Slide 1: FUCHS Group Financial Results 2018
FUCHS GROUP Financial Results 2018 | Analyst’s Conference, 20th March 2019, Frankfurt | Stefan Fuchs, CEO | Dagmar Steinert, CFO
Slide 2: Highlights FY 2018
Highlights FY 2018 Sales +4% EBIT +3% to €2.6 bn to €383 mn Dividend +4% Double-digit organic growth in Asia-Pacific, EPS +7% to €0.95 per pref. share / €0.94 per ord. share Africa and Americas Negative currency effects especially in Asia- Outlook 2019 Pacific, Africa as well as North and South
Slide 3: Comparison outlook and results 2018
Comparison outlook and results 2018 Outlook 2018 Outlook 2018 Performance indicator FY 2017 FY 2018 (March & July 18) (October 18) Sales € 2,473 mn +3% to +6% +3% to +5% € 2,567 mn (+4%) At previous year‘s EBIT before one-off effect1 € 373 mn +2% to +4% € 371 mn (-1%) level EBIT € 373 mn - +2% to +4
Slide 4: Sales development
Sales development € mn 2,473 2,567 + 4% YoY 700 668 643 642 618 629 615 611 614 600 500 400 300 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 l4
Slide 5: EBIT development
EBIT development (excluding one-off effect from sale of at equity share in Q3 2018) € mn 373 + 4% (-1%) YoY 383 (371) 120 101 104 94 96 91 92 92 (92) 90 86 60 30 0 Q1 '17 Q2 '17 Q3 '17 Q4' 17 Q1 '18 Q2 '18 Q3 '18 Q4' 18 l5
Slide 6: 2018 Group sales
2018 Group sales € mn 3,000 + 180 -7 - 79 (+ 7%) (-) (- 3%) 2,500 2,567 2,473 + 94 (+ 4%) 2,000 1,500 2017 Organic Growth External Growth FX 2018 l6
Slide 7: Sales by customer location
Sales by customer location Sales 2018: €2,567 mn (2,473) Asia-Pacific, Africa 846 (800) Europe 33% 1,293 (1,262) (32) 50% (51) 17% (17) Americas 428 (411) l7
Slide 8: Regional sales growth 2018
Regional sales growth 2018 Europe and Asia-Pacific, Africa declining in the course of the year 2018 2017 Growth Organic External FX (€ mn) (€ mn) Europe 1,546 1,515 +2% +3% 0% -1% Asia-Pacific, Africa 783 733 +7% +11% - -4% Americas 409 393 +4% +13% - -9% Consolidation -171 -168 - - - - Total 2,567
Slide 9: Slightly higher EBIT in 2018
Slightly higher EBIT in 2018 € mn 400 373 +10 (+3%) ; w/o one-off effect -2 (-1%) 383 300 Excluding one-off effect, at equity income down due to the difficult economic environment in Saudi Arabia and the weakness of the Turkish currency 200 Planned increase of production and other function costs
Slide 10: EBIT by regions
EBIT by regions 2018 (2017)1 € mn 59 11 383 (61) (9) (373) 400 121 350 (128) 300 250 192 (175) 200 150 100 50 0 EBIT margin Europe Asia-Pacific, Africa Americas Holding/cons. Group before at equity1 11.5% (11.4%) 13.9% (15.4%) 14.4% (15.5%) 13.9% (14.4%) 12017 comparable l 10
Slide 11: Income statement 2018
Income statement 2018 € mn 2018 2017 Δ € mn Δ in % Sales 2,567 2,473 94 4 Gross Profit 899 882 17 2 Gross Profit margin 35.0 % 35.7 % - -0.7 %-points Other function costs -542 -526 -16 3 EBIT before at Equity 357 356 1 0 At Equity (including €12 mn one-off) 26 17 9 53 EBIT 383 373 10 3 Earnings afte
Slide 12: Solid balance sheet and strong cash flow generation
Solid balance sheet and strong cash flow generation € mn 2018 2017 2016 2015 2014 Total assets 1,891 1,751 1,676 1,490 1,276 Goodwill 174 173 185 166 88 Equity 1,456 1,307 1,205 1,070 916 Equity ratio 77% 75% 72% 72% 72% € mn 2018 2017 2016 2015 2014 Net liquidity 191 160 146 101 186 Operating cash
Slide 13: Investment in the future
Investment in the future R&D expenses and Capex R&D expenses 2018: €52 mn Capex 2018: €121 mn € mn 60 140 121 120 50 105 100 93 40 80 30 58 60 52 50 53 47 11 PPA 20 39 11 40 10 30 10 20 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Capex Scheduled amortisation/depreciation l 13
Slide 14: Net operating working capital (NOWC)
Net operating working capital (NOWC)* 650 24.0% 23.4% 600 22.3% 21.8% 22.5% 550 21.3% 85 500 21.0% 81 21.0% 450 79 19.9% 78 400 19.5% 350 77 73 300 18.0% 2013 2014 2015 2016 2017 2018 NOWC (in € mn) NOWC (in %)* NOWC (in days) * In relation to the annualized sales revenues of the last quarter l 14
Slide 15: Cash flow 2018
Cash flow 2018 € mn 2018 2017 Δ in % Earnings after tax 288 269 7 Amortization/Depreciation 58 59 -2 Changes in net operating working capital (NOWC) -48 -78 -39 Other changes -30 -3 - Capex -121 -105 15 Free cash flow before acquisitions1 147 142 4 Acquisitions1 12 -2 - Free cash flow 159 140 14 1 I
Slide 16: Net Liquidity 2018
Net Liquidity 2018 € mn 500 450 -63 400 350 -48 -30 300 288 250 Free cash flow before acquisitions -126 200 €147 mn 10 150 100 160 191 50 0 Net liquidity Earnings after tax Depreciation ./. NOWC Other changes Dividend Other changes Net liquidity Dec 2017 Capex Dec 2018 l 16
Slide 17: FUCHS Value Added (FVA)
FUCHS Value Added (FVA) Ø Capital Employed € mn 1,317 1,227 Cost of Capital 1,134 132 (123) 960 786 833 737 EBIT FVA 383 251 (373) (250) 2012 2013 2014 2015 2016 2017 2018 2018 (2017) Cost of Capital = CE x WACC (10%) l 17
Slide 18: FY 2018 earnings summary
FY 2018 earnings summary Mainly volume driven organic sales growth coming from Asia-Pacific, Africa and North and South America; Europe driven by price and product mix changes Strong negative FX effects in North and South America as well as in Asia-Pacific, Africa Although higher raw material
Slide 19: Dividend proposal
Dividend proposal The Executive and Supervisory Board will 4% propose an increase of €0.04 to the Annual General Meeting higher dividend to be held on 7th May 2019 payment proposed €0.95 €0.94 (0.91) (0.90) per preference share per ordinary share l 19
Slide 20: Outlook 2019
Outlook 2019 Economic outlook gloomy due to trade conflicts between US and China as well as Brexit Performance indicator Actual 2018 Outlook 2019 Sales € 2,567 mn +2% to +4% EBIT comparable (before one-off effect) € 371 mn -5% to -2% EBIT € 383 mn -8% to -5% FUCHS Value Added € 251 mn ~ € 200 mn Fre
Slide 21: Strategic Outlook
Strategic Outlook
Slide 22: Profitable Growth
“Profitable Growth” 3,000 14 2,567 2,473 12 2,500 2,267 2,079 10 2,000 1,866 1,819 1,832 1,652 8 1,459 1,500 1,365 1,394 1,323 1,192 1,178 6 1,065 1,096 1,041 1,000 902 940 789 834 4 500 2 Sales net – margin in € million 0 0 In % 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 23: Growth initiative
Growth initiative 5.500 employees € 50+ mn R&D +50% during the expenses p.a. last 10 years x2 during the last 10 years € 700+ mn capex Global IT 2016-2021 processes l 23
Slide 24: Investment initiative
Investment initiative € mn 200 150 100 50 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 l 24
Slide 25: Development of the Mannheim site – new properties
Development of the Mannheim site – new properties FUCHS PETROLUB Office building FUCHS SCHMIERSTOFFE AS/RS warehouse for raw materials l 25
Slide 26: China: WuJiang (next to Shanghai) – new plant
China: WuJiang (next to Shanghai) – new plant l 26
Slide 27: USA: Harvey (next to Chicago) – expansion
USA: Harvey (next to Chicago) – expansion l 27
Slide 28: Australia: Acquisition of NULON
Australia: Acquisition of NULON Contract to acquire NULON Products Australia Pty Ltd signed at the beginning of March Closing early Q2 Sales AUD 40 mn (~ € 25 mn) 65 employees Automotive Retail Business l 28
Slide 29: E-Mobility: a variety of opportunities for FUCHS
E-Mobility: a variety of opportunities for FUCHS Coolants for power Corrosion preventive for electronics battery housing Greases for bearings in E- Coolant for Motor battery MTF in machining Cleaners in of E-Motor a. battery gearbox production Drawing oils for copperwire Forming oils for E-Drive Oil
Slide 30: FUCHS booth at bauma
my = & ~ = ° nn ae = o y = 2 3 a Holistic FUCHS booth at bauma
Slide 31: FUCHS2025: Culture, Strategy, Structure
FUCHS2025 Culture 2018 act global 2025 Strategy Structure l 31
Slide 32: Changes in Board responsibilities as of Jan 1 and Oct 1, 2019
Changes in Board responsibilities as of Jan 01 and Oct 1, 2019 Stefan Fuchs (CEO) Dr. Lutz Lindemann (CTO) Dr. Timo Reister • Region North and South • R&D • Region Asia-Pacific, Africa America (until Sept. 30, 2019) • Technology • Region North and South • Corporate Group • Product Management America
Slide 33: Disclaimer
Disclaimer The information contained in this presentation is for background purposes only and is subject to amendment, revision and updating. Certain statements and information contained in this presentation may relate to future expectations and other forward-looking statements that are based on man
Slide 34: Thank you for your attention
Thank you for your attention