Boliden: Not much progress but not a thesis-changer either

Research evidence excerpt

Boliden: Not much progress but not a thesis-changer either

t a big surprise; we flagged it as a risk at Q1 results

(here). Revised guidance still calls for a step-up in H2 with H1 annualised at

1.45mtpa. Management agreed that it is reasonable to infer, given the downgrade to

expectations for 2026, that 2027 guidance may be below where it otherwise would have been.

We now assume 1.75mt in 2027 and 2.0mt in 2028 (consensus 2.0mt and 2.1mt respectively).

Nexa: Management seemed to talk down the prospects of a transaction, noting conversations

with other industry players about strategic steps are part of normal course business

development, Boliden has progressed only a small number of possible deals to execution in the

last decade, and it was only made public because of a leak in the Brazilian press requiring

disclosure. What makes a discussion interesting is that Nexa has a number of similar mines and

smelters to Boliden's assets, which have technical challenges and opportunities. We discussed

the pros and cons of a transaction in detail here.

Bridge into Q3: We see a combined commodity price and FX headwind of SEK-0.3bn QoQ in Q3;

on spot prices this lifts to flat QoQ. Smelter maintenance costs are expected to be SEK50m in Q3

vs. SEK350m in Q2. Garpenberg EBIT contribution was zero in Q2 - assuming 90% of revenue

conversion to EBITDA this adds SEK450m QoQ. There will also be a headwind from higher diesel

and oil-related costs: quarterly spend was SEK400m on diesel and SEK600m on oil-related

inputs such as explosives, chemicals, freight, etc. On our Brent forecasts, that implies a SEK30m

headwind QoQ in Q3. We assume a SEK50m QoQ benefit from higher sulphuric acid prices per

guidance. The EBITDA uplift from Odda is likely to be absorbed by SEK300m QoQ higher D&A