Aurubis Ag · XETR:NDA
Aurubis — Investor Day (September 2018)
65 slides from Aurubis's investor day presentation, Sep 5, 2018
Slide 1: Capital Market Day 2018
Capital Market Day 2018 September 5, 2018 Pirdop, Bulgaria
Slide 2: Agenda
Agenda Keynote Jürgen Schachler Internal & External Growth William Scotting Future Complex Metallurgy (FCM) Thomas Bünger Lunch break Efficiency Improvement Program Mehdi Al-Radhi Sustainability at Aurubis Kirsten Kück FY 17/18 Outlook Rainer Verhoeven Closing remarks Jürgen Schachler 2
Slide 3: Our metals for an innovative world
Our metals for an innovative world: our copper will enable the trends of the future renewable energy e-mobility Continuous growth in metal demand expected digitalization urbanization 3
Slide 4: Our Vision 2025
Our Vision 2025 AAurubis Mission Vision 2025 Responsibly transforming raw materials Passion for metallurgy. Metals for progress. into value to provide metals for an Together with you. innovative world. VISION VISION VISION Ps || Pg || Tg Passion Metals Together for metallurgy for progress with you
Slide 5: Our strategic business triad: realizing our purpose
Our strategic business triad: realizing our purpose 5
Slide 6: Aurubis holds a leading position in the copper value-added chain
Aurubis holds a leading position in the copper value-added chain FY 2016/17 Position Concentrate processing* 2,424,000 t No. 2 worldwide FY 2016/17 Copper scrap input 272,000 t No. 1 worldwide Sulfuric acid 2,364,000 t output Cathode output 1,156,000 t No. 2 worldwide Gold output 42 t Wire rod outpu
Slide 7: The key drivers of our value and earnings
The key drivers of our value and earnings 28 34 45 46 47 Ni Se Rh Pd Ag Sulfuric acid Treatment and 50 Smelting and Sn Copper premium refining charges for refining processing copper concentrate into 82 79 78 75 52 cathodes (TC/RCs) Pb Au Pt Re Te Further Refining charge for processing processing cop
Slide 8: Solid balance sheet figures provide room for future growth
Solid balance sheet figures provide room for future growth (operating IFRS) 6/30/2018 6/30/2017 operating operating Target Profitability ROCE* 14.6 % 13.0 % 15 % Capital structure - Equity ratio (equity / total liabilities) 51.2 % 50.9 % > 40 % Debt and interest coverage - Net financial liabilities
Slide 9: Our financial goal: sustainable earnings improvement
Our financial goal: € 200 + 200 million sustainable earnings improvement (in € million) 200 400 Business improvement: » Measures for 2017/18 have been identified and are being implemented » We are currently fully on schedule » All of the company’s divisions are contributing to 200 project success, i
Slide 10: Agenda
Agenda Keynote Jürgen Schachler Internal & External Growth William Scotting Future Complex Metallurgy (FCM) Thomas Bünger Lunch break Efficiency Improvement Program Mehdi Al-Radhi Sustainability at Aurubis Kirsten Kück FY 17/18 Outlook Rainer Verhoeven Closing remarks Jürgen Schachler 10
Slide 11: Agenda
Agenda 1. Market environment 2. Strategic initiatives 3. Conclusion 11
Slide 12: Metal demand depends on macro-economic development cycle and GDP drivers
Metal demand depends on the stage of macro-economic develop- ment cycle and the GDP drivers on a regional and country level Timeframe 1970 – 2017 (real GDP) 25 Copper Consumption [kg/capita] 20 15 South Korea Germany 10 China Japan 5 USA India UK 0 0 10.000 20.000 30.000 40.000 50.000 60.000 GDP per
Slide 13: Copper demand sustainable over longer term
Copper demand sustainable over longer term due to late cycle consumption sectors Global copper demand Per consumption segment (2017) Per year (in million t) Consumer & 29.1 Construction 28.3 general 25% 30% 6.0 5.7 scrap refined Transport 11% 22.6 23.1 Industrial Electrical Machinery Network 10% 24%
Slide 14: Demand for metals forecast to have steady growth
Demand for copper, other base metals and precious metals is forecast to have steady growth over the next decade Demand for base metals – Cu, Zn, Pt & Ni Demand for precious metals – Au, Ag, Pt & Pd (in million t) (in kt) Cu Zn Pb Ni CAGR Au Ag Pt Pd CAGR 29 27 28 27 1.38% 26 0.97% 26 25 24 23 25 3.0
Slide 15: Uncommitted copper mine projects required to meet forecast demand
Uncommitted copper mine projects (and higher recycling) will be required to meet forecast demand over the next decades Forecast committed copper mine production and potential from uncommitted projects (in mt) Source: CRU 15
Slide 16: Global copper scrap market volumes will increase
Global copper scrap market volumes will increase over the next decades … Copper in use (in million t) Overall theoretical recycling potential in 2020-2030 of ~70 mill. t of copper content Overall theoretical recycling potential in 2010-2020 of ~50 mill. t of copper content Source: Fraunhofer ISI, Gl
Slide 17: Shift in scrap mix towards more complex material
… and there will also be a shift in mix of the scrap towards more complex material CU content Scrap category Life cycle/trends No2 Shredder WEEE 1950 low » 60-80 years 2015 high* » Faster in China -> Trend for substitution No2 Shredder WEEE » 10-15 years 1990 ~9 kg/car » EV will have higher Cu in th
Slide 18: Agenda
Agenda 1. Market environment 2. Strategic initiatives 3. Conclusion 18
Slide 19: Aurubis growth focused on an integrated set of competencies
Aurubis growth focused on an integrated set of competencies Aurubis Growth Staircase Secondary Contimelt Olen product business (Cumerio) Copper KRS Lünen +40 % DG wire rod (HK acquisition) (Codelco share) Rod Olen, Avellino Multi-metal (Cumerio) FCM business +30 % DG (HK acquisition) Primary copper
Slide 20: Multi-Metal Technology: two interdependent pillars
The core smelting and refining business is based on two interdependent pillars Complex Raw Technology Multi-Metal Aurubis’ strategic growth Materials Business markets Multi-Metal Recovery Potential for differentiation Focus on margin optimization Synergies Enabling Standard Copper Standard Copper
Slide 21: Multi-metal approach focuses on complex feed and recovery
Aurubis’ multi-metal approach will focus on increasing complex feed mix, metal recovery rates and the strong synergy of Aurubis’ mixed Cu- Pb metallurgy Multi-Metal Intake Base Metal Diversification Multi-Metal Recovery Intermediate Metal Products Cu Ni Zn Pb Pb Ag Au Cu Au / Ag Se Copper as a carri
Slide 22: Project Future Complex Metallurgy (FCM)
Project Future Complex Metallurgy (FCM): substantial step for Growth with multi-metal expansion New facilities in Hamburg and Olen: » Bath smelting furnace, as well as leaching and electro-winning plant » Capex: around € 320 million (PFS) Additional use of raw materials: » 270,000 t of concentrates,
Slide 23: Flowsheet and multi-metal capabilities provide future growth options
Aurubis flowsheet and multi-metal capabilities provide various future growth options Raw Material Supply (Secondary Examples) Future Options Flowsheet Integration Potential Copper scrap smelting Lünen › collectors and operation recycling companies Metallic ~70-90kt › waste incineration, shredder inp
Slide 24: Taking a solutions approach to grow in multi-metals
Taking a “solutions” approach to grow in multi-metals Aurubis Knowledge/Capabilities » Technology is a basis for our metallurgical know-how and a starting point Market for development of strong multi-metal flowsheet to maximize metal Processing recovery from complex raw materials » “Solutions” to di
Slide 25: Agenda
Agenda 1. Market environment 2. Strategic initiatives 3. Conclusion 25
Slide 26: Key messages
Key messages » A bright future for metal demand. » Trends for sustainability and increasing complexity of supply chains. » Aurubis business model is robust: » Built on knowledge and asset-based metallurgical, flowsheet and commercial capabilities that provide various options to differentiate and ben
Slide 27: Agenda
Agenda Keynote Jürgen Schachler Internal & external growth William Scotting Future Complex Metallurgy (FCM) Thomas Bünger Lunch break Efficiency Improvement Program Mehdi Al-Radhi Sustainability at Aurubis Kirsten Kück FY 17/18 Outlook Rainer Verhoeven Closing remarks Jürgen Schachler 27
Slide 28: Project Future Complex Metallurgy (FCM)
Project Future Complex Metallurgy (FCM): substantial step for Growth with multi-metal expansion New facilities in Hamburg and Olen: » Bath smelting furnace, as well as leaching and electro-winning plant » Capex: around € 320 million (PFS) Additional use of raw materials: » 270,000 t of concentrates,
Slide 29: Future Complex Metallurgy at a glance
Future Complex Metallurgy at a glance Objectives » Expansion of Hamburg site » Securing the future viability of primary copper » Acceptance & sampling (expansion) production » Bath smelting furnace, phase separation » Optimizing throughput times, reducing working furnace, wastewater treatment (new
Slide 30: Complex flowsheet offers flexibility in feed material
The complex flowsheet offers flexibility in feed material and accelerates metal flow Hamburg Olen PM-containing raw materials, Blister Copper bleed intermediates, PM residues, PM (own) anode Refining furnace Blister leaching residue slimes Cathodes PbO Raw slag silver New bath smelting furnace TBRC
Slide 31: Expanding potential market portfolio on purchasing markets
Aurubis is expanding its potential market portfolio and strengthening its position on the purchasing markets Market Cluster: Complex concentrate Smelter Smelter intermediates Cu Mine E-scrap Copper PM refining material Anode slime, E-scrap PCBs speiss, flue dust, libration Complex slime (Cu, As), co
Slide 32: Accelerated metal flow allows net working capital gain
The accelerated metal flow allows for a substantial net working capital gain Aurubis Group net working capital (in million €) 1,220 250 970 » Decrease in net working capital is mainly stock-driven » FCM enables a significant reduction (60 %-70 %) of throughput times in terms of days in stock compare
Slide 33: Summary
Summary » With FCM we will serve a broader range of several kinds of primary and secondary material streams and gain access to new market segments » Our metallurgical and process expertise was the basis for developing the FCM flowsheet as an answer to the growing supply of various complex input mate
Slide 34: Lunch Break
Lunch Break Please be back at 2:00 p.m. 34
Slide 35: Agenda
Agenda Keynote Jürgen Schachler Internal & External Growth William Scotting Future Complex Metallurgy (FCM) Thomas Bünger Lunch break Efficiency Improvement Program Mehdi Al-Radhi Sustainability at Aurubis Kirsten Kück FY 17/18 Outlook Rainer Verhoeven Closing remarks Jürgen Schachler 35
Slide 36: Our strategic business setup: Realizing our purpose
Our strategic business setup: Realizing our purpose 36
Slide 37: Our strategic focus Efficiency
Our strategic focus Efficiency: Optimization and continuous improvement in all areas Efficiency targets » Project success of more than € 200 million until FY 2019/20 (Top-Down Approach) » Standardization of best practices, transparency of operational losses, empowerment of our staff (AOS Approach) »
Slide 38: Business Improvement Project increases efficiency and results
Sustainable increase in efficiency and results through our Business Improvement Project Project success (in million €)* 200 Based on diagnostic findings, implementation is 120 pushed through organization top-down 60 30 Based on detailed performance indicators and loss recordings, implementation will
Slide 39: Efficiency Improvement Program
€ 200 million Efficiency Improvement Program fully on schedule (in € million) + 80 > 200 + 60 » Project target of additional € 30 million will be (> 120) achieved for FY 2017/18 » Measures for 2018/19 are under implementation or + 30 under preparation (> 60) » All of the company’s divisions are cont
Slide 40: Aurubis Operating System AOS – Sites
Aurubis Operating System AOS – Sites Target » Installation of an Improvement Program at all sites identifying losses in production & maintenance of Aurubis, removing them step by step in teams, and thus becoming more and more effective and efficient. » Staff empowerment across all levels and further
Slide 41: Aurubis Operating System AOS – Transversals
Aurubis Operating System AOS – Transversals Target » Installation of an Improvement Program across all transversal functions identifying losses in the processes and organization of Aurubis, removing them step by step in teams, and thus becoming more and more effective and efficient. » Staff empowerm
Slide 42: Efficiency improvement activities at Aurubis Bulgaria
Efficiency improvement activities at Aurubis Bulgaria Concentrate throughput in the Pirdop smelter Breakdown (machine area) Others Functionality 3% 6% Hydraulics Chain 33% 11% Milling heads 16% Concentrate throughput (in million t) Anode clamps 1.40 1.41 * 1.47 31% 1.32 Breakdown (reasons) 1.19 1.04
Slide 43: Agenda
Agenda Keynote Jürgen Schachler Internal & External Growth William Scotting Future Complex Metallurgy (FCM) Thomas Bünger Lunch break Efficiency Improvement Program Mehdi Al-Radhi Sustainability at Aurubis Kirsten Kück FY 17/18 Outlook Rainer Verhoeven Closing remarks Jürgen Schachler 43
Slide 44: Aurubis drives sustainability forward
Aurubis drives sustainability forward Since 2002 Annual Aurubis AG Environmental Reports 2008 First Aurubis AG Sustainability Report Since 2009 Group Sustainability Report (every two years) Since 2010 Group Environmental Report (every two years) 2013 Sustainability Strategy 2013-2018 2014 4th Sustai
Slide 45: Sustainability performance during the reporting period
Sustainability performance during the reporting period » ROCE: 15.1 in FY 2016/17 (10.9 in FY 2015/16) » Reduction of CO2 emissions (direct and indirect): 1.63 million t in 2017 (1.67 million t in 2016) » Reduction of specific emissions » SO2: 4.9 kg/t Cu in 2017 (5.1 in 2016) » LTIFR: 4.8 in FY 201
Slide 46: Continuous reduction of environmental impact
Continuous reduction of environmental impact » Outstanding success in environmental and climate protection » One of the most environmentally friendly copper producers in the world today Specific emissions and usage SO2 emissions of copper smelters (in t/t of copper output) (in kg SO2 per t of copper
Slide 47: Sustainability as integral part of the Group strategy
Sustainability as integral part of the Group strategy Mission: Responsibly transforming raw materials into value to provide metals for an innovative world. 47
Slide 48: Sustainability with a focus on economy, environment, and people
Sustainability with a focus on economy, environment, and people Aurubis Sustainability Strategy » 2018-2023 » Balance of economy, environment, people » 9 fields of action » 9 targets » 27 measures 48
Slide 49: Sustainability Strategy – Example for Environment
Sustainability Strategy – Example for Environment Relevant action area energy and climate PEOPLE ECONOMY Creating value – preserving the environment ENVIRON- MENT » Target: Aurubis aims to further increase the energy efficiency within the Group and to save CO2 emissions. » Key measures: » Introducin
Slide 50: Progress in reducing CO2 emissions
We steadily work towards further progress in reducing CO2 emissions PEOPLE ECONOMY CO2 emissions Specific CO2 emissions from fuel (direct and indirect within the Group, in million t) (in t/t of copper output*) ENVIRON- MENT 1.72 0.32 -40 % 1.67 1.63 0.21 0.22 1.20 1.15 0.19 1.11 Scope 2: Purchased E
Slide 51: Flagship project: CO2-free industrial heat for HafenCity East
Flagship project: CO2-free industrial heat for HafenCity East PEOPLE ECONOMY » Energy-efficient heat for HafenCity East in ENVIRON- MENT Hamburg » Heat extraction line 1 (first stage): ca. 160 million kWh per year (20 MW), equivalent to the heat requirements of about 8,000 four-person households » I
Slide 52: Sustainability Strategy – Example for People
Sustainability Strategy – Example for People Relevant action area health & safety PEOPLE ECONOMY Encourage commitment – protect health and safety ENVIRON- MENT » Target: The area of occupational safety and health protection will be further strengthened; work-related accidents, injuries, and illnesse
Slide 53: Safety is fundamental to our business
Safety is fundamental to our business LTIFR(1-n): Lost Time Injury Frequency Rate PEOPLE ECONOMY (Incidents/accidents with loss of time of one complete shift or more, per million h worked) ENVIRON- MENT 23.7 18.1 17.1 13.3 11.7 9.1 7.8 6.3 4.6 4.8 FY FY FY FY FY FY FY FY FY FY 07/08 08/09 09/10 10/1
Slide 54: Sustainability Strategy – Example for Economy
Sustainability Strategy – Example for Economy Relevant action area recycling solutions PEOPLE ECONOMY Complex processes – innovative solutions ENVIRON- MENT » Target: In the area of recycling, Aurubis intends to increasingly use complex secondary raw materials and to produce additional metals in add
Slide 55: Main sustainability ratings & initiatives
Main sustainability ratings & initiatives Best Newcomer (2015) MDAX Leader (2016) oekom research: Prime (2017) Score B (2017) 68 von 100 (2018) AA (2018) 55
Slide 56: Agenda
Agenda Keynote Jürgen Schachler Internal & External Growth William Scotting Future Complex Metallurgy (FCM) Thomas Bünger Lunch break Efficiency Improvement Program Mehdi Al-Radhi Sustainability at Aurubis Kirsten Kück FY 17/18 Outlook Rainer Verhoeven Closing remarks Jürgen Schachler 56
Slide 57: EBT and ROCE considerably improved, cash flow lagging
EBT and ROCE 9 months year-on-year considerably improved, cash flow still lagging Operating EBT (in million €) Operating ROCE (in %) 15.1 298 14.6 264 211 13.0 FY 2016/17 9M 2016/17 9M 2017/18 FY 2016/17 9M 2016/17 9M 2017/18 Capital expenditure (in million €, incl. finance leases) Net cash flow (in
Slide 58: Cash flow from operations influenced by increase in intermediate products
Cash flow from Operations strongly influenced by temporary increase in intermediate products » The cash flow before the change in net working capital was significantly Consolidated cash flow statement positive and was in line with previous year. (in million €, IFRS) » The high inventory build-up was
Slide 59: 2016/17 dividend payout of € 1.45
2016/17 dividend payout of € 1.45 Aurubis dividends (in € per share) Payout ratio on the basis of operating consolidated results (in %) 1.45 1.35 53 1.25 1.10 45 1.00 34 28 24 12/13 13/14 14/15 15/16 16/17 12/13 13/14 14/15 15/16 16/17 59
Slide 60: Planned major shutdowns in the next years
Planned major shutdowns in the next 3 years Status: August 2018 (preliminary) FY 2018/19 FY 2019/20 FY 2020/21 Hamburg › Boiler repair/inspection › Anode furnace Oct./Nov. 2019 Apr. 2021 EBT effect ca. € 30 million EBT effect ca. € 8 million Pirdop › Boiler repair/inspection (already announced) May/
Slide 61: Forecast for operating EBT & ROCE 2017/18 confirmed
Forecast for operating EBT & ROCE 2017/18 confirmed For FY 2017/18, we expect a moderately higher operating EBT for the Aurubis Group compared to the 2016/17 reporting year. Aurubis definition for a qualified comparative forecast 343 ± 0 to 5 % At prior-year level 313 298 ± 5.1 to 15 % Moderate > ±1
Slide 62: Agenda
Agenda Keynote Jürgen Schachler Internal & External Growth William Scotting Future Complex Metallurgy (FCM) Thomas Bünger Lunch break Efficiency Improvement Program Mehdi Al-Radhi Sustainability at Aurubis Kirsten Kück FY 17/18 Outlook Rainer Verhoeven Closing remarks Jürgen Schachler 62
Slide 63: Capital Market Day 2018
Capital Market Day 2018 September 5, 2018 Pirdop, Bulgaria
Slide 64: Your IR Contacts
Your IR Contacts: Angela Seidler Elke Brinkmann Christoph Tesch Head of Investor Relations Senior Manager Senior Manager +49 40 7883-3178 +49 40 7883-2379 +49 40 7883-2378 [email protected] [email protected] [email protected] Financial calendar » Annual Report 2017/18 12/11/2018 » Quarte
Slide 65: Disclaimer
Disclaimer Forward-looking statements This document contains forward-looking statements that involve risks and uncertainties, including statements about Aurubis’ plans, objectives, expectations, and intentions. Readers are cautioned that forward-looking statements include known and unknown risks and