Boliden AB

Ladies and gentlemen, I'd like to welcome you to Boliden's Q2 2026 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 and our CFO Håkan Gabrielsson. We will also have a Q&A session led by the operator. Mikael, welcome.

Thank you, Olaf, and good morning to all of you out there. Let's just jump into this presentation right away, and then we'll see what discussions we'll have and what questions you have coming up afterwards. The highlights of the quarter, I just first want to point out that we have a strong quarter. We have about 2.9 billion Swedish kronor in the EBIT, ex-profit inventory evaluation, clearly up from what we had last year. We have a quarter with relatively weak cash flow. This cash flow is both seasonal in the sense that we have maintenance stops in Q2, which typically is that we're tying up capital in our inventories, but it's also seasonal. linked to a little bit of timing events again around the end of the quarter. Actually, the inventory built up is much bigger than these $2 billion because there are some other parts of working capital working the other way around. And the high inventories, and we'll get to that, also affects the internal profit elimination, which is also a bit of discussion here. We have, of course, significantly lower earnings from Garpenberg compared to any comparison quarter, both first quarter and last year. But we're very positive around Garpenberg. Garpenberg has started up according to plan, has delivered according to the plan we gave in Q1. We have now all infrastructure in Garpenberg up and running, with the exception of the personnel hoist, which is not really crucial and will come roughly in September. But otherwise, everything is up and running and we're up and producing. We're also up and developing and, you know, not losing any time and trying to get to the other war bodies in the area now that Lapland is going to be impaired for quite some time. So Garpenberg moving nice according to the plan that we had last time. We have, and we just want to make that point, a very strong contribution from the acquired mines. Both Zincruvan and especially, I would say, Sommelkor is producing clearly better than our own expectations. And we're quite pleased with the developments that are going on there. In Aitik, we have also a strong quarter. clearly improved mill volumes, and the total volumes mined, if you also include the stripping, is a record high of ever. You know that one of the challenges has been over time that we have been a little bit behind in stripping. We're catching that up, and you're also seeing that now as we can get the ore volumes up as well, which we also feel very good about. On the other side, what has not worked perfectly? Well, the ODA ramp-up has not been ideal. We've encountered quite some issues on the ramp-up of ODA. Just to have a sense of it, it is nothing that is fundamentally problematic. The roaster works at full capacity when it runs. But we've had way too many shutdowns linked to both IT and control systems and linked to some parts of the conveyor system and others that have not been able to produce. So the financial performance, as I said, in EBIT, including profits and inventory valuation of 2.9 billion Swedish, clearly up against last year. The financial impact from the planned maintenance came in at... 350, which is a little bit in line with last year and very much in line with the guidance that we had given. Cash flow, as we said, clearly negative, partially seasonal, but also partially a timing issue that comes in around that. CapEx at a little bit more than $4 billion, right around where our guidance is. On the gap and by update, so we had the abnormal rockfall and the seismic event back in March. All the infrastructure, including the ore hoist, is now up and running and operational as of end of Q2, you could say. It's only the personnel shaft that is still being repaired, but it's not crucial for production, and it should be done by September. The production has restarted according to guidance, exactly as we expected. Also, the developments have come along according to what we thought ourselves, so that's also working well. The paste production, which is important because, as you know, we have a big void after we had the ore body go down. This void needs to be filled both for safety reasons and water reasons, all kinds of reasons. That has been not quite completed, but it's very well underway. In order to do this, we have also managed to produce... paste and produce paste from the existing, using tailings from the existing tailings dam. I think we've been very quick at developing and rebuilding in the concentrators to be able to take tailing sand the other way that you usually don't do it, to truck it back from the dam as opposed to get it to the dam. The ambition is still to have a full production by, here it says 2032, so it's a full year, but to get the new hoist in place by 2031 so that we will be full mining in the bottom parts. And we're not changing any guidance. We're having the same guidance at 1.5 million tons for 2026 and at 2.3 million tons for 2027. Key projects, if you go through, well, the Oda tank house project is also moving on very nicely. We have it scheduled for ramp up in Q4 of this year. The sand recycling project is also on track and it looks quite promising, both on a kind of technical point of view, but also to make sure we get the environmental size right. And we're about to start, you know, during the next winter to start commencing using the equipment. Rönnscher Cementum and the Garpen by 4.5 million expansions are in very early days, but so far so good. The other one is, as I spoke about, is the Alda and the Alda expansion. Ramp-up is ongoing. It is at a lower pace than expected. And the challenge has been with the roaster. So that's where we can isolate the issues around that. There has been one set of issues linked to automation and programming where the roaster went into emergency stop way too easy. And we got emergency stops early on. And with the roaster, as you know, it could take several days to cool down. So you can go in and do some adjustments to sensors and other things. And then it takes several days to restart. So we've been spending way too many times cooling it down and warming it up again to fix things around that. We have that now, I would say, more or less under control. We have now put that in a good situation. It doesn't put emergency stops where it's not supposed to. We've also had some very mundane issues also around the roaster, for example, with conveyors. Conveyors is nothing high-tech or fancy, but we've had issues with them that we have tried to repair, and we have them now up and running. So as I'm speaking, we're running at full speed in Oda, and we have been running at full speed when we've been running, but we went down way too much. And I would say it's quite some confidence that we feel that we sorted out several of the issues. We might encounter some more issue, but there is nothing fundamental with the design of the roaster or anything else. We have also, in the time we have been running full, we've also been able to check the equipment that's been ready for quite some time, including the tank house and the new foundry and the leaching section. We've been able to test that at full capacity for shorter times, and we've also done that very successfully. If you then move over to the ESG development, we've also had a very good and strong second quarter. We have an injury frequency, which is one of the lowest ones that we've ever had, maybe the lowest for any individual quarter, and we've had quite some good development on that side for quite some time. The sick leave that went up during COVID is now more or less back on pre-COVID levels and is sticking on that level. And we are on our plan regarding the greenhouse gas emissions. It's a little bit difficult to see in this graph, but you have to remember here that we have not restated any history regarding the acquisitions from Lundin, and therefore it looks like we have an increase of CO2, whereas in reality we have a decrease. If you look at market developments, and those of you out there, you will notice relatively well that we had, of course, a very good pickup of market developments in the early part of this year. During the quarter, it's been moving more sideways, or actually sideways, to some extent a little bit a little bit downwards but it's still just on a compared to historic level very high metal prices that we have right now and we also have a slightly higher dollar that helps us as well a little bit weaker spot TCs working against us but then we have the very strong sulfuric acid prices, which helps us, maybe not as much as you think, because we have lots of our assets sold in long-term contracts with slow-moving prices, but of course, it's helping for the spot volumes that we're selling with the very high spot prices on sulfur. If you look at the development in the world on the copper price and where it's going, you can see that the copper price is at a high level, and most copper mines in the world make quite nice money. You can also see that the cost level has started to nudge up a little bit in the last quarter, I think with a combination of both a lower gold price that puts the copper price up, but also the cost related to what's happening in the Persian Gulf starting to show through a little bit. On the zinc side, we've had a little bit slower development, but the prices are now on quite a healthy level. And here the cost level in the world mining is still going downwards. Looking at our production, as I said before, I think it comes out very strong with almost 11 million tons. So it's close to 44 million tons on an annual pace. We feel good about that. We have a record mine production if you also include the stripping. And as you know, for a long time, stripping has been a challenge. So I think that actually looks quite good. The copper grade is nudging upwards. And as you know, since before, we're expecting to continue to nudge upwards. and go up during the second half of the year, which looks good. Bullion area, very stable operations. Now, bullion area has had so many records in the last couple of years, so it's difficult to beat those, but we're clearly adding another very strong quarter in the bullion area. We talked about Garpenberg around that. Kevitsa, slightly lower mill volume, but once again, the permit is the limiting factor in Kevitsa, and we will for sure going to use the full environmental permit for the year. Somincor and Zincruvan, strong production, developing well. The challenge that we have is Tara and the ramp up issues that we're having there since the care and maintenance. And we're also guiding down the total production for the year in Tara. If you then move over to the smelters, of course, this is a quarter where there's been big maintenance stops, which of course has an impact. One unit that has not had maintenance stop that has it in Q3 is Berrisø. They have then had, it's the smallest unit, but they've had record production of lead alloys in the quarter, which we feel good about. And Harjavata and Kokkola are both, of course, marked by the high level of maintenance that we've had there. Rönnskär, also a high level of maintenance. In Rönnskär, we had some ramp-up issues after maintenance. I wouldn't say major, but it took some extra days to get going after the maintenance stop was done. And finally, regarding Odda, we've spoken about Odda, that we have continued with the ramp-up as we have, but it's been slower than expected due to issues with the new roadster, and the roadster has been a challenge. With that, I'll leave the word to you, Håkan, to comment a little bit more on the financials.

Good morning. Good to talk to you. I hope my voice manages it. It's not what it typically is, but let's go. You've seen the result. We deliver an EBITDA of 5.5 billion SEK, an operating profit excluding process inventory of 2.9 and an EPS of 7.81. All of those numbers are clearly up from last year, but lower sequentially compared to Q1. CapEx is 4 billion, which is in line with plan. Free cash flow is a negative 2 billion. We've been successful a number of quarters going back to reduce working capital in spite of higher prices, and this time We had some build and I will come back to that later on. Looking by business area, what I said about up substantially year on year and a bit lower than Q1 still holds for both of them. And the reduction sequentially in mines is all Garpenberg and the reduction in smelters is mainly the maintenance, the heavy maintenance that we do in Q2. Looking at the EBIT bridges, And then starting with the comparison year on year, comparing Q2 of 26 to Q2 of 25. As you can see, we have a major support from prices. And that's metal prices across all metals, basically base metals, precious metals, that really supports the result. The negative impact there of about 1.2 billion in volumes is all Garpenberg. It's fully explained by Garpenberg. Looking at the other business, apart from Garpenberg, we have a good contribution from the acquired mines. They have been running well. And then also Q2 of last year, there were two weeks that we didn't own them. So it's a full quarter. But then on the other hand, we have slightly lower grades in Kevitsa. But again, the big impact of volumes is Gapenberg. Costs are a bit higher. There is an effect of full quarter with acquired mines also there. But we're starting to see some oil price-related cost inflation increasing. We're talking about excluding electricity somewhere in the range of 2.5% to 3% inflation after having been at much lower numbers for a while. I think with that, I'll leave this bridge and move on to the sequential one, comparing quarter... one with quarter two as you can see here prices are more or less flat there are some moving parts we have weaker metal prices than which is then offset by a stronger dollar and and a better sulfuric acid level but all in all the impact from prices is is is quite small Again, volumes, we have a significant drop there from Carpenberg out of the 1.5 billion, if we round it in this chart, 1.4 comes from Carpenberg. And in addition, we have maintenance in smelters and then the rest slightly positive. Costs. are up compared to last quarter. It was a fairly expensive quarter, this one. A big part is maintenance. The maintenance stops, drives costs. So we have the cost part of the maintenance is about 200 million compared to last quarter. And again, there is some oil-related inflation also in these numbers. Depreciations, maybe I could say something about that. We have basically no major change sequentially. We've had 2.3 billion in the quarter, and we had a similar level last quarter, not including the impairment we did in Gapenberg. If we look forward for the rest of the year, when Odda starts depreciating, I estimate that to be about 2.6 billion, so moving from 2.3 billion per quarter to 2.6 billion per quarter. But so far this year, not a big change. The one-off items affecting comparability is the big write-down that we had last quarter. And that concludes this EBIT bridge. Moving on then to cash flow. As I said, we've had over the last couple of years a quite good run with working capital in spite of higher prices. This time we built some capital. It's a lot of timing. One part is the slower ramp up in Odda where inventory piles up. And then also Michael referred to some ramp up issues in Rönnskär, a bit minor. It still has had an impact on inventories. And then a lot is timing on shipments. So it hasn't been an ideal quarter when it comes to working capital. My expectation, though, is that if we look one quarter ahead, especially towards the later part of that quarter, will revert that for ongoing business. So if it's just regular ongoing business, I think the 2 billion should come back next quarter. Having said that, we will start to prepare for the ramp-up in Rönnskär shortly, and that means a working capital build that we've guided for in the vicinity of 1.5 to 2 billion. So if you put all of that together, my best estimate right now is that the working capital build contribution to cash flow in the quarter to come is around zero. Finally, looking at the balance sheet and the capital structure, still a very strong balance sheet. We've had an increase of net debt of $5 billion. Three of that is the dividend that was paid, and two is the negative cash flow we just talked about. But all in all, a strong balance sheet with a gearing of 24%. So with that, Mikael, hand over to you.