ALL THE BEST FOR THE FUTURE Annual Report 2015/16 All the Best for the Future All for the Best Annual Report 2015/16 Annual Report THE AURUBIS GROUP IN FIGURES o T 001 IFRS 2015/16 3) 2014/15 3) Change Results Revenues € million 9,475 10,995 –14 % EBITDA € million 312 336 –7 % Operating EBITDA € million 358 500 –28 % EBIT € million 177 200 –12 % Operating EBIT € million 229 370 –38 % EBT € million 159 170 –6 % Operating EBT 1) € million 213 343 –38 % Consolidated net income € million 124 134 –7 % Operating consolidated net income € million 165 257 –36 % Net cash flow € million 236 365 –35 % Operating ROCE 1) % 10.9 18.7 – Aurubis shares Market capitalization € million 2,242 2,558 –12 % Earnings per share € 2.71 2.95 –8 % Operating earnings per share € 3.64 5.68 –36 % Dividend per share 2) € 1.25 1.35 –7 % 1) Corporate control parameters. 2) 2015/16 figure is the proposed dividend. 3) Values have been “operationally” adjusted for measurement effects deriving from the use of the average cost method in accordance with IAS 2, from copper price-related measurement effects on inventories and from purchase price allocation impacts, primarily on property, plant and equipment, commencing from fiscal year 2010/11 onwards. Input/output Human resources in thousand t (previous year in parentheses) Number of employees (personnel expenses in € million in parentheses) 2,156 6,372 6,563 6,359 1) 6,321 1) 6,454 1) (2,295) (421) (429) (415) (431) (449) 1,084 (1,138) 758 (764) 253 172 218 (294) (170) (216) 2011/12 2012/13 2013/14 2014/15 2015/16 Cathode outputWire rod output Copper scrap input 1) Excluding Schwermetall Halbzeugwerk GmbH & Co. KG. Concentrate throughput Flat rolledspecialty products wire outputand Continuous cast shapes output REASONS TO INVEST IN AURUBIS SHARES 1. 2. 3. 4. 5. Good earnings history; Risk-averse business Sustainable investment, Diversified business Innovative, strong stable balance sheet model with first-class risk stable shareholder model with leading company with extensive structure and robust management systems structure and a consistent position along the expertise in metal cash flows dividend policy copper value chain extraction, processing and recycling 1 AURUBIS – ALL THE BEST FOR THE FUTURE We are 150 years young and still have many good years ahead of us. That’s because we supply high-purity copper, a material that is essential for many emerging technologies, and thus a key element in modern society. It’s because we take the expectations of our employees, suppliers, customers and other interest groups seriously and learn from these stakeholders. And it’s because we are increasingly creating real closed cycles in the copper value chain, making our production processes even more sustainable and environmentally friendly. The next 150 years of Aurubis have just begun – read about our successful start in this report. 2016 SITES Entire Aurubis Group 33 sites worldwide USA EUROPE ASIA 2 sites 22 sites 9 sites TABLE OF CONTENTS 2 Letter from the Management Board 22 Company Management 111 Consolidated Financial Statements 4 Interview with Jürgen Schachler 26 Supervisory Board Report 118 Notes to the Consolidated 8 All the Best for the Future 31 Corporate Governance Financial Statements 10 All the Best for the World 45 Aurubis Shares on the 192 Responsibility Statement 14 All the Best for Our Group Capital Market 193 Auditors’ Report 18 All the Best for People 51 Combined Management Report 195 Further Information Detailed tables of contents for the Combined Management Report and the Consolidated Financial Statements can be found on pages 51 and 111. Aurubis Annual Report 2015/16 2 Dr. Stefan Boel Jürgen Schachler Erwin Faust Executive Board Member for Executive Board Chairman Chief Financial Officer Business Unit Copper Products 3 We successfully concluded Aurubis AG’s fiscal year 2015/16 at the end of September and are wrapping up our anniversary year 2016 as well. The past several months have been very poignant. We received many words of congratulation – from employees and their families, from business partners around the world, from representatives of government and society, from institutions and interest groups and, not least, from our company’s shareholders. Feeling the strength of these bonds during our anniversary year moved us, and pushes us to continue adding chapters to the Aurubis success story. Times have not become easier, and uncertainties have increased. The past fiscal year showed once again that the international commodity markets are influenced by political and economic events. Pure market data is not enough to provide accurate analyses and assessments. The year 2016 was marked in particular by the historic vote of the British people to remove their country from the European Union. The reduced economic growth of commodity giant China was on market analysts’ risk list yet again. We followed the development of the US interest rate policy and the US dollar as well as the polarizing election of the US president just as closely as we did the escalation of tensions in the Middle East. The uncertain overall economic and political conditions were also reflected in an unusually varied price trend for industrial and precious metals. While gold and zinc were the big price winners in 2016, the price recovery bypassed copper this time. This is notable because the global copper market indicated a distinct production deficit in the first half of 2016. From our perspective, the fact that there wasn’t another, more dramatic price decline on the London Metal Exchange up to the end of the year is only a small consolation. The trend on the markets for our raw materials and products was also varied. While the supply of copper concentrates allowed for good volume levels and high treatment and refining charges, the supply situation for copper scrap Aurubis Annual Report 2015/16 2 Dr. Stefan Boel Jürgen Schachler Erwin Faust Executive Board Member for Executive Board Chairman Chief Financial Officer Business Unit Copper Products 3 was unsatisfactory for long periods of the fiscal year. Sales of sulfuric acid were not very convincing either, as prices on the market were weak. In contrast, the copper products business was satisfactory overall, with a good trend in rod sales. The results of fiscal year 2015/16 were good when compared with past years, allowing for a suitable dividend for our shareholders. However, it did not come close to the record results of the previous year, in which all of the relevant factors developed positively. So we ask ourselves if we are satisfied by this – the answer is a clear “no”. To set the course for a successful future, we have to remove ourselves from a short- term mindset, now more than ever. For this reason, we started several different initiatives in late July 2016. We want to know: What do we do well? How do we compare to the competition? First and foremost, what can we improve? External consultancies are supporting us in answering these questions. The results will lead to concrete improvements starting in 2017. At the same time, we are working within the Executive Board on developing a clear vision for Aurubis with an internal management team. Based on this vision, we will adjust the company strategy before spring 2017. We will therefore create a starting point from which to continue successfully developing the company. So fiscal year 2016/17 will be a year of change. We will improve Aurubis from the inside out to prepare ourselves for all of the changes in our business environment. We hope that you will continue to join us on this path. We will of course update you about the progress we make along the way. Sincerely, Jürgen Schachler Dr. Stefan Boel Executive Board CVs » Aurubis Annual Report 2015/16 2 Dr. Stefan Boel Jürgen Schachler Erwin Faust Executive Board Member for Executive Board Chairman Chief Financial Officer Business Unit Copper Products 3 EXECUTIVE BOARD Jürgen Schachler started his career in the chemical industry after studying economics. He then switched to the metal processing industry, where he initially held positions in marketing and sales. Starting in 1993, he served in the management of various companies of ArcelorMittal Luxembourg. He has worked in management positions abroad in the USA, Thailand and Canada. In 2013 Jürgen Shachler assumed the position of CEO of ArcelorMittal Europe, Flat Product, Business Division South West, where he was responsible for 10,000 employees. Effective July 1, 2016, he was appointed Chairman of the Aurubis AG Executive Board. In addition, he oversees BU Primary Copper and serves as Director of Industrial Relations. Dr. Stefan Boel worked from 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. Erwin Faust held managerial positions in the Volkswagen Group, at VAW Aluminium and from 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 was interim Executive Board Spokesman from November 1, 2015 to June 30, 2016. Aurubis Annual Report 2015/16 4 5 INTERVIEW WITH JÜRGEN SCHACHLER Jürgen Schachler assumed the role of Aurubis AG involvement with many nations and employees in a Executive Board Chairman on July 1, 2016.