Letter from the Executive Board

Graphic: Letter from the executive board

2017 was an eventful year for Aurubis, one that saw our company realign itself both strategically and organizationally to give itself an even greater competitive advantage, all based on our sound foundation. In this report, we will provide you with more information in this respect, explaining our aspirations for the future and how we intend to achieve these. But before we do, let us first take a look at the past fiscal year.

2016/17 was a good fiscal year for Aurubis. With operating earnings before taxes (EBT) of € 298 million, we have, as forecasted, significantly exceeded the previous year’s figure of € 213 million. Our operating ROCE was 15.1 % and therefore in line with our internal target and above the previous year’s result of 10.9 %. Moreover, thanks to strong developments within our operating business, we have the means necessary to drive growth sensibly.

On the whole, this fiscal year presented us with both highlights and challenges.

While we benefited from positive developments in metal prices and copper scrap refining charges, and from a favorable US dollar, the continued overcapacity suffered on the sulfuric acid market and issues within the concentrate markets presented us with challenges. However, thanks to forward planning and especially the 170,000 t capacity optimization of our production site in Pirdop (Bulgaria), we achieved significantly higher throughputs during this reporting year than in the previous year. This, together with our advantageous input mix and good availability of copper concentrates, enabled us to counterbalance market volatilities. Our higher metal yield coupled with increased metal prices also had a positive impact on the results. In terms of product developments, we saw an increase in sales of our flat rolled products and shapes, but a decline in volume in the previous year for our continuous wire rod. This decline was mainly due to inventory corrections in the cable sector because of a change in standards for cable within the European Union with regard to their fire resistance, as well as geopolitical influences.

On March 2, 2017, we launched our Vision 2025 at our Annual General Meeting. Its three core messages, “Passion for metallurgy. Metals for progress. Together with you” encapsulate what we envision for 2025. We want theses statements to come to embody who we are; to be seen by our business partners as intrinsically associated with Aurubis, and seen by our employees as a source of continual inspiration and motivation.

Setting motivational goals is important, no question. But setting out a path to achieving them is just as important. Our path in this respect is the ONE Aurubis transformation program, which we developed in connection with our new Vision 2025. The program consists of five interconnected components, each comprising a variety of measures. For more detailed information on ONE Aurubis, please read on!

Until now, the name Aurubis has been primarily associated with copper. But we are capable of more. As part of our strategy, we are set to expand our production range of marketable metals by capitalizing on our existing capacity to recover gold, silver and other precious metals. This expansion will enable us our base metal copper due to the fact that along with the copper concentrates and recycling materials that we use, further valuable metals also reach us at the same time. In the interaction between copper – which will remain our important key metal, both now and in the future – and the business with further valuable metals, we will significantly expand our competitive position. This offers us the opportunity for further growth. In this respect, we are driving internal growth projects and at the same time actively seeking external growth opportunities. Internal growth includes our important “Future Complex Metallurgy” project, which will see around € 320 million invested in our Hamburg (Germany) and Olen (Belgium) sites over the next several years. Our goal is to process additional complex raw materials, to extract precious metals more quickly and to optimize recovery of additional metals.

A further ONE Aurubis component is our new organizational structure, which has been in effect since October 1, 2017. This structure is more customer-focused and more closely aligned with our value-added business processes. Of course, such structural changes cannot take place overnight, and the process of implementing them is still ongoing. We aim to complete this process during the first quarter of 2018. Externally, our new organizational structure will be particularly apparent in the fact that we will, in the future, report on two segments, Metal Refining & Processing and Flat Rolled Products.

We not only want to become faster, but also increasingly lean and more efficient. We will accomplish this by means of constant further development. The basis for this is sound standardization, for example in IT, where we are unifying processes globally in areas such as purchasing, sales, logistics and finance. Building on this, we are introducing our Group-wide “Aurubis Operating System”, which promotes a common understanding of how we will work together in the future at Aurubis. At the same time, it provides answers to the questions: “How can I organize my work more efficiently?” and “Where can I eliminate losses?” On this basis, we generated a multitude of ideas for improvement in 2017. Among these are measures for improving technical procedures, for optimizing the procurement of energy and materials, and for increasing the efficiency of our maintenance processes and internal communication. All of this contributes to our goal of gradually increasing our operating EBITDA by more than € 200 million by fiscal year 2019/20 – based on the market data from fiscal year 2014/15. We already achieved our goal of at least € 30 million operating EBITDA from this program in the last fiscal year and are therefore fully on track.

Ladies and gentlemen, you see that Aurubis is very well positioned at the beginning of fiscal year 2017/18. We produce metals that are in high demand across a variety of everyday applications. And, because these metals are crucial to important societal trends such as electromobility and energy transformation, this demand is only set to grow. Our products are therefore highly sustainable, both socially and economically. We take our corporate responsibility very seriously. As a consequence, we began to revise and refine our self-defined sustainability targets in the areas of economy, environment and people in 2017. One goal which is very important to us in accident avoidance is the “Vision Zero” goal, which stands for zero accidents. Additional investments in the area of accident avoidance are therefore at the top of our agenda. In order to further strengthen relations with our customers and suppliers in the future, we are increasingly developing from a processor of raw materials to a solutions provider. Furthermore, we are working on our company culture, because we will only be able to face the forthcoming changes if we inspire our employees to embrace change. This means working more closely together across all departments in order to create a common understanding.

Over the past year, we have generated a wealth of ideas, implemented a wide range of measures and achieved important milestones. We are therefore confident that Aurubis is set for continued strong growth and development, guided by our Vision 2025. Our confidence in this respect is supported by the information in our Annual Report, which also provides you with a progress overview of our various projects. It is important to stress: Vision 2025 and ONE Aurubis are of course both long-term in nature. As such, their results will not be immediately apparent, but rather become visible gradually. We are, however, deeply convinced that we are on the right path with them, and that this path will lead us to even greater strength and prosperity.

To conclude, we would like to express our heartfelt gratitude to our shareholders, our customers and suppliers and, most importantly, our employees, for their support they have shown to us, especially with regard to our corporate development efforts.


Graphic: Signature Jürgen Schachler
Graphic: Signature Dr. Stefan Boel

Jürgen Schachler          Dr. Stefan Boel    


Jürgen Schachler

JÜRGEN SCHACHLER began his professional career in the chemical industry after having completed a degree in economics. He later moved into the metal processing industry, where he held positions in marketing and sales. Beginning in 1993, he occupied management positions in various ArcelorMittal group companies. His international experience comprises management positions in the USA, Thailand, Canada and France. In 2013, Jürgen Schachler took on the role of CEO at ArcelorMittal Europe Flat Products. He joined Aurubis AG as Executive Board Chairman on July 1, 2016. In the reporting period he was responsible for the Business Unit Primary Copper and also served as Director of Industrial Relations.

Dr. Stefan Boel

DR. STEFAN BOEL joined Product Development and Marketing in the former Copper Division of Umicore in 2001 and subsequently became the commercial director of the Umicore Group plant in Bulgaria. After the demerger of Cumerio, Dr. Stefan Boel became Vice President Copper Refining and Mining Projects and a member of the Executive Committee at Cumerio. As part of the integration of Cumerio into the Aurubis Group, he joined the Executive Board of Aurubis in 2008. In the reporting period he was responsible for the Business Unit Copper Products.