Aurubis AG Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Daniel Major - UBS Investment Bank - Analyst : A couple of questions. You mentioned positive contribution from sulfuric acid in the first quarter. Can you quantify that either quarterly delta or total contribution to EBITDA?

Question: Daniel Major - UBS Investment Bank - Analyst : Okay. So sorry -- double-digit impact and you said the trend continues, i.e., a similar level of earnings contribution or a incrementally higher earnings in the subsequent quarter?

Question: Daniel Major - UBS Investment Bank - Analyst : Very clear. And then maybe on the other side of the earnings bridge, you mentioned the expectation of lower earnings from recycling materials despite your book being covered from a perspective of volumes, I guess that implies lower secondary refining charges. Yes, you mentioned strength of or potential pick up in demand from China post Chinese New Year, et cetera. I mean it seems from my side, the logic from the smelting industry if you're operating with a $20 benchmark treatment charges to use more scrap everywhere. Yes, is that a risk from a perspective of sharply lower refining charges and shortages of scrap?

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : Just going back to the point that Dan made around the scrap markets. And you used to provide in the past visibility on how well supplied the refining facilities are. You've done that for the smelters, the custom smelters today. You talk about the smelter network being well supplied with concentrates through Q3 of this current fiscal year. Can you give us some indication on how well supplied the recycling network is at this point?

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : Understood. And just a second question, going back to the discussion on CapEx. Could you remind us what's the maintenance CapEx we should be baked into our models once all the strategic projects are in production? I'm thinking fiscal year '28-'29 onwards, just to get a sense on cash flow generation.

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : Understood. So maybe something in the order of EUR350 million is a good assumption beyond the next three years, four years for maintenance CapEx?

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : EUR350 million, yes, would be a good estimate beyond that three years, four years -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 1:00PM, NAFG.DE - Q1 2025 Aurubis AG Earnings Call

Question: Bastian Synagowitz - Deutsche Bank - Analyst : My first one is actually just a quick follow-up on the recycling business. Just coming back on the supply which you currently have here, which, I guess, basically for the next two months, I think in the context of history, that's clearly a little bit less than usual. Are you getting a bit more concerned about your ability to fill the pipeline maybe throughout the next couple of quarters? I think you seem to be signaling that you're cautiously confident, but maybe you could just like explain that a little bit better. And then secondly, also, is there already any guidance on when you expect Richmond to basically get from the current startup loss situation to above breakeven, i.e., can we expect that already next business year, Q1, Q2? Is there any sort of time frame on that? These are my first question.

Question: Bastian Synagowitz - Deutsche Bank - Analyst : Understood. Then my next question is actually maybe a bit more technical on the benefits of your free metals. I guess, you mentioned earlier that you basically locked in a larger part of your price exposure in free metals than usual. Could you maybe share with us how much of your exposure you basically have hedged for this year and maybe also next year? And given how strong many of the metals you're exposed to have been, particularly, I guess, on the precious side, could you maybe also provide us some sensitivity on how much more additional uplift to EBT you would see if you basically would run your free metals at current spot prices? That would be very helpful. Obviously, I know I'm going a little bit into the weeds here, but I guess it's a very important number, so it would be great to have a bit more color on that front. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 1:00PM, NAFG.DE - Q1 2025 Aurubis AG Earnings Call

Question: Bastian Synagowitz - Deutsche Bank - Analyst : No, that's very helpful already. Is there any color which you could give us in terms of what the gap is, given that, again, it's sort of the important number? I mean, in principle, you could have locked this in early last year at some point. So I guess, if we would mark things to market, I suppose, it would definitely give you a relatively decent tailwind incrementally.

Question: Bastian Synagowitz - Deutsche Bank - Analyst : Yes. Okay. No problems. Then my last question is just on your cash flow statement. I guess you highlighted this EUR148 million item from others in your cash flow, you said that, that was valuation driven. So if it's valuation driven, I'm not quite sure why it would be impacting your cash flow. Is this basically just cash settled hedges? Or is there anything else which is behind that? Maybe you can just explain that briefly and whether that reverses later?

Question: Bastian Synagowitz - Deutsche Bank - Analyst : But technically, then, I guess, it would be fair to assume that, that reverses later on, maybe via the operating number or --

Question: Bastian Synagowitz - Deutsche Bank - Analyst : Restricts -- yes.

Question: Christian Obst - Baader-Helvea - Analyst : First of all, the still rising personnel costs should become or expect to come to an end for all these rising or overproportional rising personnel costs? And as you have fully staffed Richmond already, can we expect some kind of an underproportional increase going forward? This is the first question. I'll take one at a time.

Question: Christian Obst - Baader-Helvea - Analyst : Okay. Then coming to electricity. So what is the main lever do you see to increase or decrease going forward? And then most obviously, we will have a new coalition led by CDU/CSU going forward. And in the program, they are guiding for lower electricity tax and grid fees and stated that there might be a relief of at least EUR0.05 per kilowatt hour. And we expect any support from these developments.

Question: Christian Obst - Baader-Helvea - Analyst : Okay. Then very briefly, you are guiding for a net cash position going forward, EUR500 million to EUR600 million. CapEx might be EUR820 million. So free cash flow should be negative this year between EUR200 million and EUR300 million. This is the right calculation, right?

Question: Christian Obst - Baader-Helvea - Analyst : Okay. And then coming a little bit back to Richmond. So you're guiding for the EUR50 million approximately negative development this year. So what is -- so the main lever you can work on to reduce these negative development? Is it a certain throughput? Is it to have a control cost or whatever? So what is the main lever there, which brings you to the minus EUR50 million?

Question: Maxime Kogge - ODDO BHF Corporate & Markets - Analyst : So first question is on TC/RCs. So there was a first significant transaction settled at $21 in December for 2025. And since then, there have been reports that Japanese and European smelters were trying to extract a higher benchmark level from the miners. Can you give us an update on where the negotiation stands and whether you're still hopeful that you can get more than $21 as a benchmark in 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 1:00PM, NAFG.DE - Q1 2025 Aurubis AG Earnings Call

Question: Maxime Kogge - ODDO BHF Corporate & Markets - Analyst : And the second question is on, yes, potential tariffs on copper imports in the US. How would that impact your activity in Richmond? And would that lead you to accelerate perhaps your thoughts about adding some downstream units to Richmond, i.e., refining and finished products?

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : Just going back to Richmond. If we look at Phase 1, when do you expect to hit full run rate of production?

Question: Ioannis Masvoulas - Morgan Stanley - Analyst : And as we think about Phase 2, is that ramp-up going to be faster given that you have a lot of the infrastructure already in place?

Question: Lutz Kihm - GCIS Ltd - Analyst : A question regarding nonoperating assets. Aurubis holds roughly 1.3 million treasury shares. Are there any plans to monetize these shares? And what are the other major nonoperating assets of the company? And what plans are in place to monetize these assets?

Question: Lutz Kihm - GCIS Ltd - Analyst : And what are the other major nonoperating assets of the company?

Question: Lutz Kihm - GCIS Ltd - Analyst : Yes. I wonder -- I mean, I find return on capital employed very impressive. It's good. But my impression is the company still has too much nonoperating assets. And there may be ways to monetize these assets to finance your growth.

Question: Lutz Kihm - GCIS Ltd - Analyst : So back to the treasury shares. I mean, if you see, we're talking about roughly EUR100 million, which you're holding on the balance sheet, which could finance CapEx, which could be distributed to shareholders in lieu of dividends. So we have less debt rate on the balance sheet.

Question: Lutz Kihm - GCIS Ltd - Analyst : [02/18].

Question: Boris Bourdet - Kepler Cheuvreux - Analyst : The first question, you provide on Slide number 17, a trajectory of CapEx. Could you please share if you have a trajectory of depreciation and amortization for the coming years? This is something you used to do, but I suppose it's not up to date. And the second point is just some clarification on Richmond. You're referring to a minus EUR50 million startup costs. Is it only for Richmond? Or is it for the overall startup strategic projects?

Question: Boris Bourdet - Kepler Cheuvreux - Analyst : So if we take the slight positive contribution of ASPA and BOB projects, then we should have a small positive contribution overall -- sorry, a lower negative contribution overall?

Question: Boris Bourdet - Kepler Cheuvreux - Analyst : And just if I can add a third question. It's on TC/RCs. I get your message that this is less and less relevant for you because of your contract relationship with suppliers. But can you share with us any view you have on the trends in the TC/RCs for the coming years?