Fuchs Se · XETR:FPE
Fuchs — Fuchs Petrolub — Kepler Cheuvreux / Unicredit 16th German Corporate Conference 2017
54 slides from Fuchs's conference presentation, January 2017
Slide 1: FUCHS Group - Setting Standards Worldwide
FUCHS GROUP Setting Standards - Worldwide | Company Presentation, January 2017 | Dagmar Steinert, CFO | Thomas Altmann, Head of Investor Relations
Slide 2: Agenda
Agenda 01 | The Leading Independent Lubricants Company 02 | Q1-3 2016 03 | Shares 04 | Appendix l2
Slide 3: The Leading Independent Lubricants Company
02 The Leading Independent Lubricants Company
Slide 4: FUCHS at a glance
FUCHS at a glance No. 1 The Fuchs family among the indepen- dent suppliers of owns 54% of lubricants ordinary shares Established 3 generations ago as a More than 2 bn family-owned business euro sales A full range of over 10,000 ~ 5,000 Preference share is 60 companies lubricants and employees listed
Slide 5: German Sustainability Award 2016
German Sustainability Award 2016 l5
Slide 6: Top lubricants manufacturers 2015
Top 20 lubricants manufacturers 2015 By volume A top-10 ranking lubricants manufacturer Number 1 among the independent lubricants companies l6
Slide 7: Our unique business model is the basis for our competitive advantage
Our unique business model is the basis for our competitive advantage Technology and innovation leadership in strategically important product areas FUCHS is fully focussed on lubricants FUCHS is a full-line supplier Independency allows reliability, customer & Global presence, R&D strength, market pro
Slide 8: Organic growth potential in emerging countries
Organic growth potential in emerging countries Market Demand FUCHS Sales (by customer location) +130 % 36.4 mn t 35.6 mn t € 902 mn € 2,079 mn 19% 27% 51% (1,064) 28% +100 % 34% 18% (364) +66 % 59% (531) 53% 39% 31% 24% (219) +328 % (650) 17% (152) 2000 2015 2000 2015 Asia-Pacific & MEA Americas Eur
Slide 9: We are where our customers are
We are where our customers are 55 Operating Companies 34 Production Sites l9 As of Dec. 2016
Slide 10: Full-line supplier advantage
Full-line supplier advantage Sales 2015: €2.1 bn (~80% international) by customer location Industrial lubricants Automotive lubricants ~60% ~40% e.g. Industrial oils, MWF/CP* and greases 100,000 customers in more than 150 countries Car industry Manufacturing Engineering Construction Mining Trade, Se
Slide 11: Investments, amortisation & depreciation
Investments, amortisation & depreciation € mn Investment 80 focus on… 70 70 61 Construction of 60 new plants in 52 50 growth regions 50 Modernisation 40 39 36 PPA and expansion 30 of existing plants 30 26 27 28 36 Expansion of 20 R&D capacities 10 0 2011 2012 2013 2014 2015 Capex Regular amort
Slide 12: Investments 2016 - 2018
Investments 2016 - 2018 Planned investments of €300mn (~ €100mn p.a.) Expansion of the Mannheim site, Germany Expansion of the Kaiserslautern site, Germany Expansion of the Chicago site, USA New plant in WuJiang, China New plants in Australia and Sweden ~ 50% of planned investments is main
Slide 13: FUCHS' 3C grease commitment
FUCHS‘ 3C grease commitment Our objectives Globally identical production equipment Globally identical finishing equipment Globally identical quality control test devices Globally similar raw materials Globally identical quality standards l 13
Slide 14: FUCHS & E-Mobility
FUCHS & E-Mobility Development passenger car production (in mn) Implication for FUCHS Revolution – Complete switch to only EVs: 74 89 102 111 120 13% 10% - No power train; reduced oil consumption 24% - New additional high value applications 37% - Sales per car would decrease slightly 98% 97% 85% Evo
Slide 15: Strong track record of integrating businesses
Strong track record of integrating businesses Revenues (p.a.) 2016 Ultrachem (US) € 15 mn Chevron Lubricants (US) € 11 mn 2015 Statoil Fuel & Retail Lubricants AB (SVE) €140 mn Deutsche Pentosin-Werke GmbH (GER) €135 mn 2014 Lubritene (ZA) € 15 mn Batoyle (UK) € 15 mn 2010 Cassida (global) € 21 mn l
Slide 16: Q1-3 2016
02 Q1-3 2016
Slide 17: Highlights Q1-3 2016
Highlights Q1-3 2016 Revenues +11% to €1,703 mn EBIT + 6% to €276 mn Europe €1,080 mn Asia-Pacific, Africa €451 mn Outlook 2016 Americas €260 mn reaffirmed l 17
Slide 18: Q1-3 2016 Group Sales
Q1-3 2016 Group Sales € mn +176 1,800 (+11.5%) 1,700 +40 -52 1,703 (+2.6%) (-3.4%) 1,600 1,500 1,539 +164 (+10.7%) 1,400 1,300 1,200 Q1-3 2015 Organic Growth Acquisitions FX Q1-3 2016 l 18
Slide 19: Regional sales growth Q1-Q3 2016
Regional sales growth Q1-Q3 2016 Organic Growth (in %) Q1 2016 Q2 2016 Q3 2016 Q1-3 2016 Europe +1.8 +4.7 +4.7 +3.8 Asia-Pacific, Africa +2.0* +2.5 +11.0 +5.1 Americas -3.4 +1.8 -4.0 -1.9 Total +1.1 +3.7 +3.0 +2.6 External Growth (in %) Q1 2016 Q2 2016 Q3 2016 Q1-3 2016 Europe +24.9 +24.4 +9.3 +19.2
Slide 20: EBIT by regions
EBIT by regions Q1-3 2016 (Q1-3 2015) € mn 47.3 (50.4) 276.2 300 (260.9) 89.8 (87.1) -9.6 250 (-4.2) 200 148.7 (127.6) 150 100 50 0 Europe Asia Pacific, Africa Americas Holding/cons. Group EBIT margin before at equity 13.7% (14.2%) 17.2% (17.3%) 18.2% (18.9%) 15.4% (16.2%) l 20
Slide 21: Income Statement Q1-3 2016
Income Statement Q1-3 2016 € mn Q1-3‘15 Q1-3‘16 Δ Mio. € Δ in % Sales 1,539 1,703 164 10.7% Gross Profit 591 641 50 8.5% Gross Profit margin 38.4% 37.7% Selling, admin., R&D expenses, others -342 -378 -36 10.9% EBIT before at Equity 249 263 14 5.3% At Equity 12 13 1 EBIT 261 276 15 5.9% Earnings aft
Slide 22: Cash flow
Cash flow mn € Q1-3 2015 Q1-3 2016 Earnings after tax 181 192 Amortisation/Depreciation 28 35 Changes in net operating working capital (NOWC) -34 -45 Other changes -3 17 Capex -29 -54 Free cash flow before acquisitions 143 145 Acquisitions -110 -20 Free cash flow 33 126 l 22
Slide 23: Outlook 2016 reaffirmed
Outlook 2016 reaffirmed Performance indicators Actual 2015 Outlook 2016 Sales €2,079 mn Total Growth +11.4% 7% to 8% Organic Growth +0.3% At the top end External Growth (Acquisitions 2015) +6.0% of 7% - 11% Currency +5.1% Negative Effect EBIT €342 mn 4% to 6% Slightly above the FVA €246 mn previous
Slide 24: Shares
03 Shares
Slide 25: Breakdown ordinary & preference shares
Breakdown ordinary & preference shares (December 2016) Ordinary shares Preference shares MDAX-listed Free Free Fuchs float float family 46% 100% 54% Basis: 69,500,000 ordinary shares Basis: 69,500,000 preference shares Characteristics: Characteristics: Dividend Dividend plus preference profit sh
Slide 26: Stable dividend policy
Stable dividend policy Dividend per Preference Share Market Capitalization € per share € mn 1.00 6,000 Payout Ratio 2015: 48% 0.90 0.82 5,000 0.80 0.70 4,000 0.60 0.50 3,000 0.40 2,000 0.30 0.12 0.20 1,000 0.10 0.00 0 Our target: Increase the absolute dividend amount each year or at least maintain p
Slide 27: Appendix
04 Appendix
Slide 28: Top lubricant countries 2015
Top 20 lubricant countries 2015 KT 7,000 China and the USA cover more than one third of the world lubricants 6,000 market. FUCHS is present in every important 5,000 lubricants consuming country 4,000 3,000 2,000 1,000 0 l 28
Slide 29: Regional per-capita lubricants demand 2015
Regional per-capita lubricants demand 2015 kg 20 15 10 5 0 l 29
Slide 30: Well balanced customer structure
Well balanced customer structure FUCHS sales revenues Industrial goods manufacturing 2015: €2.1 bn Vehicle manufacturing 9% 20% Energy and mining 7% Trade, transport and services 29% 26% Agriculture and construction 9% Engineering/ machinery construction l 30
Slide 31: Base oil / additives value split
Base oil / additives value split Base oil prices do not necessarily follow 20% crude oil prices 60% No direct link between additives and crude oil prices. We even face price increases for certain raw materials where supply/demand is not balanced or special situations occur 80% Special lubrican
Slide 32: Technology & Innovation fueled by strong R&D focus
Technology & Innovation fueled by strong R&D focus R&D expenses 40 €39 mn 30 20 10 0 2011 2012 2013 2014 2015 l 32
Slide 33: Workforce Structure
Workforce Structure 4,823 employees globally Regional Workforce Structure Functional Workforce Structure Other Germany European 1,397 (29%) Marketing Production Countries 1,809 & Sales 1,505 (38%) 2,209 (31%) (46%) 2015 2015 Asia- R&D Pacific, 441 Africa (9%) 1,029 Americas Admin (21%) 588 668 (12%)
Slide 34: Further market consolidation to be expected
Further market consolidation to be expected Manufacturers High degree of fragmentation 130 Major oil companies Concentration especially amongst Independent smaller companies lubricant manufacturers* 590 Market Shares Other 710 > 50% Differences are enormous manufacturers Top 10 < 50% manufactu
Slide 35: Acquisitions 2015: PENTOSIN
Acquisitions 2015 PENTOSIN Acquisition July 1st, 2015 2 legal entities around 200 new colleagues € 135 mn 2 plants in Wedel Sales revenues OEM, and Dormagen, Low € 112.3 mn Technology Germany complexity Purchase Price focus l 35
Slide 36: Acquisitions 2015: STATOIL
Acquisitions 2015 STATOIL Acquisition Oct. 1st, 2015 8 legal entities around 500 new colleagues € 140 mn Market Sales revenues 1 Product Portfolio of € 72.5 mn leader blending plant (rented) in Nynäshamn,Sweden 750 products Purchase Price in Scandinavia l 36
Slide 37: Acquisitions 2016
Acquisitions 2016 FUCHS acquires ULTRACHEM INC (Share Deal) Deal Structure Business will continue to be operated from Delaware location €15 mn in sales p.a. Specialty Synthetic Lubricants for Compressor OEM and Industrial Focus Maintenance Markets Closing in Q4 2016 FUCHS acquires lubricants busines
Slide 38: Long-term Objective: Focus on Shareholder Value
Long-term Objective: Focus on Shareholder Value Organic growth through strict customer focus, geographic expansion and product innovation Drive returns Improve operating profitability through margin and mix management, operating cost management and efficiency improvements Capex with returns ab
Slide 39: Cash allocation
Cash allocation Cash allocation priority Reinvest in the business Return cash to shareholders Capex Stable Dividends Working Capital Share Buyback Acquisitions l 39
Slide 40: Unique Track Record for continued profitability and added value
Unique Track Record for continued profitability and added value Sales (in € mn) Earnings After Tax (in € mn) 2,400 300 2,079 236 1,800 1,323 200 1,200 97 100 600 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EBIT (in € mn) FVA (in € mn) 16.5%
Slide 41: Solid balance sheet and strong cash flow generation
Solid balance sheet and strong cash flow generation € mn 2011 2012 2013 2014 2015 Total assets 985 1,109 1,162 1,276 1,490 Equity 658 782 854 916 1,070 Equity ratio 67% 71% 74% 72% 72% € mn 2011 2012 2013 2014 2015 Net liquidity 65 135 167 186 101 Operating cash flow 89 203 221 255 281 Free cash flo
Slide 42: EBIT increase of more than 9% in 2015
EBIT increase of more than 9% in 2015 € mn 2011 2012 2013 2014 2015 Δ 14/15 Sales 1,652 1,819 1,832 1,866 2,079 11.4% Gross Profit 605 666 690 693 791 14.2% Gross Profit margin 36.6% 36.6% 37.7% 37.2% 38.1% +0.9 % points Selling, admin., R&D expenses, others -346 -387 -391 -400 -467 16.6% EBIT befor
Slide 43: Regional Sales 2015
Regional Sales 2015 2014 2015 Total Organic External Currency (€ mn) (€ mn) Growth Growth Growth Effects Europe 1,113 1,227 +10.3% +1.5% +9% -0.2% Asia-Pacific, Africa 517 583 +12.9% +0.5% +2.2% +10.2% Americas 316 353 +11.6% -4.1% +1.4% +14.3% Consolidation -80 -84 - - - - Total 1,866 2,079 +11.4%
Slide 44: FUCHS Group EBIT 2015
FUCHS Group EBIT 2015 (EBIT 2014) € mn 400 +13 mn +29 mn 350 65 -7 +16 mn (52) (-7) 300 250 122 (106) 200 342 (313) 150 100 162 (162) 50 0 Europe Asia Pacific, Africa Americas Holding costs/cons. Group EBIT margin before at equity (previous year) 13.1% (14.4%) 18.2% (16.8%) 18.4% (16.3%) 15.6% (15.7
Slide 45: Acquisitions fully financed by operating cash flow
Acquisitions fully financed by operating cash flow mn € 2014 2015 Gross cash flow 258 274 Changes in net operating working capital -14 0 Other changes 11 7 Operating cash flow 255 281 Capex -52 -50 Other changes 7 1 Free cash flow before acquisitions 210 232 Acquisitions -22 -170 Free cash flow 188
Slide 46: Net operating working capital (NOWC)
Net operating working capital (NOWC)* 500 22.0% 21.3% 21.1% 21.0% 21.0% 450 19.9% 400 20.0% 78 350 77 77 73 77 300 18.0% 2011 2012 2013 2014 2015 NOWC (in € mn) NOWC (in %) NOWC (in days) * In relation to the annualized sales revenues of the 4th quarter of the year l 46
Slide 47: FUCHS Value Added (FVA)
FUCHS Value Added (FVA) Increase by 7.2% € mn Cost of Capital Cost of Capital 96 83 EBIT FVA EBIT FVA 313 230 342 246 2014 2015 Cost of Capital = CE (2014: €833 mn; 2015: €960 mn) x WACC (10% pre tax) l 47
Slide 48: Quarterly income statement
Quarterly income statement € mn Q1´15 Q2´15 Q3´15 Q4´15 Q1´16 Q2´16 Q3´16 Sales 493 515 531 540 550 586 567 Gross Profit 188 200 203 201 206 221 214 Gross Profit margin 38.1 % 38.8 % 38.2 % 37.2 % 37.4 % 37.7 % 37.8 % Selling, admin., R&D expenses, others -110 -113 -118 -126 -126 -128 -124 EBIT befo
Slide 49: Quarterly sales by regions
Quarterly sales by regions 2015 2016 Sales (€ mn) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q1-3 Europe 278.3 292.9 321.4 334.4 1,227.0 349.4 371.5 359.2 1080.1 Asia-Pacific, Africa 146.5 155.7 141.2 139.5 582.9 144.4 154.0 152.4 450.8 Americas 88.3 87.8 90.8 85.9 352.8 84.5 87.4 88.1 260.0 Consolidation -20.5 -21.4
Slide 50: Quarterly EBIT by regions
Quarterly EBIT by regions 2015 2016 EBIT (€ mn) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q1-3 Europe 39.4 43.3 44.9 34.4 162.0 43.1 51.8 53.8 148.7 Asia-Pacific, Africa 26.6 32.5 28.0 35.1 122.2 29.2 31.8 28.8 89.8 Americas 16.5 16.4 17.5 14.5 64.9 15.1 16.4 15.8 47.3 Consolidation -0.8 -2.3 -1.1 -2.7 -6.9 -2.2 -2.5
Slide 51: The executive board
The executive board Stefan Fuchs: CEO, Corporate Development, Dr. Lutz Lindemann: R&D, Technology, Supply Dr. Timo Reister: Asia-Pacific / Africa HR, PR, Americas Chain, Sustainability, OEM, Mining Dr. Ralph Rheinboldt: Europe, LUBRITECH, Dagmar Steinert: CFO, Finance, Controlling, SAP/ERP Systems I
Slide 52: Executive Compensation & FUCHS-Shares
Executive Compensation & FUCHS-Shares Executive Board Supervisory Board 25% 50% of variable compensation of variable compensation must be invested in FUCHS preference must be invested in FUCHS preference shares with a 3 year lock-up period shares with a lock-up period of 5 years. The vesting period
Slide 53: Disclaimer
Disclaimer This presentation contains statements about future development that are based on assumptions and estimates by the management of FUCHS PETROLUB SE. Even if the management is of the opinion that these assumptions and estimates are accurate, future actual developments and future actual resul
Slide 54: Financial Calendar & Contact
Financial Calendar & Contact Financial Calendar Contact March 21, 2017 Full Year Results 2016 FUCHS PETROLUB SE Friesenheimer Str. 17 April 28, 2017 Quarterly Statement Q1 2017 68169 Mannheim May 5, 2017 Annual General Meeting Investor Relations August 1, 2017 Financial Report H1 2017 Thomas Altmann
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