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Letter from the Executive Board

Dear Aurubis shareholders
and friends of the company,


Over the past year, Aurubis has shown that we deliver! We are systematically executing the investment projects in our historic growth agenda, strengthening our smelter network, and driving our multimetal business forward. We also underwent reorganization at the Executive Board level. And as a company, we remain reliable, robust and future proof. We will continue to bolster lasting confidence in Aurubis.

With operating earnings before taxes (EBT) of €413 million, in the 2023/24 fiscal year the Aurubis Group achieved a 19 % higher result than in the previous year (€349 million). It might have been even higher if Q4 had not been affected by below-target operations at the Hamburg site. In the previous year, one-off effects negatively impacted the result.

Positive effects resulted from higher treatment and refining charges for concentrates, a significant rise in the metal result, and elevated earnings from the Aurubis copper premium accompanied by high demand for wire rod. These positive impacts more than compensated for a considerable year-over-year drop in sulfuric acid revenues, lower income from refining charges for recycling materials, launching costs for the projects currently being realized, and rising costs in the Group, especially for safety and security measures. Operating return on capital employed (ROCE) was 11.5 % (previous year: 11.3 %). Net cash flow was strong at €537 million (previous year: €573 million) due to higher product sales.

From left to right Steffen Hoffmann (CFO), Inge Hofkens (COO), Dr. Toralf Haag (CEO), Tim Kurth (COO)

Following the events of 2023, we are now looking ahead. As the new Executive Board team, we have set clear priorities for the future. Occupational safety and plant security are two of these.

Our vision for occupational safety is clear: zero work-related accidents. As part of our TOGETHER program, 4we launched a number of measures in 2023/24. Along with technical and organizational measures, aspects of company culture also play a considerable role in behavior-based work safety. In the past fiscal year, a comprehensive analysis with external support highlighted where our sites have individual potential. We will systematically tackle this in the Group in 2024/25.

We already implemented wide-ranging measures to consistently raise safety and security standards in the past fiscal year. We are continuing with their systematic and sustainable implementation in order of importance and influence and have already made significant strides here. Examples range from more effective monitoring of critical equipment to introducing highly automated sampling systems. The plans for building a new precious metals facility at the Hamburg site will also significantly heighten our security level. We also employ powerful campaigns to raise employee awareness. To ensure their safety and counter insider threats.

As part of our Metals for Progress: Driving Sustainable Growth strategy, we are strengthening our core business, growing in recycling, and investing in climate-friendly production. Here our focus is on advancing all our sites according to their individual needs. Our mission is to judiciously expand our smelter network, further optimize material flows, and expand the metal raw materials loop. ASPA (Advanced Sludge Processing by Aurubis) and BOB (Bleed treatment Olen Beerse) at our Belgian sites and Complex Recycling Hamburg (CRH) are three important projects that fulfill these objectives that are instrumental in strengthening our core business. We are also currently expanding the capacity of our tankhouse in Bulgaria by around 50 % over current performance, another improvement to our core business. In Lünen we finished refurbishing the tankhouse as well mid-year, an investment that increased copper cathode production capacity by around 10 %. With these two projects, Aurubis is securing the supply of the metals European industry needs for the energy transition and other objectives.

Mid-year, we completed the largest scheduled maintenance shutdown in the history of the Hamburg site, with some delays in the ramping-up phase and a total investment of around €95 million. The scope included around 500 individual measures for equipment maintenance and technical updates including important steps in raising efficiency and environmental protection at the Hamburg plant. In the 2022 and 2024 shutdowns, Aurubis also comprehensively invested in new plant technology and in numerous digitalization and automation measures to drive efficiency and production stability forward. A shutdown with a smaller scope is scheduled for our Bulgarian site in Pirdop in the current fiscal year.

Growth in recycling is the second pillar in our strategy after our core business. Around two thirds of the approved strategic investment volume is earmarked for this growth field. We celebrated the ribbon cutting for the first secondary smelter for complex recycling materials in the US in the reporting period, for example. The US market offers interesting opportunities, and overall conditions there are extremely attractive. Our goal is to become the market leader in multimetal recycling in the US. The investment in Aurubis Richmond is a strategic expansion into the growth market in North America and represents expedient geographical diversification. It rounds out our business in Europe and strengthens our business model.

Aurubis is targeting carbon-neutral production before 2050. We realized two strategic projects during the shutdown in Hamburg that move us forward on our decarbonization roadmap. We exchanged our anode furnaces, essential equipment used in copper refining, for new, innovative furnaces that are H2 ready. They can run on hydrogen instead of natural gas, an important step in decarbonizing our metal production. This €40 million investment will allow the company to avoid up to 5,000 t of CO2 per year at the Hamburg site when hydrogen is exclusively used as a reduction agent, further lowering the CO2 footprint of our copper, which is already over 60 % below the global average today.

Aurubis also invested around €100 million during the shutdown to lay the technical groundwork for feeding more CO2-free industrial heat into the Hamburg district heating grid. Aurubis has been delivering heat since 2018 with the first stage, and with the second stage the multimetal company will be able supply a total of up to 28,000 households in Hamburg starting with the 2024/25 heating period. The anticipated heat supplied makes this the largest industrial heat project in Germany, avoiding up to 120,000 t of CO2 in the city of Hamburg every year. The Industrial Heat project received funding from the German Ministry for Economic Affairs and Climate Action (BMWK). It highlights how crucial the role of industry is for the energy and heat transition.

Aurubis has been investing in expanding its captive solar park in Bulgaria since 2021. Four new photovoltaic arrays will cover around 15 % of the site’s electricity needs with green energy in the future, reducing our on-the-ground dependence on energy market fluctuations and promoting carbon-neutral production. Aurubis will prevent around 25,000 t of CO2 per year once the park is finished. The final stage is anticipated to be completed in 2025/26.

We assume responsibility within our supply chains, so we support the Copper Mark, the gold standard for sustainable processing in the copper value chain. We completed the certification of all our major smelter sites in the past fiscal year, and the majority of our smelter network is now certified. As such, more than 95 % of Aurubis cathode production complies with the Copper Mark standards, which draw on the 33 internationally recognized sustainability criteria of the Risk Readiness Assessment of the Responsible Minerals Initiative (RMI). In the coming year, the Copper Mark certification of Deutsche Giessdraht GmbH, an Aurubis subsidiary, is planned along with a number of recertifications.

In November 2024, Aurubis was presented with the 17th German Sustainability Award in the metal industry category. The most comprehensive award of its kind recognized Aurubis’ pioneering role in sustainability, honoring our activities to promote carbon-neutral and circular metal production. This award confirms our extensive dedication to responsibly using resources.

In the coming three years, we will carry out additional projects designed to further heighten the performance of our smelter network. Aurubis has the means, as we are a solidly financed company. An equity ratio of over 55 % and very little outside debt gives us a lot of latitude. We will continue implementing the projects currently approved totaling €1.7 billion, over 50 % of which has already been invested, on schedule and with exceptional quality. Substantial capital spending has also temporarily had a significant impact on free cash flow; over the medium term, we plan to considerably increase the company’s free cash flow profile. In the coming months, we will also be thoroughly reviewing the long-term assumptions of our strategy and adjusting the strategic targets where needed.

Aurubis is still undergoing the most far-reaching transformation in its history. We are an important global supplier of the metals that are crucial to transitioning to a more sustainable global economy. Despite the deteriorating outlook on market prices, particularly on the concentrate market, and the ramping-up costs for strategic projects, we remain optimistic about the 2024/25 fiscal year and expect another good operating EBT between €300 million and €400 million. Because we bring together dedicated specialists who leverage their innovative ideas to realize organic growth projects and expand and further optimize our unique smelter network with innovative operational and processing options. Our mission is to become the partner of choice — for suppliers, for customers, and for the society in which we live and work!

We are looking forward to seeing Aurubis through this exciting journey.

 

Dr. Toralf Haag     Steffen Hoffmann     Inge Hofkens     Tim Kurth

The fiscal year in 170 seconds: