Business and earnings development in the Aurubis Group
Business expectations
In fiscal year 2017/18, we kicked off different initiatives and individual measures within the Group to strengthen Aurubis. These are contained in the ONE Aurubis transformation program and the strategy Growth, Efficiency & Responsibility, with which we want to achieve our Vision 2025. Aurubis is currently the market leader in many areas – these positions will be further developed over the long term.
The largest internal growth step is the project Future Complex Metallurgy. It is a key component of the new multi-metal approach and involves major investments. Moreover, the company plans to continue growing in the future through acquisitions. In the coming years, Aurubis will develop from a copper group into a multi-metal group. In this regard, we have been reporting the sales volumes of gold, silver, lead, nickel, tin, platinum group metals, and minor metals since Q2 2017/18, in addition to information about our copper products.
On March 29, 2018, Aurubis AG and Wieland-Werke AG signed a contract to sell Segment Flat Rolled Products. The final execution of the sales contract is subject to approval by the antitrust authorities. A final decision is expected in January 2019. For more information, see the Subsequent Events section in the Notes to the Consolidated Financial Statements.
For fiscal year 2018/19, the following maintenance shutdowns are planned:
At our Lünen site, we will carry out two scheduled maintenance shutdowns lasting 17 and 25 days in March and September 2019, respectively. The shutdowns will have a total impact of approximately € 8 million on our EBT, according to our current plans.
In May and June 2019, we will carry out an 18-day legally mandated maintenance shutdown at our site in Pirdop (Bulgaria). According to our current plans, this will have a roughly € 12 million impact on our EBT.
Earnings expectations
Our earnings are subject to quarterly fluctuations because of the nature of our business model. This is due to seasonal factors, but may also be caused by disruptions in equipment or operating processes. The business performance of the first quarter of a fiscal year in particular is shaped by special features related to the period, including subdued customer orders and changes in raw material deliveries.
The future development and forecast of Aurubis AG coincides with the general statement on the Aurubis Group.
The outlook for fiscal year 2018/19 is based on the following premises:
- We expect stable-to-good copper product demand based on industry forecasts.
- For 2019 annual contracts, the market conditions for copper concentrates weren’t final at the time of reporting.
- In fiscal year 2018/19, the market trend for copper scrap and sulfuric acid continues to be difficult to forecast due to the short-term nature of the business.
- The copper premium for 2019 has been set at US US$ 96/t for 2019 (previous year: US;US$ 86/t).
- A significant portion of our revenues is based on the US dollar. We reduce the resulting risks with our hedging strategy.
- We anticipate additional project success of € 60 million from the efficiency improvement program, compared with the base year 2014/15. The target of this program is to continue optimizing all of our sites.
- In fiscal year 2018/19, we expect plant availability to be slightly lower than in the previous year owing to scheduled shutdowns in particular, as well as facility downtimes due to wear and tear, which we will remedy in the course of scheduled maintenance measures.
Overall, we expect moderately lower operating EBT and a slightly lower operating ROCE for the Aurubis Group in fiscal year 2018/19 compared to the previous year.
In Segment Metal Refining & Processing, we expect moderately lower operating EBT and a slightly lower operating ROCE in fiscal year 2018/19 compared to the previous year.
In Segment Flat Rolled Products, we anticipate significantly higher operating EBT and a slightly higher operating ROCE in fiscal year 2018/19 compared to the previous year.