Slide 1: FUCHS Capital Market Day, June 2018
FUCHS GROUP New Thinking | FUCHS Capital Market Day, June 2018 | Stefan Fuchs, CEO | Dagmar Steinert, CFO
Slide 2: FUCHS at a glance
FUCHS at a glance The Fuchs family holds No. 1 among the independent 54% of suppliers of lubricants ordinary shares Established 3 generations ago as a €2.5 bn family-owned business sales A full range of over 10,000 More than 5,000 Preference share is listed lubricants and related employees in the MD
Slide 3: Full-line supplier advantage
Full-line supplier advantage Sales 2017: €2.5 bn (~80% international) by customer location Automotive lubricants Industrial lubricants ~45% ~55% e.g. Engine & gear oils, hydraulic oils, shock absorber fluids, etc. e.g. Industrial oils, MWF/CP* and greases 100,000 customers in more than 150 countries
Slide 4: Well balanced customer structure
Well balanced customer structure Top 20 Customers account for ~ 25% of 2017 sales Engineering / Machinery construction Agriculture and construction Industrial goods manufacturing 7% 7% 19% Sales 2017: Trade, transport and services €2.5 bn Vehicle manufacturing 29% 29% 9% Energy and mining l4
Slide 5: FUCHS' Strategy
FUCHS‘ Strategy Profitable Growth: Internationalization of core activities Local production in 33 plants Utilize disruptions like e-mobility, digitalization, etc. People: as an opportunity ▪ Employer Branding Global ▪ Culture Agile network structure based standards, ▪ Talent- on common values proces
Slide 6: Employer Branding – FUCHS as employer brand
Employer Branding – FUCHS as employer brand l6
Slide 7: Investment in the future
Investment in the future R&D, capex, regular amortisation & depreciation R&D expenses 2017: €47 mn Capex 2017: €105 mn € mn 50 120 105 45 100 93 40 35 80 70 30 25 60 52 53 50 47 20 9 PPA 39 9 40 15 28 30 3 10 20 5 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Capex Regular amortisation/depre
Slide 8: Investment initiative: Growth/replacement/efficiency
Investment initiative Growth/replacement/efficiency ▪ For 2016 - 2018 around €300 mn capex was planned with focus on the expansion of Mannheim, Kaiserslautern and Chicago as well as new plants in China, Australia and Sweden. As of today we expect capex to be ~ €340 mn. ▪ From today‘s perspective mor
Slide 9: 3C grease commitment
“3C grease commitment” Grease plant Harvey, IL/USA l9
Slide 10: Investment initiative Beresfield (Newcastle), Australia
Investment initiative Beresfield (Newcastle), Australia l 10
Slide 11: Investment initiative
Investment initiative 150 € mn 100 50 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 l 11
Slide 12: Highlights Q1 2018
Highlights Q1 2018 Sales +4% EBIT currency related to € 643 mn down by 2% to €92 mn ▪ Strong organic growth across all three regions: Europe, Asia-Pacific, Africa and Americas Outlook 2018 unchanged ▪ Negative FX effect impacting sales and EBIT ▪ Sales +3% to +6% ▪ EBIT +2% to +4% ▪ Investments of a
Slide 13: Regional sales growth Q1 2018
Regional sales growth Q1 2018 Q1 2017 Q1 2018 Growth Organic External FX (€ mn) (€ mn) Europe 368 396 +8% +9% - -1% Asia-Pacific, Africa 181 199 +10% +18% - -8% Americas 104 95 -9% +7% - -16% Consolidation -35 -47 - - - - Total 618 643 +4% +10% 0% -6% l 13
Slide 14: Income statement Q1 2018
Income statement Q1 2018 € mn Q1 2017 Q1 2018 Δ € mn Δ in % Sales 618 643 25 4.0 Gross Profit 226 225 -1 -0.4 Gross Profit margin 36.6 35.0 - -1.6 %-points Other function costs -137 -136 -1 0.7 EBIT before at Equity 89 89 0 0.0 At Equity 5 3 -2 - EBIT 94 92 -2 -2.1 Earnings after tax 66 67 1 1.5 l 1
Slide 15: Development EBIT – Cost of Capital – FVA
Development EBIT – Cost of Capital – FVA € mn 400 371 373 342 350 EBIT 312 313 Cost of capital 293 300 FVA 264 257 250 246 250 250 230 222 208 195 200 180 183 186 172 161 150 129 137 110 117 100 100 86 123 113 71 90 96 78 85 83 50 37 67 58 61 59 62 63 49 0 2004 2005 2006 2007 2008 2009 2010 2011 201
Slide 16: Cash flow Q1 2018
Cash flow Q1 2018 € mn Q1 2017 Q1 2018 Earnings after tax 66 67 Amortization/Depreciation 13 14 Changes in net operating working capital (NOWC) -25 -33 Other changes 2 -9 Capex -14 -18 Free cash flow before acquisitions 42 21 Acquisitions - -1 Free cash flow 42 20 l 16
Slide 17: Net operating working capital (NOWC)
Net operating working capital (NOWC)* 600 22.3% 22.3% 22.5% 21.8% 550 21.3% 21.0% 21.0% 500 21.0% 82 450 19.9% 81 79 400 78 19.5% 350 77 77 73 300 18.0% 2012 2013 2014 2015 2016 2017 Q1 2018 NOWC (in € mn) NOWC (in %) NOWC (in days) Inventories/days 79 75 76 80 84 84 81 Debtors/days 52 53 56 54 57 5
Slide 18: Q1 2018 earnings summary
Q1 2018 earnings summary ▪ Strong organic growth across all regions, particularly in Asia-Pacific, Africa ▪ Strong negative FX-effects impacting sales and earnings; This effect will most likely weaken over the course of the year ▪ Before currency translation increase in gross profit as a result of h
Slide 19: Outlook 2018
Outlook 2018 Performance indicator Actual 2017 Outlook 2018 Sales € 2,473 mn +3% to +6% EBIT € 373 mn +2% to +4% FUCHS Value Added € 250 mn At previous year‘s level Free cash flow before acquisitions € 142 mn At previous year‘s level l 19
Slide 20: Breakdown ordinary & preference shares
Breakdown ordinary & preference shares (December 31, 2017) 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 profi
Slide 21: Stable dividend policy
Stable dividend policy Dividend per Preference Share Market Capitalization € mn 1.00 0.91 7,000 Payout Ratio 2017: 47% 0.90 6,000 0.80 5,000 0.70 0.60 4,000 0.50 3,000 0.40 0.25 0.30 2,000 0.20 1,000 0.10 0.00 0 Our target: Increase the absolute dividend amount each year or at least maintain previou
Slide 22: 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