Business Unit Copper Products
in € million operating2012/13 operating2011/12
Revenues 9,045 9,619
EBIT 7 28
EBT (8) 10
Capital expenditure 36 27
Depreciation and amortization (31) (27)
Average number of employees 2,800 2,748
BU Copper Products produces and markets high-quality copper products such as continuous cast rod, shapes, pre- rolled and finished strip and specialty profiles, primarily from internally produced copper cathodes. Copper scrap with high copper contents is also used to fabricate flat products. AURUBIS ROD is the most important copper product in the portfolio by volume. This continuous cast copper wire rod fea- tures the highest electrical conductivity, the best workability and an excellent surface and is therefore a central feedstock for the cable and wire industry. Aurubis is a leader in this mar- ket segment. The Group runs four state-of-the-art operations in Hamburg (Germany), Olen (Belgium), Avellino (Italy) and Emmerich (Germany).
AURUBIS SHAPES is our brand for our broad portfolio of continuous cast copper shapes. These casts are the starting products for semi-finished product fabricators and tube rolling mills. We are a leading supplier in these markets, especially when large piece weights, unique geometries and special copper grades are required. A significant part of our AURUBIS SHAPES output is directly delivered to our subsidiary Schwer- metall Halbzeugwerk GmbH, which produces pre-rolled strip for semis fabricators worldwide.
Finished strip is produced in Stolberg (Germany), Pori (Fin- land) and Buffalo (USA). The site in Zutphen (Netherlands) is specialized in innovative vertical strip casting operated exclusively at Aurubis as well as the subsequent strip rolling process. The strip production at our site in Finspång (Sweden) was relocated to Zutphen during 2013. Production in Sweden ceased as of September 30, 2013. In addition, we fabricate shaped brass wire for the electrical industry in Stolberg. Moreover, Aurubis Belgium in Olen (Belgium) produces cop- per bars and profiles using the Conform process.
A significant portion of the revenues of BU Copper Products consists of so-called shape surcharges, a premium that is added to the copper price to compensate the transformation costs for turning copper cathodes into copper products.
COPPER PRODUCT MARKETS REMAIN WEAK OVERALL WITH STRONG REGIONAL DIFFERENCES The copper product markets are usually slow in the first quarter of a fiscal year. The weak economic situation in Europe, especially in Southern Europe, also negatively impacted demand in fiscal year 2012/13. Product business in the con- struction sector in North America and parts of the Far East was better but could not fully compensate for weak European demand, which was mainly driven by the lack of recovery in the automotive industry.
There were strong regional differences in the ongoing trend, which was generally uncertain. In North America the market for copper products rose slightly after the longer winter 2012/13, while the economy in Southern Europe remained at a lower activity level. There were positive impulses in Germany and, in some cases, Italy and France, but still not enough to compensate for the unfavorable course of other national mar- kets. North America maintained its momentum and had good sales results. Cable manufacturers ordered higher volumes for applications in infrastructure and construction, while the automotive sector remained weak. Though the rod, brass and specialty material business improved later, the general situation remained quite unstable, resulting in orders at short notice.
AURUBIS ROD deals with with difficult environment Aurubis was able to hold its ground in the European rod mar- kets in fiscal year 2012/13 despite the difficult environment thanks to its high-quality product portfolio and its attention to customer demands. After a restrained start in the first few months of the fiscal year, AURUBIS ROD sales later improved slightly.
All in all, Aurubis manufactured 608,000 t of AURUBIS ROD in fiscal year 2012/13, a 6 % decrease compared to the previ- ous year (646,000 t).
Wire rod output in thousand t 622 766 608 646 785 08/09 09/10 10/11 11/12 12/13
AURUBIS SHAPES draws positive effects by focusing on specialty products
The European demand for copper shapes decreased strongly in the course of fiscal year 2012/13. The standard product busi- ness in particular has suffered from the impact of economic weakness. The structural relocation of some downstream pro- duction activities to the Far East also had a negative impact. Nevertheless, the high-quality portfolio of AURUBIS SHAPES products paid off. The higher margins from this business together with process improvements nearly compensated for the volume reductions of AURUBIS SHAPES in the standard product sector.
The production volume of continuous cast AURUBIS SHAPES came to 149,000 t during the fiscal year, which is a 9 % de- cline compared to the previous year (164,000 t).
Pre-rolled strip sales* in thousand t
* incl. Wieland-Werke AG’s 50 % share Continuous cast shape output
in thousand t
Fabrication of flat rolled products slightly increased The sales markets for flat rolled products varied. After a weak first quarter of the fiscal year, demand stagnated on the European market. There was a slight dip in the summer due to seasonal influences. In contrast, the performance in North America was much better than in calendar year 2013. After successfully integrating Business Line Flat Rolled Products into the Aurubis Group in the last fiscal year, the work in 2012/13 focused on optimizing the individual plants. The central project, ROMS (Restructuring of Manufactur- ing Structure), continued with the relocation of production capacities from Finspång, Sweden to Zutphen, Netherlands. Furthermore, we implemented specific performance and qual- ity improvement measures at all sites. At the same time, we reinforced our sales activities in Europe, the Middle East, the Americas and Asia.
145 209 188 202 08/09 09/10 10/11 11/12 12/13 153 210 164 197 08/09 09/10 10/11 11/12 12/13 149 192
In fiscal year 2012/13 the Aurubis Group’s output of flat rolled products and specialty wire was marginally higher than the previous year’s level. The Group’s strip output of around 215,000 t was slightly above the prior year (207,000 t) despite a very difficult market environment in our core market in Europe. Specialty wire output stayed stable at 9,600 t, al- though competitive pressure in the markets remained high. Pre-rolled strip capacities well utilized overall
In the first quarter the incoming orders for pre-rolled strip weakened a great deal and the activity at the beginning of the fiscal year was very slow. From January onwards the demand constantly increased and remained at a good level until summer. The plant was very well utilized during that period. Seasonal effects impacted demand afterward.
In fiscal year 2012/13 Schwermetall Halbzeugwerk sold a total of 192,000 t of strip products made of copper and copper alloys, about 2 % more compared to the previous year (188,000 t).
Bars and profiles business influenced by internal restructuring
Bars and profiles business was influenced by the ongoing restructuring steps during fiscal year 2012/13, which included the relocation of production facilities for bars and profiles from Yverdon-les-Bains (Switzerland) to Olen (Belgium) and centralization of production there. The restructuring had a negative impact on output in the first half of the fiscal year, though production improved again from the second half. RESULT
The earnings of BU Copper Products suffered from the weak economic environment and were affected by the ongoing restructuring in Business Line Flat Rolled Products as well as Bars & Profiles. Overall, the BU generated operating earnings before taxes (EBT) of € –8 million (€ 10 million in the previous year).
The BU’s revenues totaled € 9,045 million in the fiscal year, a decrease of € 574 million compared to the previous year. The BU had an average of 2,800 employees.
Copper strip and shaped wire in thousand t
Shaped wire Strip
* incl. Luvata RPD as of September 1, 2011 217* 29 41 10 10 39 51 207 40 10 11 51* 08/09 09/10 10/11 11/12 12/13 225* 10 215