Boliden AB 1 Boliden Interim Report January - March 2006 Mines Smelters Zinc Copper
Boliden AB 2 Continued strong growth in China lower growth rate in the rest of the world Global 2006 Q1* - Cu-consumption 5.5 % - Cu-production 7.3 % - Zn-consumption 3.4 % - Zn-production 1.1 % 20 15 Industrial Production USA - Cu-consumption 9.9 % - Zn-consumption 0.0 % Europe - Cu-consumption 2.6 % - Zn-consumption 0.0 % Growth % 10 5 0 China - Cu-consumption 10.6 % - Zn-consumption 9.5 % Continued good forecast for 2006 Q1 2006 v.s. Q1 2005-5 03 04 05 06 USA W Europe Japan China
Boliden AB 3 LME Copper Price and Stocks USD/tonne Tonnes 7 500 1 200 000 7 000 1 100 000 6 500 1 000 000 6 000 900 000 5 500 800 000 5 000 700 000 4 500 600 000 4 000 500 000 3 500 400 000 3 000 300 000 2 500 200 000 2 000 100 000 1 500 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 0
LME Zinc Price and Stocks USD/tonne Tonnes 3 500 1 075 000 3 100 950 000 2 700 825 000 2 300 700 000 1 900 575 000 1 500 450 000 1 100 325 000 700 200 000 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Boliden AB 4
Boliden AB 5 Increased demand for zinc import in Europe Production and consumption in '000 tonnes 2 600 2 500 2 400 2 300 2 200 2 100 2 000 64 58-60 -86-143 -208-248 2004 2005 2006 2007 2008 2009 2010 900 700 500 300 100-100 -300-500 Balance in '000 tonnes Balance Europe Production total Europe Consumption total Europe Data: CRU Zinc Quarterly, 4th quarter 2005; comparison of forecasted Zn metal production capacity and Zn metal consumption
Boliden AB 6 Zinc metal premiums USD/tonne 185 175 165 155 145 135 125 115 105 95 85 75 65 55 110 105 110 105 105 105 100 100 95 Jan -05 Feb -05 95 94 Mar-05 100 100 88 Apr -05 77 Maj -05 100 100 100 Jun -05 61 Jul -05 73 105 Aug -05 100 83 110 105 Sep -05 94 Oct -05 115 105 100 115 Nov -05 110 100 130 Dec -05 115 100 Jan -06 130 123 105 143 Feb -06 140 110 Current 176 155 130 US Midwest Delivered Europe ex-works Far East (Western) Data: CRU Monitor Zinc, March 2006
Boliden AB 7 Shortage of copper concentrate? Copper: Present production + probable expansions + possible expansions '000 tonnes of copper p.a. 30 000 Possible expansions Probable expansions Base Case 25 000 New Projects and planned expansions 1% growth rate 3 % growth rate 20 000 5% growth rate 15 000 10 000 5 000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Data: CSFB, Brook Hunt
Boliden AB 8 Shortage of zinc concentrate? Zinc: Present production + probable expansions + possible expansions '000 tonnes of zinc p.a Possible Expansions Probable Expansions 20 000 18 000 16 000 Base Case + Highly Probable 1% Demand Growth 3% Demand Growth 5% Demand Growth 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Data: CSFB, Brook Hunt
Boliden AB 9 Historically strong result SEK m First quarter Change 2006 2005 in % Net sales 7 337 4 458 65 Operating result (EBIT) 1 750 398 340 Result after financial items 1 697 353 381 Earnings per share 4.28 0.88 387 Cash flow from operating activities 999 249 301 Return on capital employed, % 44 10 Net debt/shareholders equity, % 45 71 Improved metal prices, increase in TC/RC and higher US dollar exchange rate. Higher levels of production. Reduced debt levels have positive effect on net financial items. Actual tax payments continued to be low. Return on capital employed well above financial goal.
Operating result - quarterly SEK m 2 000 1 800 1750 1 600 1634 1 400 1 200 1 000 800 686 600 400 440 405 511 398 351 200 0 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Boliden AB 10
Boliden AB 11 Production Copper Tonnes 100 000 90 000 80 000 70 000 60 000 Mining production, metal content Tonnes 100 000 90 000 80 000 70 000 60 000 Smelter production, cathodes 89 196 88 143 89 429 90 029 80 939 50 000 50 000 40 000 30 000 20 000 19 027 19 258 21 484 27 161 25 617 40 000 30 000 20 000 10 000 10 000 0 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 0 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Aitik continued high production during Q1 due to good grades. Boliden Area increase in copper production. Copper Smelters high, stable production.
Boliden AB 12 Production Zinc Tonnes 120 000 100 000 80 000 Mining production, metal content 87 021 86 800 87 548 89 225 80 164 Tonnes 120 000 100 000 80 000 Smelter production, casted zinc 108 845 112 537 104 378 107 429 108 455 60 000 60 000 40 000 40 000 20 000 20 000 0 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 0 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Tara good production levels during Q1. Boliden Area lower zinc production due to change in concentrate mix. Garpenberg healthy production with higher grades. Boliden Kokkola stable production of zinc. Boliden Odda improved production due to new direct leach process.
Boliden AB 13 Garpenberg Area Long section Garpenberg Garpenberg N 0Z 400Z Dammsjön Kvarnberget Lappberget 870 Z 800Z Strand Ore Kanal Ore Finnhyttan & Tyskgården & Kyrkmalmen Dammsjön 910 Z Kaspersbo N Production Levels Potential Areas
Boliden AB 14 Operating result per segment SEK m First quarter 2006 2005 Copper 733 231 Zinc 1 027 218 Other -10-51 Total 1 750 398 Copper higher metal prices, US dollar exchange rate, TC/RC, increased production and stock profit were counteracted mainly by higher costs. Zinc higher metal prices, US dollar exchange rate and increased production were counteracted mainly by stock loss and higher costs.
Boliden AB 15 Cash flow Cash flow from operating activities SEK 999 million (SEK 249 m). 2 100 1 900 Operating result before depreciation (EBITDA), SEK m 1 949 2 079 Cash flow from investment activities SEK -441 million (SEK -76 m). Free cash flow SEK 558 million (SEK 173 m). 1 700 1 500 1 300 1 100 998 Net loan amortisation SEK 1 220 million (SEK 314 m). 900 700 701 655 500 Kv1 2005 Kv2 2005 Kv3 2005 Kv4 2005 Kv1 2006
Boliden AB 16 Capital structure 31 Mar 31 Mar 2006 2005 Net debt / Equity Balance Sheet total, SEK bn 24.2 20.6 80% 70% 71% 69% 64% Capital employed, SEK bn 16.1 15.4 60% 50% 40% 54% 45% Shareholders equity, SEK bn 10.9 9.2 30% 20% Net debt, SEK bn 5.0 6.5 Gearing, % 45 71 10% 0% Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Equity/assets ratio,% 45.1 44.5
Boliden AB 17 Summary Q1 and forecast 2006 Continued strong and stable growth in the global economy. Higher metal prices and US dollar exchange rate. Good production levels from all units during Q1. Result after financial items SEK 1 697 million (SEK 353 m) Production on planned levels in early Q2 2006. Continued good market forecasts for Boliden s metals.
Boliden AB 18 www.boliden.com Mines Smelters Zinc Copper