Lennart Evrell - Bolideninvestors.boliden.com/sites/default/files/event/boliden-q4-13-presentation.pdf · Zinc TC and premiums 100 150 200 250 $/t metal Metal premium 100 150 200

Year-end reportJanuary – December 2013

Lennart EvrellPresident & CEO

Mikael StaffasCFO

Summary Q4 2013

� Revenues 8 653 (10 194) MSEK

� EBIT ex PIR* 548 (839) MSEK

‒ EBIT 486 (676) MSEK

� Free Cash Flow -206 (110) MSEK

� Milled production Aitik 10 mt

‒ Target 36 mt reached one year in advance 4 000

4 800

5 600

6 400

7 200

1 000

1 200

1 400

1 600

1 800

R4Q,MSEK

MSEK Quarterly EBIT excl PIR*

Rolling Q EBIT, RHS

Rolling Q EBIT excl PIR*, RHS

2014-02-12Boliden Group Q4 2013 2

* PIR=Process Inventory Revaluation

0

800

1 600

2 400

3 200

0

200

400

600

800

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2008 2009 2010 2011 2012 2013

Summary 2013

� Revenues 34 409 (40 001) MSEK

� EBIT ex PIR* 2 271 (4 042) MSEK

� Lower metal prices and terms

� Major planned maintenance shutdowns

� Stable production in general

2014-02-12Boliden Group Q4 2013 3

� Stable production in general

� Weak Rönnskär, strong Harjavalta

� Large investments

‒ Projects on plan

� Proposed dividend 1.75 (4) SEK per share

The Market

2014-02-12Boliden Group Q4 2013 4

Economic development

4

6

8

10

12

14

China World

USA EU27

0

5

10

15

20

25

GDP growth, year on year % Industrial production, year on year %

2014-02-12

-8

-6

-4

-2

0

2

-25

-20

-15

-10

-5

0

China World

USA EU27

December 2013 latest dataLatest data: USA, China Q42013, EU, World Q3 2013

Source: Reuters Datastream, Boliden calculations for world data

Boliden Group Q4 2013 5

10

20

30

40

EU27 construction IP

USA - construction expenditure

China - fixed assets investment

ConstructionLargest segment for Cu and Zn

40

50

60

70

0,8

1,0

1,2

M units annual rate NAHB index

Activity, year on year % US housing starts and construction sentiment

-30

-20

-10

0

10

2014-02-12

0

10

20

30

40

0,0

0,2

0,4

0,6

2008 2009 2010 2011 2012 2013

US Housing starts

US home builders sentiment

Source: Reuters Datastream


AutomotiveNo 2 segment for Cu and Zn

20

40

60

80

100

120China - Production of passenger cars

USA - industrial production automobile & light duty truck

Europe - light vehicles

Quarterly car production, year on year %

-80

-60

-40

-20

0

20

2008 2009 2010 2011 2012 2013

2014-02-12

Source: Reuters Datastream, European data from LMC Automotive

Latest data: Q4 2013


Market balance

Zinc – global market Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013

Demand 2.7% 2.3% 3.0% 3.7% 4.8%

Smelter production -5.5% 1.6% 5.1% 9.1% 5.1%

Metal balance, kt -49 45 42 21 114

Mine production -2.2% 2.6% 0.7% 1.3% -1.4%

Concentrate balance, kt 153 -38 182 143 23

Copper – global market Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013

2014-02-12

Demand 2.3% 1.1% 3.6% 6.0% 5.4%

Smelter production 2.4% 6.1% 4.6% 2.8% 1.2%

Metal balance, kt 289 147 -117 -10 89

Mine production 2.2% 8.9% 6.5% 10.4% 8.3%

Concentrate balance, kt 10 -65 104 200 212

� Good demand for both copper and zinc

� Limited growth in zinc mine production while high for copper

Source: CRU - January and February 2014, Boliden calculations


Zinc price and inventories

0,8

1,0

1,2

1,4

1,6

1,8

2 000

2 500

3 000

3 500

4 000

4 500

5 000

USD/t

Mill

ions

LME Inventory Shanghai Inventory Price Price Q avg

1 500

1 600

1 700

1 800

1 900

2 000

2 100

2 200

2 300

31-dec 31-jan 28-feb 31-mar 30-apr 31-maj 30-jun 31-jul 31-aug 30-sep 31-okt 30-nov 31-dec

USD/t

Q1 Q3Q2 Q4

2014-02-12Boliden Group Q4 2013 9

Average price in Q4 vs period

Q3-13 Q2-13 Q1-13 Q4-12

+3% +4% -6% -2%0,0

0,2

0,4

0,6

0

500

1 000

1 500

2 000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Zinc TC and premiums

100

150

200

250

$/t metal Metal premium

100

150

200

250

300

US$/t concentrate

Treatment charges

� Stable spot TC, well below benchmark

� Contract TC stable, small change in Zn price

� New benchmark not set

� European premiums up slightly in a balanced European market

2014-02-12Boliden Group Q4 2013 10

Source: CRU January and February 2014

0

50

2010 2011 2012 2013

Europe ex-works US Midwest DeliveredFar East (Western)

0

50

100

2010 2011 2012 2013

Spot TC outturn

Realised contract TC (incl.price participation)

Copper price and inventories

0,8

1,0

1,2

1,4

1,6

5 000

6 000

7 000

8 000

9 000

10 000

11 000

Mill

ions

USD/t LME Inventory Shanghai Inventory COMEX Inventory Price Price Q avg

6 000

6 500

7 000

7 500

8 000

8 500

9 000


USD/t

Q1 Q2 Q3 Q4

2014-02-12Boliden Group Q4 2013 11

0,0

0,2

0,4

0,6

0

1 000

2 000

3 000

4 000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014



Q3-13 Q2-13 Q1-13 Q4-12

+1% 0% -10% -10%

Copper TC and premiums

60

80

100

120

140

$/t metalMetal premium

60

80

100

120

140

US$/t concentrate Treatment charges

� Spot TC continued up, well above benchmark

� Spot market – small volumes in Q4

� New benchmark set at 92/9.2

� Spot premium up in Q4 in a tight European market

0

20

40

2010 2011 2012 2013

Spot Copper premium CIF W. Europe

Benchmark CIF Europe

2014-02-12

0

20

40

2010 2011 2012 2013

Standard grade spot TC

Contract TC - annual and mi-year benchmark


Source: CRU January and February 2014

Gold, Silver and Lead prices

50

100

150

200

250

300

350

400

450

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

USD/t

Tho

usa

nd

s

Lead

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

USD/oz Gold

2014-02-1213Boliden Group Q4 2013

0

50

0

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

200

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

10

20

30

40

50

60

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

USD/oz Silver


Q3-13 Q2-13 Q1-13 Q4-12

Gold -4% -10% -22% -26%

Silver -2% -10% -31% -36%

Lead 0% +3% -8% -4%

Mines

2014-02-12Boliden Group Q4 2013 14

Mines – Q4 2013

Q4

� EBIT 422 (545) MSEK

‒ 372 MSEK in Q3 2013

� Capex 1 037 (1 195) MSEK

� Aitik milled production 10 mt

� Stable production

Full year 2 400

3 600

4 800

800

1 200

1 600

R4Q, MSEK

MSEK

Quarterly EBIT

Rolling Q EBIT

� EBIT 1 598 (2 974) MSEK

� Capex 3 763 (3 570) MSEK

� Lower metal prices and terms

� Aitik above 36 mt target

2014-02-12Boliden Group Q4 2013 15

0

1 200

0

400

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2008 2009 2010 2011 2012 2013

Mines – Full Year 2013EBIT by Unit

Aitik

1 732

2 974

2 000

2 500

3 000

3 500

MSEKTotalTaraGarpenbergBoliden� Lower metal prices and terms

Aitik

� Higher copper production

� Lower gold production

Boliden

� Mix change – copper to zinc


369

1 033

100

882

19

776

195

1 598

0

500

1 000

1 500

2012 2013 2012 2013 2012 2013 2012 2013 2012 2013

� Mix change – copper to zinc

� High exposure to precious metals

Tara

� Extraordinary items of +171 MSEK

� Personnel reduction from 700 to 650

2014-02-12

8

12

16

20

24

4

6

8

10

Metal content, kt

Milled ore, mt

Copper

Mines – Production

40

60

80

100

0,6

0,9

1,2

1,5

Metal content,

kt

Milled ore, mt

Zinc

0

4

0

2

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011 2012 2013

Milled ore (Aitik) Metal content

� Aitik – 10 mt of milled production in Q4

� Boliden Area – production down on ore mix

� Tara – higher grades and higher milled production

� Garpenberg – lower grades

� Boliden Area –production up due to ore mix and less smelter slag than Q3

2014-02-12Boliden Group Q4 2013 17

0

20

0,0

0,3

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011 2012 2013

Milled ore Zinc metal content

Mineral Reserves & Resources

2014-02-12Boliden Group Q4 2013 18

� Mineral reserves up in Boliden Area and Garpenberg

‒ Lower grades in Garpenberg

� Mineral resources decreased in all mining areas except in Tara

� Significant increase in mineral resources in Laver and Rockliden

Mineral Reserves & Mineral Resources

2014-02-12

resources in Laver and Rockliden

� Exploration in 2013 300 (350) MSEK

‒ 159 000 m drilled (228 000)


Aitik and Boliden Area

Boliden AreaAitik

1 000

1 500

2 000

2 500

Million ton

6 000

8 000

10 000

12 000

14 000

16 000

18 000kton

� Reserves and resources decreased

‒ New drill hole information

� Reserves increased while resources decreased

2014-02-12Boliden Group Q4 2013 20

0

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Inferred Measured/Indicated

Proven/Probable Production*10

0

2 000

4 000

6 000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013



Garpenberg and Tara

Garpenberg Tara

15 000

20 000

25 000

30 000

35 000

40 000

kton

15 000

20 000

25 000

30 000kton

� Reserves increased but lower grades

‒ Low grade resources upgraded to reserves

‒ New drill hole information

� Life of mine plan 2019 (2018)

2014-02-12Boliden Group Q4 2013 21

0

5 000

10 000

15 000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013



0

5 000

10 000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013



Smelters

2014-02-1222Boliden Group Q4 2013

Smelters – Q4 2013

Q4:

� EBIT ex PIR* 149 (202) MSEK

‒ 262 MSEK in Q3 2013

� Capex 254 (277) MSEK

� Sulphuric acid prices down

� Kokkola silver project on plan

� Fire in Harjavalta, -30 MSEK

1 800

2 300

2 800

700

900

1 100

R4Q, MSEKMSEK

Quarterly EBIT excl PIR*

Rolling Q EBIT, RHS

Rolling Q EBIT excl PIR*, RHS

Full year:

� EBIT ex PIR* 679 (1 095) MSEK

� Capex 1 200 (993) MSEK

� Major planned maintenance shutdowns, -330 (-170) MSEK

� Process instability in Rönnskär, high free metals in Harjavalta

2014-02-12Boliden Group Q4 2013 23


-200

300

800

1 300

-100

100

300

500

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2008 2009 2010 2011 2012 2013

Bergsöe Kokkola

Smelters – Full Year 2013EBIT excl PIR by Unit

535

1 095

679

600

800

1 000

1 200

MSEK Odda TotalRönnskärHarjavalta� Lower prices and terms for copper

smelters

� Major maintenance shutdowns

Harjavalta

� Higher contribution from free metals than normal, ~130 MSEK

2014-02-12Boliden Group Q4 2013 24

34 31

261

324

535

39 -26

248

316

53

-200

0

200

400

2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013

Rönnskär

� Negative impact from maintenance shutdowns and production instability, ~200 MSEK

� Action plan initiated

‒ Raw material management

‒ Process control

‒ Cost focus

‒ Organisational changes

Smelters – Production

60

80

100

200

250

300

350

400

Cathode production,

kt

Total feed, kt

Copper

60

80

100

120

140

150

200

250

Metal production,

ktTotal feed,

kt

Zinc

� Feed decrease – fire in Harjavalta, Rönnskär focus on intermediaries

� Metal production up – good performance in cellhouses

� Kokkola – lower feed due to planned cleaning, good metal production

� Odda – one leaching reactor short

2014-02-12Boliden Group Q4 2013 25

0

20

40

0

50

100

150

200

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011 2012 2013Copper feed, total Cathode production

0

20

40

60

0

50

100

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011 2012 2013

Zinc feed, total Zinc metal production

Financials

2014-02-12Boliden Group Q4 2013 26

MSEK Q4 2013 Q4 2012 Q3 2013

Revenues 8,653 10,194 8,471

EBITDA 1,212 1,279 1,380

EBIT 486 676 681

Financial development – Summary

EBIT ex PIR 548 839 603

Investments 1,294 1,474 1,151

Free cash flow -206 110 436

Earnings per share, SEK 1.42 3.15 1.81

Net debt / equity ratio 38 28 38

2014-02-12Boliden Group Q4 2013 27

EBIT analysis Q4 vs Q3

MSEK Q4 2013 Q3 2013

EBIT 486 681

Process inventory revaluation (PIR) -62 78

EBIT excl. PIR 548 603

Deviation -55

Specification of deviation

Volume 63Volume 63

Prices and Terms (incl. hedges) -9

Whereof currency effects 5

Costs -111

Depreciation -25

Internal profit elimination 56

Other -28

Deviation -55

Result for respective period

Realized Metal- and Currency hedge 10 6

2014-02-12Boliden Group Q4 2013 28

EBIT analysis Q4 vs Q4

MSEK Q4 2013 Q4 2012

EBIT 486 676

Process inventory revaluation (PIR) -62 -163

EBIT excl. PIR 548 839

Deviation -291


Volume 346Lower prices for precious metals

Higher mine production

Prices and Terms (incl. hedges) -435

Whereof currency effects -47

Costs 41

Depreciation -122

Internal profit elimination -116

Other -5

Deviation -291



2014-02-12Boliden Group Q4 2013 29

Lower prices for precious metals and sulphuric acid

Commission of new production equipment and increased mine production

Good cost development

Financial development – Summary

MSEK

Full year

2013

Full year

2012

Revenues 34,409 40,001

EBITDA 4,632 6,731

EBIT 1,803 4,171

2014-02-12Boliden Group Q4 2013 30

EBIT ex PIR 2,271 4,042

Investments 4,974 4,569

Free cash flow -1,466 1,389

Earnings per share, SEK 4.72 12.21

Net debt / equity ratio 38 28

EBIT analysis 2013 vs 2012

MSEK 2013 2012

EBIT 1,803 4,171

Process inventory revaluation (PIR) -469 129

EBIT excl. PIR 2,271 4,042

Deviation -1,770


Volume 287Higher mine production

Prices and Terms (incl. hedges) -1,818

Whereof currency effects -422

Costs -136

Depreciation -280

Internal profit elimination -1

Extraordinary items 171

Other 7

Deviation -1,770



2014-02-12Boliden Group Q4 2013 31

Lower metal prices Weak USD

Maintenance shutdownsHigher electricity prices

Commission of new production equipment and increased mine production

Cash flow

MSEK 2013 2012

EBITDA including PIR* 4,632 6,731

PIR 469 -129

Inventories -253 -405

Payables -580 615

Receivables -177 234

2014-02-12Boliden Group Q4 2013 32


Other -5 5

Changes in working capital -546 320

Cash flow from investments -4,971 -4,129

Financial items -222 -179

Tax paid -303 -1 145

Other incl. translation differences -56 -209

Free cash flow -1 466 1 389

Capital structure

SEK bnUnless otherwise stated

31 Dec 2013

31 Dec 2012

Total Asset 41.8 40.1

Capital employed 34.5 31.2

Shareholders' equity 23.1 22.4

Net debt 8.7 6.3 20

25

30

35

40

45

6 000

8 000

10 000

%MSEK

2014-02-12Boliden Group Q4 2013 33

Net debt 8.7 6.3

Gearing, % 38 28

Loan duration, years 2.6 3.5

Average interest rate, % 1.8 3.1

Interest duration, years 0.7 0.9

Net payment capacity 6.4 9.2

0

5

10

15

20

0

2 000

4 000

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2011 2012 2013

Net debt Gearing

Project update

� Silver recovery Kokkola on plan

‒ Start-up Q3 2014

� Garpenberg on plan

‒ Start-up first half 2014, full production end 2015

� Aitik45 - Decision in 2014

� Laver conceptual study

2014-02-12Boliden Group Q4 2013 34

Summary going forward

Market

� Global macro improved

� Prices flat‒ Base metals up

‒ Precious metals down

� New benchmark set for copper TC

Boliden

� Aitik‒ Production target of 36 mt reached one

year ahead of plan

‒ Low grades through 2014

� Garpenberg � New benchmark set for copper TC

� Weak USD

� Garpenberg ‒ Ramp-up start H1 2014

� Rönnskär, Harjavalta ‒ Action programme initiated to stabilise

Rönnskär production

‒ Harjavalta on high level of free metals 2013

� Kokkola

‒ Silver project on plan, expected to start Q3 2014

2014-02-12Boliden Group Q4 2013 35

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.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.

2014-02-12Boliden Group Q4 2013 36

2014-02-1237Boliden Group Q4 2013

Documents

Lennart Evrell - Bolideninvestors.boliden.com/sites/default/files/event/boliden-q4-13-presentation.pdf · Zinc TC and premiums 100 150 200 250 $/t metal Metal premium 100 150 200