We were pleasantly surprised by the past fiscal year in more than one respect. The German economy proved to be considerably more stable than many had dared to believe; it even became the growth locomotive in Europe. Export business is buzzing in nearly all industries. Domestic demand is booming and on the labour market, more people are employed than ever in reunified Germany. This trend is being rewarded on the stock markets. The leading German index DAX has reached a level not seen since June 2008 and is again aiming at the 7,000 point mark.
It almost seems as if there had never been a global financial and economic crisis, but we shouldn’t forget where we came from. The German economy faced the worst recession of the post-war period, and major adverse repercussions on the labour market were only avoided with the help of short-time working. Germany is also not an island. The latest euro-zone shocks in Ireland and Portugal show that we still cannot speak of stability and that it would be fatal simply to return to the normal daily agenda.
As a company in the copper industry, we are concerned with two entirely different phenomena at the same time. On the one hand, the conditions for our core business in Europe are improving in line with the economic recovery. On the other hand, risks which we can do little to avoid exist and arise on a macroeconomic level and have an impact on day-to-day business.
The world does not end for us at Europe’s borders. China, the superpower, has long since become the most influential factor on the copper market and the other international commodity markets. It thus indirectly influences how our business develops as well. When China introduces changes to its copper sector and its procurement policy for copper-bearing raw materials, we are also affected.
If the country continues expanding its infrastructure or embraces economic measures, there are immediate reactions on the metal markets around the world. Now more than ever, foreign exchange rate fluctuations and the activities of institutional investors who regard commodities as an excellent investment also influence events.
Since our business cannot be disconnected from global economic developments and other conditions are also becoming increasingly unpredictable, a business model that is flexible enough to adjust to these changes is necessary. Aurubis has such a model. It provides the Company with basic economic stability and, due to its orientation and structure, has possible courses of action at the ready to mitigate adverse impacts: Our raw material base is so extensive that emerging negative effects can be completely or partially com- pensated. This was confirmed again in the past fiscal year. While the markets for copper concentrates were characterised by short supplies and poor procurement conditions, the markets for copper scrap offered a completely different picture. Moreover, demand for the by-product sulphuric acid, which is produced during concentrate processing, developed favourably.
Dr Stefan Boel
worked as of 2001 in Product Develop- ment and Marketing in the former Copper Division of Umicore S.A. 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 Group, he joined the Executive Board on 19 April 2008 and has been put in charge of Business Unit Copper Products.
Dr Bernd Drouven
after management positions in the metal industry at Preussag, Degussa and Possehl, began his career in the Group in 2001 as the Managing Director of the former subsidiary Spiess- Urania Chemicals. In 2004 he moved to the Group headquarters and was responsible for strategic planning. He has been a full member of the Executive Board since January 2006 and was the Chief Financial Officer until the end of September 2008. Dr Drouven was appointed Chief Executive Officer on 16 Janu- ary 2008.
Peter Willbrandt
joined the Group in 1988. After senior positions in the smelter production sectors, he was put in charge of Met- allurgy in 2001. This was followed by his appointment as General Manager of Primary Copper Production in 2004. He was appointed deputy member of the Executive Board on 1 April 2007 and has been a full member since 19 April 2008. He is responsible for Business Unit Primary Copper. Erwin Faust
held managerial positions in the Volkswagen Group, at VAW Aluminium and as of 2003 at Novelis Europa, a sub-group of Novelis Inc. (for- merly Alcan Inc.). As the Chief Financial Officer, 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 on our Group’s Executive Board with effect from 1 October 2008.
Dr Michael landau
has been employed by the Company since 1981. In March 1998 he was appointed a deputy member of the Executive Board and has been a full member since 1 June 1999. Dr Landau took over as Director of Indus- trial Relations on 9 November 2007 and is therefore respon sible for Human Resources. Business Unit Recycling / Precious Metals is also his responsibility.
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Because of its production structure, Aurubis can continue producing copper cathodes without restrictions in the midst of a poor sales situation and declining capacity utilisation for copper products and market these commodities internationally. In 2009 we used this option to reduce the effects of the international economic crisis. Our strong customer orientation proved to be very positive for business development as well. The integrated network of individual plants in the Group allows Aurubis to control material flows as the situation requires. This is always especially beneficial when there are supply shortages of raw materials or intermediate products as well as stoppages of individual production plants as a result of maintenance or technical disruptions.
With its business model, Aurubis is optimally positioned on the international copper and metal markets. We don’t stop there, however. A Chinese adage says, “When the wind of change blows, some build walls and others build windmills.” In the sense of this aphorism, we tend to think about building windmills, i.e. using opportunities that arise from changes on the markets. We will do this strategically and in daily business but will not lose our grip on reality in the process. Our aim is to master the increasing demands of the future. Our 4,800 employees work hard toward this objective, on all levels and in all areas of the Group.
The new fiscal year has had an auspicious start on the copper market, whose structures indicate stable development with continuing high copper prices. The copper scrap markets reflect the ongoing good condi- tions, while the concentrate market is showing signs of recovery. Sales of our copper products and specialty products have been promising up to now and ensure high production capacity utilisation for us. However, there is no reason for us to contentedly pat ourselves on the back. We are only at the beginning of the fiscal year and know quite well about the risks that accompany our business, such as those resulting from volatile global economic and market trends. Therefore, we will only be satisfied when we can present a good annual result yet again at the same time next year.
Yours sincerely
Dr Bernd Drouven
Dear Shareholders,
The Supervisory Board reports in the following on its activities in fiscal year 2009 / 10, in particular about the deliberations at the meetings, the work of the committees, the compliance with the corporate governance code, the examination of the financial statements of Aurubis AG and the consolidated financial state- ments as well as changes in the membership of the Company’s boards. Aurubis AG achieved a good operating result in the fiscal year. The Supervisory Board would like to thank the Exec- utive Board, management and employees for their successful contributions.
Collaboration between Supervisory Board and Executive Board
The Supervisory Board performed the functions and obligations incumbent upon it by law and in the Articles of Association. It regularly supervised and assisted the Executive Board in an advisory capacity in the management of the Company and supported the strategic orientation of the Group that had been mutually agreed. The joint target of the Executive Board and