Fuchs Se · XETR:FPE

Fuchs — Fuchs Petrolub — Investor Presentation (January 2015)

63 slides from Fuchs's investor presentation, January 2015

  1. 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 2015

  2. Slide 2: The leading independent lubricants manufacturer of the world

    The leading independent lubricants manufacturer of the world  Founded in 1931  2013 sales revenues: €1.8 bn  2013 number of employees: 3,888 in 50 operating companies worldwide  31 production facilities  100,000 customers in more than 150 countries  Member of the MDAX, DAXplus Family 30 and ST

  3. 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 ov

  4. 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  C

  5. Slide 5: Regional breakdown of world lubricants demand

    Regional breakdown of world lubricants demand World lubricants demand 2013: 35 mn t Demand (mn t) 36.4 35.3  Asia-Pacific biggest regional lubricants 27% 20% market with highest growth rate Europe  North America and Western Europe 28% mature markets; focus is more on a 34% Americas specialized pro

  6. Slide 6: 2013 per-capita lubricants demand shows significant growth opportunities

    2013 per-capita lubricants demand shows significant growth opportunities kg Latin 20 18.8 America Africa Middle 5% 9% East 6% Western 15 Europe 11% 10 9.0 Central/ World lubricants 7.7 7.8 Eastern demand 2013: Europe 35 mn t 5.4 9% 4.9 5 3.7 Asia- 1.8 Pacific 42% 0 North America 19% Source: FUCHS Gl

  7. Slide 7: Top Lubricants Countries 2013

    Top 20 Lubricants Countries 2013 K tons 7,000 7,000 6,000 6,000 5,000 5,000 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 00 China USA India Russia Japan Brazil Germany Korea Mexico Iran Indonesia UK Canada France Thailand Taiwan Turkey Australia Egypt Italy 7 FUCHS PETROLUB SE

  8. Slide 8: Competition – Strong fragmentation

    Competition – Strong fragmentation manufacturers:  High degree of fragmentation 130 major oil companies  Concentration especially among smaller companies 590 independent manufacturers 720 manufacturers  Differences in the size of sizes: manufacturers are enormous manufacturers volumes % top 10 >

  9. Slide 9: Strategic Position

    Strategic Position 9 FUCHS PETROLUB SE

  10. Slide 10: FUCHS is fully focused on lubricants

    FUCHS is fully focused on lubricants Sales 2013: €1.8 mn Automotive lubricants Other Industrial lubricants 40.4% 3.6% 56.0% 100,000 customers Automotive Manufacturing Engineering Construction & Mining & Trade, services & industry transportation passenger steel & cement conveyer belt agriculture wind

  11. Slide 11: FUCHS is strategically well positioned

    FUCHS is strategically well positioned  9th largest lubricant company worldwide (by volume)  Among 590 independent lubricant companies the number 1 Source: FUCHS Global Competitive Intelligence 11 FUCHS PETROLUB SE

  12. Slide 12: FUCHS is the Specialist for Lubricants

    FUCHS is the Specialist for Lubricants Worldwide lubricant market 2013 FUCHS manufactured lubricants 2013 (volume) (volume) Process Oils Process Oils 9.9% 1.6% Automotive Automotive Oils Oils MWF/CP/ MWF/CP/ 56.0% 45.8% Greases* Greases* 8.3% 30.0% Industrial Oils 25.8% Industrial Oils 22.8% *metalw

  13. Slide 13: Technology and market leadership positions in 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-resista

  14. Slide 14: FUCHS – The niche specialist

    FUCHS – The niche specialist R & D expenses in € mn 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  Technical leadership through intensive Research & Development.  398 researchers around the globe help our customers to solve their problems.  FUCHS PETROLUB spent €31 mn in R&D expens

  15. Slide 15: Breakdown of group sales revenues by customer sector

    Breakdown of group sales revenues by customer sector Manufacturing industry (incl. chemicals production) Automotive industry 20% (vehicle manufacturing and components) 27% Engineering Sales 2013 8% FUCHS €1,831.6 mn Agriculture and Energy and mining construction 9% 8% Trade, transport and services 2

  16. Slide 16: Global Presence – Worldwide growth

    Global Presence – Worldwide growth Sales by customers’ location Asia-Pacific, Asia-Pacific, Africa Africa 19.4 % Europe 30.6 % Europe 61.5 % 52.3 % Sales 2003 Sales 2013 €1,041 mn €1,832 mn North and South America 19.1 % North and South America 17.1 % 16 FUCHS PETROLUB SE

  17. Slide 17: We have a worldwide network

    We have a worldwide network production sites 17 FUCHS PETROLUB SE

  18. Slide 18: FUCHS’ strategic position is a combination of…

    FUCHS’ strategic position is a combination of… Comments around €1.8 bn in sales (80% 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 Customer customers of Specialisation & Focu

  19. Slide 19: Our business model has paid dividends

    Our business model has paid dividends 19 FUCHS PETROLUB SE

  20. Slide 20: FVA increased by 25% p.a.; market capitalization close to €4.5 bn

    During the past 10 years, FVA increased by 25% p.a. and market capitalization is close to €4.5 bn. FVA = Fuchs Value Added FUCHS market capitalization € mn € mn 250 5,000 5,000 200 4,000 4,000 150 3,000 3,000 221.9 208.2 186.0 2,000 2,000 182.7 100 136.5 116.8 110.1 100.3 50 1,000 1,000 71.4 24.1 37

  21. Slide 21: Sales revenues and earnings after tax growth

    During the past 10 years, sales revenues have increased by 5.8% p.a. and earnings after tax by 18.5% p.a. Sales Earnings after tax € mn € mn 1,800 250 1,800 1,500 1,500 200 1,200 1,200 1,652 1,832 900 1,819 150 218.6 900 207.0 183.1 600 1,459 1,394 1,365 1,323 171.6 100 1,192 1,178 1,096 1,041 300 6

  22. Slide 22: Solid financing – Increase of equity ratio to 73.5%

    Solid financing – Increase of equity ratio to 73.5% and net payment items of €167,4 mn € mn 2009 2010 2011 2012 2013 Equity 392.9 546.5 658.2 781.7 853.5 Equity ratio 52.7% 61.1% 66.8% 70.5% 73.5% Return on equity (ROE) 35.3% 36.6% 31.0% 29.0% 26.7% Return on capital employed (ROCE) 32.8% 42.7% 39.1

  23. Slide 23: Generation of free cash flow of more than €100 mn since 2006

    Generation of free cash flow on average of more than €100 mn since 2006 € million 200 Free cash flow 181.1 180 160 149.9 140.4 140 128.4 120 100 86.4 77.7 80 59.0 60 40 20 8.4 0 2006 2007 2008 2009 2010 2011 2012 2013 23 FUCHS PETROLUB SE

  24. Slide 24: Dividends paid since IPO in 1985

    Since IPO in 1985 we have paid dividends – during the past 10 years, dividends have been increased by 22.8% p.a. Dividend per preference share (adjusted for changes in equity structure) € 1.40 0.70 0.60 1.20 0.50 1.00 0.40 0.80 0.30 0.60 0.20 0.40 0.20 0.10 0.00 0.00 2003 2004 2005 2006 2007 2008 20

  25. Slide 25: Growth Initiative

    Growth Initiative 25 FUCHS PETROLUB SE

  26. Slide 26: Growth initiative – Expanded global footprint

    Growth initiative – We have significantly expanded our global footprint € mn 80 Main focus of investments were the construction of new plants 72.8 71.4 in growth regions such as Russia and China, the modernization 70 and expansion of our large sites in the U.S. and Germany as well as an expansion of

  27. Slide 27: Investments

    Investments India: Mumbai (2010) China: Yingkou (2013) Russia: Kaluga (2013) USA: Chicago (2012/2013) Germany 27 FUCHS PETROLUB SE

  28. 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 December) 38.9% Marketing 34.8% and sales Production 4,000 1,512 1,353 (1,463) (1,334) 2013: 3,888 3,500 3,773 3,888 employees 3,669 3,584 3,488 16.1% 10.2% Administr. R&D 625 398 3,000 (598) (378) 2009 2010 20

  29. Slide 29: Acquisitions 2014

    Acquisitions 2014 FUCHS PETROLUB SE

  30. Slide 30: Acquisition of LUBRITENE

    Acquisition of LUBRITENE  Acquisition of the lubricant business of LUBRITENE group on 1 September 2014  Purchase of product technology and customer base  Sales: approx. €15 mn p.a.  Business mainly exists of lubricants for mining and the food industry  Production will be transferred midterm to

  31. Slide 31: Acquisition of Batoyle

    Acquisition of Batoyle  Acquisition of the lubricant business of the Batoyle Freedom Group on 20 June 2014  Purchase of product technology and customer base  Sales: approx. €15 mn p.a.  Business exists of automotive and industrial lubricants as well as lubricants for the glass industry  Integra

  32. Slide 32: The first 9 months 2014 and outlook

    The first 9 months 2014 and outlook 32 FUCHS PETROLUB SE

  33. Slide 33: The first 9 months of 2014

    The first 9 months of 2014  Sales revenues up by just under 2% to €1.4 billion (+4% currency adjusted)  At €236 million, earnings before interest and tax (EBIT) at previous year's level  Free cash flow increased to €108 million  Earnings forecast confirmed 33 FUCHS PETROLUB SE

  34. Slide 34: 1-9/2014: EBIT reaches previous year’s record level

    1-9/2014: At €236 million, EBIT reach previous year’s record level € mn 1-9/2014 1-9/2013 Variance Sales revenues 1,402.8 1,379.0 23.8 1.7% Gross profit 522.7 520.7 2.0 0.4% Gross profit margin 37.3% 37.8% Admin., sales, R&D and other net operating expenses 295.8 293.6 2.2 0.7% Expenses as a percent

  35. Slide 35: 1-9/2014: All three world regions contribute to organic growth

    1-9/2014: All three world regions contribute to the organic growth Regional sales growth Asia-Pacific/ North and Group* 1-9/2014 Africa South America € mn 11.7 0.9 23.8 Organic growth 80 Currency effects 60 External growth 40 54.1 20 32.7 14.0 14.2 0 6.0 0.7 0.0 6.7 -2.2 -13.1 -20 -21.7 -37.0 -40 -6

  36. Slide 36: 1-9/2014: EBIT growth in Europe compensates currency effects

    1-9/2014: EBIT growth in Europe compensates negative currency effects in Australia, South Africa and South America € mn EBIT 1-9/2014 250 -10.2% -0.5% 43.1 -3.9 -9.0% 235.9 200 70.9 150 +8.6% 100 125.8 50 0 Europe Asia- North and Holding Group Pacific/Africa South America cost/cons. EBIT margin befo

  37. Slide 37: 1-9/2014: Free cash flow increased

    1-9/2014: Free cash flow increased € mn 1-9/2014 1-9/2013 Gross cash flow 175.3 167.7 Change in working capital -40.9 -23.5 Other changes 5,7 3.0 Operating cash flow 140.1 147.2 Capex (incl. financial investment) -45.6 -51.2 Other changes 13.4 4.1 Free cash flow 107.9 100.1 37 FUCHS PETROLUB SE

  38. Slide 38: Increase in employees

    Increase in employees 4,124 236 more people since 3,888 3,874 beginning of the year. Approximately half of the new employees can be attributed to the acquisitions in South Africa and Great Britain. 30.09.2014 31.12.2013 30.09.2013 38 FUCHS PETROLUB SE

  39. Slide 39: Outlook

    Outlook  FUCHS forecasts an organic sales growth in the low single-figure percentage range for 2014  We expect to repeat the record EBIT of the previous year  Capex in the 4th quarter will be above the average we have seen so far  Free cash flow should at least reach the previous year’s level 39

  40. Slide 40: Appendix

    Appendix  Q1,Q2 and Q3/2014  Share Buyback / Bonus Shares  Shareholder Structure FUCHS PETROLUB SE

  41. Slide 41: Q1, Q2 and Q3/2014

    Q1, Q2 and Q3/2014 FUCHS PETROLUB SE

  42. Slide 42: Quarterly development

    Quarterly development € mn Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Sales revenues 442.0 468.3 468.7 452.6 456.8 462.5 483.5 Gross profit 165.6 177.5 177.6 169.2 170.9 172.1 179.7 (37.5%) (37.9%) (37.9%) (37.4%) (37.4%) (37.2%) (37.2%) Admin., sales, R&D and other 95.4 100.7 97.5 97.5

  43. Slide 43: Q3/2014: Record sales revenues

    Q3/2014: Record sales revenues € mn 500 468.3 468.7 462.5 483.5 442.0 452.6 456.8 400 300 200 100 0 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 +3.2% YoY +4.5% QoQ 43 FUCHS PETROLUB SE

  44. Slide 44: Q3/2014: Record EBIT

    Q3/2014: Record EBIT € mn 83.4 84.7 80.4 80 73.4 75.1 75.6 75.6 60 40 20 0 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 + 1.6% YoY + 12.0% QoQ 44 FUCHS PETROLUB SE

  45. Slide 45: Q1/2014: EBIT developed in line with sales revenues

    Q1/2014: EBIT before income from at equity developed in the same manner as sales revenues € mn Q1/2014 Q1/2013 Variance Sales revenues 456.8 442.0 14.8 3.3% Gross profit 170.9 165.6 5.3 3.2% Gross profit margin 37.4% 37.5% Sales, admin., R&D and other net expenses 98.3 95.4 2.9 3.0% Expenses as a pe

  46. Slide 46: Q1/2014: Organic growth rose in all three regions

    Q1/2014: Organic growth rose considerably in all three regions Regional sales growth 1st quarter 2014 Asia-Pacific / North- and Group* Africa South America € mn 1.7 -0.2 14.8 40 30 Organic growth 20 32.2 Currency effects 10 19.5 5.6 5.6 0.8 13.0 0.8 External growth 0 -11.3 -5.8 -10 -1.1 -18.2 -20 To

  47. Slide 47: Q1/2014: Regional results show increased earnings for Europe

    Q1/2014: Regional results show increased segment earnings for Europe EBIT 1st quarter 2014 € mn 100 -10.5% +3.0% 75 13.7 -1.5 -8.7% (15.3) (-0.2) 75.6 22.1 (73.4) 50 +21.1% (24.2) 25 41.3 (34.1) 0 Europe Asia-Pacific/ North and Holding Group Africa South America costs/cons. EBIT margin before income

  48. Slide 48: Q1/2014: Net operating working capital increased

    Q1/2014: Net operating working capital increased as expected Cash flow € mn Q1/2014 Q1/2013 Gross cash flow 57.5 52.6 Changes in net operating working capital -32.1 -10.8 Other changes 3.6 1.4 Operating cash flow 29.0 43.2 Capex -6.5 -14.2 Other changes 3.3 1.5 Free cash flow 25.8 30.5 48 FUCHS PETR

  49. Slide 49: Q2/2014: EBIT of €75.6 mn below previous year

    Q2/2014: EBIT of €75.6 mn below previous year € mn Q2/2014 Q2/2013 Variance Sales revenues 462.5 468.3 -5.8 -1.2% Gross profit 172.1 177.5 -5.4 -3.0% Gross profit margin 37.2% 37.9% Admin., sales, R&D and other net operating expenses 99.7 100.7 -1.0 -1.0% Expenses as a percentage of sales 21.6% 21.5

  50. Slide 50: Q2/2014: Organic growth in Asia-Pacific/Africa and Americas

    Q2/2014: Organic growth in Asia-Pacific/Africa and Americas Regional sales growth Asia-Pacific/ North and Group 2nd quarter 2014* Africa South America € mn 0.5 -1.5 -5.8 10 Organic growth 0.6 10.5 10.7 -1.3 4.4 0.6 Currency effects 0 -4.7 -10.0 -5.9 External growth -1.3 -17.1 -10 1.4 -20 Total growt

  51. Slide 51: Q2/2014: EBIT of €75.6 mn below previous year

    Q2/2014: EBIT of €75.6 mn below previous year EBIT 2nd quarter 2014 € mn 100 -10.2% -6.0% 75 14.1 -1.3 -11.8% (-2.4) (15.7) 75.6 23.9 (80.4) 50 -2.8% (27.1) 25 38.9 (40.0) 0 Europe Asia-Pacific/ North and Holding Group Africa South America costs/cons. EBIT margin before income from at equity 14.0% 1

  52. Slide 52: Q2/2014: Free cash flow above previous year

    Q2/2014: Free cash flow above previous year € mn Q2/2014 Q2/2013 Gross cash flow 53.4 55.0 Change in working capital -12.9 -12.2 Other changes -5.7 -11.7 Operating cash flow 34.8 31.1 Capex (incl. acquisitions) -18.6 -19.4 Other changes 2.9 2.6 Free cash flow 19.1 14.3 52 FUCHS PETROLUB SE

  53. Slide 53: Q3/2014: EBIT above previous year’s record level

    Q3/2014: EBIT above previous year’s record level € mn Q3/2014 Q3/2013 Variance Sales revenues 483.5 468.7 14.8 3.1% Gross profit 179.7 177.6 2.1 1.2% Gross profit margin 37.2% 37.9% Admin., sales, R&D and other net operating expenses 97.8 97.5 0.3 0.3% Expenses as a percentage of sales 20.2% 21.5% E

  54. Slide 54: Q3/2014: All regions recorded growth

    Q3/2014: All regions recorded growth Regional sales growth Asia-Pacific/ North and Group 3rd quarter 2014 Africa South America € mn 9.5 2.6 14.8 18 Organic growth 13 Currency effects 11.2 External growth 8 9.2 0.2 3 4.6 4.0 5.3 0.7 0.0 -2 -0.6 -0.4 -1.4 -1.7 Total growth + 1.5% + 7.8% + 3.3% + 3.2%

  55. Slide 55: Q3/2014: Currency devaluations influenced EBIT

    Q3/2014: Australia, South Africa and South America negatively influenced by local currency devaluations EBIT 3rd quarter 2014 € mn 100 90 -10.0% 1.6% 1.1 80 15.3 -6.4% 70 60 24.9 50 +9.4% 40 84.7 30 20 45.6 10 0 Europe Asia- North and Holding Group Pacific/Africa South America cost/cons. EBIT margin

  56. Slide 56: Q3/2014: Free cash flow improved

    Q3/2014: Free cash flow improved € mn Q3/2014 Q3/2013 Gross cash flow 64.4 60.1 Change in working capital 4.1 -0.5 Other changes 7.8 13.3 Operating cash flow 76.3 72.9 Capex (incl. financial investment) -20.5 -17.6 Other changes 7.2 0.0 Free cash flow 63.0 55.3 56 FUCHS PETROLUB SE

  57. Slide 57: Share Buyback / Bonus Shares

    Share Buyback / Bonus Shares 57 FUCHS PETROLUB SE

  58. Slide 58: Share buyback / Bonus shares

    Share buyback / Bonus shares  Share buyback started on 27 November 2013, ended on 28 April 2014.  Repurchase of 740,000 ordinary shares at an average price of €61.78 per share and 740,000 preference shares at an average price of €70.94 per share. Total purchase price amounted to €98.4 mn (€22.0 mn

  59. Slide 59: Total return to shareholders through dividends and share buyback

    Total return to FUCHS shareholders through dividends and share buyback Dividend payout and share buyback since 2002 € mn € per share 0.80 1.6 120 0.70 1.4 100 0.60 1.2 80 0.50 1.0 0.40 0.8 60 0.6 0.30 40 0.4 0.20 20 0.2 0.10 0 0.0 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 payo

  60. Slide 60: Shareholder Structure

    Shareholder Structure 60 FUCHS PETROLUB SE

  61. Slide 61: Breakdown of shares

    Breakdown of shares Ordinary shares Preference shares Fuchs family Free float Free float * 53 % 100 % 47 % 69,500,000 69,500,000 ordinary shares preference shares *) voting rights notification: DWS Investment, Frankfurt: 5.2% (15 Dec. 2003) 61 FUCHS PETROLUB SE

  62. Slide 62: 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

  63. Slide 63: FUCHS PETROLUB SE Investor Relations

    FUCHS PETROLUB SE Investor Relations Friesenheimer Str. 17 68169 Mannheim Telefon +49 (0)621 3802 1201, Fax +49 (0)621 3802 7274 ir@fuchs-oil.de, www.fuchs-oil.com 63 FUCHS PETROLUB SE

Fuchs Petrolub — Investor Presentation (January 2015) on 6ix