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
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 3 4 3 2 3 2 8 2 6 2 4 2 2 2 1 8 1 6 1 4 1 2 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 2 213 214 215 216 217 218 Quarterly EBIT excl PIR* Rolling Q EBIT excl PIR* R4Q, MSEK 1 2 9 6 9 8 4 7 8 7 2 6 6 6 5 4 4 8 4 2 3 6 3 2 4 1 8 1 2 6 Cost inflation mainly in energy and consumables * PIR=Process Inventory Revaluation Boliden Group Q2 218 2 218-7-2
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 Q2 218 3 218-7-2
High Cu and Zn prices relative to cash cost USD/ton Zinc Copper Nickel USD/ton USD/ton USD/ton USD/ton USD/ton 5 5 11 11 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 2 3 2 5 2 7 6 5 4 7 6 5 4 2 15 2 15 1 5 1 5 3 3 1 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 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 Q2 218 4 218-7-2
Base metal prices Copper price, USD/tonne 12 Copper KTonnes 2 4 Zinc price, USD/tonne 4 Zinc KTonnes 2 1 2 3 1 6 8 1 6 1 2 6 1 2 2 8 4 8 2 4 1 4 28 29 21 211 212 213 214 215 216 217 218 LME inventory COMEX inventory Shanghai inventory Price Price Q avg 28 29 21 211 212 213 214 215 216 217 218 LME inventory Shanghai inventory Price Price Q avg Nickel price, USD/tonne Nickel KTonnes 35 3 25 2 15 1 5 6 5 4 3 2 1 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% 28 29 21 211 212 213 214 215 216 217 218 LME inventory Price Price Q avg Note: Prices until 18 July 218 Boliden Group Q2 218 5 218-7-2
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 Q2 218 6 218-7-2
Click to edit Master text styles Second level Third level Fourth level Fifth level Mines KID 2, the new crusher at Aitik Boliden Group Q2 218 7 218-7-2
Q2 218 Mines EBIT 2,44 (1,555) MSEK 1,931 MSEK in Q1 218 Capex 1,123 (889) MSEK MSEK 2 6 2 4 2 2 R4Q, MSEK 7 8 7 2 6 6 Favourable prices & terms 2 1 8 1 6 6 5 4 4 8 1 4 4 2 Aitik Lower grades q-o-q Lower milled volume y-o-y Winter conditions at start of Q2 New crusher in operation 1 2 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 6 3 2 4 1 8 1 2 6 Tara Lower grades q-o-q Increased milled volume 213 214 215 216 217 218 Quarterly EBIT Rolling 4Q EBIT Garpenberg Low Zn grade Stable production Kevitsa Record high Ni grade Stable production Boliden Group Q2 218 8 218-7-2
Mines Production Milled ore, Mtonnes 16 Copper Metal content, Ktonnes 48 Milled ore, Mtonnes 2, Zinc Metal content, Ktonnes 1 14 12 42 36 1,6 8 1 8 3 24 1,2 6 6 18,8 4 4 2 12 6,4 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 214 215 216 217 218 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 Q2 214 215 216 217 218 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 Q2 214 215 216 217 218 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 Q2 218 9 218-7-2
Click to edit Master text styles Second level Third level Fourth level Fifth level Smelters Control room at Bergsoe Boliden Group Q2 218 1 218-7-2
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 1 3 1 1 9 7 R4Q, MSEK 3 9 3 3 2 7 2 1 5 1 5 Stable production Maintenance shutdowns in Q2-13 (-26) MSEK 3 1 9 3 Investment decision leaching plant Rönnskär -1 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 213 214 215 216 217 218 Quarterly EBIT excl PIR* Rolling 4Q EBIT excl PIR* -3 * PIR=Process Inventory Revaluation Boliden Group Q2 218 11 218-7-2
Smelters Production Cu production 9 (87) ktonnes Increased production in both smelters Total feed, Ktonnes 4 35 3 25 Copper Metal production, Ktonnes 12 15 9 75 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 2 15 1 5 Total feed, Ktonnes 25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 214 215 216 217 218 Feed, total Zinc Metal production 6 45 3 15 Metal production, Ktonnes 15 2 12 15 9 1 6 5 3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 214 215 216 217 218 Feed, total Metal production Boliden Group Q2 218 12 218-7-2
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 Q2 218 13 218-7-2
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 7.45 5.34 7.35 Net debt / equity ratio 13 25 6 Boliden Group Q2 218 14 218-7-2
EBIT ex. PIR by segment MSEK Q2 218 Q2 217 Q1 218 Mines 2,44 1,555 1,931 Smelters 63 563 64 Other/eliminations -346 78 154 The Group 2,329 2,196 2,724 Boliden Group Q2 218 15 218-7-2
218 Q2 vs. 217 Q2 Group EBIT excl. PIR MSEK Q2 218 2,329 Q2 217 2,196 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 Q2 218 16 218-7-2
218 Q2 vs. 218 Q1 Group EBIT excl. PIR MSEK Q2 218 2,329 Q1 218 2,724 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 Q2 218 17 218-7-2
Cash flow MSEK Q2 218 Q2 217 Q1 218 EBITDA excluding PIR 3,552 3,338 3,994 Cash flow from working capital 171 541-823 Inventories 322 416-974 Operating receivables -31 261-224 Operating liabilities -118-125 378 Other -2-1 -3 Cash flow from investments -1,554-1,383-1,18 Financial items -66-74 -58 Tax paid -436-284 -62 Other 51 13 46 Free cash flow 1,718 2,152 1,431 Boliden Group Q2 218 18 218-7-2
Balance sheet SEK bn 3 June 218 3 June 217 31 Dec 217 MSEK 12 % 45 Total Assets 57.8 53.5 55.9 Capital employed 44.8 42.6 42.9 1 8 4 35 3 Equity 36.2 31.1 35.1 Net debt 4.6 7.8 3.8 6 4 25 2 15 Net debt / equity ratio 13 25 11 Loan duration, years 3.8 2.9 2.4 Average interest rate, % 1.2 1.3 1.3 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 214 215 216 217 218 1 5 Interest duration, years.3.5.5 Net debt Gearing Net payment capacity 9.2 7.2 8.8 Boliden Group Q2 218 19 218-7-2
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 Q2 218 2 218-7-2
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 Q2 218 21 218-7-2
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 Q2 218 22 218-7-2
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 www.boliden.com Top of KID 2, the new crusher at Aitik Boliden Group Q2 218 23 218-7-2
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 Q2 218 24 218-7-2
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Click to edit Master text styles Second level Third level Fourth level Fifth level Appendix Zinc slabs Boliden Group Q2 218 26 218-7-2
Zinc price Zinc price, USD/tonne 4 KTonnes 2 USD/tonne 3 9 Q2 Q3 Q4 Q1 Q2 3 4 3 2 1 6 1 2 8 2 9 2 4 1 9 1 4 apr-17 jul-17 okt-17 jan-18 apr-18 jul-18 1 28 29 21 211 212 213 214 215 216 217 218 LME inventory Shanghai inventory Price Price Q avg 4 Average price in Q2 vs. period Q1-18 Q4-17 Q3-17 Q2-17 -9% -4% 5% 2% Note: Prices until 18 July 218 Boliden Group Q2 218 27 218-7-2
Copper price Copper price, USD/tonne 12 KTonnes 2 4 USD/tonne Q2 Q3 Q4 Q1 Q2 7 5 7 1 8 6 4 2 1 6 1 2 8 6 5 6 5 5 5 4 5 4 apr-17 jul-17 okt-17 jan-18 apr-18 jul-18 2 28 29 21 211 212 213 214 215 216 217 218 LME inventory COMEX inventory Shanghai inventory Price Price Q avg 4 Average price in Q2 vs. period Q1-18 Q4-17 Q3-17 Q2-17 -1% 1% 8% 21% Note: Prices until 18 July 218 Boliden Group Q2 218 28 218-7-2
Nickel price Nickel price, USD/tonne 35 KTonnes 6 USD/tonne 18 Q2 Q3 Q4 Q1 Q2 3 25 5 4 16 14 12 2 15 1 3 2 1 8 6 apr-17 jul-17 okt-17 jan-18 apr-18 jul-18 5 28 29 21 211 212 213 214 215 216 217 218 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 Q2 218 29 218-7-2
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 28 29 21 211 212 213 214 215 216 217 218 Silver price, USD/troy oz. 6 5 4 3 2 1 Silver Lead price, USD/tonne 5 Lead 4 5 4 3 5 3 2 5 2 1 5 1 5 28 29 21 211 212 213 214 215 216 217 218 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% 28 29 21 211 212 213 214 215 216 217 218 Note: Prices until 18 July 218 Boliden Group Q2 218 3 218-7-2
Zinc TC and premia US$/t concentrate 3 Treatment charges US$/t metal 25 Metal premia 25 2 2 15 15 1 1 5 5 214 215 216 217 218 214 215 216 217 218 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 Q2 218 31 218-7-2
Copper TC and premia US$/t concentrat 12 e 1 8 6 4 2 Treatment charges 214 215 216 217 218 Contract TC - annual and mid-year benchmark Standard grade spot TC US$/t metal Metal premia 16 14 12 1 8 6 4 2 214 215 216 217 218 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 Q2 218 32 218-7-2
Market balance zinc and copper Zinc global market Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Metals demand, kt 3 416 3 441 3 45 3 564 3 53 3 493 3 513 3 611 Year on year change 3,% 2,7% 1,8% 3,3% 2,6% 1,5% 1,8% 1,3% Smelter production, kt 3 378 3 555 3 33 3 297 3 28 3 544 3 342 3 317 Year on year change -1,1% 3,1%,7% -1,1% -2,9% -,3% 1,2%,6% Mine production, kt 2 929 3 147 2 795 2 985 2 986 3 143 2 841 3 11 Year on year change -1,1% 4,2% 9,2% 5,1% 1,9% -,1% 1,7% 4,2% Metal balance, kt -38 114-147 -268-224 51-171 -294 Concentrate balance, kt -135-199 -294-48 8-31 -122 111 Copper global market Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Metals demand, kt 5 673 5 85 5 189 5 841 5 822 5 998 5 385 6 51 Year on year change 2,1% 3,% 2,7% 2,2% 2,6% 2,5% 3,8% 3,6% Smelter production, kt 5 645 5 77 5 591 5 627 5 784 6 6 5 775 5 864 Year on year change 1,5% 2,7%,4% -,6% 2,5% 4,1% 3,3% 4,2% Mine production (concentrate), kt 4 75 4 245 3 789 4 82 4 224 4 383 4 176 4 124 Year on year change 7,3% 8,% -2,4%,% 3,7% 3,3% 1,2% 1,% Metal balance, kt -28-8 42-213 -37 8 39-187 Concentrate balance, kt 68 119-271 163 132 37-44 Source: CRU 218, Boliden calculations Boliden Group Q2 218 33 218-7-2
Market balance nickel and lead Nickel - global market Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Metals demand, kt 494 525 515 59 552 577 569 57 Year on year change 8,% 13,1% 6,7% -1,5% 11,7% 1,% 1,6% 11,9% Smelter production, kt 49 512 484 483 529 543 525 55 Year on year change 1,8% 3,8% 3,5% -4,5% 7,9% 5,9% 8,5% 13,8% Mine production, kt 553 513 446 552 629 585 524 634 Year on year change,7% 6,1% -2,6% 6,1% 13,6% 14,1% 17,5% 14,8% Metal balance, kt -4-12 -31-26 -23-35 -44-19 Lead - global market Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Metals demand, kt 2 95 3 43 2 877 2 916 3 2 3 11 2 939 2 992 Year on year change 3,9% 3,2% 2,3% 2,2% 1,8% 1,9% 2,2% 2,6% Smelter production, kt 2 945 2 994 2 849 2 914 2 965 3 64 2 892 2 983 Year on year change 2,8%,%,5% 1,8%,7% 2,3% 1,5% 2,4% Mine production, kt 1 225 1 236 1 33 1 13 1 24 1 211 1 51 1 164 Year on year change -3,6% -3,%,1% -,5% -1,7% -2,% 1,8% 3,% Metal balance, kt -5-49 -28-2 -37-37 -47-9 Concentrate balance, kt 48 55-79 4 41 39-73 -7 Source: CRU 218, Boliden calculations Boliden Group Q2 218 34 218-7-2
Economic development Industrial production, year on year % 1 8 6 4 2-2 -4 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 215 216 217 218 EU28 USA China World Source: Thomson Reuters Datastream, world data calculated by Boliden Boliden Group Q2 218 35 218-7-2
Construction largest segment for Cu and Zn Activity, year on year % 2 15 1 5-5 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 214 215 216 217 218 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 Q2 218 36 218-7-2
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 214 215 216 217 218 Europe North America China World Source: LMC Automotive Boliden Group Q2 218 37 218-7-2
China metals demand and economic growth Year on year growth % 25 2 15 1 5-5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 214 215 216 217 218 Zinc demand Copper demand Nickel demand GDP growth % Industrial production growth % Source: CRU Ltd, Thomson Reuters Datastream Boliden Group Q2 218 38 218-7-2
Click to edit Master text styles Second level Third level Fourth level Fifth level Boliden 39 218-7-2