Q3 2015 Interim Report
Lennart Evrell
President & CEO
Mikael Staffas
CFO
0
800
1 600
2 400
3 200
4 000
4 800
5 600
6 400
7 200
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2010 2011 2012 2013 2014 2015
R4Q,MSEK
MSEK
Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS
Robust cash flow and strong quarter for Smelters
2015-10-23 Boliden Group Q3 2015
* PIR=Process Inventory Revaluation
• Revenues 9,764 (9,287) MSEK
• EBIT ex PIR* 1,055 (711) MSEK
‒ EBIT 880 (858) MSEK
• Free Cash Flow 953 (728) MSEK
• Sharp fall in metal prices vs Q2
• Continued favorable currencies
• Strong result Smelters
• Production disturbances Aitik
• Strong cash flow
2
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 90th percentile cash cost
• Mine production cutbacks announced
2015-10-23 Boliden Group Q3 2015 3
Zinc and copper price vs cash cost
2015-10-23 4 Boliden Group Q3 2015
Source: Wood Mackenzie Q3 2015, Reuters Datastream
Normal C1 – Zinc Normal C1 – Copper USD/ton USD/ton
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
Cu average price Cu max price Cu min price
50th perc 75th perc 90th perc
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Zn average price Zn max price Zn min price
50th perc 75th perc 90th perc
Boliden market term index
2015-10-23 Boliden Group Q3 2015 5
Favourable currencies vs 1 year ago
2015-10-23 Boliden Group Q3 2015 6
Note: Graph shows period 1 January 2005 until 15 October 2015.
Zinc price
2015-10-23 Boliden Group Q3 2015
Average price in Q3 vs period
Q2-15 Q1-15 Q4-14 Q3-14
-16% -11% -17% -20%
7
1 500
1 600
1 700
1 800
1 900
2 000
2 100
2 200
2 300
2 400
2 500
jul-14 okt-14 jan-15 apr-15 jul-15 okt-15
USD/t Q3 Q4 Q1 Q2 Q3
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
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
LME inventory Shanghai inventory Price Price Q avg
Zinc price, USD/t Tonnes
Copper price
2015-10-23 Boliden Group Q3 2015 8
4 500
5 000
5 500
6 000
6 500
7 000
7 500
jul-14 okt-14 jan-15 apr-15 jul-15 okt-15
USD/t
Average price in Q3 vs period
Q2-15 Q1-15 Q4-14 Q3-14
-13% -10% -21% -25%
Q3 Q4 Q1 Q2 Q3
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
1 800 000
0
2 000
4 000
6 000
8 000
10 000
12 000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
LME inventory COMEX inventory Shanghai inventory Price Price Q avg
Copper price, USD/t Tonnes
Gold, silver and lead prices
2015-10-23 Boliden Group Q3 2015
Lead Gold
Silver
Average price in Q3 vs period
Q2-15 Q1-15 Q4-14 Q3-14
Gold -6% -8% -6% -12%
Silver -9% -11% -10% -25%
Lead -12% -5% -14% -21%
9
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
2015-10-23 Boliden Group Q3 2015 10
0
600
1 200
1 800
2 400
3 000
3 600
4 200
4 800
0
200
400
600
800
1 000
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 3
2010 2011 2012 2013 2014 2015
R4Q, MSEK
MSEK
Quarterly EBIT Rolling Q EBIT
Mines – Lower market terms & production disturbances
• EBIT 260 (355) MSEK
‒ 657 MSEK in Q2 2015
• Capex 563 (603) MSEK
• Lower metal prices
• Production disturbances Aitik
• Continued strong performance in
Garpenberg
2015-10-23 Boliden Group Q3 2015 11
0
15
30
45
60
75
90
0,0
0,3
0,6
0,9
1,2
1,5
1,8
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
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
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015
Metal content, kt
Milled ore, mt Copper
Milled ore Metal content
• Garpenberg – lower grade, unfavorable
rock conditions
• Tara – low milled tonnage
• Boliden Area – increased slag production
Mines – Production
• Aitik – production disturbances, higher grade
• Kylylahti – lower grade
• Boliden Area – increased slag production
2015-10-23 Boliden Group Q3 2015 12
Smelters
2015-10-23 Boliden Group Q3 2015 13
-400
0
400
800
1 200
1 600
2 000
2 400
2 800
3 200
-100
0
100
200
300
400
500
600
700
800
900
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2010 2011 2012 2013 2014 2015
R4Q, MSEK
MSEK
Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS
2015-10-23 Boliden Group Q3 2015
* PIR=Process Inventory Revaluation
14
• EBIT ex PIR* 825 (464) MSEK
‒ 604 MSEK in Q2 2015
• Capex 315 (116) MSEK
• Lower metal prices
• High production
• New nickel business model
• Maintenance shutdowns on plan
‒ -85 (-85) MSEK
Smelters – Strong result through high production
0
30
60
90
120
150
0
50
100
150
200
250
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
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
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015
Metalproduction,
kt
Total feed, kt
Copper
Feed, total Metal production
Smelters – Production
• Rönnskär – improved process stability,
maintenance shutdown
• Harjavalta – stable process
• Odda – high and stable production,
maintenance shutdown
• Kokkola – improved process stability,
lower silver grade
2015-10-23 Boliden Group Q3 2015 15
Financials
2015-10-23 Boliden Group Q3 2015 16
Robust cash flow and strong quarter for Smelters
2015-10-23 Boliden Group Q3 2015 17
MSEK Q3 2015 Q3 2014 Q2 2015
Revenues 9,764 9,287 10,373
EBITDA 1,746 1,709 1,970
EBIT 880 858 1,090
Process inventory revaluation (PIR) -175 146 -167
EBIT ex PIR 1,055 711 1,257
Investments 880 720 877
Free cash flow 953 728 1,557
Earnings per share, SEK 2.36 2.24 2.96
Net debt / equity ratio 24 35 28
Financial development
Lower metal prices and lower costs vs Q2 2015
2015-10-23 Boliden Group Q3 2015 18
Seasonally lower costs
Less maintenance Smelters
Lower metal prices
Lower smelter terms
MSEK
EBIT excl. PIR – Q2 2015 1,257
Specification of deviation
Volume 114
Prices and Terms (incl. hedges) -624
Whereof currency effects 54
Costs 312
Depreciation 16
Other -20
Deviation -202
EBIT excl. PIR – Q3 2015 1,055
Higher Smelter feed
EBIT excl. PIR analysis Q3 2015 vs. Q2 2015
Higher production vs. Q3 2014
2015-10-23 Boliden Group Q3 2015 19
Kylylahti
Higher production Smelters
Lower metal prices
Stronger USD
Improved smelter terms
MSEK
EBIT excl. PIR – Q3 2014 711
Specification of deviation
Volume 549
Prices and Terms (incl. hedges) -25
Whereof currency effects 760
Costs -167
Depreciation -12
Other -1
Deviation 344
EBIT excl. PIR – Q3 2015 1,055
Higher production Mines
Higher feed Smelters
EBIT excl. PIR analysis Q3 2015 vs. Q3 2014
Strong cash flow
2015-10-23 Boliden Group Q3 2015 20
MSEK Q3 2015 Q3 2014 Q2 2015
EBITDA excluding PIR 1,921 1,563 2,138
Changes in working capital 36 19 396
Inventories -500 -22 678
Payables 443 -138 -165
Receivables 92 178 -119
Other 1 0 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
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 Q3
2011 2012 2013 2014 2015
%MSEK
Net debt Gearing
Stronger balance sheet
2015-10-23 21 Boliden Group Q3 2015
SEK bn (Unless otherwise stated)
30 Sept
2015
30 Jun
2015
Total Assets 44.0 43.4
Capital employed 35.1 35.2
Shareholders' equity 25.6 25.0
Net debt 6.2 7.0
Gearing, % 24 28
Loan duration, years 2.7 2.9
Average interest rate, % 1.4 1.6
Interest duration, years 0.5 0.6
Net payment capacity 6.8 5.7
Nine months performance
2015-10-23 Boliden Group Q3 2015
* PIR=Process Inventory Revaluation
• Revenues 30,543 (27,276) MSEK
• EBIT ex PIR* 3,414 (1,471) MSEK
‒ EBIT 3,175 (1,601) MSEK
• Free Cash Flow 2,530 (1,217) MSEK
• Lower metal prices, improved
currencies
• Smelters performance
• Garpenberg investment
• Kylylahti acquisition
22
0
800
1 600
2 400
3 200
4 000
4 800
5 600
6 400
7 200
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
2010 2011 2012 2013 2014 2015
R4Q,MSEK
MSEK
Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS
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
2015-10-23 Boliden Group Q3 2015 23
Going forward
• Aitik
‒ Copper grade 0.21% in 2015-2016
• Garpenberg – 2.5 Mton pace end 2015
• Tara – improved production latter part of 2015
• Rönnskär – action plan under implementation
• Nickel business on own books H2 2015
• Odda expansion to 200 kton/year on plan
• Capex 3.5 BSEK FY 2015
• Planned maintenance EBIT impact
‒ Q4 -25 MSEK
2015-10-23 Boliden Group Q3 2015 24
Capital Markets Day on 16-17 March 2016
• Stockholm 16 March
• Odda site visit 17 March
• More info will be posted on www.boliden.com
2015-10-23 Boliden Group Q3 2015 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.
2015-10-23 Boliden Group Q3 2015 26
Appendix
2015-10-23 Boliden Group Q3 2015 28
Market balance
2015-10-23 Boliden Group Q3 2015
Source: CRU Sept/Oct 2015, Boliden calculations
29
Zinc – global market Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315
Metals demand, kt 3327 3344 3392 3327 3306 3307 3363 3340
Year on year change 4,7% 4,3% 3,1% 1,7% -0,6% -1,1% -0,9% 0,4%
Smelter production, kt 3333 3124 3250 3343 3531 3373 3514 3445
Year on year change 3,2% -0,2% 1,7% 4,2% 5,9% 8,0% 8,1% 3,1%
Mine production, kt 3047 2719 3158 3193 3236 2803 3246 3150
Year on year change -1,6% -2,1% -2,9% 1,7% 6,2% 3,1% 2,8% -1,3%
Metal balance, kt 6 -220 -142 16 225 66 151 105
Concentrate balance, kt -41 -158 173 60 -111 -363 -47 -52
Copper – global market Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315
Metals demand, kt 5381 5039 5460 5465 5536 5026 5503 5564
Year on year change 9,4% 2,3% 5,1% 3,9% 2,9% -0,3% 0,8% 1,8%
Smelter production, kt 5281 5149 5324 5528 5626 5412 5534 5475
Year on year change 3,9% 1,5% 6,0% 7,1% 6,5% 5,1% 3,9% -0,9%
Mine production, kt 3838 3541 3603 3663 3708 3648 3884 3635
Year on year change 10,5% 6,4% 4,9% -0,8% -3,4% 3,0% 7,8% -0,8%
Metal balance, kt -100 110 -136 62 90 386 31 -89
Concentrate balance, kt 229 10 34 -50 -107 -86 129 -212
Economic development
2015-10-23
Industrial production, year on year %
Boliden Group Q3 2015
Source: Reuters Datastream, Boliden calculations for world data
30
-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
2015-10-23
Activity, year on year %
Source: Reuters Datastream
Boliden Group Q3 2015
China: year on year based on cumulative investments at each point
31
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
2011 2012 2013 2014 2015
Europe North America China World
2015-10-23
Source: LMC Automotive
Boliden Group Q3 2015
Automotive
32
Production of light vehicles, year on year, quarterly data
China – metals demand and economic growth
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
2015-10-23 Boliden Group Q3 2015 33
Zinc TC and premia
• Lower realized contract TC, metal price down
• Somewhat lower spot TCs
• Concentrate stocks coming down*
• Somewhat lower spot premia in Europe
2015-10-23 Boliden Group Q3 2015
Source: CRU Sept/Oct 2015
*CRU Oct 2015
34
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 premia
• Spot TC still below annual contract level • Lower European spot premia
2015-10-23 Boliden Group Q3 2015
Source: CRU Sept/Oct 2015
35
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