Q4 Interim and Year-end Report 2016 - Bolidenir.boliden.com/sites/default/files/report/q4_2016... · Q4 vs. Q3 – Higher production & market terms Boliden Group Q4 2016 24 2017-02-10

Q4 Interim and Year-end

Report 2016

Lennart Evrell

President & CEO

Håkan Gabrielsson

CFO

High production, improved market terms & a strong cash flow

2017-02-10 Boliden Group Q4 2016

* PIR=Process Inventory Revaluation

• Revenues 12,137 (9,699) MSEK

• EBIT ex PIR* 2,106 (596) MSEK

‒ EBIT 2,353 (416) MSEK

• Free Cash Flow 1,692 (36) MSEK

• Strong result Smelters

• High production Mines

‒ Production record at several units

• Higher costs

‒ Mainly volume driven

• Improved metal prices

• Capital gain Odda 47 MSEK

2

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

5 500

6 000

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2 200

2 400

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

2011 2012 2013 2014 2015 2016

R4Q,MSEK

MSEK

Quarterly EBIT excl PIR* Rolling 4Q EBIT Rolling Q EBIT excl PIR*

FY 2016



• Revenues 40,316 (40,242) MSEK

• EBIT ex PIR* 5,094 (4,010) MSEK

‒ EBIT 5,682 (3,590) MSEK

• Free Cash Flow -2,801 (2,565) MSEK

‒ Excluding Kevitsa 3,124 MSEK

• Profitable Smelter strategy

• Higher production, mainly Mines

• Production record at several units

• Improved market terms

• Proposed dividend 5.25 (3.25) SEK

per share

3

0

1 000

2 000

3 000

4 000

5 000

6 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

MSEK

EBIT EBIT excl PIR*

Market Q4 2016 – Supply driven market

Macro

• Improved industrial production growth

Base metals markets

• Cu, Zn demand growth 3 %

• Strong growth in Ni demand

• Disruptions to Cu mine production

• Zn concentrate deficit

• Cu, Zn inventories down

• Ni supply flat, inventories still large

• Easing of Ni ore export ban in Indonesia,

while Philippine confirms closures

2017-02-10 Boliden Group Q4 2016 4

Zinc, copper and nickel prices

Normal C1 – Zinc Normal C1 – Copper

USD/ton USD/ton

Source: Wood Mackenzie January 2017, Thomson Reuters Datastream January 30 2017

Normal C1 – Nickel

USD/ton

2017-02-10 Boliden Group Q4 2016 5

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

Zn average price Zn max price

Zn min price 50th perc

75th perc 90th perc

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

Cu average price Cu max price

Cu min price 50th perc

75th perc 90th perc

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

Ni average price Ni max price

Ni min price 90th perc

75th perc 50th perc

Boliden market term index

2017-02-10 Boliden Group Q4 2016 6

Mines

2017-02-10 Boliden Group Q4 2016 7

Mines – high production, higher metal prices

• EBIT 1,136 (31) MSEK

‒ 804 MSEK in Q3 2016

• Capex 923* (688) MSEK

• High production in all mines

‒ Garpenberg strong performance

• Higher metal prices and USD

• Higher costs

‒ Mainly volume driven

2017-02-10 Boliden Group Q4 2016 8

* - excluding the acquisition of Kevitsa (-18 MSEK)

0

800

1 600

2 400

3 200

4 000

4 800

0

200

400

600

800

1 000

1 200

1 400

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

2011 2012 2013 2014 2015 2016

R4Q, MSEKMSEK

Quarterly EBIT Rolling 4Q EBIT

2016 – higher volumes & improved market terms

Boliden Group Q4 2016 9

Aitik

• Volatile production

• Cu grade 0.22 (0.21)%

• Low Cu price

Boliden Area

• Stronger production – improved processes

Garpenberg

• Successful expansion – 2.6 (2.4) Mton milled

• High Zn price

Kevitsa

• Solid production

• Low Ni and Cu prices

Kylylahti

• Higher milled volume – improved processes

• Low Cu price

Tara

• Higher production – action plan delivers

• High Zn price

2017-02-10

* - Kevitsa consolidated per 1 June 2016

** - Including items affecting comparability: changed pension terms Tara (248 MSEK),

acquisition costs Kevitsa (–39 MSEK) in 2016; energy tax Aitik (–212 MSEK), changed

pension terms Tara (227 MSEK) in 2015

183**108

1452

-74 95**

1429

222

548

2063

166*

-28

476**

2804

-500

0

500

1000

1500

2000

2500

3000

Aitik Boliden Garpenberg Kevitsa Kylylahti Tara Total

MSEK EBIT

2015 2016

Kevitsa update June-December 2016

2017-02-10 Boliden Group Q4 2016 10

• EBIT 166 MSEK and EBITDA 500 MSEK

(June-Dec 2016)

• Record milled volume pace 7.7 Mton

• Integration according to plan

• Actions so far:

‒ Process tuning for AG milling

‒ Optimization of concentrate quality

Kevitsa plan

2017-02-10 Boliden Group Q4 2016 11

• Plan 9 Mton milled volume 2020

‒ Continued tuning

‒ Improvements in milling efficiency

• Grades 2017-18 on June-Dec 2016 level

• Shifting feed to Boliden’s smelters

‒ Ni concentrate going to Harjavalta

‒ External long-term contracts expired 1 Jan 2017

‒ Before closing ~1/3 of volume

‒ ~60% of Cu concentrate going to Boliden

smelters

‒ External contracts expires end 2018

Mineral Reserves &

Resources

2017-02-10 Boliden Group Q4 2016 12

2017-02-10

Mineral Reserves & Mineral Resources

Boliden Group Q4 2016 13

• Mined volume replaced by new additions

• Significant increase in mineral reserve at

Garpenberg

‒ +36 Mton

‒ Lower reserve grades have not impacted mine

plan for next 5 years

‒ Reserve life almost doubled

• Extension of Tara following exploration

• Disappointing near mine exploration at

Kylylahti

• Exploration 380 (370) MSEK

‒ 201 400 (182 000) m drilled

Aitik and Boliden Area

• Limited exploration

• Stable reserves

• Cu grade 0.23 (0.23)%

• 27 years reserve life

• 40% of Rävliden resource upgraded from

inferred to indicated

• Maurliden East excluded, Te price lower


2017-02-10 Boliden Group Q4 2016 14

Boliden Area Aitik Mton kton

0

500

1 000

1 500

2 000

2 500

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Proven/Probable Measured/IndicatedInferred Production*10

0

5 000

10 000

15 000

20 000

25 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Proven/Probable Measured/IndicatedInferred Production*10

Garpenberg and Kevitsa

• Reserves +36 Mton

‒ Resources converted to reserves

• Lower average reserve grade

‒ Zn: 3.2 (3.9) %

‒ Ag: 97 (113) g/t


• Acquired 2016, limited exploration

• Boliden’s calculation gives slightly lower

average reserve grade


2017-02-10 Boliden Group Q4 2016 15

Garpenberg Kevitsa kton kton

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Proven/Probable Measured/Indicated

Inferred Production*10

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Proven/Probable Measured/IndicatedInferred Production*10

Garpenberg’s mineral reserves and resources

2017-02-10 Boliden Group Q4 2016 16

Lappberget

+15 Mt Reserves

+6 Mt Resources

Huvudmalmen

+9.5 Mt Reserves Dammsjön

+13 Mt Reserves

Kyrkan, Tyskgården, Finnhyttan

+4.2 Mt Resources

Note: Gross mineral reserves and resources shown in illustration

Kylylahti and Tara

• Disappointing near mine exploration

• Exploration continues

• Slightly more than 2 years reserve life

2017-02-10 Boliden Group Q4 2016 17

Kylylahti kton

• Stable reserves

• New inferred resource Tara Deep 10 Mton

‒ Grade: Zn 8,5%, Pb 1,8%

• 6 years of reserve life

Tara kton

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Proven/Probable Measured/IndicatedInferred Production*10

0

5 000

10 000

15 000

20 000

25 000

30 000

2007 2008 200920102011 2012 20132014 2015 2016

Proven/Probable Measured/Indicated

Inferred Production*10Tara Deep

Smelters

2017-02-10 Boliden Group Q4 2016 18



19

• EBIT ex PIR* 1,094 (583) MSEK

‒ 613 MSEK in Q3 2016

• Capex 420 (496) MSEK

• Higher metal prices and USD

• Stable Cu and Zn production

• Higher volume free metals vs Q3

• Capital gain Odda 47 MSEK

Smelters – improved terms, stable Cu & Zn production

-100

400

900

1 400

1 900

2 400

2 900

3 400

-100

100

300

500

700

900

1 100

1 300

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

2011 2012 2013 2014 2015 2016

R4Q, MSEKMSEK

Quarterly EBIT excl PIR* Rolling 4Q EBIT Rolling 4Q EBIT excl PIR*

727 736 739

390

18

2692

852704

572

314

109

2759

0

500

1000

1500

2000

2500

3000

Rönnskär Harjavalta Kokkola Odda Bergsöe Total

MSEK EBIT ex PIR

2015 2016

2016 – solid earnings

2017-02-10 Boliden Group Q4 2016 20

• Rönnskär’s and Bergsöe’s actions

compensate for lower market terms

Rönnskär

• Action plan completed

• Improved prices and terms

Harjavalta

• New Ni model improved position

• Lower market terms

Kokkola

• Production disturbances H2 2016


Odda

• Expansion to 200 kton/year on plan


Bergsöe

• Record high production

• Improved process stability

• Higher Pb price


*

Financials

2017-02-10 Boliden Group Q4 2016 21

Strong earnings

2017-02-10 Boliden Group Q4 2016 22

MSEK Q4 2016 Q4 2015 Q3 2016

Revenues 12,137 9,699 9,733

EBITDA 3,500 1,339 2,653

EBIT 2,353 416 1,529

Process inventory revaluation (PIR) 247 -181 211

EBIT ex PIR 2,106 596 1,318

EBIT ex PIR pro forma 537

Investments 1,343 1,187 1,028

Acquisitions* -18 - -

Free cash flow 1,692 36 91

Earnings per share, SEK 6.68 1.05 4.15

Net debt / equity ratio 32 23 40

Financial development

* - Final adjustment to the Kevitsa acquisition in Q4 2016

Q4 vs. Q4 – Higher volumes & metal prices

2017-02-10 Boliden Group Q4 2016 23

Higher metal prices

MSEK

Q4 2016 2,106

Q4 2015 - pro forma 537

Deviation 1,570

Specification of deviation

Volumes 508

Prices and Terms (incl. hedges) 1,369

Whereof currency effects 227

Costs -227

Depreciation -154

Items affecting comparability 92

Other -17

Deviation 1,570

Higher volume in all mines

EBIT excl. PIR pro forma*

Volume impact

Kevitsa

Higher volumes

*The comparison period includes Kevitsa that was acquired 1 June 2016

2016: Capital gain Odda 47 MSEK

2015: -45 MSEK

Q4 vs. Q3 – Higher production & market terms

2017-02-10 Boliden Group Q4 2016 24

Volume impact

Maintenance, tech & exploration Mines

Seasonal increase

Higher variable remunerations

Mainly FX

MSEK

Q4 2016 2,106

Q3 2016 1,318

Deviation 788


Volumes 730

Prices and Terms (incl. hedges) 390


Costs -435

Depreciation -10

Items affecting comparability 47

Other 67

Deviation 788

Higher production Mines

Higher volume free metals Cu smelters

EBIT excl. PIR

Capital gain Odda 47 MSEK

Higher free cash flow

2017-02-10 Boliden Group Q4 2016 25

MSEK Q4 2016 Q4 2015 Q3 2016

EBITDA excluding PIR 3,253 1,520 2,442

Changes in working capital -194 -143 -1,117

Inventories -651 462 -807

Payables 866 -873 -152

Receivables -424 265 -151

Other 14 3 -7

Cash flow from investments -1,147 -1,211 -981

Cash flow from acquisitions* 18 - -

Financial items -86 -62 -75

Tax paid -123 -72 -125

Other -30 4 -54

Free cash flow 1,692 36 91

Free cash flow excl. Kevitsa acquisition 1,674 36 91

Free cash flow

* - Final adjustment to the Kevitsa acquisition in Q4 2016

Stronger balance sheet

2017-02-10 26 Boliden Group Q4 2016

SEK bn (Unless otherwise stated)

31 Dec

2016

30 Sep

2016

Total Assets 53.9 51.7

Capital employed 42.5 42.1

Shareholders' equity 29.4 27.6

Net debt 9.3 11.1

Gearing, % 32 40

Loan duration, years 3.3 3.4

Average interest rate, % 1.2 1.2

Interest duration, years 0.2 0.2

Net payment capacity 7.0 5.5

0

5

10

15

20

25

30

35

40

45

0

2 000

4 000

6 000

8 000

10 000

12 000

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

2013 2014 2015 2016

%MSEK

Net debt Gearing

Full-year financial development – Summary

2017-02-10 Boliden Group Q4 2016 27

MSEK (Unless otherwise stated) FY 2016 FY 2015

Revenues 40,316 40,242

EBITDA 9,881 7,112

EBIT 5,682 3,590

EBIT ex PIR 5,094 4,010

Investments 4,127 3,650

Acquisitions 5,961 -

Free cash flow -2,801 2,565

Earnings per share, SEK 15.49 9.65

Net debt /equity ratio 32 23

2016 vs 2015 – Higher production & improved terms

2017-02-10 Boliden Group Q4 2016 28

MSEK

FY 2015 pro forma 3,961

FY 2016 pro forma 4,946

Deviation 985


Volume 1,207

Prices and Terms (incl. hedges) 579


Costs -658

Depreciation -393

Items affecting comparability 301**

Other -50

Deviation 985

Volume impact

Higher personnel costs

Improved metal prices & FX

Lower smelter terms

Higher production, mainly Mines

Higher volume Mines

Aitik capital intensive areas

Kevitsa

* The comparison periods include Kevitsa that was acquired 1 June 2016

** 2016: 256 MSEK; changed pension terms Tara (248 MSEK), acquisition costs Kevitsa (–39 MSEK),

capital gain divestment aluminium fluoride operation at Odda (47 MSEK).

2015: -45 MSEK; energy tax Aitik (–212 MSEK), changed pension terms Tara (227 MSEK), internal

profit elimination Smelters (–60 MSEK).

EBIT excl. PIR pro forma*

Going forward

• Mines

‒ Aitik: volatile production, 2017-19: Cu 0.25%

‒ Garpenberg: 2017: Zn 4.5%, Ag 120 g/ton,

lower reserve grades have not impacted mine

plan for next 5 years

‒ Kevitsa: Grades 2017-18 on June-Dec 2016 level

‒ Winter conditions in Q1 in open pits

• Smelters

‒ Planned maintenance 2017: -390 (-260) MSEK*

‒ Q2: -260 (-210) MSEK

‒ Q3: -50 (-50) MSEK

‒ Q4: -80 (0) MSEK

‒ Odda P200: ahead of plan, ramp-up continues Q1

• Capex

‒ FY 2017: slightly below 6 BSEK

• Capital gain Odda 47 MSEK in Q4 2016

2017-02-10 Boliden Group Q4 2016 29

* EBIT impact

Strong FY 2016

• Well positioned in the metal market

‒ Mines and smelters

‒ Base metals and precious metals

‒ High productivity

• Garpenberg expansion exceeding

expectations

• Kevitsa acquisition strengthens Boliden

• Production records at several units

2017-02-10 Boliden Group Q4 2016 30

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.

2017-02-10 Boliden Group Q4 2016 31

2017-02-10 32 Boliden Group Q4 2016

Appendix

2017-02-10 Boliden Group Q4 2016 33

2017-02-10 Boliden Group Q4 2016 34

Mines – Production

• Aitik – higher production

• Boliden Area – improved ore mix vs Q3

• Garpenberg – stable and high production

• Kevitsa – high milled volume, higher grades vs Q3

• Kylylahti – record milled volume

• Tara – high milled volume, low Zn grade

(*) Milled ore incl Kevitsa (**) Metal content incl Kevitsa

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

0

400

800

1 200

1 600

2 000

2 400

2 800


2013 2014 2015 2016

Metal content, kt

Milled ore, kt

Nickel

Milled ore pro forma* Milled ore Metal content pro forma** Metal content

0

5

10

15

20

25

30

0

2

4

6

8

10

12


2013 2014 2015 2016

Metal content, kt

Milled ore, mt Copper

Milled ore Metal content pro forma** Metal content

0

20

40

60

80

100

0,0

0,4

0,8

1,2

1,6

2,0


2013 2014 2015 2016

Metal content, kt

Milled ore, mt

Zinc

Milled ore Metal content

Smelters – Production

• Harjavalta: High feed and Cu production

• Rönnskär: Process rather than volume

focus

• Kokkola: Disturbances

• Odda: High feed and Zn production

• Odda P200 on plan

2017-02-10 Boliden Group Q4 2016 35

0

15

30

45

60

75

90

105

120

0

50

100

150

200

250

300

350

400


2013 2014 2015 2016

Metalproduction,

kt

Total feed, kt

Copper

Feed, total Metal production

0

30

60

90

120

150

0

50

100

150

200

250


2013 2014 2015 2016

Metal production,

kt

Total feed, kt

Zinc

Feed, total Metal production

0

400

800

1 200

1 600

2 000

0

1 000

2 000

3 000

4 000

5 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

LME inventory Shanghai inventory Price Price Q avg

Zinc price, USD/t KTonnes

1 400

1 600

1 800

2 000

2 200

2 400

2 600

2 800

3 000

okt-15 jan-16 apr-16 jul-16 okt-16 jan-17

USD/t

Zinc price


Average price in Q4 vs. period

Q3-16 Q2-16 Q1-16 Q4-15

12% 31% 50% 56%

36

Q4 Q1 Q2 Q3 Q4

Note: Prices until 6 February 2017

Copper price

2017-02-10 Boliden Group Q4 2016 37

0

400

800

1 200

1 600

2 000

2 400

0

2 000

4 000

6 000

8 000

10 000

12 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

LME inventory COMEX inventory Shanghai inventory Price Price Q avg

Copper price, USD/t KTonnes

4 000

4 500

5 000

5 500

6 000

6 500

7 000


USD/t


Q3-16 Q2-16 Q1-16 Q4-15

11% 12% 13% 8%

Q4 Q1 Q2 Q3 Q4


Nickel price

2017-02-10 Boliden Group Q4 2016 38


Q3-16 Q2-16 Q1-16 Q4-15

5% 23% 27% 15%

6 000

7 000

8 000

9 000

10 000

11 000

12 000

13 000


USD/t

0

100

200

300

400

500

600

0

10 000

20 000

30 000

40 000

50 000

60 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

LME inventory Price Price Q avg

Nickel price, USD/t KTonnes

Q4 Q1 Q2 Q3 Q4


0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gold price, USD/troy oz.

Gold, silver and lead prices


Lead Gold

Silver


Q3-16 Q2-16 Q1-16 Q4-15

Gold -8% -3% 4% 11%

Silver -12% 2% 16% 16%

Lead 15% 25% 23% 28%

39

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Lead price, USD/t

0

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Silver price, USD/troy oz.


Market balance – zinc and copper

2017-02-10 Boliden Group Q4 2016 40

Zinc – global market Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416

Metals demand, kt 3324 3344 3307 3339 3356 3419 3403 3442

Year on year change -1% -1% -1% 1% 1% 2% 3% 3%

Smelter production, kt 3365 3484 3408 3440 3275 3323 3334 3468

Year on year change 8% 7% 2% -2% -3% -5% -2% 1%

Mine production, kt 2 878 3 324 3 254 3 015 2 647 2 920 2 940 3 017

Year on year change 4% 4% 2% -10% -8% -12% -10% 0%

Metal balance, kt 41 140 101 101 -81 -96 -69 26

Concentrate balance, kt -279 59 84 -128 -345 -79 -86 -207

Copper – global market Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416

Metals demand, kt 4968 5522 5555 5684 5013 5671 5680 5844

Year on year change -1% 1% 1% 3% 1% 3% 2% 3%


Year on year change 5% 3% 0% 1% 2% 2% 2% 2%

Mine production, kt 3555 3805 3778 3934 3838 4038 4051 4005

Year on year change 2% 6% 4% 7% 8% 6% 7% 2%

Metal balance, kt 365 -77 -93 -161 373 -97 -9 -105

Concentrate balance, kt -162 54 -66 -21 -156 21 46 -56

Source: CRU December 2016 and January 2017, Boliden

calculations

Market balance – nickel and lead

2017-02-10 Boliden Group Q4 2016 41

Source: CRU December 2016 and January 2017, Boliden

calculations

Nickel - global market Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416

Metals demand, kt 476 475 460 466 485 518 495 510

Year on year change 0% -4% -2% 3% 2% 9% 7,7% 9,4%


Year on year change -5% 3% -6% -4% -2% 0% 2% 1%


Year on year change 6% 3% 3% 7% 0% -4% 2% 2%

Metal balance, kt -3 25 23 24 -22 -19 -5 -17

Lead - global market Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416

Metals demand, kt 2709 2738 2813 2929 2790 2822 2912 3009

Year on year change 0% 0% 2% 3% 3% 3% 4% 2,7%


Year on year change -1% -1% 2% 3% 4% 4% 3% 0%


Year on year change -4% -2% 1% -4% 0% -4% -3% -4%

Metal balance, kt -4 -14 19 29 13 16 -2 -39

Concentrate balance, kt -131 18 133 139 -207 -75 39 56

Economic development

2017-02-10

Industrial production, year on year %

Boliden Group Q4 2016

Source: Thomson Reuters Datastream, Boliden calculations for world data

42

-6

-4

-2

0

2

4

6

8

10

12

14

J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D J F MAM J J A S O N D

2012 2013 2014 2015 2016

EU28 USA China World

-15

-10

-5

0

5

10

15

20

25

30

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

2012 2013 2014 2015 2016

EU USA China

Construction – largest segment for Cu and Zn

2017-02-10

Activity, year on year %

Source: Reuters Datastream


China: year on year based on cumulative investments at each point

43

2017-02-10

Source: LMC Automotive


Automotive

44

Production of light vehicles, year on year, quarterly data

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

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

2012 2013 2014 2015 2016

Europe USA China World

China – metals demand and economic growth

Source: CRU Ltd, Thomson Reuters Datastream

2017-02-10 Boliden Group Q4 2016 45

Year on year growth %

0

2

4

6

8

10

12

14

16

18

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

2011 2012 2013 2014 2015 2016

Zinc demand Copper demand GDP Industrial production

Zinc TC and premia

• Concentrate market tight

• Higher Zn price, realized contract TC up

• Spot TCs in China down

• Stable premia in Europe

• Metal market fairly balanced in Europe


Source: CRU January 2017

46

0

50

100

150

200

250

300

2012 2013 2014 2015 2016

US$/t concentrate

Treatment charges

Realized TC - European contract

Spot TC, China imports

0

50

100

150

200

250

2012 2013 2014 2015 2016

US$/t metal Metal premia

Ex-Works Premia Europe

Delivered Premia US Midwest

Premia Far East - WesternContract benchmark according to market sources including CRU

Copper TC and premia

• Disruptions to mine supply

• Contract TC 2017 down

• Spot TC down

• European spot premia stable


Source: CRU January 2017

47

Contract benchmark according to market sources including CRU Contract benchmark according to market sources including CRU

0

20

40

60

80

100

120

140

160

2012 2013 2014 2015 2016

US$/t metal Metal premia

CIF European benchmark premia

CIF Average European premia

0

20

40

60

80

100

120

140

2012 2013 2014 2015 2016

US$/t concentrate

Treatment charges

Contract TC - annual and mid-year benchmark

Standard grade spot TC

2017-02-10 48 Boliden Group Q4 2016

Documents

Q4 Interim and Year-end Report 2016 - Bolidenir.boliden.com/sites/default/files/report/q4_2016... · Q4 vs. Q3 – Higher production & market terms Boliden Group Q4 2016 24 2017-02-10