Boliden Ab · OMXSTO:BOL

Boliden Ab — Q3 2009 Earnings Presentation

39 slides from Boliden Ab's earnings presentation, Oct 26, 2009

1. Slide 1: Interim Report January – September 2009

   Interim Report January – September 2009 Bildplatshållare Lennart Evrell President & CEO Johan Fant CFO Boliden AB 1 2009-10-26

2. Slide 2: Third quarter 2009 – Market

   Third quarter 2009 Market ƒ Strong Chinese demand ƒ Global demand:* – Zinc: -7% YoY and +5% from Q2-09 – Copper: -9% YoY and -3% from Q2-09 ƒ High copper and zinc prices ƒ Re-starts of zinc smelter and mine capacity ƒ Tight supply of copper concentrates – pressure on TC/RC ƒ Higher prices for by-pro

3. Slide 3: Third quarter 2009 – Boliden

   Third quarter 2009 Boliden ƒ Revenues MSEK 6,960 (7,513) ƒ Operating profit MSEK 949 (-142) ƒ Operating profit excl. process inventory revaluation MSEK 734 (125) ƒ Higher than average grades – lower towards end of period ƒ Industrial zinc sales increased Q3 vs Q2 ƒ Zinc smelters on full production:

4. 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 -500 * EBIT excl Process Inventory Revaluation Boliden AB 4 2009-10-26

5. Slide 5: The Market

   The Market Boliden AB 5 2009-10-26

6. Slide 6: Global IP slowly improving

   Global IP slowly improving Global IP * 10.0 5.0 Year over year % 0.0 -5.0 -10.0 -15.0 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Source: Reuters Ecowin, Boliden calculations Based on: USA, Eurozone, China and Japan, GDP (PPP) weighted Boliden AB 6 2009-10-26

7. Slide 7: IP – China grows, mature countries slowly improving

   IP – China grows, mature countries slowly improving 20 10 Year over year % 0 -10 -20 -30 -40 Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul 06 07 08 09 Eurozone (Seas. adj.) - Manufacturing Japan (Seas. adj.) - Manufacturing USA (Seas. adj.) - Manufacturing China (value added) - total industry Sour

8. Slide 8: China dominates base metals demand

   China dominates base metals demand 2008 Q2 2009 Other Other 7% North America 8% North America 10% 12% China 34% China 42% Zinc Europe 19% Europe 23% Other Asia Other Asia 22% Source: Cru 23% Source: Cru Other Other 6% North America 6% North America China 11% 13% 27% China 34% Copper Europe 22% Europ

9. Slide 9: Zinc – positive trend continues

   Zinc – positive trend continues Tonnes USD/Tonne 900 000 5 000 Zinc price (LME average) 800 000 4 500 Q3-09 vs USD/t period 700 000 4 000 Q3 08 1,773 - 1% 3 500 600 000 Q4 08 1,189 + 48% 3 000 500 000 Q1 09 1,174 + 50% Quarterly average 2 500 Q2 09 1,476 + 19% 400 000 2 000 Q3 09 1,757 - 300 000 1 5

10. Slide 10: Zinc TCs up and premiums flat

    Zinc TCs up and premiums flat USD/ t of USD per tonne concentrate Zinc treatment charge (TC) of metal Zinc metal price premium 600 400 350 500 Realised in Q3 based on quarter 300 to date zinc price 400 250 300 200 150 200 100 100 50 0 0 2006 2007 2008 2009 2005 2006 2007 2008 2009 Realised TC (inclu

11. Slide 11: Copper – continued price increases

    Copper – continued price increases Tonnes USD/Tonne 1 000 000 10 000 Copper price (LME average) 900 000 9 000 Q3-09 vs USD/t period 800 000 8 000 Q3 08 7,693 - 24% 700 000 7 000 Q4 08 3,940 + 48% 600 000 6 000 Quarterly average Q1 09 3,435 + 70% 500 000 5 000 Q2 09 4,676 + 25% 400 000 4 000 Q3 09 5,

12. Slide 12: Copper - continued pressure on spot TC/RC

    Copper - continued pressure on spot TC/RC USD/t of Copper treatment charge USD per tonne concentrate of metal Copper metal price premium 120 200 100 160 80 Benchmark 2009 120 60 80 40 40 20 0 0 2006 2007 2008 2009 2005 2006 2007 2008 2009 TC spot China buying terms TC benchmark Spot Copper premium C

13. Slide 13: By-products

    By-products Lead Gold Silver Tonnes USD/Tonne USD/oz USD/oz 200 000 4 500 1 200 25 1 100 180 000 4 000 1 000 160 000 20 3 500 900 140 000 3 000 800 120 000 15 700 2 500 100 000 600 2 000 500 80 000 10 1 500 400 60 000 300 1 000 40 000 200 5 20 000 500 100 0 0 0 0 ja ap 3 ju 3 ok 3 ja 3 ap 4 j u 04 o

14. Slide 14: SEK further strengthened vs the USD

    SEK further strengthened vs the USD USD/SEK EURO/SEK 13 USD/SEK (quarterly average) 12 Q3-09 vs USD/SEK period 11 Q3 08 6.31 + 16% 10 Q4 08 7.79 - 6% 9 Q1 09 8.40 - 13% 8 Q2 09 7.92 - 8% 7 Q3 09 7.29 - 6 5 2003 2004 2005 2006 2007 2008 2009 EUR/SEK EURO/SEK Q average USD/SEK USD/SEK Q average ƒ USD/

15. Slide 15: Business area Mines

    Business area Mines Boliden AB 15 2009-10-26

16. Slide 16: Mines EBIT development

    Mines EBIT development ƒ Higher than average MSEK head grades, peaking in 1200 Q3 ƒ Higher metal prices 1000 ƒ Lower zinc and lead Quarterly EBIT 800 volumes but higher for other metals 600 400 200 0 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Boliden AB 16 2009-10-26

17. Slide 17: Mines’ zinc production

    Mines’ zinc production Comments on Q3 2009 versus Q2 2009 ƒ Tara Milled ore, ktonnes Zinc metal content, tonnes 1,600 100,000 – High grades compensated for 90,000 lower milled production 1,400 80,000 – Start-up problems with new mill. 1,200 70,000 Will also impact Q4 1,000 60,000 ƒ Garpenberg 800 50

18. Slide 18: Mines - Production and grades

    Mines - Production and grades GARPENBERG tonnes TARA tonnes 30 000 9,0% 60 000 10,0% 9,0% 8,0% 25 000 50 000 8,0% 7,0% 7,0% 20 000 6,0% 40 000 6,0% 5,0% 15 000 30 000 5,0% 4,0% 4,0% 10 000 3,0% 20 000 3,0% 2,0% 5 000 2,0% 1,0% 10 000 1,0% 0 0,0% Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09

19. Slide 19: Mines’ copper production

    Mines’ copper production Comments on Q3 2009 versus Q2 2009 ƒ Aitik Milled ore, ktonnes 6,000 Copper metal content, tonnes 18,000 – High grades, peaked in Q3 16,000 – Metal content increased from a 5,000 14,000 strong Q2 2009 ƒ Boliden area 4,000 12,000 10,000 3,000 – Mill production from inventory,

20. Slide 20: AITIK production areas

    AITIK production areas S2 Boliden AB 20 2009-10-26

21. Slide 21: AITIK production areas

    AITIK production areas 6 7 Boliden AB 21 2009-10-26

22. Slide 22: AITIK copper mine expansion

    AITIK copper mine expansion ƒ Project is on plan ƒ In operation from April 1, 2010 ƒ Mined ore – from 18 to 36 Mtonnes in 2014 ƒ Copper volumes +50% ƒ Life of mine extended to 2026 Boliden AB 22 2009-10-26

23. Slide 23: Business area Smelters

    Business area Smelters Boliden AB 23 2009-10-26

24. Slide 24: Smelters EBIT development

    Smelters EBIT development MSEK ƒ Increased zinc 2000 Quarterly EBIT production Quarterly EBIT excl PIR* ƒ Lower cost YTD 1500 ƒ Improved metal prices for zinc smelters 1000 ƒ Difficult market conditions affecting copper smelters 500 0 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109

25. Slide 25: Zinc metal production up

    Zinc metal production up Comments on Q3 2009 versus Q2 2009 ƒ Odda Zinc feed, tonnes Zinc metal prod, tonnes 250,000 120,000 – Metal production +14% – Back to full capacity in 100,000 200,000 September ƒ Kokkola 150,000 80,000 – Metal production +12% 60,000 – Back to full capacity in August 100,000

26. Slide 26: Copper Smelters on reduced production

    Copper Smelters on reduced production Comments on Q3 2009 versus Q2 2009 ƒ Rönnskär Copper feed, tonnes Copper cathode prod, tonnes 400,000 100,000 – Stable production ƒ Harjavalta 90,000 350,000 80,000 – Reduced production 300,000 70,000 – Extended maintenance stop 250,000 60,000 ƒ Bergsöe (lead) 2

27. Slide 27: Financials

    Financials Boliden AB 27 2009-10-26

28. Slide 28: Financial summary

    Financial summary MSEK Q3 09 Q3 08 YTD 09 YTD 08 Revenues 6,960 7,513 19,279 24,700 Operating profit (EBIT) 949 -142 2,391 1,495 EBIT excl Process Inventory Revaluation 734 125 1,480 1,582 EBIT Margin % * 11% 2% 8% 6% Free cash flow 610 -117 -1,298 1,371 Earnings per share, SEK 2.50 -0.49 6.14 5.07

29. Slide 29: Group EBIT Q3 2009 versus Q3 2008 and Q2 2009

    Group EBIT Q3 2009 versus Q3 2008 and Q2 2009 MSEK Q3 2009 Q3 2008 Q2 2009 EBIT 949 -142 654 Process Inventory Revaluation 215 -267 177 EBIT excl Process Inventory Increased Production Revaluation 734 125 477 in zinc smelters and Deviation 609 257 high production and Specification of deviation: grad

30. Slide 30: Group EBIT YTD 2009 versus YTD 2008

    Group EBIT YTD 2009 versus YTD 2008 MSEK 2009 2008 EBIT 2,391 1,495 Process Inventory revaluation 911 -87 EBIT excl Process Inventory 1,480 1,582 Revaluation Costs in local Deviation -102 currency down -3% Specification of deviation: Volume 8 Costs 236 Average Cu down - 41% Prices & Terms -1,549 Ave

31. Slide 31: EBIT per Business Area

    EBIT per Business Area MSEK Q3 09 Q3 08 YTD 09 YTD 08 Smelters excl Process Inventory Revaluation 101 150 95 873 Mines 727 74 1,618 731 Other -94 -99 -232 -22 EBIT excl Process Inventory Revaluation 734 125 1,480 1,582 EBIT 949 -142 2,391 1,495 ƒ Higher value in Others YTD due to profit elimination

32. Slide 32: Operating costs impacted by weaker SEK

    Operating costs impacted by weaker SEK Change in operating costs, YTD 2009 vs Share of total operating costs YTD local currencies 2008 Depreciation Energy -3% & other Consumables -0% ; 13% Energy; 18% Personnel expenses -0% Transport costs -15% External services -13% External Depreciation & other +1

33. Slide 33: Cash flow

    Cash flow MSEK Q3 09 Q3 08 YTD 09 YTD 08 Op profit before depreciation (EBITDA)* 1,340 208 3,565 2,553 Changes in working capital* 211 1,085 -1,163 2,370 Capital expenditure -1,081 -1,157 -3,646 -3,091 whereof Aitik 36 -565 -678 -2,317 -1,736 Free cash flow 610 -117 -1,298 1,371 *Includes Process In

34. Slide 34: Capital structure

    Capital structure SEK bn 30Sept 30 Sept Gearing Unless otherwise stated 2009 2008 Total Asset 32.2 27.0 Capital employed 26.0 21.3 60% 55% 52% 48% Shareholders' equity1 16.0 14.2 50% 39% 40% 37% Net debt 7.6 5.3 30% Gearing % 48 37 20% Equity/asset ratio, % 50 53 10% Average maturity in years 4.0 5.

35. Slide 35: 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 485 USD/SEK 700 TC Zn 70 Copper 335 EUR/USD 420 TC/RC Cu 60 Lead 105 USD/NOK 95 TC Pb -15 Gold 90 Silver 85 Estimate of the 12-month effect on Gro

36. Slide 36: To summarize Q3 2009

    To summarize Q3 2009 Market ƒ Strong Chinese demand ƒ High prices ƒ Tight market for copper concentrates – TC/RC under pressure ƒ Zinc re-starts Boliden ƒ Strong EBIT and Cash Flow ƒ Higher than average head grades – peaked in Q3 ƒ Stable production ƒ Aitik on plan Boliden AB 36 2009-10-26

37. Slide 37: Going forward

    Going forward ƒ Head grades average or below at end of period ƒ Increasing exploration activities ƒ Commissioning problems with mill in Tara Boliden AB 37 2009-10-26

38. Slide 38: 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

39. Slide 39: Boliden produces metals that make modern life work

    Boliden produces metals that make modern life work

Boliden — Q3 2009 Earnings Presentation on 6ix