Q2 2015 Interim Report - Bolideninvestors.boliden.com/sites/default/files/event/q22015_boliden_presentation.pdfEarnings per share, SEK 2.96 1.08 3.27 Net debt / equity ratio 28 39

Q2 2015 Interim Report

Lennart Evrell

President & CEO

Mikael Staffas

CFO

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2010 2011 2012 2013 2014 2015

R4Q,MSEK

MSEK

Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS

Robust production and strong cash flow

2015-07-17 Boliden Group Q2 2015

* PIR=Process Inventory Revaluation

• Revenues 10,373 (9,438) MSEK

• EBIT ex PIR* 1,257 (374) MSEK

‒ EBIT 1,090 (478) MSEK

• Free Cash Flow 1,557 (920) MSEK

• High production Mines

• Strong result Smelters

‒ Improved smelter terms

‒ Maintenance shutdowns

• Favourable prices and terms

• Strong cash flow

2

Metal demand – high level, low growth

Macro

• Global economic growth below trend

• Slower industrial production growth in China

Base metals markets

• Demand growth below trend

• Mine supply higher than anticipated for Zn,

lower for Cu

• Balanced metal and concentrate markets

2015-07-17 Boliden Group Q2 2015 3

Boliden market term index

2015-07-17 Boliden Group Q2 2015 4

Note: Graphs show period 1 January 2010 until 30 June 2015.

Favourable currencies vs 1 year ago

2015-07-17 Boliden Group Q2 2015 5

Note: Graph shows period 1 January 2005 until 8 July 2015.

Volatile zinc price in Q2


Average price in Q2 vs period

Q1-15 Q4-14 Q3-14 Q2-14

+5% -2% -5% +6%

Q2 Q3 Q4

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1,000

1,500

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Price Price Q avg

Zinc price, USD/tQ1

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

2,400

2,500

Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15

USD/t Q2

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Volatile copper price in Q2 – negative trend

2015-07-17 Boliden Group Q2 2015 7

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Copper price, USD/t

Price Price Q avg

5,000

5,250

5,500

5,750

6,000

6,250

6,500

6,750

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7,250

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Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15

USD/t Q2 Q3 Q4 Q1 Q2


Q1-15 Q4-14 Q3-14 Q2-14

+4% -9% -14% -11%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Gold and silver prices – negative trend


Lead Gold

Silver


Q1-15 Q4-14 Q3-14 Q2-14

Gold -2% -1% -7% -7%

Silver -2% -1% -17% -16%

Lead +8% -3% -11% -7%

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Gold price, USD/troy oz.

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Silver price, USD/troy oz.

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Lead price, USD/t

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Mines

2015-07-17 Boliden Group Q2 2015 9

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R4Q, MSEK

MSEK

Quarterly EBIT Rolling Q EBIT

High production and cost control

• EBIT 657 (336) MSEK

‒ 482 MSEK in Q1 2015

• Capex 594 (657) MSEK

• High production

‒ Garpenberg ramp-up on plan

‒ Kylylahti strong quarter

‒ Production disturbances Aitik

• Good cost control

• Strong USD vs last year

2015-07-17 Boliden Group Q2 2015 10

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

2012 2013 2014 2015

Metal content, kt

Milled ore, mt

Zinc

Milled ore Metal content

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

2012 2013 2014 2015

Metal content, kt

Milled ore, mt Copper

Milled ore Metal content

• Garpenberg – higher milled tonnage,

lower grade

• Tara – higher grade, low milled tonnage

• Boliden Area – more Zn

Mines – Production

• Aitik – process disturbances due to ore quality

• Kylylahti – strong quarter

• Boliden Area – less Cu

2015-07-17 Boliden Group Q2 2015 11

Smelters

2015-07-17 Boliden Group Q2 2015 12

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R4Q, MSEK

MSEK

Quarterly EBIT excl PIR* Rolling Q EBIT, RHS Rolling Q EBIT excl PIR*, RHS


* PIR=Process Inventory Revaluation

13

• EBIT ex PIR* 604 (174) MSEK

‒ 681 MSEK in Q1 2015

• Capex 281 (250) MSEK

• Maintenance shutdowns on plan

‒ -180 (-120) MSEK

• Strong production Odda, Harjavalta

• Improved USD vs last year

• Improved smelter terms

Strong result despite maintenance shutdowns

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Metal production,

kt

Total feed, kt

Zinc

Feed, total Metal production

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2012 2013 2014 2015

Metalproduction,

kt

Total feed, kt

Copper

Feed, total Metal production

Smelters – Production

• Rönnskär – maintenance shutdown,

improved raw material mix

• Harjavalta – maintenance shutdown,

stable process

• Odda – high and stable production

• Kokkola – maintenance shutdown,

improved process stability vs Q1,

higher silver production

2015-07-17 Boliden Group Q2 2015 14

Financials

2015-07-17 Boliden Group Q2 2015 15

Robust production and strong cash flow

2015-07-17 Boliden Group Q2 2015 16

MSEK Q2 2015 Q2 2014 Q1 2015

Revenues 10,373 9,438 10,407

EBITDA 1,970 1,293 2,057

EBIT 1,090 478 1,205

Process inventory revaluation (PIR) -167 104 103

EBIT ex PIR 1,257 374 1,102

Investments 877 907 706

Free cash flow 1,557 920 19

Earnings per share, SEK 2.96 1.08 3.27

Net debt / equity ratio 28 39 33

Financial development

Higher production and metal prices vs Q1 2015

2015-07-17 Boliden Group Q2 2015 17

Maintenance shutdowns Smelters

Higher metal prices

Improved smelter terms

Weaker USD

MSEK

EBIT excl. PIR – Q1 2015 1,102

Specification of deviation

Volume 249

Prices and Terms (incl. hedges) 86

Whereof currency effects -86

Costs -163

Depreciation -30

Other 13

Deviation 155


High production Mines

EBIT excl. PIR analysis Q2 2015 vs. Q1 2015

Higher production and stronger USD vs. Q2 2014

2015-07-17 Boliden Group Q2 2015 18

Ramp-up Garpenberg

Kylylahti

Maintenance shutdowns Smelters

Stronger USD

Improved smelter terms

Lower metal prices

MSEK

EBIT excl. PIR – Q2 2014 374

Specification of deviation

Volume 283

Prices and Terms (incl. hedges) 779

Whereof currency effects 883

Costs -132

Depreciation -60

Other 13

Deviation 882


Ramp-up Garpenberg

Kylylahti

Aitik push back

Garpenberg start

Kylylahti

EBIT excl. PIR analysis Q2 2015 vs. Q2 2014

Higher profit and lower working capital

2015-07-17 Boliden Group Q2 2015 19

MSEK Q2 2015 Q2 2014 Q1 2015

EBITDA excluding PIR 2,138 1,189 1,954

Changes in working capital 396 795 -1,017

Inventories 678 1,026 -981

Payables -165 207 23

Receivables -119 -438 -59

Other 3 0 0

Cash flow from investments -875 -898 -705

Financial items -62 -93 -59

Tax paid -81 -34 -50

Other 41 -40 -103

Free cash flow 1,557 920 19

Free cash flow

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2011 2012 2013 2014 2015

%MSEK

Net debt Gearing

Capital structure

2015-07-17 20 Boliden Group Q2 2015

SEK bn (Unless otherwise stated)

30 Jun

2015

31 Mar

2015

Total Assets 43.4 44.5

Capital employed 35.2 35.8

Shareholders' equity 25.0 24.7

Net debt 7.0 8.2

Gearing, % 28 33

Loan duration, years 2.9 3.1

Average interest rate, % 1.6 1.6

Interest duration, years 0.6 0.6

Net payment capacity 5.7 5.5

Q2 2015 – Robust production and strong cash flow

• Well positioned in the metal market

‒ Mines and smelters

‒ Base metals and precious metals

‒ High productivity

• High production Mines

• Good cost control

• Favourable prices and terms

• Strong cash flow

2015-07-17 Boliden Group Q2 2015 21

Going forward

• Aitik

‒ Copper grade 0.21% in 2015-2016

‒ 39 Mton ore 2015 plan

• Garpenberg – 2.5 Mton pace end 2015

• Tara – improved production latter part of 2015

• Kokkola – working with process stability

• Rönnskär – action plan under implementation

• Nickel business on own books H2 2015

‒ Increase in WC in Q3

• Odda expansion to 200 kton/year on plan

• Planned maintenance EBIT impact

‒ Q3 -80 MSEK, Q4 -30 MSEK

‒ Mainly Rönnskär and Bergsöe in Q3

2015-07-17 Boliden Group Q2 2015 22

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.

2015-07-17 Boliden Group Q2 2015 23

2015-07-17 Boliden Group Q2 2015 24

Appendix

2015-07-17 Boliden Group Q2 2015 25

Market balance


Source: CRU June/July 2015, Boliden calculations

26

Zinc – global market Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215

Metals demand, kt 3,250 3,293 3,348 3,401 3,333 3,311 3,330 3,425

Year on year change 3.1% 4.3% 5.4% 6.0% 2.6% 0.5% -0.5% 0.7%

Smelter production, kt 3,208 3,337 3,145 3,277 3,328 3,556 3,413 3,480

Year on year change 5.0% 12.6% -1.5% 4.9% 3.7% 6.6% 8.5% 6.2%

Mine production, kt 3,173 3,060 2,742 3,192 3,167 3,231 2,836 3,348

Year on year change 1.2% -0.4% -12.4% 13.9% -0.2% 5.6% 3.4% 4.9%

Metal balance, kt -42 44 -203 -124 -5 245 83 55

Concentrate balance, kt 162 -49 -174 143 32 -162 -387 47

Copper – global market Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215

Metals demand, kt 5,256 5,390 5,081 5,487 5,485 5,476 5,058 5,578

Year on year change 5.6% 9.2% 2.7% 10.9% 4.4% 1.6% -0.4% 1.7%

Smelter production, kt 5,211 5,355 5,212 5,393 5,585 5,682 5,484 5,552

Year on year change 7.1% 5.8% 1.5% 5.4% 7.2% 6.1% 5.2% 3.0%

Mine production (concentrates), kt 3,692 3,838 3,543 3,604 3,665 3,709 3,645 3,675

Year on year change 15.5% 15.6% 2.0% 8.3% -0.7% -3.4% 2.9% 2.0%

Metal balance, kt -45 -35 131 -95 100 206 425 -26

Concentrate balance, kt 214 229 -8 16 -69 -108 -84 -30

Economic development

2015-07-17

Industrial production, year on year %

Boliden Group Q2 2015

Source: Reuters Datastream, Boliden calculations for world data

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-5

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2011 2012 2013 2014 2015

EU28 USA China World

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25

30

2011 2012 2013 2014 2015

EU USA China

Construction – largest segment for Cu and Zn

2015-07-17

Activity, year on year %

Source: Reuters Datastream


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

28

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

2011 2012 2013 2014 2015

Europe North America China World

2015-07-17

Source: LMC Automotive


Automotive

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Production of light vehicles, year on year, quarterly data

China – metals demand and economic growth

-4

-2

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18

2011 2012 2013 2014 2015

Year on year growth %

Zinc demand Copper demand GDP Industrial production

Source: CRU Ltd, Reuters Datastream

2015-07-17 Boliden Group Q2 2015 30

Zinc TC and premiums

• Slightly higher realized contract TC

• Stable spot TC, below contract

• Supply of metal for prompt delivery up

• Stable quarter average premia, down in

June


Source: CRU June/July 2015

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2012 2013 2014 2015

US$/t concentrate

Treatment charges

Realized TC, European contract

Spot TC, China imports

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2012 2013 2014 2015

US$/t metal Metal premia

Delivered Premia US Midwest

Ex-Works Premia Europe

Premia Far East - Western

Copper TC and premiums

• Spot TC down

• Mid-year contract TC lower

• Supply of metal for prompt delivery up

• Stable premia at low level


Source: CRU June/July 2015

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0

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2012 2013 2014 2015

US$/t concentrate

Treatment charges

Contract TC - annual and mid-year benchmark

Standard grade spot TC

Contract benchmark according to market sources including CRU

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2012 2013 2014 2015

US$/t metal Metal premia

CIF Average European premia CIF European benchmark premia

Contract benchmark according to market sources including CRU

2015-07-17 Boliden Group Q2 2015 33

Documents

Q2 2015 Interim Report - Bolideninvestors.boliden.com/sites/default/files/event/q22015_boliden_presentation.pdfEarnings per share, SEK 2.96 1.08 3.27 Net debt / equity ratio 28 39