Slide 1: Full Year Report January – December 2010
Full Year Report January – December 2010 Lennart Evrell President & CEO Johan Fant CFO Boliden Group 1 2011-02-11
Slide 2: Summary
Summary Full year Q4 Revenues MSEK 36 716 (27 635) Revenues MSEK 10 120 (8 356) EBIT ex PIR* MSEK 4 830 (2 350) EBIT ex PIR* MSEK 1 445 (870) ‒ Operating profit MSEK 5 643 (3 623) ‒ Operating profit MSEK 1 942 (1 232) Free Cash Flow MSEK 3 202 (-948) Free Cash Flow MSEK 1 850 (350) Ait
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 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 -500 *Process Inventory Revaluation Boliden Group 3 2011-02-11
Slide 4: The Market
The Market Boliden Group 4 2011-02-11
Slide 5: Market - full year 2010
Market - full year 2010 Metals Demand ‒ Record global demand for zinc and copper ‒ High growth in all regions ‒ Copper inventories down but zinc up 50% ‒ Sulphuric acid demand up Supply ‒ Mine production could not match demand first 9 months ‒ Smelter build continued – low capacity utilisation r
Slide 6: Global GDP development
Global GDP development Year on year % World growth near 5% in 2010 15 Lower growth in the second half Recovery in industrial activity 10 Lower than normal levels in mature economies 5 0 -5 World: Countries accounting for approx.80% of world GDP -10 2005 2006 2007 2008 2009 2010 World China U
Slide 7: Construction Market
Construction Market Year on year % Continued high activity in China 40 Low activity in mature economies 30 20 10 0 -10 -20 2006 2007 2008 2009 2010 China-residential investments cumulative value USA-total construction spending value EU construction production Source: Reuters Datastream Boliden G
Slide 8: Automotive market
Automotive market Year on Car production High global growth in 2010 year % Monthly data 3m moving average 150 Significantly lower growth in second half of 2010 Level remained well below normal in 100 China mature economies USA 50 0 Japan -50 Germany -100 2006 2007 2008 2009 2010 * Light vehicl
Slide 9: Metals demand
Metals demand Growth Q1 Q2 Q3 Q4 FY 2010 FY 2009 Growth Q1 Q2 Q3 Q4 FY 2010 FY 2009 Global 24% 23% 10% 8% 16% -7% Global 11% 9% 9% 3% 8% -4% China 25% 21% 9% 8% 15% 10% China 22% 14% 10% 2% 12% 26% RoW 24% 24% 11% 8% 16% -16% RoW 5% 6% 8% 4% 6% -16% Record global demand Record global demand Si
Slide 10: Zinc Price and Inventories
Zinc Price and Inventories USD/t Tonnes 5 000 1 200 000 Shanghai inventory LME Inventory Cash Price LME Quarterly average Zinc price (LME average) 4 500 1 000 000 Q4-10 vs 4 000 USD/t period 3 500 800 000 Q4 09 2,211 + 5% 3 000 Q1 10 2,288 + 1% 2 500 600 000 Q2 10 2,018 + 15% 2 000 Q3 10 2,013 + 15%
Slide 11: Copper Price and Inventories
Copper Price and Inventories USD/t Tonnes COMEX Inventory Shanghai inventory LME Inventory LME Cash Price Quarterly average 11 000 1 600 000 Copper price (LME average) 10 000 1 400 000 9 000 Q4-10 vs 1 200 000 USD/t period 8 000 7 000 Q4 09 6,643 + 30% 1 000 000 6 000 Q1 10 7,243 + 19% 800 000 5 000
Slide 12: Lead, Gold and Silver prices
Lead, Gold and Silver prices USD/oz Gold USD/oz Silver 1 500 35 1 400 1 300 30 1 200 1 100 25 1 000 900 20 800 700 600 15 500 400 10 300 200 5 100 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010 2011 USD/t Lead Tonnes Sulphuric acid price EUR/t 5 000 350 000
Slide 13: Treatment charges
Treatment charges USD/t Zinc treatment charge (TC) USD/t Copper treatment charge (TC) concentrate concentrate 600 160 140 500 120 400 100 300 80 60 200 40 100 20 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Realised TC (including price participation) Spot TC - outturn Standard grade TC Cif
Slide 14: Metal premiums
Metal premiums Zinc metal price premium Copper metal price premium USD/t metal USD/t metal 400 180 350 160 300 140 120 250 100 200 80 150 60 100 40 50 20 0 0 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2011 Europe ex-works US Midwest Delivered Far East (Western) Spot Copper premium C
Slide 15: Business Area Mines
Business Area Mines Boliden Group 15 2011-02-11
Slide 16: Mines - Production
Mines - Production Milled ore, Metal Milled ore, Copper Metal ktonnes Zinc content, ktonnes content, tonnes tonnes 100 000 8 000 24 000 1 500 20 000 80 000 6 000 1 200 16 000 60 000 900 4 000 12 000 600 40 000 8 000 2 000 4 000 300 20 000 0 0 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 07 07 08 08
Slide 17: Mines - Financial Summary Q4
Mines - Financial Summary Q4 MSEK 1 400 EBIT 1 217 (541) MSEK in Q4 1 200 Quarterly EBIT – 1 061 MSEK in Q3 2010 1 000 800 Higher copper, gold and silver 600 production 400 Higher prices 200 High costs in Aitik 0 Reclamation cost in Boliden area Boliden Group 17 2011-02-11
Slide 18: Mines – EBIT by Unit
Mines – EBIT by Unit Aitik Boliden area Garpenberg Tara BA Mines 5 000 4 000 3 000 2 000 1 000 0 09 10 09 10 09 10 09 10 09 10 Boliden Group 18 2011-02-11
Slide 19: Ore Reserves & Mineral Resources
Ore Reserves & Mineral Resources Boliden Group 19 2011-02-11
Slide 20: Ore Reserves & Mineral Resources - Summary
Ore Reserves & Mineral Resources - Summary Continued stable trend 229 MSEK invested in exploration 2010 Increased mineral resources in Aitik and Garpenberg Significant increase in ore reserves in the Boliden area Boliden Group 20 2011-02-11
Slide 21: Ore Reserves & Mineral Resources
Ore Reserves & Mineral Resources kton Boliden Area kton Aitik 16 000 1 800 000 14 000 1 600 000 12 000 1 400 000 10 000 1 200 000 1 000 000 8 000 800 000 6 000 600 000 4 000 400 000 2 000 200 000 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 22: Ore Reserves & Mineral Resources
Ore Reserves & Mineral Resources kton Garpenberg kton Tara 30 000 30 000 25 000 25 000 20 000 20 000 15 000 15 000 10 000 10 000 5 000 5 000 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Ore reserve Ore reserve Mineral resource (measured/indi
Slide 23: Aitik Expansion - update
Aitik Expansion - update Ramp-up period Capacity Reliability Mine and logistics Mine and ‒ Measures to improve truck availability logistics √ Crushers ‒ All ore through new crushers Q1-Q2 Crushers √ ‒ Crusher 165 (old) disconnected, to be reconnected end Q2 Conveyors √ ‒ Availability not yet s
Slide 24: Garpenberg Expansion - update
Garpenberg Expansion - update Project ‒ Investment: SEK 3.9 billion ‒ Capacity increase of ore production from 1.4 to 2.5 million tonnes ‒ Gradually increase from 2 million tonnes in 2014 to full production by the end of 2015 ‒ New mine site and facilities ‒ Production through 2030 Hedging ‒ Hed
Slide 25: Business Area Smelters
Business Area Smelters Boliden Group 25 2011-02-11
Slide 26: Smelters - Production
Smelters - Production Total f eed, Cathode Metal tonnes Copper production, Total f eed, Zinc production, tonnes tonnes tonnes 400 000 100 000 250 000 140 000 350 000 80 000 120 000 300 000 200 000 100 000 250 000 60 000 150 000 80 000 200 000 150 000 40 000 60 000 100 000 100 000 40 000 20 000 50 00
Slide 27: Smelters – Financial Summary
Smelters – Financial Summary MSEK 1 300 Quarterly EBIT EBIT excl. PIR* 530 (356) MSEK 1 100 Quarterly EBIT excl PIR* in Q4 900 – 238 MSEK in Q3 2010 700 500 Price increases 300 ‒ Free metals ‒ Realized zinc TCs 100 -100 Sulphuric acid improved -300 ‒ Volumes and prices -500 No maintenance st
Slide 28: Smelters – EBIT by Unit
Smelters – EBIT* by Unit Rönnskär Harjavalta Bergsöe Kokkola Odda BA Smelters 1 500 1 250 1 000 750 500 250 0 -250 09 10 09 10 09 10 09 10 09 10 09 10 * Excl. PIR Boliden Group 28 2011-02-11
Slide 29: Update E-scrap expansion
Update E-scrap expansion Capacity for recycling of electronic scrap from 45,000 to 120,000 tonnes/year New Kaldo plant – Capex 1.3 billion Start 2011/2012 On plan Boliden Group 29 2011-02-11
Slide 30: Financials
Financials Boliden Group 30 2011-02-11
Slide 31: Financial Summary
Financial Summary MSEK Q4 2010 Q4 2009 YTD 10 YTD 09 Revenues 10 120 8 356 36 716 27 635 Operating profit (EBIT) 1 942 1 232 5 643 3 623 EBIT margin 19% 15% 15% 13% EBIT excl Process Inventory Revaluation 1 445 870 4 830 2 350 Free cash flow 1 850 350 3 202 -948 Capex 1 025 1 269 2 996 4 915 Earning
Slide 32: Group EBIT Q4 2010 versus Q3 2010
Group EBIT Q4 2010 versus Q3 2010 Improved zinc grades in all units Ramp up of production in the Boliden area Copper smelters Volume related costs Reclamation costs Costs for start up issues in Aitik Copper USD/ton +19 % Zinc USD/ton +15% Positive hedge effect Q3 Little effect Q4 Boliden Group 32 20
Slide 33: Group EBIT 2010 versus 2009
Group EBIT 2010 versus 2009 Aitik Expansion Increased production of Maurliden Östra, Boliden area Lower zinc grades in Tara and Garpenberg Volume driven costs in Aitik, Boliden area and smelters Aitik start-up Reclamation Exploration Copper USD/ton +46 % Zinc USD/ton +30% Negative SEK/USD impact Bol
Slide 34: Capital Structure
Capital Structure SEK bn 31 Dec 31 Dec Unless otherwise stated 2010 2009 Total Asset 35,1 33,3 60% Gearing Capital employed 27,2 26,2 48% 50% 46% 46% 43% Shareholders' equity1 18,8 16,3 40% 37% Net debt 4,6 7,4 30% Gearing % 24 46 24% Equity/asset ratio, % 54 49 20% Duration of committed credit 10%
Slide 35: Operating costs
Operating costs Share of total operating costs Depreciation & other; Energy; 17% 14% MSEK Operating costs 2009 (constant currency rates) 10 098 External services; 19% Volume related 650 Depreciation 250 Consumables; 17% Start-up problems Aitik 150 Exploration and reclamation 150 General cost increas
Slide 36: Cash Flow
Cash Flow MSEK Q4 10 Q4 09 YTD 10 YTD 09 Op profit before depreciation (EBITDA)* 2 397 1 620 7 445 5 185 Changes in working capital* 483 100 -1 475 -1 063 Capital expenditure -1 025 -1 269 -2 996 -4 915 w hereof Aitik 36 -61 -665 -625 -2 982 Free cash flow 1 850 350 3 202 -948 *Includes Process Inve
Slide 37: Sensitivity Analysis
Sensitivity Analysis Change in metal EBIT EBIT Change in EBIT prices, effect, Change in effect, TC/RC, effect, +10% SEK m USD, +10% SEK m +10% SEK m Copper 580 USD/SEK 1 160 TC Zn 45 Zinc 585 EUR/USD 425 TC/RC Cu 50 Lead 105 USD/NOK 90 TC Pb -10 Gold 125 Silver 155 Boliden Group 37 2011-02-11
Slide 38: Dividend proposal
Dividend proposal Dividend policy states one third of net profit to be distributed to share holders Proposal 2010: ‒ SEK 5 per share ‒ Equals 34,6% of net profit ‒ 1,368 MSEK SEK 2005 2006 2007 2008 2009 Earnings per share 7.07 21.66 13.37 3.42 9.14 Dividend 2.00 4.00 4.00 1.00 3.00 Pay-out rati
Slide 39: Summary
Summary Strong quarter Good quarter for smelters – improved production Higher full year production volumes in Aitik and Boliden Area Aitik ramp-up: ‒ New crusher availability still too low ‒ Old crusher closed for 6 months ‒ Grades decline ‒ 36 Mton/year 2014 E-scrap expansion in Rönnskär
Slide 40: Forward-looking statements
Forward-looking statements Certain statements in this presentation are forward-looking, and the actual outcome could be materially different. Such forward-looking statements are based on Boliden’s present plans, estimates, assumptions, projections and expectations and are subject to risks and uncert
Slide 41: Boliden produces metals that make modern life work
Boliden produces metals that make modern life work Boliden Group 41 2011-02-11