Fuchs Se · XETR:FPE

Fuchs — Fuchs Petrolub — Warburg Highlights 2015

46 slides from Fuchs's conference presentation, June 2015

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 Reiner Schmidt, GMC-Member Warburg Highlights - Handout June 2015

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

   The leading independent lubricants manufacturer of the world  Founded in 1931  2014 sales revenues: €1.9 bn  2014 number of employees: 4,112 in 50 operating companies worldwide  30 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 2014: 35 mn t Demand 36.4 35.4 (mn t)  Asia-Pacific biggest regional lubricants market with highest growth rate  North America and Western Europe mature markets; focus is more on a specialized product portfolio and specialties 2

6. Slide 6: 2014 per-capita lubricants demand shows significant growth opportunities

   2014 per-capita lubricants demand shows significant growth opportunities kg Source: FUCHS Global Competitive Intelligence 6

7. Slide 7: Top lubricants countries 2014

   Top 20 lubricants countries 2014 K tons  FUCHS is present in every important lubricants country.  China and the USA cover more than one third of the world lubricants market. 7

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 LUBRICANTS. TECHNOLOGY. PEOPLE.

10. Slide 10: FUCHS is fully focused on lubricants

    FUCHS is fully focused on lubricants Sales 2014: €1.9 bn Automotive lubricants Other Industrial lubricants 40.1% 3.1% 56.8% 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  Worldwide among the top 10 of the lubricants manufacturers (by volume)  Among 590 independent lubricant companies the number 1 (by volume) Source: FUCHS Global Competitive Intelligence 11

12. Slide 12: FUCHS is the specialist for lubricants

    FUCHS is the specialist for lubricants *metalworking fluids/corrosion preventives/lubricating greases Source: FUCHS Global Competitive Intelligence 12

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. 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  Technical leadership through intensive Research & Development.  416 researchers around the globe help our customers to solve their problems.  FUCHS PETROLUB spent €33 mn in R&D expenses during 2014. 14

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

    Breakdown of group sales revenues by customer sector FUCHS sales revenues 2014: €1,866 mn As a percentage of sales * Manufacturing industry = producer goods, capital goods, consumer goods Source: FUCHS Global Competitive Intelligence 15

16. Slide 16: Worldwide network – stronger networking

    Worldwide network – “stronger networking” production sites 16

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

    FUCHS’ strategic position is a combination of… Comments around €1.9 bn in sales (80% with Size & global customers outside Germany, Asia presence Pacific is FUCHS’ 2nd largest regional market), #9 worldwide and by far the largest independent High Degree producer, close to customers Customer Focus and

18. Slide 18: Our business model has paid dividends

    Our business model has paid dividends 18

19. Slide 19: FUCHS Value Added and market capitalization

    During the past 10 years, FUCHS Value Added has increased by 19.9 % p. a. and market capitalization has increased constantly and presently is close to €5 bn. FVA = Fuchs Value Added FUCHS market capitalization € mn 5,000 4,000 3,000 2,000 1,000 19

20. Slide 20: Sales revenues and earnings after tax growth

    During the past 10 years, sales revenues have increased by 5.5% p.a. and earnings after tax by 16.3% p.a. Sales Earnings after tax € mn 20

21. Slide 21: Solid balance sheet – equity ratio 71.7%

    Solid balance sheet – equity ratio to 71.7% and net payment items of €185.7 mn € mn 2010 2011 2012 2013 2014 Equity 546.5 658.2 781.7 853.5 915.6 Equity ratio 61.1% 66.8% 70.5% 73.5% 71.7% Return on equity (ROE) 36.6% 31.0% 29.0% 26.7% 25.7% Return on capital employed (ROCE) 42.7% 39.1% 39.7% 39.7%

22. Slide 22: Dividends paid since IPO in 1985

    Since IPO in 1985 we have paid dividends – during the past 10 years, dividends have been increased by 22.6% p.a. Dividend per preference share (adjusted for changes in equity structure) € 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 22

23. Slide 23: Pay-out ratio almost 50%

    Pay-out ratio almost 50% in % 23

24. Slide 24: Growth initiative

    Growth initiative LUBRICANTS. TECHNOLOGY. PEOPLE. 24

25. Slide 25: Growth initiative – expanded global footprint

    Growth initiative – we have significantly expanded our global footprint € mn Main focus of investments were the construction of new plants in growth regions, the modernization and expansion of our large sites as well as an expansion of our R&D capacities. Capex Depreciation 25

26. Slide 26: Growth initiative: capital expenditure projects

    Growth initiative: capital expenditure projects Specialty grease plants USA and Test field Mannheim China; copy German setup Modernisation of holding building Plant Mannheim 2013 - 2015 26

27. Slide 27: New jobs with focus on sales and technology

    New jobs with focus on sales and technology 2,100 2,000 Nearly 70 % of the 600 jobs 1,900 created during the last 5 years 1,800 were in sales and production & administration technology. 1,700 sales & technology 1,600 1,500 2009 (Dec) 2010 (Dec) 2011 (Dec) 2012 (Dec) 2013 (Dec) 2014 (Dec) 27

28. Slide 28: Growth initiative: acquisitions 2014

    Growth initiative: acquisitions 2014  Acquisition of the lubricant business of LUBRITENE group in May 2014  Sales approx. €15 mn p.a.  Business mainly exists of lubricants for mining and the food industry  Acquisition of the lubricant business of the Batoyle Freedom Group in June 2014  Sales ap

29. Slide 29: Growth initiative: acquisitions 2015

    Growth initiative: acquisitions 2015  Acquisition of the Deutsche Pentosin-Werke GmbH (Signing May 2015)  Sales approx. €135 mn p.a.  190 employees  Two German production locations in Wedel and Dormagen as well as a smaller subsidiary in Sao Paulo, Brazil  Leading manufacture of quality lubrica

30. Slide 30: Q1 2015 and outlook

    Q1 2015 and outlook LUBRICANTS. TECHNOLOGY. PEOPLE. 30

31. Slide 31: Good start into the year 2015

    Good start into the year 2015  Sales revenues up 8% to €493 million (currency adjusted +1%)  Earnings before interest and tax (EBIT) up 8% to €82 million  Outlook for the financial year improved due to currency effects 31

32. Slide 32: Q1 2015: EBIT rose by 8% to €82 mn

    Q1 2015: EBIT rose by 8% to €82 mn € mn Q1/2015 Q1/2014 Variance Sales revenues 492.6 456.8 35.8 7.8% Gross profit 187.9 170.9 17.0 9.9% Gross profit margin 38.1% 37.4% Sales, admin., R&D and other net expenses 110.0 98.3 11.7 11.9% Expenses as a percentage of sales 22.3% 21.5% EBIT before income fr

33. Slide 33: Q1 2015: Organic growth in Asia

    Q1 2015: Organic growth in Asia Regional sales growth 1st quarter 2015 Asia-Pacific / North- and Group* Africa South America € mn 27.1 12.9 35.8 40 Organic growth 30 3.8 20 31.4 Currency effects 10 3.2 19.1 13.9 External growth 0 7.4 4.2 -1.0 0.0 -3.0 -10 -20 -8.1 -1.3 Total growth -2.2% +22.7% +17.

34. Slide 34: Q1 2015: Increased segment earnings

    Q1 2015: Increased segment earnings for Asia- Pacific, Africa and North and South America 1st quarter 2015 € mn 100 +20.4% +8.1% 75 16.5 -0.8 +20.4% (13.7) (-1.5) 81.7 26.6 (75.6) 50 -4.6% (22.1) 25 39.4 (41.3) 0 Europe Asia-Pacific, North and Holding Group Africa South America costs/cons. EBIT marg

35. Slide 35: Q1 2015: Net operating working capital increased

    Q1 2015: As expected, net operating working capital increased € mn Q1/2015 Q1/2014 Gross cash flow 59.6 60.6 Changes in net operating working capital -17.9 -32.1 Other changes -3.7 3.6 Operating cash flow 38.0 32.1 Capex -7.8 -6.5 Other changes 0.0 0.2 Free cash flow 30.2 25.8 35

36. Slide 36: Outlook 2015 for the FUCHS Group

    Outlook 2015 for the FUCHS Group  FUCHS plans further growth in sales and volume in 2015  Should the euro remain weak, EBIT is expected to increase by a mid to higher single-digit percentage.  We plan investments to exceed the previous year’s value and reach up to the investments of 2012 and 2013

37. Slide 37: Shareholder structure FUCHS PETROLUB

    Shareholder structure 37 FUCHS PETROLUB AG

38. Slide 38: 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) 38

39. Slide 39: Appendix - The year 2014

    Appendix - The year 2014 LUBRICANTS. TECHNOLOGY. PEOPLE. 39

40. Slide 40: EBIT at previous year’s level

    EBIT at previous year’s level € mn 2014 2013 Δ Mio. € Δ in % Sales revenues 1,865.9 1,831.6 34.3 1.9 Gross profit 693.2 689.9 3.3 0.5 Gross profit margin 37.2% 37.7% Admin., sales, R&D and other net operating expenses -400.6 -391.1 9.5 2.4 Expenses as a percentage of sales 21.5% 21.4% EBIT before at

41. Slide 41: Organic sales growth in all three world regions

    Organic sales growth in all three world regions – high growth rate in Asia Regional sales growth Asia Pacific / North- and Group* 2014 Africa South America 18.6 8.7 34.3 € mn 50 49.0 Organic growth 30 Currency effects 30.0 External growth 3.8 16.9 10 9.5 13,8 4,3 0,0 -4.6 -8.2 -10 -15.7 -28.5 -30 To

42. Slide 42: Regional sales revenues and EBIT in 2014

    Regional sales revenues and EBIT in 2014* € mn (variance to previous year %) Europe* Asia-Pacific, Africa* sales 1,112.9 +0.8% sales 516.5 +3.7% EBIT 162.0 +6.2% EBIT 105.6 +2.1% EBIT margin** 14.4% (13.7) EBIT margin** 16.8% (18.3) FUCHS sales revenues 1,865.9 EBIT margin** 15.7% (16.3) North and S

43. Slide 43: Record free cash flow of €187.9 mn

    Record free cash flow of €187.9 mn € mn 2014 2013 Gross cash flow 257.9 230.0 Changes in net current asset -14,0 -8.6 Changes in other current assets 11.4 -0.9 Operating cash flow 255.3 220.5 Investments -52.6 -72.8 Acquisitions -21.8 0.0 Other changes 7.0 2.2 Free cash flow 187.9 149.9 43

44. Slide 44: Lower capital cost rate leads to increase in FUCHS Value Added

    Lower capital cost rate leads to an increase in FUCHS Value Added (FVA) by 3.5% 2014 2013 Δ FVA +3.5% €230 mn €222 mn (FVA) (FVA) Δ EBIT +0.2% EBIT EBIT €313 mn €312 mn Cost of Cost of capital capital €83 mn €90 mn Capital employed €833 mn Capital employed €786 mn Δ Capital Employed +5.9% Cost of ca

45. Slide 45: Thank you for your attention

    Thank you for your attention 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 develop

46. Slide 46: 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 7201 ir@fuchs-oil.de, www.fuchs-oil.de

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