Fuchs Se · XETR:FPE
Fuchs — Fuchs Petrolub — Commerzbank Sector Conference 2016
62 slides from Fuchs's conference presentation, Aug 30, 2016
Slide 1: FUCHS Group - Setting Standards Worldwide
FUCHS GROUP Setting Standards - Worldwide | Commerzbank Sector Conference, 30th August 2016, Frankfurt | Dagmar Steinert, CFO | Thomas Altmann, Investor Relations
Slide 2: Agenda
Agenda 01 | The Leading Independent Lubricants Company 02 | Unique Track Record 03 | Growth Initiative 04 | H1 & Outlook 2016 05 | Shares 06 | Appendix l2
Slide 3: The Leading Independent Lubricants Company
01 The Leading Independent Lubricants Company
Slide 4: Top lubricants manufacturers 2015 (by volume)
The Leading Independent Lubricants Company Top 20 lubricants manufacturers 2015 (by volume) A top-10 ranking lubricants manufacturer Number 1 among the independent lubricants companies l4
Slide 5: Our mission statement reflects the business model
The Leading Independent Lubricants Company Our mission statement reflects the business model LUBRICANTS. 100% focus TECHNOLOGY. Holistic solutions PEOPLE. Personal commitment l5
Slide 6: Our core values are the basis for our activities
The Leading Independent Lubricants Company Our core values are the basis for our activities Trust Creating Value Respect Reliability Integrity l6
Slide 7: Full-line supplier advantage
The Leading Independent 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 Car industry Manufacturin
Slide 8: Well balanced customer structure
The Leading Independent Lubricants Company 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 l8
Slide 9: Unique Track Record
Unique Track Record LUBRICANTS. recnoiocy’ FUCHS
Slide 10: 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 10
Slide 11: 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 11
Slide 12: Solid balance sheet and cash flow generation
Unique Track Record - 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 acquis
Slide 13: Growth Initiative
Growth Initiative LUBRICANTS. recnoiocy’ FUCHS
Slide 14: Organic growth potential in emerging countries
Growth Initiative - 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 14
Slide 15: We are where our customers are
Growth Initiative - We are where our customers are Production sites l 15
Slide 16: Growth Initiative - Investments
Growth Initiative - 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/d
Slide 17: Technology & Innovation fueled by strong R&D focus
Growth Initiative - Technology & Innovation fueled by strong R&D focus R&D expenses 40 €39 mn 30 20 10 0 2011 2012 2013 2014 2015 l 17
Slide 18: Further market consolidation to be expected
Growth Initiative - 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 To
Slide 19: Strong track record in integrating acquired companies
Growth Initiative - Strong track record in efficiently integrating acquired companies 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 20
Slide 20: H1 & Outlook 2016
06 H1 & Outlook 2016
Slide 21: Highlights H1 2016 and Outlook
H1 & Outlook 2016 Highlights H1 2016 Revenues +13% to €1,136 mn EBIT + 7% to €183 mn Outlook 2016 - reaffirmed Europe €720.9 mn Sales Growth* of 7%-11% Asia-Pacific, Africa €298.4 mn EBIT Growth of 3%-7% Americas €171.9 mn *before currency translation effects l 21
Slide 22: Sales performance
H1 2016 & Outlook - Sales performance Pentosin incl. since Q3 15 & Statoil FRL since Q4 15 € mn +13.8% 600 586 580 560 550 540 540 531 520 515 500 493 480 460 440 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 l 22
Slide 23: EBIT development
H1 2016 & Outlook - EBIT development Q4 2015 includes integration costs (Acquisitions 2015) € mn +8.5% 100 97.5 95 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 l 23
Slide 24: FUCHS Group Sales
H1 2016 & Outlook - FUCHS Group Sales Headwind from FX in H1 2016 € mn +144.2 (+14.3%) 1.200 +24.3 1.100 (+2.4%) -39.9 1,136.2 (-3.9%) 1.000 1,007.6 900 +128.6 (+12.8%) 800 700 600 H1 2015 Organic Growth Acquisitions FX H1 2016 l 24
Slide 25: Regional Sales
H1 2016 & Outlook - Regional Sales Organic growth in Europe & Asia Pacific, Africa H1 2015 H1 2016 Total Organic External Currency (€ mn) (€ mn) Growth Growth Growth Effects Europe 571.2 720.9 +26.2% +3.3% +24.7% -1.8% Asia-Pacific, Africa 302.2 298.4 -1.3% +2.3% +3.8% -7.4% Americas 176.1 171.9 -2.
Slide 26: Q1 & Q2 Regional Sales
H1 2016 & Outlook - Q1 & Q2 Regional Sales Q1 2015 Q1 2016 Total Organic External Currency (€ mn) (€ mn) Growth Growth Growth Effects Europe 278.3 349.4 +25.5% +1.8% +24.9% -1.2% Asia-Pacific, Africa* 146.5 144.4 -1.4% +2.0% +2.9% -6.3% Americas 88.3 84.5 -4.3% -3.4% +2.0% -2.9% * Adjustment organic
Slide 27: Income Statement
H1 2016 & Outlook – Income Statement € mn H1 2015 H1 2016 Δ Mio. € Δ in % Sales 1,008 1,136 128 12.8% Gross Profit 388 427 39 10.1% Margin 38.5% 37.6% Selling, admin., R&D expenses, others 223 254 31 13.7% EBIT before at Equity 165 173 8 5.2% At Equity 7 10 3 36.6% EBIT 172 183 11 6.5% Earnings afte
Slide 28: EBIT by regions
H1 2016 & Outlook - EBIT by regions H1 2016 (H1 2015) € mn 31.5 182.7 200 (32.9) (171.6) 180 61.0 (59.1) -4,7 160 (-3.1) 140 120 94.9 (82.7) 100 80 60 40 20 0 Europe Asia Pacific, Africa Americas Holding/cons. Group EBIT margin before at equity 13.1% (14.4%) 17.5% (17.4%) 18.3% (18.7%) 15.2% (16.3%)
Slide 29: Free cash flow
H1 2016 & Outlook - Free cash flow mn € H1 2015 H1 2016 Earnings after tax 119 127 Amortisation/Depreciation 17 23 Changes in net operating working capital (NOWC) -29 -46 Other changes -16 0 Capex -16 -32 Free cash flow before acquisitions 75 72 Acquisitions - -20 Free cash flow 75 52 l 29
Slide 30: Net Liquidity development
H1 2016 & Outlook - Net Liquidity development 300 Free cash flow H1 2016: €53 mn 151 250 200 -46 -32 150 -20 100 50 101 -114 -5 35 0 Net liquidity Earnings and NOWC Capex Acquisitions Dividend other Net liquidity 12/31/2015 other impact changes 6/30/16 l 30
Slide 31: H1 2016 & Outlook
H1 2016 & Outlook Before currency translation effects Performance indicators Actual 2015 Outlook 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
Slide 32: Further Investments 2016 – 2018
H1 2016 & Outlook - 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 32
Slide 33: Shares
LUBRICANTS. recnoiocy’ FUCHS
Slide 34: Breakdown of ordinary & preference shares 2015
Shares Breakdown of ordinary & preference shares 2015 Ordinary shares Preference shares MDAX-listed Free float* Fuchs 46% family 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 34
Slide 35: Continuous dividends since IPO (1985)
Shares - 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 35
Slide 36: 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 37: Appendix
Appendix LUBRICANTS. recnoiocy’ FUCHS
Slide 38: FUCHS at a glance
The Leading Independent Lubricants Company 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 More than 2 bn family-owned business euro sales in 2015 A full range of over Listed on the MDAX, DAXplus
Slide 39: Top lubricant countries 2015
The Leading Independent Lubricants Company 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 39
Slide 40: Regional per-capita lubricants demand 2015
The Leading Independent Lubricants Company Regional per-capita lubricants demand 2015 kg 20 15 10 5 0 l 40
Slide 41: Development global lubricants demand
The Leading Independent Lubricants Company Development global lubricants demand mn t 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 41
Slide 42: Business Model
The Leading Independent Lubricants Company Business Modell 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,
Slide 43: Long-term objective: Focus on Shareholder Value
The Leading Independent Lubricants Company 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 effi
Slide 44: Highlights FY 2015
Unique Track Record 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 44
Slide 45: FUCHS met all key targets for 2015
Unique Track Record FUCHS met all key targets for 2015 Sales Forecast 2015 2015 Turnover similar to or slightly Organic Growth above the previous year 0.3% In a mid single-digit percentage External Growth range 6.0% Total Growth Around the 10% mark 11.4% Increase in a mid to high single- EBIT
Slide 46: 2015: EBIT increase of more than 9%
Unique Track Record 2015: 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
Slide 47: FUCHS Group Sales
Unique Track Record - FUCHS Group Sales 2015: Increase 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 47
Slide 48: Regional Sales 2015
Unique Track Record - 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% l 48
Slide 49: FUCHS Group EBIT
Unique Track Record - 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%
Slide 50: Acquisitions 2015 Purchase Price Allocation
Unique Track Record - Acquisitions 2015 Purchase Price Allocation € 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 50
Slide 51: R&D 2015
Unique Track Record - R&D 2015 415 Over 600 39 € mn R&D projects R&D spending engineers and scientists in R&D worldwide 24 laboratory locations in 21 countries l 51
Slide 52: Workforce Structure
Unique Track Record - 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 Adm
Slide 53: Acquisitions fully financed by operating cash flow
Unique Track Record 2015: 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 -2
Slide 54: Net Liquidity 2015
Unique Track Record - 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 54
Slide 55: FUCHS Value Added
Unique Track Record - FUCHS Value Added 2015: 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 55
Slide 56: Development of regional lubricants demand
Growth Initiative Development of regional lubricants demand 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 A
Slide 57: Acquisitions 2015: Pentosin
Growth Initiative - 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 57
Slide 58: Acquisitions 2015: Statoil
Growth Initiative - 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 58
Slide 59: Acquisitions 2016
Growth Initiative - Acquisitions 2016 Strategic Deals 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 Latest i
Slide 60: FUCHS Management - The Executive Board
FUCHS Management - 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
Slide 61: 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 62: Investor Relations
FUCHS PETROLUB SE Investor Relations Financial Calendar Contact August 1, 2016 H1 Results Investor Relations Thomas Altmann September 8, 2016 Capital Market Day Friesenheimer Str. 17 68169 Mannheim, Germany November 3, 2016 Q3 Results Tel. +49 (0) 621 3802 1201 ir@fuchs-oil.de March 22, 2017 Annual