Letter from the Executive Board

Photo: Executive Board

Dear Shareholders and Friends of the Company,

It has rarely been this exciting to chart Aurubis’ development. We are in the middle of a reorientation phase, making the shift from pure copper producer to multi-metal company, as planned in our Vision 2025. We are seeing that many of the growth, efficiency, and sustainability measures we have initiated are bearing initial fruit. At the same time, our markets are in constant motion, opening up new opportunities for us. For example, we see fascinating possibilities for growth in stronger cooperation with raw material ­suppliers and in multi-metal recycling, where we have a competitive edge thanks to our extensive knowledge.

We are confident that there is even more to our company. We want to provide you with an insight into which metals will come into sharper focus in the future, show where our strategic initiatives are having an impact, and illustrate how all of this is expanding our business model. This year, you will find all of this information summarized in the magazine accompanying our Annual Report.

“The development of our operating performance was very dynamic in fiscal year 2017/18, due in part to positive ­effects from the efficiency improvement program.”

Jürgen Schachler 

The development of our operating performance was also very dynamic in fiscal year 2017/18. This is especially clear in the increase in our operating earnings before taxes (EBT). We boosted this figure by 10 %, to € 329 million, compared to the previous year. Furthermore, we generated an operating return on capital employed (ROCE) of 14.8 %. Fiscal year 2017/18 was thus one of the most successful in our company history. Both operating parameters used for company management were comfortably within the range we outlined in our forecast. Therefore, we once again achieved results in the ­reporting year that are rare in companies in the basic materials industry.

Significant influencing factors for the strong operating result during fiscal year 2017/18 included positive effects from the efficiency improvement program and the good ongoing performance of the Hamburg and Pirdop sites. Regarding the first of these factors, we came one step closer in the fiscal year to our goal of achieving project success of € 200 million based on the market data of fiscal year 2014/15. After over € 30 million in the ­previous year, we generated roughly € 30 million through the project’s improvement ­measures in 2017/18 as well. We are thus well within the project schedule we established. We anticipate project success of € 60 million for the coming fiscal year. The revenues from the program help us to compensate for possible shutdowns of our facilities, cost increases, and inflation. They also make us less dependent on market developments.

“In 2018/19, we want to ­forge ahead with the ­strategy we initiated. We consider ourselves well equipped for the task.”

Rainer Verhoeven

Our concentrate throughput in the reporting year was about 4 % higher than the already very good prior-year level, thus hitting a record high. Optimization measures implemented as part of our efficiency improvement program took full effect at our Bulgarian site for the first time in fiscal year 2017/18. However, a scheduled repair shutdown of Hamburg’s anode furnace in Q3 and smaller unscheduled shutdowns in Q4 2017/18 affected concentrate throughput. It should also be taken into account that Q1 2016/17 was influenced by a scheduled maintenance shutdown in Hamburg. Overall, the throughput of 2.52 million t is a level that we can be proud of.

For the most part, our various markets developed positively in fiscal year 2017/18. We benefited from comparatively high refining charges for copper scrap and from good availability. Revenues from the sale of sulfuric acid also gained momentum due to considerably higher sales prices. The central driver of this development was stable, high global demand. At the same time, individual smelter standstills in Asia limited supply. A higher metal gain with increased copper prices, significantly higher sales volumes for rod products, and higher sales volumes for flat rolled products contributed to the good result as well. Because a large portion of our income is based on the US dollar, we carry out extensive hedging. That being said, the US dollar, which was weaker during long stretches of fiscal year 2017/18, strained the operating result.

We want our shareholders to take part in our company’s positive development. Subject to approval at the Aurubis AG Annual General Meeting on February 28, 2019, a dividend of € 1.55 per share will be paid out to the shareholders. This is a 7 % increase compared to the prior-year dividend.

At the end of March 2018, we signed a contract with Wieland-Werke AG regarding the sale of Segment Flat Rolled Products. This includes production facilities in the US, the Netherlands, Finland, and Germany. As of early December, approval of the sale by the European antitrust authorities was still pending. A final decision is expected in January 2019. In our view, Wieland-Werke AG would be a very good new owner for our Segment Flat Rolled Products.

We can be very pleased with our business performance in the reporting year, having achieved very good Group results and implemented a range of measures aimed at ­improving multiple company areas. This feat would not have been possible without our employees. At this juncture, the entire Executive Board would like to express its deepest gratitude to all employees for their hard work.

Our employees are the basis of our future success, which is why our accident KPI is a cause for concern. While in previous years, our accident rate either improved or remained the same, the past fiscal year saw our accident KPI worsen for the first time ever. We investigate all accidents thoroughly and will intensify our efforts to reduce them in the coming year. Our goal in this regard is reflected in our “Vision Zero,” which envisages no accidents whatsoever.

We would like to emphasize one special project in particular. We have always strived to put the excess energy generated by our production processes to meaningful use. In October 2018, for example, we joined forces with energy service provider enercity AG to launch Germany’s largest industrial heat project and are now supplying the Hamburg neighborhood HafenCity East with industrial heat from Aurubis. This award-winning flagship project saves around 20,000 t of carbon dioxide emissions per year through the reuse of heat. It therefore clearly demonstrates that companies like us, despite operating in an energy-intensive industry, can contribute significantly toward energy transition. It also underscores Aurubis’ deep commitment to sustainability.

We are currently working just as diligently on implementing our digital strategy, which includes measures to further harmonize software solutions, processes, and approaches – across all of the main international sites. We are also using models and artificial intelligence more, for instance to improve our raw material planning and system control. Our digitalization projects will enhance the efficiency and transparency of our processes while leveraging synergies, enabling us to develop more and more from a transaction-based company to a data-driven one. 

In fiscal year 2018/19, we aim to continue building on the successes enjoyed in the reporting year. And we consider ourselves very well positioned in this regard. After all, our metals are required across an extremely wide range of applications, be it in products that enable digitalization, in materials that allow electricity to flow from renewable energies, or in energy storage systems for the transport technologies of tomorrow. We would like to thank all of our employees, shareholders, customers, and suppliers for their trust in our company. We hope that you will continue to accompany us on our path into the future. 


 Jürgen Schachler                 Dr. Thomas Bünger                     Rainer Verhoeven     


The executive board

Jürgen Schachler

After studying economics, Jürgen Schachler initially worked at the Deutsche Solvay Werke GmbH. Following additional positions in marketing and sales, he switched to what is now known as ArcelorMittal Luxembourg in 1993. He served as a member of the Management, Managing Director, and Chief Executive Officer in different companies that now belong to the Arcelor Mittal Group. Before starting at Aurubis, Jürgen Schachler was Chief Executive Officer of ArcelorMittal Europe, Flat Product, Business Division South West.

Dr. Thomas Bünger

Dr. Bünger studied non-ferrous metallurgy. He initially worked as a research fellow at the TU Bergakademie Freiberg and, starting in 1996, as an R&D engineer at Freiberger Compound Materials GmbH. In 2005, he switched to Norddeutsche Affinerie (Aurubis since 2009), where he has served as a production engineer in the secondary smelter, a production manager in the primary smelter, Senior Vice President Technical Primary Copper, and, most recently, Senior Vice President Operations.

Rainer Verhoeven

Rainer Verhoeven, Hamburg After studying business management, Rainer Verhoeven started his career with what is now thyssenkrupp AG. He initially worked in finance and accounting at company headquarters. Starting in 2005, he held various managerial positions for thyssenkrupp outside of Germany. Before joining Aurubis, Rainer Verhoeven was Chief Financial Officer of thyssenkrupp Electrical Steel GmbH.