Slide 1: Interim Report January – March 2011
Interim Report January – March 2011 Lennart Evrell President & CEO Håkan Gabrielsson Director Group Control
Slide 2: Q1 Summary
Q1 Summary Market Boliden Industrial activity continued to improve Revenues MSEK 10,158 (8,316) Good metal demand EBIT ex PIR* MSEK 1,500 (1,043) Precious metals – strong price ‒ Operating profit MSEK 1,359 (1,230) development Free Cash Flow MSEK 448 (-52) Volatile macro environment
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 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 -500 *Process Inventory Revaluation Boliden Group 3 2011-05-03
Slide 4: The Market
The Market Boliden Group 4 2011-05-03
Slide 5: Metal markets – first quarter 2011
Metal markets – first quarter 2011 Demand ‒ Continued growth in zinc and copper demand ‒ Copper demand in China lower in Q1 ‒ Good industrial demand in Europe Supply ‒ Lower growth in metals production ‒ Zinc concentrate market in deficit, copper in balance mid quarter, surplus in March ‒ Low ac
Slide 6: Global GDP development
Global GDP development Year on year % 15 Continued robust global growth China , continued strong development 10 5 0 World: Countries -5 accounting for approx.80% of world GDP -10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2008 2009 2010 201
Slide 7: Construction Market
Construction Market Year on year % 40 No sign of slowdown in China 30 USA still weak China Europe mixed 20 10 EU 0 USA -10 -20 2006 2007 2008 2009 2010 2011 China-residential investments cumulative value USA-total construction spending value EU construction production Source: Reuters Datastrea
Slide 8: Automotive Market
Automotive Market Car production - Quarterly Million units 5.0 Europe and North America 4.0 ‒ High growth in USA ‒ Germany somewhat slower 3.0 ‒ Export lead production in Europe ‒ Production level still well below last peak in mature economies 2.0 1.0 0.0 2005 2006 2007 2008 2009 2010 2011 China U
Slide 9: Metal Market
Metal Market mt Zinc Copper mt global metal market balance global metal market balance 6,0 6,0 5,0 5,0 4,0 4,0 3,0 3,0 2,0 2,0 1,0 1,0 0,0 0,0 -1,0 -1,0 2009 2010 2011 2009 2010 2011 Balance Metals production Metals demand Balance Metals production Metals demand Source: © CRU (www.crugroup.com) Sour
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 Q1-11 vs 4 000 USD/t period 3 500 Q1 10 2,288 + 5% 800 000 3 000 Q2 10 2,018 + 19% 2 500 600 000 Q3 10 2,013 + 19% 2 000 Q4 10 2,315 + 3%
Slide 11: Zinc – treatment charges and premiums
Zinc – treatment charges and premiums USD/t USD/t conc. Zinc treatment charge metal Zinc metal price premium 600 400 350 500 300 400 250 300 200 150 200 100 100 50 0 0 2005 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Europe ex-works US Midwest Delivered Realised TC (including price p
Slide 12: 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 10 000 Copper price (LME average) 1 400 000 9 000 Q1-11 vs 1 200 000 USD/t period 8 000 7 000 Q1 10 7,243 + 33% 1 000 000 6 000 Q2 10 7,013 + 38% 800 000 5 000
Slide 13: Copper – treatment charges and premiums
Copper – treatment charges and premiums USD/t USD/t conc. Copper treatment charge metal Copper metal price premium 160 180 140 160 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 2005 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Spot Copper premium CIF W. Europe Standard grade TC Cif
Slide 14: Gold, Silver and Lead prices
Gold, Silver and Lead prices USD/oz Gold USD/oz Silver 1 600 45 1 400 40 35 1 200 30 1 000 25 800 20 600 15 400 10 200 5 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010 2011 USD/t Lead Tonnes 5 000 LME Inventory LME Cash Price Quarterly average 350 000 4 500
Slide 15: Business Area Mines
Business Area Mines Boliden Group 15 2011-05-03
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 1 200 6 000 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 08 08 08 08 09
Slide 17: Mines - Financial Summary Q1
Mines - Financial Summary Q1 MSEK 1 400 EBIT 1 200 Quarterly EBIT – MSEK 1,156 (800) in Q1 1 000 – MSEK 1,217 in Q4 2010 800 600 Volumes down 400 Low crusher availability in Aitik 200 0 Costs slightly higher excluding Q4 one-offs Boliden Group 17 2011-05-03
Slide 18: Aitik Expansion - update
Aitik Expansion - update Ramp-up period Capacity Reliability Mine and logistics ‒ Action plan, improved truck Mine and availability logistics √ Crushers ‒ All ore through new crushers Q1- Q2 Crushers √ ‒ Availability not yet satisfactory Conveyors √ ‒ Crusher 165 (old) disconnected, to be reco
Slide 19: Garpenberg Expansion - update
Garpenberg Expansion - update Project ‒ Capex: SEK 3.9 billion ‒ Ore production from 1.4 to 2.5 million tonnes ‒ Production starts 2014 , full production end 2015 ‒ New concentrator and underground infrastructure ‒ Production through 2030 Hedging ‒ Zinc, copper, lead, gold and silver ‒ Approx 1/
Slide 20: Kankberg - update
Kankberg - update Project ‒ Capex: MSEK 475 ‒ High rate of return ‒ Life of mine - 2020 ‒ Start mid 2012 ‒ Production (yearly average): ‒ Ore 320 ktonnes ‒ Gold 1,150 kg1) (high yearly variations) ‒ Tellurium 41 tonnes1) Hedges and contracts ‒ Gold production hedged, 80% at 1,460 USD/tr oz ‒ Tel
Slide 21: Business Area Smelters
Business Area Smelters Boliden Group 21 2011-05-03
Slide 22: Smelters - Production
Smelters - Production Total f eed, Cathode Metal Copper Total f eed, Zinc tonnes production, production, 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 80 000 200 000 100 000 60 000 150 000 40 000 40 000 100 000 50 000 20 00
Slide 23: Smelters – Financial Summary Q1
Smelters – Financial Summary Q1 MSEK 1 300 Quarterly EBIT EBIT excl. PIR* 1 100 Quarterly EBIT excl PIR* ‒ MSEK 226 (256) in Q1 900 ‒ MSEK 530 in Q4 2010 700 Lower volumes of free metals 500 Unfavourable feed mix 300 100 Lower zinc TCs -100 -300 -500 * Process Inventory Revaluation Boliden G
Slide 24: Update E-scrap expansion
Update E-scrap expansion Increased recycling capacity for electronic scrap from 45,000 to 120,000 tonnes/year New recycling plant – Capex 1.3 billion Start 2011/2012 On plan Boliden Group 24 2011-05-03
Slide 25: Financials
Financials Boliden Group 25 2011-05-03
Slide 26: Financial Summary
Financial Summary MSEK Q1 2011 Q4 2010 Q1 2010 Revenues 10 158 10 120 8 316 Operating profit (EBIT) 1 359 1 942 1 230 EBIT excl Process Inventory Revaluation 1 500 1 445 1 043 EBIT excl PIR margin 15% 14% 13% Free cash flow 448 1 850 -52 Capex 664 1 025 598 Earnings per share, SEK 3,51 5,17 3,21 Gea
Slide 27: Group EBIT Q1 2011 versus Q1 2010
Group EBIT Q1 2011 versus Q1 2010 Higher Copper MSEK Q1 2011 Q1 2010 Q4 2010 EBIT 1 359 1 230 1 942 production in Process Inventory revaluation -142 187 496 Aitik EBIT excl Process Inventory 1 500 1 043 1 445 Revaluation Deviation 457 55 Aitik expansion Specification of deviation Higher energy Vo
Slide 28: Group EBIT Q1 2011 versus Q4 2010
Group EBIT Q1 2011 versus Q4 2010 Lower production MSEK Q1 2011 Q1 2010 Q4 2010 volume in Aitik EBIT 1 359 1 230 1 942 Lower grades in Process Inventory revaluation -142 187 496 both Boliden and EBIT excl Process Inventory 1 500 1 043 1 445 Revaluation Aitik Deviation 457 55 Lower free metals Spe
Slide 29: Cash Flow
Cash Flow MSEK Q1 11 Q4 10 Q1 10 Op profit before depreciation (EBITDA)* 1 833 2 397 1 632 Changes in working capital* 171 483 -1 274 Capital expenditure -664 -1 025 -598 Free cash flow 448 1 850 -52 *Includes Process Inventory Revaluation Tax payment of MSEK 908 in Q1 Capex in 2011 approx. SEK
Slide 30: Capital Structure
Capital Structure SEK bn 31 Mar 31 Dec Gearing 50% Unless otherwise stated 2011 2010 46% 46% Total Asset 35,1 35,1 45% 43% 40% 37% Capital employed 26,8 27,2 35% 1 Shareholders' equity 19,6 18,8 30% 24% Net debt 4,1 4,6 25% 21% 20% Gearing % 21 24 15% Equity/asset ratio, % 56 54 10% Duration of comm
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 Copper 475 USD/SEK 1 060 TC Zn 40 Zinc 530 EUR/USD 395 TC/RC Cu 45 Lead 105 USD/NOK 75 TC Pb -10 Gold 115 Silver 185 Boliden Group 31 2011-05-03
Slide 32: Summary
Summary Low mine production in quarter Lower volumes of free metals and lower zinc TC put pressure on smelter profits Aitik ramp-up: ‒ Crusher availability still low ‒ Old crusher reconnected end of Q2 ‒ Grades decline late Q2 ‒ 36 Mton/year 2014 E-scrap expansion in Rönnskär – 2011/2012 K
Slide 33: 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
Slide 34: Boliden produces metals that make modern life work
Boliden produces metals that make modern life work