Slide 1: Full Year Report January – December 2009
Full Year Report January – December 2009 Bildplatshållare Lennart Evrell President & CEO Johan Fant CFO Boliden AB 1 2010-02-12
Slide 2: The Market
The Market Full Year 2009 Fourth Quarter 2009 Strong recovery from difficult 2008 Higher demand for base metals Overall decline in demand: – Slow increase from EU customers – Significant decline in mature – Significant increase in metal prices economies – China continues to drive global – Grow
Slide 3: Boliden
Boliden Full Year 2009 Fourth Quarter 2009 Revenues MSEK 27,635 (30,987) Revenues MSEK 8,356 (6,287) EBIT excl. PIR* MSEK 2,350 (1,793) EBIT excl PIR* MSEK 870 (211) – Operating profit MSEK 3,623 (1,004) – Operating profit MSEK 1,232 (-491) Stable production – Mines offset Cash Flow MSEK
Slide 4: Group EBIT development
Group EBIT development MSEK 2500 Quarterly EBIT Quarterly EBIT excl PIR* 2000 1500 1000 500 0 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 -500 * EBIT excl Process Inventory Revaluation Boliden AB 4 2010-02-12
Slide 5: The Market
The Market Boliden AB 5 2010-02-12
Slide 6: Industrial production gradually improving
Industrial production gradually improving Industrial production growth 30 20 10 Year over year % 0 -10 -20 -30 -40 05 06 07 08 09 Eurozone (Seas. adj.) - Manufacturing USA (Seas. adj.) - Manufacturing Japan (Seas. adj.) - Manufacturing China (value added) - total industry Source: Reuters EcoWin Ma
Slide 7: Zinc prices increased through 2009 – downward correction beginning 2010
Zinc prices increased through 2009 – downward correction beginning 2010 USD/t Stocks kt 5 000 900 4 500 800 Zinc price (LME average) 4 000 700 Q4-09 vs 3 500 600 USD/t period 3 000 500 Q4 08 1,189 + 86% 2 500 400 Q1 09 1,174 + 88% 2 000 Q2 09 1,476 + 50% 300 1 500 Q3 09 1,757 + 26% 200 1 000 Q4 09 2
Slide 8: Spot TC up, premia stable - market slowly better
Spot TC up, premia stable - market slowly better USD/ t of concentrate Zinc treatment charge (TC) Zinc metal price premium USD/t 600 400 350 500 300 400 250 300 200 150 200 100 100 50 0 - 2006 2007 2008 2009 2005 2006 2007 2008 2009 Realised TC (including price participation) Spot TC - Asia US Midwe
Slide 9: Copper prices increased through 2009 – downward correction beginning 2010
Copper prices increased through 2009 – downward correction beginning 2010 USD/t Stocks kt 10 000 1 000 9 000 900 8 000 800 Copper price (LME average) 7 000 700 Q4-09 vs USD/t period 6 000 600 Q4 08 3,940 + 69% 5 000 500 Q1 09 3,435 + 93% 4 000 400 Q2 09 4,676 + 42% 3 000 300 Q3 09 5,840 + 14% 2 000
Slide 10: Copper spot TC fell in Q4 – premia firming with cautious optimism
Copper spot TC fell in Q4 – premia firming with cautious optimism in market USD/t of concentrate Copper treatment charge USD/t Copper metal price premium 120 200 100 160 80 120 60 80 40 40 20 0 0 2005 2006 2007 2008 2009 2006 2007 2008 2009 Spot Copper premium CIF W. Europe Benchmark CIF Europe TC s
Slide 11: Lead, silver and gold increased
Lead, silver and gold increased USD/t Stocks ktUSD/t 4 500 Lead 200 180 25,0 Silver 4 000 160 20,0 3 500 140 3 000 120 15,0 2 500 100 2 000 80 10,0 1 500 60 1 000 40 5,0 500 20 0 0 0,0 2003 2004 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009 Source: Reuters Ecowin Daily price Quarter av
Slide 12: Business Area Mines
Business Area Mines Boliden AB 12 2010-02-12
Slide 13: Mines - production
Mines - production Mille d ore, Copper metal Milled ore, Zinc metal ktonnes content, tonnes ktonnes content, tonnes 6,000 18,000 1,600 100,000 16,000 90,000 1,400 5,000 14,000 80,000 1,200 4,000 12,000 70,000 1,000 60,000 10,000 3,000 50,000 800 8,000 40,000 2,000 6,000 600 30,000 4,000 400 1,000 20
Slide 14: Mines - financial summary
Mines - financial summary MSEK 1200 Overall good full year 1000 Quarterly EBIT performance in Mines 800 Higher prices did not fully compensate for volume 600 losses in Q4 400 200 0 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 MSEK BA Mines Aitik Boliden Garpenberg Tara 2009 2008 2
Slide 15: Ore Reserves & Mineral Resources
Ore Reserves & Mineral Resources Boliden AB 15 2010-02-12
Slide 16: Ore Reserves and Mineral Resources - Summary
Ore Reserves and Mineral Resources - Summary Positive development in 2009 in spite of exploration cutbacks Exploration results gave net additions in Aitik, Garpenberg and Boliden area Tara quantities largely replaced Exploration activities increased in Q4 2009 Boliden AB 16 2010-02-12
Slide 17: Increasing ore reserves and mineral resources in most mines
Increasing ore reserves and mineral resources in most mines Kton Boliden Area Kton Aitik 16 000 1 600 000 14 000 1 400 000 12 000 1 200 000 10 000 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 2000 2001 2002 2003 2004 2005 200
Slide 18: AITIK copper mine expansion
AITIK copper mine expansion Project fundamentals Double ore production – High productivity – Profitable mining of lower grades Lower grades – Cu production +50% – Current production plan has lower than average grades 2011-17 Increased ore reserves 2009 – Life of mine extended to 2029 (2026) –
Slide 19: AITIK – copper mine expansion project status
AITIK – copper mine expansion Project status Mine production – expansion on plan Concentrator – Cold tests finalized Conveyor system – Being commissioned Project on plan Boliden AB 19 2010-02-12
Slide 20: AITIK production areas
AITIK production areas Feb 2010 2014 6 7 Boliden AB 20 2010-02-12
Slide 21: AITIK production areas
AITIK production areas crusher PB5 depleted end 2010 Salmijärvi 7 S2 crusher 5 crusher S1 6 S1 main production area 2010-2014 PB6 waste 2010-2014 New Concentrator Boliden AB 21 2010-02-12
Slide 22: Aitik - varying ore head grade (indicative only)
Aitik - varying ore head grade (indicative only) Ore production 40 000 35 000 30 000 25 000 20 000 Reserve grade 15 000 0,25% 10 000 5 000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Ore production Ore reserve grade Indicative ore head g
Slide 23: Business Area Smelters
Business Area Smelters Boliden AB 23 2010-02-12
Slide 24: Smelters - production
Smelters - production Zinc metal Copper feed, Zinc feed, tonnes Copper cathode prod, tonnes tonnes prod, tonnes 250,000 140,000 400,000 100,000 90,000 120,000 350,000 200,000 80,000 300,000 100,000 70,000 250,000 150,000 60,000 80,000 200,000 50,000 60,000 40,000 100,000 150,000 30,000 40,000 100,00
Slide 25: Smelters - financial summary
Smelters - financial summary MSEK 1300 Quarterly EBIT Zinc smelters on full 1100 Quarterly EBIT excl PIR* production 900 Improved volumes gave 700 strong Q4 500 Copper smelters hit by poor 300 market conditions 100 -100 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 -300 -500 MS E
Slide 26: Financials
Financials Boliden AB 26 2010-02-12
Slide 27: Financial summary
Financial summary MSEK Q4 09 Q4 08 YTD 09 YTD 08 Revenues 8,356 6,287 27,635 30,987 Operating profit (EBIT) 1,232 -491 3,623 1,004 EBIT margin 15% -8% 13% 3% EBIT excl Process Inventory Revaluation 870 211 2,350 1,793 Free cash flow 350 -534 -948 837 Capex 1,269 1,533 4,915 4,624 Earnings per share,
Slide 28: Group EBIT Q4 2009 versus Q4 2008 and Q3 2009
Group EBIT Q4 2009 versus Q4 2008 and Q3 2009 MSEK Q4 2009 Q4 2008 Q3 2009 EBIT 1,232 -491 949 Lower grades in Process Inventory Revaluation 362 -702 215 Aitik and higher EBIT excl Process Inventory production in Revaluation 870 211 734 Smelters Deviation 659 136 Specification of deviation: Volume e
Slide 29: Group EBIT YTD 2009 versus YTD 2008
Group EBIT YTD 2009 versus YTD 2008 MSEK 2009 2008 EBIT 3,623 1,004 Process Inventory revaluation 1,273 -789 EBIT excl Process Inventory 2,350 1,793 Revaluation Deviation 557 Costs in local Specification of deviation: currency down -2% Volume -292 Costs 194 Average Cu down - 26% Prices & Terms -367
Slide 30: Capital structure
Capital structure SEK bn 31 Dec 31 Dec Gearing Unless otherwise stated 2009 2008 Total Asset 33.3 30.3 60% 55% Capital employed 26.2 24.7 52% 50% 48% 1 46% Shareholders' equity 16.3 16.1 39% 40% Net debt 7.4 6.3 Gearing % 46 39 30% Equity/asset ratio, % 49 53 20% Average maturity in years 3.8 4.8 10
Slide 31: 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 Zinc 665 USD/SEK 985 TC Zn 70 Copper 485 EUR/USD 480 TC/RC Cu 55 Lead 120 USD/NOK 120 TC Pb -15 Gold 110 Silver 95 Estimate of the 12-month effect on G
Slide 32: Adjusted financial goals
Adjusted financial goals Boliden operates in a cyclical and capital-intensive industry. Good profitability and financial stability are prerequisites for sustainable growth and long-term value creation. It is in accordance with these criteria that Boliden’s Financial goals for the net debt/equity rat
Slide 33: Going forward
Going forward Industrial demand increased through 2009 Aitik expansion starts 1 April 2010 Aitik head grades lower than average after 2011 Increasing exploration activities Cu smelters under difficult conditions – Reduced production continues Capex impacted by phase out of Aitik expansio
Slide 34: 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 35: Boliden produces metals that make modern life work
Boliden produces metals that make modern life work