Aurubis Ag · XETR:NDA
Aurubis — Investor Day (June 2023)
74 slides from Aurubis's investor day presentation, Jun 13, 2023
Slide 1: Aurubis Capital Market Day 2023
Aurubis Capital Market Day 2023 London, June 13
Slide 2: Agenda
Agenda 1 Strategy Recap 5 Battery Recycling 2 6 Strategy Implementation & Achievements Financials 3 Q&A Session 7 Q&A Session 4 Sustainability 8 Outlook Aurubis Capital Market Day 2023 2
Slide 3: Strategy Recap
1 Strategy Recap Roland Harings, CEO
Slide 4: Aurubis strategy builds on the sound mission to drive sustainable growth for our shareholders
Aurubis strategy builds on the sound mission to drive sustainable growth for our shareholders Secure Strengthen Pursue Core Business Core Business Growth Options Industry Leadership in Sustainability Enablers − Digitalization, automation, and “Plant of the Future” − Strategic resource management, ta
Slide 5: Confirming our strategy even in a challenging economic environment
Confirming our strategy even in a challenging economic environment Macroeconomic environment New regulatory has changed frameworks 2021 2023 EU Critical Raw Materials Act Economic development Recycling business benefiting from Global GDP growth & faster increasing regionalization innovation cycles W
Slide 6: Anticipated and growing metal supply deficits in North America and Europe
Anticipated and growing metal supply deficits in North America and Europe drive key growth opportunities for our core business Refined copper market balance (in Mt) North America Europe* 3.9 3.9 4.0 4.1 4.2 4.2 3.7 3.7 3.8 3.1 3.2 3.2 3.1 3.2 3.2 3.3 3.3 3.3 3.3 3.3 2.8 2.9 3.0 2.8 2.4 2.5 2.6 Produc
Slide 7: Continuous strengthening of our business model through key organic growth projects
Continuous strengthening of our business model underway through key organic growth projects Commissioning Blead treatment Olen Beerse (BOB) Start of construction Start of construction (BE Olen) Complex Recycling Solar Park (BG Pirdop) Industrial Heat (DE Hamburg) Commissioning Hamburg (CRH) Tankhous
Slide 8: Effective governance of projects in implementation
Effective governance of projects in implementation ensures efficient execution within prescribed boundaries Project management cycle Key elements of Aurubis Project Management Governance Regular meeting cadence up to Executive and Supervisory Board, ensuring Supervisory Participants: Members of Supe
Slide 9: Close monitoring of our projects enables successful implementation
Close monitoring of our projects enables successful implementation “Early warning radar" (EWR) introduced to ensure our strategy always adapts to conditions around us Project implementation dashboard Supply 30 “signposts”, each representing Unforeseen divergences between a key view or assumption of
Slide 10: Business model resilience based on independence of income components
Business model resilience based on independence of income components, drives gross margin growth Breakdown of income components in the Aurubis Group 2,240 1,916 1,680 1,545 Metal gain 30% 35% 36% 34% 38% Premiums & products 37% 30% 30% 35% 34% Treatment charges for concentrate & recycling input 33%
Slide 11: Growth strategy confirmed: Capex and EBITDA impact increase significantly
Growth strategy confirmed: Capex and EBITDA impact increase significantly Short term Medium term Long term Currently approved Medium-term planning (next 4 years) Until 2030 Growth capex ~€ 1,100 million Growth capex ~€ 280 million is Ambition and scale of our long-term approved included in the medium-
Slide 12: Strategy Implementation & Achievements: Aurubis Smelter Network
2 Strategy Implementation & Achievements » Aurubis Smelter Network Inge Hofkens, COO Multimetal Recycling 12
Slide 13: Expanding our flowsheet with additional smelting furnaces and processes
Expanding our flowsheet with additional smelting furnaces and processes to drive multimetal growth strategy Input materials Smelting Refining Multimetal Cu concentrates HH HH » Cu — Cu processing — Pir Ol Cu/CuNi — HH » Ag Primary HH CuNi electrolyte PM/Ni — tankhouse Lue — Pir » Au sites Pir — repr
Slide 14: Aurubis Richmond
Aurubis Richmond Input materials Smelting Refining Multimetal Cu concentrates HH HH » Cu — Cu processing — Pir Ol Cu/CuNi — HH » Ag Primary HH CuNi electrolyte PM/Ni — tankhouse Lue — Pir » Au sites Pir — reprocessing concentrates Ol — — Lue Bee » PGM BOB Bee |Ol » Se Scrap; PCBs1 » Te Cu anode slime
Slide 15: Complex Recycling Hamburg (CRH)
Complex Recycling Hamburg (CRH) Input materials Smelting Refining Multimetal Cu concentrates HH HH » Cu — Cu processing — Pir Ol Cu /CuNi — HH » Ag Primary HH CuNi electrolyte PM/Ni — tankhouse Lue — Pir » Au sites Pir — reprocessing concentrates Ol — — Lue Bee » PGM BOB Bee |Ol » Se Scrap; PCBs1 » T
Slide 16: Tankhouse Expansion in Pirdop
Tankhouse Expansion in Pirdop Input materials Smelting Refining Multimetal Cu concentrates HH HH » Cu — Cu processing — Pir Ol Cu/CuNi — HH » Ag Primary HH CuNi electrolyte PM/Ni — tankhouse Lue — Pir » Au sites Pir — reprocessing concentrates Ol — — Lue Bee » PGM BOB Bee |Ol Capacity increase Pir »
Slide 17: Strategy Implementation & Achievements: Aurubis Richmond
2 Strategy Implementation & Achievements » Aurubis Richmond David Schultheis, Designated President / Managing Director Aurubis Richmond LLC
Slide 18: Aurubis Richmond
Aurubis Richmond Input materials Smelting Refining Multimetal Cu concentrates HH HH » Cu — Cu processing — Pir Ol Cu/CuNi — HH » Ag Primary HH CuNi electrolyte PM/Ni — tankhouse Lue — Pir » Au sites Pir — reprocessing concentrates Ol — — Lue Bee » PGM BOB Bee |Ol » Se Scrap; PCBs1 » Te Cu anode slime
Slide 19: Aurubis Richmond (Video)
Aurubis Richmond Video AAurubis
Slide 20: Very attractive market environment: recycling materials to grow in North America
Very attractive market environment: Relevant recycling materials to grow at ~5 % p.a. in North America Pursuing growth in North America US-relevant recycling market Printed circuit boards Metal shredder supply Insulated copper (kt p.a.) (PCB) supply (kt p.a.) (kt p.a.) wire supply (kt p.a.) ~5% ~7%
Slide 21: Aurubis Richmond with significant progress since groundbreaking
Aurubis Richmond with significant progress since groundbreaking in June 2022 ‒ first equipment received in May 2023 Start of hot commissioning (Module 1) First equipment June ʻ22 June ʻ23 November ʻ23 June ʻ24 May ʻ23 Start of sampling/ Start of cold August ʻ24 pre-processing commissioning (Module 1)
Slide 22: Our growth ambition: largest fully-integrated copper producer in North America
Our growth ambition: Become the largest fully-integrated copper producer in North America Currently in development Potential growth areas Leveraging potential Sourcing Smelting & conversion Refining Products across the whole copper value chain − Gradual expansion of capacities and growth along entire
Slide 23: On track for profitable growth in North America
On track for profitable growth in North America Our strategy, The US market Aurubis Richmond With Richmond, we Richmond will focused on growth is growing rapidly ‒ is well on track: are building a state- become our "home in recycling and launching the on time and within of-the-art and very base" for
Slide 24: Strategy Implementation & Achievements: Complex Recycling Hamburg (CRH)
2 Strategy Implementation & Achievements » Complex Recycling Hamburg (CRH) Dr. Jürgen Jestrabek, CRH Project Lead
Slide 25: Complex Recycling Hamburg (CRH)
Complex Recycling Hamburg (CRH) Input materials Smelting Refining Multimetal Cu concentrates HH HH » Cu — Cu processing — Pir Ol Cu/CuNi — HH » Ag Primary HH CuNi electrolyte PM/Ni — tankhouse Lue — Pir » Au sites Pir — reprocessing concentrates Ol — — Lue Bee » PGM BOB Bee |Ol » Se Scrap; PCBs1 » Te
Slide 26: Without CRH: Currently, valuable intermediates not leveraged
Without CRH: Currently, valuable intermediates not leveraged Current metal flow sheet Speiss Sales to external parties ~135,000 t » Fine Pb Cu, Au, Ag, Pd, Pt, Pb bullion Rh, Te, Sn, Pb » Ag Rich Precious metal recycling material bullion refining » Au Pb refinery containing intermediates » PGM from pri
Slide 27: With CRH: Optimizing our metal flowsheet
With CRH: Optimizing our metal flowsheet with additional metal processing steps, using valuable intermediates New metal flow sheet with CRH Potential Speiss Sales to follow-up external parties projects » Cu + ~25 % » Ag Cu-Pb-S-PM recycling material » Au Pb bullion » PGM ~135,000 t Cu, Au, Ag, Pd, Pt,
Slide 28: CRH leverages our unique strengths for complex processing of copper, lead & sulfur
CRH leverages our unique strengths, creating opportunities for complex processing of copper, lead & sulfur Cu smelters e.g., RWO, Pirdop, AC Huelva, Boliden − Very strong in Cu/S separation: Cu anodes und SO2/sulfuric acid − Very limited in Pb: Pb losses, slag quality, and anode/Cu electrolysis S Pb
Slide 29: CRH opens up significant market opportunity from third-party materials
CRH makes the most of our valuable intermediates ‒ and opens up significant market opportunity from available third-party materials Three main relevant input materials Pb sulfate ‒ intermediate CuPb dross ‒ intermediate CuPb matte ‒ intermediate of the zinc industry* (kt p.a.) of the lead industry* (
Slide 30: Securing & strengthening our core business with CRH
Securing & strengthening our core business with CRH: World-class plant to optimize smelting process in Hamburg Secure Strengthen Core Business Core Business Investment EBITDA p.a. ~€ 190 million ~€ 40 million Strengthening our core business with a world-class facility in Hamburg ‒ one of only a (at
Slide 31: Strategy Implementation & Achievements: Tankhouse Pirdop
− Bild tauschen ggf. Lünen? Keinen Kurzschluss Sucher 2 Strategy Implementation & Achievements » Tankhouse Pirdop Dr. Thomas Sturm, SVP Corporate Development 31
Slide 32: Tankhouse Expansion in Pirdop
Tankhouse Expansion in Pirdop Input materials Smelting Refining Multimetal Cu concentrates HH HH » Cu — Cu processing — Pir Ol Cu/CuNi — HH » Ag Primary HH CuNi electrolyte PM/Ni — tankhouse Lue — Pir » Au sites Pir — reprocessing concentrates Ol — — Lue Bee » PGM BOB Bee |Ol Capacity increase Pir »
Slide 33: Continued copper deficit in Europe driven by higher consumption
Continued copper deficit in Europe driven by higher consumption Refined copper market balance* (in Mt) Europe 3.9 3.9 4.0 4.1 4.2 4.2 3.7 3.7 3.8 3.1 3.2 3.2 3.3 3.3 3.3 3.3 3.3 2.8 Production Demand Copper -0.9 -0.6 -0.6 -0.6 -0.7 -0.7 -0.8 -0.8 -0.9 deficit 2022 2023 2024 2025 2026 2027 2028 2029 20
Slide 34: Europe needs more cathodes at the highest sustainability standard
Europe needs more cathodes at the highest sustainability standard ‒ we are expanding Pirdop to cater to these needs Secure Strengthen Core Business Core Business Investment EBITDA p.a. ~ € 120 million ~ € 30 million Strengthening our core business by expanding the tankhouse at our Bulgarian site ‒ (
Slide 35: Pirdop will generate sustainable and profitable growth
Pirdop will generate sustainable and profitable growth in business areas well known to us The project fully leverages We are further optimizing our We are expanding our product our production in Pirdop and flowsheet across our smelter offering with high-grade quality is situated in a dynamic growth net
Slide 36: Q&A Session
Q&A Session AAurubis
Slide 37: Sustainability: Sustainability targets and initiatives
4 Sustainability » Sustainability targets and initiatives Christian Hein, Head of Sustainability 37
Slide 38: We continue to lead our industry in sustainability
We continue to lead our industry in sustainability ‒ minimizing emissions and costs, maximizing opportunities in new business areas We continue to strengthen our position as the most efficient and sustainable multimetal producer worldwide 1 2 Sustainability is a We strive for balance fundamental part
Slide 39: Our KPIs underline our sustainability ambitions
Our KPIs underline our sustainability ambitions and demonstrate momentum Absolute Scope 1+2 CO2 emissions Scope 3 CO2 emissions Air emissions (dust) (in kt) (in kt)1 (in g per t of multimetal Cu equivalent)2 1 2 3 56.5 1,600 6,502 6,181 48.0 1,310* 4,942 40.1 800 2018 2022 2030 2018 2021 2030 2018 2
Slide 40: Leading the way with life cycle assessments
Leading the way with life cycle assessments ‒ and substantially lower carbon footprints than industry averages CO2 footprint of Aurubis metals vs. global industry average Int'l Tin 2020: 6,632 Association Copper cathodes Tin in kg CO2 eq./t Cu in kg CO2 eq./t 2021: 1,570 Aurubis Global industry aver
Slide 41: The Copper Mark certification demonstrates our leadership
The Copper Mark certification demonstrates our leadership in sustainable production practices The Copper Mark launched Focus on steady improvement Aurubis Olen for copper producers in of the sector's production certification March 2020 practices expected shortly Basis: Joint Due Diligence Standard UN
Slide 42: Global cooperation is key: working with partners in the copper value chain
Global cooperation is key ‒ working with partners in the copper value chain to accelerate the adoption of sustainable practices MoU with Anglo American ‒ November 2022 MoU with Codelco ‒ January 2023 Companies joining forces to accelerate sustainability Companies committed to building a more sustain
Slide 43: Sustainability: Decarbonization projects
4 Sustainability » Decarbonization projects Roland Harings, CEO
Slide 44: Using ammonia as carbon-neutral fuel in rod products
Using ammonia as carbon-neutral fuel in rod products Getting ready for a hydrogen economy: first use of ammonia as a carbon-neutral fuel in Hamburg rod plant First test campaigns, on industrial scale to date, validated potential of ammonia as alternative fuel for cathode shaft furnace; implications f
Slide 45: Using Ultra High Temperature Hydrolysis (UHTH) to lower costs and fossil fuel usage
Using Ultra High Temperature Hydrolysis (UHTH) to lower costs and fossil fuel usage Pilot plant for a hydrolysis process using organic-rich recycling materials (i.e., PCBs, shredder material) to extract synthetic gas Tests showed up to 50 % of carbon extraction and utilization in synthetic gas, whic
Slide 46: Win-win project reduces our carbon footprint with district heat supply
Win-win project reduces our carbon footprint and makes Aurubis a highly valuable source for sustainable district heat supply Households: Delivery of CO2-free industrial heat with a CO2 reduction of up to 120,000 t per year Spaldingstrase Feed-in of the industrial heat into Wärme Hamburg's city-wide
Slide 47: Monetizing industrial heat strengthens partnership with Hamburg
Monetizing its industrial heat, Aurubis strengthens its symbiotic partnership with the city of Hamburg Industry Leadership in Sustainability Existing project supplies heat (as industrial by-product) to Hamburg's HafenCity East district, running successfully with enercity since 2018 Project generates
Slide 48: Using multiple technologies at our sites to decarbonize our production
Achieving results: Using multiple technologies at our sites to decarbonize our production Scope 1+2 CO2 emissions Identified further potential for Absolute Scope 1+2 CO2 emissions (in kt) reducing our Scope 1+2 CO2 emissions 1,600 Scope 2 1,310* Purchasing electricity Internal production of Energy fr
Slide 49: Battery Recycling
5 Battery Recycling Ken Nagayama, Head of Business Development Battery Materials 49
Slide 50: Battery Recycling (Video)
Battery Recycling Video AAurubis
Slide 51: Lithium-ion batteries: exceptional value hidden in complex recycling material
Lithium-ion batteries ‒ exceptional value hidden in complex products, complex recycling material Batteries are complex scraps As the metal value in black mass is very high, that are of huge value capabilities to recover the value are essential Battery management system: Cu, Sn, Ag, Au, Pd Cables & c
Slide 52: Our innovative process for black mass leverages our smelter network
Our innovative process for black mass leverages capabilities of our integrated smelter network Black mass Benefits of the unique Aurubis process Innovative process route for black mass that utilizes ozone Li recovery Lithium High lithium recovery through Graphite Graphite, lithium first extraction sep
Slide 53: Our sweet spot in the battery recycling value chain
Our sweet spot in the battery recycling value chain is based on Aurubisʼ core expertise Electric vehicle End-of-life assembly lithium-ion batteries We are developing a fully-fledged battery recycling supply and value chain Cell & battery Collection & First steps taken with Librec, a specialist manufa
Slide 54: Fast-tracked process development underpinned by metallurgical know-how
Fast-tracked process development underpinned by metallurgical and operational know-how means we can outpace other players Pairing speed and discipline Bench scale Pilot scale Demo Commercial process process scale scale with a metallurgical edge development substantiation operation operation Deep met
Slide 55: Aurubis could enter the commercial market in the second half of this decade
In line with projected market growth, Aurubis could enter the commercial market in the second half of this decade Regional supply of black mass for recycling (in kt) Europe US & Canada 2,414 1,985 938 801 310 314 8 7 75 90 2020 2025 2030 2035 2040 2020 2025 2030 2035 2040 Further pilot test work cam
Slide 56: Beyond the market hype: our advanced approach to market entry
Beyond the market hype ‒ our advanced approach to market entry Battery recycling will be crucial source for EV Our technology leadership in metallurgy, Battery recycling would not only battery raw materials in the future. Recycling, at integrated smelter network, and existing allow us to benefit from
Slide 57: Financials
6 Financials Rainer Verhoeven, CFO
Slide 58: Structural growth boosts investment proposition
Structural growth boosts investment proposition 1 2 3 4 5 Track record of Debt-free balance Growth projects EBITDA contribution Shareholders translating operating sheet forms basis financed by robust net from eight strategic participate in value EBT into strong net for strategic growth cash flow and u
Slide 59: Proven ability to translate robust operating EBT into strong net cash flow
Proven ability to translate robust operating EBT into strong net cash flow as a result of strict financial management Operating EBT (in € million) 13 % CAGR 532 − Proven robust earnings strength 381 − Consistently increased earnings over past 3‒4 years 329 291 − High earnings quality due to strict fina
Slide 60: Extraordinary balance sheet strength forms basis for strategic growth
Extraordinary balance sheet strength forms basis for strategic growth Operating equity ratio Operating equity in € million Equity ratio Minimum target − Strong equity position is solid foundation for strategic growth 3,202 − Track record of keeping equity ratio above 40 % threshold, even 2,674 in th
Slide 61: Accumulated EBITDA to rapidly overcompensate investments
Accumulated EBITDA to rapidly overcompensate investments Growth investments to be translated into profits Capex & EBITDA contribution from 8 strategic projects (in € million) − Investing around € 1.1 billion in strategic growth options ~1,340 − Rapid payback: accumulated EBITDA of € 1.3 billion Growt
Slide 62: Outflows from current project pipeline expected to peak in 2023/24
Outflows from current project pipeline expected to peak in 2023/24 Capex planning broken down into baseline and strategic Investment horizon of the Group (in € million) − The planned maintenance schedule of the two primary smelters Baseline capex Strategic capex Depreciation in Hamburg and Pirdop wil
Slide 63: Balance sheet with slightly higher gearing during ramp-up phase
Balance sheet with slightly higher gearing during ramp-up phase Solid financials as basis for profitable growth Equity ratio − Strong balance sheet and headroom towards targeted equity 54.1% ratio (>40 %) as enabler for growth − During the ramp-up of strategic projects, balance sheet likely to be gear
Slide 64: Shareholders to benefit from growth strategy with consistently high profitability
Shareholders to benefit from growth strategy with consistently high profitability Operating ROCE remains one of our most important Operating ROCE financial KPIs − Confirming our ROCE target of at least 15 % after completion of the ramp-up phase 19.0% Outlook of − In the long term, the strategic growth p
Slide 65: Increased gross margin supported by balanced portfolio
Increased gross margin supported by balanced portfolio Breakdown of income components in the Aurubis Group 2,240 1,916 1,680 1,545 Metal gain 30% 35% 36% 38% ~ 40% Premiums & products 37% 30% 30% Treatment charges for 34% ~ 30% concentrate & recycling input 33% 35% 34% Gross margin 28% ~ 30% in € mi
Slide 66: Capital allocation will focus substantially on strategic growth investments
Capital allocation will focus substantially on strategic growth investments Net cash flow Capital allocation (in € million) 1,831 10% Mergers & acquisitions Baseline investments 55% Changes in net financial position Dividend 15% Strategic growth 17% investments 3% 18/19 - 21/22 22/23e - 25/26e Aurubi
Slide 67: FY 2022/23 guidance confirmed
FY 2022/23 guidance confirmed Our forecast range Operating EBT ROCE Operating between € 450 million between 14 % and € 550 million and 18 % Operating EBT Operating ROCE (in € million) (in %) Group 450–550 14–18 Multimetal Recycling 110–170 13–17 Custom Smelting & Products 390–450 18–22 Aurubis Capita
Slide 68: Transparent KPIs enable sustainable profitable growth and long-term value creation
Transparent KPIs enable sustainable profitable growth and long-term value creation Robust earnings power generates strong Strong balance sheet structure and As soon as 2030, accumulated EBITDA cash flows ‒ used to further strengthen healthy gross margins create foundation from growth projects expecte
Slide 69: Q&A Session
Q&A Session AAurubis
Slide 70: Outlook
8 Outlook Roland Harings, CEO 70
Slide 71: Growth strategy confirmed: Capex and EBITDA impact increase significantly
Growth strategy confirmed: Capex and EBITDA impact increase significantly Medium term Short term Long term Medium-term planning Currently approved Until 2030 (next 4 years) − Growth capex ~€ 1,100 million − Growth capex ~€ 280 million is − Ambition and scale of our long-term approved included in the m
Slide 72: Strong pipeline features advanced projects included in medium-term planning
Strong pipeline features advanced projects included in medium-term planning, plus wealth of nascent concepts to drive sustainable growth Strategic projects from development to implementation Research & Concept Basic Without status Feasibility In implementation ideation development engineering Indust
Slide 73: Aurubis accelerates sustainable growth
Aurubis accelerates sustainable growth Global supplier of non- World's most efficient Clear focus on accelerated, ferrous metals essential for and sustainable smelter organic, and profitable the transformation towards network growth in our established a more sustainable global business areas plus growt
Slide 74: Aurubis CMD 2023
Aurubis CMD 2023 Capital Market Day London, June 13