Boliden operates in a cyclic and capital-intensive industry in which long-term value creation is achieved through high productivity, cost control, technical innovation, and profitable investments. Boliden’s goal is to create value for its shareholders and, at the same time, to take responsibility for people and the environment.
Return on investments
The return on investments shall be a minimum of 10%
The return on capital employed totalled 20% (21). The average return per annum during the period from 2014 to 2018 has been 15%. Any investments made shall be in line with Boliden’s strategy and available resources and shall demonstrate a return of at least 10%. The project’s return shall exceed Boliden’s weighted average cost of capital (WACC), adjusted for a risk surcharge. (The WACC before tax is nominally set at 12%, which corresponds to 10% in real terms.) Calculations for major and long-term projects are normally conducted in real terms, and are based on forecast interest rates, metal prices, exchange rates, inflation and other relevant assumptions drawn from internal analyses and external assessments.
Net debt/equity ratio
Boliden endeavours to achieve a net debt/equity ratio in an economic upturn of approximately 20%
The net debt/equity ratio at the end of 2018 was 5% (11). The decrease since 2017 was due to the free cash flow for the year. In recent years, the reclamation liability has become an increasingly important balance sheet item. It is, however, not included in the net debt concept. For 2019, the goal will be specified to also include the net reclamation liability in the calculation.
The dividend shall correspond to one third of the net profit
The proposed ordinary dividend is SEK 8.75 (8.25) per share, corresponding to 33.2% (32.9) of the net profit for the year. In addition, an extra dividend of SEK 4.25 (5.75) per share, in the form of an automatic share redemption procedure, has been proposed. The ordinary dividend share during the period from 2014 – 2018 comprised 33.2% of the aggregate net profit for the period.