Fuchs Se · XETR:FPE
Fuchs — Fuchs Petrolub — Investor Presentation (January 2014)
48 slides from Fuchs's investor presentation, January 2014
Slide 1: FUCHS PETROLUB SE: The leading independent lubricants manufacturer of the world
FUCHS PETROLUB SE The leading independent lubricants manufacturer of the world Dr. Alexander Selent, Vice Chairman & CFO Dagmar Steinert, Head of Investor Relations January 2014
Slide 2: The leading independent lubricants manufacturer of the world
The leading independent lubricants manufacturer of the world Founded in 1931 2012 sales revenues: €1.8 bn 2012 number of employees: 3,800 from 36 countries 33 production facilities 100,000 customers in more than 100 countries Member of the MDAX, DAXplus Family 30 and STOXX Europe 600 2 FUCHS PETROLU
Slide 3: FUCHS - business model
FUCHS - business model FUCHS is fully focussed on lubricants (advantage over major oil companies) Technology, innovation and specialisation leadership in strategically important product areas Independence allows customer and market proximity, responsiveness, speed and flexibility (advantage over maj
Slide 4: FUCHS - long-term strategic objectives
FUCHS - long-term strategic objectives Continue to be the world’s largest independent manufacturer of lubricants and related specialities Value-based growth through innovation and specialisation leadership Organic growth in emerging markets and organic and external growth in mature markets Creating
Slide 5: Regional breakdown of world lubricants demand in 2012
Regional breakdown of world lubricants demand in 2012 World lubricants demand: 35 mn t South America Africa Middle East The biggest regional lubricants market 8% 5% 6% with the highest growth rate is found in Western Asia-Pacific. Europe 11% North America and Western Europe are mature markets. The f
Slide 6: 2012 per-capita lubricants demand shows significant growth opportunities
2012 per-capita lubricants demand shows significant growth opportunities kg 20 19.0 15 10 9.1 7.7 7.7 5.4 5.0 5 3.6 1.8 0 e e a ld a t a c p s p ic ic ric fi or Ea ro ro ci er er Af W Eu a Eu Am Am e -P dl n n ia id er th tin r As te M t or as La es N /E W l t ra en Source: FUCHS Global Competitive
Slide 7: Competition – strong fragmentation
Competition – strong fragmentation manufacturers: High degree of fragmentation continues in the industry 130 major oil companies Concentration especially among 590 independent manufacturers smaller companies 720 manufacturers* sizes: Differences in the size of manufacturers manufacturers volumes are
Slide 8: FUCHS – strategic position
FUCHS – strategic position 8 FUCHS PETROLUB SE
Slide 9: FUCHS is the 9th largest lubricant company in the world
FUCHS is strategically well positioned as we are the 9th largest lubricant company in the world* IL IL A U NA L C IL N NE L AS N HS BP TA O IN S EL O PE RO KO XO HI IT N LI C M N N TO SH O O EM FU O V LU EX C IA TA PO N TR HE O LV D SI R ID TR IP IN VA PE C PE N PE * by volume Source: FUCHS Global C
Slide 10: Among independent lubricants companies FUCHS is the number 1
Among 590 independent lubricants companies FUCHS is the number 1. 10 FUCHS PETROLUB SE
Slide 11: FUCHS is the Specialist for Lubricants
FUCHS is the Specialist for Lubricants World Lubricants Market 2012 FUCHS Finished Lubricants 2012 (volume) (volume) Process Process Oils Oils Automotive 1.5% 10.1% Oils Automotive 55.8% Oils MWF/CP/ MWF/CP/ 44.0% Greases* Greases 8.4% 30.6% Industrial Oils 25.7% Industrial Oils 23.9% *metalworking
Slide 12: Technology and market leadership in strategically important niche areas
FUCHS is the specialist and occupies technology and market leadership positions in strategically important niche areas Metalworking No. 2-4 High-performance No. 1 fluids speciality open gear lubricants (cement industry etc.) Corrosion No. 2 preventives Mining specialities No. 1 (fire-resistant hydra
Slide 13: FUCHS research and development
FUCHS research and development 10% of total staff – approx. 380 chemists, engineers and other technical experts – work in R & D around the globe and ensure technical leadership in key products and application areas. 13 FUCHS PETROLUB SE
Slide 14: FUCHS PETROLUB Group Customer Portfolio
FUCHS PETROLUB Group Customer Portfolio Customer Sectors* Other Sectors Agriculture & Forestry 2% 6% Construction 2% Transport & Service 3% Capital & Consumer Trade Goods 25% 6% Energy & Mining 9% Engineering Producer Goods 8% 14% Vehicle Components Vehicle Manufacturing 10% 15% *Breakdown as percen
Slide 15: Regional sales revenues and EBIT in 2012
Regional sales revenues and EBIT in 2012* € mn (variance to LY %) Europe* Asia-Pacific, Africa* Sales 1,080.7 +7.4% Sales 486.8 +18.1% EBIT 133.6 +1.4% EBIT 96.3 +33.2% 29.4%*** EBIT margin** 12.3% (13.0) EBIT margin** 17.1% (16.6) (25.6) Sales FUCHS 1,819 EBIT margin** 15.3% (15.6) 17.9%*** 52.7%**
Slide 16: FUCHS manufactures in 33 production plants all over the world
FUCHS manufactures in 33 production plants all over the world 16 FUCHS PETROLUB SE
Slide 17: FUCHS’ strategic position is a combination of …
FUCHS’ strategic position is a combination of … Comments around €1.8 bn in sales (70% outside Size & Global Germany, Asia Pacific is FUCHS’ 2nd Presence largest regional market), #9 worldwide and by far the largest independent producer, close to High Degree customers Focus On of Specialisation& High
Slide 18: The business model has paid dividends
The business model has paid dividends 18 FUCHS PETROLUB SE
Slide 19: Sales and earnings after tax growth 2002-2012
During the past 10 years, sales revenues have increased by 5.5% p.a. and earnings after tax by 19.6% p.a. Sales Earnings after tax in € mn in € mn 250 1,800 1.800 GR 5.5% 1,500 1.500 CA 200 19.6% R CAG 1,200 1.200 150 900 1,652 1,459 1,819 100 1,394 1,365 1,323 1,192 1,178 207.3 1,096 600 1,065 183.
Slide 20: FUCHS Value Added has increased significantly
During the past 10 years, FUCHS Value Added has increased by 35% p. a. and generated a significant premium on our cost of capital FVA = Fuchs Value Added 250 200 150 35 .1 % R = CAG 100 50 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Fuchs Value Added (FVA) 10.3 24.1 37.4 71.4 100.3 136.
Slide 21: Solid balance sheet – equity ratio increased to 70.5%
Solid balance sheet – increase of equity ratio to 70.5% and net payment items of €134.8 million Euro mn 2007 2008 2009 2010 20113 2012 Equity 325.9 315.3 392.9 546.5 658.2 781.7 Equity ratio 45.6% 44.8% 52.7% 61.1% 66.8% 70.5% Return on equity (ROE) 37.1% 33.3% 35.3% 36.6% 31.0% 29.0% Return on capi
Slide 22: We have frequently been asked about use of cash
We have frequently been asked about use of cash Capex 1. Reinvest in Working capital the business Acquisitions Clear priority Dividends 2. Return cash to shareholders Share re-purchases 22 FUCHS PETROLUB SE
Slide 23: Share buy back program on November 26, 2013 – key points
Share buy back program on November 26, 2013 – key points Started November 2013, complete latest by March 2015 Total purchase price up to EUR 100 Mio Maximum of one million ordinary shares and one million preference shares Redemption of the shares Dividend policy will continue unchanged (constant inc
Slide 24: Growth initiative
Growth initiative 24 FUCHS PETROLUB SE
Slide 25: We are prepared for the future
We are prepared for the future Additional people Additional capex Additional opportunities – Margin management – Small market shares in certain product areas and countries – More focused – Strong team in our industry – Global network 25 FUCHS PETROLUB SE
Slide 26: Highest investment in the company’s history
Highest investment in the company’s history € mn 80 6% Apart from the construction of the new 70 5% sites in growing regions such as Russia and 60 China or the 3.8% 4% modernization of existing 50 3.3% 3.0% plants such as in the 2.3% 2.7% 2.0% 2.6% U.S., we have 40 3% 2.4% inaugurated the new 1.8% 1
Slide 27: Investments in new plants, efficiency and R & D
Investments in new plants, efficiency and R & D (2013) 27 FUCHS PETROLUB SE
Slide 28: Growth initiative – Personnel increase mainly in sales and R&D
Growth initiative – Personnel increase mainly in sales and R&D Number of employees (on 31 Dec.) 4.000 4,000 ~ +400 people 3,500 3.500 3874 3773 3669 3584 3488 3,000 3.000 Dec. 2009 Dec. 2010 Dec. 2011 Dec. 2012 Sep 13 28 FUCHS PETROLUB SE
Slide 29: Return Cash to Shareholders
Return Cash to Shareholders 29 FUCHS PETROLUB SE
Slide 30: Dividends have been increased over the past years
During the past 10 years, dividends have been increased by 24.5% CAGR (preference shares): 10.9% since 1985 € 1.40 1,40 1.20 1,20 % 1.00 24.5 1,00 R G 0.80 0,80 CA 0.60 0,60 0.40 0,40 0,20 0.20 0.00 0,00 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2
Slide 31: Total return to Fuchs shareholders
Total return to Fuchs shareholders Dividend payout and share buyback since 2002 € mn € per share 120 1.60 1,60 1.40 1,40 100 1.20 1,20 80 1,00 1.00 60 0,80 0.80 0,60 0.60 40 0,40 0.40 20 0,20 0.20 0 0,00 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 dividend distribution (in € mn) buyb
Slide 32: The first nine months of 2013 and outlook
The first nine months of 2013 and outlook 32 FUCHS PETROLUB SE
Slide 33: Record result in Q3 2013, outlook confirmed
Record result in Q 3 2013 Outlook confirmed Organic sales growth offset by currency translation effects Earnings before interest and tax increase by 5.8% to €237.2 million Outlook for the financial year confirmed 33 FUCHS PETROLUB SE
Slide 34: Q3 2013: Sales revenues remain on previous year’s level
Q3 2013: Sales revenues remain on previous year’s level due to currency effects. However, solid organic sales growth (+5.1%) € mn 500 448.4 461.6 469.2 468.3 468.7 439.9 442.0 400 300 200 100 0 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 - 0,1 % YoY + 0,1 % QoQ 34 FUCHS PETROLUB SE
Slide 35: Q3 2013: Organic growth 5.1%
Q3 2013: Organic growth 5.1% € mn € -0.5 mn (-0.1%) 500 0 24.0 -24.5 469.2 468.7 Organic growth of 5.1% or €24.0 mn External growth of 0.0 % or €0,0 mn organic external currency growth growth effects 450 Currency effects of -5.2% or -€24.5 mn 400 Sales Sales Q3 2012 Q3 2013 35 FUCHS PETROLUB SE
Slide 36: Q3 2013: All three world regions contribute to organic growth
Q3 2013: All three world regions contribute to organic growth. However, it was not sufficient to compensate for the currency translation effects. Regional sales growth Europe Asia/Pacific, North and Group 3rd quarter 2013 Africa South America € mn 2.8 -1.0 -3.1 -0.5 Organic growth 24.0 Currency effe
Slide 37: Q3 2013: FUCHS records its best quarterly result ever
Q3 2013: FUCHS records its best quarterly result ever € mn 80.4 83.4 78.8 80 72.5 72.9 73.4 68.8 60 40 20 0 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 + 5.8% YoY + 3.7% QoQ 37 FUCHS PETROLUB SE
Slide 38: 1-9/2013: Organic sales growth compensated by currency effects
1-9/2013: Organic sales growth (+2.9%) compensated by currency translation effects (-2.9%) € mn - €0.2 mn (0.0 %) 1450 0 1,379.2 39.6 -39.8 1,379.0 Organic growth of 2.9% or €39.6 mn External growth of 0.0 % or €0,0 mn 1250 organic external currency growth growth effects Currency effects of -2.9% or
Slide 39: 1-9/2013: All three world regions contribute to organic growth
1-9/2013: All three world regions contribute to the organic growth. However, significant negative currency effects in Asia and South America. Regional sales growth Europe Asia/Pacific, North and Group as at 30 September 2013* Africa South America € mn 9.0 2.4 -0.2 -9.5 40 Organic growth 20 39.6 Curr
Slide 40: EBIT increase by 5.8% or €13.6 mn
EBIT increase by 5.8% or €13.6 mn € mn 1-9/2013 1-9/2012 Variance Sales revenues 1,379.0 1,379.2 -0.2 0.0% Gross profit 520.7 503.0 17.7 3.5% Gross profit margin 37.8% 36.5% Admin., sales, R&D and other net operating expenses 293.6 289.5 4.1 1.4% Expenses as a percentage of sales 21.3% 21.0% EBIT be
Slide 41: Europe and Asia Pacific, Africa contribute to the EBIT increase
Europe and Asia Pacific, Africa regions contribute to the EBIT increase, while Americas have not reached their previous year’s level as at 30 September 2013 € mn -6.8% +5.8% 250 +9.7% 48.0 -4.5 237.2 200 77.9 150 +10.9% 100 115.8 50 0 Europe Asia Pacific, North and Holding Group Africa South America
Slide 42: Free cash flow at previous year‘s level
Free cash flow at previous year‘s level € mn 1-9/2013 1-9/2012 Gross cash flow 167.7 163.4 Change in working capital -23.5 -47.2 Other changes 3.0 14.5 Operating cash flow 147.2 130.7 Capex (incl. financial investment) -51.2 -47.6 Other changes 4.1 5.4 Free cash flow 100.1 88.5 42 FUCHS PETROLUB SE
Slide 43: Investments according to plan
Investments according to plan € mn Key investments 51.2 47.6 More than half of the investments accounted to the modernization and extension of our American production site in Chicago as well as to the new sites in China an Russia. 1-9/2013 1-9/2012 43 FUCHS PETROLUB SE
Slide 44: Outlook
Outlook Fuchs confirms its target of achieving organic growth in sales revenues in the low single-digit percentage range for the year. However, it remains uncertain whether we will also record an increase in sales after translation of all currencies to the Group currency of euros. We continue to exp
Slide 45: Shareholder structure
Shareholder structure 45 FUCHS PETROLUB SE
Slide 46: Breakdown of shares
Breakdown of shares Ordinary shares Preference shares Familiy Free float Fuchs Free float 48% 52% 100% Base: 35,490,000 ordinary shares Base: 35,490,000 preference shares 46 FUCHS PETROLUB SE
Slide 47: Thank you for your attention
Thank you for your attention 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 f
Slide 48: FUCHS PETROLUB SE Investor Relations
FUCHS PETROLUB SE Investor Relations Friesenheimer Str. 17 68169 Mannheim Telefon 0621 3802 1201, Fax 0621 3802 7274 ir@fuchs-oil.de / www.fuchs-oil.de 48 FUCHS PETROLUB SE
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