Boliden AB

Ladies and gentlemen, I'd like to welcome you to Boliden's Q4 2024 results presentation. My name is Olof Grenmark and I'm head of investor relations. Today, we will have a results presentation led by our president and CEO, Mikael Staffas, then followed by our CFO, Håkan Gabrielsson. We will also have a Q&A session, which we will start here in Stockholm. Mikael, welcome.

Thank you, Olof, and good morning, everybody, from me as well, to a lovely morning here in Stockholm with lovely weather. Let us just jump in very quickly into the presentation here and the highlights. And of course, it's a very strong set of numbers that we are presenting today. We have a profit of 3.8 billion Swedish krona. In there, there is a one-off insurance claim, as most of you will be aware of, of 935 million krona. We also have very strong cash flow. To some extent, we can be proud about this because to some extent we have worked to reduce cash from working capital. But also, as most of you will know who have been with us before, this is also very much of a timing issue where our cash flow is very volatile and we now managed to catch a point where it was very good for the end of the quarter. We've had very strong production in our smelters, especially in Harjavalta and in Kokkola. Harjavalta is full of all kinds of production records during the quarter, and also Kokkola has a very stable production. The dam project in Itik is completed. This is, of course, something that is very important, not just because it's a $5 billion project, a very big project that is now completed on time and on budget and with the functionality that we have now gotten proof with external inspection that it's all under control. But it's also good because generally it's something that ITIC has been affected by during the time, even though the direct effect might not have been there. It's something that has been a stress on the organization to make sure that this one happens. And now it feels good that we know that we have our ITIC around for the next 20 plus years. In the quarter, we've also announced the acquisitions of the Lundin mines in Neverskorvo and in Zinkruban. And we'll come back a little bit about that as late as well. The dividend, we from the company have... decided to recommend the AGM to cancel the dividend for this year. That in itself corresponds to roughly half of the suggested share issue to get new equity to finance the acquisition. So that means that a future share issue will be reduced in the corresponding amount. So if you look at the financial performance, as I said, 3.8 billion Swedish krona, the free cash flow very strong at over 4 billion. Håkan will come back and dwell more in detail on these numbers. CapEx in the quarter, 4.5 billion. That means that we're landing the full year at 15 billion, slightly less than we had guided for. That's a little bit of a timing effect around New Year's. So that half billion will come back, and we've increased the guidance for 2025 to 2014, but the sum of 2014 and 2015 is unchanged. On our key projects the other expansion is moving ahead for starting production here. Actually as of yesterday we had another smaller milestone there where we had the first zinc coming out of the new foundry. So the new foundry is now completed. We also have since before the tank house completed and all the general infrastructure completed. Leaching is very close to completion. It is a roaster that has been our sore point throughout the project, and we're moving on with that one. And those of you who will join us on the Capital Market Day and on the inauguration of ODA in June, mid-March, we'll learn much more about it then. Dam reinforcements, as I already said, is completed on time and budget, and we feel to have that one off. The Kristineberg expansion is moving ahead according to plan. We've had during the quarter the breakthrough of the new transportation infrastructure, which is now being put in place and the trolley system inside is being put in place for being able to get this one by the end of q1 or early q2 get the new full electric infrastructure in place the rancher rancher tank house as you can see here on the picture is moving on long nicely the groundwork is completed building construction as you can see is in progress still on time for ramp up in the second half of next year 2026 So that one's moving on well. The Boulinère extension has also gone well and is now up and producing. On the ESG side, the greenhouse gas emission tons are lower than last year, so we're moving this one, and we're generally keeping our plans regarding our science-based targets for 2030. We had also a very good quarter regarding lost time injury frequency of 2.3. As you know, earlier this year, we've been struggling a little bit with that. With this kind of good end of the year, it means that the full year of 2024 is still reasonable. The sick leave is also moving in the right direction. It's coming down a bite slowly, and we're not yet back to pre-COVID levels, but we're moving slowly in the right direction. On the market side, the base metals have done relatively well. Zinc prices are up. Copper prices are relatively flat on a level that is quite decent. There are no lower nickel and lead prices. But of course, what helps us quite a lot and has been very strong during the quarter is the very strong gold price. There are pressures on the TCs, not so much affecting us right now because we are on basically very much on benchmark TCs, but of course looking forward as the benchmark TCs will be settled for 2025 will impact us. We have had also slightly stronger US dollar compared to the Swedish krona and the euro in the fourth quarter. So when you look at this, in total you can see that the copper price is still quite high compared to where the cost levels are in the world. But as many of you know, there's also an upside chance on the copper price given the demand development, and we feel good about the copper price. Zinc price we feel maybe even better about. As you can see here, there's not so much downside risk given where you have the cost curves in the world. And of course, zinc is also a very much needed metal for the energy transition. Nickel is maybe the metal that we are right now a little bit more concerned about. You can see here there is a strong cost decrease in the nickel world. Everybody is very heavily responding to the low nickel price. It's a little bit unclear if there will be any kind of new developments on the nickel side going forward given the low nickel prices. If we go back to Boliden and look at our production, we can say that we've had stable and good production in Kevitsa. And even though we have lower mill volume in the Boliden area and lower grades, it's of course very good in general. It was Q3 that was extremely good for the Boliden area. We've also restarted Tara. Carpenberg has moved ahead and produced as much as it can, making sure that it keeps within the environmental permit that was in place for the year. And I think did not have a very good quarter, as you can see, 10 million tons, which is a little bit more than 10% less what it should be in terms of throughput. We have been hampered by all kinds of smaller problems and also the impact of the project finishing off at the same time. Grades are quite, of course, Haryavata that is pointing out. Haryavata has record production on the cathode side, on the copper side, record nickel... strong and stable production in the quarter uh all that to some extent struggling a little bit this of course is not easy to run an operation when you have a big product at the same site at the same time but i said during the quarter the tank house was commissioned number six and as i said before and after the quarter in the beginning but it's also strong production rancher is of course being affected by the fact that we don't have a tank house but given Thank you Mikael and good morning.

Well, as you've seen, we've released a quarterly result with good numbers, 3.8 billion EBIT excluding process inventory, and that includes an insurance revenue of 935 million. Investments just shy of 4.6, which means that we finished the year at slightly lower cap external guidance and a strong free cash flow at 4.3 billion. Earnings per share, 10.95 in a quarter. So a strong fourth quarter. Looking at business areas, we had a mine EBIT of 1.1, almost, or 1.50. Michael talked about some headwind operationally in ITIC. We also had a limitation in in the mill volume in Garpenberg due to the environmental permit. And the impact of that was about 350 million in the quarter. Voluntary came in a bit level for gold. Very strong quarter for smelters. Also, if you back out the insurance revenue, we had a strong quarter in Finland above all with a very good feed mix. And we were also successful in reducing intermediate inventories, which contributed to the results. Inventory reduction also contributed in the form of other end elimination, that's internal profit elimination, which was positive. If we then look at some more detail year on year, Q4 of this year compared to, or Q4 of 24 compared to Q4 of 23, we had a strong improvement in prices, 1.3 billion up, improved set by lower metal premiums and treatment charges. but a strong development of prices. Volumes were up. We had a restart of Tara, which added about 200 million to the volumes. And again, we also had strong production in the Finnish smelters, as I talked about, and reduced inventories and internal profits and so on. Costs were high in the quarter. Again, the restart of Tara, of course, increased the cost about 180 million. In addition, we had higher personnel expenses.