Boliden AB

Ladies and gentlemen, I'd like to welcome you to Boliden's Q4 2025 results presentation. My name is Olof Ligamark, and I'm head of investor relations. Today we will have a results presentation led by our president and CEO, Mikael Staffas, and our CFO, Håkan Gabrielsson. We will also have a Q&A session, which we will start here in Stockholm. Mikael, the stage is yours. Welcome.

Thank you, Olof, and good morning to everybody from me as well. We in Stockholm had a very crispy morning. When I woke up this morning, it said minus 15 degrees outside of my bedroom window. Today, we will give the presentation of the Q report, and we will also touch on the R&R statement update that we've also issued this morning. So generally speaking, for Q4, there's been a very strong metal price development. Everybody knows about this, and of course, precious metals has been really rallying during the quarter. At the same time, we've had a negative development on prices and terms, but that has in relationship, of course, a much smaller movement. We have a continued strong mine production in Itik. We have been stripping very, very hard for quite some time. And we are now happy to say that we're in some way catching up on the stripping debt that we've had before. We're also happy to say that the grades are going up in Itik and have now started on their journey on going upwards. Apart from IT, we've had generally lower grades in mines. To some extent, this is maybe slightly more than we had expected, but part of this was already in our guidance that we've had before. And we had a stable production in smelters. We're very pleased with that in general. We had a one-off positive of 410 million linked to summing up or taking care of the metals in Rönnskär in the fire. As we had the fire metals in the tankhouse, was going down into the ground and then we have now during this quarter done a summary of that and where we are actually standing and we have been able to recognize these 400 million positive effect. The dividend has also been recommended by the board. This is fully in line with our dividend policy, our one-third of net profit, and it amounts to 11 kroner per share. We also have a very positive R&R development. I'll get back to that in a little while. So the financial performance in general, a little bit more than 4 billion Swedish krona in profits. It's the third best profit in the history of Bolida for a quarter, which is good. We do have the positive 410 one-off, which is much lower than what we had last year in that comparison. The free cash flow was also quite healthy at 2.7 billion Swedish krona despite the record level investments. And we've had a favorable development of working capital in the quarter. And the cap exists as I said according to budget but on a high level. On the key projects, on the other project there's not really much more to say compared to what we said when we issued the guidance for 2026. We are right now in the middle of commissioning and it's going so far well. We have started to deliver some of the other leach product actually as the first deliveries. It's a very small scale delivery so far. The Rensselaer tank house is on track and ramping up during the second half of this year. The Bolin area tailing management is also on track and the early part of the Garpenbury expansion which is the the PACE project is also moving on according to plan. We have been also getting which we were hoping for to get the environmental permit for It has been appealed, so the appeal process will be launched here going forward. On the key side, we're also with the development. The greenhouse gas emissions are going the right direction, and you always have to point out when you look on the graph here to the right and also on the comparison number that we have not restated any previous numbers with the acquisition of Zinc River and Azomicorps. If we were to take that into account, this is looking much better. The lost amenity frequency at 3.6 is a very good number, even though it was even better last year. And this also means that we're ending up the full year of 3.6, which is, I think, the best year in the history of Woolleyden. Sick leave continues to move in the right direction. We're not quite back to pre-COVID levels, but we're approaching coming back to pre-COVID levels. On the market side, and I think this slide shows it all, and everybody wants to discuss that, yes, we've had negative currency development, and you see that on the little graph below, the bluish graph. We've had relatively weak T's. and for copper on the spot side, but we had copper or metal prices that have more than enough outweighed that, especially the precious metal gold and silver, but also relatively strong copper and also slightly, at least lately, improving also zinc prices. If you look at this on the cash costs, and I think that this, if there isn't time, maybe you should not look too much onto this graph right now, because it will be lots of discussion with the people who make this one, and the source of this information, exactly how they will account for the precious metals in this, because with the big increase of precious metals, as opposed to the zinc or copper mines in the world, have that as a byproduct, and as a credit, means that costs We'll go down. You see here in the assessment for 25 that costs are down. But I will not be really responsible for exactly how this has been counted. But it's not that the zinc mines in the world are getting so much better at managing costs. It has to do with the silver price going up. And the same thing with the copper mines in the world not getting better at managing the costs. It's the gold price that is going up. If you look at our production, once again in IATIC, we've had a milled volume around what we were guided for. The grades have improved versus Q3, and we had a strong total mine production with very good stripping in the quarter, which is going to help us going forward, especially to work with how to get around the diorite issue when we will get more potential. to work from. I think this is the second best quarter ever in terms of three grades are lower, but that's also according to plan. Kev, it's stable production capacity, lower grades, also reminds Summing core, quite a strong improved operational efficiency we've seen during the quarter. Tara continues with a ramp up and in zinc ruban we had good production, slightly lower zinc rates this quarter, also nothing to really look into in long term, it's more or less according to plan. On the smelter side, it's been generally good production, especially on the copper side, good production in Renishaw with high free metals, good production, actually record production in Hayavata in terms of copper cathodes, high silver production. Cochlea slightly lower, we've had some process disturbances during the quarter, maybe not much. Odda is continuing to doing well in one way, but of course also struggling operating a zinc smelter right to a major construction activities. Paysø had some planned maintenance in the quarter, otherwise everything went well. And with that, I will give over to you Håkan to talk about the numbers.

Good morning. So as Michael said, we are reporting an operating profit excluding process inventory of 4.1 billion, which is clearly above the comparison periods. I think it's also worthwhile to look at the operating profits than including process inventories, which is at 5.8 billion, a substantial increase to the comparison. And that's, of course, due to the stronger metal prices and the big pot pressures that we have in the process inventories. This leads to an earnings per share of 15.31, which is a 40% increase compared to last year. On this slide, you also see a high investment number. We do have high capex, which is completely in line with the guidance. And all in all, a strong cash flow at 2.7 billions. Looking at the profit by business area, you can see that mines has had a really good quarter. Of course, helped by the rally in gold and silver, and also strong copper. Smelters is also clearly up compared to Q3, and there are a few reasons. One is the one of recovery adjustments that we talked about already in December, but also smelters are much helped by stronger precious metal prices, and we also have slightly less maintenance in Q4 compared to Q3. If we then dive into the analysis of profit quarter on quarter here and start with the one comparing Q4 of this year, or sorry, Q4 of 2025 to Q4 of 24. Looking one year back, much is about adding the acquired units. It will come back in many of the lines here. But we can start with prices and terms where we've seen a strong improvement. Metal prices, if you only look at the metal prices isolated, contributed by about 2.5 billion compared to the same quarter one year back. And then it was then offset by a lower dollar and lower TCs, landing at the plus of almost 1 billion. So all in all, a good development. Volumes up 1.5, that's mainly the new mines, and also Tala that has been ramping up. It's a little bit offset by weaker grades, above all in the Boliden area and Garpenberg. Costs, same things. It's an effect of the acquired mines and the restart of Tara. If you back out those parts, we're roughly flat with the same quarter last year. So we do not see much of an inflation at this point in time. And I think, yeah, we can also comment the items affecting comparability. We have insurance incomes and we have recoveries in Rönnskjell, and that is further specified in the report. If we then move on and look at the sequential comparison Q4 to Q3, you can again see the big impact of stronger prices. And that's primarily silver and copper in this comparison, but also gold. Volumes, though, is a bit down, and we talked too much about Q3 being a very strong quarter with some records in it. We have slightly lower production in mines, both throughput and grades, with the exception of ITEC, where grades is starting to move in the right direction. Costs, they are seasonally higher. We see a pretty strong seasonality. As I mentioned, compared to last year, it's roughly flat, but we do have higher costs in Q4 than Q3. So at seasonality, we spend a bit more on external services. And also due to the strong development of prices, we had to increase our provisions for profit sharing and similar in Q4. Moving on then to cash flow. Well, we've talked about the strong earnings, EBITDA. We talked about investment being in line with guidance. But we also had a good quarter in working capital. Typically what happens when prices go up is that we tie more capital. Each ton of inventory has a higher value and so on. But regardless of that, we've been able to release working capital also in this quarter, which is the third consecutive quarter with a positive number in here. So all in all, we're happy with the cash flow. And that's, you know... With that cash flow and with that price development, it sums up in a strong balance sheet. We have a net debt to equity now down to 20% as a result of this good development. So a strong balance sheet and a robust financing to support that. This is also a time when we look a bit at the full year numbers. And this year we reached an operating profit excluding process inventory of 10.7 billion. It is down compared to last year, but then last year was very much boosted by big insurance income. So adjusting for that, it's a step in the right direction. Prices and terms has a positive impact. Volumes are up. And of course, the acquisitions and the restart of TARA is an important part of this. But all in all, it has been a good year. And looking at mines, you can see the profit, the EBIT for each one of the mines. And a couple of ones that I'd like to highlight is the Gatland Bay mines. Really strong performance with an EBIT of 4.4 billion. Of course, helped by good silver prices. but also by a good operational year. Also, the bull in an area which is, you know, showing an impressive result of just over $2 billion. That is, you know, another good year. And, again, good operational performance, but also good prices on gold in particular helps the bull in an area. You know, 2.5 billion profit is great. We don't disclose the return on capital employed, but, of course, it's a fantastic number for a site like Boliden. I'd also just like to highlight that in the Storming Core and Sinkgruvan numbers, the depreciation of the overvalues following the acquisition are included. Looking at an EBTA level and extrapolating to a full year, it's within the range of what we guided for for these two mines. Smelters, a year that has been to some extent characterized by low treatment charges. Still, we arrived at $3.7 billion, down compared to last year due to the one-off insurance income we had last year. But there has been some pressure on prices, but the gold and silver has compensated that, especially in the copper smelters. delivering a result in excess of 1.5 billion, and with a 1 billion profit, which is, you know, a really good number considering that we still don't have a tank house on that site. The zinc smelters are suffering a bit more with Coqolag coming down and Odda having a negative result due to the prices, but also due to the expansion project having a slight negative effect on the daily production. And I think this is also an effect of not being able to recover silver, which we cannot today in Odda, and it underlines the importance of the project that is currently ongoing. So with that, Al, And over to Mikael.