Letter to Shareholders
The images and news stories that have reached us in the past several weeks and months are present in our minds and will stay there for quite a while. Large groups of refugees, people making their way to Europe and terrible terror attacks that clearly show us that Europe isn’t an isolated island when it comes to unstable global affairs. Many of the issues that we dealt with in the past fiscal year 2014/15 and that accompanied and influenced our business and our activities pale in comparison with these events.
Let us nevertheless take a brief look back. In the past fiscal year, Aurubis was in an environment that reflected difficult general trends, including weakening economic momentum in China, the Greek debt crisis and the central banks’ interest rate policies, just to name a few. The raw material markets were also under pressure; the copper price and other raw material prices declined. The fact that we are able to report an excellent fiscal year with very good earnings despite these developments is due first and foremost to the positive situation on our significant individual markets: the copper concentrate supply was good with high treatment and refining charges; the same was true for refining charges for copper scrap. Sulfuric acid revenues improved considerably and the cathode premiums were also at a high level. The metal gain was also very good. At the beginning of the fiscal year, we had assumed that conditions on all of the relevant markets would be weaker. This quickly changed for the better, however.
This isn’t the norm, though, and we know this all too well from our varied history over the past 149 years. The general conditions and the situation on the markets can shift very quickly. Aurubis, which operated under the name Norddeutsche Affinerie AG until April 1, 2009, is approaching a notable anniversary in 2016 that not many other companies around the world have reached. In its 150-year history, Aurubis has experienced and withstood many changes. Due in large part to people’s close connection and identification with copper as a material and with their work in the multi-layered copper production and processing procedures, Aurubis has become what it is today: a Company that holds a recognized position and voice in the global copper world and that has a good position due to its integrated business model, with openness to taking advantage of opportunities and changes.
Aurubis is an attractive employer that makes decisive contributions to our Company’s raw material supply and to sustainable resource management with its comprehensive recycling activities.
All of these factors benefited us in fiscal year 2014/15 in addition to the positive situation on our individual markets. Our integrated position along the value chain of copper has proven itself. We generated an outstanding operating result and, at 18.7 %, the operating return on capital employed is well above the target of 15 %. We strengthened our balance sheet further and have excellent and very robust balance sheet ratios. Last but not least, we are in a position to recommend an attractive dividend to our shareholders.
We want to continue doing so in the future as well. However, we must ensure that we are also able to overcome less favorable market circumstances. The view in 2014/15 was mainly directed inward in order to optimize our Company’s processes further. We have worked on an upgrade for the Aurubis system that ultimately improves on the existing system and provides it with expanded functions – the upgrade Aurubis 149.0. The fundamental work has been carried out with internal participation across the Group as well as external support. Some of the many individual projects are already being implemented, and others will follow and support the further development of the Company. We want to introduce integrated management approaches in the supply and processing of raw materials in terms of value added – from concentrates and copper scrap to cathodes. The Supply Chain Management division was created for this purpose within the organization. We have also adopted a new perspective when it comes to recycling. We would like to develop more strongly as a service provider in this area and provide our customers with comprehensive solutions that contribute to closing product cycles.
Company changes of any kind require us to bring our employees along for the journey, as we will not be able to avoid adjustment processes in our way of thinking and doing. With the growing influence of Industry 4.0, the working world will increasingly shift towards digitalization. Other far-reaching topics that we are facing include demographic change, the recruitment of new employees, professional education, equal opportunities and work/life balance, just to name a few. Shaking up learned – and sometimes ingrained – ways of thinking and working should generate new ideas and facilitate an innovative approach to solving problems.
The course of the past fiscal year and recent events show that change and the uncertainties that accompany it have become an essential part of our lives. They will therefore increasingly impact our everyday work. The conditions on the individual sub-markets have also become less favorable again. We will therefore work even harder to improve our position and to continue the initiated Aurubis upgrade in the anniversary year 2016.
We will celebrate the anniversary year 2016 and our 150-year history with a series of special events. You can find more information about this on our website, www.aurubis.com.
Dr. Stefan Boel
held managerial positions in the Volkswagen Group, at VAW Aluminium and as of 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 has been the interim Executive Board Spokesman since November 1, 2015.
Dr. Stefan Boel
worked as of 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 and, on an interim basis, for BU Primary Copper.