Executive Board assessment of the Aurubis Group during fiscal year 2017/18

In fiscal year 2017/18, the Aurubis Group achieved one of the best results in its history, moderately exceeding the previous year’s result. We increased our operating earnings before taxes by about 10 %, to € 329 million (previous year: € 298 million). At 14.8 %, we achieved an operating ROCE at the very good prior-year level (15.1 %).

According to the forecast issued in our Annual Report 2016/17, we expected the Aurubis Group to record operating EBT at the previous year’s level and operating ROCE slightly below the previous year’s level in fiscal year 2017/18. In the Interim Report on the First 6 Months 2017/18, we adjusted this forecast, expecting a moderately higher operating EBT compared to fiscal year 2016/17, with ROCE at the prior-year level. All things considered, both operating consolidated EBT and operating ROCE in the reporting year were within the forecast.

Favorable developments in sub-markets and contributions to earnings from the efficiency improvement program contributed to this. Higher concentrate throughputs due to the Hamburg and Pirdop smelter sites’ good performance, substantially increased refining charges for copper scrap with a good supply, higher sulfuric acid revenues due to significantly higher sales prices, a higher metal yield with increased copper prices, and considerably higher rod sales all had a positive effect on the result in fiscal year 2017/18. We achieved the fiscal year’s efficiency improvement program target of € 30 million in project success.

The business development in Segment MRP was influenced by very good availability of input materials and a good supply situation. The supply of the facilities was always secure, with satisfactory treatment and refining charges. Concentrate processing in our primary smelters reached a new high of over 2.5 million t. During the reporting year, we benefited from the good refining charges for copper scrap, blister copper, and other recycling materials, as well as higher sulfuric acid revenues due to substantially higher sales prices. The cathode output was at the good prior-year level. Another factor relevant for Segment MRP’s result was the higher metal yield with increased metal prices.

Segment FRP also benefited from positive effects brought about by the efficiency improvement program, as well as good availability and conditions for input materials in fiscal year 2017/18. Output of flat rolled products and specialty wire increased by 2 % owing to demand, to over 235,000 t. All of the sites continued to work on implementing the programs to improve efficiency and to enhance productivity and quality.

At € 203 million as at September 30, 2018, the operating net cash flow was below the prior-year level (€ 480 million), primarily due to the build-up of inventories, including higher inventories of precious metal-bearing raw materials as at the balance sheet date.

The equity ratio (operating) was 55.5 % as at September 30, 2018 (previous year: 52.5 %). Net financial assets as at September 30, 2018 were at € 165 million (previous year: € 220 million). The Aurubis Group’s balance sheet structure thus continues to be very robust.