Slide 1: FUCHS Group Financial Results 2017
FUCHS GROUP Financial Results 2017 | Analyst’s Conference, 21st March 2018, Frankfurt | Stefan Fuchs, CEO | Dagmar Steinert, CFO
Slide 2: Highlights FY 2017
Highlights FY 2017 Sales +9% EBIT +1% to €2.5 bn to €373 mn Dividend +2% EPS +4% to €0.91 per pref. share / Strong organic growth in Asia-Pacific, Africa €0.90 per ord. share and Americas Slight external growth in North America Outlook 2018 Slight negative currency effect Sales +3% to +6%
Slide 3: Sales development
Sales development € mn + 9.1% YoY 2,473 2,267 700 618 629 615 611 600 586 567 564 550 500 400 300 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 l3
Slide 4: EBIT development
EBIT development € mn 371 + 0.5% YoY 373 120 98 96 94 94 94 91 92 90 85 60 30 0 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 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: Smart services
Smart services How FluidVision fits into FUCHS’ digitalization strategy smart services: objectives Make the lubricant talk in real-time by introducing online condition monitoring via sensors Empower customers to take immediate actions to keep the lubricant and the machine healthy, preventing unp
Slide 7: FY 2017 Group sales
FY 2017 Group sales € mn 2,600 +206 +17 -17 (+9.1%) (+0.8%) (-0.8%) 2,473 2,400 +206 (+9.1%) 2,267 2,200 2,000 FY 2016 Organic Growth External Growth FX FY 2017 l7
Slide 8: Sales by customer location
Sales by customer location Sales 2017: €2,473 mn (2,267) Asia-Pacific, Africa 800 (683) Europe 32% 1,262 (1,213) (30) 51% (54) 17% (16) Americas 411 (371) l8
Slide 9: Regional sales growth FY 2017
Regional sales growth FY 2017 FY 2016 FY 2017 Growth Organic External FX (€ mn) (€ mn) Europe 1,417 1,515 +6.9% +7.1% - -0.2% Asia-Pacific, Africa 620 733 +18.2% +19.7% - -1.5% Americas 349 393 +12.6% +9.4% +4.9% -1.7% Consolidation -119 -168 - - - - Total 2,267 2,473 +9.1% +9.1% +0.8% -0.8% l9
Slide 10: EBIT 2017 at previous year's level
EBIT 2017 at previous year’s level € mn 400 +2 (+0.5%) 371 373 300 Raw material price increases can only be passed on with a time lag Regional changes in the product and customer mix 200 Increased scheduled amortization/depreciation of €6 mn Goodwill impairment in Sweden of €6 mn Increased
Slide 11: EBIT by regions
EBIT by regions FY 2017 (FY 2016) € mn 65 (62) 373 400 (371) 134 350 -13 (127) (-14) 300 250 187 (196) 200 150 100 50 0 EBIT margin Europe Asia-Pacific, Africa Americas Holding/cons. Group before at equity 12.2% (13.7%) 16.2% (17.7%) 16.5% (17.8%) 14.4% (15.5%) l 11
Slide 12: Income statement FY 2017
Income statement FY 2017 € mn FY 2016 FY 2017 Δ € mn Δ in % Sales 2,267 2,473 206 9.1 Gross Profit 851 882 31 3.6 Gross Profit margin 37.5 35.7 - -1.8 %-points Other function costs -499 -526 -27 5.4 EBIT before at Equity 352 356 4 1.1 At Equity 19 17 -2 -10.5% EBIT 371 373 2 0.5 Earnings after tax 2
Slide 13: Solid balance sheet and cash flow
Solid balance sheet and cash flow € mn 2013 2014 2015 2016 2017 Total assets 1,162 1,276 1,490 1,676 1,751 Goodwill 82 88 166 185 173 Equity 854 916 1,070 1,205 1,307 Equity ratio 74% 72% 72% 72% 75% € mn 2013 2014 2015 2016 2017 Net liquidity 167 186 101 146 160 Operating cash flow 221 255 281 300
Slide 14: Investment in the future
Investment in the future R&D expenses 2017: €47 mn Capex 2017: €105 mn € mn 50 47 120 44 105 45 39 100 93 40 35 33 31 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 Scheduled amortization/depreciation l 14
Slide 15: Net operating working capital (NOWC)
Net operating working capital (NOWC)* 600 22.3% 21.8% 550 22.0% 21.3% 21.0% 21.0% 500 450 19.9% 81 20.0% 400 79 78 350 77 77 73 300 18.0% 2012 2013 2014 2015 2016 2017 NOWC (in € mn) NOWC (in %) NOWC (in days) * In relation to the annualized sales revenues of the last quarter l 15
Slide 16: Net operating working capital (NOWC)
Net operating working capital (NOWC) Year 2012 2013 2014 2015 2016 2017 Sales (€ mn) 1,819 1,832 1,866 2,079 2,267 2,473 Annualized last quarterly sales (€ mn) 1,760 1,810 1,852 2,161 2,256 2,442 NOWC/sales (%) 21.0 19.9 21.0 21.3 21.8 22.3 Inventories/days 79 75 76 80 84 84 Debtors/days 52 53 56 54
Slide 17: Cash flow FY 2017
Cash flow FY 2017 € mn FY 2016 FY 2017 Earnings after tax 260 269 Amortization/Depreciation & Impairment 47 59 Changes in net operating working capital (NOWC) -22 -78 Other changes 13 -3 Capex -93 -105 Free cash flow before acquisitions 205 142 Acquisitions -46 -2 Free cash flow 164 140 l 17
Slide 18: Net Liquidity 2017
Net Liquidity 2017 € mn 450 400 -46 350 -78 300 269 250 Free cash flow before acquisitions -123 200 €142 mn 150 100 146 160 50 0 Net liquidity Earnings after tax Depreciation ./. NOWC Other changes Dividend Other changes Net liquidity Dec 2016 Capex Dec 2017 l 18
Slide 19: FUCHS Value Added (FVA)
FUCHS Value Added (FVA) Decrease by 3% Capital Employed Ø CE 1,252 1,259 1,227 1,236 (1,134) 1,208 Cost of Capital 1,179 123 (114) EBIT FVA 373 250 (371) (257) Q4 Q1 Q2 Q3 Q4 CE 2017 (2016) 2016 2017 2017 2017 2017 2017 Cost of Capital = CE x WACC (10%) l 19
Slide 20: FY 2017 earnings summary
FY 2017 earnings summary Mainly volume driven organic sales growth; stronger euro in the second half of the year results in slight negative FX-effects for the full year Higher raw material prices, planned increase in costs as well as changes in product/customer mix lead to a less than proportion
Slide 21: Dividend proposal
Dividend proposal The Executive and Supervisory Board will 2% propose an increase of €0.02 to the Annual General Meeting higher dividend to be held on 8th May 2018 payment proposed €0.91 €0.90 (0.89) (0.88) per preference share per ordinary share l 21
Slide 22: 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 Sales growth mainly driven by organic volume growth as well as p
Slide 23: Investments
Investments Beresfield (Newcastle), Australia – New plant l 23
Slide 24: Investment initiative
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 25: 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 25
Slide 26: Extension of contracts of the Executive Board until 2023
Extention of contracts of the Executive Board until 2023 The contracts of the Executive Board members Dr. Lutz Lindemann, Dr. Timo Reister, Dr. Ralph Rheinboldt and Dagmar Steinert are extended until December 2023 Dr. Lutz Lindemann (57 years): 19 years at FUCHS, Member of the Executive Board sinc
Slide 27: 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 28: Thank you for your attention
Thank you for your attention