In fiscal year 2018/19, we kicked off different initiatives and individual measures within the Group to strengthen Aurubis. We bring them together under the strategy Growth, Efficiency & Responsibility, with which we want to achieve our Vision 2025. Aurubis currently holds leading market positions in many areas – in which we aim to continue developing over the long term.
With the acquisition of the Belgian/Spanish Metallo Group, which is still subject to approval by the European Commission, we want to continue driving external growth. The company specializes in processing non-organic recycling materials and materials with low metal contents. This acquisition would enable us to add to our metals portfolio in areas such as nickel, tin, zinc, and lead in particular. Following approval by the antitrust authority and the closing, we plan to push forward with the integration in fiscal year 2019/20.
The Metallo acquisition would support us on our path to becoming a multi-metal group. In this regard, we have been reporting the sales volumes of gold, silver, lead, nickel, tin, platinum group metals, and minor metals since 2017/18, in addition to information about our copper products. We plan to continue growing through internal and external projects in the future as well.
After the European Commission blocked the sale of Segment FRP in February 2019, we are now reviewing different strategic options for the sale of the segment. The segment thus continues to fulfill the conditions for presentation as discontinued operations pursuant to IFRS 5.
For fiscal year 2019/20, the following maintenance shutdowns are planned or have recently taken place:
At our site in Hamburg (Germany), we carried out a scheduled, legally mandatory maintenance shutdown in October and November 2019. According to our current plans, this will have a roughly € 34 million impact on our result.
At our Lünen site, we will carry out scheduled, legally mandatory maintenance shutdowns in April and September 2020. According to our current plans, this will have a roughly € 11 million impact on our result.
Our earnings are subject to quarterly fluctuations because of the nature of our business model. This is due to seasonal factors but may also be caused by disruptions in equipment or operating processes. The first quarter of a fiscal year in particular is shaped by seasonal features, including subdued customer orders and changes in raw material deliveries.
The future development and forecast of Aurubis AG coincide with the general statement on the Aurubis Group.
The outlook for fiscal year 2019/20 is based on the following premises:
- We expect stable copper demand based on industry forecasts. Product demand from the automotive sector is expected to remain subdued.
- The level for 2020 annual contracts on the copper concentrate market will likely be substantially lower than in 2019 in light of the November 2019 benchmark.
- In fiscal year 2019/20, the market trend for copper scrap and sulfuric acid is difficult to forecast due to the short-term nature of the business.
- The Aurubis copper premium for 2020 has been set at US$ 96/t (previous year: US$ 96/t).
- A significant portion of our revenues is based on the US dollar. We reduce the resulting risks with our hedging strategy.
- We will transition our efficiency improvement program, which has focused on leveraging efficiency across the Group thus far, to a program with a clear focus on cost savings in 2019/20. The objective is to counteract both inflation and the weaker economic and market conditions that are expected.
- We expect plant availability for fiscal year 2019/20 to be above that of the previous year overall, especially because of the investments made in our sites within the scope of planned shutdowns.
In fiscal year 2019/20, we are changing the type of our forecast from a qualified comparison to the prior year to an interval forecast. The interval forecast is a bandwidth between two limit values. With this change, we aim at providing a more comprehensive understanding of our expected future performance, while still making room for the inevitable uncertainties and opportunities that the Aurubis Group will face. In light of this new forecast type, we expect the following developments in fiscal year 2019/20:
In total, we expect an operating EBT between € 185 and 250 million and an operating ROCE between 8 and 11 % for fiscal year 2019/20.
In Segment Metal Refining & Processing, we expect an operating EBT between € 230 and 310 million and an operating ROCE between 11 and 16 % for fiscal year 2019/20. The development of the segment’s result will be influenced in part by weaker market conditions, especially a tightening copper concentrate market, compared to the previous year.
In Segment Flat Rolled Products, we expect an operating EBT between € 11 and 15 million and an operating ROCE between 5 and 7 % for fiscal year 2019/20. Operating EBT in the reporting period was negatively influenced by a change in the definition of the operating result and an impairment loss recognized against the segment’s non-current assets (in total: € 51 million), but these effects aren’t expected anymore for fiscal year 2019/20.