Executive Board assessment of the Aurubis Group during fiscal year 2015/16

The Aurubis Group generated a result in fiscal year 2015/16 that was significantly below the record result of the previous year. This confirmed what we had already anticipated in the outlook included in our last Annual Report. Operating consolidated earnings before taxes (EBT) reached € 213 million (previous year: € 343 million). This was caused by unfavorable developments in the relevant sub-markets, especially the markets for sulfuric acid and copper scrap. The scheduled shutdown in Bulgaria and lower cathode premiums reduced the result further. With lower metal prices overall, the very good metal gain of the previous year couldn’t be repeated. In the meantime, the group-wide optimization and efficiency enhancement program that was initiated in the previous year continued.

Both Business Units achieved a positive result, but with considerable downturns in each case. In the process, the unfavorable trends in individual markets impacted the Business Units to different degrees. The internal operating ROCE target of 15 % for the entire Group was not achieved, reaching 10.9 %.

Business development in BU Primary Copper was characterized by good ongoing conditions on the concentrate markets, which enabled not only a good supply, but also high treatment and refining charges. The extensive scheduled maintenance and repair shutdown at our smelter site in Pirdop, Bulgaria weighed on earnings. Concentrate throughputs were slightly down on the previous year due to the shutdown. Furthermore, market-related factors, such as reduced revenues for sulfuric acid, lower refining charges for copper scrap, decreased premiums for copper cathodes and a reduced metal gain overall with lower metal prices, strained the BU’s result.

Development in BU Copper Products varied. The recycling business was strained by declining refining charges for copper scrap, lower cathode premiums and reduced metal prices. Rod and shapes business was high, and sales remained stable compared to the prior year. The restructuring of Business Line Flat Rolled Products continued. The results increased slightly with a sales volume at prior-year level.

Despite the lower business result, the net cash flow was at a good level at € 236 million, though it was significantly below the € 365 million of the previous year.

The Aurubis Group’s balance sheet structure is very robust. The equity ratio (operating) is 47.8 % (previous year: 46.9 %). Net borrowings were reduced further to € 23 million (previous year: € 53 million).