Business and earnings expectations for the Aurubis Group

As the remarks about the overall economic trend and the development on the markets relevant to our business indicate, the Aurubis Group’s fiscal year 2017/18 will, from our current perspective, once again be influenced by a good market environment.

For fiscal year 2017/18, no major maintenance shutdowns are planned. We expect good material supply in our raw material markets.

No larger new projects are expected for 2018 on the concentrate markets; however, market research companies estimate the probability of disturbances caused by strikes to be lower than in the previous year. In addition, a higher copper price could have a beneficial effect on mine output. Due to our market positioning and our supplier diversification, we expect a good supply with satisfactory treatment and refining charges.

The development of the copper scrap and blister copper supply can’t be gauged. Business in this area, particularly for copper scrap, is conducted with short timelines and is therefore dependent on influences that are difficult to forecast. Higher metal and copper prices, which analysts expect in some cases, could nevertheless help to keep the supply at a high level. Our broad market position absorbs supply risks in this case as well. In the first quarter of 2017/18, we are supplied with good refining charges. We will continue to pursue the closing-the-loop approach in fiscal year 2017/18. This involves, for example, selling copper products to customers and, at the same time, taking back their resulting production scrap for our recycling, closing the materials cycle in doing so.

Sulfuric acid sales also depend on short-term developments. The terms of the contracts are therefore also short. In addition, sales options are very different from region to region, with conditions varying accordingly. Aurubis supplies the global sulfuric acid market, with a focus on Europe and South America. The relationship between our local sales and the exports fluctuates depending on market circumstances. The current insights for the first quarter of 2017/18 signalize a stable situation with slightly higher prices.

Sales of free cathode volumes on the market are based on the planned processing of our cathode output in the Group.

Adequate statements about the development of the copper product business in the new fiscal year are only possible to a limited extent since the negotiation season for 2018 sales contracts hasn’t ended yet. One factor that is already clear is the copper premium Aurubis has established for European wire rod and continuous cast shape customers for the coming calendar year. This was kept at the previous year’s level of US$ 86/t. We are therefore taking into account the expected customer demand for annual contracts in European operations.

In light of the good economic situation in the relevant sectors, we expect to be able to conclude the negotiation season for copper products with appropriate contracts. Good customer relationships in our key markets support this. We will also continue expanding our business with new customers.

Overall, there could be quarterly differences as in previous years. 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.

In fiscal year 2016/17, we kicked off different initiatives and individual measures within the Group to strengthen Aurubis further. These are contained in the ONE Aurubis transformation program, 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. It was decided to continue the FCM project in this way. It is a major component of the new multi-metal approach and is associated with major investments. We plan to realize the FCM facilities at the Olen (Belgium) and Hamburg sites. In the coming years, Aurubis will develop from a copper group into a multi-metal group.

The future development and forecast of Aurubis AG coincides with the general statement on the Aurubis Group.