Annual Report1990

TRELLEBORG

ContentsOrganisation 2

Comment by the President 4

Summary of operations 6

Group finances 7

Results 7

Financial position 8

Investments, Financial Operations 9

Ore prospecting, Metal production 10

The international metals market 12

Business Area Boliden Mineral 14

Business Area Boliden International 16

Business Area Boliden Metals 18

Business Area Ahlsell 20

Business Area Bröderna Edstrand 22

Business Area Enertech 24

Business Area Ventilation 26

Business Area Swegon 28

Business Area Trelleborg Industri 30

Falconbridge (associated company) 32

Svedala Industri (associated company) 34

Norzink (associated company) 36

Munksjö (associated company) 37

Other companies 38

Report of the Board of Directors 39

Structural changes 40

Personnel 42

Proposed distribution of profit 42

Profit and Loss Accounts 43

Balance Sheets 44

Source and Application of Funds Statements _ 46

Comments on the Financial Statements 47

Notes 48

Report of the Auditors 55

Share capital and ownership structure 56

Group Management 59

Board of Directors and Auditors _ 60

Five-Year review, Definitions 62

Summary diagrams 64

Addresses 66

1990 Highlights• Profit after financial income and expenses of

SEK 2,302M (2,743) as forecast.• Profit per share after 30 per cent standard tax

was SEK 25 (30).• Invoiced sales amounted to SEK 25,200M

(26,500). For comparable units, turnover wasunchanged compared with the previous year.

• Recommended dividend: SEK 6.50 (6) on A andB shares, and SEK 10 (10) on C and D shares.

New organisationNine Business Areas instead of four previously• Boliden Mineral • Enertech• Boliden International • Ventilation• Boliden Metals • Swegon• Ahlsell • Trelleborg Industri• Bröderna Edstrand

Financial information and reportsTrelleborg AB regularly publishes informationabout Group development.A Preliminary Report on the 1990 accounts waspublished on 4 March 1991. Final Accounts werepresented on 10 April 1991.

A Forecast for 1991 will be given at the AnnualGeneral Meeting in Skellefteå on 30 May 1991.The Annual Report will be published at the begin-ning of May 1991. An Interim Report covering thefirst 8 months of 1991 will be published onWednesday 16 October 1991.

Reader informationFigures quoted in brackets in the Annual Reportrefer to 1989 operations unless otherwise stated.SEK, Swedish Crowns, are used throughout. SEKmillion is abbreviated to SEK M and SEK thou-sand to SEK T. All amounts refer to SEK M unlessotherwise stated.

Change of addressShareholders who have changed their addressmust notify VPC in writing at the following ad-dress VPC, S-171 18 Solna, Sweden.

Annual General MeetingThe Annual General Meeting will be held in Expolaris Konferenscentrum,

Kanalgatan 73, Skellefteå on Thursday 30 May 1991 at 12.30 pm.The AGM can be viewed on a large screen in Folkets Hus, Norregatan 46-48 Trelleborg.

The AGM will be broadcast live via a TV link and therefore participants in Trelleborgwill also be able to put questions to the AGM panel in Skellefteå.

Following the AGM, special programmes will be arranged for those attending the AGM,both in Skellefteå and in Trelleborg.

Notification of attendenceShareholders who wish to attend the AGM and the ensuingevents in Skellefteå and Trelleborg must notify the Companyof their intention not later than 3 pm on Monday 27 May,either by telephoning Int +46 410 51419/51103 (direct lines),51000 (switchboard), or in writing to the Company Secretary,Trelleborg AB, S-231 81 Trelleborg, Sweden.

Qualifications for attendanceCompany practice conforms with the law on the simplifiedhandling of shares. To qualify for attendance, shareholdersmust be registered with the Swedish Securities RegisterCentre (Värdepapperscentralen VPC AB) by Friday 17 May1991.

Shareholders whose shares are managed by a bank or aprivate stockbroker must arrange for their shares to be regis-tered in their own names with VPC by 17 May.

DividendThe Board of Directors and the President propose a dividendof SEK 6.50 per A and B share and SEK 10 per C and Dshare for the 1990 financial year.

Services to shareholdersAccounts Report, Annual and Interim Reports will besent direct to those shareholders who have informedVPC that they wish to receive them. The reports canalso be ordered direct from Trelleborg AB, InformationDepartment, S-231 81 Trelleborg, Sweden.

From February 1991, Trelleborg also offers services toshareholders by telephone. Via a special telephonenumber, Int +46 8 30 62 80, those interested can beprovided with answers to questions, order magazines,brochures, etc, be put in touch with experts in a spe-cific area, etc. Those who only wish to know the cur-rent metal prices, can telephone “Miss Metal” on Int+46 8 623 1100, who will provide information on cur-rent prices in the quoted currency and SEK for gold,silver, copper, lead, zinc and nickel. The report isupdated every weekday after 3 pm.

Services toshareholders

Dividend qualificationsIn order to qualify for the dividend, 6 June 1991 has beenproposed as the date of record with VPC. As a result. divi-dends should be paid by VPC on 13 June 1991.

Miss Metal

Organisation

2

and Management

The Group was previously organised in four Business Areas:Boliden (Mining and Metals), Norrviken Industri (Building andDistribution), Svedala Industri (Mineral Processing Systems)and Trelleborg Industri (Rubber and Plastics). In turn, theBusiness Areas were organised in a number of BusinessSectors.In autumn 1990, Trelleborg’s Board of Directors decided notto complete its previously announced plans for a marketintroduction of Norrviken Industri. Against that background,it was decided to abolish the existing business area/busi-ness sector structure and replace it with nine new BusinessAreas. These are described in detail on page 14 onwards.Within these Business Areas, operations are organised in anumber of independent Divisions or similar units. As before,the profit responsibility is strongly decentralised.

The more important associated companies, i.e. companiesin which Trelleborg holds a substantial minority interest, areFalconbridge (page 32), Norzink (page 36), Svedala Industri(page 34) and Munksjö (page 37).

The Group Management comprises:• Kjell Nilsson (President and CEO of Trelleborg AB from 31

May 1990)• Fredrik Arp (President of Trelleborg Industri AB)• Bo Lundquist *) (Overall responsibility for Business Areas

Ahlsell, Enertech and Bröderna Edstrand and President ofBusiness Area Ventilation)*) until 1 May 1991

and the following Heads of Group Staff:• Carl Aspegren (Senior Vice President – Company

Secretary)• Lennart Bergstedt (Senior Vice President – personnel)• Bo Jakobsson (Senior Vice President - Control and

Finance)• Hans Nyberg (Senior Vice President – Internal Audit)• Lars Wallenberg (Senior Vice President – Group Counsel)• Leif Öberg (Senior Vice President – Information Services)

Other leading executives are the following Business AreaPresidents:• Lars Abrahamson (Ahlsell)• Anders Bülow (Enertech)• Håkan Hermansson (Boliden International)• Lars Kollberg (Boliden Metals)• Sten Lindstedt (Swegon)• Bengt Löfkvist (Boliden Mineral)• Lars Slettengren*) (Bröderna Edstrand)

*) Jan Söderberg from 1 July 1991

3

Comments by the President

Operations in 1990 were characterised by the graduallydeclining economic trend. It is true that the very first weeksof the year gave rise to some optimism, but as early as at theend of January, the business trend for some of our mostimportant products started to decline. This decline wasstrongly intensified in February. Until summer, there was arecovery which made some analysts think that the slumpwas over. In Trelleborg, we did not share that optimistic viewand, unfortunately, we were right. Already during summer,the economic trend began to tail off and then, immediatelyafter the holiday period, came the crisis in the Middle Eastwith its well-known consequences.

Despite the decline in business activities, Trelleborg wasable to meet its forecast for 1990. The Group reported aprofit of more than SEK 2,300M and reached its return oncapital target for operating units, i.e. 20 per cent on capitalemployed. Bearing in mind the circumstances, I considerthat to be a good result.

During 1990, metal prices weakened gradually, the dollar fell,Swedish wages and contracting costs increased very con-siderably as did, among other things, taxes on energy andthe environment. Taken together, this contributed very sub-stantially to a less favourable result in 1990 for Trelleborg’sSwedish mining and metals operations than in 1989 - de-spite increased ore production, higher metal extraction andcontinued cost-cutting measures.

Metal prices are the same throughout the world: not so costdevelopment. The international mining operations had a verysuccessful 1990 despite low metal prices. Boliden Interna-tional’s Spanish mining company, Apirsa, was one item ofgood news. Metal extraction increased in the Aznalcóllarmine and preplanning of a new significant find nearby hasbeen started.

The development for Falconbridge, our largest acquisitionever, is promising. In several areas, we had confirmation thatthe company-groupings supplement each other well, bothfrom a technology and a commercial viewpoint.

The Trelleborg Group’s most expansive business area in thepast year was Boliden Metals, which very determinedlycontinued its expansion with the objective of becoming oneof the more important producers and distributors of copperand brass products. Recently, Boliden Metals acquiredcompanies with a total annual turnover of around SEK1,800M.

The Swedish part of Trelleborg Industri’s rubber operationshad yet another tough year in 1990. Also here, the economicsituation and cost levels in Sweden are the direct or indirectcause. In Sweden, Trelleborg Industri’s products are exten-sively sold to the automotive industry and other engineeringindustries -those operations which most rapidly felt thedecline in the economic trend.

Now, it is not only the Swedish rubber industry which hasproblems. The situation is the same in many other markets.The entire industry is in need of structural changes and wewill continue to participate in that process.

Those parts of the Group which sell their products and ser-vices to the building industry developed positively in 1990.New companies were acquired in some of the businessareas, and Ahlsell made a strategic investment in a newcentral warehouse at Hallsberg.

During the year, Trelleborg continued to make acquisitions invarious areas but with a somewhat different orientation thanbefore. We have become 48 per cent owners of Munksjö,and therefore indirectly of the Hexagon Group, and haveacquired a majority holding in the listed company, Swegon.Within Munksjö/Hexagon, work on changing the structure isin progress. For Swegon, we see major development oppor-tunities, partly in combination with other operations in theGroup.

Despite the slow-down in the economic trend during the veryfirst year of the 1990s, we look ahead towards the continueddevelopment of the decade with some optimism. One rea-son is that the necessary investments in an improved andextended infrastructure will mean a lift for the company’sproducts and services. There are also signs of a politicalsobering-up and increased insight both with regard to theimportance of investing in the infrastructure and with regard

to the conditions of enterprise in general and maybe on theenergy and the environment side in particular.

I can’t resist ending with a quote: “The optimist is right justas often as the pessimist, but he has more fun”. That washow Trelleborg expressed itself in an advertisement some-time ago and the statement reflects our general attitude verywell. We must not let adversities obscure the sight of theopportunities that nevertheless always exist. During thedecline in the economic trend in the past year, Trelleborg -like most other companies - has gone through a process ofadaptation which is just as useful as it is necessary. We willcontinue to “cut our cloth” in order to be well-equippedwhen the economic trend turns upwards once again.

5

Summary of operationsGroup ( SEK M unless otherwise stated) 1990 1989 1988Invoiced sales 25,216 26,485 21,523Profit:

after financial income and expenses 2,302 2,743 1,959before appropriations and taxes 2,323 2,794 1,961

Return, per cent:on adjusted equity after 30 per cent standard tax 22.9 34.8 40.5on total capital employed before tax 18.6 20.6 19.4ditto, operating units (excluding associated companies) 21.1 24.4 21.4

Equity ratio I, per cent 29.0 21.6 19.6Equity ratio II, per cent 32.7 24.9 26.0Risk capital, per cent 35.7 27.5 29.0

Investments in fixed assets 1,488 1,657 960Average number of employees 21,939 26,384 26,083Profit, SEK per share after 30 per cent standard tax

(after full conversion): 24.70 29.60 21.90Adjusted equity, SEK per share 117,40 99.00 71.50Risk capital, SEK per share 130.40 109.00 80.50Dividend, SEK per share*) 6.50 6.00 4.00Share price 31 December, SEK (restricted B shares) 90.00 180.00 137.50*) For 1991, proposed by the Board of Directors and the President(refers to A and B shares; dividend on C and D shares is SEK 10.00).For definitions of key figures see page 63.

Sales and operating profitby Business Area

Invoiced sales Profit after Return on(Group external) SEK M depreciation SEK M capital employed %1990 1989 1988 1990 1989 1988 1990 1989 1988

Boliden MineralBoliden InternationalBoliden MetalsAhlsellBröderna Edstrand¹)

Enertech²)

VentilationSwegonTrelleborg lndustriStrategic metals tradingOther³)

3,5512,6622,3593,6832,2241,4462,010

397 - -3,226

2313,427

4,0822,8852,0313,2882,4271,1671,731

3,7822,0991,1442,728

614204

1,513

417415

95152

95983031 - -

180348 -

53

619573102174164

7061

569337

75129

552264

246313202422

92712

36107

1929411916

—13

45602428232720

—11201

26 -180

15261 - - -

249 - - -

3,351- 1035,626

3,013- 716,497

Total Group,excluding financial items 25,216 26,485 21,523 1,914 2,118 1,591 21 24 21

Share of profitsof associated companies4) 771 389 152

¹) Included from 1 October 1988 4) Of which, in 1990: Falconbridge SEK 61OM, Svedala SEK²) Included from 1 November 1988 89M, Norzink SEK 50M and others, SEK 22M net.3) Comprises Group leasing operations and Group-wide Return on capital employed is calculated on operating profitcosts including some restructuring costs. In addition, thefollowing companies are included: Mataki, Trelleborgplastics

after planned depreciation including minority interests, divid-

BV, Velox, Boliden Kemi (until 1 April 1989), Mineral Process-ed by average balance sheet total (calculated on the closingbalance each month) less shares, interest-bearing invest-

ing Systems/Svedala Industri (until 1 July 1990) and GävleAhlsell (until 9 November 1990).

ments and non-interest-bearing operating liabilities.

6

GroupfinancesIn 1990, Group invoiced sales amounted to SEK 25,216M(1989: 26,485). The decrease compared with the previousyear is because Svedala Industri AB is reported as an asso-ciated company from 1 July 1990 and is therefore only in-cluded for six months in 1990. For comparable units, turn-over remained unchanged compared with the previous year.However, there were very considerable variations betweenthe different Business Areas.

Group Profit (SEK M)

3000

2500

Business Area Boliden Metals continued its expansionthrough further acquisitions. Business Areas Ahlsell, Ener-tech and Ventilation reported a continued positive salestrend. Volume increases in a strong market together withacquisitions of some fifteen operations in Scandinavia andWestern Europe contributed to the increase in turnover.Business Areas Bröderna Edstrand and Trelleborg IndustriAB were hit by a declining Swedish market with lower vol-umes and squeezed prices as the result. The turnover of theGroup’s wholly-owned mining operations reduced as a resultof lower metal prices and the closure of the Black Angel zincand lead mine on Greenland.

2000

1500

1000

500

Invoiced sales (SEK M)1986 1987 1988 1989 1990

30000

25000

20000

15000

10000

5000

01986 1987 1988 1989 1990

Results

Foreignsales

Exports

Profitafterfinancialitems

Profitafterdepre-ciation

Net Interest income and expenses fell by SEK 352M to SEK-514M, mainly because of the increased indebtedness ofaround SEK 2,600M in connection with the rights issue inFalconbridge in February 1990.

Exchange gains increased by SEK 141M to SEK 280M mainlyas the result of Interest arbitrage via forward foreign ex-change contracts.

Other financial items of SEK -100M net (+319) consist to alarge extent of write-downs of short-term investments tomarket value at balance sheet date.

Interest in profit of associated companies increased by SEK382M to SEK 771M mainly because Falconbridge was onlyincluded for three months in 1989. As already mentioned,Svedala Industri AB is reported as an associated company

fromSweden Profit per share (SEK)

30

25 After 30%

Operating profit amounted to SEK 1,914M (2,118). Running-in standard tax

costs in respect of new production plants (Business AreaVentilation) as well as new computer systems and a centralwarehouse (Ahlsell) were charged to the 1990 profit at

20

around SEK 100M. Operating profit was further reduced byaround SEK 100M compared with the previous year as a neteffect of the deconsolidation of Svedala Industri AB and the 15contribution from acquired units. The result of strategicmetals trading was SEK 348M (-26). The bulk referred torepurchases of previously sold gold and silver contracts.These profits compensated for the loss of profit in the whol- 10ly-owned mining operations which was primarily caused bylower metal prices and the closure of the Black Angel mine.

5

1986 1987 1988 1989 1990

from 1 July 1990. Its share of the profit in the second half ofthe year was SEK 89M. Norzink’s profit fell mainly as a resultof lower zinc prices and a weaker US dollar. Its share of theprofit reduced by SEK 127M to SEK 50M.

The profit-share per employee in the Group’s Swedish com- Currentpanies amounted to SEK 2,300 (2,800) in 1990.

assetsProfit after financial items was SEK 2,302M (2,743), which isequivalent to a profit per share after 30 per cent standard taxof SEK 24.70 (29.60).

Extraordinary income amounted to SEK 574M (507) andconsisted mainly of capital gains on sales of shares, Stategrants and income from associated companies of SEK 92Min total.

Extraordinary expenses amounted to SEK 553M (456).These consisted mainly of closing-down costs for unitswithin Trelleborg Industri and Boliden Mineral and of depre-ciation against State grants received.

Profit before appropriations and taxes was SEK 2,323M(2,794).

The year’s tax cost amounted to SEK 615M (484) of whichthe share of associated companies was SEK 414M (133).Thus, the tax cost represented 26 per cent of profit beforeappropriations and taxes and 14 per cent excluding partici-pations of associated companies.

Return on adjusted shareholders’ equity after 30 per centstandard tax amounted to 22.9 per cent (34.8) and on capitalemployed to 18.6 per cent (20.6). Return on capital employedin operations (excluding associated companies) was equiv-alent to 21.1 per cent (24.4).

Return (per cent)

50 On equity (after

40

30% standard tax)

30 On capital employed,

20

operat ing units

10

(before tax)

01986 1987 1988 1989 1990

Capital structure (SEK M)1989

16000 Fixed assets

8000 Liquid

4000 resources

0

4000

Non-interest8000 bearing liabilities Risk-

12000 Interest-bearing

capital

16000 liabilities

Financial positionIn 1990, liquid assets reduced by SEK 847M to SEK 3,049Mbecause of reduced short-term borrowing.

Long-term interest-bearing investments decreased by SEK5,319M to SEK 2,623M. Of this decrease, SEK 2,643M wasdue to a changed financing structure for Falconbridge. InFebruary, loans from Trelleborg to Falconbridge of CAD500M were replaced by a shareholder contribution of a simi-lar amount. At the turn of the year, investments in connectionwith interest arbitrage transactions amounting to SEK4,043M were settled against corresponding loans and thusdo not influence the balance sheet total.

Current interest-bearing liabilities reduced by SEK 3,287M toSEK 7,122M in 1990.

Long-term interest-bearing liabilities fell by SEK 484M toSEK 4,954 mainly as a result of the deconsolidation of Sve-dala Industri AB.

Net indebtedness increased by SEK 2,395M to SEK 6,404M.Excluding the effects of the rights issue in Falconbridge, netborrowing reduced by around SEK 200M during the year. Inrelation to the risk capital, which increased by SEK 1,386M

On total capital to SEK 8,505M, net borrowing represented 75 per cent (56).employed (before tax)

Seen over a three-year period, the risk capital has more thantrebled. From its lowest level of 12 per cent in 1987, theequity ratio increased to 22 per cent in 1989 and 29 per centin 1990.

By reducing the balance sheet total by total liquid assetswhen calculating equity ratios, a more neutral measurementis attained in the evaluation at various levels of the relation-ship between liquid assets and short-term borrowing. Byapplying this method of calculation, the equity ratio amount-ed to 32.7 per cent in 1990 (24.9) and the share of risk capitalto 35.7 per cent (27.5 per cent).

Risk-bearing capital per share (SEK)

150

120 Risk-bearing capital

90

Adjusted equity

60

I

0

1986 1987 1988 1989 1990

InvestmentsThe Group’s gross investments in fixed assets excludingacquisitions amounted to SEK 1,488M (1,657). The largestinvestments were made within the framework of the so-called mining package which in 1990 was in its final phase.The investment level is expected to fall to below SEK 1,000Min 1991.

Financial operationsOrganisation

The control of the Trelleborg Group is based on an operatingresponsibility decentralised to each Business Area, whereasthe financial operations are one of the few areas in whichthere is a distinct Groupwide central responsibility. As aresult, benefits of large scale operations and specialist ex-pertise can be utilised.

Group Staff Finance at the head office in Trelleborg is re-sponsible for co-ordinating the operations and for the bulk ofthe long-term borrowing. Within Group Staff Finance, Trelle-borg Finance BV in Brussels functions as an internal bankvis-à-vis other Group companies. Its main tasks includeinvestment of liquid assets, short-term borrowing, foreignexchange trading and the handling of interest rate risks aswell as assignments in the area of cash management. Where

Handling of foreign exchange risksThe Group is exposed to foreign exchange risks, both in theform of commercial flows and via net investments abroad.

The main income exposure to changes in exchange ratesexists in the mining and metals operations. From an expo-sure viewpoint, the US dollar is the most important currency.It is covered forward in order to reduce the foreign exchangerisk and to even out fluctuations. Taking into account thetotal risk picture, the Group’s various borrowing instrumentsand forward contract markets are also utilised for interestarbitrage.

In December 1990, the book value of the Trelleborg Group’snet assets abroad amounted to around SEK 8,OOOM. Thelargest portion of the exchange risk on these net assets iseliminated via hedging loans. Foreign exchange differencesthat have arisen on these loans are settled against exchangedifferences on net assets (so called translation differences) inthe Consolidated Accounts.

Refinancing of FalconbridgeThe acquisition of Falconbridge was refinanced in Septem-ber 1990, partly via a syndicated loan for USD 950M - ofwhich Trelleborg and Noranda guaranteed 50 per cent each- arranged by The Royal Bank of Canada and Swiss BankCorporation with the participation of a total of 45 banks, andpartly via a loan for CAD 900M raised by Falconbridge from13 Canadian banks.

Risk-bearing capital, equity ratio10000

8000

Risk-bearing capital

6000 Equity ratio II

4000

Equity

2000 ratio I

possible, the Group’s monetary flows are co-ordinated viacash pools and netting systems. The systems make possible SEK Mmore favourable interest rates for investment and borrowingas well as lower transaction costs and fewer interest days. 1986 1987 1988 1989 1990

100

80

60

40

20

%

Ore prospecting

Boliden MineralDuring the autumn, it was decided to concentrate and ex-tend prospecting in the Skellefte field. This means that SEK250M will be invested over a five-year period in order tosecure the ore base until around 2015.

Boliden Mineral’s investment in prospecting during 1990amounted to nearly SEK 45M, of which around SEK 39M inprospecting adjacent to existing mining operations. Thebulk, around SEK 35M, went to the Skellefte field.A large number of new deposits of both complex ore (cop-per, zinc, lead, gold, silver) and gold ore are currently beinginvestigated. During 1990, 33 mining concession claims weremade and claims were staked in a concession for the Petik-näs II deposit. In the western and central parts of the Skel-Iefte field, primarily six complex ore deposits are being sur-veyed. These are characterised by a fairly high zinc contentwith elements of gold. Drilling in the area will continue in1991,

In the eastern part of the Skellefte field, a mining survey hasbeen in progress in the Petiknäs area where new ore hasbeen discovered. The zinc content is very high, up to 15 percent in places. In addition, its content of gold is interesting.The depth of the ore is not yet known but the upper stratumstarts 300 metres underground. Drillings continue. In the

eastern part of the field, six gold-carrying zones are alsobeing investigated and two of these have been surveyed inmore detail. The results are currently being evaluated.

Boliden Minerals’ Prospecting Division also participated inprojects outside Sweden, including Spain (Los Frailes) andBurkina Faso (Perkoa). Collaboration started with Falcon-bridge regarding prospecting methods. The start was madein the first half of 1990. Continued exchange and transfer ofexperience is planned.The development of a special borehole method me that itis now possible to indicate both ores that are low in sulphideand transformations such as compact ores which are rich insulphide.

A system for transmission of measuring data in the field viamobile telephone has been taken into use and has also beensuccessfully tested abroad.

Integrated information-processing of geology, geochemistryand geophysics by computer has become one of the mostimportant tools for evaluating geodata.SEK 1.5M was invested in a new transport system for fielddiamond drilling. The system has made a substantial contri-bution to increased productivity in the drilling operation.

10

Boliden International MiningBoliden International Mining’s objective is to expand viaacquisition of mines or known deposits. Majority ownershipand management responsibility or a controlling position arealso included in the objective. Minority ownership may be ofinterest on condition that the company is able to make man-agement as well as technology and marketing agreements atthe same time.

In 1990, Boliden International Mining invested SEK 68M inprospecting and development work relating to new finds.

The Spanish company, APIRSA, with the Aznalcóllar mine atSeville in Southern Spain was acquired at the 1987/1988 turnof year. Around 2.3 million tonnes of ore is mined annually.The mine’s products in the form of concentrate consist ofzinc, copper, silver, led and pyrite. The currently-known orereserve will last until 1993. A new major find close by, LosFrailes - a result of Boliden’s prospecting investments in thearea - is currently being preplanned.

In 1989, the Bald Mountain copper and zinc deposit inMaine, USA, was acquired, which contains ore reserves thatare expected to suffice for fifteen years’ production. BolidenResources Inc, a subsidiary in the USA, is now managing theproject. The State of Maine has previously not had any mod-ern mining legislation. Environmental prerequisites present-ed so far by the Authorities could involve very considerabledifficulties in starting mining operations.In 1989, Boliden International Mining and the Saudi ArabianGovernment-owned oil and mining company, Petromin,formed the Saudi Company for Precious Metals – which isowned in equal parts – to explore the Sukhaybarat gold find.The operations are being expanded to an annual productioncapacity of 1.6 tonnes of gold. Production is planned to startin April 1991.

In 1990, a preliminary agreement with the African state, Bur-kina Faso, for the so-called Perkoa find was transferred intoa joint venture agreement between the government-ownedmining company, Bumigeb, and Boliden InternationalMining. Boliden has the management responsibility and a 65per cent holding in the project. The sulphide ore depositcontains mainly zinc. The prerequisites for a future decisionregarding investments and mining operations look favour-able.In 1990, Boliden International Mining acquired a 51 per centholding and the Canadian mining company, GreenstoneResources, a 49 per cent stake in the Santa Rosa gold find inPanama. The deposit contains a known ore base of 10 mil-lion tonnes and the possibility of proving further tonnage viadrillings is considered to be very good. It is expected that itwill be possible to begin extraction of around 1.5 tonnes ofgold per annum in mid-1992.In addition, Boliden International Mining owns a 10 per centshareholding in Pirites Alentejanas, a mainly government-owned Portuguese company which mines complex sulphideore and which is carrying out major restructuring and expan-sion. Among other things, the mining of ore is increasing anda concentrator will become operational in April 1991 for theproduction of zinc, copper and lead concentrate.

An indirect involvement (8 per cent) in the large Faro leadand zinc mine in Yukon, Canada, also led to Boliden In-ternational Mining becoming the part-owner of a large de-posit of high-grade coal in Nova Scotia as well as of the zincfind in British Columbia which will produce around 220,000tonnes of zinc and lead concentrate per annum. Boliden’sstake in these two deposits may be increased in the long-term.

FalconbridgeFalconbridge’s reserves in Sudbury, Timmins and the Do-minican Republic are expected to last another 15–20 yearsat the current production rate. In order to be able to replacethese reserves and to ensure a continued flow of materials toFalconbridge’s metallurgical plants, prospecting work relat-ing particularly to copper, nickel and zinc is given priority.

During 1990, USD 51.2M was invested in prospecting, ofwhich nearly 70 per cent was in the Sudbury and Timminsfields, close to concentrator and smelting plants. A furtherUSD 10M was spent on planning work related to the newRaglan nickel find in Northern Quebec.

In Sudbury, work continued on an exploratory shaft at thenickel find in Lindsley. The shaft has reached a depth of1,600 metres and in May 1991, drillings will start aimed atestablishing the deposit’s financial potential. More than36,000 metres of diamond drilling is planned for 1991.

The surveys in the Timmins area during 1990 resulted in thediscovery of a nickel deposit at Dundeal, 19 kilometres northeast of Kidd Creek. Although the find is not very large, theprospects of being able to extend the find during 1991 areconsidered to be good.

The Raglan find at Ungava Bay in the subarctic areas northof Quebec is one of the largest new known nickel deposits inthe world at the present time. In summer 1991, an under-ground research programme will be started at Katiniq in thewestern part of the Raglan deposit. At the same time, alabour camp will be built there which will have its own powerstation and engineering workshop. The surveys in summer1991 will show whether it will be possible to develop theRaglan find into Falconbridge’s next large nickel mine.

Group metal productionRefined

Mining production metal*)

1989 1990 1989 1990Boliden:Copper, tonnes 000 56.7 59.1 94.7 97.4Lead, tonnes 000 113.1 105.3 34.5 35.4Zinc, tonnes 000 218.7 201.3 - - Silver, tonnes 231.8 241.0 302.0 274.4Gold, kilos 3,600 4,200 8,121 7,946

Falconbridge and Norzink (50%):Copper, tonnes 000 74.4Zinc, tonnes 000

77.3 86.7 91.481.5 78.6 126.5 127.9

Nickel, tonnes 000 30.1 31.1 43.2 43.3Silver, tonnes — 98.5 87.0 81.1Gold, kilos 1,644 1,735 1,645 1.735

*) of which, for Boliden around 50 per cent own concen-trates.

11

The international metals market4000 USD/

1000

tonne

Copper

1986 1987 1 988 1989 1990 91

During 1990, the price of copper varied from a low of USD2,358 per tonne (SEK 14,418 per tonne) on average in Febru-ary to a high of USD 3,029 per tonne (SEK 17,467) per tonnein September. In December, the copper price stood at anaverage of USD 2,495 per tonne. In SEK, the price reached ayear-low quote of SEK 13,995 per tonne in December. Theweakening of the US dollar vis-a-vis the Swedish krona hadthe effect that the price in SEK fell substantially. The annualaverage was USD 2,663 per tonne (SEK 15,734 per tonne).

Mining production in the Western world remained un-changed at around 7.1 million tonnes. Metals productron,however, increased by 1 .1 per cent to 8.55 million tonnes.

10,000 tonnes to 250,000 tonnes in 1990. The USSR andPoland particularly increased their exports during the pastyear.

Overall, a deficit of around 50,000 tonnes was registered inthe world balance. At the same time, “visible” copper stocksincreased by 34,000 tonnes. This is probably explained bythe fact that the high avista premiums (the difference be-tween the cash-price and the three-month price) duringAugust and September attracted previously unregisteredmaterials. That was most clearly noted in exchange stockswhich increased by 73,000 tonnes. In the same period, thetotal stock increased by only 34,000 tonnes. At the year-end,world stocks of copper were equivalent to around 5 weeks’consumption.

Lead800

GBP/700 tonne

600

500

400

300

2001986 1 987 1988 1989 1990 91

During the first half of the year, the lead market was charac-terised by extensive production disruptions. That led to aquote for lead in March at a top average of GBP 654 per

tonne (SEK 6,536 per tonne). After June, production dis-ruption decreased and the price of lead fell back. Themonthly average for December was GBP 325 per tonne (SEK3,518 per tonne) and the annual average for the whole of1990, GBP 460 per tonne (SEK 4,820 per tonne).

3000 As clear evidence of the increasing world interest in recy-cling, 1990 was the first year ever in which secondary leadproduction was larger than primary production. During theyear, mining production Increased by 4 per cent, mainly as

2000 the result of major expansions in North America and Aus-tralia. Overall, 2.35 million tonnes were produced.

Production of refined lead remained unchanged, 4.35 milliontonnes. Lead consumption was hard hit by reduced car saleswhich brought the growth in consumption down to only 0.5per cent in 1990.

Trade with the East showed a net export from the West of25,000 tonnes. In 1990, metal stocks increased by 60,000tonnes. In the past year, the consumption/production bal-ance in the Western world showed a deficit of 50,000tonnes. The probable reason why stocks nevertheless in-creased by 60,000 tonnes was the high avista premiums inMarch which attracted materials from undisclosed stocks. Atthe year-end, world stocks were equivalent to around 5weeks’ consumption.

ZincDuring the year, consumption of refined copper increased by 2500

USD/more than 1 per cent to 8.9 million tonnes which was a rela-tively moderate growth. In the past three years, copper con-sumption increased by 3.5 per cent per annum on average. 2000

tonne

lmports of refined copper from the Eastern bloc rose bv

1500

1000

5001986 1987 1988 1989 1990 91

The price of zinc also fluctuated strongly in the past year. Inspring, the price increased from USD 1,294 per tonne (SEK7,979 per tonne) in January to USD 1,776 per tonne (SEK10,737 per tonne) in May. Disturbances in South Americaand threats of strikes at two of the largest producers in NorthAmerica forced prices up. Since then, the market has beenfairly free of disruptions and, in step with the decline in thebusiness trend, the price dropped to USD 1,266 per tonne(SEK 7,098 per tonne) in December. The annual average forzinc was USD 1,520 per tonne (SEK 9,012 per tonne). Miningproduction in the West increased by 4.7 per cent to 5.17million tonnes in 1990. In the same period, production ofrefined zinc increased by more than 1 per cent to 5.2 milliontonnes. Zinc consumption increased by a moderate 0.7 percent in the past year.

In 1990, the Eastern bloc countries turned from having beena net importer for a number of years to exporting 18,000tonnes of zinc metal to the West. Behind this lies the severeeconomic situation in the Eastern bloc which has causedincreased exports due to the decline in domestic demand.The zinc metal market was balanced during 1990 but thereported metal stocks nevertheless fell by 74,000 tonnes. Atthe 1990/91 turn of year, world stocks were equivalent toaround 5 weeks’ consumption.

Nickel

0

1986 1987 1988 1989 1990 91

At the beginning of 1990, the price of nickel fell to below

9

USD 7,000 per tonne and reached a low of USD 6,988 per

8

tonne (SEK 42,714 per tonne). Most of the world’s nickel

7

producers announced production cuts in February which 6

had the effect of arresting the price fall. When, later on, one 5of the producers was hit by an unexpected strike, the price

4shot up to USD 10,982 per tonne (SEK 63,380 per tonne) in

3August. Thereafter, it fell again in step with the declining

USD/oz

business trend in the Western world. The annual average for1990 was USD 8,893 per tonne (SEK 52,492 per tonne).

During the year, production of refined nickel in the West fellby nearly 1 per cent to 560,000 tonnes as a result of disturb-ances and production cuts. Consumption Increased by 1 percent to 670,000 tonnes. Exports of nickel from the East fellslightly to 95,000 tonnes.

The nickel market shows a deficit between production andconsumption of 10,000 tonnes but IS nevertheless balancedbecause of the large exports from the USSR. Thus, the priceof nickel is to a large extent determined by how much theUSSR exports. In the past year, world stocks fell by 11,000tonnes. At the end of 1990, they were equivalent to around5.5 weeks’ consumption.

Gold500

USD/oz

450

400

350

3001986 1987 1988 1989 1990 91

In the past year, the price of gold continued to fall from USD410 per troy ounce (SEK 81,289 per kg) to USD 378 per troyounce (SEK 68,272 per kg) in December. The annual averagewas USD 384 per troy ounce (SEK 72,956 per kg).

The gold market is fairly evenly balanced between supplyand physical demand, i.e. industrial demand. What is lackingis investor demand. In 1990, mining production increased by5 per cent to 1,754 tonnes of gold. Added to this were 340tonnes of gold scrap and 500 tonnes from the Eastern bloc.Industrial demand increased by 3.7 per cent to 2,085 tonnes,

of which jewellers accounted for 81 per cent. This gave asurplus of 475 tonnes to be absorbed by investors.

20000 All the factors required for a “traditional” rise in the price of

16000

USD/ gold were in place in the past six months: political uncer-tonne tainty, rising oil prices and a declining economy. Despite

12000 that, the price of gold has not managed to climb more than

8000

marginally. Previously, gold was considered to be one of the

4000

main inflatron proof investments. This is no longer so.

Silver

1986 1987 1988 1989 1990 91

During the year, silver was characterised by a continuednegative price trend. The price fell from USD 5.29 per troyounce (SEK 1,039 per kg) in January to USD 4.08 per troyounce (SEK 736 per kg) In December. All the time, the priceof silver is losing ground against other precious metals. Oneexplanation is that large parts of the production come as aby-product from lead and zinc mining. That has the effectthat the total output of silver is only marginally affected byfall in prices. The annual average for 1990 was USD 4.83 pertroy ounce (SEK 921 per kg).

During the year, mining production increased by 7 per centto 124,000 tonnes to which was added 36,000 tonnes ofsecondary production. Total demand increased by less than1 per cent to 156,000 tonnes, of which the photographicindustry accounted for 41 per cent. That left a surplus of12,000 tonnes for investments. Added to this are already-existing very large stocks of silver.

Metal price s - summaryLME

Average Ditto prices Dittoprices 1989 1990 1989 1990

Copper USD/tonne 2,687 2,621 2,852 2,663Zinc USD/tonne 1,718 1,520 1,715 1,520Nickel USD/tonne 12,048 9,185 13,352 8,893Lead GBP/tonne 403 458 412 460

The two left columns show average prices of metals sold byTrelleborg/Falconbridge, whereas the two to the right repre-sent average prices (cash-prices) on the London Metal Ex-change (LME).

Business Area Boliden Mineral

Bengt Löfkvist

Business Area Boliden Mineral consists of the Aitik, Laisvall,Boliden/Kristineberg and Garpenberg/Enåsen Mining Divi-sions as well as the Rönnskär Smelter Division which to-gether with Prospecting and the Technology Division, Boli-den Mindeco, are incorporated in Boliden Mineral AB.

Other companies in the Business Area are Boliden Metech(USA), Boliden France (France) and Arv. Andersson (Skel-Iefteå), all of which operate in the metals recovery industry.Arv. Andersson has recovery plants in Umeå, Skellefteå andLuleå. Spånga Metall outside Stockholm is included from1990. Boliden Metech is the leading precious metals recov-ery company in the USA. The Business Area is characterisedby a far-reaching decentralisation and specialisation. Eachoperation is being developed within its own legal entitieswhich in a natural way collaborate closely with one another.Boliden France in Paris runs trading operations in the metalsrecovery industry.

Boliden Mineral produces and markets non-ferrous metalsand concentrates which are based primarily on materialsfrom its own mines in Sweden as well as recycling of metalscrap. Through the technology division, Boliden Mindeco,and Boliden Process Control AB, expertise and serviceswhich are used in the base operations are developed andmarketed.

The company’s position in the market is very strong. OfSweden’s estimated consumption of refined copper in 1990– around 120,000 tonnes, Boliden Mineral accounted for97,000 tonnes, of which 53,000 tonnes was from its own rawmaterials. Boliden Minerals’ production of lead in lead con-centrates of 70,000 tonnes and production of zinc in zincconcentrates of 90,000 tonnes far exceeds Sweden’s needs.The company’s main products are mineral concentratescontaining primarily copper, lead, zinc, silver and gold. Theconcentrates are refined in its own smelting plants or sold onthe international market. At the smelting plant in Rönnskär

outside Skellefteå, special products such as selenium, sul-phuric acid, sulphur dioxide and zinc oxide are produced inaddition to metals.

AitikPresident: Rolf Ritzén

In the Aitik Mine outside Gällivare in Norrbotten, 15 milliontonnes of ore are mined annually. The copper content isapproximately 50,000 tonnes. Every year, 1,700 kilos of goldand 38 tonnes of silver are also extracted. The mine has 420employees.

LaisvallPresident: Lars Eriksson

In the Laisvall mine, west of Arjeplog in Norrbotten, 1.65million tonnes of ore are mined. From the concentrates,55,000 tonnes of lead and 14,000 tonnes of zinc are extract-ed. The number of employees is 280.

Garpenberg/EnåsenPresident: Svante Holmgren

In the Garpenberg and Enåsen mines, east of Hedemora andnorth of Ljusdal, a total of 1 million tonnes of ore is mined.The metal content includes 24,000 tonnes of zinc and 12,000tonnes of lead. Together, the mines have 390 employees.

Boliden/KristinebergPresident: Bo-Johan Nilsson

In Boliden/Kristineberg, west of Skellefteå in Västerbotten,1.4 million tonnes of ore are mined which contain 7,000tonnes of copper and 40,000 tonnes of zinc. The number ofemployees is 450.

14

Rönnskar MindecoPresident: Gunnar Axheim President: Ebbe Pehrsson

The smelting plant, east of Skellefteå in Västerbotten, pro- Mindeco in Skellefteå is Boliden Mineral’s Technology Divi-duces 100,000 tonnes of copper and 50,000 tonnes of lead. sion which specialises in planning, projecting and construc-In addition to the two main products, 8.5 tonnes of gold and tion of mainly mining installations. Boliden Mindeco has250,000 tonnes of sulphur products are produced. The more than 500 employees. Since the turn of the year, Boli-smelting plant has 1,300 employees. den Mindeco’s process control department has been a sep-

arate company, Boliden Process Control AB.

Operations in 1990Key figures 1989 1990Invoiced sales, SEK M 4,082 3,551Of which, sales abroad, per cent 61 59Operating profit after depreciation, SEK M 619 417Return on capital employed, per cent 24Investments in fixed assets, SEK M 36 634Number of employees at 31 December 4,539 4,286Of whom, outside Sweden 144 157

In 1990, Boliden Mineral had 18 mines in operation in Swe-den. In these, 16.3 million tonnes of ore was mined whichslightly exceeded the previous year’s production. In general,extraction of metals was higher than in 1989 except for leadwhich provided the same result as in the previous year, andzinc which gave a reduced metal content. Both invoicedsales and operating earnings reduced compared with 1989,mainly because of the fall in the dollar, gradually lower metalprices and very substantial cost increases in Sweden on thewages, salaries and contracting side. During the year, morethan SEK 600M was invested, primarily within the frameworkof the so-called mining package.

AitikDuring the year, investments totalling SEK 540M in the largeextension were completed which involved a radical changeof technology as the ore is crushed in the mine and trans-ported to the surface via belts. During the year, productionwas the highest ever.

LaisvallThe fairly high metal prices and high production contributedto a satisfactory profit. The capacity was extended in theconcentrator following the installation of a new mill.

RörnnskärProduction of copper and zinc clinker ran smoothly, whereasthe lead line had continued problems until the last fewmonths of the year. A continued increase in productivity,made it possible to keep costs down. The work-force de-creased by around 200 people. In accordance with the deci-sion by the National Franchise Board for EnvironmentalProtection, the final limit for discharge of sulphuric dioxide atthe Rönnskär plant will be 5,000 tonnes per annum from

1994. As a result of concerted efforts, this level has alreadybeen beaten when it was possible to restrict the discharge in1990 to 4,900 tonnes. For a few other substances, the histor-ically lowest discharge levels were registered during theyear. Surveys in the area surrounding the Rönnskär plantconfirm that the reduced discharges are leading to improve-ments in the environment. This positive development isexpected to continue.

Garpenberg/EnåsenDuring the year, measures were carried out which led toincreased productivity through higher metal production anda changed concentrating process while, at the same time, itwas possible to reduce the Iabour force. A decision wastaken to close the gold mine in Enåsen when the ore, asplanned, will have been finally extracted during 1991.

KristinebergA lower tonnage was mined in the area than in the previousyear which, however, was balanced by a higher content.Costs were low. The concentrator will be closed in spring1991 and the ore will in future be transported to the modern-ised Boliden plant for concentrating. The closure of theconcentrator in Kristineberg and the close-down of theHolmtjärn and Rävliden mines will reduce the number ofemployees by nearly 200.

BolidenThe Division reached the estimated production despite theongoing rebuilding of the concentrator. The work on trans-forming the Långdal mine into an open-pit mine continuedand during the year, the line of the Skellefteå river wasmoved to make this possible. At the turn of the year, the ex-hausted Långsele and Udden mines were closed. They werereplaced by the newly-opened Åkerberg and Kankberg minesin which production started. A mining survey in Petiknäs pro-vided positive results and a Iicence for mining was granted.

MindecoIn spring 1990, Boliden Mindeco - short for Mine Develop-ment and Contracting – was formed. Mindeco’s task is todevelop and market systems, technology and services pri-marily for the mining industry. Marketing is carried out incollaboration with other Group companies.

The Business Area’s prospects for 1991The first part of the year involved a reduced profit as a result use of energy. The Rönnskär plant is undergoing a restruc-of a low dollar rate and a fall in metal prices. Structural turing programme which will result in increased copper pro-changes are planned and being implemented in several duction and closure of the arsenic plant. Following thesedivisions. Investments within the framework of the mining measures, the personnel requirement will reduce in thepackage will on the whole be completed in the first half of mines as well as in the smelting plant. The Government’sthe year. As a result, the mines will be well equipped for the negative response to the Laisvall project will also have con-future with regard to efficiency both in production and in the sequences for the size and appearance of the organisation.

15

Business Area Boliden International

Håkan Hermansson

Business Area Boliden International is responsible for theGroup’s international mining operations by owning andworking and by trading with products from mines or adjacentareas in which knowledge about customers’ needs can beutilised. The Business Area is characterised by far-reachingdecentralisation and specialisation. Each operation is beingdeveloped within its own legal entities which in a natural waycollaborate closely with one another.

Boliden International MiningPresident: Fred Boman

Boliden International Mining AB owns and runs the BusinessArea’s wholly or partly-owned mining projects and mines.Currently, the company has three wholly-owned mines/mining projects: the Aznalcóllar mine at Seville in SouthernSpain (zinc, copper, silver, lead and pyrite), the Black Angelzinc and lead mine, on Greenland (which was finally exhaust-ed in summer 1990) and a large copper and zinc deposit,Bald Mountain in Maine, USA.In addition, Boliden International Mining has the manage-ment responsibility in three partly-owned mines/miningprojects: a gold find in Sukhaybarat in Saudi Arabia (which isowned equally by Boliden and the Saudi Company, Petro-min), a zinc deposit in Burkina Faso in Africa (a joint venturewith the Government mining company, Bumigeb) and theSanta Rosa gold find in Panama (of which Boliden owns 51per cent and the Canadian company, Greenstone Re-sources, 49 per cent).In addition, Boliden International Mining has indirect minorityinvolvements in the large Faro lead and zinc mine in Yukon,Canada and in the Portuguese copper, zinc and lead mine,Pirites Alentejanas.

Boliden Ore & MetalsPresident: Curt Järnfelt

The marketing of mining and smelting plant products onbehalf of both the Swedish and international operations ishandled by Boliden Ore& Metals AB. The organisation isstructured into three functions: smelting plant products,metal concentrates and LME activities (LME = London MetalExchange). In addition to Stockholm, the company has offic-es in London and in Lima, Peru. Annually, more than 1 million

tonnes of materials are sold and shipped through BolidenOre & Metals. Sales are mainly made outside Sweden.

Boliden ContechPresident: Staffan Jähkel

Boliden Contech is mainly involved in selling technology thathas been developed within Boliden and which consists ofefficient industrial processes in the mining and metals indus-try, on the production as well as on the environmental side.The technology is sold both in the form of Iicences and con-sultancy services, and as turn-key plants. In step with thetightening of environmental demands both inside and out-side Sweden, a number of new areas of application for Boli-den’s environmental know-how outside the traditionalmining and metals industry has also been identified.

Boliden Contech operates actively in a large number ofcountries all over the world but focuses its operations on theEuropean market and, in collaboration with SIDA, on devel-oping countries.

Boliden IntertradePresident: Eilert Frithiofsen

Boliden Intertrade runs a trading operation in steel productsraw materials to the steel and cement industries, cement,sulphur, sulphuric acid, waste oils and certain logistic ser-vices. Intertrade has several subsidiaries both in Europe andNorth America. The trading in steel is concentrated fromScandinavia and the Eastern bloc to the Mediterranean area.Trading in sulphur and sulphuric acid is handled on a world-wide basis with own terminals in Europe and North America.The subsidiary, Chemtrade, has more than 50 per cent of theworld market with regard to trading in seaborne sulphuricacid.

Ahlsell MineralPresident: George Ljungdahl

Ahlsell Mineral AB produces and markets industrial rawmaterials. The industrial chemicals sector offers a widerange of refined sand, binding agents and other additives aswell as pig iron and alloys for the foundry industry, produc-tion and resources around waterglass, products and tech-

16

nical service to the pulp and paper industry as well as raw minerals. The MA sector is a service function which buys,materials to the food, pharmaceutical and feedstuff indus- manages and transports around 700,000 tonnes of sand,tries. The industrial sector markets refined industrial sand minerals, chemicals and other supplies. The company’sand cleaning technology for air, process water and drinking products are marketed in Scandinavia, the Middle East andwater. The industrial minerals sector markets highly-refined Great Britain.

Operations in 1990Key figures 1989 1990Invoiced sales, SEK M 2,885 2,662Of which, sales abroad, per cent 91 91Operating profit after depreciation, SEK M 573 415Return on capital employed, per cent 107 63Investments in fixed assets, SEK M 127 155Number of employees at 31 December 1,114 1,397Of whom, outside Sweden 889 1,179

Invoiced sales fell by 8 per cent compared with the previousyear, mainly as a result of lower ore production caused bythe closure of the Black Angel mine on Greenland aroundJuly/August. The operating profit deteriorated by 28 per centmainly because of reduced quantities but also as a result ofthe less favourable foreign exchange and price situation forthe mining operation in 1990. Investments in fixed assetsamounted to SEK 155M and referred mainly to mining pro-jects in Spain, Panama and the USA.

Boliden International MiningInvoiced sales fell by 10 per cent compared with the previousyear, mainly because the Black Angel zinc and lead mine onGreenland was finally extracted during the year. Productionthere ceased at the end of July. The Aznalcóllar mine inSpain set a new record with 10 per cent higher ore concen-trate production than in 1989.

Operating profit for the year fell by 30 per cent, however.That was not only the result of lower quantities but alsobecause of less favourable metal prices and a weak devel-opment in the US dollar.Read more about Boliden International Mining’s prospectingand development projects on page 11.

Boliden Ore& MetalsIn 1990, Boliden Ore& Metals showed continued satisfactoryprofitability. However, the margins of the trading operationsare shrinking and the company’s activities are thereforeincreasingly being concentrated on sales on an agencybasis. During 1990, an agency agreement was made withFalconbridge Inc with regard to the copper production of the

Kristiansand plant, and with Pirites Alentejanas in Portugalwith regard to lead, copper and zinc concentrates. The com-pany’s operation in London will be adapted to the changedprerequisites.

Boliden ContechThe ongoing mining project in Portugal, Pirites Alentejanas,proceeded according to plan and is expected to be complet-ed in 1991. SIDA assignments continue in southern Africawith regard to the erection of two crushing plants as well asrefurbishment of railways. The delivery of a kaldo furnace toItaly was completed according to plan as were two deliveriesof wet electro filters to Norsk Hydro in the Municipality ofKarlskoga. The inflow of new orders was slightly below bud-get for most of the year but a rise was noted towards the endof the year and accentuated by an order worth SEK 100M fora precious metals plant in Poland.

Boliden IntertradeFor Boliden Intertrade, both invoicing and profit increasedslightly in 1990. During the year, Intertrade acquired its ownproduction plant in the USA, primarily for sulphuric acid. Theunit has a dominant market share in south-east USA and awell-developed distribution network. As a result of the acqui-sition, Boliden Intertrade confirmed its position as theworld’s largest trader of seaborne sulphuric acid.

Ahlsell MineralAhlsell Mineral continued to gain market shares in the Nordiccountries. Both invoicing and operating profit improved.During the year, a new waterglass plant was built in Lödösewhich doubled the capacity for that product. The subsidiary,Finite (producer of cenospheres), continues its expansionand now has a presence in some 30 countries. In the MiddleEast, Boliden Intermarket has maintained its leading positionas a supplier of blasting agents. Boliden Askania, which wasestablished during the year, has taken a large share of thecalcium chloride market. Work on the so-called quality as-surance system 9001 was carried out in the Swedish andBritish companies during the year and will be completed in1991.

The Business Area’s prospects for 1991It will not be possible to repeat the very positive financial find in Saudi Arabia will not cover the reduced mining pro-result for the Business Areas’ mining operation in 1991, partly duction. The Business Area’s other companies are expectedbecause of the development in metal prices and partly be- to attain the Group’s long-term profitability requirements incause of the loss of capacity following the closure of the 1991.operation on Greenland. The opening of the Sukhaybarat

17

Business Area Boliden Metals

Lars Kollberg

Business Area Boliden Metals expanded strongly, mainly viaacquisitions, and in three years has increased its turnoverten-fold. The company’s business concept - to recover andrefine base metals - has been developed in recent years toinclude development and sales of high quality semi-manu-factures and metal alloys. The common denominator for allproduction units in the Business Area is the raw material -metal scrap. Boliden Metals is one of Europe’s three largestproducers of brass rod, one of the most important players inthe European market in the copper tubing product area, andthe market leader in Scandinavia with regard to lead and tinalloys. From 1990, the Business Area comprises four divi-sions - Brass, Copper Tubing, Lead & Tin and Distribution.

Brass DivisionPresident: Jörgen Breth

The Brass Division consists of three production units: Glos-trup in Denmark, Gusum in Sweden and Drunen in the Neth-erlands. In addition, three sales companies are linked to theDivision - Boliden Bergsöe A/S in Denmark, Boliden LDMNonferro GmbH in Germany and John Edgell Metals Ltd inGreat Britain. From January 1991, the British company, Boli-den MKM Ltd (formerly McKechnie Extruded Products Ltd)is also included. The annual brass production amounts to100,000 tonnes. The Division is one of the market leaders inEurope with a share of around 15 per cent. Most of the pro-duction is sold to the West European light-fitting, plumbing,heating and ventilation industries and to other metal pro-cessing industries including sub-contractors to the automo-tive industry.

Copper Tubing DivisionPresident: Patrick de Maeyer

The Division includes two copper tubing plants, in Liège inBelgium and in Lyon in France, and four sales companies:Boliden Cuivre & Zinc Deutchland GmbH, Copper Distribu-tion Center in Belgium, Metal Supplies Ltd in Britain, andBoliden France in France.

25,000 tonnes of copper tubing are produced annually forthe European market. The products are primarily sold tomanufacturers in the heating, plumbing and ventilation in-dustry. The Division is one of the largest players in the mar-ket. In February 1991, DEF’s radiator plant in Liège –which has around 110 employees and an annual turnover ofabout SEK 125M - was acquired. The unit is able to makeextensive use of the Division’s distribution and sales chan-nels as the customers are often the same as for coppertubing.

Lead & Tin DivisionPresident: Jan Nimmermark

The Division consists of the secondary smelting plant Boli-den Bergsöe AB in Landskrona and the sales companies,Boliden Bergsöe A/S in Norway and Oy Boliden Bergsöe Abin Finland. The secondary smelting plant produces variousalloys of lead and tin. To a large extent, the raw material isvarious types of batteries. A separate company, Returbatt,was formed together with the Swedish battery industry andthe Swedish scrap trade with the objective of increasing thecollection and recycling of spent car batteries. The custom-ers are mainly found in the battery and electronics industries.50,000 tonnes of lead are produced annually. The Division isthe market leader in Scandinavia.

Distribution DivisionPresident: Gerard Lièvre

The Division - which was formed in 1990- consists of themetals trading house, Reynolds European S. A., and fourminor sales companies. In recent years, the strategy of Busi-ness Area Boliden Metals has been to change from agencysales to its own, fully comprehensive distribution and salesnetwork and today, the Business Area has such a well-es-tablished network in all its major markets.

18

Operations in 1990Key figures 1989 1990

Invoiced sales, SEK M 2,031 2,359Of which, sales abroad, per cent 81 83Operating profit after depreciation, SEK M 102 95Return on capital employed, per cent 19 13Investments in fixed assets, SEK M 160 93Number of employees at 31 December 1,224 1,262Of whom, outside Sweden 713 769

The Business Area’s operations were characterised by con-tinued strong expansion via acquisition. Altogether, compa-nies were acquired with a combined turnover of SEK1,000M. The largest company was the French metals tradinghouse, Reynolds European S.A. (turnover of more than SEK800 M). At the same time, the operations were concentrated,partly following the sale of an aluminium smelting plant inDenmark. The Business Area was divisionalised to attainincreased co-ordination of production and distribution. In-voiced sales increased but the operating profit decreased asa result of restructuring costs of a non-recurring nature inconnection with acquisitions. At 1 January 1991, the Britishbrass rod mill, McKechnie Extruded Products Ltd, which hasa turnover of SEK 800M and around 700 employees, wasacquired.

Brass DivisionThe Brass Division reported a satisfactory result. The pro-duction units in the Netherlands, Denmark and Swedenreached budgeted volume and profitability.

For Boliden LDM at Drunen in the Netherlands, 1990 was thefirst full year of production within the Business Area. A long-term investment plan was started. A new foundry for specialalloys became operational towards the end of the year andwill increase sales opportunities during 1991.

The brass mill in Glostrup, Denmark increased its productionstill further which, among other things, resulted in higherexports to southern Europe.The Gusum plant in Sweden started an action programmeon the cost side as well as a major investment programmethat will be completed in summer 1991 and which will pro-vide opportunities to produce more refined products.

On 1 January, McKechnie Extruded Products – now BolidenMKM Ltd -in Birmingham, England, was acquired. Followingthis acquisition, the Division has secured a market share ofmore than 10 per cent in Europe and thus a considerablymore extensive product range with regard to brass rod,profiles, sections and wire.

lesser extent, via organic expansion. The objective has beento achieve control over sales and distribution in markets thatrepresent the main European consumption. In January 1990,Cuivre & Zinc GmbH was established for direct sales in Ger-many. In February, Metal Supplies Ltd was acquired fromBoustead Plc. In April, the copper division of Sidal Alumin-ium was acquired which ensured a better distribution on theBelgian market. At the end of 1990, Boliden Cuivre & ZincEspaña was established in Barcelona.

Lead & Tin DivisionThe market for the Division’s products was very satisfactoryin the first six months of 1990. During the autumn, the leadmarket turned from a shortage of materials – which had ledto the historically highest price levels on the LME – to a sur-plus situation. Towards the end of the year, prices ap-proached the extremely low levels of the mid-80s.

In order to make it possible to operate collection and recy-cling of spent car batteries independently of the develop-ment in lead prices, a new permanent system managed byReturbatt AB was established in Sweden at the end of 1990,following eighteen months of trial operations. A charge isimposed on every starter battery sold in order to achieve 95per cent recycling. During the autumn, the construction forindoor storage of battery scrap was started in Landskronaas, in future, all processing of batteries must take placeunder cover in accordance with a concession decision.The solder tin production, which was operated in the alu-minium smelting plant in Kolding, Denmark, was moved toLandskrona during the year. At the beginning of the year,Kemiska Fabriken Effekto AB was acquired with the ob-jective of strengthening the Division’s position with regard tosolder products. The production was moved to Landskrona.

Distribution DivisionReynolds European S. A., with its subsidiaries IntermetauxS.A. in France, Reyton Metals Ltd in Britain and C.E.C. S.A.in Spain, was acquired in June 1990 and together with thetwo other metals distribution companies – Metallhalbzeug-Handel and Sauer Stahl in Germany – forms the DistributionDivision. The Division operates as an independent distribu-tion company which will cover the most important markets inEurope as far as non-ferrous semi-manufactured metals areconcerned.

Towards the end of the year, the Division was hit by thedeteriorating business trend in the form of reduced marginsand lower volumes. However, this was partly counteractedby ongoing new investments in the German market.

Copper Tubing DivisionThe Division’s sales network was extended very consid-erably in 1990 mainly as a result of acquisitions and, to a

The Business Area’s prospects for 1991The slow-down in the economic trend is being felt by theBusiness Area. The Copper Tubing, Brass and DistributionDivisions are affected by the building trend, and the Lead&Tin Division by the trend in the automotive industry. Thanksto the German economic trend, however, the Copper Tubing

Division has not noted any slow-down and expects to beable to maintain budgeted volumes and margins. The BrassDivision has already been hit by over-production andsqueezed prices. Continued structural changes in brassproduction will be made.

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Business Area Ahlsell

Lars Abrahamson

Ahlsell has developed from a core operation that dates backto 1877, when large-scale installations of water and sewagelines began in Sweden. The business concept is to be ableto offer as a wholesaler complete functions and services toheating and plumbing contractors and electric contractorsas well as to specialise in products for transporting liquids.The wholesale trend is changing from being a stockist andtransporter to playing a more active role in the manufacturer- wholesaler – end-user chain. A higher degree of special-isation within the product range provides for greater ex-pertise in individual products which, among other things,means that the sales staff will be able to give better adviceand service to customers. A well-balanced product rangealso has a positive effect on reliability of delivery and speed.The Ahlsell Group is organised in four operating Divisions:Ahlsell VVS, Ahlsell Industry/Municipal Technology, Ahlsell Eland Ahlsell Tools. All Divisions are among the leaders in theirrespective market segments.

Ahlsell VVSPresident: Jan lwarsson

The Division is Sweden’s largest wholesaler of heating andplumbing products. The main products are found in theareas of heating, bathrooms and kitchens, piping and relatedproducts. The Division is organised in regional sales unitswith a central buying and market function. Goods are des-

patched from a central distribution centre, regional ware-houses and 65 collect stores (self-serviced). In Sweden,Ahlsell has been the pioneer in self-service stores for con-tractors. The rapid development of Ahlsell’s collect stores isbased on excellent availability and service as a result of afunction-adapted product range.

The largest competitors are Dahl Invest, Skoogs VVS andsome 40 medium-sized and small wholesalers with stronglocal anchorage.

Ahlsell Industry/MunicipalTechnology

President: Kenneth BohlinAhlsell Industry/Municipal Technology is organised along thesame distribution structure as Ahlsell VVS. In addition, thereare three subsidiaries which run agency operations. TheDivision is Sweden’s largest wholesaler specializing in prod-ucts for the transport of liquids, i.e. full-range supplies ofpumps, pipes, valves, instruments and gauges for the Swe-dish supply and sewage market, and industry.Main competitors on the supply and sewage side are DahlInvest and Bröderna Edstrand, and on the industrial side,Tibnor, Bröderna Edstrand and agency companies.

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Ahlsell El Ahsell ToolsPresident: Lars Sunemo

Ahlsell El is one of the leading electrical wholesalers in Swe-den with more than 50 branches and collect stores through-out the country. In many locations, the Division is jointlyestablished with other Ahlsell divisions.

Customers are mainly electrical contractors and industries,which buy installation materials, cable, lighting, telecommu-nication and data networks, and electric heating.

Competitors are ASEA Scandia, Selga, Skoogs El and Storelas well as 20 medium-sized and small electrical wholesalers.

President: Göran NäsholmAhlsell Tools comprises the companies, Jirva AB and FlexScandinavia AB. The Division is one of Sweden’s leadingsuppliers of tools, machinery and assembly components forheating, plumbing, electrical and ventilation contractors.Distribution is made from own warehouses and professionalmarts via the Ahlsell Group’s collect stores and throughindependent retailers. Main competitors are Tibnor (VIM),heating and plumbing wholesalers and a large number ofniche companies,

Operations in 1990Key figures 1989 1990Invoiced sales, SEK M 3,288 3,683Of which, sales abroad, per cent — -Operating profit after depreciation, SEK M 174 152Return on capital employed, per cent 29 20Investments in fixed assets, SEK M 74 81Number of employees at 31 December 1,367 1,417Of whom. outside Sweden — —

During the year, Ahlsell operated in a continued strong Swe-dish construction market. The sales development was satis-factory with the exception of the VVS and Industry/MunicipalTechnology Divisions in the Stockholm area where marketshares were lost during the autumn as a result of running-indifficulties with the central distribution centre in Hallsberg.

Invoiced sales increased by 12 per cent compared with theprevious year thanks to higher prices and volumes. Oper-ating profit was charged with large costs of a non-recurringnature in connection with the investments in Hallsberg and anew computer system. As a result, profit fell from SEK 174Min 1989 to SEK 152M in 1990. During the year, the number ofemployees increased from 1,367 to 1,417 as a result of someten newly-established collect stores and acquisitions.

Ahlsell VVSDuring the year, production of new housing was high andcontributed strongly to the Division’s increased invoicing.The start-up of the new central distribution centre in Halls-berg and a new computer system were charged to the profitat SEK 65M and resulted in delayed deliveries and lost mar-ket share in Stockholm area. In other parts of Sweden, theDivision adequately defended its market position. invest-ment in new collect stores continued during the year andnine new stores were established. In addition, the Divisionestablished two bathroom exhibitions for consumers – Glad

i Bad – in collaboration with Ernström Kakel. Ahlsell is of theopinion that demand for consumer heating and plumbing willincrease strongly in the 1990s. Operating profit deterioratedslightly during the year but remains on par with the Trelle-borg Group’s objectives.

Ahlsell Industry/Municipal TechnologyThe supply and sewage market and industrial market inSweden weakened during the year and was characterised bylower activity and a reduction in new investments. The repairand maintenance market nevertheless was satisfactory.During the year, the Division acquired two agency compa-nies, Sprinkler Teknik i Göteborg AB and Euronord WTM AB.As a result, the Division confirmed its already very strongposition in the Swedish market. During the year, profitabilityfell but remains on par with the Trelleborg Group’s objec-tives.

Ahlsell ElThe market for electric materials increased both in price andvolume but a slow-down was noted towards the end of theyear. Ahlsell El continued its concentration on collect storesand established seven new marts. Sales by the professionalmarts rapidly approach half of the Division’s invoicing.As the first electric wholesaler in Sweden, Ahlsell El intro-duced a customer terminal system – Brix – for the electroniccommunication of orders, supply status and stock status.

The Division’s profit improved during the year and is consid-ered satisfactory.

Ahlsell ToolsDemand for the Division’s products was strong in the first sixmonths but abated towards the end of the year. Both Jirvaand Flex Scandinavia strengthened their market positions.Profit continued to be satisfactory.

The Business Area’s prospects for 1991The boom in the Swedish building market is over for the Ahlsell continues its investment in logistics and informationmoment. A weak market trend is forecast for 1991 with re- technology with the objective of increasing productivity andduced volumes. This trend is expected to be strengthened quality. Through co-ordination of the Group’s resources,during 1992. Ahlsell expects to attain increased cost-efficiency and re-

duced tying-up of capital.

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Business Area Bröderna Edstrand

Lars SIettengren(from 1 July 1991, Jan Söderberg)

Bröderna Edstrand was founded in Malmö in 1885 and istoday Sweden’s largest independent wholesaler of steel andother metals, supply and sewage disposal materials andbuilding products. The company is well established andholds a strong position in the Swedish market. High demandand increased use of steel in construction has resulted in avery positive development for Bröderna Edstrand during theentire 1980s.

Bröderna Edstrand has six independent companies withtheir own warehouses. These are strategically located for

efficient inward and outward deliveries: Malmö, GothenburgJönköping, Norrköping, Stockholm and Sundsvall. The totalstorage area is more than 110,000 square metres.

Decentralisation involves a local adaptation of product rangeand services as well as a rapid and reliable service to cus-tomers. Distribution is extensively made via own scheduledtruck services. Every day, 150–200 trucks are loaded fromBröderna Edstrand’s warehouses. Time of delivery is gener-ally 1 –2 days and many locations have deliveries five times aweek.

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Every year, some 200,000 tonnes of steel, metals and build-ing products arrive at Bröderna Edstrand’s warehouses, alarge proportion by ship. Because Bröderna Edstrand isindependent of the steel mills, it has a number of well-estab-lished contacts both in Sweden and in other parts of theworld. The most important subcontracting countries outsidethe Nordic area are Benelux, Germany, Hungary, Britain andFrance.

The product range, which has been gradually extended andadapted to market needs, comprises commercial steel,stainless steel, aluminium, industrial pipes, supply and sew-age disposal products and building materials. In the respec-tive product area, various dimensions and designs are keptin stock such as sheet metal, girders, rod, etc.

Increasingly, the materials are supplied in value-added form.Cross-cutting, sawing, blasting and anti-rust painting areexamples of pre-treatment carried out by Bröderna Ed-strand. As a result, customers not only transfer the stock-holding to the wholesalers but also simple preparatory oper-ations. The wholesaler’s role is given a bigger content andincreased importance.

In addition to the engineering and building industries, munic-ipalities and retailers are large customer groups.

Major competitors are Tibnor, Dickson, Heléns and otherworks-owned wholesalers as well as Calvert and Fosselius &Alpen.

Operations in 1990Key figures 1989 1990Invoiced sales, SEK M 2,427 2,224Of which, sales abroad, per cent — —Operating profit after depreciation, SEK M 164 95Return on capital employed, per cent 41 24Investments in fixed assets, SEK M 24 39Number of employees at 31 December 790 785Of whom, outside Sweden - -

Volumes reduced gradually during 1990. Total invoicing fellby 8.3 per cent to SEK 2,224M. Profit deteriorated partlybecause of the slow-down in Sweden’s business trend.In autumn 1990, a newly-built warehouse for storing stain-less steel and aluminium was taken into use in Gothenburg.The plant, which cost SEK 23M, covers an area of 6,000square metres and represents a very considerable strength-ening of the Group’s resources in the aforementioned prod-uct areas.

An extension of the operation in Sundsvall is going accord-ing to plan. In February 1991, the office was moved intonewly-refurbished premises in the city centre. In spring, anewly-built workshop covering 2,700 square metres andequipped with pre-treatment machinery will become oper-ational. The investment, which is SEK 20M, means that theEdstrand Group’s resources in Norrland are now on par withthose in the Sweden as a whole.

During the year, a project aimed at the future and the EC wasstarted. The objective is to adapt routines and instructions tothe internationally accepted standard, ISO 9002. The endproduct is a quality awareness among all employees whichwill raise the level of service and internal efficiency. At thesame time, work on adapting the product range to the newEuropean standard is in progress.

The Business Area’s prospects for 1991The positive business trend in 1988-89 resulted in the estab- The Business Area’s profit is therefore expected to be slight-Iishment of a large number of new operations in the industry. Iy less positive than in 1990. Work on adapting the Group’sThe current recession is expected to bring about a fall in storage and distribution structure continues.volumes and reduced margins in 1991.

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Business Area Enertech

Anders Bülow

The Enertech Group develops, manufactures and marketsappliances and systems for heating, hot water and indoorclimate as well as components for flow control in energyproduction and processing industries. The Group is orga-nised in five independent Divisions, the NAF Group, theBurner Group, the Boiler Group, Boiler Projects and SpareParts.

The NAF GroupPresident Thomas Cederborg

The Group includes the following companies: NAF AB, NAFBroms AB, the two Finnish companies, Oy Naval Ab and OyNAF Ab, NAF Ventiler in Norway, NAF A/S in Denmark, NAFGmbH in Austria, and NAF Corporation in the USA. NAF isone of the leading manufacturers in the Nordic countries ofadvanced industrial valves. In Sweden, every third valve inthe energy industry and every fourth valve in the pulp andpaper industry comes from NAF. NAF Broms in Lund manu-factures brake equipment for trackbound vehicles. Oy NavalAb is the world’s leading manufacturer of all-welded ballvalves. Sales subsidiaries are located in Denmark, Finland,Norway, Austria and the USA, and representatives in mostparts of the world. Customers in the energy sector are mainlycentral heating plants, heat-electric stations, district heatingdistributors and boiler and turbine manufacturers. In theprocessing industry, the customers are primarily found in thepulp and paper industry. In Sweden, most competitors in theenergy valve sector are agency companies which sell valvesmade by foreign manufacturers. With regard to valves for theprocess industry, NAF meets the hardest competition both inthe domestic market and in exports outside the Nordic coun-tries from a couple of other manufacturers in the Nordicarea.

The Burner GroupPresident: Sven-Olov Lövgren

The Burner Group includes Bentone-Electro Oil AB, ElectroOil International A/S in Denmark, Electro-Oil GmbH andGiersch GmbH in Germany, Giersch AG in Switzerland andElectro Oil& Gas Burners Ltd in England. Production and/orsales units are located in Sweden, Great Britain, Germanyand Denmark, and agents in France, Spain and Greece. TheBurner Group is one of the largest manufacturers of burnersfor private houses in Europe. In Sweden, customers arewholesalers and in other countries, oil companies, contrac-tors, wholesalers and boiler manufacturers. Competitors arethe large number of European manufacturers.

The Boiler GroupPresident: Håkan Rugfelt

The Group consists of CTC Parca AB, CTC Wärme AG inSwitzerland, CTC-FerroFil A/S in Norway, and HermannHeim GmbH in Germany. Production units are located inSweden, Norway and Germany, sales units in the samecountries as well as in Switzerland. The group is representedby agents in Finland, Austria, France, Italy and Yugoslavia.Production comprises heat pumps, central heating boilersand water boilers for private houses and leisure houses. Theproduct range is adapted to all major types of energy suchas electricity, oil, solid fuels and gas as well as combinationsthereof. The most important markets are the Scandinaviancountries, Switzerland, Germany and Austria. Sales in Scan-dinavia are made via wholesalers. In Sweden, the main com-petitors are Albin-Pannan and Värmebaronen. In other mar-kets, competitors are the large number of local manufactur-ers. The acquisition of the Germany boiler manufacturer,Hermann Heim GmbH, is a phase in the intensive workwhich is in progress aimed at increasing the Boiler Group’soperations on the Continent of Europe. The acquisition of theNorwegian company, FerroFil, strengthens the BoilerGroup’s position as a producer and supplier of hot waterboilers in the Scandinavian market while, at the same time, creates prerequisites for an improved production structure the Norwegian operation.

Boiler ProjectsPresident: Lennart Andersson

The Division includes Osby Parca AB as well as Ång-JanneAB and Ingenjörsfirman Elektro-Relä AB. The group manu-factures hot water boilers and steam boilers from 25 kWupwards for all types of fuel (oil, gas, electricity, chips, peat,etc). The companies are market leaders in the Nordic areaCustomers are housing companies, industries, county coun-cils and municipalities. The main competitors are VEÅ ABand IGF Energigas AB.

Spare PartsPresident: Gerry Richards

The Spare Parts Division consists of the British company,Heating Replacements Parts & Controls Ltd. The companyhas 30 sales locations throughout Great Britain and is thelargest distributor of spare parts for heating systems witharound 50 per cent of the British market. Customers arecontractors, British Gas and local authorities.

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Operations in 1990Key figures 1989 1990Invoiced sales, SEK M 1,167 1,446Of which, sales abroad, per cent 61 65Operating profit after depreciation, SEK M 70 98Return on capital employed, per cent 19 22Investments in fixed assets, SEK M 19 32Number of employees at 31 December 1,495 1,616Of whom, outside Sweden 578 675

Invoicing of the Enertech Group increased by 25 per cent in1990. Of this increase, units acquired during the financialyear accounted for SEK 130M. The background to the posi-tive sales development in 1990 was a satisfactory trend inmost markets with the exception of Great Britain. Operatingprofit increased by 40 per cent compared with 1989, partlyas a result of the favourable market prerequisites and also asan effect of the extensive cost-cutting which have beenimplemented within the Enertech Group in recent years.Adjusted for acquired and sold units, the number of employ-ees in 1989/90 reduced by around 300. Investments duringthe year referred mainly to replacement investments.

The NAF GroupThe Scandinavian market for industrial valves weakened inthe second half of 1990, mainly as a result of the slow-downin the forest industry. Internationally, investments in thepaper and pulp industry remained at a high level which, asfar as the NAF Group is concerned, meant that a reducedvolume in the domestic market was compensated by in-creased export sales. The restructuring work within the NAFGroup which started in 1989 was completed in 1990 andproduction of energy fittings at Jakobstad in Finland wasmoved to the Linköping plant. During the financial year, asales company was established in Atlanta, USA, with theobjective of creating a more solid base for covering the im-portant market in the forest industry in south-eastern USAwhich is very important for NAF.

The Burner GroupThe sales trend for domestic burners was favourable in mostmarkets in which the Burner Group is represented. The Ger-man market especially was characterised by very satis-factory demand following the reunification as a result of theongoing conversion from coal to oil as the primary type offuel for heating purposes. The British market, however, rep-resented stark contrast with a total decline of around 20 percent for the second year in succession which led to a reduc-tion of production capacity in Electro Oil& Gas Burners Ltd.

The market situation in Germany was strengthened duringthe year following the acquisition of the German burner man-ufacturer, Giersch GmbH, which has a sales company inSwitzerland.

The Boiler GroupIn 1990, the market prerequisites for the Boiler Group werevery satisfactory, particularly in the Swedish market whichwas characterised by high activity in the building sector andexceptionally high demand for solid fuel burners from theagricultural industry. During the year, in Norway, the produc-tion of Enertech A/S was moved to the Ferro-Fil A/S plant. Inaddition, investments were made in a new enamelling fur-nace and equipment for rotation enamelling in the produc-tion unit in Norrahammar. An important event in the Groupwas also the work on developing a new oil burner that meetsthe demands of the so-called Zürich Standard for low dis-charges of nitrogen dioxide, a requirement set by a growingnumber of European markets.

Boiler ProjectsIn 1990, the total market was at an acceptable level com-pared with 1989. However, the number of major new in-vestment projects for heating domestic and public premisesremained low as a result of the uncertainty around futurepolitical control of the price of various types of fuels. TheDivision’s market position was strengthened following theacquisition in December of Ång-Janne AB and Elektro-ReläAB which add electric steam boilers, level indicators andcatastrophe protection to the product range.

Spare PartsThe British spare parts company, Heating and ReplacementParts & Controls Ltd, developed very favourably during thefinancial year. The reduced new and replacement invest-ments in heating systems in the British market insteadbrought about an increase in the service and spare partsmarket. During the year, two new sales units were establish-ed in Dudley and Glasgow. In addition, the local competitor,Coalburn Ltd, was acquired. During the year, the involve-ment of the spare parts operation was extended also in theDanish market following the acquisition of the operations ofthe specialised spare parts wholesaler, Benny Hansen A/S,and the spare parts activities of the Danish Statoil company.

The Business Area’s prospects for 1991In the heating production area, 1991 is expected to continue production units. In addition, the anticipated market devel-to develop favorably in the German market, whereas the opment will create new business opportunities in the sparemajority of other European markets will weaken. This partic- parts area. On the part of the NAF Group, it is consideredularly applies to Sweden and Finland. It is expected that it that it will be possible to meet the reduced investment levelswill be possible to compensate in part for the development in the forest industry in Scandinavia with higher demand as athrough cost reductions as a result of co-ordination and result of increased maintenance activities and continuedstructural work within and between the Business Area’s significant growth opportunities in the export market.

25

Business Area Ventilation

Bo Lundquist(until 1 May, 1991)

tionsunion, Ventitech and the operation, Stifab Plåt AB,which was started in Boliden in 1990. The business conceptis – via a Nordic company structure in the ventilation area –to accommodate producers as well as distributors and con-tractors.

Ventitech ABPresident: Björn Berner

Business Area Ventilation includes the companies, Ventila-

Ventitech manufactures, markets and distributes products to

Ventilationsunion ABPresident: Runar Andersson

Ventilationsunion is a nationwide group of contracting com-panies in ventilation and air treatment. Several of the compa-nies also manufacture their own ventilation products.Today, Ventilationsunion consists of some twenty compa-nies which have a strong anchorage in local market. Be-cause the companies are close to their customers, they areable to work speedily and to maintain a high level of service.The operations also include large total contracts which com-prise project management, purchasing, supply, installationand service. Ventilationsunion grew strongly in the 1980s,from a turnover in 1981 of just over SEK I00M to SEK 1,300Min 1990. Employees number more than 1,100. Ventilations-union operates only in Sweden and is one of the two largestventilation contractors in the market.

Ventilationsunion is divided into two groups, Comfort andIndustry. The majority of the companies in the Comfortgroup are involved in the installation and service of ventila-tion plants in private residences, offices, schools, hospitalsand other properties. The emphasis is on comfort ventilation.The Industry group possesses extensive expertise coveringair treatment in processing industry, engineering companiesand building and construction operations. The companies inthe group manufacture and install plants for ventilation, fluegas cleaning, dust separation, drying, energy recovery, etc.

contractors operating in the comfort ventilation, steel sheeting, commercial refrigeration and air-conditioning markets.The companies operate independently in their various cus-tomer segments.

The Stifab Group is the market leader in the Nordic area insystems products for ventilation. The group comprises Sti-fab AB in Sweden, Oy Stifab Ab in Finland and Stifab A/S inDenmark and Norway. Stifab AB in Sweden has plants inJönköping and Tomelilla for developing and manufacturingair terminal devices, air-flow systems, clean room ventilationand measuring units.

IF Luftfilter specialises in the production of filters for air pur-ification and dust separation. The product programme in-cludes filters for climate installations in all types of proper-ties, micro-filters for the biological and electronics industries(clean room technology) and machine filters. Sales officesand warehouses are situated in several locations in SwedenNorway and Finland. The head office and production plantare located in Borås. Kryotherm specialises in refrigerationand heat pumps for comfort cooling and energy saving withcompact units which combine refrigeration, heating and,when required, heat recovery. The head office and produc-tion are located in Piteå, sales offices in Stockholm andFinland.

Plåtluna is a nationwide wholesaler for Sweden’s sheet metalworkshops in the areas of ventilation and structual steelsheeting. The products range includes materials for all typesof sheet metal work: flat-coated sheeting, profile sheeting,roof drainage, ventilation ducts, air terminal devices, as-sembly components, tools and machinery. In recent years,

26

collect warehouses – currently there are sixteen – have beenopened. The organisation is decentralised as the companyhas been organised in five regions.

The Refrigeration group is one of the largest wholesalers ofrefrigeration in the Nordic countries with a well-developeddistribution network in Sweden, Denmark, Norway and Fin-land. Companies included in the group are Ahlsell Kyl AB inSweden, Oy Ahlsell Ref in Finland, Ahlsell Kulde A/S in Nor-way and Skaneks A/S in Denmark. The product areas areparticularly refrigeration compressors and climate units forrefrigeration and heating. The Refrigeration group has agen-cies for leading manufacturers in Europe, the USA and Ja-pan which include well-known brand-names such as L’Unité

Hermétique, Prestcold, DWM-Copeland, Searle and Sanyo.Customers are manufacturers of refrigeration plants, con-tractors and service companies in the refrigeration industry.

Stifab PlåtPresident: Björn Berner

In 1990, a brand-new factory for the production of ventilationducts and roof drainage systems, Stifab Plåt AB, was startedin Boliden. Most of the products will be sold via the whole-sale company, Plåtluna AB, which is included in the Venti-tech Group.

Operations in 1990Key figures 1989 1990Invoiced sales, SEK M 1,731 2,010Of which, sales abroad, per cent 16 16Operating profit after depreciation, SEK M 61 30Return on capital employed, per cent 16 9Investments in fixed assets, SEK M 153 37Number of employees at 31 December 1,918 2,044Of whom, outside Sweden 158 160

The Business Area’s operations were affected by aroundSEK 35M in costs of a non-recurring nature for starting upthe new plant in Boliden, Stifab Plåt AB, which has about 100employees. Excluding these costs, the Business Area at-tained a profit in line with the Trelleborg Group’s 20 per centreturn on capital requirements.

VentilationsunionIn 1990, the market was characterised by satisfactory de-mand. During the year, Bela Plåt och Fläkt AB, SvemaxVentilation & Plåt AB, Jörns Plåt AB and Industritjänst iVärmland AB – which form an excellent complement to theexisting operations – were acquired. Ventilationsunion againattained the Trelleborg Group’s return on capital requirementin 1990. The Comfort group reported satisfactory growthboth with regard to market share and profitability, whereasthe profit of the Industry group was reduced because ofprofitability problems in Leckner Processventilation AB andIndustrifilter AB.

VentitechIn Sweden and Finland, the trend for the products of theVentitech Group remained positive, whereas the Danish andNorwegian markets continued at a low level. Profitabilitydeveloped negatively.

Operating profit for the Stifab Group fell in 1990 as a result ofmoving the production of duct components from Jönköpingwhile, at the same time, production of low-speed terminaldevices was started up. In Finland, a new manufacturing andsales unit for round duct components became operational.

During 1990, IF Luftfilter’s sales and profit developed posi-tively in Finland and Sweden.

Kryotherm concentrated its development on ventilation units(“Kryovent”) and began to manufacture refrigeration units toits sister company, Ahlsell Kyl. Turnover increased sub-stantially which was mainly attributable to the Finnish mar-ket.

In 1990, Plåtluna’s operating profit deteriorated and marketshares were lost in some product segments. The biggest fallwas attributable to the new water drainage system whichwas introduced at the beginning of 1990.

The profit and volume of the Refrigeration group showed acontinued satisfactory trend in Sweden and Denmark. TheFinnish company was hit by a decline in the air-conditioningmarket. In the Norwegian market, activity remained low.

Stifab PlåtThe plant in Boliden, which employs around 100, was inau-gurated in May 1990. The production start was preceeded byan extensive training programme. Many young people ap-plied to work in the company. The average age is below 30.

It is expected that it will be around three years before thefactory has been run-in and the targeted capacity utilisationand efficiency attained. The product range will be concen-trated on ventilation products.

The Business Area’s prospects for 1991The order backlog for 1991 is very good, primarily in Ventila- months of 1991, the activity will be at a very low level. Vari-tionsunion. However, building in Sweden is expected to slow ous rationalisation and restructuring measures are beingdown gradually. It is therefore possible that, in the last few prepared to counteract that.

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Business Area Swegon

Sten Lindstedt

The listed company, Swegon AB, has been part of the Trelle-borg Group since autumn 1990 when Trelleborg AB acquired

Building62.2 per cent of the share capital and 84.3 per cent of the The companies in the Building business area develop, manu-

voting rights in Swegon from Munksjö AB. facture and market products which are generally incorporat-

Swegon, which was established in autumn 1980, is an indus-ed in buildings regardless of the purpose of the building.

trial group which operates in the building, climate and distri- Allhaboverken’s main products are industrial door systems,

bution areas. The Swegon Group has emerged via acquisi- while Carpro manufactures and markets garage doors for

tions and because the business concept of the companies private houses and roll-formed profiles. Kami manufactures

included has been refined on a determined and long-term and markets façade and roofing systems of thin sheet metal

basis. Some 20 well-established companies in Sweden and and Plånyl, complete rain water systems primarily of plastic-

abroad are included in Swegon which, with a very high de- coated galvanised steel plate. Kefab’s product range com-

gree of independence and under its own identity, manu- prises site huts, office modules and hygiene cabins as well

factures and markets its products and services, mainly to the as modular leisure, nursery and residential units.

construction industry.

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Climate DistributionThe companies in the Climate business area develop, manu-facture and market products which influence the indoorclimate of buildings with regard to air, heating, refrigeration,sound, comfort, etc.

Contura’s product range contains open fireplaces, tiledfireplaces and chimneys. It also markets Dovre’s cast ironproducts. Farex produces and markets systems solutionsand products which satisfy very strict demands for the rightindoor climate. Priority product areas are ventilation, heatingand refrigeration as well as sound and vibration insulation.Filterprodukter manufactures air filters for the ventilation andautomotive industries, while Sebo operates with products forair treatment and heat recovery. Ventilationsteknik’s mainproducts are ventilation units with their control equipment.

The Distribution business area was formed when Swegonacquired 50 per cent of Belano on 1 September 1990. Swe-gon has the management responsibility for the company andBelano is consolidated as a subsidiary in the Swegon Groupfrom that date.

Belano is one of Sweden’s leading wholesale companies inthe sheet metal and ventilation industries.

Operations in 1990Key figures October-December 1990Invoiced sales, SEK M 397Of which, sales abroad, per cent 13Operating profit after depreciation, SEK M 31Return on capital employed, per cent 27Investments in fixed assets, SEK M 10Number of employees at 31 December 1,014Of whom, outside Sweden 127

1990 was a successful year for Swegon. Once again, profitwas very satisfactory despite a gradual slowing down indemand and increased price competition in most markets.

The Building business area increased its invoicing, whereasthe profit fell. This was mainly a result of the declining busi-ness trend in 1990 in all product areas and also because areduction in the volume of rain-water products becausePlånyl lost one of its two main distributors in 1989. However,the reduction was smaller than expected because Belanocovered the market very intensively and increased its volumefor these products. The fall in profit was expected but it wasamplified as a result of KAMI’s investment in a new salescompany.

The Climate business area’s invoicing in 1990 increased by15 per cent while, at the same time, profit increased by 52

per cent. The business trend for the area’s products re-mained satisfactory in Sweden and led to large volume in-creases for open and tiled fireplaces, products for comfortrefrigeration in offices and ventilation units for the privatehousing market. All companies with the exception of ABVentilationsteknik reported very satisfactory profit improve-ments. The fall in Ventilationsteknik’s profit was in everyessential respect the result of a reduction in volume follow-ing structural changes in the market.Belano’s operations (the Distribution business area) wereextended in 1990 following the establishment of new oper-ations in Falun and Jönköping. In Falun, Dalaform - which isnow operated as a branch of Belano – was acquired. As inrecent years, the demand for the company’s products againincreased in 1990 but not, however, at the same rate asbefore. Compared with 1989, the increase was just under 20per cent which means a not unimportant increase in volume.The increase was primarily a result of the contributions re-ceived because the operations that the company had estab-lished in 1989 had a full impact in 1990. Nevertheless, profitdid not reach the 1989 level as a result of a falling marginsand cost increases in connection with acquisitions and thesetting up of new operations.

The Business Area’s prospects for 1991For 1991, a continued slow-down in the business trend in considered to be positive as a result of already implementedSweden is expected and no major improvements are ex- restructuring measures, a satisfactory backlog of orders andpected in the international markets in which the Swegon a strong financial position.Group companies operate. The starting point, however, is

29

Business Area Trelleborg Industri

Fredrik Arp

Trelleborg Industri develops, manufactures and marketsrubber products – often in combination with other materials –mainly for industrial use. Manufacturing takes place at some15 plants in Sweden and abroad. The Business Area investsin supplying highly-functional and high quality rubberproducts within a number of selected niches.

Technical RubberPresident: Gunnar Johnsson

Main products: Advanced moulded rubber products, often incombination with metals and ceramics for, among others,the automotive, engineering and food industries; extrudedprofiles and sealing strips for the engineering and buildingindustries.

Production units: In Sweden, moulded products are manu-factured in Trelleborg, Sjöbo and Traryd, and at the subsidi-ary, Sigma, in Örebro and on Gotland. Outside Sweden,manufacturing takes place at the subsidiaries, Viking Mjön-dalen in Norway, Bergougnan in Belgium, Bakker and Velp inthe Netherlands, Sigma UK in Great Britain, as well as atTrelleborg Gummiwerke and Ellerbrock in Germany. Extrud-ed profiles and punched rubber components are manu-factured by the subsidiary, Värnamo Gummifabrik in Värna-mo, Skelleftehamn and Great Britain, Horda Packningsin-dustri in Horda and Österbymo, Johnssons Söner inLimmared as well as at Technical Polymers in Great Britainand Trelleborg Gummiwerke in Germany.

Market positions: In the Scandinavian market, the BusinessArea is well positioned in most product groups. In the WestEuropean market, there are many competitors.

Industrial SuppliesPresident: Stefan Johansson

Main products: Special hose for fuel, compressed air,chemicals, ventilation and hydraulics, antivibration mount-ings, rubber sheeting and rubber mats as well as V-belts andother transmission products; battery containers of hardrubber and polypropene.

Production units: Manufacturing for the European markettakes place in Trelleborg and at the subsidiary, TrelleborgBV, in the Netherlands. Sales are partly made via 15 ownwarehouses throughout Sweden as well as via subsidiaries

and agents. The subsidiary, Goodall, has 30 sales officesthroughout North America and own production in Canada.Battery containers are made at Trelleborg BV in the Nether-lands and Spondon Plastics in Great Britain.

Market positions: In the Scandinavian market, the BusinessArea is well positioned in most products groups. In the WestEuropean market, there are many competitors. In NorthAmerica, Goodall is one of the leading distributors of specialhose for certain selected industries. For battery containers ofhard rubber, the Division is the world leader.

TyresPresident: Sven-Gunnar Schough

Main products: Low profile special tyres with low groundpressure for use in forestry and agriculture; special tyres forindustrial vehicles and agricultural equipment as well asmotorcycle and bicycle tyres; solid tyres for industrial vehi-cles; rims and tubes.

Production units: Low profile tyres for use in agriculture andforestry are produced in Trelleborg and in Belgium. In Trelle-borg, other types of industrial tyres and motorcycle/bicycletyres are also manufactured. Solid truck tyres are also pro-duced by the subsidiary, Bergougnan, in Belgium and SriLanka. Contract production of Viskafors tyres for agriculturalequipment takes place at several plants in Europe. As com-plementary products, tubes (Swedish Tyre in Helsingborg)and rims (Sävsjö Fälgar in Sävsjö) are also manufactured.Market positions: In special tyres for agricultural and forestryuse, the Business Area holds a strong position in Scandina-via and Western Europe. In standard tyres, it competes withseveral European manufacturers, and in industrial tyres alsowith imports from South East Asia. In the area of solid trucktyres, it holds a world-leading position.

Special ProductsPresident: Fredrik Arp

Main products: Chemical and fire-protective clothing, ABCproducts for personal protection, hospital and rescue tents,containers for liquids, oil booms, dock gate insulation anddry diving suits; roll-coverings of rubber and polyurethane aswell as corrosion and wear protection coverings for theoffshore, mining, chemical and nuclear industries.

30

Production units: Protective products are manufactured in Market positions: The Protective Products product areaYstad and Trelleborg as well as at the British subsidiary, holds a world-leading position. The Roll-covering and LiningBeadle. Roll-covering and corrosion and wear protection product area holds a dominant position in the Nordic area.covering is carried out in Trelleborg as well as at VikingMjöndalen in Norway.

Operations in 1990Key figures 1989 1990Invoiced sales, SEK M 3,351 3,226Of which, sales abroad, per cent 66 63Operating profit after depreciation, SEK M 201 180Return on capital employed, per cent 13 12Investments in fixed assets, SEK M 265 263Number of employees at 31 December 5,851 5,450Of which, abroad 2,792 2,601

Invoiced sales reduced by 4 per cent compared with theprevious year, mainly because of lower volumes andsqueezed prices as a result of the reduced activity after thefirst quarter, primarily among the company’s Swedish cus-tomers.

Operating profit fell by 10 per cent. The deterioration in profitwas wholly attributable to the Swedish units. The result ofoperations abroad improved by around 30 per cent. Imple-mented efficiency measures and cost adaptations, primarilyin the Swedish operations, during the year were only able tocompensate in part for the loss of profit caused by the de-terioration in the economic trend and the continued rapidcost increases in Sweden. The full effect on the result of theimplemented measures is expected during 1991-92. In-vestments in fixed assets amounted to SEK 263M and main-ly referred to replacement investments. Major new invest-ments include a tyre plant in Belgium and a factory for vibra-tion insulators in Trelleborg.

Technical Rubber DivisionThe market for moulded articles to Swedish engineering andautomotive industries and for profiles to industry and build-ing reduced very considerably. In the European market,however, demand remained satisfactory. Both operatingprofit and return on capital deteriorated despite a substantialimprovement in the result of operations abroad. A concen-tration of the production to a smaller number of competitiveunits continued.

Industrial Supplies DivisionThe Swedish market weakened slightly during the year,whereas other markets in Europe reported an acceptabletrend. The American subsidiary, Goodall, again generated apositive result despite a falling market particularly in Canada.

Sales of battery containers, which are mainly made to devel-oping countries, dropped. Overall, the Division’s operatingprofit fell slightly, whereas return on capital improved, mainlyas a result of capital rationalisations and improved operatingprofit for industrial hose as well as Goodall.

A restructuring and cost adaptation was carried out in theentire Swedish sales organisation. Goodall’s production ofindustrial hose was concentrated to the company’s plant inCollingwood in Canada. A distribution company with threedepots in Louisiana in the USA was acquired.

Tyres DivisionThe demand for tyres for agricultural and forestry use re-duced very considerably in the second half of the year as aresult of a lower activity in the forest industry and structuralrationalisations in agriculture. Sales of other pneumaticindustrial tyres fell slightly as a result of lower demand andincreased competition from low-cost countries. Demand forBergougnan’s solid industrial tyres remained satisfactory.The Division’s invoiced sales were more or less unchanged.Both operating profit and return on capital deteriorated,however, mainly as a result of the decline in the market fortyres for agricultural and forestry use. At the beginning of theyear, a decision was made to close down the production oftyres at the subsidiary, Viskafors AB. Agreements for manu-facturing under contract were made with a number of ex-ternal suppliers. Swedish Tyre AB in Helsingborg wasformed to market the Viskafors product range.

Special Products DivisionThe demand for the Division’s various protective productswas satisfactory. Towards the end of the year, the conflict inthe Middle East led to a very considerable increase in de-mand for ABC products. The demand for rubber covering ofrolls for the paper and pulp industries and corrosion protec-tive coverings for, among others, the chemical and offshoreindustries was also satisfactory. Both profit and return oncapital improved. Production of diving suits was concentrat-ed to Ystad during the year. A new plant for covering rollswith polyurethane became operational in Trelleborg.

Prospects for 1991For 1991, a continued weak market trend is expected for At the beginning of 1991, Trelleborg Industri made an agree-Iarge parts of the product range with reduced volumes and ment with the German rubber company, Phoenix, for long-squeezed prices as a result of overcapacity and tough com- term technological and commercial collaboration. The Trelle-petition. Despite the effects of already implemented or initi- borg Group has a 20 per cent shareholding in the listedated efficiency measures, further action may become neces- company, Phoenix AG.sary to maintain the profit level under the current businesstrend situation. This applies primarily to the Swedish oper-ations. Continued positive development is forecast for theinternational operations.

31

FalconbridgeAssociated Company

Franklin G.T. Pickard

Falconbridge Inc, Canada, which was formed in 1928, isshown as an associated company in the Trelleborg Group.50 per cent of the shares are owned by Trelleborg and 50per cent by the Canadian forestry and mining group, Noran-da Inc.Falconbridge’s main products are nickel, ferro nickel (nickeliron), copper, zinc and cobalt. Falconbridge is the secondlargest producer in the Western World of nickel with a mar-ket share of around 15 per cent. Production units are locatedin Canada, Norway, the Dominican Republic and Zimbabweand the company has its own sales offices in Toronto, Brus-sels, Pittsburgh, (USA), Tokyo and the Barbados.

Sudbury, Ontario, CanadaThe Sudbury area comprises five mines: Lockerby, Onaping,Craig, Fraser and Strathcona. The company also operates aconcentrator in Strathcona and a smelter in the town ofFalconbridge. Overall, Falconbridge has about 2,400 em-ployees in the Sudbury area. The main products are copper/nickel matte, copper concentrate, cobalt, precious metals inmatte and sulphuric acid. The concentrator in Strathconahas a daily capacity of 10,000 tonnes. The annual capacity of the smelter is 70,000 tonnes of nickel/copper.

32

Timmins, Ontario, CanadaAt Kidd Creek in Timmins, copper/zinc ore is mined,dressed, smelted and refined. The large orebody is minedunderground at two mines with a third under construction.Also located in the area are concentrator, a zinc plant, acopper smelter and refinery. The mining and metallurgicalcomplex at Kidd Creek employs more than 2,400 people.Products include zinc, copper, silver, cadmium, sulphuricacid and iridium. The annual capacity for copper and zinc is100,000 and 130,000 tonnes, respectively.

Falcondo, the Dominican RepublicIn the Dominican Republic - in the central Caribbean - Fal-conbridge mines, dresses, smelts and refines nickel-bearinglaterite ore in an open-pit mine. The plant includes a smelter,a power station and an oil refinery to which oil is supplied viapipeline from the port in Santo Domingo. The products areferro nickel (nickel iron) in various forms. The annual capacityis 32,000 tonnes of nickel in ferro nickel, and customers aresteel mills throughout the world.

Falconbridge Nikkelverk, NorwayProduction at the refinery in Kristiansand – one of the largestin the world – comprises mainly nickel, copper, cobalt andsulphur. In addition, small volumes of gold, silver and plati-num are refined, The bulk of the raw material comes fromFalconbridge’s Sudbury mines in Canada and from Bots-wana and the Soviet Union. The annual production capacityis 57,000 tonnes of nickel, 35,000 tonnes of copper and2,000 tonnes of cobalt.

In addition to the operations in Canada and the DominicanRepublic and the nickel refinery in Norway, Falconbridge hastwo subsidiaries which mine gold ore.

Falconbridge Gold Corporation operates the Hoyle Pondunderground mine in Timmins, Ontario. The plants in KiddCreek process the mined gold ore. In Zimbabwe, gold isextracted in two underground mines through the subsidiary,Falconbridge Investments (Zimbabwe) Ltd.

Falconbridge also has its own exploration group with 9 offic-es in Canada, the Dominican Republic and Botswana (seealso the section on ore prospecting on pages 10-11),

Operations in 1990Key figures(=Trelleborg’s share, 50 per cent) 1989¹) 1990 Invoiced sales, SEK M 1,572 5,154Operating profit after financial items, SEK M 196 610Profit after taxes, SEK M 83 350Number of employees at 31 December 4,817 4,400¹) 22 September-31 December

Lower metal prices, primarily for nickel, and an increase inthe value of the Canadian dollar combined to result in thecomparable profit before financial income and expenses andtaxes falling by 33 per cent compared with 1989. The fall inprofit was limited through increased proportion of purchasesof raw materials for refining in the company’s plants in Kris-tiansand, through increased production and through theclosure of East Mine, the nickel mine in Sudbury, Canada,which had the highest costs.

Because of the strong fall in nickel-prices at the end of 1989and the beginning of 1990, it was decided to close the East

Mine in the Sudbury area and to bring forward a ten-weekrefurbishment of one of the smelting furnaces at the plant inthe Dominican Republic. Together, the measures reducedFalconbridge’s mining production of nickel ore by nearly 10per cent or approximately 6,000 tonnes.The operations were concentrated following the sale of theFahramet foundry operation and the industrial minerals com-pany, Indusmin in May and September, respectively. TheUnited Keno Hill Mines (silver and lead) was also sold.

Since March 1990, Trelleborg and Noranda have sold Fal-conbridge’s copper and zinc on an agency basis.

At the Raglan property in Northern Canada, successful test-drilling provided further evidence that Raglan is one of theworld’s richest nickel deposits known today (around 17million tonnes of ore with a nickel content of 3.13 per centand a copper content of 0,88 per cent).The Kidd Creek indium plant was completed during the yearand put into production in November.

Prospects for 1991The recession in North America and lower growth in Europeand Asia resulted in reduced demand and lower prices forthe company’s most important metals. At the beginning of1991, copper and zinc prices were considerably lower thanaverage prices attained in 1990. Above all, the demand forzinc is very weak in North America which led to a decision tocut the Kidd Creek Division’s production by 20,000 tonnes.The reduction is equivalent to around 16 per cent of KiddCreek’s annual zinc production and will be compensated byincreased copper production.

The planned mining production of nickel in Sudbury, and ofcopper and zinc in Kidd Creek, is lower in 1991 than in 1990.

In Sudbury, the lower nickel volume is amply balanced byincreased ferro nickel extraction at the company’s plants inthe Dominican Republic.

The current three-year collective agreement for the employ-ees at the company’s mines and smelter in Sudbury willcome up for renegotiation in August 1991.

An extensive restructuring programme is in progress with theaim of reducing costs and making the operations at thecompany’s plants even more efficient.

33

Svedala Industri ABAssociated company

Thomas Oldér

Svedala Industri AB is one of the world’s leading groups fordeveloping, manufacturing and marketing systems andturn-key plants for the mineral processing industry.

More than 90 per cent of the group’s operations are outsideSweden. The largest market is North America with around 40per cent of the sales. Other big markets are Scandinavia with10 per cent, Western Europe 20 per cent, South America 15per cent and Australia 5 per cent.

The need for mineral processing systems exists mainly in thebuilding and construction industries as well as in the miningand metals industries. From a turnover viewpoint, around 35

per cent of Svedala’s customers are found in the first-men-tioned sector. Approximately 25 per cent of turnover can beattributed to the mining and metals industries.

The Svedala Group consists of three units, Allis MineralSystems, Trellex and Minco International. In turn, these unitsown nearly 80 subsidiaries with operations in more than 20countries.

In order to co-ordinate the activities in the USA and Canada,a separate company – Svedala Inc, which is located in Mil-waukee, Wisconsin – has been formed.

34

Allis Mineral SystemsAllis Mineral Systems is the largest business area in theSvedala Group and accounts for nearly 75 per cent of itsturnover. Operations comprise the manufacturing of equip-ment and spares as well as consultation, installation andservice.The business area consists of five divisions. The Crushingand Screening Division manufactures and markets mainlysystems for the milling, crushing and screening of minerals.The Pumps and Processing Equipment Division has a wideproduct programme in the areas pumping of goods, mineralsseparation and industrial drainage. The Pyro Systems Divi-sion develops and markets complete processing systems fordrying, burning and conversion/recycling of various rawmaterials for a broad market. The Grinding Systems Divisionis one of the largest units in the world in the field of millingtechnology and milling processing. The Bulk Materials Hand-ling Division supplies a wide range of equipment and sys-tems for transport, storage and recycling of bulk materials.

The Conveyor Belt Division is a leading player in WesternEurope in the market for conveyor belts and holds a verystrong position in the world market for vertical transportsystems. The Division accounts for more than half of Trel-Iex’s turnover. The Screening/Wear Protection Division holdsa world-leading position in polymer products for screening,wear protection and milling. The Fender Division manu-factures complete systems for fenders for port installationsand ships.

Minco InternationalMinco International is a marketing organisation which isresponsible for those geographical areas in which Allis Min-eral Systems and Trellex have no organisation of their own.After Minco has initiated a transaction, manufacturing anddelivery is handled by Allis Mineral Systems and Trellex,respectively. Mince’s income and expenses are reported inTrellex and Allis Mineral Systems, respectively.

TrellexTrellex develops, manufactures and markets products andsystems for screening, milling, wear protection and transportof goods, mainly for the mineral processing industry. Theoperation is organised in three divisions.

Operations in 1990Key figures(=Trelleborg’s share, 49.5 per cent) July-December 1990Invoiced sales, SEK M 1,587Operating profit after financial items, SEK M 89Profit after taxes, SEK M 25Number of employees at 31 December 3,474

1990 was characterised by a continued satisfactory develop-ment for Svedala Industri. Both Svedala Group’s invoicingand profit increased compared with the previous year. Dur-ing the year, a number of supplementary acquisitions were

made while, at the same time, the work continued on in-tegrating units acquired during 1989. The combined annualturnover of the acquired companies amounts to around SEK320M.

Svedala Industri, whose shares are quoted on the O list ofthe Stockholm Stock Exchange, submits its own AnnualReport. The Report can be ordered direct from SvedalaIndustri AB, Box 4004, S-203 11 Malmö, or by telephoningInt +46 40-24 58 00. Annual General Meeting will be held on23 May 1991 in Malmö.

35

NorzinkAssociated company

Olav Nummedal

Norzink is a Norwegian zinc smelter which is owned in equal The neighboring countries, Sweden and Denmark, areparts by Trelleborg and the British mining company, RTZ important markets and Germany, Great Britain, and USA are(Rio Tinto Zinc) Corporation Plc. also large buyers. The zinc smelter and main administration

Norzink’s main products are zinc, zinc alloys, zinc oxide, are situated in Odda on the west coast of Norway. Factory

cadmium, mercury, sulphuric acid and aluminium fluoride. units are also located in Larvik and Sarpsborg in Norway.

The raw material comes in the form of concentrates from, The products are marketed direct from Odda and Larvik via

among others, Boliden’s mines in Sweden. Norzink - which sales companies in Great Britain (Norzink UK and USA

is not consolidated in the Group - has a market share in (Asturmet Inc), and through agents. Aluminium fluoride is

Scandinavia of around 50 per cent for its main product, zinc. sold via Hydro Aluminium.

Operations in 1990Key figures Demand was satisfactory throughout 1990 and production

(=Trelleborg’s share, 50 per cent) 1989 1990 and deliveries operated without any disturbances worth

Invoiced sales, SEK Mmentioning. Invoiced sales remained at the 1989 level and

787 748 profit was satisfactory. During the year, investments wereOperating profit after financial items, SEK M 177 50 concentrated on capacity and quality improvements while, atProfit after taxes, SEK M 8 the same time, work on production-promoting measuresNumber of employees at 31 December 303 315 continued.

36

MunksjöAssociated company

Rolf Ekedahl

During autumn 1990, Trelleborg and Custodia acquired theentire Munksjö Group via Munksjö Intressenter AB.Munksjö consists of a paper-related industrial group, Hexa-gon’s mixed industrial operations and a 48 per cent share-holding in the engineering industry group, Components.

Munksjö is one Europe’s leading envelope manufactures. InScandinavia, Ljungdahls is the market leader and in Britain,Chapman Industries Plc is one of the major companies in themarket. The Ljungdahls Group has manufacturing units inNybro and Högsby. The subsidiary, Björnbaks Konvolut-fabrik in Denmark manufactures envelopes in Hedehusene.In addition to envelope factories in London, Walsall, Edin-burgh and Darwen, Chapman has a recycled fibre-basedpaper mill in Darwen for the production of envelope paper.

Munksjö Kraftemballage AB is one of Sweden’s leadingmanufactures of highly-refined transport and consumerpackaging. The main product is corrugated paper packag-ing. The products are mainly manufactured from recycledfibre-based paper from the mill in Timsfors. Refinement andconversion takes place at the units in Norrköping, Nybro,Timsfors and Landskrona.

In the pulp and paper area, the Munksjö Group runs oper-ations in two units. Aspa Bruk produces and markets high-quality bleached special pulp, most of which is sold in the

export markets. An investment is being made in a newly-developed bleached but chlorine-free pulp. The second unitis Munksjö Paper AB which produces and markets specialpapers of various types. Today, Munksjö Paper is one of theworld’s largest producers of electro-technical paper and theleading manufacturer in Europe of carbonised base paper.The raw material and the carbonised base paper are pro-duced at the papermill in Billingsfors, whereas the electro-technical paper is manufactured at the plant in Jönköping.

Munksjö’s Hygiene Division manufactures and marketsprimarily toilet and household paper for the Scandinavianconsumer and institutional household markets. The productsare mainly produced from unbleached recycled fibre-basedraw material. In addition, a substantial volume of base paperis exported to external refining industries which is the pre-requisite for a cost-efficient production, especially ofbleached qualities. The pulp production and manufacturingof finished products takes place at the unit in Jönköping aswell as at Sunland Eker in Drammen, Norway.In recent months, parts of the Hexagon operations havebeen sold. The work on restructuring and concentrating theoperations continues.For Trelleborg, the effect on profit was marginal in 1990.

Prospects for 1991Swedish forest industry is currently finding itself in a difficult profit is expected to be poor. The continued restructuringrecession. Internal cost reductions combined with falling raw will involve freeing of substantial amounts of capital.materials prices will counteract the market problems. The

37

Other companiesSorbinvest

Associated companyLennart Wahlberg

Sorbinvest in Skellefteå was formed in 1987 to counteractthe effects of reductions in mining and smelting plant oper-ations. Sorbinvest acquires and participates in the establish-ment and expansion of companies in Northern Sweden andtoday is a group with a total of 17 companies.

Trelleborg is the largest owner with 49.7 per cent of thevoting rights and 34.6 per cent of the capital. The remainingshares are owned by the Swedish Government, SkandiaFörsäkringar, Stiftelsen Småföretagsfonden, a number ofbanks and the Municipality of Skellefteå. The operationsexpanded very considerably during 1990, primarily throughthe acquisition of all the shares in Contorta AB which is theparent company of a group which has 7 subsidiaries. Theoperations of the Contorta companies are mainly located inthe same region as Sorbinvest, and the acquisition broughtabout very considerable synergy benefits and new opportu-nities for joint development for the companies included inthe new group. Following the implemented co-ordination,Sorbinvest with its management is the parent company ofthe new group. The turnover of the Sorbinvest Group in 1990amounted to SEK 430M (195) and, including the companiesnow incorporated, is around SEK 800M on an annual basis.The number of employees amounts to 840 (326). The busi-ness areas are Trading, Mechanics, Timber, Electro andMaterials.

Phoenix AGAssociated company

Dr Ludwig HoratzAs stated above, Trelleborg has an around 20 per centshareholding in the listed German company, Phoenix AG,with which Trelleborg Industri AB made an agreement forlong-term technological and commercial collaboration at thebeginning of 1991.

Phoenix, which has its head office in Hamburg, has a turn-over of around SEK 3,500M, of which 70 per cent is in theGerman market. Of sales, rubber products to the automotiveindustry - including Mercedes Benz, Volkswagen, Renaultand Volvo – account for around 60 per cent and other indus-trial rubber (hose, conveyor belts, seals, rubber/metal com-ponents, etc) account for the remaining 40 per cent.In Germany, Phoenix has around 6,200 employees, of whomnearly half are at the plants in Hamburg-Harburg. Foreignsubsidiaries with a total of 800 employees are located inFrance, Italy, Spain, Belgium, the Netherlands and GreatBritain. Recently, Phoenix also acquired the former EastGerman rubber company, Thüringen Gummiwerke GmbH.

38

Report of the Board of Directors(Group and Parent Company)

SalesIn 1990, Group invoiced sales amounted to SEK 25,216M(1989: 26,485). The decrease was mainly because Svedalalndustri AB is reported as an associated company from 1July 1990 and is therefore included for only six months in1990. For comparable units, the turnover was unchangedcompared with the previous year.

During the year, Business Area Boliden Metals acquired theFrench metals trading company, Reynolds European S.A.and the British company, Metal Supplies Ltd, with a com-bined annual turnover of around SEK 965M and, at the sametime, sold its aluminium smelting plant in Denmark with aturnover of around SEK 200M. Business Areas Ahlsell, Ener-tech and Ventilation acquired some 15 small and medium-sized operations in Scandinavia and Western Europe with acombined annual turnover of around SEK 300M. On theother hand, the Gavle/Ahlsell Group, which has a turnover ofaround SEK 500M, was sold in November. In September1990, 62.2 per cent of the share capital of Swegon AB (turn-over around SEK 880M) was acquired. From autumn 1990,Trelleborg owns 48 per cent of Munksjö Intressenter ABwhich in turn owns more than 90 per cent of the Munksjö/Hexagon Group.In 1990, sales abroad accounted for SEK 12,600M or 50 percent of the Trelleborg Group’s total sales (1989: SEK14,029M and 53 per cent, respectively). Exports from Swe-den amounted to SEK 4,575M (5,015).Invoiced sales by market are shown in the following table.

Invoiced sales Change(SEK M) 1990 1989 1989/90

Sweden 12,616 12,456 + 1 %Other Nordic countries 2,374 2,810 –16%Other European countries 7,037 7,371 – 4%USA and Canada 1,615 1,980 –18%Other markets 1,574 1,868 –16%Total 25.216 26,485 – 5%

ProfitIn the Final Accounts Report published on 2 March 1990, aGroup profit of more than SEK 2,000M was indicated for the1990 full-year after financial income and expenses, exclud-ing minority interest but including interests in associatedcompanies. At the Annual General Meeting on 30 May -based on metal prices and foreign exchange rates prevalentat that time – a full-year profit in the region SEK 2,100-2,500M was forecast. In the Interim Report published on 16October, a final result of around SEK 2,300M was forecastagainst the background of the increasingly pronounceddecline in the economic trend in several countries.The actual result was SEK 2,302M compared with SEK2,743M in 1989. This is equivalent to SEK 25 (30) per shareafter 30 per cent standard tax calculated on the averagenumber of shares.

Appropriations to profit-sharing for employees in theGroup’s Swedish companies amounted to SEK 36M (1989:60). The profit-share per employee was SEK 2,300 com-pared with SEK 2,800 in 1989.

92M. Extraordinary expenses amounted to SEK 553M (456).They consisted mainly of costs for discontinuing operationswithin Trelleborg Industri and Boliden Mineral as well aswrite-down against State grants.

Group profit before appropriations and taxes was SEK2,323M (2,794). After appropriations and taxes, a net profitof SEK 1,553M (1,851) is reported.The year’s tax cost was SEK 615M (484) which is equivalentto 26 per cent (17) of profit before appropriations and taxes.

Return on own risk capital after tax accounted for amountedto 23.1 per cent (37.8) and on capital employed to 18.6 percent (20.6).

Group accounting principles, etc are explained in the Com-ments on the Financial Statements (page 47).

Financial positionThe Group’s net borrowing (defined as interest-bearingliabilities less cash and interest-bearing investments) in-creased by SEK 2,395M to SEK 6,404M (1989: a decrease ofSEK 206 M). In the first four months, a rights issue was car-ried out in Falconbridge Ltd. The two owners, Trelleborg andNoranda, each contributed CAD 500M (around SEK 2,600 M).Excluding the effects of this rights issue, the TrelleborgGroup’s net borrowing during the year decreased by aroundSEK 200M.The acquisition of Falconbridge was refinanced in Septem-ber 1990 partly via a syndicated loan for USD 950M guaran-teed by Trelleborg and Noranda and arranged by the RoyalBank of Canada and Swiss Bank Corporation with the partic-ipation of a total of 45 banks, and partly via a loan for CAD900M raised by Falconbridge from 13 Canadian banks.

LiquidityAt the year-end, the Group’s liquid assets amounted to SEK3,049M (3,896).

Risk-bearing capitalRisk-bearing shareholders’ equity increased by SEK 1,386Mto SEK 8,505M (7,119).

Listed sharesOn 26 September 1990, shares which were acquired in Fors-heda AB at the end of 1987- equivalent to 11.4 per cent ofthe share capital and 5.2 per cent of the voting rights in thatcompany – were sold.

InvestmentsIn 1990, the Group’s investments in machinery and plantamounted to SEK 1,488M (1,657) excluding the value of fixedassets in companies acquired during the year.

Extraordinary income brought in SEK 574M (1989: 507) andconsisted mainly of capital gain on sale of shares, Stategrants and income from associated companies totalling SEK

39

Structural changesDuring 1990 and so far in 1991, the following companies and operations were acquired and sold. Some are commentedon in more detail under the relevant Business Area.

Turnover Number of1990 Date SEK M employeesAcquisitionsHermann Heim GmbH, Germany (Enertech)Kemiska Fabriken Effekto AB (Boliden Metals)Svenska Klimataggregat AB (Ventilation)Giersch AG, Switzerland (Enertech)Metal Supplies Ltd, Great Britain (Boliden Metals)EDIFO AB (Boliden International)Giersch GmbH, Germany (Enertech)Svernax Ventilation & Plåt AB (Ventilation)Sprinklerteknik i Göteborg AB (Ahlsell)Reynolds European S.A. France (Boliden Metals)Benny Hansen A/S, Denmark (Enertech, acquisition of

fixed assets)H Sauer GmbH & Co KG, Germany (Boliden Metals)Coalburn Ltd, Great Britain (Enertech)Euronord WTM AB (Ahlsell)CTC-FerroFil A/S, Norway (Enertech)Bela Plåt och Fläkt AB (ventilation)Tennessee Chemical Company, USA (Boliden International)Swegon AB (62.2 per cent)Munksjö Intressenter AB (48 per cent)River Rubber, USA (Trelleborg Industri, acquisition of fixed assets)N E Olsson Nordic AB (Enertech)Industritjänst i Värmland AB (Ventilation)Jörns Plåt AB (ventilation)SalesPart of the operations in Ellerbrock GmbH, Germany (Trelleborg lndustri)Boliden Bergsöe Metalvaerk i Kolding A/S, Denmark

(Boliden Metals)Gavle/Ahlsell Group in Sweden, Norway and Denmark

1 January1 January1 January1 January

2 February12 February

1 March1 April1 May 161 July

1 July 19 71 July

10 July1 September1 September1 September

21 September24 September

11 October16 October

28 December31 December31 December

1 February

1 July9 November

15234 2

150207015

815

35243427

4400

1,0545,270

402045

6

80

200500

3031

304

70195

120

20189

215

4001,0146,572

3517808

170

65400

Turnover Number of1991 Date SEK M employeesAcquisitionsLa-Ca Verktyg & Maskin AB (Ahlsell) 1 January 10 5DEF’s radiator plant, Belgium

(acquisition of assets, Boliden Metals) 1 January 125 110McKechnie Extruded Products Ltd, Great Britain

(Boliden Metals) 2 January 800 720Oy Raceme Ab, Finland (Ventilation) 7 February 20 2

40

Spread of ownership in SvedalaIndustri AB

The Annual General Meeting on 30 May approved a recom-mendation regarding the spread in the ownership in theshares in the subsidiary, Svedala Industri AB via a rightsissue in that company, directed at Trelleborg shareholders.10 shares in Trelleborg AB, regardless of class of share,entitled the holder to subscribe for one new share in SvedalaIndustri AB at the price of SEK 110. The issue was fully sub-scribed and realised SEK 697M net. Trelleborg AB now owns49.5 per cent of the shares and voting rights in SvedalaIndustri AB which, from 1 July 1990, is reported as an asso-ciated company. The operations are described in detail onpage 34.

MunksjöIn summer 1989, Trelleborg acquired more than 4.4 millionshares in Munksjö AB which represented 10.5 per cent of thevoting rights and 10.3 per cent of the capital. Later, the hold-ing was increased to a total of 5.5 million shares, equivalentto 12.9 per cent of the voting rights in Munksjö.

On 21 August 1990, Munksjö Intressenter AB - in whichcompany Trelleborg owns 48 per cent of share capital andvoting rights – offered to acquire all the outstanding shares,subscription options and convertible debentures in MunksjöAB. The offer was accepted to such an extent that on 8October, Munksjö Intressenter had at its disposal shares, etcequivalent to more than 92 per cent of the capital and votingrights in Munksjö AB (calculated after full dilution). Com-pulsory redemption of the shares that remain has been de-manded.

On 1 June 1990, Munksjö AB announced an offer to acquirethe remaining shares in its subsidiary, Hexagon AB. After arevised, extended offer, more than 90 per cent of the shareshad been handed in at 5 September. Also here, compulsoryredemption procedure is in progress.

With regard to operations, etc, reference is made to page 37.

SwegonOn 24 September 1990, Trelleborg acquired Munksjö AB’sshareholding in the listed company, Swegon AB. The acqui-sition comprised 2,388,350 shares, which is equivalent to62.2 per cent of the capital and 84.3 per cent of the votingrights in Swegon.

Swegon, which had a turnover of SEK 1,054M in 1990 andhas 1,014 employees, is an industrial group of some 20 com-panies which manufacture and market products mainly tothe building industry (see details on page 28).

Changes to Board of Directors andManagement

Ernst Herslow, who has been a Member of the TrelleborgBoard of Directors for 25 years – the past five years as Chair-man – retired at the Annual General Meeting on 30 May1990. Kjell Nilsson, the new President and CEO of Trelle-borg, was elected a Board Member from 31 May 1990. Theretiring President and CEO, Rune Andersson was appointedto succeed Ernst Herslow as Chairman. The Deputy BoardMembers, Bengt Hultgren and Karl-Erik Wåhlberg, who hadbeen appointed by the Union Group Council, left the Boardat the AGM and were replaced by Lennart Nordström (Ahl-sell) and Börje Enocson (Gavle/Ahlsell). In connection withthe sale of Gavle/Ahlsell, Börje Enocson was replaced byJan Boldrup (AR-Ventilation Ost AB) in December 1990.

Special work environment fundIn 1989, SEK 50M was allocated in the Group’s Swedishunits for special long-term investments in the area of workenvironment as a complement to those improvements al-ready underway. Of the amount, SEK 4.5M is at the disposalof the associated company, Svedala Industri AB. The fundsare to be used primarily for research and development in theareas of environmental protection, on-the-job safety and thedevelopment of prototype machines, tools and other equip-ment. Another key objective is to cultivate special projectsfor improving conditions regarding the most hazardouswork-tasks or sites.

The funds will be disposed of by two specially-appointedwork environment committees – one for Svedala and one forother units – both comprising a union majority. Funds will,however, not be allocated to projects that may be financedthrough other means, such as via contributions from theNational Work Environment Fund.

In 1990, contributions were granted to some 30 projectstotalling SEK 13.6M, of which the majority were in TrelleborgIndustri and Boliden Mineral.

41

PersonnelDuring 1990, the average number of employees in the Group,calculated as annual workers, reduced by 4,445, mainlybecause Svedala lndustri AB is reported as an associatedcompany from 1 July 1990.

Average number of employees 1990 1989Parent Company 50 2,238Other Swedish companies 13,384 12,847

Total Swedish companies 13,434 15,085

Companies abroad 8,505 11,299

Total Trelleborg Group 21,939 26,384

of these, blue-collar workers 13,194 15,338salaried staff 8,745 11,046women 3,943men 17,996

The average number of employees has been calculated asannual workers in accordance with the recommendations ofthe Swedish Accounting Board.

On 31 December 1990, - calculated in the same way-theGroup had 19,924 employees, of whom 14,155 in Swedenand 5,769 abroad. The associated companies, FalconbridgeInc, Norzink A/S, Svedala Industri AB and Munksjö AB had atotal of around 23,000 employees on the same date.

Salaries and remunera- Group Parent Companytions (SEK M) 1990 1989 1990 1989Boards and Presidents 102 97 4 11Other employees 3,559 3,682 10 320Total 3,661 3,779 14 331

Recommended distribution ofprofit

The Group’s unappropriated earnings, including its 1990profit, amount to SEK 3,123,152T. Of this, SEK 0T is requiredfor appropriation to restricted reserves.

The Parent Company’s disposable profit comprises retainedearnings from the previous year, SEK 1,726,583T which,added to the net profit for 1990 of SEK 2,048,314T, makes atotal of SEK 3,774,897T.

The Board of Directors and the President recommend that adividend of SEK 6.50 (6) per A and B share and SEK 10 per Cand D share, SEK 459,490T in all, be paid to shareholdersand that the balance, SEK 3,315,407T, be carried forward.

As already stated, the Board of Directors is of the opinionthat the dividend excluding the “excess dividend” on C andD shares, in the long term should correspond to approxi-mately one-third of the annual profit after financial incomeand expenses and 30 percent standard tax. The dividendnow recommended is equivalent to approximately 28 percent of the Group’s profit after financial income andexpenses.

As required by law, a complete specification is kept at theParent Company’s head office (see also page 53, Note 30).

Social costs 1,303 1,363 5 158

42

Profit and Loss Accounts(SEK M)

Group Parent Company1990 1989 1990 1989

Operating income and expensesInvoiced sales (Note 1) 25,216 26,485 1,329Other operating income

—+ 385 + 438 + 164 + 260

Operating income 25,601 26,923 164 1,589Cost of production, sales and administration -22,961 -24,128 - 263 -1,650

Operating profit before depreciation 2,640 2,795 - 99 - 61Planned depreciation (Note 2) — 726 - 677 - 1 - 32

Operating profit after depreciation 1,914 2,118 - 100 - 93

Financial income and expensesNet interest (Note 3) — 514 - 162 - 736 - 248Currency gain/loss (Note 4) + 280 + 139 + 439 + 380Other financial items (Note 5) — 100 + 319 + 2,909 +1 ,642

Associated companies/minority interestsInterest in profit of associated companies (Note 6) + 771 + 389 — —Minority interests in profit — 13 0 — —Profit-sharing with employees (Note 7) — 36 - 60 - 7 - 5Profit after financial income and expenses 2,302 2,743 2,505 1,676Extraordinary income and expenses (Note 8) + 21 + 51 - 700 -1,688Group contributions/Shareholder contribution — — + 212 - 11Profit before appropriations and taxes 2,323 2,794 2,017 - 23

Appropriations (Note 9) — 155 - 459 + 45 + 40Profit before taxes 2,168 2,335 2,062 17

Taxes (Note 10) — 615 - 484 - 14 0Net profit for the year 1,553 1,851 2,048 17

43

Balance Sheets(31 December, SEK M)

Group Parent Company1990 1989 1990 1989

AssetsCurrent assetsCash and bank balance 767 921 64 88Short-term investments (Note 11) 2,282 2,975 909 1,278Accounts receivable (Note 12) 3,490 3,897 — 173Receivable from subsidiaries - - 2,485 1,573Other current receivables (Note 13) 1,979 1,534 772 785Stock 4.776 5,708 - 193

Total current assets

Blocked accounts with the Riksbank (Note 14)

13,294 15,035

22 160

Fixed assetsShares and participations in

non-Group companies (Note 15) 4,702 765Shares in subsidiaries (Note 16)Receivable from subsidiariesLong-term investments (Note 17) 2,623 7,942Other long-term receivables 97 202 - -Patents and similar rights 38 41 -Goodwill (Note 18) 492 470 -Development expenses brought forward 4 53 -Ships (Note 18) 386 431 - -Machinery and equipment (Note 18) 3,278 2,940Underground preparations (Note 18) 130 44Buildings (Note 18) 1,191 1,294Land and land improvements (Note 18) 244 256Construction in progress and projects 341 168

4,230

0

648- - 9,571- - 494 2,648

2,597

4— —

162—

4,090

0

937,899

2,937

301

222

2536

Total fixed assets 13,526 14,606 13,332 13,837

Total assets 26,842 29,801 17,562 17,927

44

Group Parent Company1990 1989 1990 1989

Liabilities and shareholders’ equityCurrent liabilities (Note 19)Accounts payable to subsidiaries - - 412 7,856Accounts payable to suppliers (Note 20) 2,434 2,543 16 127Other current non-interest-bearing liabilities (Note 21) 3,203 3,688 495 416Other current interest-bearing liabilities (Note 22) 7,122 10,409 264 563

Total current liabilities 12,759 16,640 1,187 8,962

Long-term inabilities (Note 19)To subsidiaries - - 9,608 3,785Overdraft facilities 151 533Bond and debenture loans (Note 23)

- -13 13 13 13

Other long-term borrowing 3,406 3,463 441 254Provision for pensions (Note 24) 1,384 1,429 282 345Other long-term non-interest-bearing liabilities 624 604 40 27

Total long-term liabilities 5,578 6,042 10,384 4,424

Untaxed reserves (Note 25)Stock reserve 689 423 - 45Accumulated excess depreciation 1,400 1,093 — 122Investment fund 7 445 — —Other untaxed reserves 320 289 — —

Total untaxed reserves 2,416 2,250 — 167

Minority participations (Note 26) 130 5 — -

Shareholders’ equityNon-disposable capital (Note 27)Share capital 1,629 1,629 1,629 1,629Statutory reserves 1,207 768 587 587

Total non-disposable capital 2,836 2,397 2,216 2,216

Disposable capital (Note 28)Profit brought forward 1,570 616 1,727 2,141Net profit for the year 1,553 1,851 2,048 17

Total disposable capital 3,123 2,467 3,775 2,158

Total shareholders’ equity 5,959 4,864 5,991 4,374

Total liabilities and shareholders’ equity 26,842 29,801 17,562 17,927

Contingent liabilities (Note 29) 3,972 3,445 14,887 12,672Assets pledged (Note 29) 3,813 4,007 2,990 3,150

45

Source and Application ofFunds Statements

(SEK M)

Group Parent Company1990 1989 1988-90 1990 1989 1986-90

Funds provided internallyProfit before appropriations and taxes +2,323 +2,794 + 8,268 + 2,017 - 23 + 4,682Depreciation + 726 + 677 + 2,458 + 1 + 32 + 108Taxes - 615 - 484 - 1,400 — 14 0 - 13Dividends - 432 - 322 - 1,035 — 432 - 322 - 1,034Changes in blocked accounts + 138 + 76 – 22 — + 30 —Translation differences - 94 - 123 - 205 — — —

Total funds provided internally 2,046 2,618 8,064 1,572 - 283 3,743

Funds utilised internallyOperating capital:

Change in stock levels - 932 + 681 + 4,232 — 193 — 15 - 243Change in operating receivables + 38 + 686 + 5,078 + 726 -2,355 + 2,914Change in operating liabilities + 574 - 261 - 5,732 + 7,463 -6,907 - 642

Investments:In fixed assets, gross +1,488 +1,657 + 5,074 + 1 + 94 + 255Acquisitions/sales/write-downs/interests inassociated companies, net +3,503 - 361 + 7,521 + 2,110 +2,712 + 9,778

Total funds utilised internally 4,671 2,402 16,173 10,107 -6,471 12,062

Total internally generated funds -2,625 + 216 - 8,109 - 8,535 + 6,188 - 8,319

Funds provided/utilised externallyIssue of new shares(including on-going issue) 0 + 38 + 1,964 — + 39 + 1,965Change in interest-bearing long-termliabilities - 484 +2,784 + 4,418 + 5,947 - 720 + 9,983Change in interest-bearing currentliabilities -3,287 +1,095 + 6,675 - 299 -6,756 - 119Change in long-term receivables +5,424 -5,987 - 2,569 + 2,494 -1,226 - 3,038Change in minority participations + 125 - 48 + 109 — — —

Total funds provided/utilised externally +1 ,778 -2,118 +10,597 + 8,142 -8,663 + 8,791

Change in liquid funds andshort-term investments - 847 -1,902 + 2,488 - 393 -2,475 + 472

46

Comments on the Financial StatementsThe Consolidated Accounts

The Accounts for the Trelleborg Group comprise the ParentCompany and all companies in which Trelleborg AB directlyor indirectly owns more than 50 per cent of the voting rights.

The Accounts have been prepared according to the pur-chase accounting method. This involves off-setting share-holders’ equity in acquired companies at the time of acquisi-tion against the book value of the shares. Companies ac-quired during the year are included in the Group’s Profit andLoss Account at values representing the period after theacquisition. Companies sold during the year have beenincluded in the Group’s results up to and including the dateof sale.

Provision for deferred taxes in acquired untaxed reserveshave been estimated at the time of acquisition as costsexpected within the foreseeable future.With the exception of subsidiaries in countries with highinflation, the Trelleborg Group applies the so-called daily ratemethod for translating Balance Sheets and Profit and LossAccounts of foreign subsidiaries. The effect is that all assetsand liabilities of the subsidiaries are translated at the rateprevailing on balance sheet date, whereas all items of theProfit and Loss Accounts are translated at an average rate.The translation differences which arise are the effect of thedifference between average rates and rates prevailing onbalance sheet date of the profit and loss accounts as well asthe fact that net investments are translated at a different rateat the year-end than at the beginning of the year. The trans-lation differences are not shown via the Profit and Loss Ac-counts but are directly posted to shareholders’ equity.

The Balance Sheets and Profit and Loss Accounts of subsid-iaries in countries with high inflation are translated in accord-ance with the monetary/non-monetary method. This has theeffect that goods, machinery, real estate, customer ad-vances, untaxed reserves and shareholders’ equity aretranslated at the rate applicable on the date of acquisition.Other items - monetary items - are translated at balancesheet date rate. The Profit and Loss Account is translated atthe average rate with the exception of depreciation andcosts in respect of sold goods which are translated at acqui-sition rate. The exchange rate differences, which arise ontranslation of the monetary items, are included in the Con-solidated Profit and Loss Account partly as operating-relatedexchange rate differences included in the operating profitand partly as financial exchange rate differences included infinancial income and expenses.

As the South American currencies follow the US dollar, thetranslation is first made into USD in accordance with themonetary/non-monetary method. Thereafter, translation intoSEK is made in accordance with the daily rate method.Shareholdings in associated companies, in which the Groupowns at least 20 per cent and a maximum of 50 per cent ofthe voting rights, are reported in accordance with the equitymethod. On calculation of net profit for the year, deferred taxon the year’s appropriations has not been considered.

In the Consolidated Accounts, minority interests in the profitare shown as a share of the result after financial income andexpenses. Subsequent items in the Profit and Loss Account,i.e. extraordinary items, appropriations and taxes, are shownexclusive of the minority’s share. The minority’s share in theBalance Sheet includes both participation in taxed share-holders’ equity and a share of untaxed reserves less deferredtaxes.

Receivables and liabilities inforeign currencies

Group companies’ receivables and liabilities in foreign cur-rencies are translated at rates prevailing on balance sheetdate. Unrealised exchange gains are settled against unreal-ised exchange losses. A resultant net loss is entered via theProfit and Loss Account, whereas net profit is balanced andthus not included in the profit shown. Where the exchangerate is secured through a forward contract, the rate of theforward contract is used. Advances from customers or tosuppliers have not been revalued but are shown at the rateapplicable when the advance was received or given. TheParent Company has borrowed foreign currencies to bal-ance against the main portion of net investments in foreignsubsidiaries. Exchange rate differences arising from suchloans have been directly posted within the Group to share-holders’ equity to the extent they correspond to a translationdifference posted there during the year in respect of subsidi-ary companies. Exchange differences relating to the currentbusiness operations have been credited/debited to oper-ating profit, whereas exchange differences of a financialnature are shown under financial income and expenses.

Forward contracts in metalsThe main part of forward contracts on the metal exchangeconcerns sales contracts which are entered into in order toassure a high price level for own production during a certainperiod of time. The results of such sales contracts are notshown until the period in which the physical production anddelivery take place. When contracts are repurchased for thesame term, profit/loss-accounting is made in the Group atthe time of repurchase.

StockStock is shown at the lower of acquisition cost in accord-ance with the first in/first out principle (FIFO) and actualvalue. Adequate depreciation for obsolescence has beenmade.

Work in progressWork in progress has been valued in accordance with thecosts incurred for unfinished plants, less a deduction forpartly invoiced amounts. In the relevant cases, reserves havebeen created for expected losses. These items are adjustedagainst income when the invoicing for the work is complete.

Prospecting, research and developmentCosts for prospecting as well as research and developmentare charged to operating costs as incurred.

Fixed assets and depreciationFixed assets are shown at their historic acquisition valuesless accumulated planned depreciation. Costs for under-ground preparations referring to installations for regularmining, estimated to be used for more than one year, arecapitalised. Planned depreciation is based on historic valuesof the fixed assets. The depreciation rates are calculated ontheir estimated economic life. These are 5–33 per cent inrespect of machinery and equipment and 1.5–6 per cent inrespect of buildings. The annuity model is applied to leasingassets. This has the effect that they are depreciated to theirestimated value at the end of the contract period. Shipschartered out are depreciated according to plan to theirestimated value at the end of the contract period. Goodwillvalues are written off by 10 per cent. Book depreciation hasbeen calculated in accordance with prevailing laws andpractices in each country. Excess depreciation constitutesthe difference between planned depreciation and bookdepreciation.

47

NotesNote 1 Note 5

Other financial itemsInvoiced salesInvoiced sales for the Group were distributed as follows: Group Parent Company

SEK M 1990 1989 1990 1989Invoiced sales by market(SEK M) 1990 1989 - - +2,977

+ 12 + 43 + 4+ 23 + 224 + 23

+1,358+ 35+ 224

Dividends on shares in subsidiariesDividends on other sharesProfit on sale of sharesProfit on sale of interest-bearingsecuritiesLoss on sale of sharesLoss on sale of interest-bearingsecuritiesWrite-down on shares and securi-tiesOther financial items

Sweden 12,616 12,456Other Nordic countries 2,374 2,810Other European countries 7,037 7,371USA and Canada 1,615 1,980Other markets 1,574 1,868

+ 8 + 50 + 8- 30 - - 13 —

+ 50

- 6 - 10 - 6 - 10Total 25,216 26,485

- 80 - 9 - 79 -- 27 + 21 - 5 -

96

Exports from Sweden amounted to SEK 4,575M (5,015).

Total -100 +319 +2,909 +1,642

Note 2Depreciation Note 6

Interest in profitof associated companies

SEK M 1990 1989

Group Parent CompanySEK M 1990 1989 1990 1989Patents and similar rights 3 3 - 1Goodwill 57 37 - -Development cost

brought forward 4 5 - -Ships 45 24 - -Machinery and equipment 539 523 1 29Buildings 69 83 0 2Underground preparations 8 1 - -Land improvements 1 1 0 -

Profit after financialincome and expenses 771 389

Extraordinary items 92 - 34Appropriations - 34 - 9 7Taxes -414 -133Net profit for the year 415 125Total planned depreciation 726 677 1 32

Excess depreciation 306 709 - 5Book depreciation 1,032 1,386 1 37 Profit after

Interests in associated financial items Net profitcompanies, SEK M 1990 1989 1990 1989Falconbridge Inc 610 196 350 83Svedala Industri AB 89 - 25 -Norzink A/S 50 177 8 43Other 22 16 32 -1

Note 3Net interest

Total 771 389 415 125Group Parent Company

SEK M 1990 1989 1990 1989Interest income 1,097 1,113 640 651Interest expenses -1,457 -1,164 -1,343 -867

During 1990, the Group received dividends from associatedcompanies of SEK 15M (8) which in the Group reduced thebook value of the shares in the associated companies by theequivalent amount.Interest on pension

Inabilities - 154 - 111 - 35 - 32

Net interest - 514 - 162 - 736 -248

Note 7Profit-sharing with employeesNote 4

In 1986, an agreement was made to set up a profit-sharingscheme to comprise the Parent Company and its wholly-owned subsidiaries in Sweden. The profit-share for 1987amounted to SEK 1,200 per employee, for 1988 to SEK 2,400,for 1989 to SEK 2,800 and for 1990 to SEK 2,300. The moneyis primarily invested in Trelleborg shares. Withdrawals maybe made after five years at the earliest.

Currency gain/lossThe Parent Company has taken up loans in foreign cur-rencies as a balance against net investments in subsidiaries.Exchange differences in respect of these loans amounted in1990 to SEK +242M in total (+74) which is entered undershareholders’ equity in the Consolidated Accounts.

48

Note 8Extraordinary items

Note 11Short-term investments

Short-term investments in shares and interest-bearing secu-rities (in respect of interest-bearing securities, includingcoupon rate) are shown at the lower of acquisition cost andmarket value on balance sheet date. Interest-bearing securi-ties, which are intended to be held until their date of redemp-tion, are shown as long-term investments.

Group Parent CompanySEK M 1990 1989 1990 1989

Extraordinary incomeCapital gains:

shares 293 156 77 154real estate 38 204 11 669other operating assets 16 - - -

State grants 124 140 - -Interests in extraordinary items

of associated companies 92 - - -Other 11 7 - 7

Note 12Accounts receivableTotal extraordinary income 574 507 88 330

Group Parent CompanySEK M 1990 1989 1990 1989Extraordinary expenses

Restructuring/d iscontinuationof operations 326 96 - -

Sales of/write-down onshares and participations 86 60

Sales of properly 5 82Cost of issue - 18 -Appropriations to special

environmental improvements - 50 -Foundation for research and

training - 10 -Write-down against State grants 124 140 - -Other 12 -

Bills receivable 144 50 - -Accounts receivable 3,346 3,847 - 173

67517 -

2,445

18

Total 3,490 3,897 - 173

Receivables are reported at the amounts which are expectedto be realised.45

10 Note 13Other current receivables96 -

Total extraordinary expenses -553 -456 -788 -2,518Group Parent Company

SEK M 1990 1989 1990 1989Total extraordinary items + 21 + 51 -700 -1,688

Prepaid costsand accrued income 1,546 924 689 515

Advances to suppliers 12 27 - 1Tax recoverable 52 55 - -VAT recoverable 16 31 1 8Other current receivables 353 497 82 261

Note 9Appropriations

Total other receivables 1,979 1,534 772 785Group Parent Company

SEK M 1990 1989 1990 1989

Change in stock reserve -265 + 1 + 45 -41Change in investment fund +438 +267 - +30Excess depreciation -306 - 709 - - 5Change in other

untaxed reserves - 22 - 18 - +56

Note 14Blocked accounts with the Riksbank

Group Parent CompanySEK M 1990 1989 1990 1989

Special investment reserve 0 - - -Investment fund 21 158 - -Renewal reserve 1 2 0 0

Total 22 160 0 0

Total appropriations -155 - 459 + 45 +40

Of the change during 1990 in other untaxed reserves in theGroup, SEK -34M (-97) represents appropriations in asso-ciated companies. During the year, fixed assets were writtendown by SEK 584M (465) via utilisation of investment re-serves. These write-downs increased accumulated surplusdepreciation. The Parent Company’s depreciation in excessof plan has been transferred in connection with transfers offixed assets within the Group.

Note 10Taxes

1990 tax expenses include profit-sharing tax of SEK 2M (5)and tax in associated companies of SEK 414M (133). In 1990,tax accounted for amounted to 26 (17) per cent of profitbefore appropriations. The equivalent ratio for full tax, i.e. taxaccounted for plus 30 per cent assumed standard tax onappropriations, was 28 (22) per cent.

49

Note 15Shares and participationsin non-Group companies

Phoenix AG, Germany²) 20 300,002 DEM 15,000Pirites Alentejanas SA,Spain 10 497,830 ESP 690,173QuimiBol AG, Switzerland 50 1,000 CHF 50Saudi Company for PreciousMetals Ltd 50Scanchem Chartering AG,Switzerland 50 CHF 25Sherritt Gordon Ltd,Canada 9 2,328,476 CADTrianco Redfyre Ltd, UK 27 500,000 GBP 500Westray Coal Project, Canada 20Other companies abroad

349,861

35,916131

57,523

Share Par Bookper No. of value value

31 December 1990 cent¹ ) shares SEK T SEK T

110

99,5805,831

49,075754

Parent CompanySwedish companies

Ahlsell Finans ABAronowitsch & Lyth ABB & B Ahlsell Venture HBAB CustodiaDala Airport ABExpandum ABLerisol Nordsvenska ABLiljans BadhusföreningAB Malmfälten Industri ABMunksjö Intressenter AB²)

Näringslivets Stiftelse forAvfallsbehandlingSkandinavisk Försakrings-service ABSorbinvest AB²)

AB StadsfastigheterSvecia Invest ABSvedala Industri ABAB Svensk Alunskiffer-utveckling

50 70,0001,750

50 -25 650,000

133 16635 5,250

4157 89,200

48 399,999

10

253 16,666

9700

496,390,000

50 25

7,00088

65,0000

17525

24,460

24,996

7,000201

065,000

017

00

5,92090,654

Added participations in shareholders’ equityand untaxed reserves in companies reportedin accordance with the equity method 822,058Residential property participations 9,524Total other shares and participations 4,701,634

¹) Highest percentage of share capital or voting rights.²) Associated companies are shown in the Group in accordance with the

equity method.In order better to reflect the true value of the companies,their book values have been redistributed by write-ups andwrite-downs totalling SEK 46M.

10 0

21,667

9

31,950

32,040

0470,502 Note 16

Shares in subsidiaries25 0AB Svensk EnergiförsörjningHB Svenska Dagbladet AB & CoSvenska Re - -AB Svenska SjögodsintressenterTP-Data AB 50AB Trelleborgs FFTrelleborgs Stuveri ABAB Trinova 25Uniplast AB 50

84100

170500

2,500540

1,25050,000

4 4 The change in book value of the shares owned by the ParentCompany in subsidiaries is shown below (SEK M):

- o9

2150

50327

1266,000

1750

25054

1255,000

Value as at 1 January 1990 7,899Plus:

Shares in acquired subsidiaries +1,012New issues/shareholders’ contribution +2,648

Less:Sale of shares in subsidiaries/spread ofownership/winding-up -1,988

Value as at 31 December 1990 9.571Companies abroad

Cie de la Maison de Suede,France - FRF 250 67

Total 648,144In order better to reflect the true value of subsidiary compa-nies in connection with restructuring, their book values havebeen redistributed by write-ups and write-downs totallingSEK 511M.

Other Group companiesSwedish companies

Ahlsell Export KBBoliden-KAR Adelmetall ABComfort Invest ABEkdahls Byggnadsfirma iLöberöd ABGruvkraft ABMalmfälten Industri ABOBO Trading KBSIBA-Verken ABSorbinvest AB²)

Stiftelsen Mineralindu-strins TeknikutvecklingSvetsmarc ABTacna Kapitalförvalt-nings KBTrygg Hansa Holding ABTätskiktsgarantierOther Swedish companies

Companies abroadALG-konsortiet, NorwayBIT de España SABoliden de España SABoliden Portugal T I LdaCorporation Europade Comercio SAFalconbridge Inc, Canada²)

Frame Mining Corp, CanadaNordim A/S, DenmarkNorzink A/S, Norway²)

Perkoa Zinc,Burkina Faso

504989

21,960

46,683

400196

4,668

400196

5,604Par Book

No. of value value31 December 1990 shares SEK T SEK T

3022

915 - -2532

15095,00082,500

100166,749

159,5004,125

2516,695

40012,9625,2507,7611,500

20,400

Shares in Swedish subsidiariesOperating companies

Ahlsell ABAhlsell Administrativ Service ABBoliden InternationalMining & Trading ABBoliden Mineral ABBröderna Edstrand ABEnertech industries ABMataki Industri ABNorrviken Industri ABStifab Plåt ABSwegon AB (62.2%)Trelleborg Industri ABVelox AB

Non-operating companiesAdvanced Mineral Research ABAhlsell Control ABAhlsell Control Svenska För-säljnings ABAhlsell Industri ABAhlsell Pacific IncAB AkvarexAttender ABAB BanaklavoBoliden AB

10,129734,915

111,1001,316,016

0664

1,26096,00040,000

313,590119,130

83,984

33,733

5231,394

50550

7825050

28,0008,000

2,800800

2,00020,00020,00010,00012,000

1,600,00090,000

2,388,350725,000

1,000

1,0002,0002,0001,0001,200

160,0009,000

23,88472,500

1,000

- 1,500 1,50010 500 50 150

19 - -

43

2,89884

383

60864

8464

1720

1 NOK 1,430 1,914250 ESP 250 130

9,998 ESP 10,000 5,9141 212

500200,000 20,000

50 5120,00 50

9,250 ESP 10,000 4,3031 CAD 2,453,750

15 CAD 5,000 29,1255,000 DKK 500 462

750,000 NOK 75,000 66,975

60011,500

5,000500100500500

601,150

50050

1005050

50102550

14 790

50

Boliden Electronics ABBolidens Gruv ABBoliden lntercargo ABBoliden Process Control ABBoliden Renting ABDjursholms Byggmarknad ABEnertech Component ABFörvaltnings AB AlcorKloss i Linköping ABNorrahammars Bruk ABNorrtälje Snickeri- ochByggvaror ABAB NovibraProton Trading ABRB’s Profilteknik ABRETEC-Royal Energiteknik ABAB TegeaTrelleborg Fond ABTrellswitch ABVäsby Trävaru AB

3,000900500

1,5006,0001,000

500250

9,6002.000

100500

1,5002,500

20,000500

1,25012,500

500

3,0009050

150600

5050

250960200

10050

150250

2,00050

1251,250

50

3,636109

52285727

7955

2961,164

242

12051

150321

2,52950

1251,894

50

Total in Swedish subsidiaries 2,875,861

Par BookNo. of value value

31 December 1990 shares SEK T SEK T

Shares in subsidiaries abroadOperating companies

Bergougnan Benelux, Belgium 208,000 BECBoliden Holdings UK Ltd,Great Britain GBPEnertech Industries GmbH,Germany DEMNorrviken Holding A/S,Denmark DKKOy Trelleborg Ab, Finland FIMTrelleborg SA, France 90,000 FRFTrelleborg Australia Pty Ltd,Australia 1,000 AUDTrelleborg Boliden Inc, USA USDTrelleborg Corp, USA 40,160 USDTrelleborg Fabrieken BV,Holland 20,000 NLGTrelleborg Finance BV,Holland 150,000 NLGTrelleborg Gummiwerke GmbH,Germany DEMTrelleborg Holding A/S,Denmark 54,000 DKKTrelleborg Holding Ltd, UK 6,999,999 GBPTrelleborg Holdings (UK) Ltd, GBPTrelleborg International BV 40 NLGTrelleborg Mining Ltd, Canada 5,000 CADTrelleborgplastics BV, Belgium 4,000 BECViking Mjöndalen A/S, Norway 70,000 NOK

208,000 50,727

0

4,000 8,832

5,000 4,7223,000 09,000 3,000

1 751,920

401,600 2,386,925

20,000 302,740

150,000 1,192,956

7,000 81,345

27,000 29,1097,000 25,192

11,42640 16,548

500,000 2,452,1007,582

70,000 70,130

Total subsidiaries abroad 6,695,261

Total shares in subsidiaries 9,571,122

Note 17Long-term investments

Of this, SEK 2,597M (4,888) consists of interest-bearingsecurities and receivables intended for holding long term.These form collateral for, among other things, fulfilment ofcommitments in accordance with rental agreements in con-nection with sale/lease-back transactions relating to plantsand for obligations to deliver in accordance with agreementsentered into and loan agreements, respectively (see page 52,Note 19).

Note 18Fixed assets

Group Parent CompanySEK M 1990 1989 1990 1989

GoodwillAcquisition costs 522 537 - 0Accumulated depreciation/

write-down - 30 - 67 - 0

Residual value 492 470 - 0Accumulated excess depreciation - 4 - 39 -

Book value 488 431 - 0

Machinery and equipmentAcquisition costs 7,499 6,975 5 430Accumulated depreciation/

write-down -4,221 -4,035 - 1 -208Residual value 3,278 2,940 4 222Accumulated excess depreciation -1 ,027 - 707 - - 118

Book value 2,251 2,233 4 104Fire insurance value 7 1,791

Underground preparationsAcquisition costs 145 45 - -Accumulated depreciation’write-down - 15 - 1 - -Residual value 130 44 - -Accumulated excess depreciation - 118 - 44Book value 12 0 - -

ShipsAcquisition costs 465 455 - -Accumulated depreciation/write-down - 79 - 24 - -

Residual value 386 431 - -Accumulated excess depreciation - 143 - 165 - -

Book value 243 266 - -

BuildingsAcquisition costs 1,510 2,087 18 28Accumulated depreciation/write-down - 319 - 793 - 2 - 3

Residual value 1,191 1,294 16 25Accumulated excess depreciation - 84 - 111 - - 4

Book value 1,107 1,183 16 21

Taxable value 6 10Fire insurance value 620 613

of which, rented buildings 604 534

Land and improvementsAcquisition costs 260 277 2 3Accumulated depreciation/

write-down - 16 - 21 0 0

Residual value 244 256 2 3Accumulated excess depreciation - 4 - 4 - -Book value 240 252 2 3

Taxable value 1 2

The total taxable value of the Group’s properties in Swedenamounted to SEK 1,438M (1,382).

A number of Group companies rent buildings from rentingcompanies. A total rental of SEK 203M (101) was paid in 1990of which SEK 57M (37) was charged to the Parent Company.The average remaining rental period is 13 years.

51

Note 19Group liabilities

SEK M 1990 1989

Current interest-bearing liabilities 7,122 10,409Long-term interest-bearing liabilities 4,954 5,438

12,076 15,847Less:Cash, bank balance andshort-term investments - 3,049 - 3,896Lena-term investments - 2,623 - 7,942

Total liabilities includingPRI-pension liabilities 6,404 4,009

1991 amortisation of long-term liabilities, SEK 316M (82) areshown under short-term liabilities. in order to hedge pay-ments in USD in respect of supply contracts, which refer toprecious metals produced by the Company in the period1991-1996, loans of USD 320M in total have been raised. Inmonetary terms, these loans are equivalent to the inflow ofUSD as per the supply contracts and have identical dates ofmaturity. The loan settlements have been invested in in-terest-bearing Swedish bonds with maturity dates corre-sponding to those of the loans. In the Balance Sheet, theloans including accrued interest - SEK 2,040M in total -have been offset against equivalent investments.

Bond loans and debenture loans in Trelleborg AB totallingSEK 22M are shown as redeemed in advance through atransfer of funds to an administration which is independentof the Company. These funds have been invested in Swe-dish securities with interest rates and terms which providesufficient cash-flow to pay interest expenses and amor-tisations on the loans.

Investments amounting to SEK 2,003M, which refer to in-terest arbitrage, have been settled against correspondingloans.

A long-term loan for USD 425M with a 5-year term has beenraised in respect of Trelleborg’s investment in Falconbridge.The loan has been swapped into CAD for its entire term.

Note 20Accounts payable

Group Parent CompanySEK M 1990 1989 1990 1989

Bills payable 98 56 - -Accounts payable to suppliers 2,336 2,487 16 127

Total 2,434 2,543 16 127

Note 21Other current

non-interest-bearing liabilitiesGroup Parent Company

SEK M 1990 1989 1990 1989

Accrued taxes 178 186 5 5Accrued costs and

prepaid income 1,978 1,906 364 358Advances from customers 131 663 10Accrued VAT 61 71Other current liabilities 855 862 126 43

Total 3,203 3,688 495 416

Note 22Other current

interest-bearing liabilitiesGroup Parent Company

SEK M 1990 1989 1990 1989Next year’s amortisation

of long-term liabilities 316 82 224 24Other current interest-

bearing liabilities 6,806 10,327 40 539

Total 7,122 10,409 264 563

Note 23Bonds and debenture loans

Original Remaining Interest Termamount year-end rateSEK M SEK M %

Parent CompanyBond loan, 1973 20 5 7.25 1973-93Convertible

debentures 1984*) 20 0 10.0 1984-94Bond loan, 1993**) 100 1 11.875 1978-93Bond loan, 1997**) 150 7 11.875 1982-97

Total 13

*) Conversion into shares maybe exercised from 1 October 1987 up toand including 31 December 1991. After full conversion of the outstandingdebenture notes, the number of B shares will increase by 1,267.**) Transferred from Boliden AB on 31 December 1988.

Note 24Provision for pensions

Group Parent CompanySEK M 1990 1989 1990 1989PRI/FPG pensions 1,194 1,130 229 279Other commitments 190 299 53 66

Total 1,384 1,429 282 345

Note 25Untaxed reserves

Changes in the value of the Group’s untaxed reserves during1990 are shown below:

Balance Dissolutions/ Trans- Balancebrought Appropr. as Iation carriedforward per Profit & differ- forward

SEK M 1 /1/90 Loss Accounts ence 31/12/90Stock reserve 423 265 1 689Reserve for losses 0 - 0 0Renewal reserve 0 0 0 0Accumulated excess

depreciation 1,093 306 1 1,400Investment reserve 445 -438 0 7Other untaxed

reserves 289 22 9 320

Total 2,250 155 11 2,416

52

Note 26Minority interests

Refers to minority interests in untaxed reserves (reduced bydeferred tax) plus taxed shareholders’ equity in subsidiaries.

Note 29Contingent liabilitiesand assets pledged

Group Parent CompanySEK M 1990 1989 1990 1989

Note 27Non-disposable capital

Contingent liabilitiesDiscounted bills 9 13 - -Pension commitments 83 26 3 3Guarantees and othercontinent liabilities 3,880 3,406 14,884 12,669SEK M Group Parent Company

Totalof which, for subsidiaries

Assets pledgedProperty mortgagesLeasehold site mortgagesCorporate mortgagesLong-term investmentsShort-term investmentsTitle retained in

machinery and equipmentSharesOperating assetsOther

3,972 3,445 14,88711,615

12,6729,745

Value as at 1 January 1990 2,397 2,216New issue 0 -Transfer to restricted reserves 1 -Release of restricted reserves

in companies sold - 5 -Transfer of non-restricted re-serves in associated companies 375 -Translation difference 68 -

1753

5692,218

527

294 -3 -

4932,902

12

10 - -

284 - -9 - -

03

2452,902

2452,218

527Value as at 31 December 1990 2,836 2,216

70 - - -250

1

On 31 December 1990, the share capital of Trelleborg ABamounted to SEK 1,629,685,325 distributed over 65,187,413shares, each with a nominal value of SEK 25. The shareswere distributed as follows: Total 3,813 4,007 2,990 3,150

In instances where loans have been settled against invest-ments in the Balance Sheet (see Note 19), those securitieswhich have been placed as collateral for the loans have notbeen included under Pledged Assets.

Class Number Per cent Number Per cent ofof share of shares of shares of votes total votesA restricted 6,608,000 10.14 66,080,000 48.40B restricted 35,836,139 54.97 35,836,139 26.24C restricted 8,690,410 13.33 8,690,410 6.36D restricted 1,321,600 2.03 13,216,000 9.68

Note 30Average number of employees;salaries and other remuneration

Totalrestricted 52,456,149 80.47 123,822,549 90.68

B un-restricted 12,524,632 19.21 12,524,632 9.17C un-restricted 206,632 0.32 206,632 0.15

Group Parent Company1990 1989 1990 1989Total

unrestricted 12,731,264 19.53 12,731,264 9.32Operations in SwedenNumber of municipalities 72 75 1 26Average number of employees 13,434 15,085 50 2,238Salaries and

other remuneration, SEK M 2,353 2,302 14 331

Total 65,187,413 100.00 136,553,813 100.00

Note 28Disposable capital

Operations abroadNumber of countries 25 17 - -Average number of employees 8,505 11,299 - -Salaries and

other remuneration, SEK M 1,308 1,477 - -SEK M Group Parent CompanyValue as at 1 January 1990 2,467 2,158Less:

Transfer to restricted reserves - 1 -Dividends paid during 1990 - 432 - 432Transfer of non-restrictedreserves in associatedcompanies - 375 -

Plus:Release of restricted reservesin companies sold 5 -Net profit, 1990 1,553 2,048

Translation difference - 94 -

Total average numberof employees 21,939 26,384 50 2,238Of these, women 3,943 20

men 17,996 30Total salaries and

other remuneration, SEK M 3,661 3,779 14 331

A complete statutory specification has been appended tothe copy of the Annual Report forwarded to the SwedishPatent and Registration Office. A copy of this specificationmay be obtained on request from the Company’s head officein Trelleborg.

Value as at 31 December 1990 3,123 3,775

53

Note 31Profit per share

Note 33Risk-bearing capital

1990 1989 1988 SEK M 1990 1989 1988

Profit after financialincome and expenses, SEK M 2,302 2,743 1,959

Ditto, after 30’% standard tax 1,611 1,920 1,371

Average number of shares(after full conversion) 65,189,738 64,962,600 62,538,000

Profit, SEK per shareafter 30% standard tax 24.70 29.60 21.90

Note 32Profitability

SEK M 1990 1989 1988

Profit after financialincome and expenses 2,302 2,743 1,959

30 per cent standard tax - 691 - 823 - 588

Adjusted profit after30 percent standard tax 1,611 1,920 1,371

Shareholders’ equity 5,959 4,864 3,35970 per cent of untaxed reserves 1,691 1,575 1,250

Adjusted shareholders’ equity 7,650 6,439 4,609

Average adjusted shareholders’equity 7,045 5,524 3,386

Return on adjusted shareholders’equity capital, per cent 22.9 34.8 40.5

Shareholders’ equity 5,959 4,864 3,359Minority interests 130 5 53Untaxed reserves 2,416 2,250 1,786

Total risk-bearing capital 8,505 7,119 5,198

Balance sheet total 26,842 29,801 23,740Liquid resources 3,049 3.896 5,798

Adjusted balance sheet total 23,793 25,905 17,942

Risk-bearing capital, per cent 35.7 27.5 29.0

Trelleborg, April 1991

Rune AnderssonChairman of the Board

Bertil Bertilsson Gustaf DouglasHans Cavalli-Björkman Göran LindersLennart Nilsson Sven OlvingErik Penser Sven BoreliusKarl-Axel Lindskog Barry GustavssonArne Nilsson

Kjell NilssonPresident

The Auditors’ Report was submitted on 11 April 1991.

Reidar Peters Thomas Thiel

54

Auditors’ ReportWe have examined the Annual Report, the ConsolidatedFinancial Statements, the accounting records and the ad-ministration by the Board of Directors and the ManagingDirector for the 1990 financial year. The examination wascarried out in accordance with generally accepted auditingstandards.

Parent CompanyThe Annual Report has been prepared in accordance withthe Swedish Companies Act.

We recommend

that the Profit and Loss Account and the Balance Sheet beadopted,

that the profit be distributed in accordance with the propo-sal in the Report of the Board of Directors and

that the Board of Directors and the Managing Director bedischarged from liability for the 1990 financial year.

GroupThe Consolidated Financial Statements have been preparedin accordance with the Swedish Companies Act. We recom-mend that the Consolidated Profit and Loss Account andConsolidated Balance Sheet be adopted.

Trelleborg, 11 April 1991

Reidar Peters Thomas ThielAuthorised Public Accountant Authorised Public Accountant

Peters & Co AB Bohlins ABArthur Andersen & Co KPMG

55

Share capital and ownershipThe share capital of Trelleborg AB currently amounts to SEK 1,629,711,725, distributed on 65,188,469 shares, each with anominal value of SEK 25, A and D shares carry 10 votes each, B and C shares one vote each. C and D shares have prefer-ential right to a dividend of SEK 10 per share to 1996 inclusive, whereafter they are converted into B and A shares, respec-tively. Such conversion may occur earlier when a dividend is paid on B and A shares equivalent to or exceeding SEK 10. Theshares are distributed as follows.

Number Per cent of Number Per cent ofClass of share of shares total shares of votes total votesA restricted 6,608,000 10.14 66,080,000 48,40B restricted 35,837,195 54.97 35,837,195 26.24C restricted 8,690,410 13.33 8,690,410 6.36D restricted 1,321,600 2.03 13,216,000 9.68Total restricted 52,457,205 80.47 123,823,605 90.68

B unrestricted 12,524,632 19.21 12,524,632 9.17C unrestricted 206,632 0.32 206,632 0.15Total unrestricted 12,731,264 19.53 12,731,264 9.32Total 65,188,469 100.00 136,554,869 100.00

In 1984, an issue of convertible debentures totalling SEK At the AGM on 30 May 1990, the Board of Directors were20M was made to employees of the Swedish part of the given the authority until the next AGM to decide a new issueGroup. The loan runs for ten years at an interest rate of 10 of not more than 6,500,000 restricted and/or unrestricted Bper cent per annum, Conversion to restricted B shares can and/or C shares with a departure from the shareholders’be made from 1 October 1987 to 31 December 1991. The right of preference.bulk of the loan was converted into shares in autumn 1987.After full conversion of the outstanding debenture notes, thenumber of B shares will increase by 1,267 which raises theshare capital by SEK 31,675 to SEK 1,629,743,400 distrib-uted over 65,189,736 shares.

DevelopmentImmediately before its introduction on the Stockholm StockExchange in 1964, Trelleborg had a share capital of SEK63M. In 1966, a directed non-cash issue for SEK 2.6M wasmade on the acquisition of Ulvex AB. In 1969, the share

of share capitalcapital was increased by SEK 26.2M as a result of a newissue 2:5 at a price of SEK 100. Thereafter, the followingissues have been made:

Increase of TotalYear issues made share capital share capital19761978

198219841986198619871987198819881988198919891989198919901991

New issue 1:3 at SEK 110Directed non-cash issue to acquire Tekn GummifabrikenJakobsberg ABDirected new issue to Aritmos, and others, at SEK 125Bonus issue 1:4, split 4:1 *)

Directed new issue at SEK 95 to acquire Sävsjö Fälgar ABDirected new issue at SEK 200 to acquire Boliden sharesBonus issue 1:1Conversion of debenturesNew issue 1:5 of C and D shares (“bonus” shares)Directed new issue to acquire Boliden shares and convertiblesConversion of debenturesDirected new issue to acquire Boliden convertiblesConversion of debenturesBonus issue 1:1Conversion of debenturesConversion of debenturesConversion of debentures

30,613,200

3,158,00042,000,00041,902,800

6,875,00095,150,000

311,539,00015,587,125

127,733,02539,559,750

934,1507,787,700

60,100814,739,850

17,075188,55026,400

122,453,200

125,611,200167,611,200209,514,000216,389,000311,539,000623,078,000638,665,125766,398,150805,957,900806,892,050814,679,750814,739,850

1,629,479,7001,629,496,7751,629,685,3251,629,711,725

*) Five new shares, each with a nominal value of SEK 25 were given for every old share with a nominal value of SEK 100. Ofthese, one new share was in respect of the bonus issue and four new shares the result of the split.

56

Trelleborg’s 10 largest shareholders (April 1991)Number of Per cent of Per cent

shares share capital of votesDunker Funds & Foundation 8,247,740 12,65 58.30Investment AB Latour and Latour Handel och Industri AB 8,850,000 13.58 6.48Skandia Försäkringar 2,253,900 3.46 1.654th AP Fund 1,774,336 2.72 1.30SPP/AMF 1,606,300 2.46 1.18Investment AB Cardo 1,507,330 2.31 1.10Wasa Försäkringar 1,466,300 2.25 1.07Trelleborg AB’s profit-sharing foundations

and share-savings funds 1,157,713 1.78 0.85Trygg-Hansa 1,001,700 1.54 0.73Swedish Employers’ Confederation 904,000 1.39 0.67Other approximately 41,000 shareholders 36,419,150 55.86 26.67Total 65,188,469 100.00 100.00

Trelleborg shares during 1990Trelleborg share prices developed less favorably than thegeneral index. During the year, the latter decreased by 31 percent, whereas the price of restricted Trelleborg B sharesdecreased by 50 per cent and the price of unrestricted Bshares by 48 per cent. The price of restricted and unrestrict-ed C shares dropped by 42 and 36 per cent, respectively.Viewed over a five-year period (1986-1990), restricted Trelle-borg B shares increased by 486 per cent compared with a181 per cent rise in the general index. This is equivalent to anaverage rise in price of 37 per cent per annum during thatperiod, compared with 13 per cent in the general index.The value of units in the company-related savings scheme,Trelleborgs Aktiesparfond and Trelleborgs Allemansfond, fellduring 1990 by 44 per cent and 39 per cent, respectively.

In 1986, an agreement was made for a profit-sharingscheme, comprising mainly the Swedish part of the Trelle-borg Group. The profit-share for 1986 was SEK 1,500, for1987 SEK 1,200, for 1988 SEK 2,400, for 1989 SEK 2,800 andfor 1990 SEK 2,300 per employee. The funds are primarilyinvested in Trelleborg shares. Withdrawal may be made afterfive years at the earliest.

Share price, StockholmStock Exchange

Trelleborg B restricted Low High1986 25.70 62.801987 48.20 142.851988 77.50 144.001989 130.50 235.001990 88.00 179.001991 January-March 84.00 138.00

Calculated on maximum and minimum buying price eachmonth and adjusted for issues and splits.

Distribution of shareholdings(April 1991)

Number of Per cent ofHolding shareholders total shares1 -500 33,118 7.96501 -5,000 7,142 15.335,001 -50,000 609 13.1450,001 - 97 63.57At the beginning of April 1991, there were approximately41,000 shareholders of which 26,500 were directly registeredand 14,500 nominee registered.

57

Profit, SEK (after full conversion):after 30% standard tax

Dividend, SEKShare price at 31 December(restricted B shares), SEKditto B unrestrictedditto C restrictedditto C unrestrictedAdjusted shareholders’ equity, SEKRisk capital, SEKYield per centPrice/Earnings ratioAverage number of sharesafter full conversion

24.70 29.60 21.90 11.80 5.506.50 6.00 4.00 2.00 1.00

90.00 180.00 137.50 78.00 62.5099.00 189.00 138.50 87.50 65.00

109.00 188.00 168.00 - -121.00 190.00 165.00 - -117.40 99.00 71.50 42.50 29.00130.40 109.00 80.50 50.00 32.50

7.2 3.3 2.9 2.6 1.64 6 6 7 11

65.189.738 64.962.600 62538,000 52806,000 38,400,000

Data per share(adjusted for issues) 1990 1989 1988 1987 1986

Compulsory redemption of Trelleborg share pricesBoliden shares 1986-1991

Compulsory redemption was demanded on 8 February 1988. Refers to restricted B shares. Continuous line = share pricesAfter being granted “access in advance”, Trelleborg on 25 at the end of each month. Broken line = The “Affärsvärlden”November the same year became the owner of the remain- general index at the end of each month.ing around 260,000 shares, equivalent to less than 3 per centof the total number of shares and voting rights in Boliden. In 250an arbitration settlement on 19 December 1990, the redemp- 200tion amount was set at SEK 575 plus a yield supplement ofSEK 36, i.e. a total of SEK 611 per share, together with in- 150terest from 25 November 1988.

100 .

75

50

251986 1987 1988 1989 1990 1991

Group Management

Kjell Nilsson Fredrik Arp Bo LundquistBorn 1948 Employed 1985 President andCEOHolding 169 500 shares (in associatedcompanies).

Born 1953 Employed 1985 Executive VicePresidentHolding 67,766 shares (in own name andin associated company).

Born 1942 Employed 1986 Executive VicePresidentHolding 56 800 shares (in own name andin associated company).

Carl Aspegren Lennart Bergstedt Bo JacobssonBorn 1931 Employed 1958 Senior VicePresident - Company SecretaryHolding 5,296 shares.

Born 1943 Employed 1968 Senior VicePresident PersonnelHolding 7.800 shares.

Born 1951 Employed 1975 Senior VicePresident Control and FinanceHolding 8 300 shares (in own name, Infamily’s name and in associated company).

Hans Nyberg Lars Wallenberg Leif ÖbergBorn 1942 Employed 1987 Senior VicePresident - Internal AuditHolding 12 960 shares (in own and family ´snames).

Born 1951 Employed 1981 Senior VicePresident - Group CounselHolding Nil.

Born 1946 Employed 1978 Senior VicePresident Information ServicesHolding 12.000 shares.

Board of Directors and AuditorsBoard of Directors

Rune AnderssonChairman Born 1944 Elected 1983Chairman. ASG AB, Esselte AB. Getingelntressenter AB and Svedala lndustri ABBoard Member BPA AB IFL the Feder-ation of Swedish Industries, MalmfältenIndustri AB, Skandinaviska EnskildaBanken. Sydsvenska Handelskammarenand AB Swedcarrier.Holding: 501.620 shares (in associatedcompanies).

Bertil BertilssonFirst Deputy Chairman Born 1926 Elected1976 Chairman Gorthon Invest ABPresident of Förvaltnings AB HD. HenryDunkers Förvaltnings AB, AB Hevea andReinhold Syd AB Board Member Henryand Gerda Dunker’s Foundation andDonation Fund No 2Holding 9,080 shares (in own andspouse’s name)

Gustaf DouglasSecond Deputy Chairman. Born 1938.Elected 1985. Executive partner ofFörvaltnings AB Wasatornet ChairmanAlmedahlsgruppen AB, Investment ABLatour and Securitasgruppen AB DeputyChairman SNS and Swegon AB BoardMember AB PirenHolding 8 850 000 shares (in the associat-ed company Investment AB Latour)

Born 1928. Elected 1970. Former President of Born 1933. Elected 1982. Partner of Born 1941 Elected 1985. President ofSkandinaviska Enskilda Banken. Chairman: Mannheimer Swartling KB, Solicitors, Investment AB Cardo. Chairman: GambroBibliotekstjänst AB, Elektrokoppar AB, Lands- Malmö. Board Member: Brio AB, Henry AB and Skåne-Gruppen AB. Board Member:krona Utvecklings AB. Malmfälten lndustri AB, and Gerda Dunker’s Foundation and The The Crafoord Foundation, FrigoscandiaAB Malmros International. AB Scansped. Donation Fund No 2. Frigoscandia AB. AB, Gorthon Invest AB, Henry and GerdaSkoogs Företagsgrupp AB, Uddeholms AB. Gorthon Invest AB, Svedala Industri. Dunker’s Foundation and Donation FundÄlvsbyhus AB, Sydsvenska Handelskammaren Strålfors AB and others. No 2, Investment AB Öresund Volvoand others Board Member: Kanthal Höganäs Holdinq: 8,600 shares. Flygmotor AB and others.AB, Llndab AB. Platzer Bygg AB, Reinhold SydAB Saab-Scanla AB. Sea-Link AB. S-E-Banken. Wasa Försäkring and othersHolding: 390 shares.

Erik PenserBorn 1942 Elected 1988 Resident in”Belgium Chairman Nobel lndustrlerSverige AB. Board Member: GamlestadenAB, ldeon AB, AB Industriväden, SandrewFilm & Teater AB. Svenska Cellulosa ABSCA and others.Holding: NiI.

Holding Nil.

Sven BoreliusBorn 1928. Elected 1988. Former Presidentand CEO of Industri AB Euroc. BoardMember: FABEGE AB. Industri AB Euroc,Investment AB Cardo. SkandinaviskaEnskllda Banken. Svedala lndustri AB,Sydkraft AB, the Federation of SwedishIndustries, Det Norske Veritas Råd, OySanitec Ltd, Finland. and others.Holding: Nil.

Sven OlvingBorn 1928 Elected 1988 Former ViceChancellor of Chalmers lnstitute ofTechnology President of IVA (the SwedishAcademy of Engineerlng Sciences)Chairman AB Volvofinans Board MemberCelsius lndustrier AB, AB Electrolux.Telefon AB LM Ericsson. Göta Bank.Götaverken Energy AB and othersHolding NiI.

Kjell NilssonBorn 1948 Elected 1990 President andCEO of Trelleborg AB Chairman MunksjöAB, Persson Invest AB. Sorbinwest AB andSwegon AB Deputy Chairman TheSwedish Post Office Board MemberFortia AB, Nordbanken. Svedala lndustriAB, Wihlborg & Son AB and othersHolding 169 500 shares (in associatedcompanies).

Karl-Axel LindskogBorn 1928. Elected 1979. EmployeeRepresentative (Swedish Trade UnionConfederation). Elected by the unions ofthe Trelleborg Group. Chairman of theSwedish Factory Workers’ Union localbranch at Trelleborg industri AB. DeputyChairman of Trelleborg Municipal Council.Holding: 4,740 shares.

Barry GustavssonBorn 1954 Co-opted in 1987 elected 1988.Employee Representative (Swedish TradeUnion Confederation) Elected by theunions of the Trelleborg Group.Holding: Nil.

Arne NilssonBorn 1933 Elected 1981 EmployeeRepresentative (Federation of SalariedEmployees in Industry and Services)Elected by the unions of the TrelleborgGroup Chairman of the SIF branch atTrelleborg lndustrl ABHolding 6,220 shares (in own andspouse’s name)

Deputy Directors

Lilian RingsandBorn 1942. Elected 1989. EmployeeRepresentative (Federation of SalariedEmployees in Industry and Services).Elected by the unions of the TrelleborgGroup.Holding: 26 shares.

Auditors

Lennart NordströmBorn 1936. Elected 1990. EmployeeRepresentative (Federation of SalariedEmployees I” Industry and Services).Elected by the unions of the TrelleborgGroupHolding NiI.

Jan BoldrupBorn 1948. Elected 1990. EmployeeRepresentative (Swedish Trade UnionConfederation). Elected by the unions ofthe Trelleborg Group.Holding: 1,000 shares.

Deputy Auditors

Reidar PetersBorn 1939. Authorised Public Accountant,Peters & Co Revisionsbyrå MalmöArthur Andersen & Co. Appointed 1977.

Thomas ThielBorn 1947. Authorised Public Accountant,Bohlins Revisionsbyrå AR, Stockholm;KPMG Appointed Deputy Auditor 1983.Auditor 1985.

Hans PihlBorn 195 1 Authorised Public Accountant.Peters & Co Revsionsbyå AB, MalmöArthur Anderse ” & Co Appointed 1984

Alf SvenssonBorn 1949. Authorised Public Accountant.Bohlins Revisionsbyrå AB, Malmö; KPMG.Appointed 1988.

Group highlightsGroup, SEK M 1990 1989 1988 1987 1986

Income and profitOperating income 25,601 26,923 21,683 17,251 2,897Profit after depreciation 1,914 2,118 1,591 725 290Profit after financial income and expenses 2,302 2,743 1,959 910 300Profit before appropriations and taxes 2,323 2,794 1,961 889 290Appropriations 155 - 459 - 742 - 651 - 134Taxes - 615 - 484 - 280 0 - 22

Net profit for the year 1,553 1,851 939 238 134

Capital structureCurrent assetsBlocked accounts with the RiksbankFixed assetsCurrent liabilitiesLong-term liabilitiesUntaxed reservesMinority interestsShareholders’ equity

13,29422

13,52612,7595,5782,416

1305,959

15,035160

14,60616,6406,0422,250

54,864

15,673236

7,83115,253

3,2891,786

533,359

12,041

6,22812,776

2,9811,044

551,432

1,87621

1,6651,179

752392

191,220

Balance sheet total 26,842 29,801 23,740 18,288 3,562

Key indicatorsAdjusted equity¹)Risk-bearing capital¹)Equity ratio I³)Equity ratio II³)Debt/equity ratio4)Capital turnover5)Gross margin6)Profit margin7)Interest covers8)Return on total capital before tax9)Return on total capital employed

before tax10)Return on capital employed

before tax, operating units(excluding associated companies)11)

Return on adjusted equity after tax12)

%%

timestimes

%%

times%

%

%%

7,6508,505

29331.61.27.59.02.4

13.3

18.6

21.122.9

6,4397,119

2225

2.61.37.9

10.23.2

13.7

20.6

24.434.8

4,6095,198

2026

2.71.57.39.03.6

12.6

19.4

21.440.5

2,1632,531

1217

4.31.64.25.22.38.2

12.7

17.534,1

1,4941,631

4351

0.91.3

10.010.4

3,316.2

20.2

22.320.3

Other informationAverage number of employees 21,939 26,384 26,083 21,945 5,305

of which abroad 8,505 11,299 8,701 3,723 1,883Investments (excluding fixed

assets in companies acquired) 1,488 1,657 960 690 279

62

Definitions1)

2)

3)

4)

5)

6)

7)

8)

Adjusted shareholders’ equityShareholders’ equity plus 70 per cent of untaxed re-serves.

Risk-bearing capitalShareholders’ equity, minority interests plus 100 percent of untaxed reserves.Risk-bearing capital, per centShareholders’ equity, minority interests plus 100 percent of untaxed reserves, divided by the balance sheettotal less cash, bank balances and short-term invest-ments.

Equity ratio IAdjusted shareholders’ equity plus minority interests,divided by the balance sheet total.Equity ratio IIAdjusted shareholders’ equity plus minority interests,divided by the balance sheet total less cash, bank bal-ances and short-term investments.

Debt/equity ratioCurrent liabilities plus long-term liabilities and 30 percent of untaxed reserves, divided by adjusted share-holders’ equity plus minority interests.

Capital turnoverOperating income divided by average balance sheettotal less non-interest-bearing liabilities.

Gross marginOperating profit after planned depreciation divided byoperating income.

Profit marginProfit after net financial items divided by operating in-come.

Interest coverProfit after financial income and expenses plus interestcosts, divided by interest costs.

9)

10)

11)

12)

13)

Return on total capital before taxOperating profit after planned depreciation plus financialincome (excluding other financial items), interests inprofit of associated companies and minority interests inprofit, divided by average balance sheet total.

Return on total capital employed before taxProfit after financial income and expenses plus interestexpenses, divided by average adjusted shareholders’equity plus minority interests and interest-bearing liabil-ities.

Return on capital employed before tax,operating unitsProfit after planned depreciation including minority in-terests, divided by average balance sheet total (calculat-ed on the closing balance each month) less shares,interest-bearing investments and non-interest-bearingoperating liabilities.Return on adjusted equity after taxProfit after financial income and expenses less 30 percent standard tax, divided by average adjusted share-holders’ equity.

Profit per share (standard tax)Profit after financial income and expenses less 30 percent standard tax (adjusted for tax-free dividends), di-vided by the average outstanding number of shares.

Profit per share (full tax)Profit after financial income and expenses less tax ac-counted for and 30 per cent standard tax on appropri-ations, divided by the average outstanding number ofshares.

63

AddressesTrelleborg AB

S-231 81 Trelleborg SwedenVisitors’ address: Nygatan 102

Tel +46 410-51000

Boliden MineralS-936 00 BolidenSwedenVisitors’ address: Kontorsvägen 1Tel +46 910-606 00

Boliden InternationalP.O. BOX 21024S-100 31 StockholmSwedenVisitors’ address: N Stationsgatan 75-77Tel +46 8-610 15 00

Boliden MetalsP.O. BOX 132S-261 22 LandskronaSwedenVisitors’ address: GasverksgatanTel +46 418-161 50

Trelleborg IndustriS-231 81 TrelleborgSwedenVisitors’ address: Nygatan 49 ATel +46 410-51 000

AhlsellS-191 88 SollentunaSwedenVisitors’ address: Bagarbyvägen 61Tel +46 8-623 70 00

Bröderna EdstrandP.O. BOX 225S-201 22 MalmöSwedenVisitors’ address: Spadegatan 1Tel +46 40-38 40 00

EnertechP.O. Box 309S-341 26 LjungbySwedenVisitors’ address: NätvägenTel +46 372-880 00

VentilationP.O. Box 1246S-16428 KistaSwedenVisitors’ address: Isafjordsgatan 21Tel +46 8-793 90 55

SwegonBirger Jarlsgatan 37S-111 45 StockholmSwedenTel +46 8-11 41 65

Major associated companies:

Falconbridge lncP. O. Box 40Toronto, Ontario M5L 1B4CanadaVisitors’ address: Commerce Court WestTel +1-416 863 70 00

Norzink A/SEitrheimN-5750 OddaNorwayTel +47 54-410 11

Svedala Industri ABP.O. Box 4004S-203 11 MalmöSwedenVisitors’ address: Kaptensgatan 1Tel +46 40-24 58 00

Munksjö ABP.O. BOX 624S-551 18 JönköpingSwedenVisitors’ address: Barnarpsgatan 41Tel +46 36-11 94 00

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