Last update on 2024-06-07

Aurubis (NDA.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Aurubis (NDA.DE) achieves a 5/9 Piotroski F-Score for 2023, indicating moderate financial health based on profitability, liquidity, and operating efficiency.

Short Analysis - Piotroski Score: 5

We're running Aurubis (NDA.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score assesses a company's financial strength, with a score of 5 out of 9 calculated for Aurubis (NDA.DE). This score is derived from an evaluation of the firm's profitability, liquidity, and operating efficiency. Aurubis showed positive net income and cash flow from operations in 2023, indicating good profitability and financial health. However, its return on assets and gross margin declined, reflecting some operational inefficiencies. While its leverage slightly increased, the current ratio improved. The company maintained a stable number of outstanding shares, but asset turnover also decreased, raising concerns about long-term operational efficiency.

Insights for Value Investors Seeking Stable Income

Aurubis (NDA.DE) holds a moderate position with its Piotroski F-Score of 5, suggesting a balance of strengths and weaknesses. While it demonstrates robust profitability and liquidity, there are concerns about declining operational efficiency and margins. Investors may consider buying but should be cautious of the observed inefficiencies. Further research into the company’s operational strategies and market conditions is recommended before making a final investment decision.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Aurubis (NDA.DE)

Company has a positive net income?

Net income measures a company's total earnings, reflecting the profitability during a specific period.

For 2023, Aurubis reported a net income of €140,934,000, a positive figure. Reviewing the historical data over the last 20 years, the company has shown mixed profitability, with occasional dips into negative earnings, such as in 2009 (-€46,106,000) and 2013 (-€153,880,000). The current positive net income is indicative of robust financial health for the fiscal year 2023. This positive trend garners a score of 1 under the Piotroski analysis, reflecting favorable conditions for investors.

Company has a positive cash flow?

Cash Flow from Operations (CFO) checks if a company can generate sufficient operational cash flow to maintain and grow its operations without relying on external financing.

For 2023, Aurubis (NDA.DE) generated a positive Cash Flow from Operations (CFO) of €572,705,000, thereby earning a point in the Piotroski Score system. Historically, Aurubis's CFO depicts a fluctuating but predominantly positive trend over the last 20 years. Despite years with negative cash flows (2006 and 2013), the majority of other years exhibit strong positive figures, highlighting Aurubis's general ability to generate operational cash inflow. This trend inclines favorably, suggesting robust operational capabilities and resilience against occasional downturns. Such positive cash flow reassures investors regarding the company’s ability to finance its operations and future growth internally.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's ability to generate profits from its assets. It is an important indicator of operational efficiency.

The ROA of Aurubis decreased significantly from 0.1017 in 2022 to 0.0192 in 2023. This indicates a decline in its ability to generate profit from its assets, primarily driven by the challenges in the broader market. Given this decline, the score for this criterion is set to 0.

Operating Cashflow are higher than Netincome?

Operating cash flow represents the cash generated by a company's regular business operations. Comparatively, net income is the total profit of a company after all expenses and taxes have been deducted. It is crucial because a higher operating cash flow than net income demonstrates efficient cash management and the company's ability to generate more cash than its reported profit, pointing to strong operational health and financial stability.

For Aurubis (NDA.DE) in 2023, we observe an operating cash flow of €572,705,000 compared to a net income of €140,934,000. Clearly, the operating cash flow is significantly higher than the net income. This indicates that Aurubis excels in its cash-generating capabilities from its core business activities, providing a cushion and flexibility to cover short-term liabilities and invest in growth opportunities. Historically, the trend represents a substantial variability in both metrics over the past two decades but generally illustrates positive synergy between operational efficiency and income stability, especially in recent years post-2020. This positive trend earns a score of 1 point in the Piotroski F-Score, highlighting Aurubis' strength in this critical financial indicator.

Liquidity of Aurubis (NDA.DE)

Leverage is declining?

Change in Leverage measures the ratio of total debt to total assets over consecutive periods. This criterion indicates a company's financial strategy regarding its utilization of debt for operations.

The Leverage for Aurubis has slightly increased from 0.0281 in 2022 to 0.0282 in 2023. This increase, albeit marginal, results in 0 points based on the Piotroski score criteria. Historically, Aurubis' leverage peaked in 2016 at 0.1004, and since then, it has been decreasing, ultimately stabilizing at current levels. This slight increase in 2023 might not pose a significant risk, but it disrupts the decreasing trend seen over recent years. Consistent increases in leverage can indicate leaning towards debt for operational needs, which may elevate financial risk if not managed prudently. Therefore, this trend is viewed negatively.

Current Ratio is growing?

A higher current ratio indicates that the company has a greater ability to pay off its short-term liabilities with its short-term assets.

Aurubis (NDA.DE)'s current ratio has increased from 2.3536 in 2022 to 2.3755 in 2023. This slight increase suggests an improvement in the company's liquidity position. Over the last 20 years, Aurubis' current ratio has consistently remained above the industry median, indicating a comparatively healthier short-term financial condition. For instance, in 2023, Aurubis has a current ratio of 2.3755 while the industry median stands at 1.8142, highlighting Aurubis' stronger capability to cover its short-term obligations. This trend is beneficial and thus adds 1 point to the Piotroski score.

Number of shares not diluted?

Change in shares outstanding measures if the company has issued more shares, which can dilute existing shareholders' equity, or if it has bought back shares, which can boost shareholder value.

For the fiscal years 2022 and 2023, Aurubis had outstanding shares maintained at 43,659,000. This indicates there was no change in the number of shares. Consequently, the score for this criterion is 0, as there was neither a decrease in the share count nor a buyback activity. Maintaining the outstanding shares stable can be seen as neutral as it neither dilutes current shareholders nor increases their equity stakes. Over the last 20 years, the outstanding shares have seen various changes, notably some years with significant increases such as from 2005 (33,813,400) to 2006 (37,154,319). However, the consistency over the recent years reflects a potentially stabilized equity structure.

Operating of Aurubis (NDA.DE)

Cross Margin is growing?

Gross Margin represents the percentage of total revenue that Aurubis retains as gross profit after incurring the direct costs associated with producing the goods and services it sells. It is an important measure of operational efficiency, giving insight into how well the company manages production costs relative to its revenue. For a specialized metal manufacturer like Aurubis, a high and stable gross margin suggests strong pricing power and cost controls. Conversely, fluctuations might indicate operational inefficiencies or volatile market conditions.

Comparing the Gross Margin figures, Aurubis saw its Gross Margin decline from 0.0975 in 2022 to 0.0637 in 2023. This represents a decrease, setting the score at 0 according to the Piotroski criterion of gross margin improvement. Over the last 20 years, the Gross Margin shows fluctuation, peaking at 0.1159 in 2017 and reaching its lowest in 2004 and 2005 when it was barely noticeable or not recorded. The industry median Gross Margin, on the other hand, tends to be significantly higher, although it also experienced substantial variability. For instance, it went down to 0.113 in 2015 from 0.5618 in 2006. The drop in Aurubis' Gross Margin, particularly in 2023, underlines the competitive and cost pressures faced, suggesting inefficiencies or changes in market conditions adversely affecting profitability. The lower margin compared to the industry median in recent years denotes further areas of concern.

Asset Turnover Ratio is growing?

The change in Asset Turnover measures how efficiently a company uses its assets to generate revenue over time. It is important as it indicates operational efficiency.

Comparing the Asset Turnover of 2.3205 in 2023 with 2.6344 in 2022, Aurubis (NDA.DE) has experienced a decrease in Asset Turnover. This indicates a decline in operational efficiency, scoring 0 points based on Piotroski’s criteria. Reviewing historical data for the past 20 years, Aurubis displayed fluctuating Asset Turnover ratios with notable highs in 2008 (3.0103) and lows in subsequent years. The latest decline suggests a period of slight inefficiency or changes in assets' revenue contribution.