Boliden Ab · OMXSTO:BOL

Boliden Ab — FY2011 Earnings Presentation

43 slides from Boliden Ab's earnings presentation, Feb 10, 2012

  1. Slide 1: Year-end Report January – December 2011

    Year-end Report January – December 2011 Lennart Evrell President & CEO Mikael Staffas CFO

  2. Slide 2: Summary

    Summary Full year Q4  Revenues MSEK 40,323 (36,716)  Revenues MSEK 9,716 (10,120)  EBIT ex PIR* MSEK 5,008 (4,830)  EBIT ex PIR* MSEK 991 (1,445) ‒ Operating profit MSEK 4,748 (5,643) ‒ Operating profit MSEK 1,075 (1,942)  Free Cash Flow MSEK -3 (3,202) ‒ 125 MSEK reclamation provision  Divide

  3. Slide 3: Group EBIT Development

    Group EBIT Development MSEK 2 500 Quarterly EBIT 2 000 Quarterly EBIT excl PIR* 1 500 1 000 500 0 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 -500 *Process Inventory Revaluation Boliden Group 3 2012-02-10

  4. Slide 4: The Market

    The Market Boliden Group 4 2012-02-10

  5. Slide 5: Construction

    Construction Change from the previous year % USA and Europe China Fixed asset investments - urban areas 5 40 0 30 -5 20 -10 10 -15 -20 0 2009 2010 2011 2009 2010 2011 USA - construction expenditure EU27 construction IP Source: Reuters Datastream Source: Reuters Datastream Boliden Group 5 2012-02-10

  6. Slide 6: Car production

    Car production Change from the previous year % Q4 2011 Full year 2011 20 20 10 10 0 0 -10 -10 -20 -20 China Germany S Korea Japan USA All 5 China Germany S Korea Japan USA All 5 Source: Reuters Datastream, CRU, Wards Automotive Source: Reuters Datastream, CRU, Wards Automotive Boliden Group 6 2012-0

  7. Slide 7: Zinc price and inventories

    Zinc price and inventories USD/t LME Inventory Shanghai Inventory Tonnes Zinc price (LME average) 5 000 Price Price Quarter avg 1 400 000 Q4-11 vs 4 500 USD/t period 1 200 000 4 000 Q4 10 2,315 - 18% 3 500 1 000 000 Q1 11 2,393 - 20% 3 000 Q2 11 2,250 - 16% 800 000 2 500 Q3 11 2,224 - 15% 2 000 600

  8. Slide 8: Copper price and inventories

    Copper price and inventories USD/t LME Inventory Shanghai Inventory COMEX Inventory Tonnes Copper price (LME average) 11 000 1 600 000 Price Price Quarter avg Q4-11 vs 10 000 USD/t period 1 400 000 9 000 Q4 10 8,634 - 13% 8 000 1 200 000 Q1 11 9,646 - 22% 7 000 1 000 000 Q2 11 9,137 -18% 6 000 800 0

  9. Slide 9: Smelter treatment charges

    Smelter treatment charges Zinc Copper US$/t concentrate US$/t concentrate 600 160 140 500 120 400 100 300 80 60 200 40 100 20 0 0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Realised TC (including price participation) Standa

  10. Slide 10: Metal premiums

    Metal premiums Zinc Copper US$/t metal US$/t metal 400 200 300 150 200 100 100 50 0 0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Europe ex-works US Midwest Delivered Spot Copper premium CIF W. Europe Far East (Western) Benc

  11. Slide 11: Gold, Silver and Lead prices

    Gold, Silver and Lead prices USD/oz 2 000 Gold USD/oz 60 Silver 1 800 50 1 600 1 400 40 1 200 1 000 30 800 20 600 400 10 200 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 USD/t Lead Tonnes 5 000 450 000 Inventory Price Price Quarter avg 4 500

  12. Slide 12: Business Area Mines

    Business Area Mines Boliden Group 12 2012-02-10

  13. Slide 13: Mines – Production

    Mines – Production Metal Milled ore, Copper Metal Zinc content, Milled ore, ktonnes content, ktonnes tonnes tonnes 100 000 10 000 24 000 1 500 8 000 20 000 80 000 1 200 16 000 6 000 60 000 900 12 000 4 000 40 000 8 000 600 2 000 4 000 300 20 000 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 0 0 08 09 0

  14. Slide 14: Mines - Financial Summary Q4

    Mines - Financial Summary Q4 MSEK  EBIT 646 (1,217) MSEK 1 400 – 1,047 MSEK in Q3 2011  Provision reclamation costs 1 200 Quarterly EBIT 125 (80) MSEK 1 000  Lower metal prices than Q3 800 – Stronger USD/SEK 600  High costs compared to Q3 – External services and spare 400 parts 200 0 Boliden Gro

  15. Slide 15: Mines Full Year

    Mines Full Year EBIT by Unit MSEK Aitik Boliden Garpenberg Tara Total 4 500 4 113 3 913 4 000 3 500 3 000 2 500 2 008 2 046 2 000 1 500 1 314 1 124 1 000 481 530 383 268 500 0 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 Boliden Group 15 2012-02-10

  16. Slide 16: Ore Reserves & Mineral Resources

    Ore Reserves & Mineral Resources Boliden Group 16 2012-02-10

  17. Slide 17: Mineral Reserves & Mineral Resources

    Mineral Reserves & Mineral Resources  Increases in the Boliden Area ‒ Mineral resources almost 30% ‒ Mineral reserves by 10 % ‒ Renström, Kristineberg  Increased resources in Aitik and Garpenberg  Modest decrease in Tara  Exploration in 2011 282 (229) MSEK ‒ 190 000 m drilled (140 000) Boliden G

  18. Slide 18: Boliden Area and Aitik

    Boliden Area and Aitik Aitik Boliden Area Kton Kton 1 800 000 16 000 Proven/Probable 1 600 000 Measured/Indicated 14 000 Inferred 1 400 000 Production*10 12 000 1 200 000 10 000 1 000 000 8 000 800 000 6 000 600 000 4 000 400 000 200 000 2 000 0 0  Mineral reserves -3% - less than prod.  Mineral r

  19. Slide 19: Garpenberg and Tara

    Garpenberg and Tara Garpenberg Tara Kton Kton 30 000 Proven/Probable 30 000 Measured/Indicated Inferred 25 000 Production*10 25 000 20 000 20 000 15 000 15 000 10 000 10 000 5 000 5 000 0 0  Mineral reserves -6%  Mineral reserves -2%  Mineral resources +4%  Mineral resources -12%  Maintained po

  20. Slide 20: Business Area Smelters

    Business Area Smelters Boliden Group 20 2012-02-10

  21. Slide 21: Smelters – Financial Summary Q4

    Smelters – Financial Summary Q4 MSEK 1 500 Quarterly EBIT  EBIT excl. PIR* 1 300 Quarterly EBIT excl PIR* ‒ MSEK 326 (530) in Q4 1 100 Rolling Q EBIT excl PIR* ‒ MSEK 356 in Q3 900  E-scrap prioritized Q4 (and Q3) 700  Lower metal prices, TC, premiums vs Q3 500  Higher volume and prices bi- 300

  22. Slide 22: Smelters – Production

    Smelters – Production Zinc Metal Cathode Total f eed, Copper production, Total f eed, production, tonnes tonnes tonnes tonnes 400 000 100 000 250 000 140 000 350 000 120 000 80 000 200 000 300 000 100 000 250 000 60 000 150 000 80 000 200 000 40 000 100 000 60 000 150 000 100 000 40 000 20 000 50 00

  23. Slide 23: Smelters Full Year

    Smelters Full Year EBIT excl PIR by Unit MSEK Bergsöe Odda Kokkola Harjavalta Rönnskär Total 1 200 1 134 1 051  Copper smelters 1 000 + Copper prices 800 + Free metals + TC/RC 600 + Bi-products 505 470  Zinc smelters 400 ‒ Realized TC 246 222 reduced 187 200 154 + Premiums 82 75 39 -25 0 2010 2011

  24. Slide 24: Silver recovery at Kokkola

    Silver recovery at Kokkola  Increasing silver content in Zn concentrates  Higher silver prices  Proven technology  25 tonnes silver, depending on raw material  Production Q3 2014  Capex 27 MEUR  High return Boliden Group 24 2012-02-10

  25. Slide 25: Expansion projects

    Expansion projects Boliden Group 25 2012-02-10

  26. Slide 26: Project portfolio

    Project portfolio 2010 2012 2014 Aitik Rönnskär Kankberg Garpenberg Expansion E-scrap Au, Te Expansion Cu-Au Zn, Ag, Pb Boliden Area Hötjärn Maurliden East Boliden Area Kankberg, Te tailings pond Cu open pit mine Mill/feed leaching logistics Boliden Group 26 2012-02-10

  27. Slide 27: Aitik expansion 2010-2014

    Aitik expansion 2010-2014  Status February 2012 ‒ Ramping up continues ‒ Refurbishment in Q1 2012 of one crusher ‒ Next crusher summer 2012 Boliden Group 27 2012-02-10

  28. Slide 28: Kankberg – mid 2012

    Kankberg – mid 2012  Production ‒ Ore 320 ktonnes ‒ Gold 1,150 kg1) (high yearly variations) ‒ Tellurium 41 tonnes1)  Start mid 2012, life of mine 2020  Capex: MSEK 475  Status February 2012 ‒ Many access ramps ready ‒ Gold/Tellurium equipment on plan ‒ Gold production Q3 ‒ Tellurium production

  29. Slide 29: E-scrap expansion - 2012

    E-scrap expansion - 2012  No 1 electronics recycling plant  120,000 tonnes/year ‒ 2 tonnes gold ‒ 14,500 tonnes copper  Electronics from phones, computers  Capex MSEK 1,300  Status February 2012 ‒ Test production started in January ‒ Full capacity during Q2 Boliden Group 29 2012-02-10

  30. Slide 30: January 2012

    18 January 2012 Boliden Group 30 2012-02-10

  31. Slide 31: Garpenberg expansion - 2014

    Garpenberg expansion - 2014  Ore production from 1.4 to 2.5 mtonnes  New concentrator  Shafts and underground infrastructure  Production start 2014  Capex: SEK 3.9 billion  Status February 2012 ‒ Underground developments on plan ‒ Environmental permit January 2012 ‒ Concentrator construction s

  32. Slide 32: Financials

    Financials Boliden Group 32 2012-02-10

  33. Slide 33: Financial Summary

    Financial Summary MSEK Q4 2011 Q4 2010 YTD 11 YTD 10 Revenues 9 716 10 120 40 323 36 716 Operating profit (EBIT) 1 075 1 942 4 748 5 643 EBIT excl Process Inventory Revaluation 991 1 445 5 008 4 830 Free cash flow -482 1 850 -3 3 202 Capex 1 368 1 025 4 045 2 996 Earnings per share, SEK 2,88 5,17 12

  34. Slide 34: Group EBIT Q4 2011 versus Q3 2011

    Group EBIT Q4 2011 versus Q3 2011 MSEK Q4 2011 Q4 2010 Q3 2011 EBIT 1 075 1 942 1 180 Process Inventory revaluation 84 496 -216 EBIT excl Process Inventory 991 1 445 1 397 Revaluation Metal prices down 15- Deviation -454 -405 20% Specification of deviation Volume -199 18 Positive hedge effect Q4 Pri

  35. Slide 35: Group EBIT Q4 2011 versus Q4 2010

    Group EBIT Q4 2011 versus Q4 2010 MSEK Q4 2011 Q4 2010 Q3 2011 EBIT 1 075 1 942 1 180 Process Inventory revaluation 84 496 -216 Lower grades EBIT excl Process Inventory 991 1 445 1 397 Revaluation Deviation -454 -405 Base metals down Specification of deviation approx 15% Precious up approx 20% Volum

  36. Slide 36: Cost development Q4 2011 vs Q4 2010

    Cost development Q4 2011 vs Q4 2010 MSEK (adjusted for transl differences) 140 64 -63 120 100 80 69 8 3 60 17 45 -6 40 20 0 Boliden Group 36 2012-02-10

  37. Slide 37: Cost break-down and actions

    Cost break-down and actions  High inflation  Staffing up Kankberg Gold mine towards end of quarter  Cost overruns in Aitik – actions initiated ‒ Crushers ‒ Conveyor system Boliden Group 37 2012-02-10

  38. Slide 38: Cash Flow

    Cash Flow MSEK Q4 11 Q4 10 YTD 11 YTD 10 Op profit before depreciation (EBITDA)* 1 552 2 397 6 674 7 445 Change in inventories -675 -1 401 182 -2 820 Change in receivables 108 -321 -827 423 Change in liabilities 218 2 210 -372 1 199 Other change in working capital 0 -7 0 -277 Changes in working capi

  39. Slide 39: Capital Structure

    Capital Structure SEK bn 31 Dec 31 Dec MSEK % Net debt & Gearing Unless otherwise stated 2011 2010 10 000 60 Total Asset 37,6 35,1 50 8 000 Capital employed 30,5 27,2 40 1 6 000 Shareholders' equity 21,0 18,8 30 4 000 20 Net debt 6,1 4,6 10 2 000 Gearing % 29 24 0 0 -10 Equity/asset ratio, % 56 54 -

  40. Slide 40: Summary

    Summary  Macro worries remain but prices holding up well  Average prices lower – stronger into 2012  Boliden Q4 ‒ Copper increase in Boliden Area compensated lower Aitik volume ‒ Mined zinc down on grades ‒ Smelter bi-products better ‒ Reclamation provision 125 MSEK ‒ Underlying cost increase  E

  41. Slide 41: Going forward

    Going forward  E-scrap recycling ‒ High E-scrap volume Q4 2011 ‒ Start-up Q1  Kankberg start mid-year ‒ Gold Q3 ‒ Tellurium-gold Q4  Garpenberg expansion 2014  Aitik refurbishments, production impact Q1 Boliden Group 41 2012-02-10

  42. Slide 42: Disclaimer

    Disclaimer  This presentation has been prepared by Boliden for information purposes only. Nothing in this material shall be construed as an offer or solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction.  This presentation has been prepare

  43. Slide 43: Boliden produces metals that make modern life work

    Boliden produces metals that make modern life work Boliden Group 43 2012-02-10

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