Financial goals and fulfilment

Boliden operates in a cyclic and capital-intensive industry, where growth is primarily achieved through investments in new production, expanded capacity, and improved productivity. Good profitability and financial stability are vital to sustainable growth and long-term value generation.

Boliden has three externally communicated financial goals: Return on capital employed, net debt/equity ratio (capital structure) and dividend policy.

Return on capital employed

Boliden’s goal is a return on capital employed that shall exceed 10 per cent over a business cycle. In order to achieve this goal, Boliden both endeavours to increase its productivity and to cut costs, and to increase the efficiency of both its financial and its material flows, thereby reducing the amount of capital tied up.

Goal fulfilment: The return on capital employed in 2010 totalled 21 per cent (14%). The increased return is due to the improvement in the profit. The average return during the period from 2006 to 2010 was 24 per cent per annum.

Net debt/equity ratio (Capital structure)

The goal is for the net debt/equity ratio in an economic upturn to be no higher than 20 per cent, in order to maintain a reasonable financial ability to act in a recession.

Goal fulfilment: The net debt/equity ratio at the end of 2010 was 24 per cent (46%) with the decrease primarily due to a markedly improved cash flow for the year as a whole.

Dividend

Boliden’s policy states that the dividend shall correspond to approximately one third of the net profit.

Goal fulfilment: The dividend was SEK 5 per share, or a total of SEK 1,368 million, for 2010, corresponding to 34.6 per cent of the Group’s net profit for the year. The ordinary dividend payments during the period from 2006 to 2010, including the proposed dividend for 2010, correspond to 27.1 per cent of the aggregate net result for the period.