18 215-1-23
Higher production vs. Q3 214 EBIT excl. PIR analysis Q3 215 vs. Q3 214 MSEK EBIT excl. PIR Q3 214 711 Specification of deviation Volume 549 Prices and Terms (incl. hedges) -25 Whereof currency effects 76 Costs -167 Depreciation -12 Other -1 Deviation 344 Higher production Mines Higher feed Smelters Lower metal prices Stronger USD Improved smelter terms Kylylahti Higher production Smelters EBIT excl. PIR Q3 215 1,55 Boliden Group Q3 215 19 215-1-23
Strong cash flow Free cash flow MSEK Q3 215 Q3 214 Q2 215 EBITDA excluding PIR 1,921 1,563 2,138 Changes in working capital 36 19 396 Inventories -5-22 678 Payables 443-138 -165 Receivables 92 178-119 Other 1 3 Cash flow from investments -879-718 -875 Financial items -51-72 -62 Tax paid -69-55 -81 Other -5-9 41 Free cash flow 953 728 1,557 Boliden Group Q3 215 2 215-1-23
Stronger balance sheet SEK bn (Unless otherwise stated) 3 Sept 215 3 Jun 215 MSEK 1 % 45 Total Assets 44. 43.4 Capital employed 35.1 35.2 Shareholders' equity 25.6 25. 8 6 4 35 3 25 Net debt 6.2 7. Gearing, % 24 28 4 2 2 15 1 Loan duration, years 2.7 2.9 Average interest rate, % 1.4 1.6 Interest duration, years.5.6 Net payment capacity 6.8 5.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 211 212 213 214 215 Net debt Gearing 5 Boliden Group Q3 215 21 215-1-23
Nine months performance Revenues 3,543 (27,276) MSEK EBIT ex PIR* 3,414 (1,471) MSEK EBIT 3,175 (1,61) MSEK Free Cash Flow 2,53 (1,217) MSEK MSEK 1 8 1 6 1 4 1 2 R4Q, MSEK 7 2 6 4 5 6 4 8 Lower metal prices, improved currencies Smelters performance Garpenberg investment Kylylahti acquisition 1 8 6 4 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 3 2 2 4 1 6 8 21 211 212 213 214 215 Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS * PIR=Process Inventory Revaluation Boliden Group Q3 215 22 215-1-23
Robust cash flow & strong quarter for Smelters Well positioned in the metal market Mines and smelters Base metals and precious metals High productivity Sharp fall in metal prices vs Q2 Continued favorable currencies Strong result Smelters Production disturbances Aitik Strong cash flow Boliden Group Q3 215 23 215-1-23
Going forward Aitik Copper grade.21% in 215-216 Garpenberg 2.5 Mton pace end 215 Tara improved production latter part of 215 Rönnskär action plan under implementation Nickel business on own books H2 215 Odda expansion to 2 kton/year on plan Capex 3.5 BSEK FY 215 Planned maintenance EBIT impact Q4-25 MSEK Boliden Group Q3 215 24 215-1-23
Capital Markets Day on 16-17 March 216 Stockholm 16 March Odda site visit 17 March More info will be posted on www.boliden.com Boliden Group Q3 215 25 215-1-23
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 215 26 215-1-23
Appendix Boliden Group Q3 215 28 215-1-23
Market balance Zinc global market Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Metals demand, kt 3327 3344 3392 3327 336 337 3363 334 Year on year change 4,7% 4,3% 3,1% 1,7% -,6% -1,1% -,9%,4% Smelter production, kt 3333 3124 325 3343 3531 3373 3514 3445 Year on year change 3,2% -,2% 1,7% 4,2% 5,9% 8,% 8,1% 3,1% Mine production, kt 347 2719 3158 3193 3236 283 3246 315 Year on year change -1,6% -2,1% -2,9% 1,7% 6,2% 3,1% 2,8% -1,3% Metal balance, kt 6-22 -142 16 225 66 151 15 Concentrate balance, kt -41-158 173 6-111 -363-47 -52 Copper global market Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Metals demand, kt 5381 539 546 5465 5536 526 553 5564 Year on year change 9,4% 2,3% 5,1% 3,9% 2,9% -,3%,8% 1,8% Smelter production, kt 5281 5149 5324 5528 5626 5412 5534 5475 Year on year change 3,9% 1,5% 6,% 7,1% 6,5% 5,1% 3,9% -,9% Mine production, kt 3838 3541 363 3663 378 3648 3884 3635 Year on year change 1,5% 6,4% 4,9% -,8% -3,4% 3,% 7,8% -,8% Metal balance, kt -1 11-136 62 9 386 31-89 Concentrate balance, kt 229 1 34-5 -17-86 129-212 Source: CRU Sept/Oct 215, Boliden calculations Boliden Group Q3 215 29 215-1-23
Economic development Industrial production, year on year % 2 15 1 5-5 211 212 213 214 215 EU28 USA China World Source: Reuters Datastream, Boliden calculations for world data Boliden Group Q3 215 3 215-1-23
Construction largest segment for Cu and Zn Activity, year on year % 3 25 2 15 1 5-5 -1-15 211 212 213 214 215 EU USA China China: year on year based on cumulative investments at each point Source: Reuters Datastream Boliden Group Q3 215 31 215-1-23
Automotive Production of light vehicles, year on year, quarterly data 3% 25% 2% 15% 1% 5% % -5% -1% -15% 211 212 213 214 215 Europe North America China World Source: LMC Automotive Boliden Group Q3 215 32 215-1-23
China metals demand and economic growth Year on year growth % 18 16 14 12 1 8 6 4 2 211 212 213 214 215 Zinc demand Copper demand GDP Industrial production Source: CRU Ltd, Reuters Datastream Boliden Group Q3 215 33 215-1-23
Zinc TC and premia US$/t concentrate Treatment charges US$/t metal Metal premia 3 25 25 2 2 15 15 1 1 5 5 212 213 214 215 212 213 214 215 Realized TC, European contract Spot TC, China imports Delivered Premia US Midwest Ex-Works Premia Europe Premia Far East - Western Lower realized contract TC, metal price down Somewhat lower spot TCs Concentrate stocks coming down* Somewhat lower spot premia in Europe Source: CRU Sept/Oct 215 *CRU Oct 215 Boliden Group Q3 215 34 215-1-23
Copper TC and premia US$/t concentrate Treatment charges US$/t metal Metal premia 14 16 12 14 1 8 6 4 12 1 8 6 4 2 2 212 213 214 215 212 213 214 215 Contract TC - annual and mid-year benchmark Standard grade spot TC CIF Average European premia CIF European benchmark premia Contract benchmark according to market sources including CRU Contract benchmark according to market sources including CRU Spot TC still below annual contract level Lower European spot premia Source: CRU Sept/Oct 215 Boliden Group Q3 215 35 215-1-23