The main objective of the management control system is to increase the Aurubis Group’s corporate value by generating a positive overall contribution to the enterprise beyond the costs of capital.
Corporate control parameters
In order to measure financial success for the medium and long term within the scope of value-oriented corporate control, Aurubis uses the following central control parameters:
- Operating consolidated earnings (operating EBT = earnings before taxes)
- Operating return on capital employed (operating ROCE) in the Group
These parameters are regularly presented to the entire Executive Board and are utilized for internal control purposes. The Executive Board’s variable compensation is also oriented to these parameters.
The Aurubis Group reports in accordance with International Financial Reporting Standards (IFRS). When the average cost method is applied in accordance with IAS 2, metal price fluctuations systematically lead to considerable discontinuities in the presentation of the Aurubis Group’s results of operations, financial position and net assets. In our view, these valuation results lead to an economically inaccurate presentation in the Management Report. Furthermore, the purchase price allocation in the course of the acquisition of Luvata’s Rolled Products Division resulted in one-time effects that would also lead to a distortion in the Aurubis Group’s presentation of the results of operations, financial position and net assets.
In order to present the Aurubis Group’s operating success more independently of these valuation effects on internal control systems, internal Group reporting and control are carried out on the basis of the operating result.
The operating result is derived from the IFRS results of operations by
- Adjustment by valuation results from the use of the average cost method in accordance with IAS 2,
- Adjustment by copper price-related valuation effects on inventories,
- Adjustment by effects from purchase price allocations, primarily on fixed assets, from fiscal year 2010/11 onwards.
Operating return on capital employed (ROCE)
|in € million||9/30/2015||9/30/2014|
|Trade accounts receivable||307||414|
|Other receivables and assets||212||156|
|– Trade accounts payable||(761)||(797)|
|– Provisions and other liabilities||(480)||(452)|
|Capital employed as at the balance sheet date||1,979||1,961|
|Earnings before taxes (EBT)||343||137|
|Earnings before interest and taxes (EBIT)||370||167|
|Return on capital employed (operating ROCE)||18.7%||8.5%|
|Prior-year figures have been adjusted.|
Corresponding to the calculation of the operating result, operating capital employed is derived by adjusting the balance sheet items in accordance with IFRS by the effects previously mentioned.
A reconciliation of the balance sheet and income statement from IFRS to operating figures is provided in the Economic Report of the Management Report.