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Photo: Aurubis: the entire Executive Board walks onto a site in uniform and yellow helmets

Our smelter network is our strength

Every crisis is also an opportunity: Aurubis is facing significant challenges in occupational safety and plant security. We’re staying the course, though, with our strategic investments in our core business and the growth markets of the future. Aurubis is a powerful company with products that are shaping the future, a solid financial footing, and a global smelter network that is unique, sustainable and efficient. In an interview, CEO Roland Harings, CFO Rainer Verhoeven, COO Multimetal Recycling Inge Hofkens, and COO Custom Smelting & Products Heiko Arnold look back on the eventful past fiscal year, and provide an outlook for the future.

Roland, after Covid-19, the severe flooding in Stolberg, the energy crisis, and the cyberattack of the past year, Aurubis faced serious industrial accidents and criminal activities in 2023. How do you steer a company through such turbulent times?

Roland Harings With confidence and a steady hand. We’re facing significant challenges in occupational safety and plant security, and we’re tackling them head on. The company is staying the course despite these incidents, and consistently realizing our ambitious growth strategy. We’re strengthening our position as a sustainable smelter network, laying the groundwork for more growth in recycling, and driving the decarbonization of our company decisively forward. At € 1.7 billion, our investment plan is the largest Aurubis has seen in a long time. We are making good progress with project implementation. This communicates strength and confidence, especially in these turbulent times — and especially to the workforce.

What are the next steps in plant security?

Roland Harings We’ll be focusing on the legal and forensic investigations into the criminal activities until the end of the year. Beyond that, though, we’re also driving lasting improvements in our process and plant security. We’ll be rolling out a revamped security concept Group-wide in 2024, which will permanently raise the level of security throughout the Group. Every crisis is also an opportunity. And we’re taking advantage of it!


What role does occupational safety play in the company?

Roland Harings We have always placed the highest priority on safety in the workplace. And the central importance of occupational safety has only become more apparent in recent months. Building on the work invested in and findings from the immediate measures taken in Hamburg right after the accidents, we started an in-depth, multi-step analysis at the plant and Group levels with external support. Our aim is to systematically tap our improvement potential and develop a long-term strategy and vision for occupational safety going forward. Safety is a promise throughout the Group — which is why we’re assessing and enhancing occupational safety levels at all sites. We’re cultivating a safety culture that includes occupational safety and plant security in equal measure.

Photo: Aurubis: Portrait photo Member of the Executive Board Roland Harings, CEO

“As a company, we’re staying the course and consistently realizing our ambitious growth strategy.”

— Roland Harings, CEO

What do you think the future holds?

Roland Harings I’m optimistic about the future. We’re a global supplier of metals that are essential for the transition to a more sustainable global economy. We have very good future prospects because we continue to strengthen our business model through organic growth projects and steadily expand our unique smelter network by adding processes and increasing processing capabilities, increasing our productivity, and raising efficiency. At the same time, we’re driving the digitalization of our production forward, getting our plants ready for new fuels, and pursuing our goal of sustainable, carbon-neutral production by 2050.


Rainer, how do you view the fiscal year results and the negative impact of the criminal activities?

Rainer Verhoeven The criminal activities directed against Aurubis resulted in a high shortfall in metals, which significantly hampered the past 2022/23 fiscal year result. At € 349 million, operating earnings before taxes were at the upper end of the adjusted forecast of € 310 to 350 million. So we were again able to close the fiscal year with a satisfactory annual result despite the significant financial impact of the criminal activities.


What contribution are the growth projects making, and what requirements do they need to fulfill to fit into the financing strategy?

Rainer Verhoeven Cumulative EBITDA from the growth projects is projected to surpass investment volume by 2030. We’re leveraging the potential of all sites with targeted investments in our processes and facilities for profitable growth. The parameters are clearly defined: The investment projects have to make a significant and sustainable contribution to the strategic targets and improve our processing ability and capacities, while creating valuable synergies with our existing processes. The value added by each individual growth investment has to positively impact our most important Group KPI, operating return on capital employed (ROCE), and simultaneously comply with our sustainability targets. Our solid financial position and a good earnings situation coupled with strong cash flow create a robust foundation for funding our attractive growth projects. This is primarily taking place from our own resources and existing credit lines, some of which we have linked to our sustainability performance through the EcoVadis rating agency. We further improved our EcoVadis CSR ranking (corporate social responsibility) this year and number among the top 1 % of companies in the non-ferrous metals industry worldwide when it comes to responsible corporate governance.


How do you ensure that the strategic projects are realized with discipline and consistency?

Rainer Verhoeven We have set clear financial criteria and adopted a transparent, vibrant governance structure and proactive risk management. From the initial idea through to completion, we continuously develop and monitor our projects based on defined parameters and decision-making criteria.


How do you meet the expectations of shareholders and investors?

Rainer Verhoeven Our share price went through significant fluctuations due to the criminal activities directed against Aurubis and geopolitical factors as well. But we’re confident that our investment in the future will pay off in the long run. By the end of the 2025/26 fiscal year, Aurubis will have invested around € 1.7 billion in strategic investment projects. These will start delivering positive earnings contributions by fiscal year 2024/25. We intend to continue financing the present, and any future projects, from current cash flow. Back in December 2022, we announced that the accelerated growth trajectory would be supported by a more flexible dividend payout in the future. And that shareholders would continue to participate accordingly in company profits. Which is why we will be recommending a dividend of € 1.40 for the 2022/23 fiscal year at the Annual General Meeting. This shows that we’re striving for a balanced capital allocation that enables self-financed growth and an appropriate dividend, thus creating value over the long term — for our shareholders and investors, too.

Photo: Aurubis: Portrait photo Member of the Executive Board Rainer Verhoeven, CFO

“A robust balance sheet, a good earnings situation, and strong cash flow create the foundation for our strategic growth.”

— Rainer Verhoeven, CFO

Inge, what impact will the new plant being built in the US state of Georgia have on Aurubis?

Inge Hofkens The plant has far-reaching implications — both inside the company and for the outside world, as a visit from First Lady Dr. Jill Biden clearly showed. We’re holding fast to our growth strategy and showing that we can successfully realize a major project like Aurubis Richmond. The plant and the team are growing rapidly. We now have 100 employees on-site who are very excited and enthusiastic about helping shape our vision. We’ll be pioneers in the country for the recycling of reusable materials and recovering valuable metals like copper, nickel and tin.

Where does Aurubis Richmond stand in fall 2023?

Inge Hofkens The project is progressing well. The US market is growing very quickly and holds a lot of excellent opportunities for us. So the decision to move up the original start date for the second module was absolutely right, as was mapping out the value chain from blister copper to wire rod now. We’re in the US to stay — and to grow there, too.


What kind of growth expertise does Aurubis have?

Inge Hofkens We not only have the right strategy; we also have the know-how from well-educated, talented experts. Aurubis is achieving profitable growth in areas the company has been active in for over 150 years. We’ll use the knowledge from the newer Group sites to continue to advance them, whether in concentrate processing, recycling or product business. We’re continually optimizing our material flows in our smelter network so we can extract more marketable metals and transform all input materials into valuable products. We’re reducing waste streams, taking a zero-waste approach, and have already established ourselves as a cornerstone of the European circular economy.


How is Aurubis’ pioneering role in sustainability being measured?

Inge Hofkens We’re an industry leader in sustainability, as our KPIs clearly show: Our production has lower carbon footprints than the industry average. The Copper Mark certifications of our production sites confirm that we produce sustainably, enabled by our processes. Following the plants in Pirdop, Hamburg and Lünen in 2023, Aurubis Olen became the fourth site in the smelter network to be awarded the quality seal. Aurubis Stolberg and Aurubis Beerse are currently in the process of certification. The great interest the US market has shown in Aurubis is another indication of how attractive we are with our sustainable approach.

Photo: Aurubis: Portrait photo Member of the Executive Board Inge Hofkens, COO

“We’re reducing waste streams, taking a zero-waste approach, and establishing our role as a cornerstone of Europe’s circular economy.”

— Inge Hofkens, COO

Heiko, what makes the Aurubis smelter network so special?

Heiko Arnold The Aurubis smelter network is unique worldwide and is the powerhouse behind our company. Every plant in the Group runs independently and autonomously. Together, we leverage potential to benefit the entire company by optimizing material flows and supporting each other. We’re investing locally in developing new technologies that are transferable. We’re exploring and promoting the use of alternative, carbon-neutral energy sources to make environmentally sound cost benefits available to the entire company. This is visible in the testing of ammonia as a low-carbon fuel in wire rod production in Hamburg (see here), the lowering of costs and fuel consumption with the UHTH project in Lünen (see here), and the Industrial Heat 2.0 project (see here), which will prevent up to an additional 100,000 t of CO₂ emissions in Hamburg by feeding our production heat into a district heat network.


What’s next for our smelter network?

Heiko Arnold Every site in every country has its own specific strengths, challenges and overall conditions — whether in Germany, Bulgaria or Belgium. Aurubis’ expertise, productivity and efficiency has grown with every expansion of the smelter network. The smelters work in tandem, helping each other, but they also follow their own individual development plans, such as for digitalization. Our technology leadership in metallurgy is helping us decarbonize metal production at all our sites, and develop additional metal processing steps that will allow us to process and extract valuable intermediate products we’ve had to sell to competitors up to now.

Photo: Aurubis: Portrait photo Member of the Executive Board Dr. Heiko Arnold, COO

“The Aurubis smelter network is unique worldwide and is the powerhouse behind our company.”

— Heiko Arnold, COO

How are the growth projects contributing to the smelter network?

Heiko Arnold The many projects at all our sites are helping us optimize material flows and continually improve on the strengths of the individual sites — and with them our unique, global, integrated smelter network. Projects like ASPA and BOB are custom-tailored for the sites in Olen and Beerse, while Hamburg is the best place to develop a project like CRH. There are no rankings among the plants, but there is no one-size-fits-all solution, either. Together, all the sites form a working structure that will take us into the future, is cost-efficient, and sustainably generates more metals for the transformation tasks ahead.