Boliden Ab · OMXSTO:BOL
Boliden Ab — H1 2004 Earnings Presentation
20 slides from Boliden Ab's earnings presentation, Aug 5, 2004
Slide 1: Interim Report, January-June, 2004
Boliden Interim Report, January-June, 2004 Mining Smelting Zinc Copper and Refining August 5, 2004
Slide 2: Strong global economic recovery
Strong global economic recovery Growth - Q2 2004 Industrial production • Global - Cu consumption 5% 20 - Cu production 1% - Zn consumption 5% - Zn production 0% 15 • USA - Cu consumption -2 % 10 - Zn consumption 4% • Europe 5 - Cu consumption 2% - Zn consumption 2% • China 0 - Cu consumption 10 % -
Slide 3: Major Zn and Cu imbalance in 2004 & 2005
Major Zn and Cu imbalance in 2004 & 2005 Zinc balance Copper balance supply – demand supply – demand Thousand tonnes Thousand tonnes 1 200 1 000 400 800 600 200 400 200 0 0 -200 -200 -400 -600 -400 -800 90 92 94 96 98 00 02 04 90 92 94 96 98 00 02 04
Slide 4: Zinc: Price and LME stocks
Zinc: Price and LME stocks USc/lb Tonnes 55 800 000 750 000 50 700 000 45 650 000 40 600 000 35 550 000 30 500 000
Slide 5: Copper: Price and LME stocks
Copper: Price and LME stocks USc/lb Tonnes 150 1 090 000 140 990 000 890 000 130 790 000 120 690 000 110 590 000 490 000 100 390 000 90 290 000 80 190 000 70 90 000
Slide 6: Exchange rates: USD/SEK – EUR/USD
Exchange rates: USD/SEK – EUR/USD 9.00 8.75 USD/SEK 8.50 8.25 8.00 7.75 7.50 7.25 7.00 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 04 Feb Mar Apr May Jun Jul 1.300 1.275 1.250 EUR/USD 1.225 1.200 1.175 1.150 1.125 1.100 1.075 1.050 1.025 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 04 Feb Mar Apr May
Slide 7: Metal prices and exchange rates
Metal prices and exchange rates Actual Actual Change Actual Change YTD YTD Change Q2 -04 Q1 -04 Q2 -03 June 04 June 03 Metal Prices Copper USc/lb 127 124 2% 74 70% 125 75 67% Zinc USc/lb 47 49 -4% 35 33% 48 35 37% Lead USc/lb 37 38 -4% 21 78% 38 21 81% Gold USD/oz 394 408 -4% 347 13% 401 350 15% Sil
Slide 8: Record result for first half of 2004
Record result for first half of 2004 SEK m Q2/04 Q1/04 Q2/03 1H/04 1H/03 Net sales 4 547 4 498 2 298 9 045 4 636 Operating result 397 434 84 831 210 Earnings per share 1.11 1.27 0.37 2.36 1.59 Return on capital employed, % 10.5 11.6 4.5 11.1 5.8 Net debt/Shareholders’ equity, % 99 103 154 99 154 • S
Slide 9: Operating result – quarterly
Operating result – quarterly 450 434 397 400 350 300 250 200 166 150 137 130 100 100 50 0 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 2003 – Remaining Operations
Slide 10: Mines: Zinc & copper production
Mines: Zinc & copper production* Zinc Copper Zinc Copper 120,000 196,871 200,000 101,351 180,000 173,196 100,000 160,000 85,456 140,000 80,000 120,000 60,000 100,000 80,000 40,000 60,000 46,690 43,454 24,929 22,513 40,000 20,000 20,000 0 0 YTD June -03 YTD June -04 Q2 -03 Q2 -04 • Garpenberg – Incre
Slide 11: Smelters: Copper production
Smelters: Copper production* 100 000 95 000 89 613 89 113 90 000 87 767 86 804 85 000 82 558 82 687 80 000 75 000 70 000 65 000 60 000 55 000 50 000 Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 • Increased production of copper cathodes • Continued production optimisation • Stable flows of external copper con
Slide 12: Smelters: Zinc production
Smelters: Zinc production* 108 086 106 143 110 000 102 539 102 212 100 740 98 140 100 000 90 000 80 000 70 000 60 000 50 000 Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 • Stable zinc production • Scheduled shutdown for repairs at Norzink in Q2 • Coordination benefits between mining and smelting production •
Slide 13: Operating result per Area
Operating result per Area SEK m Q2/04 Q1/04 Q2/03 1H/04 1H/03 Mining Operations 297 245 66 543 136 Copper 171 220 47 391 128 Zinc -21 29 - 9 - Other -50 -60 -29 -112 -54 Total 397 434 84 831 210
Slide 14: Operating result per product
Operating result per product SEK m Copper Zinc 800 700 600 500 400 300 200 100 0 -100 Q1 2003 Q2 2003 YTD June -03 Q1 2004 Q2 2004 YTD June -04
Slide 15: Key ratios
Key ratios 30 June 30 June 31 Dec Operating margin 2004 2003 2003 11 Operating margin, % 9.2 4.5 Neg 10 9.6 8.7 9 Earnings per share, SEK 2.36 1.59 0.12 8 7 6 5.4 Return on capital 5 3.7 3.7 employed, % 11.1 5.8 - 4 3 3 Return on shareholders’ 2 1 equity, % 15.3 11.8 0.4 0 Q1-03 Q2-03 Q3-03 Q4-03* Q
Slide 16: Cash flow
Cash flow • Cash flow from operating Operating result before activities: SEK 910 million depreciation (EBITDA), SEK m (SEK 336 m) 800 771 743 700 • Cash flow from investment 600 activities: SEK -875 million 500 (SEK -280 m) 400 293 300 245 249 • Net loan amortisation: 200 SEK 1,762 million (SEK 20 m
Slide 17: Investments
Investments • Total investments for first half First half of 2004 - of 2004: SEK 751 million breakdown of investments, % (SEK 301 m) Zinc 52% Mines 40% • Norzink and Tara investment programmes complete in latter half of 2004 • Investment levels will return to normal from 2005 Copper 8%
Slide 18: Capital structure
Capital structure 30 June 30 June 31 Dec Net debt/Shareholders’ equity, % 2004 2003 2003 Balance Sheet total, 200% SEK bn 19.9 10.9 19.9 175% Capital employed, 150% SEK bn 15.1 7.5 14.8 125% 100% Shareholders’ equity, SEK bn 7.8 3.1 6.1 75% 50% Net debt, SEK bn 7.7 4.7 9.0 25% 0% Gearing, % 99 154 1
Slide 19: The project portfolio
The project portfolio The rights issue, completed in Q2, was over-subscribed and generated SEK 1,374 million for the company. A new partnership agreement will increase supplies of copper concentrate from the Portuguese mine, Neves Corvo. The Canadian Myra Falls mine was sold. Boliden received 18 mil
Slide 20: Summary
Summary • Strong global economic recovery • Higher prices for all of Boliden’s metals • Operating result for the first half of 2004: SEK 831 million (SEK 210 m) • Stronger financial position • Increased potential for operational synergies • Good market conditions in the latter half of the year will