Q2 Interim report 2018

Transcription

1 Click to edit Master text styles Second level Third level Fourth level Fifth level Q2 Interim report 218 Mikael Staffas President & CEO Håkan Gabrielsson CFO

2 Q2 Interim report 218 Strong results due to continued favourable prices and terms Revenues 14,71 (11,554) MSEK EBIT ex PIR* 2,329 (2,196) MSEK Free Cash Flow 1,718 (2,152) MSEK Favourable prices & terms Improved results in Mines New crusher in Aitik in operation Lower grades in Aitik and Tara relative to very high grades in first quarter Stable production in Smelters MSEK Quarterly EBIT excl PIR* Rolling Q EBIT excl PIR* R4Q, MSEK Cost inflation mainly in energy and consumables * PIR=Process Inventory Revaluation Boliden Group Q

3 Market Q2 218 Macro Strong industrial output Increased uncertainty Base metals Strong prices Healthy growth in metals demand Especially Ni Concentrate markets Still tight Zn concentrate market, despite increasing mine supply Modest increase in Cu mine supply Copper Cathodes from Rönnskär Boliden Group Q

4 High Cu and Zn prices relative to cash cost USD/ton Zinc Copper Nickel USD/ton USD/ton USD/ton USD/ton USD/ton 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 218 Normal C1 cash cost*, Thomson Reuters Datastream July 17, 218 * Normal C1 cash cost: cash operating cost, freight cost, treatment and refining charges, less value of by-metal products Boliden Group Q

5 Base metal prices Copper price, USD/tonne 12 Copper KTonnes 2 4 Zinc price, USD/tonne 4 Zinc KTonnes LME inventory COMEX inventory Shanghai inventory Price Price Q avg LME inventory Shanghai inventory Price Price Q avg Nickel price, USD/tonne Nickel KTonnes Average price in Q2 vs. period Q1-18 Q4-17 Q3-17 Q2-17 Copper -1% 1% 8% 21% Zinc -9% -4% 5% 2% Nickel 9% 25% 38% 57% LME inventory Price Price Q avg Note: Prices until 18 July 218 Boliden Group Q

6 Boliden market term index Click to edit Master text styles Second level Third level Fourth level Fifth level Note: Index 1 = 1 January 213 Boliden Group Q

7 Click to edit Master text styles Second level Third level Fourth level Fifth level Mines KID 2, the new crusher at Aitik Boliden Group Q

8 Q2 218 Mines EBIT 2,44 (1,555) MSEK 1,931 MSEK in Q1 218 Capex 1,123 (889) MSEK MSEK R4Q, MSEK Favourable prices & terms Aitik Lower grades q-o-q Lower milled volume y-o-y Winter conditions at start of Q2 New crusher in operation Tara Lower grades q-o-q Increased milled volume Quarterly EBIT Rolling 4Q EBIT Garpenberg Low Zn grade Stable production Kevitsa Record high Ni grade Stable production Boliden Group Q

9 Mines Production Milled ore, Mtonnes 16 Copper Metal content, Ktonnes 48 Milled ore, Mtonnes 2, Zinc Metal content, Ktonnes , , , ,4 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Milled ore Metal content pro forma** Metal content Nickel Milled ore, Metal content, Mtonnes Ktonnes 3,2 4, 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 Q4 Q1 Q Milled ore pro forma* Milled ore Metal content pro forma** Metal content (*) Milled ore incl Kevitsa (**) Metal content incl Kevitsa, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Milled ore Metal content Cu production 34 (38) ktonnes Lower grades in Aitik Production disturbances in Aitik Zn production 71 (8) ktonnes Lower grades in Garpenberg Maurliden in Boliden Area depleted Ni production 3.7 (3.5) ktonnes Record high grades in Kevitsa Stable production at Kevitsa Boliden Group Q

10 Click to edit Master text styles Second level Third level Fourth level Fifth level Smelters Control room at Bergsoe Boliden Group Q

11 Q2 218 Smelters EBIT ex PIR* 63 (563) MSEK 64 MSEK in Q1 218 Capex 437 (495) MSEK Stable prices & terms Strong metal prices Lower TC s MSEK R4Q, MSEK Stable production Maintenance shutdowns in Q2-13 (-26) MSEK Investment decision leaching plant Rönnskär Quarterly EBIT excl PIR* Rolling 4Q EBIT excl PIR* -3 * PIR=Process Inventory Revaluation Boliden Group Q

12 Smelters Production Cu production 9 (87) ktonnes Increased production in both smelters Total feed, Ktonnes Copper Metal production, Ktonnes Zn production 125 (115) ktonnes Improved process stability in Kokkola Production record at Odda Ni in matte production 7.5 (4.) ktonnes More extensive maintenance shutdown last year Total feed, Ktonnes 25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Feed, total Zinc Metal production Metal production, Ktonnes Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Feed, total Metal production Boliden Group Q

13 Click to edit Master text styles Second level Third level Fourth level Fifth level Financials 4.5 tonnes gold produced in Q2 218 Boliden Group Q

14 218 Q2 Earnings MSEK Q2 218 Q2 217 Q1 218 Revenues 14,71 11,554 13,331 EBITDA 3,691 3,58 3,941 EBIT 2,468 1,916 2,672 EBIT ex PIR 2,329 2,196 2,724 Investments 1,561 1,385 1,19 Free cash flow 1,718 2,152 1,431 Earnings per share, SEK Net debt / equity ratio Boliden Group Q

15 EBIT ex. PIR by segment MSEK Q2 218 Q2 217 Q1 218 Mines 2,44 1,555 1,931 Smelters Other/eliminations The Group 2,329 2,196 2,724 Boliden Group Q

16 218 Q2 vs. 217 Q2 Group EBIT excl. PIR MSEK Q ,329 Q ,196 Deviation 132 Specification of deviation Volumes -29 Prices and Terms (incl. hedges) 721 Whereof currency -33 Costs -222 Depreciation -54 Other -21 Deviation 132 Lower milled production/grades in Mines Higher production in Zn Smelters Internal profit elimination Positive effect from metal prices, offset by negative FX & TC Inflation: energy & consumables, salaries Higher metal production in Mines Boliden Group Q

17 218 Q2 vs. 218 Q1 Group EBIT excl. PIR MSEK Q ,329 Q ,724 Deviation -396 Specification of deviation Volumes -371 Prices and Terms (incl. hedges) 149 Whereof currency effects 351 Costs -244 Depreciation 14 Items affecting comparability 5 Other 8 Deviation -396 Lower grades, high deliveries in Mines Higher free metals in Smelters Internal profit elimination Stronger USD Increased milled volume in Mines and maintenance in Smelters Q1 fire in Bergsöe Boliden Group Q

18 Cash flow MSEK Q2 218 Q2 217 Q1 218 EBITDA excluding PIR 3,552 3,338 3,994 Cash flow from working capital Inventories Operating receivables Operating liabilities Other Cash flow from investments -1,554-1,383-1,18 Financial items Tax paid Other Free cash flow 1,718 2,152 1,431 Boliden Group Q

19 Balance sheet SEK bn 3 June June Dec 217 MSEK 12 % 45 Total Assets Capital employed Equity Net debt Net debt / equity ratio Loan duration, years Average interest rate, % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Interest duration, years Net debt Gearing Net payment capacity Boliden Group Q

20 New ruling on Aitik s reclamation Increased collateral requirement from 1.8 BSEK to 2.9 BSEK Increased reclamation provision and reclamation asset by.8 BSEK The adjustment does not affect the Q2 income statement depreciation will increase by 3 MSEK per year The ruling has been appealed Reclaimed land area in Aitik with top layer of sludge from the Stockholm sewage systems Boliden Group Q

21 Going forward Q2 production above reserve grade Aitik Remainder of 218 and 219: Cu.25% 22: 45 Mtonnes milled volume Garpenberg 218: Zn 4.%, Ag 115 g/ton, 219: Zn 4.% 22: 3 Mtonnes milled volume Kevitsa 22: 9.5 Mtonnes milled volume pace Negative internal profit elimination in Q2 World-class productivity in underground and open-pit mines Planned Maintenance Smelters 218: -2 (-415) MSEK* Q3: -7 (-5) MSEK, Q4: () MSEK Capex: 218 slightly above 6 BSEK * EBIT impact Boliden Group Q

22 Conclusion Well positioned in the metal market Mines and smelters Base metals and precious metals High productivity / stable production High corporate responsibility Long life of key mines Stable jurisdictions Strong balance sheet Several growth opportunities Milled volume expansion in key mines Tara Deep Kylylahti prolongation (cobalt) Smelters well positioned for circular economy Co-worker at Kokkola Boliden Group Q

23 Click to edit Master text styles Second level Third level Fourth level Fifth level 219 Capital Markets Day Stockholm 13 March Aitik site visit 14 March More info to be available on Top of KID 2, the new crusher at Aitik Boliden Group Q

24 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

25 Click to edit Master text styles Second level Third level Fourth level Fifth level Boliden

26 Click to edit Master text styles Second level Third level Fourth level Fifth level Appendix Zinc slabs Boliden Group Q

27 Zinc price Zinc price, USD/tonne 4 KTonnes 2 USD/tonne 3 9 Q2 Q3 Q4 Q1 Q apr-17 jul-17 okt-17 jan-18 apr-18 jul LME inventory Shanghai inventory Price Price Q avg 4 Average price in Q2 vs. period Q1-18 Q4-17 Q3-17 Q % -4% 5% 2% Note: Prices until 18 July 218 Boliden Group Q

28 Copper price Copper price, USD/tonne 12 KTonnes 2 4 USD/tonne Q2 Q3 Q4 Q1 Q apr-17 jul-17 okt-17 jan-18 apr-18 jul LME inventory COMEX inventory Shanghai inventory Price Price Q avg 4 Average price in Q2 vs. period Q1-18 Q4-17 Q3-17 Q % 1% 8% 21% Note: Prices until 18 July 218 Boliden Group Q

29 Nickel price Nickel price, USD/tonne 35 KTonnes 6 USD/tonne 18 Q2 Q3 Q4 Q1 Q apr-17 jul-17 okt-17 jan-18 apr-18 jul LME inventory Price Price Q avg 1 Average price in Q2 vs. period Q1-18 Q4-17 Q3-17 Q2-17 9% 25% 38% 57% Note: Prices until 18 July 218 Boliden Group Q

30 Gold, silver and lead prices Gold price, USD/troy oz Gold Silver price, USD/troy oz Silver Lead price, USD/tonne 5 Lead Average price in Q2 vs. period Q1-18 Q4-17 Q3-17 Q2-17 Gold -2% 2% 2% 4% Silver -1% -1% -2% -4% Lead -5% -4% 2% 11% Note: Prices until 18 July 218 Boliden Group Q

31 Zinc TC and premia US$/t concentrate 3 Treatment charges US$/t metal 25 Metal premia Realized TC - European contract" Spot TC - China imports Ex-Works Premia Premia Delivered Premia Contract benchmark according to market sources including CRU New benchmark 147 (172) USD/t conc Spot TC in China up but still very low Metal available in Europe Stable to somewhat lower spot premiums Source: CRU 218 Boliden Group Q

32 Copper TC and premia US$/t concentrat 12 e Treatment charges Contract TC - annual and mid-year benchmark Standard grade spot TC US$/t metal Metal premia CIF European benchmark premia CIF Average European premia Contract benchmark according to market sources including CRU Balanced concentrate market Spot TC below benchmark Good metals demand in Europe Spot premia stable Source: CRU 218 Boliden Group Q

33 Market balance zinc and copper Zinc global market Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Metals demand, kt Year on year change 3,% 2,7% 1,8% 3,3% 2,6% 1,5% 1,8% 1,3% Smelter production, kt Year on year change -1,1% 3,1%,7% -1,1% -2,9% -,3% 1,2%,6% Mine production, kt Year on year change -1,1% 4,2% 9,2% 5,1% 1,9% -,1% 1,7% 4,2% Metal balance, kt Concentrate balance, kt Copper global market Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Metals demand, kt Year on year change 2,1% 3,% 2,7% 2,2% 2,6% 2,5% 3,8% 3,6% Smelter production, kt Year on year change 1,5% 2,7%,4% -,6% 2,5% 4,1% 3,3% 4,2% Mine production (concentrate), kt Year on year change 7,3% 8,% -2,4%,% 3,7% 3,3% 1,2% 1,% Metal balance, kt Concentrate balance, kt Source: CRU 218, Boliden calculations Boliden Group Q

34 Market balance nickel and lead Nickel - global market Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Metals demand, kt Year on year change 8,% 13,1% 6,7% -1,5% 11,7% 1,% 1,6% 11,9% Smelter production, kt Year on year change 1,8% 3,8% 3,5% -4,5% 7,9% 5,9% 8,5% 13,8% Mine production, kt Year on year change,7% 6,1% -2,6% 6,1% 13,6% 14,1% 17,5% 14,8% Metal balance, kt Lead - global market Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Metals demand, kt Year on year change 3,9% 3,2% 2,3% 2,2% 1,8% 1,9% 2,2% 2,6% Smelter production, kt Year on year change 2,8%,%,5% 1,8%,7% 2,3% 1,5% 2,4% Mine production, kt Year on year change -3,6% -3,%,1% -,5% -1,7% -2,% 1,8% 3,% Metal balance, kt Concentrate balance, kt Source: CRU 218, Boliden calculations Boliden Group Q

35 Economic development Industrial production, year on year % 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 EU28 USA China World Source: Thomson Reuters Datastream, world data calculated by Boliden Boliden Group Q

36 Construction largest segment for Cu and Zn Activity, year on year % 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 EU USA China China: year on year based on cumulative investments at each point. USA: construction spending. EU: construction production Source: Reuters Datastream Boliden Group Q

37 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 Q Europe North America China World Source: LMC Automotive Boliden Group Q

38 China metals demand and economic growth Year on year growth % Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Zinc demand Copper demand Nickel demand GDP growth % Industrial production growth % Source: CRU Ltd, Thomson Reuters Datastream Boliden Group Q

39 Click to edit Master text styles Second level Third level Fourth level Fifth level Boliden