Fuchs Se · XETR:FPE

Fuchs — Fuchs Petrolub — Investor Presentation (September 2014)

62 slides from Fuchs's investor presentation, September 2014

  1. Slide 1: 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 September 2014

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

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

  3. Slide 3: FUCHS - business model

    FUCHS - business model  FUCHS is i fully f ll focussed f d on lubricants l bi t (advantage ( d t over major j oilil companies) i )  Technology, innovation and specialisation leadership in strategically important product areas p  Independence allows customer and market proximity, responsiveness, s

  4. Slide 4: FUCHS - long-term strategic objectives

    FUCHS - long-term strategic objectives  C Continue ti tto b be th the world’s ld’ llargestt iindependent d d t manufacturer f t off llubricants bi t and d related specialities  Value-based g growth through g innovation and specialisation p leadership p  Organic growth in emerging markets and orga

  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 20% market with highest growth rate 27% Europe  N North th A Americai and dWWestern t E Europe 28% mature markets; focus is more on a 34% Americas s

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

    2013 per-capita lubricants demand shows significant growth opportunities kg 20 18.8 Latin America Africa Middle 5% 9% East 6% Western 15 Europe 11% 10 9.0 Central/ Word lubricants 7.7 7.8 Eastern demand 2013: Europe 35 mn t 5.4 4.9 9% 5 37 3.7 Asia- 1.8 Pacific 42% 0 North America 19% Source: FUCHS

  7. Slide 7: Top 20 lubricants countries 2013

    Top 20 lubricants countries 2013 K ttons 7,000 6 000 6,000 5,000 4,000 3 000 3,000 2,000 1,000 0 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 Hi h d degree off fragmentation f t ti 130 major oil companies  Concentration especially among smaller companies 590 independent manufacturers 720 manufacturers  Differences in the size of sizes: manufacturers are enormous manufacturers f t

  9. Slide 9: FUCHS – strategic position

    FUCHS – 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*  Among 590 independent lubricant companies the number 1 * by volume 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 Process Oils Oils Automotive 1.6% 9.9% Oils Automotive 56.0% Oils MWF/CP/ MWF/CP/ Greases* Greases 45.8% 8 3% 8.3% 30 0% 30.0% Industrial Oils 25 8% 25.8% Industrial Oi

  13. Slide 13: 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 No. 2 2-4 4  High-performance No. 1 fluids speciality open gear lubricants (cement industry etc etc.))  Corrosion No. 2 preventives  Mining specialities No. 1 (

  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 expen

  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 8% Sales FUCHS €1,831.6 mn Agriculture and Energy and mining construction 9% 8% Trade, transport and services 28% A

  16. Slide 16: We have a worldwide network

    We have a worldwide network production sites 16 FUCHS PETROLUB SE

  17. Slide 17: FUCHS’ strategic position is a combination of…

    FUCHS’ strategic position is a combination of FUCHS of… Comments around €1.8 bn in sales (80% outside Size & Global Germany Asia Pacific is FUCHS’ Germany, FUCHS 2nd Presence largest regional market), #9 worldwide and by far the largest independent producer, close to High Degree Customer customers o

  18. Slide 18: Our business model has paid dividends

    Our business model has paid dividends 18 FUCHS PETROLUB SE

  19. Slide 19: FUCHS market capitalization and FVA

    During the past 10 years, FVA increased by 25% p.a. and market capitalization presently is close to €4.5 €4 5 bn bn. FVA = Fuchs Value Added FUCHS market capitalization 250 5,000 200 4,000 150 3,000 221.9 208.2 86.0 82.7 100 2,000 18 18 136.5 116.8 110.1 100.3 50 1,000 71.4 24.1 37.4 0 0 2003 2004 2

  20. Slide 20: Sales and earnings after tax growth over 10 years

    During the past 10 years, sales revenues have increased by 5.8% 5 8% pp.a. a and earnings after tax by 18.5% 18 5% p p.a. a Sales Earnings after tax € mn € mn 250 1,800 1,500 200 1,652 1,200 150 218.6 1,819 1,832 207.0 183.1 900 459 394 365 1.6 1,323 100 92 78 1,4 1,096 6 171 1,041 1 1,3 1,19 1,3 1,

  21. Slide 21: Solid balance sheet

    Solid balance sheet € mn 1,000 800 600 400 200 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -200 -400 -600 net debt/net cash equity 21 FUCHS PETROLUB SE

  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 €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% q y (ROE) Return on equity ( ) 35.3% 36.6% 31.0% 29.0% 26.7% Return on capital employed (ROCE) 3

  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 200 180 Free cash flow 181.1 160 149.9 140.4 140 128.4 120 100 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 years, 22.8% 8% pp.a. a Di id d per preference Dividend f share h (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

  25. Slide 25: Growth Initiative

    Growth Initiative 25 FUCHS PETROLUB SE

  26. Slide 26: Growth initiative - We have significantly expanded our global footprint

    Growth initiative - We have significantly expanded our global footprint € mn 80 Main focus of investments were the construction of new plants 71.4 72.8 in growth regions such as Russia, China and Brazil, the 70 modernization and expansion of our large sites in the U.S. and 60 Germany as well as an e

  27. Slide 27: Investments

    Investments I di Mumbai India: M b i (2010) Chi China: Yi k (2013) Yingkou R Russia: i Kaluga K l (2013) Germany USA: Chicago (2012/2013) 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% 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 669 84 3,488 8 3,58 3 3,6 16.1% 10.2% Administr. R&D 625 398 3,000 (598) (378

  29. Slide 29: Acquisitions 2014

    Acquisitions 2014 FUCHS PETROLUB SE

  30. Slide 30: Acquisition of LUBRITENE

    Acquisition of LUBRITENE  Acquisition A i iti off th the lubricant l bi t business b i off LUBRITENE group in i May M 2014  Purchase of product technology and customer base  Sales: S l approx. € 15 mn p.a.  Business mainly exists of lubricants for mining and the food industry  Production will b

  31. Slide 31: Acquisition of BATOYLE

    Acquisition of BATOYLE  A Acquisition i iti off th the lubricant l bi tbbusiness i off th the BATOYLE FREEDOM G Group on 20 June 2014  Purchase of p product technology gy and customer base  Sales: approx. € 15 mn p.a.  Business exists of automotive and industrial lubricants as well as lubricants

  32. Slide 32: 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. SE Even if the management is of the opinion that these assumptions and estimates are accurate, future actual developments an

  33. Slide 33: Appendix

    Appendix LUBRICANTS. TECHNOLOGY. PEOPLE.

  34. Slide 34: Appendix

    Appendix  The year 2013  Q1 and Q2 2014  1st half year 2014 and outlook  Share buyback / bonus shares  Shareholder structure 34 FUCHS PETROLUB SE

  35. Slide 35: The year 2013

    The year 2013 FUCHS PETROLUB SE

  36. Slide 36: 2013: EBIT increase by 6.6% or €19.3 mn

    2013: EBIT 2013 increase by 6 6.6 6 % or €19.3 €19 3 mn € mn 2013 2012 ∆ Mio. € ∆ in % Sales revenues 1,831.6 1,819.1 12.5 0.7 Gross profit 689 9 689.9 666 0 666.0 23 9 23.9 36 3.6 Gross profit margin 37.7 % 36.6 % Admin., sales, R&D and other net operating expenses -391.1 -387.2 3.9 1.0 Expenses as

  37. Slide 37: 2013: Organic sales growth in all three world regions

    2013: Organic sales growth in all three world regions, high growth rate in Asia Regional sales growth 2013 Asia Pacific / North- and Group* Africa South America € mn 11.1 -13.0 12.5 60 40 72.5 Organic growth 45.6 20 32.1 Currency effects 0 40 4.0 External growth -8.6 -17.0 -20 -34.5 -60.0 -40 -60 To

  38. Slide 38: 2013: Regional EBIT contributions

    2013: Europe and Asia-Pacific, Africa contributed to the increase in EBIT whereas America could not achieve hi previous i year’s ’ figures fi € mn (variance to previous year %) Europe* Asia-Pacific, Africa Asia-Pacific Africa* sales 1,104.2 +2.2% sales 497.9 +2.3% EBIT 103.4 +7.4% 52.3%*** EBIT 152.

  39. Slide 39: 2013: Free cash flow of €149.9 mn

    2013: Free cash flow of €149.9 mn allows higher dividends and share buyback € mn 2013 2012 Gross cash flow 224.6 219.0 Changes in net current asset -8.6 -24.9 Changes in other current assets -0.9 9.0 Operating cash flow 215.1 203.1 Investments -72.8 -71.4 Acquisitions 0.0 -0.9 Other changes 7.6 9.6

  40. Slide 40: Q1 and Q2 2014

    Q1 and Q2 2014 FUCHS PETROLUB SE

  41. Slide 41: Quarterly development

    Quarterly development € mn Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Sales revenues 442.0 468.3 468.7 452.6 456.8 462.5 Gross profit 165.6 177.5 177.6 169.2 170.9 172.1 (37.5%) (37.9%) (37.9%) (37.4%) (37.4%) (37.2%) Admin., sales Admin sales, R&D and other net 95 4 95.4 100 7 100.7 97 5 97.5 97 5 97.5 98

  42. Slide 42: Q1: EBIT before income from at equity developed in line with sales

    Q1: EBIT before income from at equity developed in the same manner as sales revenues € mn Q 1 2014 Q 1 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% 37.4% 37 5% 37.5% Sales, admin., R&D and other net expenses 98.3 95.4 2.9 3.0% Expense

  43. Slide 43: Q1: Organic growth rose in all three regions

    Q1: 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 19.5 566 5.6 5.6 0.8 13.0 0.8 External growth 0 -11.3 -5.8 -10 -1.1 -18.2 -2

  44. Slide 44: Q1: Regional results show increased earnings for Europe

    Q1: Regional results show increased segment earnings for Europe EBIT 1st quarter 2014 € mn 100 -10.5% 10 5% +3.0% 3 0% 75 13.7 -1.5 -8.7% (15.3) (-0.2) 75.6 22.1 22 1 (73.4) (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 ma

  45. Slide 45: Q1: Net operating working capital increased as expected

    Q1: 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 45 FUCHS PETROLUB

  46. Slide 46: Q2: EBIT of €75.6 mn below previous year

    Q2: EBIT of €75.6 €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 1 172.1 177 5 177.5 -5 4 -5.4 -3 0% -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 percen

  47. Slide 47: Q2: Organic growth in Asia/Pacific, Africa and Americas

    Q2: Organic growth in Asia/Pacific, Asia/Pacific Africa and Americas Regional sales growth Asia/Pacific, North and Group 2nd quarter 2014* Africa South America € mn 05 0.5 -1.5 15 -5 8 -5.8 10 Organic growth 0.6 10.5 0.6 10.7 -1.3 4.4 Currency effects 0 -4.7 -10.0 -5.9 External g growth -1.3 13 -10

  48. Slide 48: Q2: EBIT by region

    Q2: EBIT of €75.6 €75 6 mn below previous year EBIT 2nd quarter 2014 € mn 100 -10.2% 10 2% -6.0% 6 0% 75 14.1 -1.3 -11.8% (-2.4) (15.7) 75.6 23.9 23 9 (80.4) (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 incom

  49. Slide 49: Q2: Free cash flow above previous year

    Q2: Free Cash flow above previous year Cash flow € 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 F Free cash h flow fl 19 1 19.1 14 3 14.3 49 FUCHS

  50. Slide 50: 1st half year 2014 and outlook

    1st half year 2014 and outlook FUCHS PETROLUB SE

  51. Slide 51: The first half year 2014

    The first half year 2014  Good G d organici growthth off jjustt under d 5% substantially b t ti ll eroded d dbby currency effects; ff t sales revenues rise by 1% to €919 million  EBIT of €151 million just under 2% lower than in previous year, currency adjusted an EBIT increase of 2%  Earnings per

  52. Slide 52: H1: EBIT of €151.2 million below previous year

    H1: EBIT of €151.2 million below previous year by almost 2%, 2% currency adjusted an increase of 2% € mn 1-6/2014 1-6/2013 Variance Sales revenues 919.3 910.3 9.0 1.0% Gross profit 343 0 343.0 343 1 343.1 -0 1 -0.1 0 0% 0.0% Gross profit margin 37.3% 37.7% Admin., sales, R&D and other net operating

  53. Slide 53: H1: Organic growth outside Europe eroded by currency effects

    H1: Organic growth outside Europe eroded by currency effects Regional sales growth Asia/Pacific, North and Group 1st half year 2014* Africa South America € mn 90 9.0 2.2 Organic growth 25 -1.7 42.9 Currency effects External g growth 14.8 23.5 5 14 1.4 10.00 10 14 1.4 -2.4 -11.7 -15 -21.3 -35.3 -35 T

  54. Slide 54: H1 2014: EBIT increase in Europe

    H1 2014: EBIT increase in Europe EBIT 1st half year 2014 € mn -10.3% -1.7% 150 -10.3% 27.8 -2.8 151.2 46.0 100 +8.2% 80.2 50 0 Europe Asia Pacific Pacific, North and Holding Group Africa South America costs/cons. EBIT marging before at equity income 14.2% 16.5% 18.1% 15.8% (previous year) (13.4%) (1

  55. Slide 55: H1: Free cash flow at previous year’s level

    H1: Free cash flow at previous year’s year s level Cash flow € mn 1-6/2014 1-6/2013 Gross cash flow 110.9 107.6 Change in working capital -45.0 -23.0 Other changes -2.1 -10.3 Operating cash flow 63.8 74.3 Capex (incl. acquisitions) -25.1 -33.6 Other changes 6.2 4.1 F Free cash h flow fl 44 9 44.9 44

  56. Slide 56: Outlook 2014

    Outlook 2014  FUCHS remains i committeditt d tto itits fforecastt off organic i growth th iin th the llow single-digit i l di it range for the financial year 2014 and for the second half of the year. However, the development of currency exchange rates must be taken into account.  As regards EBIT,

  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 Sh buyback b b k started t t d on 27 November N b 2013 2013, ended d d on 28 A Aprilil 2014 2014.  Repurchase of 740,000 ordinary shares at an average price of €61.78 per share , and 740,000 preference shares at an average p g pprice of €70.94 p per share. Total

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

    Total return to FUCHS shareholders through dividends and share buyback Di id d payoutt and Dividend d share h b buyback b k since i 2002 € mn € per share 01.6 0.80 180 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 2

  60. Slide 60: Shareholder structure

    Shareholder structure 60 FUCHS PETROLUB SE

  61. Slide 61: Breakdown of shares

    Breakdown of shares Ordinary shares Preference shares Free float * Family Fuchs Free float 47 % 53 % 100 % 69,500,000 69 500 000 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: 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 62 FUCHS PETROLUB SE

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