Boliden AB · OMXSTO:BOL

Boliden AB — Q3 2008 Earnings Presentation

20 slides from Boliden AB's earnings presentation, Oct 28, 2008

  1. Slide 1: Introduction and Q3 summary

    Introduction and Q3 summary Bildplatshållare Lennart Evrell President & CEO 1 2008-10-28

  2. Slide 2: Third Quarter

    Third Quarter Market ƒ Weakening demand ƒ Pressure on zinc price ƒ Weakening copper price ƒ Stable gold and decline in silver price ƒ Strengthening dollar Boliden ƒ Lower production in Mines ƒ Smelters had higher copper but lower zinc metal production ƒ Revenues SEK 7,513 million (8,166) ƒ Operating

  3. Slide 3: Segment Smelters

    Segment Smelters 3 2008-10-28

  4. Slide 4: Smelters – increased feed and stable zinc metal production compared with Q2

    Smelters – increased feed and stable zinc metal production compared with Q2 ƒ Odda Tonnes 250 000 – Planned maintenance shutdown – continues into Q4 200 000 – Unplanned stop in September due to equipment failure 150 000 – Continued synergy work with 100 000 Kokkola 50 000 ƒ Kokkola 0 – Concentrate f

  5. Slide 5: Odda signs agreements for long term electricity supply

    Odda signs agreements for long term electricity supply ƒ Odda and Statkraft entered into Electricity supplied under Odda and Statkraft agreements GWh/year electricity supply agreements 1000 for 2009-2030 900 – Total quantity of 900 GWh/year 800 700 600 ƒ Positive for Odda’s long term 500 400 competi

  6. Slide 6: Zinc smelters’ revenue distribution

    Zinc smelters’ revenue distribution Zn prices hit free metal and escalators 9M 2008 9M 2007 By-products By-products 8% 5% Premiums Premiums 13% 12% TC 47% TC 55% Free metal 25% Free metal 35% 6 2008-10-28

  7. Slide 7: Smelters – stable feed and copper cathode production

    Smelters – stable feed and copper cathode production ƒ Rönnskär Tonnes – Planned maintenance 400 000 shutdown 350 000 – Stable feed 300 000 250 000 ƒ Harjavalta 200 000 150 000 – Increased concentrate feed 100 000 – Quality of concentrates 50 000 remains variable 0 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3

  8. Slide 8: Copper smelters’ revenue distribution

    Copper smelters’ revenue distribution Lower TC/RC, good development on by-products 9M 2007 9M 2008 By-products 15% By-products 28% Premiums 5% TC/RC 44% TC/RC Premiums 55% 3% Free metal 25% Free metal 25% 8 2008-10-28

  9. Slide 9: Segment Mines

    Segment Mines ‘BOLIDEN E Ww 2008-10-28

  10. Slide 10: Mines’ zinc production

    Mines’ zinc production ƒ Garpenberg Milled ore, Zinc metal – Production record tonnes content, tonnes 1 600 000 100 000 – Expansion from 1.2 to 1.4 90 000 1 400 000 million tonnes in progress 80 000 1 200 000 70 000 – Tara 1 000 000 60 000 – Imbalance between 800 000 50 000 development and productio

  11. Slide 11: Mines’ copper production

    Mines’ copper production ƒ Aitik Milled ore, Copper metal conte nt, – Mining in low grade sections tonnes tonnes 6 000 18 000 due to high water levels 16 000 – Improved grindability 5 000 14 000 4 000 12 000 ƒ Boliden area 3 000 10 000 8 000 – Planned cutbacks 2008-2009, 2 000 6 000 back in full pro

  12. Slide 12: Aitik 36

    Aitik 36 Project time-plan ƒ Project running on schedule ƒ Milled ore production raised from 18 to 36 million tonnes by 2014 ƒ Start-up March 2010 and ramp up to annual rate of 33 million tonnes after Q2 2010 CAPEX update ƒ CAPEX will be approx. SEK 6 billion (SEK 5.2 billion) ƒ Higher mine site con

  13. Slide 13: Financials

    Financials BOLIDEN 13 2008-10-28

  14. Slide 14: Financial summary

    Financial summary SEK m Q3 08 Q3 07 Change 9M 08 9M 07 Change Revenues 7,513 8,166 -8% 24,700 25,913 -5% Operating profit (EBIT) -142 1,332 n.a. 1,495 4,838 -69% EBIT margin, % -2 16 6 19 Free cash flow (before -117 62 n.a. 1,371 1,630 -16% financing activities) Earnings per share, SEK - 0.49 3.20 n

  15. Slide 15: EBIT – 2008 vs. 2007

    EBIT – 2008 vs. 2007 SEK m Q3 9M EBIT 2007 1,332 4,838 Exchange rate effects - 34 -887 Metal prices and terms -1,189 - 2,147 Difference – Metal price hedging 271 963 Difference – Iron stock result -193 - 172 Definite prices (MAMA) -86 212 TC/RC terms -44 -215 Premiums -115 -203 Total effect prices a

  16. Slide 16: EBIT – Q3 2008 vs. Q2 2008

    EBIT – Q3 2008 vs. Q2 2008 SEK m EBIT Q2 2008 406 Exchange rate effects 209 Metal prices and terms -593 Difference – Metal price hedging 24 Difference – Iron stock result -142 Definite prices (MAMA) -14 TC/RC terms -14 Premiums -71 Total effect prices and terms -810 Volume variation, Smelters 78 Vol

  17. Slide 17: Action being taken to assure short term and long term competitiveness

    Action being taken to assure short term and long term competitiveness ƒ CAPEX reductions – To compensate higher CAPEX for Aitik 36 ƒ Productivity programmes – Odda/Kokkola, Aitik, Garpenberg ƒ Procurement project ƒ Head count reductions – Reduction of entrepreneurs, some 200 persons – Boliden employ

  18. Slide 18: Looking into Q4

    Looking into Q4 ƒ Sharp fall in metal prices in the beginning of Q4 ƒ Capacity reductions announced for many mines and smelters in the world ƒ Low visibility ƒ Action programmes implementation ƒ Maintenance stop. EBIT impact approx. – 50 MSEK 18 2008-10-28

  19. Slide 19: Boliden in brief, November 2008

    Boliden in brief, November 2008 Positive Negative Market Cost levels on way down(?) General demand Strong USD Zn price, TC and premiums Cu falling sharply Aitik overrun Boliden Expansion 2010 Production Boliden area Garpenberg Cost development Exploration Tara developments Energy deal Norway Grindab

  20. Slide 20: Boliden produces metals that make modern life work

    Boliden produces metals that make modern life work

Boliden — Q3 2008 Earnings Presentation on 6ix