Aurubis AG (NDA) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Aurubis AG conference call on the occasion of the publication of the third quarter results. [Operator Instructions] Let me now turn the floor over to your host, Elke Brinkmann. Please go ahead.

Good afternoon, ladies and gentlemen, also from my side. As you heard before here, the presentation and -- the report and the presentation are already available on our website since earlier this morning. We are here together with our CEO, Roland Harings; our CFO, Rainer Verhoeven; and Heiko Arnold, our CEO -- COO. After the presentation, all gentlemen will be available for Q&A. And now I hand over Roland Harings.

Okay. Thanks, Elke. Also for me, welcome to our call today, and I'm very pleased to present to you, together with my colleagues, the very good 9 months figures of Aurubis this afternoon. As you can see and you have the slides in front of you, I -- and the presentation, we navigate -- we continue to navigate well through the pandemic, and we are also able to leverage and benefit from the overall very good market conditions in which we operate. This combined with stable operating performance and the strong demand that we see for all our products leads to, from our perspective, very satisfying results. But let me start with a brief overview of the very strong 9-month figures of our fiscal year 2021. With an operating EBT of EUR 268 million, we more than doubled our results compared to the previous year's period. Again, market and stable operating performance were the key factors here. A corresponding ROCE, one of our key leading indicators, of 13.5%, shows also the strong development compared to last year's results where ROCE was at 8.5%. Despite the fact, and you know that we have some major shutdown in our plant in Pirdop, we had to build up higher stock level. Nevertheless, our ROCE significantly improved at the end of last quarter. Market conditions in Q3 remains positive. You heard this in our last call. We still benefit from very strong good RCs. We will come in more details of this later. Good availability of recycling material, in general, high metal prices and I stated it already, a very strong demand for all our Aurubis products. And if there is 1 negative impact on our results, it was increasing -- of the increasing energy prices that we are seeing compared for -- to last year. Regarding net cash flow, it nearly doubled, or exactly doubled to be precise, which is a key result of very strong earnings and also of the increased sales of our various metals, especially, lead, nickel, tin and also zinc. With this performance after 9 months, we are here to confirm our expectation that the operating EBT for the total fiscal year will be within the range of EUR 270 million to EUR 330 million, and that ROCE will be in the range of 9% to 12%. And in order to preempt certainly the questions as you probably can imagine also referring to our call last time, we'll be at the higher part of this range, given the good performance that we have achieved after 9 months. Aurubis is benefiting and also leveraging the integration of Beerse and Berango in our smelter network. And we will today talk also about our new recycling capabilities, the new plant, ASPA, as we call it, Advanced Sludge Processing by Aurubis, which Heiko Arnold will talk more about at the second part of this presentation to give you more insight what this is all about. Although reconfirming what we stated last time, our PIP, our Performance Improvement Program is well on track, and we do confirm that the contribution for this fiscal year of EUR 70 million will be reached. In the news, you saw the tremendous tragic event, flooding event we had in our FRP plant in Stolberg, which was a shock to us and -- to all of us. Fortunately, we were able with the early evacuation of the plant that none of our employees or business partners was hurt or suffered from any incident. However, the plant has been massively damaged, and the cleaning and investigation work is ongoing. But clearly, given the size of this operation and of the FRP segment, we do not expect any financial impact also given that the damage is insured any financial impact on the group level for this fiscal year. If we go to the next slide, You see a quick overview of the year-to-date figures. And clearly, revenue is quite impressive increase by 37% for the first 9 months compared to the period before. Clearly, metal prices are here the main driver. And however, although gross profit increased by 25%. So strong development in markets, and you heard me say this already, stable operating performance and the very successful integration of Beerse, Berango, delivering synergies and also increased throughput are the key drivers for this very good performance. Overall, EBT at EUR 268 million, nearly -- or no, it doubled compared to the last year and underpinning, underscoring the strong performance and the very robust, solid business model of Aurubis. If we go to the next page, just a quick snapshot on the CO2 and the energy. On the left side, you can find the breakdown of the various type of energy that we require for our production process, clearly highlighting that we have electrified our production process already to a large extent, that electricity represents today already 82% of our energy source. Having said this, compared to last year, energy prices in total increased by about EUR 27 million, resulting now in total energy costs of about EUR 166 million versus EUR 139 million in the last year. The significant increase mainly coming from the electricity price is driven by higher prices for CO2 certificates and also for coal price. On average, the CO2 prices for Q3 were about around EUR 50 per ton versus only EUR 21 in the respective period last year. And also on the coal, which is an element in our pricing formula, the coal, which was at USD 43 per ton last year was at -- the same quarter, Q3, at USD 89 per ton. So over here, we have a significant increase of energy costs. On the right side of the slide, you see an update of the CO2 emissions of the calendar year 2020. As I stated already, the Aurubis production process is already mainly electrified, and 2/3 of our CO2 emissions are Scope 2 emissions and come from the electricity production. We are, with this, clearly on track to further reduce our CO2 footprint by replacing today's fossil-based or coal-based electric energy by renewable energies going forward, which is a clear -- and we talk about this later in the sustainability part of our presentation, it's a clear focus in our decarbonization efforts and we will have a deeper look of this -- on this later. Coming to the market conditions on the next slide. The market conditions kept a very positive momentum as the graph quite impressively show. Product demand remains strong, and price levels are expected to stay at very good levels also in the actual quarter. Overall, we had for concentrates, a very good supply situation. Mines are running, and we have all the qualities and quantities of concentrates available to operate our smelters. With some maintenance shutdowns and some adjustments in the smelter industry, mainly in Asia, we see a slowing concentrate demand and CRU estimates that the Chinese demand for concentrate will decrease by around 800,000 tons of demand in this calendar year. So a significant relief on the concentrate side also supported by strong mine production. Clearly, high copper prices additionally incentivize mines to fully ramp up their production and even accelerate new mine projects. Again, CRU confirmed that the global concentrate supply will increase by around 4% in 2021, and this is exactly what we see in our daily business, concentrates are available. On the spot -- on the TC/RC spot level and the buying floor that the Chinese smelter purchase team announced for this -- for the last quarter -- sorry, for the running quarter, we see that the lows that we have seen in the first half of this calendar year are behind us and numbers are going up and the floor, which has been communicated is now at $55, $0.55 for TC/RCs for the concentrates. So hence, what we stated in our calls, in our discussions that there will be -- that we have seen the bottom of TC/RCs and there is a strong rationale for better TC/RCs for the smelting side going forward has been confirmed by these last developments. But again, I would to underline that we are hardly active in the spot markets. Our business model is long-term relationships and contracts for the supply of concentrates, so we are more observing the spot market than being active there. Talking now after concentrates about the scrap RCs. Also here, scrap markets kept the positive momentum during Q3, high metal prices overall and also a good availability of scrap no.2 and other recycling materials remained stable in this last quarter. And in total, we see also a positive outlook. CRU, again to have -- give you a reference point, estimates that the average RC for the Q2 2021, so that's also what's our Q3 fiscal year, is at USD 655 per ton. So this is 180 -- 118% higher than what was the level that CRU reported in the same quarter last year. For the rest of our fiscal year, until end of September, we are completely supplied with input materials and with quantities, qualities and also with a very good price level. So the outlook for this remaining 2 months of the fiscal year are very positive, and this momentum continues also into the beginning quarter of the next fiscal year. Also positive news regarding sulfuric assets. Demand is very strong. Price level has increased significantly, and levels in spot Chile are now at USD 170 to USD 175, and also European spot prices increased to levels up to 70 -- EUR 71 to EUR 78 FOB. So levels which are significantly higher than what we have seen in the period in the year before. ACP. Talking about our Aurubis Copper Premium which was set for this calendar year at USD 96. This reflects and is supported by the market given strong demand in products and for the metals we produce specifically copper in the current market circumstances. And as a last point, numbers you have heard in our last quarterly call, we have a long position for U.S. dollars of about EUR 500 million in our fiscal year. We have hedged for this fiscal year 83% at a rate of 1.13, and we have already secured 54% of our long position at a rate of 1.14 for the next fiscal year. So given this, we are benefiting, and we expect positive earnings contribution from our existing U.S. dollar hedges. Going to the next slide and talking about multimetal. Also here, you see and you are well aware, multimetal and the different key metals for us remained very positive due to Q3 of our fiscal year. And if I just pick on gold, demand is strong in Germany and in Europe. There's a strong demand from producers of investment bars, but also from electronic industries. And we are -- also, we don't see any indication that this trend or this demand is going to change going forward. Also CRU reconfirms a stable -- a bit bearish, but still o,n a very high level, stable outlook going forward. What I stated for gold is also true for silver. We see here for silver a strong demand very much from industrial economic -- from the industrial economic recovery from electronics, from all kind of applications. So the demand for our metals, just picking on the two, remains very strong. And with this, I would like to hand over to Rainer, who will talk about specific numbers then.

Thanks a lot, Roland, and good afternoon also from my side. Let's talk a bit or let's have a look at the key performance indicators, the key figures of the Aurubis Group. So our balance sheet remains, again, very solid. We have an equity ratio of around 44%, a bit lower than in the last year, but given the high metal prices and huge increase, of course, in inventory, that's just a given here. The very good earnings ratio also contributed in a significant reduction in our debt, which means when we purchased Metallo last year, we had a net financial debt of roughly EUR 560 million, which was completely replenished within this 1 year. We are currently, the 30th of June, standing at EUR 17 million positive year. So this good financial position also provides significant room for the implementation of our strategy, of which you will hear more in the coming months in December during our Capital Markets Day. All in all, the key figures shown here remain very robust. The equity ratio decreased, already explained. Despite the fact that the equity has increased, we have, of course, a buildup in our working capital due to the stance that we would see in Pirdop. We started that in -- on Sunday, and it will last for, I think, 44 days, if I'm not mistaken. ROCE improved to 13.5%, also quite a significant increase. We have a lower capital employed here at EUR 2.7 billion only, which fosters a better ROCE. The net cash flow at EUR 332 million is exactly, as already mentioned, doubled from last year and also the free cash flow with EUR 122 million quite significant. Looking to the segments, starting with MRP. Here, a couple of factors such as market drivers and so forth, have already been explained, so let me be quite brief here again. On the operating EBIT, we are at EUR 304 million, and thus 63% above the previous year, mainly influenced, of course, by the significant higher refining charges for the copper scrap and of course, substantially higher metal gains based on the metal prices that we have seen over the past month and the strong demand in all our products on all product sites. 15% ROCE target clearly exceeded. So we are at 17.3% ROCE in this segment, very, very positive. A look at our production figures also shows positive development in the first 9 months here. So throughput of scrap and other recycling materials increased significantly. Key factor, of course, here is that the recycling feedstock of Beerse and Berango is also added now to the total figures. The concentrate throughput was slightly above previous year. Smaller repair shutdowns had an impact on the throughput in Q3, and, of course, the additional planned shutdown of the anode furnace here at our site in Hamburg. The cathode production increased significantly compared to previous year. Last year was, of course, influenced by the crane damage in Olen,, This year, we have a lower cathode production in Lunen due to the ongoing refurbishment in the tankhouse there, which will also last for still the coming years. Sulfuric asset production increased in line with the concentrates, so nothing special here to mention. But important is the product lines. So all copper products showed strong demand compared to prior year, but also in general. We have a rod production that increased by 17% year-over-year and shapes even by 21% year-over-year. So very strong demand here. And of course, the contributions already mentioned by Roland from the Performance Improvement Program also contributed to the positive results. The CapEx is more or less in line with previous year. We are a bit behind schedule, but there will be quite some expenses, also some investments coming now in the last quarter on our RDE, but also on the standstill in Pirdop. So I would say nothing special to mention here. We could, however, postpone our maintenance shutdown in Lunen that was originally planned for September '21 now to the first quarter of the next year, which will have a positive impact for our last quarter. So for the current quarter 4, roughly EUR 6 million effect here. Looking to FRP. So here, the operating EBT of EUR 10 million year-to-date in the segment is clear, improved compared to the last fiscal year. And of course, that also comes from significant increases in the product sales volumes on the one side, but also very good scrap rates and scrap prices on the other. The ROCE is at roughly 5%, 4.9%, significantly above the prior year, of course, where we still had the influence -- the onetime influence on the impairment. So all in all, for the segment FRP, quite a decent number, which we see here. CapEx, nothing special to mention, EUR 7 million, so more or less in line with the figures that you know from the last year, a bit below that. But in principle, nothing special to mention. We have -- or Roland has been mentioning the flooding in Stolberg. And on the next slide, I would like to show you some of the pictures of the current status of the cleanup works that we are doing here on the site. So we had evacuated the site -- we had to evacuate the site and we are very relieved that no employees nor family members of our employees were harmed at that point in time. So we were quite lucky on that one. And of course, we are doing the utmost to clean up and repair and to try and restart the production as fast as possible. But for sure, it will take several months as we have severe damages in pretty much all the production lines that we are having here. All the electronics and so forth are destroyed here. Aurubis Stolberg is an essential part of the FRP segment, but only of marginal significance for the Aurubis Group, the results in the total. So Stolberg contributed roughly with 2% to the consolidated sales figures in the past year. And as we assume, the damages are fully covered by insurance, including the business interruption insurance. We don't see that there will be any impact on our current financial year results. Coming to the next page, where we have a look at the market outlook. So all in all, nothing -- pretty much nothing to add to what Roland already said. Just to reiterate, once again, CRU and Wood Mack expect the global mine production to further increase, driven by the high incentive from the metal prices that we are seeing in the market. That, combined with the mentioned smelter maintenance measures, we expect a further recovery of the concentrate prices in the second half in the coming months of this year. We are and we have been already able to completely supply our plants with the necessary concentrate volumes. So therefore, we do not participate here in the spot markets, and we are fully supplied by the end -- definitely by the end of -- until the end of this fiscal year and even a bit above or beyond that. Scrap RCs. Our core markets here in Europe and the U.S. remain well supplied with material, but we foresee a normalization of the oversupply which means the RCs are, let's say, plateauing at a higher level, and copper scrap and recycling materials will remain available. But again, at not further increasing prices. The prices will stay at that level or go slightly below that. Production plants are also here well supplied. So we don't have scarcity for this fiscal year for sure and also beyond that, currently, we see good supply. Sulfuric acid, the global spot market shows ongoing strong demand with very limited spot availability, which leads to further price increases. So here, we see some positive effects for the next quarter. And the asset markets remain of course, as you know, that's a general disclaimer as they are pretty much spot driven, very difficult to forecast. The Copper Premium currently at $96. We will continue with that, and it reflects simply very good product demand that we see for pretty much all our products. We have been talking about rod and shapes. Here, we have a continuous strong demand on pretty much all products. As I said, rod and shapes and the FRP business, all of them are pretty much fully booked, which of course causes another issue with regards to our Stolberg topic. Probably, we will hear more about it in the Q&A session. Now going to the next page. So we confirm our forecast here between EUR 270 million to EUR 330 million. As already mentioned, clearly, at the upper end of the guidance also with regards to the ROCE that already has been mentioned. Please bear in mind that we have our big standstill now in our Pirdop plant. So the consensus is at EUR 324 million. We feel quite confident with this consensus. Let me have a look. Anything else to mention here. I would say, no. We Just mentioned the standstill in Pirdop. And for sure, we still continue to have impacts of higher electricity and energy prices. We have smaller scale maintenance works to be done here and there. But in total, an impact of EUR 30 million to our, let's say, normalized quarterly results to be expected for the Q4. So ladies and gentlemen, with that, I would like to hand over back to Roland.

Okay. Thanks, Rainer. Coming to the next page, talking about sustainability and our commitment to the science-based targets. You see in this graph that we have set ourselves ambitious targets in line with the Paris Climate Agreement. You know this initiative. It's really -- it intends to map company's contribution to the goal of limiting global warming well below 2 degrees Celsius in the future. We have discussed it with -- the initiative with the Science Based Targets Initiative, and our targets, as we have laid them out here, have now been approved and confirmed by this initiative. So we are really committed, and we will reduce our absolute Scope 1 and Scope 2 greenhouse emissions by 50% until 2030 compared to the starting of the base year 2018. And on top -- and we are in intense dialogue with all our business partners. We are also committed to reduce our Scope 3 greenhouse gas emissions by 24% per ton of copper until the year 2030, again, base year 2018. Clearly, this is not an easy journey, but we are very committed and we will achieve this goal. And we will take extraordinary and very clear project steps in order to achieve this target. And one project I just want to highlight, as we have just announced this a couple of weeks ago is the construction of a PV plant in Pirdop in Bulgaria. You see some pictures on the next slide. So it's the largest in-house PV plant and represents a major milestone in Bulgaria, but also for us as a company to reduce our CO2 footprint going forward. This is a plant with a peak performance -- or peak power of 10 megawatts, and it will contribute about 11,000 megawatts hours annually to our electricity consumption. And if we look at the Bulgarian energy mix, which is very much, I'd say, 50% based on coal-fired power plant, this PV asset will reduce the CO2 emissions by around 15,000 tons of CO2 per year just in the size of a PV plant. So we are very, very proud, and we see this as a starting point in Bulgaria, and we have the ambition to further increase the amount of renewable energy -- in-house produced renewable energy in our Pirdop site, which has the space, which has the location to really benefit on solar produced electricity. If I go to the next slide, I think also here, significant and impressive, specifically compared to the worldwide CO2 emissions per ton of copper. Aurubis was already one of the leading, if not the leading, company in 2013, which is the reference here we took with only 2.3 tons of CO2 emitted per ton of copper. And we have -- with all the activities to decarbonize, electrify and optimize our production, we have further reduced our CO2 footprint now to 1.69 tons per ton of copper. So significant step towards reducing CO2 emissions. And in our last quarterly calls, we talked about the different measures. It's industrial heat, it's gas cleaning systems. It's the PV. It's many, many small and larger projects, which we have implemented already in the past, and we have a very, very active agenda to further reduce this footprint towards climate neutrality in the future for our products. Coming to a different subject, also in the context of ESG. Proud and happy to announce that Union Investment corporate governance study linked Aurubis as the #1 in the MDAX with -- next to Commerzbank in the area of corporate governance. Also important to mention, and you can read this also in detail in the text, is that we moved up 4 spots compared to the last study, which was conducted by Union Investment. And it shows that we are improving, also towards or in comparison to our peers, to our -- to the other market participants. So I think it shows that besides strong performance financially, focusing very strong on improving our environmental footprint even further. We're also very active, and these studies confirm that we're here on the right track also to significantly move towards the governance -- improving the governance structure even further. And with this, I think, regarding sustainability and moving the company forward, I would like to hand over to Heiko Arnold, who will talk about an investment project in Beerse.

Yes. Thanks, Roland. Here with this project, we will present to you the first example of a growth synergy of the Metallo acquisition. Metal recycling is the core of our business here in Aurubis. And with this project, we will contribute significantly to the circular economy. Last week, we announced ASPA, the construction of the state-of-the-art recycling facility at our Beerse site Belgium. ASPA stands for Advanced Sludge Processing by Aurubis, and is the next step towards the goal of becoming the most efficient and sustainable integrated smelter network worldwide. With ASPA, a newly developed hydrometallurgical process, our production in Beerse will extract more valuable metals such as gold, silver and tin from the anode sludge and that in a more efficient and faster way. The new facility is a prime example of the synergies created by the acquisition of Metallo and how the whole company now benefits in developing new innovative solutions together. ASPA uses the in-house recycling know-how of the Beerse plant and graft it into the process of other Aurubis plant. Coming to the financials of this investment. We aim at spending a total CapEx of roughly EUR 27 million, which is solidly financed by operating cash flow. The expected EBITDA contribution is a high single-digit million amount once we are in full operation. The production is scheduled to start financial year '24/'25. In total, the capacity is around 2,500 tons of anode sludge produced from complex multimetal recycling materials at the Beerse and Lunen site. ASPA is taking metal recycling to the next level. We combine efficiency and speed to get even more out of it. It's a complex process. However, recycling as many components as possible and harnessing the potential of urban mining for scrap metal is crucial to closing the waste loop and catering to the increased demand for metals in a resource-efficient way. ASPA is Aurubis contribution to the circular economy. Now let me talk about the shutdown in Bulgaria. We would like to remind you that in the financial year 2021, we now are in a shutdown of our Pirdop site in Bulgaria for boiler repairs as well as the replacement of absorption towers and heat exchanges in the sulfuric acid plant. The shutdown that started last Sunday will take place in August, September and will last a total of 44 days. The shutdown will be used to carry out all necessary regulatory inspections, but at the same time, we are preparing for forward-looking investments that will further enhance our capability for highly profitable feedstock. We are investing a total of EUR 45 million in this shutdown which, as mentioned earlier, is scheduled to last 44 days. With this 44 days shutdown, the throughput effect will be 166,000 tons of concentrate, corresponding to an EBT effect in the area of EUR 23 million. With that, I would like to hand over back to our CEO, Roland Harings.

Yes. Thanks, Heiko. And I think also important with the project that Heiko presented, I think it clearly again, underlines how well the integration of Beerse and Berango into our smelter network has progressed and that we are already today announcing a significant -- or we announced this already and explaining today the significant investment and improving further the flow sheet of our company. Talking about, which is leading to the discussion of our strategy, and let's have a look into this group strategy process. We have informed you that we are working on a holistic update of our strategy, fact base and also conclusions. And we have progressed extremely well on that. And with this, we will give you a clear answer, we give our all stakeholders, the clear answer how we will shape the future and how we will develop ourselves, Aurubis, going forward. One thing is clear what has been confirmed, the world needs more of the metals that we produce. And our determination, and just ASPA is one additional step, is to become the most efficient and sustainable multimetal producer worldwide. This efficient smelter network is the strong core of our business, and we see strong growth drivers in the circular economy and in the recycling in the future. Also given the financials of our company and the performance, we act from a position of strength. And looking at the balance sheet, looking at our financial position, we can really make bold moves. We have decided that we will host our Capital Market Day in December on the 6th and 7th of December. And some of you might ask why only in December because we were contemplating in our last calls that this might be in the summer time frame. But really, what we are actually reviewing is the segmentation of our company because feedback from many market participants and analysts was that we should review how we report, how transparent we inform you about our company. And hence, we will announce our strategy, details of our strategy, combined with an adopted segmentation potentially and then also with results of our full fiscal year 2021. And I -- we believe that this is the best foundation in order to really put in all detail our strategy and our way forward into the discussion. And we also hope -- and in a moment, we are optimistic that vaccination and pandemic will not limit any meetings in person, so we are really looking forward to welcome you and meet you in person in...

Beerse.

In Beerse, also the opportunity to see the site of -- in Belgium in December 6 or 7. More details will certainly come from our IR team in due course. And with this, I would like to thank for your attention, and looking forward to your questions.

Roland, and Heiko and Rainer. We will now open the Q&A session. [Operator Instructions] Thank you.

All right. So we have a first questioner, and the question comes from Ioannis Masvoulas.

I've got 3 questions, and I'll take them one at a time. So the first one is on MRP. And looking at the EBT bridge for Q3 relative to Q2. So EBT was down around EUR 50 million quarter-over-quarter despite the strength that you know that the recycling, asset prices and corporate products. And surely, there has been some impact from rising energy costs and maintenance, but they still cannot explain around EUR 50 million of sequential earnings decline. Could you perhaps elaborate on the reasons for any underlying costs or other one-off elements that we should take into account for MRP?

So this is Rainer, Ioannis, thanks for your question. Sure. We have changed here quarter-over-quarter. And the main impact comes really from the energy. You don't have a fully linearized costs month-on-month. It's not always the same. So we see an increase there, and we also see some non linear cost development here, especially in the last quarter. But also on the other side, the input materials have been increasing. So therefore, the gross profit is in Q3 a little bit below the gross profit of the quarter before.

Sorry, could you perhaps elaborate? Because if I look at energy, you show about a EUR 5 million sequential headwind at the group level? And also on input materials, could you elaborate what are the main elements there?

Well, again, it is the energy. That's for sure. It's mainly the electricity. I can't go into further details here. It is, as said, we do have linearized effect here that is not seen in the Q2 that is seen now in Q3. And it is also, hopefully, not too much an effect that we will see going forward. So that's the only answer that I can give to that.

Okay. And a related question on the full year guidance. Again, if I look at MRP guidance for the year, even the top end suggests lower earnings in fiscal Q4 relative to Q3? And again, the underlying dynamics around the scrap RCs, asset prices would suggest that earnings should be at least stable even with energy costs that you indicated. Again, is there any incremental headwind in fiscal Q4 beyond energy and the maintenance?

Again, I mean, we -- as you all know us, we are on a very conservative level here. We already said that we are at the upper end. So that's all that we can say here. And one thing is for sure, we do have the standstill in Pirdop, which will have a significant impact to our Q4 results. And yes, that's the story here for the moment.

Okay. Okay. And then one last question for me on the Stolberg plant and the recent impact from the floods. It is a small asset in the Aurubis, portfolio, but it is a major and profitable asset for the FRP business that you're looking to divest as a package. So what do you see as a potential impact to the time line? Do you need to get this plant up and running before you are able to sell? Or are you confident of completing the divestment while the plant gets rebuilt?

Ioannis, yes, sure. So clearly, the plant is an important asset in the FRP portfolio, and it's also very important for certain customers. So we are going to rebuild. At this point in time, we are not at a position to make any statements regarding restart timing because the cleanup has been more or less finished or is in well progressed, and the experts are now assessing what really happened to the equipment and machinery. So it would be not correct to make any anticipation, what's going to happen, when it's going to restart. But clearly, the plant will be rebuilt and restarted. That's the clear commitment that we have made.

Understood. And there's no change to the divestment strategy for the asset?

Regarding the FRP sales process, we are -- as we stated in the last calls, we are well advanced, and we will finally, announce the situation and how we are going forward with FRP in the coming weeks. So we are now at the final decision point. And due to confidentiality with the business partners, we are finalizing. I cannot disclose today anything, but it will take place very soon. That's what I can promise, and then everybody has clarity what's going to happen with FRP. Our intention with FRP doesn't change. Also with the impact on Stolberg, it's not core business of Aurubis. And that's the statement we made in the past, and it's just to reconfirm.

And the next question comes from Jatinder Goel.

A couple of questions from my side. Just on buyback, you've got about 5 to 6 weeks remaining for the initially approved time line. How are you thinking because you haven't been in the market? Share price, obviously, they're a lot higher from where you announced it. How are you thinking about the buyback from here? And would you keep the shares that you bought back into treasury? How do you plan to use those?

No, Jatinder, thanks, a valid question. As we said in the -- for this question in the past, we are reviewing how we best invest. And as we are finalizing our strategy and going to announce, we see significant investment potential. Hence, we have not yet decided. We are reviewing this regularly. We have not decided to restart our share buyback program. So we are reviewing this regularly, but no decision at this point in time to be announced. And regarding the -- sorry, the...

Shares in stock.

Shares in stock. Shares are in stock. We are, let's say, happy shareholder of our shares.

Okay. So just to be clear, the time line for buyback is, I think, 17th of September. You'll announce your strategy probably at Capital Markets Day, not before. So does it mean the buyback itself just gets canceled?

Just as we have the authorization by the General Assembly, which is valid until the end of this fiscal year, then it will just expire, just expire. If we -- again, we are reviewing this regularly, if we take a decision on this in the remaining period, the decision has not been taken, but if we are going to announce this, obviously.

Understood. Second question on treatment and refining charges. Contract negotiations for '22. I mean we saw some early settlements from Antofagasta which were lower than current year's benchmark. Obviously, benchmark has gone down for 6 years in a row. Your commentary continues to suggest that we probably have found a bottom. But what gives you confidence that next year will be a higher settlement level versus this year's benchmark when an early settlement has been done lower year-on-year?

Yes. Again, the fundamentals. As I pointed some of the key factors out, availability of concentrate is very good. Mine production is increasing by 4%. A lot of new projects are in the pipeline going forward. And we see a slowdown or certainly no increase in concentrate demand from the largest market in China. So all these fundamentals are there. And I don't want to speculate or comment what was done with Antofagasta and the Chinese smelter. But I think it's also quite interesting that they locked in a deal at this point in time because Antofagasta were typically the mine company who was the last to sign something. So therefore, I think it underpins that the fundamentals are going in the right direction, and we should expect that this trend -- and it has bottomed out and this trend of -- based on the facts will show higher TC/RCs in the future.

Understood. And just to expand it a little bit further, I know you won't give any guidance for FY '22 until December. But if TC/RCs don't improve year-on-year, can the business still hold its current EBT level that we might see in FY '21, which could be at top end or higher than top current year's guidance? Can FY '22 maintain that level without getting help from TC/RCs?

Yes. I think it's -- also this year, it shows that Aurubis has many strong earning pillars, and TC/RC is one of them. We have products, we have sulfuric assets, we have metals, we have recycling. So as we saw this year, even with low TC/RCs, you saw the performance, you see the performance. So you have to put it in perspective.

And the next question comes from Sebastian Synagowitz.

I've got a first quick one and a follow-up on Stolberg. You mentioned that the plant is quite important also for a couple of your customers -- customer group. Could you please just share with us maybe what is the market share broadly in the market which the plant is operating in? Does the plant have a rather high market share? Is there any color you could provide us on that front?

Yes, sure. Happy to do so. Sebastian. So typically, in automotive, they have multi-supplier strategies. So there are only very few customers, and it's Tier 2, Tier 3. So we are not supplying directly to any direct automotive producer. So typically, these customers have various sources of supply. However, for some, the Stolberg plant is quite important. What we see today is a very high solidarity in the, let's say, FRP community with all producers, and we have been able already to discuss with other market participants, some reloading, some joint production efforts and so on. So we do, as an industry, not just as Aurubis, we do the utmost to keep all customers up. At this point, it's too early if we are successful to achieve this. Because, again, as I mentioned, we have -- today, we are not in a position to state the restart of assets or even the whole plant as the analysis is still ongoing. But again, discussion with customers, with all market participants, with direct competitors are very constructive, and we try to solve this jointly in order to keep the industry going.

And sorry if I follow up once again, the -- on the market share side, obviously, we've seen obviously in the past that market share obviously was a constraint also in some of the -- in your M&A talks. So I guess, at least there is a chance obviously the market share is at least slightly elevated. What is roughly a number? And I appreciate it's a very small business of your overall company. But I mean, do we have to think about this as a 30% market share of total operation? Or is it less than that? Or is there any color you could give us on that side as well?