Boliden AB Corporate Analyst Meeting Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Adrian Gilani - ABG Sundal Collier - Analyst : Yes, good morning. Two questions here from my end. First of all, you showed us CapEx breakdown for 2025 [SEK0.5 billion] being from R÷nnskSr and Boliden Area. Can you just remind us how much CapEx would then be left for 2026 for those two projects?

Question: Adrian Gilani - ABG Sundal Collier - Analyst : Okay. Perfect. That's very clear. Thank you. And then the second question from my end on the EUR150 million annual EBITDA increase. You mentioned that corresponds well with today's market conditions. So just to clarify, is that assuming the current benchmark TC for zinc or is that assuming the spot TC for zinc, because those are very different at the moment?

Question: Adrian Gilani - ABG Sundal Collier - Analyst : Okay. Presumably lower than the current benchmark, though?

Question: Adrian Gilani - ABG Sundal Collier - Analyst : Okay. Thank you. That's helpful.

Question: Richard Hatch - Berenberg - Analyst : Yeah, thanks. Thanks for the call and Morning, guys. I'm just on this CapEx of '25. Are you able just to clarify how much in particular is going for R÷nnskSr and how much we should think and 2026, I mean, just for reference and yeah, that would be very helpful.

Question: Richard Hatch - Berenberg - Analyst : So I mean, mind my numbers I've got about a couple of billion in for the tank house in 2025. Is that a decent rule of thumb number to have in?

Question: Richard Hatch - Berenberg - Analyst : Okay, fine. And then just on the other projects. So maybe your confidence on the ability to keep those within CapEx budget? Or are you sort of concerned what about the potential for creep or delay there as well? The push on this, what is it on orders? It's just a project-specific situation you're comfortable with the others.

Question: Richard Hatch - Berenberg - Analyst : Thanks very much.

Question: Krishan Agarwal - Citigroup - Analyst : Hi, thanks a lot for taking my question. I had two, if I may do you mind giving us a split of this incremental SEK100 million CapEx between the increase in the cost because of the fixed cost and also the equipment cost, but you mentioned that there were some surprises in terms of the additional equipment needed to connect the facility between the old and the new. And then what is the consequent impact of this higher CapEx in the project IRR you had earlier? I'll ask the second question later.

Question: Krishan Agarwal - Citigroup - Analyst : Understand. And then the second question, probably more suitable for Hakan and in the slide number four, you are saying the 2025 CapEx breakdown, mine sustaining 5.5 and then stay-in business CapEx 3.5. And that gives us a kind of a steady CapEx on data for SEK9 billion per annum and from here onwards. So if you add the SEK9 billion in our model and then probably some inflation taking to SEK10 billion in long term, would you disagree with that number on a sustainable basis, SEK10 billion? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 12, 2024 / 7:00AM, BOL.ST - Boliden AB Corporate Analyst Meeting

Question: Krishan Agarwal - Citigroup - Analyst : Understand. So SEK10 billion is not necessarily a wild number in the model. Okay. And then the final question for me probably and we are building the tank house in or you're just finished building the tank house in Odda. And then you are doing the same activity in R÷nnskSr. So when you say SEK7.3 billion for the new tank house, is it fair to assume that there is a lot of kind of the intelligence you would have applied into the new CapEx and then there are synergies as well when you say 7.3 for the new tank house.

Question: Krishan Agarwal - Citigroup - Analyst : Okay. Okay. Thanks a lot. And that's all from my side.

Question: Daniel Major - UBS - Analyst : Hi. Yeah, thanks for the questions. Three questions. Yeah, the first one, you're guiding to EUR150 million of incremental EBITDA when the project is complete, can you give us any guide on how much you would expect to be in 2025 during the ramp-up period?

Question: Daniel Major - UBS - Analyst : Maybe just got that I said a different way than you will in volume terms, what's the expectation now following the delay in terms of tonnage to get a sense of that linear accrual of EBITDA.

Question: Daniel Major - UBS - Analyst : Okay. All right. Thanks. And then the second question, just to clarify the sensitivity of the returns on the project to the changes in CapEx because the CapEx is 50% higher now than when you originally approved that I think at the time you were talking about double-digit kind of returns, whilst you articulate that the variables driving the EBITDA of change with a lower treatment charge and higher by-products, et cetera. I still struggle to see how we can still be within that 10% return hurdle rate when the CapEx is 50% higher than you originally envisaged when the project was approved.

Question: Daniel Major - UBS - Analyst : Okay. Thanks so much. That's clearly based on what information you can tell us. The third question was on the 2025 CapEx guidance is no inclusion for the pushback, five at Kevitsa within this, you'd previously spoke towards potentially moving forward this project and including it in the budget by the end of 2024. Is that still something that is possible I guess would be incremental to the 13.5 or should we not expect anything in terms of spend there until beyond 2025, if the project goes ahead.

Question: Daniel Major - UBS - Analyst : Okay. So they're more likely probably to slot in post '26 in terms of material '25, sorry, in terms of materiality?

Question: Daniel Major - UBS - Analyst : Okay, great. Thank you very much.

Question: Liam Fitzpatrick - DB - Analyst : Two or three questions from myself. The first one just on this [overrun], are you suggesting that it's because of the delays from suppliers? So just wanted to check if there's any kind of recourse that you may have or compensation in relation to this latest delay? That's the first question.

Question: Liam Fitzpatrick - DB - Analyst : Okay, understood. And then I think you suggested on the previous call that because of this big project that was underway, that was impacting kind of the current production levels at Alta, which are around 200,000 tons. Should we assume that that will extend for the next few quarters because of this delay to the project?

Question: Liam Fitzpatrick - DB - Analyst : Okay. And then last two. Just on [Tara], does this have any bearing or impact on how quickly you aim to ramp up and tara.

Question: Liam Fitzpatrick - DB - Analyst : Okay. And then finally on Kevitsa, I mean, you gave us the color, though, in the previous response, should we start to worry about Kevitsa kind of

Question: Liam Fitzpatrick - DB - Analyst : Okay. Thank you. That's all from me.

Question: Marina Calero - RBC Capital Markets - Analyst : Good morning and thanks for the call. I just have a follow-up question on your mine sustaining CapEx, and you're guiding for SEK5.5 billion in 2025. In a previous question, you explained that you will have to keep CapEx -- sustaining CapEx levels elevated for a couple of years more. How do you see that sustaining CapEx sustainably, what kind of sustainable networks you think you will need to run the business in the long term?

Question: Marina Calero - RBC Capital Markets - Analyst : Yeah.

Question: Ola Soedermark - Kepler Cheuvreux - Analyst : I have a follow up on the P&L effect for the ramp up of Odda. I don't mean the actual profits on the increased volume. I'm more interested in the potential additional costs in Q1 and Q2 for the ramp up or is it just going to be smooth transition? Or do you have an additional cost for ramp up [EBITDA] need to look at?

Question: Ola Soedermark - Kepler Cheuvreux - Analyst : Yeah, of course. But just to give us a ballpark. Is it fair to assume that it's going to be depreciated over 20 years or so, maybe SEK500 million in additional depreciation per year?

Question: Ola Soedermark - Kepler Cheuvreux - Analyst : Well, thank you very helpful.

Question: Viktor Trollsten - Danske Bank Markets - Analyst : Yes. Thank you, operator. And you actually just answered my question on depreciation period, but perhaps on sort of how you view the derisking of the project. Now you mentioned that you have derisked quite a lot of the other parts apart from the roasting facility. But is it fair to say that now it's difficult to say what should go in additional room in this project?

Question: Viktor Trollsten - Danske Bank Markets - Analyst : Okay. And then perhaps a difficult question to answer. But in hindsight, if it didn't end the saying obious that you would have done differently on this project. You know, it's been quite a lot of programs, not just a I guess what I'm after is how much have been in out of your control or in your control? It's difficult to answer, of course.

Question: Viktor Trollsten - Danske Bank Markets - Analyst : And just little of finally, but on your, you know, sort of capital requirement of, you know, you often speak about ROEs above 10% in your project. Some you're still selling that you read stuff about isn't with higher depreciation on your long term pricing. I just I guess I'm not really going to get the figures right. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 12, 2024 / 7:00AM, BOL.ST - Boliden AB Corporate Analyst Meeting

Question: Viktor Trollsten - Danske Bank Markets - Analyst : So you don't count the pressures in that figure.

Question: Viktor Trollsten - Danske Bank Markets - Analyst : Yes, yes. Okay.

Question: Viktor Trollsten - Danske Bank Markets - Analyst : Okay. Thank you very much.

Question: Richard Hatch - Berenberg - Analyst : Thanks. Just I wondered if you could just give us a thought on the ramp up of voter. You've mentioned that you expect to run at about 200,000 tonnes in the first quarter. And so how should we think about and how 2025 looks in terms of the ramp up and it's helpful.

Question: Richard Hatch - Berenberg - Analyst : Okay. All right. And I guess we'll wait and see. Thanks.

Question: Johannes Grunselius - DNB Bank ASA, Filial Sverige - Analyst : Yes, hi, everyone. It's Johannes here. I just have a question on the EUR100 million incremental cost or new cost caused by the delay maybe I missed this information earlier, but term is it incremental cost or is it more like a shift in timing of the costs that you foresaw Q4 that is now pushed into '25? And why is why do you carry these costs now if you can elaborate on that, please.

Question: Johannes Grunselius - DNB Bank ASA, Filial Sverige - Analyst : Okay. That's helpful. But it sounds to me that it's like a gray zone or what's CapEx and what's OpEx, but it seems you decide to go for OpEx? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 12, 2024 / 7:00AM, BOL.ST - Boliden AB Corporate Analyst Meeting

Question: Johannes Grunselius - DNB Bank ASA, Filial Sverige - Analyst : Because of let me maybe I got it wrong because, of course, I understand the CapEx overrun, but you also mentioned in the press release about additional EUR100 million in increased OpEx, no?

Question: Johannes Grunselius - DNB Bank ASA, Filial Sverige - Analyst : Project cost. Okay.

Question: Johannes Grunselius - DNB Bank ASA, Filial Sverige - Analyst : No, because you didn't cover it in the call. It's just, you know, when I read the press release also in the Swedish version, but then it's no OpEx over, you know, incremental OpEx, if you have a CapEx over Africa

Question: Johannes Grunselius - DNB Bank ASA, Filial Sverige - Analyst : Very, very clear. Thanks.