Full Year ReportJanuary – December 2010
Lennart EvrellPresident & CEO
Johan FantCFO
2011-02-111Boliden Group
Summary
Full year Revenues MSEK 36 716 (27 635) EBIT ex PIR* MSEK 4 830 (2 350)
‒ Operating profit MSEK 5 643 (3 623) Free Cash Flow MSEK 3 202 (-948)
Aitik start-up Aitik and Boliden area production
increase E-scrap expansion on plan Decision to expand Garpenberg
Q4 Revenues MSEK 10 120 (8 356) EBIT ex PIR* MSEK 1 445 (870)
‒ Operating profit MSEK 1 942 (1 232) Free Cash Flow MSEK 1 850 (350)
2011-02-11Boliden Group 2
* PIR=Process Inventory Revaluation
Group EBIT Development
2011-02-113Boliden Group
*Process Inventory Revaluation
-500
0
500
1 000
1 500
2 000
2 500
Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410
MSEK
Quarterly EBIT
Quarterly EBIT excl PIR*
The Market
2011-02-11Boliden Group 4
Market - full year 2010
Metals Demand
‒ Record global demand for zinc and copper‒ High growth in all regions‒ Copper inventories down but zinc up 50%‒ Sulphuric acid demand up
Supply‒ Mine production could not match demand first 9 months‒ Smelter build continued – low capacity utilisation rates
Prices‒ Average USD prices up for all metals – SEK stronger‒ Record highs for copper and gold‒ Sulphuric acid – prices up
Tight mining concentrate markets first 9 months‒ Very low copper spot TC/RC and low zinc TC‒ Realised contract zinc TC 258 (245) USD/t concentrate‒ Copper benchmark TC down to 46.5 (75) USD/t concentrate
2011-02-11Boliden Group 5
Global GDP development
2011-02-116Boliden Group
World growth near 5% in 2010 Lower growth in the second half Recovery in industrial activity Lower than normal levels in mature
economies
-10
-5
0
5
10
15
Year on year %
World China USA EU
Source: Reuters Datastream, IMF, Boliden calculation of world GDP
World: Countries accounting for approx.80% of world GDP
2005 2006 2007 2008 2009 2010
Construction Market
Continued high activity in China Low activity in mature economies
2011-02-11Boliden Group 7
-20
-10
0
10
20
30
40
Year on year %
China-residential investments cumulative valueUSA-total construction spending valueEU construction production
2006 2007 2008 2009 2010
Source: Reuters Datastream
Automotive market
High global growth in 2010 Significantly lower growth in second
half of 2010 Level remained well below normal in
mature economies
2011-02-118Boliden Group
-100
-50
0
50
100
150
Year onyear %
Car productionMonthly data 3m moving average
2006 2007 2008 2009 2010
Source: Reuters Datastream * Light vehicle assemblies
China
USA
Japan
Germany
Metals demand
Record global demand Since the peak in 2006
‒ China +50%‒ RoW -9%
Record global demand Since the peak in 2007:
‒ China +53%‒ RoW -15%
2011-02-119Boliden Group
Growth Q1 Q2 Q3 Q4 FY 2010 FY 2009
Global 24% 23% 10% 8% 16% -7%
China 25% 21% 9% 8% 15% 10%
RoW 24% 24% 11% 8% 16% -16%
Growth Q1 Q2 Q3 Q4 FY 2010 FY 2009
Global 11% 9% 9% 3% 8% -4%
China 22% 14% 10% 2% 12% 26%
RoW 5% 6% 8% 4% 6% -16%
Zinc Price and Inventories
2010-10-21Boliden Group 10
Zinc price (LME average)
USD/tQ4-10 vs period
Q4 09 2,211 + 5%
Q1 10 2,288 + 1%
Q2 10 2,018 + 15%
Q3 10 2,013 + 15%
Q4 10 2,315 -
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
2003 2004 2005 2006 2007 2008 2009 2010 2011
USD/t Tonnes
Shanghai inventory LME Inventory Cash Price LME Quarterly average
Price increased 14% in Q4 Inventories up 16% and continued to increase into 2011
Copper Price and Inventories
2010-10-21Boliden Group 11
Copper price (LME average)
USD/tQ4-10 vs period
Q4 09 6,643 + 30%
Q1 10 7,243 + 19%
Q2 10 7,013 + 23%
Q3 10 7,242 + 19%
Q4 10 8,634 -
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
11 000
2003 2004 2005 2006 2007 2008 2009 2010 2011
TonnesUSD/tCOMEX Inventory Shanghai inventory LME Inventory LME Cash Price Quarterly average
Price increased 21% in Q4
Inventories slightly up, 5%
0
5
10
15
20
25
30
35
2003 2004 2005 2006 2007 2008 2009 2010 2011
USD/oz
0100200300400500600700800900
1 0001 1001 2001 3001 4001 500
2003 2004 2005 2006 2007 2008 2009 2010 2011
USD/oz
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
2003 2004 2005 2006 2007 2008 2009 2010 2011
USD/t Tonnes
LME Inventory LME Cash Price Quarterly average
Lead, Gold and Silver prices
2010-10-2112Boliden Group
Silver
Lead
Gold
0
50
100
150
200
EUR/t Sulphuric acid pricecfr NW Europe
Annual average 6 month contract
Source: © CRU (www.crugroup.com), British Sulphur
2006 2007 2008 2009 2010
Treatment charges
Concentrate shortage 9M – spot TC down Concentrate surplus in Q4 – spot TC up Spot well below contract all year
Concentrate shortage 9M – spot TC sharply down
Surplus in Q4 – spot TC sharply up Spot TC above 2010 benchmark in Q4
2011-02-1113Boliden Group
0
20
40
60
80
100
120
140
160
USD/t concentrate
Copper treatment charge (TC)
Standard grade TC Cif spot mine/trader USD/t TC benchmark
Source: © CRU (www.crugroup.com)
2006 2007 2008 2009 20100
100
200
300
400
500
600
USD/t concentrate
Zinc treatment charge (TC)
Realised TC (including price participation) Spot TC - outturn
Source: © CRU (www.crugroup.com)
2006 2007 2008 2009 2010
Metal premiums
European demand up – spot premiums up in 2010
Contract premium rising
European demand up – spot premiums up in 2010
Scrap supply rose - cathode surplus –– premiums down in Jan 2011
Benchmark premium higher in 2011
2011-02-1114Boliden Group
020406080
100120140160180
USD/t metalCopper metal price premium
Spot Copper premium CIF W. Europe Benchmark CIF Europe
Source: © CRU (www.crugroup.com)
2005 2006 2007 2008 2009 2010 20110
50
100
150
200
250
300
350
400
USD/t metalZinc metal price premium
Europe ex-works US Midwest Delivered Far East (Western)
Source: © CRU (www.crugroup.com)
2005 2006 2007 2008 2009 2010
Business Area Mines
2011-02-1115Boliden Group
Mines - Production
2011-02-1116Boliden Group
0
4 000
8 000
12 000
16 000
20 000
24 000
0
2 000
4 000
6 000
8 000
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 09
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Metal content, tonnes
Milled ore, ktonnes
Copper
Milled ore (Aitik) Metal content
0
20 000
40 000
60 000
80 000
100 000
0
300
600
900
1 200
1 500
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 09
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Metal content, tonnes
Milled ore, ktonnes Zinc
Milled ore Zinc metal content
Aitik expansion from Q2 Metal production +4% vs Q3
Growth in Boliden area and Garpenberg
Metal production +11% vs Q3
Mines - Financial Summary Q4
2011-02-1117Boliden Group
EBIT 1 217 (541) MSEK in Q4– 1 061 MSEK in Q3 2010
Higher copper, gold and silver production Higher prices High costs in Aitik Reclamation cost in Boliden
area0
200
400
600
800
1 000
1 200
1 400
MSEK
Quarterly EBIT
Mines – EBIT by Unit
2011-02-11Boliden Group 18
0
1 000
2 000
3 000
4 000
5 000Aitik Boliden area Garpenberg Tara
09 10
BA Mines
09 10 09 10 09 10 09 10
Ore Reserves & Mineral Resources
2011-02-11Boliden Group 19
Ore Reserves & Mineral Resources - Summary
Continued stable trend 229 MSEK invested in exploration
2010 Increased mineral resources in Aitik
and Garpenberg Significant increase in ore reserves in
the Boliden area
2011-02-11Boliden Group 20
Ore Reserves & Mineral Resources
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Boliden Area
Ore reserveMineral resource (measured/indicated)Mineral resource (inferred)Ore production*10
kton
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
1 600 000
1 800 000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
kton Aitik
Ore reserveMineral resource (measured/indicated)Mineral resource (inferred)Ore production*10
Ore reserves grew by 29% Mineral resources increased by 14%
2011-02-11Boliden Group 21
Ore Reserves & Mineral Resources
0
5 000
10 000
15 000
20 000
25 000
30 000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
kton Garpenberg
Ore reserveMineral resource (measured/indicated)Mineral resource (inferred)Ore production*10
0
5 000
10 000
15 000
20 000
25 000
30 000
2002 2003 2004 2005 2006 2007 2008 2009 2010
kton Tara
Ore reserveMineral resource (measured/indicated)Mineral resource (inferred)Ore production*10
Mineral resources increased by 38% Mineral resources unchanged Ore reserves slightly reduced
2011-02-11Boliden Group 22
Aitik Expansion - update
2011-02-11Boliden Group 23
Capacity Reliability
Mine and logistics √
Crushers √Conveyors √Mills √ √Flotation √ √
Ramp-up period
Mine and logistics‒ Measures to improve truck availability
Crushers‒ All ore through new crushers Q1-Q2‒ Crusher 165 (old) disconnected,
to be reconnected end Q2‒ Availability not yet satisfactory
Grades declining below averagereserve grade from Q2
36 Mtonnes 2014
Garpenberg Expansion - update
Project‒ Investment: SEK 3.9 billion‒ Capacity increase of ore production from 1.4 to 2.5 million tonnes‒ Gradually increase from 2 million tonnes in 2014 to full production by the end of 2015‒ New mine site and facilities‒ Production through 2030
Hedging‒ Hedging of zinc, copper, lead, gold and silver metal prices ‒ Approx 1/3 of the Group's metal price risk and corresponding exchange rate risk for the
period of the investment in Garpenberg.‒ Refers to 2011, 2012 and the first six months of 2013.
2/11/2011Boliden Group 24
Business Area Smelters
2011-02-1125Boliden Group
Smelters - Production
Rönnskär -2 % compared to Q3 Harjavalta +16 % compared to Q3 Improving feed through the year Lead alloys higher +49 % vs Q3
Kokkola + 6 % compared to Q3 Odda, + 6 % compared to Q3 Record year for Kokkola
2011-02-1126Boliden Group
0
20 000
40 000
60 000
80 000
100 000
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Cathode production,
tonnes
Total feed, tonnes Copper
Copper feed, total Copper cathode production
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
0
50 000
100 000
150 000
200 000
250 000
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Metal production,
tonnes
Total feed, tonnes
Zinc
Zinc feed, total Zinc metal production
Smelters – Financial Summary
EBIT excl. PIR* 530 (356) MSEK in Q4– 238 MSEK in Q3 2010
Price increases‒ Free metals‒ Realized zinc TCs
Sulphuric acid improved‒ Volumes and prices
No maintenance stops Q4
2011-02-1127Boliden Group
-500
-300
-100
100
300
500
700
900
1 100
1 300
MSEK
Quarterly EBIT
Quarterly EBIT excl PIR*
* Process Inventory Revaluation
-250
0
250
500
750
1 000
1 250
1 500Rönnskär Harjavalta Bergsöe
09 10
BA SmeltersKokkola Odda
09 10 09 10 09 10 09 10 09 10
Smelters – EBIT* by Unit
2011-02-11Boliden Group 28
* Excl. PIR
Update E-scrap expansion
2011-02-11Boliden Group 29
Capacity for recycling of electronic scrap from 45,000 to 120,000 tonnes/year
New Kaldo plant – Capex 1.3 billion Start 2011/2012 On plan
Financials
2011-02-1130Boliden Group
Financial Summary
2011-02-1131Boliden Group
MSEK Q4 2010 Q4 2009 YTD 10 YTD 09
Revenues 10 120 8 356 36 716 27 635
Operating profit (EBIT) 1 942 1 232 5 643 3 623
EBIT margin 19% 15% 15% 13%
EBIT excl Process Inventory Revaluation 1 445 870 4 830 2 350
Free cash flow 1 850 350 3 202 -948
Capex 1 025 1 269 2 996 4 915
Earnings per share, SEK 5,17 3,00 14,47 9,14
Gearing 24% 46%
Group EBIT Q4 2010 versus Q3 2010
2011-02-1132Boliden Group
Improved zinc grades in all units
Ramp up of production in the Boliden area
Copper smelters
Copper USD/ton +19 %Zinc USD/ton +15%
Positive hedge effect Q3Little effect Q4
Volume related costs
Reclamation costs
Costs for start up issues in Aitik
Group EBIT 2010 versus 2009
2011-02-1133Boliden Group
Volume driven costs in Aitik, Boliden area and smelters
Aitik start-up
Reclamation
Exploration
Aitik Expansion
Increased production of Maurliden Östra, Boliden area
Lower zinc grades in Tara and Garpenberg
Copper USD/ton +46 %
Zinc USD/ton +30%
Negative SEK/USD impact
Capital Structure
2011-02-1134Boliden Group
48%46%
43%46%
37%
24%
0%
10%
20%
30%
40%
50%
60%
Q309 Q409 Q110 Q210 Q310 Q410
Gearing
1. Shareholders’ equity includes the value of outstanding hedge contracts
SEK bnUnless otherwise stated
31 Dec2010
31 Dec2009
Total Asset 35,1 33,3
Capital employed 27,2 26,2
Shareholders' equity1 18,8 16,3
Net debt 4,6 7,4
Gearing % 24 46
Equity/asset ratio, % 54 49
Duration of committed credit facilities, years 4,2 3,0
Average interest rate, % 3,29 2,62
Interest duration, years 2,0 2,1
Net payment capacity 10,728 6,924
Operating costs
2011-02-1135Boliden Group
Operating costs 2009 (constant currency rates) 10 098Volume related 650Depreciation 250Start-up problems Aitik 150Exploration and reclamation 150General cost increases 337
Operating costs 2010 11 635
MSEKEnergy; 17%
Consumables; 17%
Personnel; 28%
Transport; 5%
External services; 19%
Depreciation & other; 14%
Share of total operating costs
Cash Flow
2011-02-1136Boliden Group
MSEK Q4 10 Q4 09 YTD 10 YTD 09Op profit before depreciation (EBITDA)* 2 397 1 620 7 445 5 185
Changes in working capital* 483 100 -1 475 -1 063
Capital expenditure -1 025 -1 269 -2 996 -4 915w hereof Aitik 36 -61 -665 -625 -2 982
Free cash flow 1 850 350 3 202 -948*Includes Process Inventory Revaluation
Capex in 2011 about SEK 4-5 billion
Sensitivity Analysis
2011-02-1137Boliden Group
Changein metalprices,+10%
EBITeffect, SEK m
Change inUSD, +10%
EBITeffect, SEK m
Change inTC/RC,+10%
EBITeffect,SEK m
Copper 580 USD/SEK 1 160 TC Zn 45
Zinc 585 EUR/USD 425 TC/RC Cu 50
Lead 105 USD/NOK 90 TC Pb -10
Gold 125
Silver 155
Dividend proposal
Dividend policy states one third of net profit to be distributed to share holders
Proposal 2010:‒ SEK 5 per share‒ Equals 34,6% of net profit‒ 1,368 MSEK
SEK 2005 2006 2007 2008 2009
Earnings per share 7.07 21.66 13.37 3.42 9.14
Dividend 2.00 4.00 4.00 1.00 3.00
Pay-out ratio,% 28.3 18.5 29.9 29.2 32.8
2/11/2011Boliden Group 38
Summary
Strong quarter Good quarter for smelters – improved production Higher full year production volumes in Aitik and Boliden Area Aitik ramp-up:
‒ New crusher availability still too low‒ Old crusher closed for 6 months‒ Grades decline‒ 36 Mton/year 2014
E-scrap expansion in Rönnskär – 2011/2012 Garpenberg expansion and new hedge program
2/11/201139Boliden Group
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 uncertainties. In addition to the factors explicitly discussed, other could have a material effect on the actual outcome. Such factors include, but are not limited to, general economic or political conditions, fluctuations in exchange rates, interest rates and in metal prices, production disruptions, technological issues, interruptions in supply, actions of courts, regulators, government agencies, competitors, customers, suppliers, employees and other third parties.
2011-02-1140Boliden Group
Boliden produces metals that make modern life work
2011-02-1141Boliden Group