Fuchs Se · XETR:FPE

Fuchs — Fuchs Petrolub — European Small & Mid-Cap Symposium, Goldman Sachs, London (May 2016)

56 slides from Fuchs's conference presentation, May 10, 2016

  1. Slide 1: FUCHS PETROLUB – Setting Standards - Worldwide

    FUCHS PETROLUB Setting Standards - Worldwide | 10th May 2016 | European Small & Mid-Cap Symposium Goldman Sachs, London, UK

  2. Slide 2: Agenda

    Agenda 01 Our company 02 Facts & Figures 2015 03 Q1 2016 04 Outlook 2016 05 Appendix 06 Financial Calendar l2

  3. Slide 3: 01 Our Company

    Our Company LUBRICANTS. recnoiocy’ FUCHS

  4. Slide 4: FUCHS at a glance

    FUCHS at a glance No. 1 The Fuchs family among the indepen- dent suppliers of holds 54% of lubricants ordinary shares Established 3 generations ago as a > €2 bn sales family-owned business in 2015 A full range of over > 50 10,000 Almost 5,000 Preference share is companies lubricants and employees li

  5. Slide 5: A leading global lubricants company

    A leading global lubricants company Full-line supplier advantage Sales 2015: €2.1 bn (~80% international) by customer location Industrial lubricants Automotive lubricants ~60% ~40% e.g. Industrial oils, MWF/CP* and greases 100,000 customers in more than 150 countries Trade, Services & Automotive ind

  6. Slide 6: The main industries

    The main industries Over 100,000 customers worldwide Mechanical engineering Construction sector Mining and exploration Glass industry Agriculture and forestry Accessories sector Transportation sector Food industry Energy generation Cement, lime and gypsum industry Steel and metals industry Forging i

  7. Slide 7: FUCHS in figures

    FUCHS in figures Regional sales breakdown 2015* Asia-Pacific, Africa 31% Europe 52% 17% North and *By customer location South America l7

  8. Slide 8: Lubricants Market

    Lubricants Market Development Regional Lubricants Breakdown Demand (Million Tons)* Middle East Asia-Pacific & MEA Americas Europe Africa 5% (5%) Asia 6% (6%) Pacific 36.0 35.6 Western 42% (35%) Europe 23% 19% 11% (13%) 28% Eastern 2015 31% Europe (2007) 8% (10%) Latin 53% America 46% 9% (10%) North

  9. Slide 9: Competitive Landscape

    Competitive Landscape Ranking Top 20 Lubricants Manufacturers* l9 *By Volume

  10. Slide 10: Shareholder structure

    Shareholder structure Allocation of ordinary and preference shares* Ordinary shares Preference shares MDAX-listed Free Fuchs float family 46% 54% Free float 100% Basis: 69,500,000 ordinary shares Basis: 69,500,000 preference shares *Securities registered at the stock exchanges in Frankfurt and Stutt

  11. Slide 11: 02 Facts & Figures 2015

    - Facts & Figures 2015 LUBRICANTS. recnoiocy’ FUCHS

  12. Slide 12: Key developments 2015

    Key developments 2015 Revenues +11% EBIT to over €2 bn +7% +9% higher dividend to €342 mn payment proposed  Europe up 10% to €1.23 bn  Asia-Pacific, Africa up 13% to €583 mn 2 acquisitions were completed:  Americas up 12% to €353 mn Pentosin & Statoil l 12

  13. Slide 13: PENTOSIN

    PENTOSIN Acquisition July 1st, 2015 2 legal entities around 200 new colleagues 2 plants in Wedel OEM, and Dormagen, Low € 135 mio. Technology Germany complexity Sales revenues focus l 13

  14. Slide 14: STATOIL

    STATOIL Acquisition Oct. 1st, 2016 8 legal entities around 500 new colleagues Market 1 Product Portfolio of € 140 mio. leader blending plant (rented) in Nynäshamn,Sweden 750 products Sales revenues in Scandinavia l 14

  15. Slide 15: FUCHS Group

    FUCHS Group Increase in sales by 11,4 % in mn € +96mn 5,1% 2.100 2.079 +111mn 6% 2.000 +6mn 0,3% 1.900 1.866 1.800 1.700 2014 Organic Growth Acquisitions FX 2015 l 15

  16. Slide 16: FUCHS Group – Regions in €mn

    FUCHS Group – Regions in €mn Increase in sales by 11,4 % Europe +100mn 1.250 9% 1.200 -2mn 1.227 Europe + €114 mn (10%) -0,2% +16mn Americas + € 37 mn (12%) 1.150 1,5% Asia-Pacific, Africa + € 66 mn (13%) 1.100 1.113 1.050 2014 Organic Acquisitions FX 2015 Growth Americas 600 Asia-Pacific, Africa +5

  17. Slide 17: EBIT increase of more than 9%

    EBIT increase of more than 9% € mn 2014 2015 Δ Mio. € Δ in % Sales 1.866 2.079 213 11,4 Gross Profit 693 791 98 14,2 Margin 37,2% 38,1% +0,9% points Selling, admin., R&D expenses, others -400 -467 -67 16,6 EBIT before at Equity 293 324 31 10,9 At Equity 20 18 -2 -12,7 EBIT 313 342 29 9,3 Earnings af

  18. Slide 18: FUCHS Group - Regions

    FUCHS Group - Regions EBIT Increase € mn 350 +13 342 340 +16 330 320 313 0 310 300 2014 Europe Asia Pacific/Africa Americas 2015 l 18

  19. Slide 19: FUCHS Group – EBIT 2015

    FUCHS Group EBIT 2015 (EBIT 2014) € mn 400 +13 mn +29 mn 350 65 -7 +16 mn (52) (-7) 300 250 122 (106) 200 342 (313) 150 100 162 (162) 50 0 Europe Asia Pacific, Africa Americas Holding costs/cons. Group l 19

  20. Slide 20: Expert know-how results in technological lead over competitors

    Expert know-how of our staff results in the technological lead over our competitors R&D expenditure 40 €39 mn 30 20 10 0 2011 2012 2013 2014 2015 l 20

  21. Slide 21: 4.823 employees globally

    4.823 employees globally Increase of 17,3% +40 +20 4.823 +649 +2 4.112 Dec 2014 Acquisitions Asia-Pacific/Africa Europe Americas Dec 2015 l 21

  22. Slide 22: Net liquidity

    Net liquidity € mn 450 400 350 300 232 220 250 200 150 186 106 100 50 101 0 net liquidity free cash flow acquisitions dividend other changes net liquidity December 2014 before acqu. (purchase price + December 2015 net debt) l 22

  23. Slide 23: Acquisitions 2015

    Acquisitions 2015 Purchase Price Allocation € mn 250 200 35 55 150 30 220 25 100 185 59 50 76 0 purchase price net debt short term fixed assets intangible assets Goodwill assets/liabilities l 23

  24. Slide 24: Growth initiative

    2015 Growth initiative € mn Investment 80 70 focus on… 70 61 60  Construction of 52 50 new plants in 50 growth regions 39 40 36 PPA  Modernisation 30 30 26 27 28 and expansion 36 of existing plants 20  Expansion of 10 R&D capacities 0 2011 2012 2013 2014 2015 Capex Regular amortisation/depreciati

  25. Slide 25: Solid balance sheet

    Solid balance sheet € mn 2011 2012 2013 2014 2015 Total assets 985 1.109 1.162 1.276 1.490 Equity 658 782 854 916 1.070 Equity ratio 67% 71% 74% 72% 72% Net liquidity 65 135 167 186 101 l 25

  26. Slide 26: FUCHS Value Added (FVA)

    FUCHS Value Added (FVA) Increase by 7,2% € mn Capital Employed FVA 1.087 1.022 960 Cost of Capital 917 924 96 851 EBIT FVA 342 246 Q4 Q1 Q2 Q3 Q4 Ave. CE 2014 2015 2015 2015 2015 2015 2015 Cost of Capital = CE x WACC (10%) l 26

  27. Slide 27: Q1 2016

    Q1 2016 LUBRICANTS. recnoiocy’ FUCHS

  28. Slide 28: Key developments Q1 2016

    Key developments Q1 2016 Revenues +11,7% to €550,2 mn EBIT + 4,3% to €85,2 mn Outlook 2016  Europe +25,5% to €349,4 mn  Projected Growth of 7-11%  Asia-Pacific, Africa -1,4% to €144,4 mn  Projected EBIT of 3-7%  Americas -4,3% to €84,5 mn (before currency translation effects) l 28

  29. Slide 29: Sales Performance

    Sales Performance Pentosin figures included since Q3 15 & Statoil Lubricants since Q4 15 € mn +11,7% 600 540 550 531 515 500 493 400 300 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 l 29

  30. Slide 30: EBIT development

    EBIT development Q4 2015 includes integration costs (Acquisitions 2015) € mn +4,3 % 95 89,9 89,3 90 85,2 85 81,7 81,3 80 75 70 65 60 55 50 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 l 30

  31. Slide 31: FUCHS Group – Q1 2016 Headwind from FX

    FUCHS Group Q1 2016 Headwind from FX € mn +63,3 600 (+12,9%) 550 +9,5 (+1,9%) 550,2 -15,2 500 (-3,1%) 492,6 450 +57,6 (+11,7%) 400 350 300 Q1 2015 Organic Growth Acquisitions FX Q1 2016 l 31

  32. Slide 32: FUCHS Group – Regional Sales in €mn

    FUCHS Group – Regional Sales in €mn Q1 2016: Organic Growth in Europe & Asia Pacific, Africa +69,4mn 400 Europe +24,9% +5,1mn +1,8% 300 -3,4mn -1,2% • Europe + 71,1 mn (+25,5%) • Americas - 3,8 mn ( -4,3%) 200 349,4 • Asia-Pacific, Africa - 2,1 mn ( -1,4%) 278,3 100 0 Q1 2015 Organic Acquisitions FX

  33. Slide 33: EBIT development Q1 2015 / Q1 2016

    EBIT development Q1 2015 / Q1 2016 € mn Q1 2015 Q1 2016 Δ Mio. € Δ in % Sales 492.6 550.2 57.6 11.7% Gross Profit 187.9 205.8 17.9 9.5% Margin 38.1% 37.4% -0.7% points Selling, admin., R&D expenses, others 110.0 125.5 15.5 14.1% EBIT before at Equity 77.9 80.3 2.4 3.1% At Equity 3.8 4.9 1.1 28.9% EB

  34. Slide 34: EBIT by regions

    EBIT by regions Q1 2016 (Q1 2015) € mn 100 80 15,1 (16,5) -2,2 (-0,8) 60 29,2 (26,6) 85,2 40 (81,7) 43,1 20 (39,4) 0 Europe Asia Pacific, Africa Americas Holding/cons. Group l 34

  35. Slide 35: Free Cash Flow

    Free Cash Flow mn € Q1 2015 Q1 2016 Gross cash flow 59,6 64,2 Changes in net operating working capital -17,9 -31,8 Other changes -3,7 10,9 Operating cash flow 38,0 43,3 Capex -7,8 -14,4 Other changes 0 -1,6 Free cash flow before acquisitions 30,2 27,3 Acquisitions - - Free cash flow 30,2 27,3 l 35

  36. Slide 36: Free Cash Flow development in Q1 2016

    Free Cash Flow development in Q1 2016 200 Free cash flow Q1 2016: €27 mn 180 75 160 140 32 120 14 5 100 80 60 125 101 40 20 0 Net liquidity Earnings and NOWC Capex other changes Net liquidity 12/31/2015 other impact 3/31/16 l 36

  37. Slide 37: 04 Outlook 2016

    Outlook 2016 LUBRICANTS. recnoiocy’ FUCHS

  38. Slide 38: Outlook 2016

    Outlook 2016 (before currency translation effects) Performance indicators Actual 2015 Forecast 2016 Sales €2.079 mn Total Growth +11,4% 7% to 11% Organic Growth +0,3% Low single-digit % External Growth (Acquisitions 2015) +6,0% High single-digit % Currency +5,1% EBIT €342 mn 3% to 7% FVA €246 mn Low

  39. Slide 39: 2016 – 2018: Planned investments of €300mn

    Growth Initiative 2016 – 2018: Planned investments of €300mn  Expansion of the Mannheim site, Germany  Expansion of the Kaiserslautern site, Germany  Expansion of the Chicago site, USA  New plant in WuJiang, China  New plants in Australia and Sweden l 39

  40. Slide 40: Acquisition 2016

    Acquisition 2016 FUCHS acquires lubricants business from CHEVRON (Asset Deal) Deal Structure €11 mn in sales p.a.; 85 % in North America Focus White Oils and Food Machinery Lubricants Closing 1st June 2016 l 40

  41. Slide 41: 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

  42. Slide 42: 05 Appendix

    Appendix LUBRICANTS. recnoiocy’ FUCHS

  43. Slide 43: Our five product categories: Automotive

    Our five product categories: Automotive  Engine oils  Motorcycle lubricants  Gear oils  Lubricants for agricultural machinery  Shock absorber fluids  Service fluids  Hydraulic oils  Biodegradable lubricants  Greases l 43

  44. Slide 44: Our five product categories: Industry

    Our five product categories: Industry  Hydraulic oils  Machine oils  Refrigerator oils  Compressor oils  Cylinder oils  Rapidly biodegradable oils  Slide way oils  Transformer oils  Textile oils  Gear oils  Tacky oils, heat transfer  Greases oils  Turbine oils  Compressor and general l

  45. Slide 45: Our five product categories: Metal processing

    Our five product categories: Metal processing  Cutting and grinding  Quenching fluids lubricants  Minimal quantity lubrication  Forming lubricants (MQL) products  Corrosion preventives  Cleaners l 45

  46. Slide 46: Our five product categories: Special applications

    Our five product categories: Special applications  Open gear lubricants  Concrete release agents  Hot metal forming lubricants  Chain oils  Food grade lubricants  Wind power lubricants  Glass lubricants  Other specialties  Dry coating lubricants  Greases l 46

  47. Slide 47: Our five product categories: Services

    Our five product categories: Services  Analytical services  Open gear services  Chemical process management  Lubrication critical control point for audit compliance in food and beverage  Condition monitoring processing  Tailor-made development  Coating services  Technical services l 47

  48. Slide 48: Applications in a Passenger Car

    Product Applications in a Passenger Car Air condition flap Sunroof Hydraulic damper Wiper motor Tension pulley Wheel bearing Brake Dual mass fly wheel Door lock Battery Seat adjuster Electric mirror Steering adjustment Window lifter Belt retractor CV joints Chassis l 48

  49. Slide 49: Lubricants Market: Global Demand

    Lubricants Market Development Global Lubricants Demand (Million Tons)* 36,0 35,8 35,6 35,6 35,4 35,2 35,1 34,5 32,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 l 49 *Without Marine Oils

  50. Slide 50: Lubricants Market: Top Lubricant Countries 2015

    Lubricants Market Ranking Top 20 Lubricant Countries 2015 (KT) 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0 l 50

  51. Slide 51: Lubricants Market: Per-Capita Demand 2015

    Lubricants Market Regional Per-Capita Lubricants Demand 2015 (kg) 20 15 10 5 0 l 51

  52. Slide 52: FUCHS Management

    FUCHS Management The Executive Board Stefan Fuchs: CEO, North and South America, Dr. Lutz Lindemann: R&D, Technical, Supply Dr. Timo Reister: Asia-Pacific and Africa HR, PR Chain, Sustainability, OEM, Mining Dr. Ralph Rheinboldt: Europe, LUBRITECH, Dagmar Steinert: Finance, Tax, IR, Legal, SAP/ERP S

  53. Slide 53: Change in compensation for the executive bodies

    As of 1st January 2016: Change in compensation for the executive bodies  The Executive Board invests 25 % of the variable compensation in FUCHS PETROLUB SE preference shares with a 3 year lock-up period  The Supervisory Board invests 50 % of the variable compensation in FUCHS PETROLUB SE preferenc

  54. Slide 54: 06 Financial Calendar

    Financial Calendar LUBRICANTS. recnoiocy’ FUCHS

  55. Slide 55: Financial Calendar 2016

    Financial Calendar 2016 Dates 19th February Preliminary Numbers 2015 22nd March Full Year Results 2015 29th April Q1 2016 4th May Annual General Meeting, Mannheim 1st August Q2 2016 8th September Capital Market Day, Mannheim 3rd November Q3 2016 l 55

  56. Slide 56: Thank you for your attention

    Thank you for your attention FUCHS PETROLUB SE | Investor Relations Friesenheimer Str. 17 | 68169 Mannheim Telefon +49 621 3802 1201 www.fuchs.com/group

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