Q2 2015 Interim Report
Lennart Evrell
President & CEO
Mikael Staffas
CFO
0
800
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1 000
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1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
2010 2011 2012 2013 2014 2015
R4Q,MSEK
MSEK
Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS
Robust production and strong cash flow
2015-07-17 Boliden Group Q2 2015
* PIR=Process Inventory Revaluation
• Revenues 10,373 (9,438) MSEK
• EBIT ex PIR* 1,257 (374) MSEK
‒ EBIT 1,090 (478) MSEK
• Free Cash Flow 1,557 (920) MSEK
• High production Mines
• Strong result Smelters
‒ Improved smelter terms
‒ Maintenance shutdowns
• Favourable prices and terms
• Strong cash flow
2
Metal demand – high level, low growth
Macro
• Global economic growth below trend
• Slower industrial production growth in China
Base metals markets
• Demand growth below trend
• Mine supply higher than anticipated for Zn,
lower for Cu
• Balanced metal and concentrate markets
2015-07-17 Boliden Group Q2 2015 3
Boliden market term index
2015-07-17 Boliden Group Q2 2015 4
Note: Graphs show period 1 January 2010 until 30 June 2015.
Favourable currencies vs 1 year ago
2015-07-17 Boliden Group Q2 2015 5
Note: Graph shows period 1 January 2005 until 8 July 2015.
Volatile zinc price in Q2
2015-07-17 Boliden Group Q2 2015
Average price in Q2 vs period
Q1-15 Q4-14 Q3-14 Q2-14
+5% -2% -5% +6%
Q2 Q3 Q4
6
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Price Price Q avg
Zinc price, USD/tQ1
1,500
1,600
1,700
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15
USD/t Q2
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Volatile copper price in Q2 – negative trend
2015-07-17 Boliden Group Q2 2015 7
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Copper price, USD/t
Price Price Q avg
5,000
5,250
5,500
5,750
6,000
6,250
6,500
6,750
7,000
7,250
7,500
7,750
8,000
Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15
USD/t Q2 Q3 Q4 Q1 Q2
Average price in Q2 vs period
Q1-15 Q4-14 Q3-14 Q2-14
+4% -9% -14% -11%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Gold and silver prices – negative trend
2015-07-17 Boliden Group Q2 2015
Lead Gold
Silver
Average price in Q2 vs period
Q1-15 Q4-14 Q3-14 Q2-14
Gold -2% -1% -7% -7%
Silver -2% -1% -17% -16%
Lead +8% -3% -11% -7%
8
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Gold price, USD/troy oz.
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Silver price, USD/troy oz.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Lead price, USD/t
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mines
2015-07-17 Boliden Group Q2 2015 9
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1 200
1 800
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3 000
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4 800
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1 200
1 400
1 600
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
2010 2011 2012 2013 2014 2015
R4Q, MSEK
MSEK
Quarterly EBIT Rolling Q EBIT
High production and cost control
• EBIT 657 (336) MSEK
‒ 482 MSEK in Q1 2015
• Capex 594 (657) MSEK
• High production
‒ Garpenberg ramp-up on plan
‒ Kylylahti strong quarter
‒ Production disturbances Aitik
• Good cost control
• Strong USD vs last year
2015-07-17 Boliden Group Q2 2015 10
0
15
30
45
60
75
90
0,0
0,3
0,6
0,9
1,2
1,5
1,8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015
Metal content, kt
Milled ore, mt
Zinc
Milled ore Metal content
0
4
8
12
16
20
24
0
2
4
6
8
10
12
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015
Metal content, kt
Milled ore, mt Copper
Milled ore Metal content
• Garpenberg – higher milled tonnage,
lower grade
• Tara – higher grade, low milled tonnage
• Boliden Area – more Zn
Mines – Production
• Aitik – process disturbances due to ore quality
• Kylylahti – strong quarter
• Boliden Area – less Cu
2015-07-17 Boliden Group Q2 2015 11
Smelters
2015-07-17 Boliden Group Q2 2015 12
-400
0
400
800
1 200
1 600
2 000
2 400
2 800
3 200
-100
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100
200
300
400
500
600
700
800
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
2010 2011 2012 2013 2014 2015
R4Q, MSEK
MSEK
Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS
2015-07-17 Boliden Group Q2 2015
* PIR=Process Inventory Revaluation
13
• EBIT ex PIR* 604 (174) MSEK
‒ 681 MSEK in Q1 2015
• Capex 281 (250) MSEK
• Maintenance shutdowns on plan
‒ -180 (-120) MSEK
• Strong production Odda, Harjavalta
• Improved USD vs last year
• Improved smelter terms
Strong result despite maintenance shutdowns
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30
60
90
120
150
0
50
100
150
200
250
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015
Metal production,
kt
Total feed, kt
Zinc
Feed, total Metal production
0
15
30
45
60
75
90
105
120
0
50
100
150
200
250
300
350
400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015
Metalproduction,
kt
Total feed, kt
Copper
Feed, total Metal production
Smelters – Production
• Rönnskär – maintenance shutdown,
improved raw material mix
• Harjavalta – maintenance shutdown,
stable process
• Odda – high and stable production
• Kokkola – maintenance shutdown,
improved process stability vs Q1,
higher silver production
2015-07-17 Boliden Group Q2 2015 14
Financials
2015-07-17 Boliden Group Q2 2015 15
Robust production and strong cash flow
2015-07-17 Boliden Group Q2 2015 16
MSEK Q2 2015 Q2 2014 Q1 2015
Revenues 10,373 9,438 10,407
EBITDA 1,970 1,293 2,057
EBIT 1,090 478 1,205
Process inventory revaluation (PIR) -167 104 103
EBIT ex PIR 1,257 374 1,102
Investments 877 907 706
Free cash flow 1,557 920 19
Earnings per share, SEK 2.96 1.08 3.27
Net debt / equity ratio 28 39 33
Financial development
Higher production and metal prices vs Q1 2015
2015-07-17 Boliden Group Q2 2015 17
Maintenance shutdowns Smelters
Higher metal prices
Improved smelter terms
Weaker USD
MSEK
EBIT excl. PIR – Q1 2015 1,102
Specification of deviation
Volume 249
Prices and Terms (incl. hedges) 86
Whereof currency effects -86
Costs -163
Depreciation -30
Other 13
Deviation 155
EBIT excl. PIR – Q2 2015 1,257
High production Mines
EBIT excl. PIR analysis Q2 2015 vs. Q1 2015
Higher production and stronger USD vs. Q2 2014
2015-07-17 Boliden Group Q2 2015 18
Ramp-up Garpenberg
Kylylahti
Maintenance shutdowns Smelters
Stronger USD
Improved smelter terms
Lower metal prices
MSEK
EBIT excl. PIR – Q2 2014 374
Specification of deviation
Volume 283
Prices and Terms (incl. hedges) 779
Whereof currency effects 883
Costs -132
Depreciation -60
Other 13
Deviation 882
EBIT excl. PIR – Q2 2015 1,257
Ramp-up Garpenberg
Kylylahti
Aitik push back
Garpenberg start
Kylylahti
EBIT excl. PIR analysis Q2 2015 vs. Q2 2014
Higher profit and lower working capital
2015-07-17 Boliden Group Q2 2015 19
MSEK Q2 2015 Q2 2014 Q1 2015
EBITDA excluding PIR 2,138 1,189 1,954
Changes in working capital 396 795 -1,017
Inventories 678 1,026 -981
Payables -165 207 23
Receivables -119 -438 -59
Other 3 0 0
Cash flow from investments -875 -898 -705
Financial items -62 -93 -59
Tax paid -81 -34 -50
Other 41 -40 -103
Free cash flow 1,557 920 19
Free cash flow
0
5
10
15
20
25
30
35
40
45
0
2 000
4 000
6 000
8 000
10 000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2011 2012 2013 2014 2015
%MSEK
Net debt Gearing
Capital structure
2015-07-17 20 Boliden Group Q2 2015
SEK bn (Unless otherwise stated)
30 Jun
2015
31 Mar
2015
Total Assets 43.4 44.5
Capital employed 35.2 35.8
Shareholders' equity 25.0 24.7
Net debt 7.0 8.2
Gearing, % 28 33
Loan duration, years 2.9 3.1
Average interest rate, % 1.6 1.6
Interest duration, years 0.6 0.6
Net payment capacity 5.7 5.5
Q2 2015 – Robust production and strong cash flow
• Well positioned in the metal market
‒ Mines and smelters
‒ Base metals and precious metals
‒ High productivity
• High production Mines
• Good cost control
• Favourable prices and terms
• Strong cash flow
2015-07-17 Boliden Group Q2 2015 21
Going forward
• Aitik
‒ Copper grade 0.21% in 2015-2016
‒ 39 Mton ore 2015 plan
• Garpenberg – 2.5 Mton pace end 2015
• Tara – improved production latter part of 2015
• Kokkola – working with process stability
• Rönnskär – action plan under implementation
• Nickel business on own books H2 2015
‒ Increase in WC in Q3
• Odda expansion to 200 kton/year on plan
• Planned maintenance EBIT impact
‒ Q3 -80 MSEK, Q4 -30 MSEK
‒ Mainly Rönnskär and Bergsöe in Q3
2015-07-17 Boliden Group Q2 2015 22
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.
2015-07-17 Boliden Group Q2 2015 23
2015-07-17 Boliden Group Q2 2015 24
Appendix
2015-07-17 Boliden Group Q2 2015 25
Market balance
2015-07-17 Boliden Group Q2 2015
Source: CRU June/July 2015, Boliden calculations
26
Zinc – global market Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215
Metals demand, kt 3,250 3,293 3,348 3,401 3,333 3,311 3,330 3,425
Year on year change 3.1% 4.3% 5.4% 6.0% 2.6% 0.5% -0.5% 0.7%
Smelter production, kt 3,208 3,337 3,145 3,277 3,328 3,556 3,413 3,480
Year on year change 5.0% 12.6% -1.5% 4.9% 3.7% 6.6% 8.5% 6.2%
Mine production, kt 3,173 3,060 2,742 3,192 3,167 3,231 2,836 3,348
Year on year change 1.2% -0.4% -12.4% 13.9% -0.2% 5.6% 3.4% 4.9%
Metal balance, kt -42 44 -203 -124 -5 245 83 55
Concentrate balance, kt 162 -49 -174 143 32 -162 -387 47
Copper – global market Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215
Metals demand, kt 5,256 5,390 5,081 5,487 5,485 5,476 5,058 5,578
Year on year change 5.6% 9.2% 2.7% 10.9% 4.4% 1.6% -0.4% 1.7%
Smelter production, kt 5,211 5,355 5,212 5,393 5,585 5,682 5,484 5,552
Year on year change 7.1% 5.8% 1.5% 5.4% 7.2% 6.1% 5.2% 3.0%
Mine production (concentrates), kt 3,692 3,838 3,543 3,604 3,665 3,709 3,645 3,675
Year on year change 15.5% 15.6% 2.0% 8.3% -0.7% -3.4% 2.9% 2.0%
Metal balance, kt -45 -35 131 -95 100 206 425 -26
Concentrate balance, kt 214 229 -8 16 -69 -108 -84 -30
Economic development
2015-07-17
Industrial production, year on year %
Boliden Group Q2 2015
Source: Reuters Datastream, Boliden calculations for world data
27
-5
0
5
10
15
20
2011 2012 2013 2014 2015
EU28 USA China World
-15
-10
-5
0
5
10
15
20
25
30
2011 2012 2013 2014 2015
EU USA China
Construction – largest segment for Cu and Zn
2015-07-17
Activity, year on year %
Source: Reuters Datastream
Boliden Group Q2 2015
China: year on year based on cumulative investments at each point
28
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
2011 2012 2013 2014 2015
Europe North America China World
2015-07-17
Source: LMC Automotive
Boliden Group Q2 2015
Automotive
29
Production of light vehicles, year on year, quarterly data
China – metals demand and economic growth
-4
-2
0
2
4
6
8
10
12
14
16
18
2011 2012 2013 2014 2015
Year on year growth %
Zinc demand Copper demand GDP Industrial production
Source: CRU Ltd, Reuters Datastream
2015-07-17 Boliden Group Q2 2015 30
Zinc TC and premiums
• Slightly higher realized contract TC
• Stable spot TC, below contract
• Supply of metal for prompt delivery up
• Stable quarter average premia, down in
June
2015-07-17 Boliden Group Q2 2015
Source: CRU June/July 2015
31
0
50
100
150
200
250
300
2012 2013 2014 2015
US$/t concentrate
Treatment charges
Realized TC, European contract
Spot TC, China imports
0
50
100
150
200
250
2012 2013 2014 2015
US$/t metal Metal premia
Delivered Premia US Midwest
Ex-Works Premia Europe
Premia Far East - Western
Copper TC and premiums
• Spot TC down
• Mid-year contract TC lower
• Supply of metal for prompt delivery up
• Stable premia at low level
2015-07-17 Boliden Group Q2 2015
Source: CRU June/July 2015
32
0
20
40
60
80
100
120
140
2012 2013 2014 2015
US$/t concentrate
Treatment charges
Contract TC - annual and mid-year benchmark
Standard grade spot TC
Contract benchmark according to market sources including CRU
0
20
40
60
80
100
120
140
160
2012 2013 2014 2015
US$/t metal Metal premia
CIF Average European premia CIF European benchmark premia
Contract benchmark according to market sources including CRU
2015-07-17 Boliden Group Q2 2015 33