Fuchs Se · XETR:FPE
Fuchs — Fuchs Petrolub — DZ BANK Equity Conference 2016
55 slides from Fuchs's conference presentation, Nov 14, 2016
Slide 1: FUCHS Group - Setting Standards Worldwide
FUCHS GROUP Setting Standards - Worldwide | DZ BANK Equity Conference, 14th November 2016, Frankfurt | Dagmar Steinert, CFO | Thomas Altmann, Investor Relations
Slide 2: Agenda
Agenda 01 | The Leading Independent Lubricants Company 02 | Q1-3 2016 03 | Shares 04 | Appendix l2
Slide 3: The Leading Independent Lubricants Company
01 The Leading Independent Lubricants Company
Slide 4: Top 20 lubricants manufacturers 2015
Top 20 lubricants manufacturers 2015 (by volume) A top-10 ranking lubricants manufacturer Number 1 among the independent lubricants companies l4
Slide 5: Our business model
Our business model Technology, innovation and specialisation leadership in strategically important product areas FUCHS is fully focussed on lubricants FUCHS is a full-line supplier Independency allows customer and Global presence market proximity, responsiveness, speed and flexibility Advant
Slide 6: Our mission statement reflects the business model
Our mission statement reflects the business model LUBRICANTS. 100% focus TECHNOLOGY. Holistic solutions PEOPLE. Personal commitment l6
Slide 7: We are where our customers are
We are where our customers are l7
Slide 8: Full-line supplier advantage
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 Car industry Manufacturing Engineering Construction Mining Trade, Se
Slide 9: Well balanced customer structure
Well balanced customer structure FUCHS sales revenues Industrial goods manufacturing 2015: €2.1 bn Vehicle manufacturing 9% 20% Energy and mining 7% Trade, transport and services 29% 26% Agriculture and construction 9% Engineering/ machinery construction l9
Slide 10: Investments focus
Investments € 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/depreciation l 10
Slide 11: 2016 – 2018: Planned investments of €300mn
Further Investments 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 11
Slide 12: Acquisitions
Acquisitions Revenues (p.a.) 2016 Ultrachem (US) € 15 mn Chevron (US) € 11 mn 2015 Statoil Fuel & Retail Lubricants AB (SVE) €140 mn Deutsche Pentosin-Werke GmbH (GER) €135 mn 2014 Lubritene (ZA) € 15 mn Batoyle (UK) € 15 mn 2010 Cassida (global) € 21 mn l 12
Slide 13: Q1-3 2016
Q1-3 2016 LUBRICANTS. recnoiocy’ FUCHS
Slide 14: Highlights Q1-3 2016
Highlights Q1-3 2016 Revenues +11% to €1,703 mn EBIT + 6% to €276 mn Europe €1,080 mn Asia-Pacific, Africa €451 mn Outlook 2016 Americas €260 mn reaffirmed l 14
Slide 15: Q1-3 2016 Group Sales
Q1-3 2016 Group Sales € mn +176 1,800 (+11.5%) 1,700 +40 -52 1,703 (+2.6%) (-3.4%) 1,600 1,500 1,539 +164 (+10.7%) 1,400 1,300 1,200 Q1-3 2015 Organic Growth Acquisitions FX Q1-3 2016 l 15
Slide 16: Organic growth in Europe & Asia Pacific, Africa
Organic growth in Europe & Asia Pacific, Africa Q1-3´15 Q1-3´16 Total Organic External Currency (€ mn) (€ mn) Growth Growth Growth Effects Europe 893 1,080 +21.0% +3.8% +19.2% -2.0% Asia-Pacific, Africa 443 451 1.7% +5.1% +2.6% -6.0% Americas 267 260 -2.6% -1.9% +2.5% -3.2% Consolidation -64 -88 - -
Slide 17: EBIT by regions
EBIT by regions Q1-3 2016 (Q1-3 2015) € mn 47.3 (50.4) 276.2 300 (260.9) 280 89.8 260 (87.1) -9.6 240 (-4.2) 220 200 180 148.7 160 (127.6) 140 120 100 80 60 40 20 0 Europe Asia Pacific, Africa Americas Holding/cons. Group EBIT margin before at equity 13.7% (14.2%) 17.2% (17.3%) 18.2% (18.9%) 15.4% (
Slide 18: Income Statement Q1-3 2016
Income Statement Q1-3 2016 € mn Q1-3‘15 Q1-3‘16 Δ Mio. € Δ in % Sales 1,539 1,703 164 10.7% Gross Profit 591 641 50 8.5% Margin 38.4% 37.7% Selling, admin., R&D expenses, others -342 -378 -36 10.9% EBIT before at Equity 249 263 14 5.3% At Equity 12 13 1 EBIT 261 276 15 5.9% Earnings after tax 181 19
Slide 19: Free cash flow
Free cash flow mn € Q1-3 2015 Q1-3 2016 Earnings after tax 181 192 Amortisation/Depreciation 28 35 Changes in net operating working capital (NOWC) -34 -45 Other changes -3 17 Capex -29 -54 Free cash flow before acquisitions 143 145 Acquisitions -110 -20 Free cash flow 33 126 l 19
Slide 20: Outlook 2016 reaffirmed
Outlook 2016 reaffirmed Performance indicators Actual 2015 Outlook 2016 Sales €2,079 mn Total Growth +11.4% 7% to 8% Organic Growth +0.3% At the top end External Growth (Acquisitions 2015) +6.0% of 7% - 11% Currency +5.1% Negative Effect EBIT €342 mn 4% to 6% Slightly above the FVA €246 mn previous
Slide 21: Shares
LUBRICANTS. recnoiocy’ FUCHS
Slide 22: Breakdown ordinary & preference shares
Breakdown ordinary & preference shares (September 2016) 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 *Voting rights notification: DWS Investment, Frankfurt: 5.2% (15 Dec. 2003) l 2
Slide 23: Continuous dividends since IPO (1985)
Continious dividends since IPO (1985) Dividend per Preference Share Market Capitalization € per share € mn 1.00 6,000 0.90 0.82 5,000 0.80 0.70 4,000 0.60 0.50 3,000 0.40 2,000 0.30 0.20 0.12 1,000 0.10 0.00 0 Payout Ratio 2015: 48% l 23
Slide 24: 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 25: Appendix
Appendix LUBRICANTS. recnoiocy’ FUCHS
Slide 26: Workforce Structure
Workforce Structure 4,823 employees globally Regional Workforce Structure Functional Workforce Structure Other Germany European 1,397 (29%) Marketing Production Countries 1,809 & Sales 1,505 (38%) 2,209 (31%) (46%) 2015 2015 Asia- R&D Pacific, 441 Africa (9%) 1,029 Americas Admin (21%) 588 668 (12%)
Slide 27: Long-term Objective: Focus on Shareholder Value
Long-term Objective: Focus on Shareholder Value Organic growth through strict customer focus, geographic expansion and product innovation Drive returns Improve operating profitability through margin and mix management, operating cost management and efficiency improvements Capex with returns ab
Slide 28: Top 20 lubricant countries 2015
Top 20 lubricant countries 2015 KT 7,000 China and the USA cover more than one third of the world lubricants 6,000 market. FUCHS is present in every important 5,000 lubricants consuming country 4,000 3,000 2,000 1,000 0 l 28
Slide 29: Regional per-capita lubricants demand 2015
Regional per-capita lubricants demand 2015 kg 20 15 10 5 0 l 29
Slide 30: Organic growth potential in emerging countries
Organic growth potential in emerging countries Market Demand FUCHS Sales (by customer location) +130 % 36.4 mn t 35.6 mn t € 902 mn € 2,079 mn 19% 27% 51% (1,064) 28% +100 % 34% 18% (364) +66 % 59% (531) 53% 39% 31% 24% (219) +328 % (650) 17% (152) 2000 2015 2000 2015 l 30
Slide 31: Technology & Innovation fueled by strong R&D focus
Technology & Innovation fueled by strong R&D focus R&D expenses 40 €39 mn 30 20 10 0 2011 2012 2013 2014 2015 l 31
Slide 32: Base oil / additives value split
Base oil / additives value split Base oil prices do not necessarily follow 20% crude oil prices 60% No direct link between additives and crude oil prices. We even face price increases for certain raw materials where supply/demand is not balanced or special situations occur 80% Special lubrican
Slide 33: FUCHS' 3C Grease Commitment - Objectives
FUCHS‘ Our 3C Grease Commitment - Objectives objectives Globally identical production equipment Globally identical finishing equipment Globally identical quality control test devices Globally similar raw materials Globally identical quality standards l 33
Slide 34: Greases in Passenger Car
Greases in 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 34
Slide 35: Further market consolidation to be expected
Further market consolidation to be expected Manufacturers High degree of fragmentation 130 Major oil companies Concentration especially amongst Independent smaller companies lubricant manufacturers* 590 Market Shares Other 710 > 50% Differences are enormous manufacturers Top 10 < 50% manufactu
Slide 36: Acquisitions 2015: Pentosin
Acquisitions 2015 PENTOSIN Acquisition July 1st, 2015 2 legal entities around 200 new colleagues € 135 mn 2 plants in Wedel Sales revenues OEM, and Dormagen, Low € 112.3 mn Technology Germany complexity Purchase Price focus l 36
Slide 37: Acquisitions 2015: Statoil
Acquisitions 2015 STATOIL Acquisition Oct. 1st, 2016 8 legal entities around 500 new colleagues € 140 mn Market Sales revenues 1 Product Portfolio of € 72.5 mn leader blending plant (rented) in Nynäshamn,Sweden 750 products Purchase Price in Scandinavia l 37
Slide 38: Acquisitions 2016
Acquisitions 2016 FUCHS acquires ULTRACHEM INC (Share Deal) Deal Structure Business will continue to be operated from Delaware location €15 mn in sales p.a. Specialty Synthetic Lubricants for Compressor OEM and Industrial Focus Maintenance Markets Closing in Q4 2016 FUCHS acquires lubricants busines
Slide 39: Unique Track Record for continued profitable growth
Unique Track Record for continued profitable growth € mn Sales Earnings After Tax 2,079 250 236 2,000 1,652 200 183 1,600 150 1,200 100 800 400 50 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 l 39
Slide 40: Unique Track Record for continued profitability and added value
Unique Track Record for continued profitability and added value € mn EBIT FVA (FUCHS Value Added) 342 246 350 250 300 264 200 186 250 150 200 150 100 100 50 50 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 l 40
Slide 41: Solid balance sheet and cash flow generation
Solid balance sheet and cash flow generation € 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 Operating cash flow 89 203 221 255 281 Free cash flow before acquisitions 59 141 150 210
Slide 42: Highlights FY 2015
Highlights FY 2015 Revenues +11% EBIT to over €2 bn +9% +7% to €342 mn higher dividend 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 42
Slide 43: EBIT increase of more than 9% in 2015
EBIT increase of more than 9% in 2015 € 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 Ear
Slide 44: Regional Sales 2015
Regional Sales 2015 2014 2015 Total Organic External Currency (€ mn) (€ mn) Growth Growth Growth Effects Europe 1,113 1,227 +10.3% +1.5% +9% -0.2% Asia-Pacific, Africa 517 583 +12.9% +0.5% +2.2% +10.2% Americas 316 353 +11.6% -4.1% +1.4% +14.3% Consolidation -80 -84 - - - - Total 1,866 2,079 +11.4%
Slide 45: 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 EBIT margin before at equity 13.1% (14.4%) 18.2% (16.8%) 18.4% (16.3%) 15.6% (15.7%) (previous yea
Slide 46: Purchase Price Allocation - Acquisitions 2015
Purchase Price Allocation - Acquisitions 2015 € mn 250 200 35 55 150 30 25 84 220 100 185 50 76 0 purchase price net debt short term fixed assets deferred taxes intangible Goodwill assets/liabilities assets l 46
Slide 47: Acquisitions fully financed by operating cash flow
Acquisitions fully financed by operating cash flow mn € 2014 2015 Gross cash flow 258 274 Changes in net operating working capital -14 0 Other changes 11 7 Operating cash flow 255 281 Capex -52 -50 Other changes 7 1 Free cash flow before acquisitions 210 232 Acquisitions -22 -170 Free cash flow 188
Slide 48: Net Liquidity 2015
Net Liquidity 2015 € 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 48
Slide 49: FUCHS Value Added
FUCHS Value Added Increase by 7.2% € mn Cost of Capital Cost of Capital 96 83 EBIT FVA EBIT FVA 313 230 342 246 2014 2015 Cost of Capital = CE (2014: €833 mn; 2015: €960 mn) x WACC (10%) l 49
Slide 50: Regional Sales Q1 & Q2 2016
Regional Sales Q1 & Q2 2016 Q1 2015 Q1 2016 Total Organic External Currency (€ mn) (€ mn) Growth Growth Growth Effects Europe 278 349 +25.5% +1.8% +24.9% -1.2% Asia-Pacific, Africa* 147 144 -1.4% +2.0% +2.9% -6.3% Americas 88 85 -4.3% -3.4% +2.0% -2.9% Consolidation -20 -28 - - - - Total 493 550 +11
Slide 51: Regional Sales Q3 2016
Regional Sales Q3 2016 Q3 2015 Q3 2016 Total Organic External Currency (€ mn) (€ mn) Growth Growth Growth Effects Europe 321 359 11.8% +4.7% +9.3% -2.2% Asia-Pacific, Africa 141 153 7.9% +11.0% +0.0% -3.1% Americas 91 88 -3.0% -4.0% +2.1% -1.1% Consolidation -22 -33 - - - - Total 531 567 +6.7% +3.0%
Slide 52: EBIT development Q1'15 – Q3'16
EBIT development Q1’15 – Q3‘16 € mn +4.7% 100 97.5 95 93.5 89.9 89.3 90 85.2 85 81.7 81.3 80 75 70 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3´16 l 52
Slide 53: The executive board
The executive board Stefan Fuchs: CEO, Corporate Development, Dr. Lutz Lindemann: R&D, Technology, Supply Dr. Timo Reister: Asia-Pacific / Africa HR, PR, Americas Chain, Sustainability, OEM, Mining Dr. Ralph Rheinboldt: Europe, LUBRITECH, Dagmar Steinert: CFO, Finance, Controlling, SAP/ERP Systems I
Slide 54: Executive Compensation
Executive Compensation Changes as of 2015 Executive Board Supervisory Board 25% 50% of variable compensation of variable compensation must be invested in FUCHS PETROLUB SE must be invested in FUCHS PETROLUB preference shares with a 3 year lock-up SE preference shares with a lock-up period period of
Slide 55: FUCHS PETROLUB SE Investor Relations
FUCHS PETROLUB SE Investor Relations Financial Calendar Contact March 21, 2017 Full Year Results 2016 Investor Relations Thomas Altmann April 28, 2017 Quarterly Statement Q1 2017 Friesenheimer Str. 17 68169 Mannheim, Germany May 5, 2017 Annual General Meeting Tel. +49 (0) 621 3802 1201 ir@fuchs-oil.