interim report - bolideninvestors.boliden.com/sites/default/files/event/boliden...interim report...
TRANSCRIPT
Interim report January – December 2012
Lennart Evrell President & CEO
Mikael Staffas CFO
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012
Msek Quarterly EBIT
Quarterly EBIT excl PIR*
Rolling Q EBIT excl PIR*
Summary
Full year Revenues 40 001 (40 323) MSEK EBIT ex PIR* 3 941 (5 008) MSEK
‒ EBIT 4 071 (4 748) MSEK Free Cash Flow 1 389 (-3) MSEK One-off tax effect 415 MSEK, non-cash Proposed dividend 4 (4) SEK per share Positive mineral resource development Q4 Revenues 10 194 (9 716) MSEK EBIT ex PIR* 818 (991) MSEK
‒ EBIT 656 (1 075) MSEK Free Cash Flow 110 (-482) MSEK Weak mine production Lower margins in smelters Projects on plan
2013-02-11 Boliden Group Q4 2012 2
* PIR=Process Inventory Revaluation
The Market
2013-02-11 Boliden Group Q4 2012 3
Industrial production Year on year %
-25
-20
-15
-10
-5
0
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10
15
20
25
2007 2008 2009 2010 2011 2012
Boliden calculation world IP and BRIC IP
World estimated by Boliden
China
BRIC World USA
Euro Area
2013-02-11 4 Boliden Group Q4 2012
Construction Year on year %
-30
-20
-10
0
10
20
30
40
2006 2007 2008 2009 2010 2011 2012
USA: construction spending value EU27: Index construction production China: fixed asset investments - cumulative value
USA
EU27
China
2013-02-11 5 Boliden Group Q4 2012
Car production Year on year %
-15
-10
-5
0
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10
15
20
25
30
35
Q1 2012 Q2 2012 Q3 2012 Q4 2012
China Germany US auto IP light vehicles
-20
-10
0
10
20
30
40
50
2010 2011 2012
China Germany US auto IP light vehicles
2013-02-11 6 Boliden Group Q4 2012
Zinc price and inventories
2013-02-11 Boliden Group Q4 2012 7
Zinc price (LME average)
USD/t Q4-12 vs period
Q4 11 1,897 +3%
Q1 12 2,025 -4%
Q2 12 1,928 +1%
Q3 12 1,885 +3%
Q4 12 1,947 -
Global zinc demand YoY up % End Q3 to end Q4:
‒ Price down 3% ‒ Inventories up 19%
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
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USD/t
Mill
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LME Inventory Shanghai Inventory Price Price Q avg
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1 200
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1 600
1 800
2 000
2 200
2 400USD/t Q3 Q4
Zinc TC and premiums
Spot TC improved Low smelter production, high mine
production in China
Zinc premium stable in Europe
2013-02-11 Boliden Group Q4 2012 8
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2009 2010 2011 2012
USD/t concentrate
Zinc treatment charge (TC)
Realised TC (including price participation)
Spot TC - outturn
Source: © CRU (www.crugroup.com)
0 20 40 60 80
100 120 140 160 180 200
2009 2010 2011 2012
USD/t metal Zinc metal price premium
Europe ex-works US Midwest Delivered
Far East (Western)
Source: © CRU (www.crugroup.com)
Copper price and inventories
2013-02-11 Boliden Group Q4 2012 9
Global copper demand YoY up % End Q3 to end Q4:
‒ Price down by 4% ‒ Inventories up 37%
Copper price (LME average)
USD/t Q4-12 vs period
Q4 11 7,489 +6%
Q1 11 8,310 -5%
Q2 12 7,869 +1%
Q3 12 7,706 +3%
Q4 12 7,909 -
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1,6
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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Mill
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USD/t LME Inventory Shanghai Inventory COMEX Inventory Price Price Q avg
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6 500
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7 500
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8 500
9 000USD/t Q3 Q4
Copper TC and premiums
Spot TC improved Low volumes, single trades influenced
in Q4
Copper premium stable in Q4
2013-02-11 Boliden Group Q4 2012 10
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20
40
60
80
100
120
2009 2010 2011 2012
USD/t concentrate
Copper treatment charge (TC)
TC annual and mid-year benchmark contract
Standard grade spot TC US$/dmt
Source: © CRU (www.crugroup.com)
0
20
40
60
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100
120
2009 2010 2011 2012
USD/t metal Copper metal price premium
Spot Copper premium CIF W. Europe
Benchmark CIF Europe
Source: © CRU Sep 2012 (www.crugroup.com)
Gold, Silver and Lead prices
2013-02-11 11 Boliden Group Q4 2012
Average prices Q4 2012 vs period
Q4-11 Q3-12
Gold +2% +4%
Silver +3% +10%
Lead +11% +11%
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USD/t
Thou
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Inventory Price Price Q avg
Lead
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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
USD/oz Gold
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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
USD/oz Silver
Market situation – summary Q4
Metal demand ‒ European demand weaker ‒ Zinc demand in China up
Metal supply
‒ Copper concentrate output up ‒ Zinc concentrate output stable ‒ Zinc metal production down
YoY % Q1-12 Q2-12 Q3-12 Q4-12
Zinc
Concentrate supply 4.9 4.1 3.8 -0.6
Metal production -1.4 -3.1 -5.2 -3.5
Metals demand -1.4 -0.5 1.8 4.3
Copper
Concentrate supply -1.8 2.6 5.0 2.9
Metal production 2.8 1.4 2.1 0.9
Metals demand 8.8 0.9 0.9 -2.2
Lead
Concentrate supply 12.3 5.5 3.9 3.3
Metal production 2.8 2.7 0.6 1.6
Metals demand 2.5 4.0 3.8 4.5
2013-02-11 Boliden Group Q4 2012 12
Source: © CRU January 2013 (www.crugroup.com)
Mines
2013-02-11 Boliden Group Q4 2012 13
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012
Msek Quarterly EBIT
Rolling 4Q EBIT
Mines – Summary
EBIT 517 (646) MSEK ‒ 842 MSEK in Q3 2012
Garpenberg in lower grade areas Low production in Tara
‒ High unit costs ‒ Negotiations ongoing
Aitik production disturbances Boliden area ore mix change
‒ Less copper, more zinc
Projects on plan Capex 1,087 (802) MSEK
2013-02-11 Boliden Group Q4 2012 14
Mines Full Year EBIT by Unit
2013-02-11 Boliden Group Q4 2012 15
2 046
530
1 314
268
3 913
1 692
369
1 033
73
2 908
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2011 2012 2011 2012 2011 2012 2011 2012 2011 2012
MSEK Aitik Boliden
area Tara Mines total Garpenberg
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Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012
Metal content, ktonnes
Milled ore, mtonnes
Zinc
Milled ore Zinc metal content
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Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012
Metal content, ktonnes
Milled ore, mtonnes Copper
Milled ore (Aitik) Metal content
Mines – Production
Milled ore lower, disturbances in Aitik Copper production in Boliden Area down,
ore mix change
Garpenberg mining in low zinc grade areas Lower grade, production disturbances in Tara Higher zink production in Boliden Area
2013-02-11 Boliden Group Q4 2012 16
Mineral Reserves & Resources
2013-02-11 Boliden Group Q4 2012 17
2013-02-11 18 Boliden Group Q4 2012
Resources increased in all mines Continued reserve increase in
Garpenberg and Boliden Area Resources increase Aitik, low grades New additions to mineral resources
‒ Laver, 690 Mt low grade Cu, Au, Mo ‒ Rockliden, 4,5 Mt Cu, Zn, Ag, Pb
Exploration in 2012 350 (282) MSEK ‒ 228 000 m drilled (190 000)
Mineral Reserves & Mineral Resources
Aitik and Boliden Area
Mineral reserves unchanged Mineral resources
‒ large increase but low grades
Both reserves & resources increased
Boliden Area Aitik
2013-02-11 19 Boliden Group Q4 2012
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Inferred Measured/Indicated
Proven/Probable Production*10
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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Inferred Measured/Indicated
Proven/Probable Production*10
Garpenberg and Tara
Both reserves & resources increased Mineral reserves down, slight increase in resources
Garpenberg Tara
2013-02-11 20 Boliden Group Q4 2012
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30 000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Inferred Measured/Indicated
Proven/Probable Production*10
0
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15 000
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25 000
30 000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Inferred Measured/Indicated
Proven/Probable Production*10
Smelters
2013-02-11 21 Boliden Group Q4 2012
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012
Msek Quarterly EBIT
Quarterly EBIT excl PIR* Rolling 4Q EBIT excl PIR*
Smelters – Summary
EBIT ex PIR* 191 (326) MSEK ‒ 292 MSEK in Q3 2012
Rönnskär production instability Odda direct leaching disruption
‒ EBIT -40 MSEK Costs
‒ Seasonally higher vs Q3 ‒ In line with Q4 2011
Capex 277 (514) MSEK Kokkola silver recovery project on
plan
2013-02-11 Boliden Group Q4 2012 22
Smelters Full Year EBIT excl PIR by Unit
2013-02-11 Boliden Group Q4 2012 23
75
-25
246 222
470
1 051
34 8
261 324
535
1 072
-200
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2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012
MSEK Rönnskär Harjavalta Smelters
total Kokkola Odda Bergsöe
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Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012
Cathode production,
ktonnes Total feed,
ktonnes Copper
Copper feed, total Cathode production
Smelters – Production
Feed and production up Improved production in Harjavalta
Stable production in Kokkola Production disturbances in Odda
2013-02-11 24 Boliden Group Q4 2012
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2010 2011 2012
Metal production,
ktonnes
Total feed, ktonnes Zinc
Zinc feed, total Zinc metal production
Financials
2013-02-11 25 Boliden Group Q4 2012
Financial development – Summary
MSEK Q4 2012 Q4 2011 Q3 2012 Revenues 10,194 9,716 9,123
EBITDA 1,171 1,552 1,760
EBIT 656 1,075 1,146
EBIT ex PIR 818 991 974
Investments 1,366 1,321 874
Free cashflow 110 -482 310
Earnings per share, SEK 3.11 2.88 2.99
Net debt / equity ratio, % 25 29 26
2013-02-11 26 Boliden Group Q4 2012
Includes non-cash one-off tax effect of 1.52 per share (415 MSEK)
EBIT analysis Q4 vs Q3
MSEK Q4 2012 Q3 2012 EBIT 656 1,146
Process inventory revaluation (PIR) -163 172
EBIT excl. PIR 818 974
Deviation -155
Specification of deviation
Volume -280
Prices and Terms (incl. hedges) -48
Currency effects -31
Costs -194
Depreciation 104
Internal profit elimination 278
Others 15
Deviation -155
Result for respective period
Realized Metal- and Currency hedge 70 93
Lower production in Mines
Production disturbances and season variation More underground mining
Lower prices and terms for by-products and lower metal prices in beginning of quarter
2013-02-11 27 Boliden Group Q4 2012
Correction in Tara, -79 MSEK in Q3
EBIT analysis Q4 vs Q4
MSEK Q4 2012 Q4 2011 EBIT 656 1,075
Process inventory revaluation (PIR) -163 84
EBIT excl. PIR 818 991
Deviation -173
Specification of deviation
Volume -135
Prices and Terms (incl. hedges) -123
Currency effects -30
Costs -90
Depreciation -44
Internal profit elimination 143
Others 105
Deviation -173
Result for respective period
Realized Metal- and Currency hedge 70 190
2013-02-11 28 Boliden Group Q4 2012
Lower production Mines Modest increase from BoRe
Lower prices and terms Smelters
125 MSEK in reclamation provisions 2011
Financial development – 2012 vs 2011
MSEK 2012 2011 Revenues 40,001 9,716
EBITDA 6,287 6,674
EBIT 4,071 4,748
EBIT ex PIR 3,941 5,008
Investments 4,185 3,998
Free cashflow 1,389 -3
Earnings per share, SEK 11.96 12.39
Net debt / equity ratio, % 25 29
2013-02-11 29 Boliden Group Q4 2012
Cash flow
MSEK 2012 2011 EBITDA* (Operating profit before depr.) 6,288 6,674
PIR -129 261
Change inventories -405 -79
Change payables 615 -372
Change receivables 234 -827
Other 5 0
Change in working capital 320 -1,017 Cash flow from investments -4,129 -4,024
Financial items -179 -188
Tax paid -1 145 -1,540
Other -235 92
Free cash flow 1,389 -3
* Includes PIR=Process Inventory Revaluation
2013-02-11 30 Boliden Group Q4 2012
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Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012
% MSEK
Net debt Gearing
Net debt & Gearing
Capital structure
SEK billion 31 Dec 2012
31 Dec 2011
Total assets 40,0 37.6
Capital employed 31,4 30.5
Shareholders equity 22,9 21.0
Net debt 5,7 6.1
Net debt /equity ratio, % 25 29
Equity/assets ratio, % 57 56
Loan duration, years 3,5 3,3
Average loan interest, % 3,1 3,29
Interest duration, years 0,9 1,0
Net payment capacity 9,2 8,7
2013-02-11 31 Boliden Group Q4 2012
Accounting specifics in Q4 – and after
Q4 (2012) Lower corporate tax rate in Sweden
‒ From 26,3 to 22 % ‒ Non-cash effect 2012: 415 MSEK ‒ Positive impact on net profit and EPS
Future reclamation costs
‒ Reclamation provision increased by 538 MSEK
‒ No effect on profits and C/F 2012 ‒ Annual effect from 2013:
‒ Depreciations +30 MESEK ‒ Financial costs +10 MSEK
Post Q4 (January 2013) Diesel with wrong tax-rate used in Aitik
‒ Mistake with no financial benefit ‒ Taxes paid as if correct diesel was used ‒ Authorities intend to impose tax liability of 212 MSEK plus interest ‒ If final ruling is negative, Boliden will appeal ‒ No provision
2013-02-11 32 Boliden Group Q4 2012
Project update
Aitik on plan to 36 Mt 2014 Rönnskär E-recycling at full capacity Kankberg
‒ Mine production started early ‒ Gold leaching started ‒ Tellurium leaching trimming-in phase
Silver recovery Kokkola on plan Garpenberg on plan
‒ Underground infrastructure, shafts, concentrator ‒ Start-up first half 2014, full production end 2015
Aitik45 feasibility under way Laver conceptual study started
2013-02-11 33 Boliden Group Q4 2012
Summary
General Macro somewhat better but
uncertainty remains Metal prices stable
‒ By-products lower
Operations Aitik on low grades for two years Garpenberg in low grade areas Mix change in Boliden area
‒ Kankberg start ‒ Depletion of Maurliden Östra (Cu) and
gold in Kristineberg ‒ Shift from open pit to underground
Cost programs in Tara and Odda Projects on plan Improved mineral reserves and
resources Maintenance stops 2013
‒ EBIT -325 MSEK ‒ Whereof approx. -300 in Q2
2013-02-11 Boliden Group Q4 2012 34
Disclaimer
This presentation has been prepared by Boliden for information purposes only. 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.
This presentation has been prepared as per the indicated date and Boliden does not undertake any obligation to correct or update the information or any statements made therein. Views that may have been expressed may be subject to change without notice.
Certain statements in this presentation are forward-looking and are based on plans, estimates, assumptions, projections and expectations and are subject to risks and uncertainties. In addition to the factors explicitly discussed, other circumstances may also have a material effect on the actual outcome. Such factors include, but are not limited to, general economic or political conditions, fluctuations in exchange or interest rates or metal prices, technological factors, interruptions in supply or production, actions of courts, regulators, governmental agencies, competitors, customers, suppliers, employees or other third parties.
Nothing contained herein shall constitute any representation or warranty as to the accuracy or completeness and Boliden accepts no responsibility or liability as to the accuracy or completeness of the information contained herein. The material may include information from third party sources believed to be reliable. However, Boliden has not made an independent verification of the information provided.
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 does not accept any liability whatsoever for any direct, indirect, consequential or other loss arising from or in connection with any use of this information.
This material has not been reviewed, registered or approved by any authority under any applicable laws.
Boliden Group Q4 2012 2013-02-11 35
Metals for modern life
2013-02-11 36 Boliden Group Q4 2012