Slide 1: Interim Report January – June 2011
Interim Report January – June 2011 Lennart Evrell President & CEO Mikael Staffas CFO
Slide 2: Q2 Summary
Q2 Summary Market Boliden Low growth in construction and Revenues MSEK 9,896 (8,908) automotive markets EBIT ex PIR* MSEK 1,120 (1,130) China construction develops well Operating profit MSEK 1,134 (1,123) Stable metal demand Free Cash Flow MSEK -790 (201) Weaker USD vs Q1 Working capital +1,073 MSEK
Slide 3: Group EBIT Development
Group EBIT Development EBIT Q2, ex PIR 1,120 MSEK Compared to Q1 -380 2 500 Maintenance smelters -180 Quarterly EBIT Internal profit elim. -170 2 000 Quarterly EBIT excl PIR* 1 500 1 000 500 0 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 -500 *Process Inventory Revaluation Bolide
Slide 4: The Market
The Market Boliden Group 4 2011-07-19
Slide 5: Construction
Construction year on year % Monthly data 40 Continued growth in China 30 Mixed in Europe Continued decline in the US 20 10 0 -10 -20 -30 2006 2007 2008 2009 2010 2011 China - investments residential building (cum.value) EU27 - Construction IP SA USA - Construction spending, total value SA, AR Bolide
Slide 6: Automotive
Automotive Quarterly production - million units 5 China and the US, growth vs 2010 but lower production in Q2 4 Export led production in Europe EU China 3 USA 2 Growth in car Q1 Q2 6M Japan production China +8% +3% +6% 1 Germany +8% +2% +5% USA +12% +5% +9% 0 2005 2006 2007 2008 2009 2010 2011 Sourc
Slide 7: Metals demand – low growth in Q2
Metals demand – low growth in Q2 Year over year Global metals demand and IP, GDP Zinc end use 30% Consumer 7% Source: © CRU (www.crugroup.com) Machinery 7% Infrastr- ucture 20% 14% Construc- tion 50% Transport 22% 10% Source: Brook Hunt - A Wood Mackenzie Company 0% Copper end use Consumer 8% -10% C
Slide 8: Metals market balance
Metals market balance Mt metal Zinc - global metal Copper - global metal Mt metal market balance market balance 3.5 6.0 3.0 5.0 2.5 4.0 2.0 3.0 1.5 2.0 1.0 1.0 0.5 0.0 0.0 -1.0 2009 2010 2011 2009 2010 2011 Balance Metals production Metals demand Balance Metals production Metals demand Source: © CRU
Slide 9: Zinc price and inventories
Zinc price and inventories USD/t LME Inventory Shanghai Inventory Price Price Quarter avg Tonnes 5 000 1 400 000 Zinc price (LME average) 4 500 Q2-11 vs 1 200 000 USD/t period 4 000 1 000 000 Q2 10 2,018 + 11% 3 500 Q3 10 2,013 + 12% 3 000 800 000 Q4 10 2,315 - 3% 2 500 600 000 Q1 11 2,393 - 6% 2 00
Slide 10: Zinc TC and premiums
Zinc TC and premiums USD/t Zinc treatment charge (TC) Zinc metal price premium concentrate USD/t metal 600 400 350 500 300 400 250 300 200 150 200 100 100 50 0 0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Realised TC (including price participation) Spot TC - outturn Europe ex-works
Slide 11: Copper price and inventories
Copper price and inventories USD/t LME Inventory Shanghai Inventory COMEX Inventory Price Price Quarter avg Tonnes 11 000 1 600 000 Copper price (LME average) 10 000 1 400 000 Q2-11 vs 9 000 USD/t period 1 200 000 8 000 Q2 10 7,013 + 30% 7 000 1 000 000 Q3 10 7,242 + 26% 6 000 Q4 10 8,634 + 6% 800 0
Slide 12: Copper TC and premiums
Copper TC and premiums Copper treatment charge (TC) Copper metal price premium USD/t USD/t metal concentrate 160 180 140 160 120 140 120 100 100 80 80 60 60 40 40 20 20 0 0 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Standard grade TC Cif spot mine/trader USD/t Spot Copper premium CI
Slide 13: Gold, Silver and Lead prices
Gold, Silver and Lead prices USD/oz USD/oz 1 800 Gold 60 Silver 1 600 50 1 400 1 200 40 1 000 30 800 600 20 400 10 200 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010 2011 USD/t Lead Tonnes 5 000 350 000 Inventory Price Price Quarter avg 4 500 Average prices
Slide 14: Metal markets – Q2
Metal markets – Q2 Demand Low growth in global demand except Construction in China Probable inventory correction in China Supply Low growth in global zinc metal production Decline in global copper metal production Prices USD weaker Average metal prices stable – volatile within quarter Concentrate ma
Slide 15: Business Area Mines
Business Area Mines Boliden Group 15 2011-07-19
Slide 16: Mines - Summary Q2
Mines - Summary Q2 MSEK 1 400 EBIT 1 200 Quarterly EBIT – MSEK 1,064 (1,034) in Q2 – MSEK 1,156 in Q1 1 000 800 Metal production in line with 600 Q1-11 and Q2-10 400 Higher costs 200 0 Garpenberg expansion on plan – start up 2014 Kankberg gold mine on plan – start up mid 2012 Boliden Group 16 2011-0
Slide 17: Mines - Production
Mines - Production Metal Copper Zinc content, Milled ore, Metal Milled ore, ktonnes content, ktonnes tonnes tonnes 100 000 8 000 24 000 1 500 80 000 20 000 1 200 6 000 16 000 60 000 900 4 000 12 000 600 40 000 8 000 2 000 20 000 4 000 300 0 0 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2
Slide 18: Aitik Expansion - update
Aitik Expansion - update Ramp-up period Capacity Reliability 32 mtonnes annualized ore production in Q2 36 mtonnes 2014 Mine and logistics Actions implemented More robust ore supply Crushers Truck engine exchange program Old crusher connected Conveyors New crushers not satisfactory Mills Flotation B
Slide 19: Business Area Smelters
Business Area Smelters Boliden Group 19 2011-07-19
Slide 20: Smelters – Summary Q2
Smelters – Summary Q2 MSEK 1 300 EBIT excl. PIR* Quarterly EBIT 1 100 MSEK 143 (110) in Q2 Quarterly EBIT excl PIR* MSEK 226 in Q1 900 700 Increased secondary feed 500 Higher copper TC/RCs 300 Lower zinc TCs 100 Maintenance stops in quarter -100 – 180 MSEK EBIT impact -300 -500 E-scrap expansion on
Slide 21: Smelters - Production
Smelters - Production Cathode Zinc Metal 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
Slide 22: Financials
Financials Boliden Group 22 2011-07-19
Slide 23: Financial Summary
Financial Summary MSEK Q2 2011 Q2 2010 YTD 11 YTD 10 Revenues 9 896 8 908 20 054 17 224 Operating profit (EBIT) 1 134 1 123 2 492 2 353 EBIT excl Process Inventory Revaluation 1 120 1 130 2 620 2 172 EBIT excl PIR margin 11% 13% 13% 13% Free cash flow -790 201 -342 149 Capex 1 020 806 1 684 1 405 Ea
Slide 24: Group EBIT Q2 2011 versus Q2 2010
Group EBIT Q2 2011 versus Q2 2010 MSEK Q2 2011 Q2 2010 Q1 2011 EBIT 1 134 1 123 1 359 Process Inventory revaluation 14 -7 -142 Higher production EBIT excl Process Inventory 1 120 1 130 1 500 Lower grades Revaluation Deviation -10 -380 Specification of deviation Higher ore volume Volume 43 27 Aitik a
Slide 25: Cost increase Q2 2011 vs Q2 2010
Cost increase Q2 2011 vs Q2 2010 MSEK 400 350 29 -26 300 44 333 250 61 200 83 150 100 142 50 0 Boliden Group 25 2011-07-19
Slide 26: Group EBIT Q2 2011 versus Q1 2011
Group EBIT Q2 2011 versus Q1 2011 MSEK Q2 2011 Q2 2010 Q1 2011 EBIT 1 134 1 123 1 359 Higher ore production in Process Inventory revaluation 14 -7 -142 Aitik EBIT excl Process Inventory 1 120 1 130 1 500 Lower grades in Revaluation Garpenberg and Aitik Deviation -10 -380 Higher secondary feed Specif
Slide 27: Cash Flow
Cash Flow MSEK Q2 11 Q2 10 YTD 11 YTD 10 Op profit before depreciation (EBITDA)* 1 616 1 589 3 450 3 222 Change in inventories -975 -1 121 51 -2 080 Change in receivables -82 -150 -861 -30 Change in liabilities -19 768 -71 334 Other change in working capital 4 0 -21 0 Changes in working capital* -1
Slide 28: Capital Structure
Capital Structure SEK bn 30 Jun 31 Dec Unless otherwise stated 2011 2010 Total Asset 36,4 35,1 50% Gearing 46% Capital employed 28,6 27,2 45% 43% 40% 37% 1 Shareholders' equity 19,0 18,8 35% 33% Net debt 6,3 4,6 30% 24% 25% 21% Gearing % 33 24 20% Equity/asset ratio, % 52 54 15% 10% Duration of comm
Slide 29: 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 1 100 TC Zn 40 Zinc 535 EUR/USD 405 TC/RC Cu 50 Lead 115 USD/NOK 70 TC Pb -10 Gold 135 Silver 190 Boliden Group 29 2011-07-19
Slide 30: Summary
Summary Metal demand good but low growth Higher ore production in Aitik - lower grades EBIT Maintenance stops Increased costs Weaker USD Internal profit elimination Aitik ramp-up: Actions implemented Crusher availability still low Expansion projects on plan Boliden Group 30 2011-07-19
Slide 31: Going forward
Going forward Aitik ramp-up continues Smelter maintenance stops in Q3 will effect EBIT by ~-45 MSEK Lower grades in Aitik from Q3 Grades declining below average reserve grade (0,25 %) Grades in Garpenberg on average reserve grade (5,3%) Capex between 4-5 billion in 2011 Expansion projects: E-scrap e
Slide 32: 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 prepared as
Slide 33: Boliden - metals for modern society
Boliden - metals for modern society Boliden Group 33 2011-07-19