Letter from the Executive Board

Dear Aurubis shareholders
and friends of the company,

The past fiscal year was a turbulent one for our company. After achieving the best result in the history of the company in 2021/22 and successfully kickstarting a number of strategic projects, we were faced with a number of unique challenges over the course of fiscal year 2022/23, starting with a cyberattack on our IT systems in fall of 2022, which we were successfully able to counter without a negative impact on our business. Then came a serious accident at our Hamburg plant in May 2023 that took the lives of three employees and released a wave of sorrow among our employees and many Aurubis business partners. This was followed by criminal acts directed against Aurubis we disclosed in June 2023. The fact that the company is still positioned so well and is able to pursue its strategy unchanged is primarily due to three reasons:

First: We have exceptionally motivated and loyal employees. Their dedication and commitment to the company were particularly impressively revealed during these crises. They have more than earned our trust and we would like to express our deep appreciation. Second: Our products and metals put us in an excellent position, and we serve markets showing enormous growth potential. Our products are essential to the energy transition. They lay the groundwork for our transformation to a more sustainable society. And third: Our business model is rock solid, with a range of powerful, and at times complementary, earnings drivers. We will continue to advance and expand this business model based on a solid financial foundation.

At the same time, the incidents from the past fiscal year have made it painfully clear: Despite the huge advances made in recent years, when it comes to occupational safety and plant security, we have not yet reached a level that meets our expectations. We have a clear target — zero accidents. This means safety in the workplace is always our highest priority. When accidents happen, we take it as impetus and incentive to look at what is in place, improve it where necessary, and double down on proven prevention measures. Right after the accident, a number of immediate measures went into effect, including in particular safety procedures, how to handle dangerous gases, occupational safety documentation, and accompanying training. We are also actively advancing our safety culture. We are integrating the know-how of an internationally renowned consultancy into the process. Together with all our employees, we want to — and we will — a safety culture for Aurubis that is sustainable and more uniform. We are taking the current challenging situation as an opportunity to meet the future better and even stronger.

We are also working on boosting our plant security. In the past fiscal year, Aurubis was the target of criminal activities that resulted in a serious precious metal shortfall that was recognized in profit and loss for fiscal year 2022/23. In close coordination with renowned consultants and the authorities, we are working intensively on fully getting to the bottom of the criminal activities directed against Aurubis. We’re improving our processes at the same time, making them more effective and resilient. In the short term, this includes additional restrictions on access authorizations for sensitive areas, particularly sampling, increased checks of individuals and vehicles, more extensive video surveillance, more detailed documentation of processes, and more intensive screening of selected suppliers. In the medium term, we will set new standards with structural changes in the precious metal production areas. We will also be making even better use of the advancements coming out of our Digital Factory, such as digital twins of our smelter network that allow us to track material flows simultaneously. We are pulling out all the stops to fulfill our industry leadership role in occupational safety and plant security, as in other areas — to benefit all our stakeholders.

One thing is clear: We will continue to invest — in our core business, in improvements, and in growth. This includes the planned maintenance shutdown at our Bulgarian plant, which we brought to a successful close in June 2023. We invested in maintenance and expansion, just like the ongoing realization of our strategic program. The investment projects approved in the fiscal year and to the end of calendar year 2023 include the Complex Recycling Hamburg (CRH) project, funding for the hydrogen-ready anode furnaces, the expansion stage for our Reducing Diffuse Emissions (RDE) project, and precious metals processing all at our parent plant in Hamburg, the second module of our Aurubis Richmond recycling plant in the US state of Georgia, and the considerable enlargement of the solar park at our Bulgarian Pirdop site, along with a 50 percent capacity increase in the tankhouse, and a slag processing project that will better protect the environment while also increasing our metal yield. With Aurubis Richmond in Georgia, we are building the first secondary smelter for complex recycling materials in the US. After launching the project in mid-2022, construction is making giant leaps forward. The first stage of the plant will go online in 2024 with the second stage to follow in 2026.

In core business, the next large-scale maintenance shutdown is coming up for our Hamburg plant in spring 2024. We’re investing in the actual shutdown, along with the expansion of our Industrial Heat project and the anode furnaces mentioned above. The second phase of our Industrial Heat project will allow us to supply around 20,000 more households with CO₂-free heat, saving the city of Hamburg up to 100,000 t of additional CO₂ per year. Our Hamburg plant is also slated to become one of the first copper smelters in the world to use hydrogen instead of natural gas for the reduction process in anode furnaces. These examples illustrate the strides we are making in decarbonizing our company. We will continue to focus our energy on research and development to ensure we achieve our goal of carbon-neutral operations well before 2050.

We are also developing new options for Aurubis in another area — our multimetal portfolio. Here the spotlight is on lithium, a valuable element. We are intensively exploring options for recycling end-of-life batteries that will enable us to recover this element on an industrial scale in the future. One and a half years of testing in our pilot plant has confirmed: The process developed and patented by Aurubis works. We are recovering around 95 % of the metals contained in the black mass. In addition to lithium, this valuable core extracted from used batteries contains nickel, cobalt, manganese and graphite — elements that are strategically key for electric vehicles. We’ll be building on the success of the pilot plant with a demo plant set for commissioning in spring 2024. This is a decisive step towards the industrial application of our process.

A look at the entire project landscape shows Aurubis is growing. At both our established and our new sites — in Germany, Europe and North America. For our sites in Europe, we need a clear perspective, if we, as a company in the energy-intensive basic materials industry, want to achieve carbon-neutral production here while remaining internationally competitive. Policymakers in Europe and in Germany in particular have to create the right framework conditions. And the list of what needs to happen is long, starting with less red tape and fast-tracked permitting, through to a reliable and competitive energy supply. We need policymakers and society to make a clear commitment to our industry, and action needs to follow those words.

When it comes to carbon neutrality: Our course is set for carbon-neutral production well before 2050. Our most recent life cycle assessment results show that our efforts here, such as electrifying our processes, decarbonizing our smelting facilities, and switching our electricity supply to carbon-free sources, are bearing fruit. These assessments document the environmental impact of seven Aurubis product groups, and reveal that we have cut our carbon footprint for copper cathodes by more than 35 % since 2013. Today, we are more than 60 % below the global industry average of all copper smelters. Some of the results for other product groups are even more impressive: We are a full 75 % below the worldwide average for tin. These are all clear signs of how serious we are about decarbonization. Ratings agency EcoVadis also confirmed our sustainability performance in October. We number among the best 1 % in our industry. With 78 out of a possible 100 points from the assessment questionnaire concerning responsible corporate governance, Aurubis improved again by five points compared to the previous year. Our score increased in the Sustainable Procurement assessment category in particular. Aurubis sites’ comprehensive Copper Mark certifications also contributed to the higher ranking: Following Pirdop (2021), Hamburg and Lünen (both 2022), the Belgian plant in Olen was the fourth site in the Aurubis smelter network to receive the internationally recognized quality seal for responsible copper production in September 2023.

The Aurubis Group generated operating earnings before taxes (EBT) of € 349 million in fiscal year 2022/23 (previous year: € 532 million). Once again, the high performance of our Group-wide smelter network together with important earnings drivers, such as a significant increase in treatment and refining charges for concentrates, a serious increase in the Aurubis copper premium, and high demand for wire rod, were decisive for the company’s success. The considerable financial impact of the criminal activity directed against Aurubis, however, also meant we closed out the fiscal year well below the exceptional result from the year before. We are confident, though that the (preventative) measures initiated and in part completed to promote plant and process security have already considerably increased Aurubis’ security and safety level, and that the company’s successful development will be reflected in the results of years to come. For the current fiscal year, we are therefore forecasting operating EBT between € 380 and 480 million.

Aurubis is going through the greatest transformation process in its history. We are putting our faith in growth, getting our business ready for the future, and using the opportunity to learn from setbacks to emerge even stronger than before. Our company has the skills, the people, and the financial means to produce even more metals sustainably in the future, forging a path towards the decarbonization the world so desperately needs. This is good for us, and it’s good for the society in which we do business, pay taxes, and create the secure jobs and educational opportunities of the future.

We look forward to your continued support for Aurubis on this exciting path.

Roland Harings     Dr. Heiko Arnold     Inge Hofkens     Rainer Verhoeven