Copper Production Segment Copper Processing Segment Other Group total
in € thousand 2007/ 08 2006 / 07 2007/ 08 2006 / 07 2007/ 08 2006 / 07 2007/ 08 2006 / 07 Revenues Total revenues 6,245,627 4,474,074 6,273,112 5,053,116 3,728 3,551 Inter-segment revenues 4,081,394 2,994,104 56,512 67,799 0 0 Revenues with third parties 2,164,233 1,479,970 6,216,600 4,985,317 3,728 3,551 8,384,561 6,468,838 EBIT 256,142 184,091 129,689 84,481 (3,172) (8,370) 382,659 260,202 EBITDA 322,593 229,756 153,496 96,016 (1,388) (7,676) 474,701 318,096
Result from investments 700 411 6 7 2 155 708 573
Fixed assets 763,915 297,610 152,623 92,987 3,850 219,264 920,388 609,861
Capital expenditure on intangible assets and property, plant
and equipment 91,279 77,672 20,745 13,767 1,884 2,741 113,908 94,180
Depreciation and
amortisation 66,451 45,665 23,807 11,535 1,784 694 92,042 57,894
Other non-cash expenses 44,248 26,481 10,638 6,787 (3,084) 7,222 51,802 40,490
Segment assets 1,910,183 1,073,536 858,267 617,509 6,524 227,356 2,774,974 1,918,401
Segment liabilities 793,306 758,400 155,189 202,733 6,140 3,981 954,635 965,114
Average number of
employees 2,802 2,083 1,293 1,125 11 11 4,106 3,219
Personnel expenses 182,040 146,040 83,495 68,854 517 500 266,052 215,394
Segment reporting is oriented to the NA Group’s internal organisation and reporting. The classifi cation of the segments refl ects the process cycles that are in place and the production structure in the Group. The “Other” column includes all those amounts and results that cannot be allocated to one of the two defi ned segments.
The segment information was determined applying the same accounting policies as for the remaining fi nan- cial statements, but using the LIFO method for the valuation of inventories. This is because internal reporting to management for decision-making and group management control purposes is also based on the fi gures obtained by the application of the LIFO method. These fi gures are regarded as the most appropriate for the external presentation of the two segments, since they are much less infl uenced by metal price fl uctuations.
m a n a g e m e n t g r o u p m a n a g e m e n t r e p o r t consolidated financial statements f u r t h e r i n f o r m at i o n Notes to the fi nancial statements l Notes to the cash fl ow statement
The reconciliation of the segment results to the earnings before taxes reported in the income statement after revaluation of LIFO inventories using the average cost method is as follows:
After revaluation of LIFO inventories using the average cost method
Copper Production Segment Copper Processing Segment Other Group total
in € thousand 2007/ 08 2006 / 07 2007/ 08 2006 / 07 2007/ 08 2006 / 07 2007/ 08 2006 / 07
Difference in earnings resulting from revaluation
of LIFO inventories (45,468) 42,869 (52,162) 12,641 0 0 (97,630) 55,510
EBIT 210,674 226,960 77,527 97,122 (3,172) (8,370) 285,029 315,712
EBITDA 277,125 272,625 101,334 108,657 (1,388) (7,676) 377,071 373,606
Segment assets 2,052,807 1,335,490 999,444 736,986 6,524 227,356 3,058,775 2,299,832
The Group generates most of its revenues with business associates in countries in the European Union. The exact breakdown of revenues by segments and regions is as follows:
Revenues by regions
Copper Production Segment Copper Processing Segment Other Group total in % 2007/ 08 2006 / 07 2007/ 08 2006 / 07 2007/ 08 2006 / 07 2007/ 08 2006 / 07
Germany 42.9 57.3 51.0 60.2 100.0 100.0 49.0 59.6
Other European Union
states 34.1 22.3 38.9 27.3 - - 37.6 26.1 Rest of Europe 4.6 1.6 4.1 3.8 - - 4.3 3.3 Non-European countries 18.4 18.8 6.0 8.7 - - 9.1 11.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Revenues by regions Group total in € thousand 2007/ 08 2006 / 07 Germany 4,104,464 3,851,366
Other European Union states 3,155,371 1,689,272
Rest of Europe 361,493 212,435
Non-European countries 763,233 715,765
Information on regions
Capital expenditure Segment assets Segment assets after revaluation of LIFO inventories
in % 2007/ 08 2006 / 07 2007/ 08 2006 / 07 2007/ 08 2006 / 07 Germany 78,321 92,862 1,329,088 1,900,873 1,612,889 2,282,300 Belgium 8,220 0 468,791 0 468,791 0 Bulgaria 24,785 0 825,816 0 825,816 0 Rest of Europe 2,582 1,318 151,279 17,528 151,279 17,532 Group total 113,908 94,180 2,774,974 1,918,401 3,058,775 2,299,832
The locations in the rest of Europe are mainly production sites in the European Union.
Copper Production Segment
Primary copper production Recycling / Precious metals
The Copper Production Segment includes all sectors from the procurement of copper and precious metal- bearing raw materials to the production of marketable metals. The raw materials used for this comprise in particular copper concentrates, copper-bearing recycled materials and precious metal-bearing raw mate- rials. The segment produces tradable copper cathodes as well as marketable gold, silver and platinum group metal products. At the same time, the natural by-products extracted from the raw materials are also processed into products, such as sulphuric acid and iron silicate stone, and marketed.
The vast majority of the copper cathodes produced are passed on to the Copper Processing Segment, where they are processed into copper products and sold to external customers. This accounts for most of the revenues in the Copper Processing Segment. Thus, the Copper Production Segment generates most of its revenues within the Group.
Precious metals, sulphuric acid and iron silicate stone on the other hand are sold especially to external customers.
Furthermore, the Copper Production Segment is also engaged in the production of high-grade selenium products as well as the environmentally friendly dismantling of cables and the sale of the granules produced from this.
m a n a g e m e n t g r o u p m a n a g e m e n t r e p o r t consolidated financial statements f u r t h e r i n f o r m at i o n Notes to the fi nancial statements l Segment reporting
Copper Processing Segment
Copper products
The Copper Processing Segment includes all of the business units engaged in the production and sale of continuous cast wire rod and shapes, pre-rolled strip, strips and shaped wires, as well as copper trading. The copper cathodes produced in the Copper Production Segment are the main starting products. The vast majority of the Copper Processing Segment’s products are sold to customers in Europe.
Segment data
The revenues of the individual segments consist of inter-segment revenues and of revenues with third parties outside the Group. The total third party revenues of the individual segments correspond with the consolidated revenues of the Group. The prices and conditions for products and services exchanged between group companies and segments correspond to those with non-related parties.
EBIT (earnings before interest and taxes) represents earnings before taxes, adjusted for the net interest allocated to the segment. EBITDA (earnings before interest, taxes, depreciation and amortisation) is EBIT plus depreciation and amortisation. The sum of the EBIT and EBITDA of the segments results in the EBIT and EBITDA of the Group.
The result from investments mainly comprises dividend payments from non-consolidated companies.
Segment fi xed assets are also reported. Goodwill from consolidation is allocated to its respective segment. Depreciation and amortisation of fi xed assets are reported accordingly.
Other non-cash expenses and income consist of allocations to provisions, to the extent that they can be allocated to the segments, and write-downs on current assets, and other non-cash expenses and income. The latter resulted in particular, in the past fi scal year, from the release of negative goodwill from the fi rst-time consolidation of Cumerio.
Segment assets totalling € 2,774,974 thousand (€ 1,918,401 thousand in the prior year) comprise all assets with the exception of deferred tax assets of € 4,164 thousand (€ 1,326 thousand in the prior year) and cash and cash equivalents of € 186,482 thousand (€ 20,018 thousand in the prior year). Inventories were also recognised here using the LIFO method. The reconciliation to the values after revaluation of the LIFO inventories using the average cost method is presented separately.
Impairment losses of altogether € 93,161 thousand (€ 6,018 thousand in the prior year) were recognised on assets, of which € 62,069 thousand (€ 5,544 thousand in the prior year) related to the Copper Production Segment, € 30,504 thousand (€ 474 thousand in the prior year) to the Copper Processing Segment and € 588 thousand to “Other”. The impairment losses in the Copper Production Segment comprise write-downs on property, plant and equipment of € 6,239 thousand (€ 5,544 thousand in the prior year) and write-downs on the current assets in the amount of € 55,830 thousand. In the Copper Processing Segment, write-downs were recognised on property, plant and equipment in the amount of € 8,766 thousand (€ 474 thousand in the
prior year) and of € 21,738 thousand on current assets. After application of the average cost method, write- downs on current assets amounted to € 130,539 thousand (€ 10,832 thousand in the prior year), of which € 81,683 thousand (€ 9,619 thousand in the prior year) was attributable to the Copper Production Segment and € 48,856 thousand (€ 1,213 thousand in the prior year) to the Copper Processing Segment.
Segment liabilities consist of the provisions allocated to the segments, trade accounts payable and other liabilities for each segment. The total liabilities of the group are arrived at after including borrowings and deferred taxes.
in € thousand 30.9.2008 30.9.2007
Total segment liabilities of the individual segments 954,635 965,114
Deferred taxes 221,325 298,989
Borrowings 932,674 143,441
Total Group liabilities 2,108,634 1,407,544
The average number of employees for each segment includes the employees of all the companies which were fully or proportionately consolidated in the accompanying fi nancial statements. Employees of the propor- tionately consolidated companies have been included in accordance with the Group’s holding. Employees, who became part of the Group in the course of the fi scal year, are included in accordance with the duration of their employment in the Group. Personnel expenses were reported accordingly.