Letter to Shareholders

Photo: Letter to Shareholders
f. l. t. r.:
Stefan Boel Executive Board Member for Business Unit Copper Products,
Jürgen Schachler Executive Board Chairman,
Erwin Faust Chief Financial Officer

We successfully concluded Aurubis AG’s fiscal year 2015/16 at the end of September and are wrapping up our anniversary year 2016 as well. The past several months have been very poignant. We received many words of congratulation – from employees and their families, from business partners around the world, from representatives of government and society, from institutions and interest groups and, not least, from our company’s shareholders. Feeling the strength of these bonds during our anniversary year moved us, and pushes us to continue adding chapters to the Aurubis success story.

Times have not become easier, and uncertainties have increased. The past fiscal year showed once again that the international commodity markets are influenced by political and economic events. Pure market data is not enough to provide accurate analyses and assessments.

The year 2016 was marked in particular by the historic vote of the British people to remove their country from the European Union. The reduced economic growth of commodity giant China was on market analysts’ risk list yet again. We followed the development of the US interest rate policy and the US dollar as well as the polarizing election of the US president just as closely as we did the escalation of tensions in the Middle East.

The uncertain overall economic and political conditions were also reflected in an unusually varied price trend for industrial and precious metals. While gold and zinc were the big price winners in 2016, the price recovery bypassed copper this time. This is notable because the global copper market indicated a distinct production deficit in the first half of 2016. From our perspective, the fact that there wasn’t another, more dramatic price decline on the London Metal Exchange up to the end of the year is only a small consolation.

The trend on the markets for our raw materials and products was also varied. While the supply of copper concentrates allowed for good volume levels and high treatment and refining charges, the supply situation for copper scrap was unsatisfactory for long periods of the fiscal year. Sales of sulfuric acid were not very convincing either, as prices on the market were weak. In contrast, the copper products business was satisfactory overall, with a good trend in rod sales.

The results of fiscal year 2015/16 were good when compared with past years, allowing for a suitable dividend for our shareholders. However, it did not come close to the record results of the previous year, in which all of the relevant factors developed positively. So we ask ourselves if we are satisfied by this – the answer is a clear “no”.

To set the course for a successful future, we have to remove ourselves from a short-term mindset, now more than ever. For this reason, we started several different initiatives in late July 2016. We want to know: What do we do well? How do we compare to the competition? First and foremost, what can we improve? External consultancies are supporting us in answering these questions. The results will lead to concrete improvements starting in 2017. At the same time, we are working within the Executive Board on developing a clear vision for Aurubis with an internal management team. Based on this vision, we will adjust the company strategy before spring 2017.

We will therefore create a starting point from which to continue successfully developing the company. So fiscal year 2016/17 will be a year of change. We will improve Aurubis from the inside out to prepare ourselves for all of the changes in our business environment. We hope that you will continue to join us on this path. We will of course update you about the progress we make along the way.

Sincerely,

Graphic: Signature Jürgen Schachler

Jürgen Schachler          Dr. Stefan Boel

Executive board

Jürgen Schachler

started his career in the chemical industry after studying economics. He then switched to the metal processing industry, where he initially held positions in marketing and sales. Starting in 1993, he served in the management of various companies of ArcelorMittal Luxembourg. He has worked in management positions abroad in the USA, Thailand and Canada. In 2013 Jürgen Shachler assumed the position of CEO of ArcelorMittal Europe, Flat Product, Business Division South West, where he was responsible for 10,000 employees. Effective July 1, 2016, he was appointed Chairman of the Aurubis AG Executive Board. In addition, he oversees BU Primary Copper and serves as Director of Industrial Relations.

Dr. Stefan Boel

worked from 2001 in Product Development and Marketing in the former Copper Division of Umicore and subsequently became the commercial director of the Umicore plant in Bulgaria. After the demerger of Cumerio from the Umicore Group, Dr. Boel became Vice President Copper Refining and Mining Projects and a member of the Executive Committee. As part of the integration of Cumerio in the Aurubis Group, he joined the Executive Board in 2008. He is responsible for BU Copper Products.

Erwin Faust

held managerial positions in the Volkswagen Group, at VAW Aluminium and from 2003 at Novelis Europa, a sub-group of Novelis Inc. (formerly Alcan Inc.). As the Chief Financial Officer there, he served on the supervisory committees of the European companies and for a time as the commercial director of the German company. Erwin Faust was appointed Chief Financial Officer of the Aurubis Executive Board in 2008. He was interim Executive Board Spokesman from November 1, 2015 to June 30, 2016.