Fuchs Se · XETR:FPE
Fuchs — Fuchs Petrolub — Main First Bank, Zurich (June 2014)
51 slides from Fuchs's conference presentation, Jun 5, 2014
Slide 1: FUCHS PETROLUB SE: 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 Main First Bank, Zurich, 5 June 2014
Slide 2: The leading independent lubricants manufacturer of the world
The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees: 3,888 from 36 countries 31 production facilities 100,000 customers in more than 150 countries Member of the MDAX, DAXplus Family 30 and STOXX Europe 600 2 FUCHS PETROLU
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 over maj
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 Creating
Slide 5: Regional breakdown of world lubricants demand in 2013
Regional breakdown of world lubricants demand in 2013 World lubricants demand: 35 mn t The biggest regional lubricants market with the highest growth rate is found in Asia- Pacific. North America and Western Europe are mature markets. The focus is on a more specialized product portfolio and speciali
Slide 6: 2013 per-capita lubricants demand shows significant growth opportunities
2013 per-capita lubricants demand shows significant growth opportunities kg 20 18.8 15 10 9.0 7.7 7.8 5.4 4.9 5 3.7 1.8 0 Source: FUCHS Global Competitive Intelligence 6 FUCHS PETROLUB SE
Slide 7: Top 20 Lubricants Countries 2013
Top 20 Lubricants Countries 2013 K tons 7.000 6.000 5.000 4.000 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
Slide 8: Competition – strong fragmentation
Competition – strong fragmentation manufacturers: High degree of fragmentation continues in the industry 130 major oil companies Concentration especially among 590 independent manufacturers smaller companies 720 manufacturers* sizes: Differences in the size of manufacturers manufacturers volumes are
Slide 9: FUCHS – strategic position
FUCHS – strategic position 9 FUCHS PETROLUB SE
Slide 10: FUCHS is fully focused on lubricants
FUCHS is fully focused on lubricants Sales €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 energ
Slide 11: FUCHS is the 9th largest lubricant company in the world
FUCHS is strategically well positioned as we are the 9th largest lubricant company in the world* * by volume Source: FUCHS Global Competitive Intelligence 11 FUCHS PETROLUB SE
Slide 12: Among independent lubricants companies FUCHS is the number 1
Among 590 independent lubricants companies FUCHS is the number 1. 12 FUCHS PETROLUB SE
Slide 13: 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 1.6% 9.9% Automotive Oils Automotive MWF/CP/ 56.0% MWF/CP/ Oils Greases* Greases 45.8% 8.3% 30.0% Industrial Oils 25.8% Industrial Oils 22.8% *metalwo
Slide 14: 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-resistant hydra
Slide 15: FUCHS - the niche specialist
FUCHS - the niche specialist Research and development are key factors in the success. 385 engineers and scientists engaged in research and development around the globe develop new products and help our customers to solve their problems. They support our technical leadership in key products and appli
Slide 16: 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% 2013 Sales FUCHS €1,831.6 mn Agriculture and Energy and mining construction 9% 8% Trade, transport and services
Slide 17: We have a worldwide network
We have a worldwide network production sites 17 FUCHS PETROLUB SE
Slide 18: FUCHS’ strategic position is a combination of …
FUCHS’ strategic position is a combination of … Comments around €1.8 bn in sales (80% outside Size & Global Germany, Asia Pacific is FUCHS’ 2nd Presence largest regional market), #9 worldwide and by far the largest independent producer, close to High Degree customers Focus On of Specialisation& High
Slide 19: Our business model has paid dividends
Our business model has paid dividends 19 FUCHS PETROLUB SE
Slide 20: FUCHS market capitalization and Fuchs Value Added
During the past 10 years, FUCHS Value Added has increased by 24.9% p. a. and market capitalization has increased constantly and presently is close to €5 bn. FVA = Fuchs Value Added FUCHS market capitalization 250 5.000 200 4.000 150 3.000 221.9 208.2 186.0 182.7 100 2.000 136.5 116.8 110.1 100.3 50
Slide 21: Sales revenues and earnings after tax growth over 10 years
During the past 10 years, sales revenues have increased by 5.8% p.a. and earnings after tax by 18.5% p.a. Sales Earnings after tax € mn € mn 1.800 250 1.500 200 1,652 1.200 1,819 1,832 150 218.6 207.0 183.1 900 1,459 1,394 1,365 1,323 1,192 1,178 171.6 1,096 100 1,041 600 121.4 120.3 110.3 97.2 74.2
Slide 22: Solid financing
Solid financing € 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 22 FUCHS PETROLUB SE
Slide 23: Since IPO in 1985 we have paid dividends
Since IPO in 1985 we have paid dividends - during the past 10 years, dividends have been increased by 22.8% p.a. Dividend per preference share € 1.40 1,40 1,20 1.20 1.00 1,00 0,80 0.80 0,60 0.60 0,40 0.40 0,20 0.20 0,00 0.00 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Slide 24: Use of Cash
Use of Cash 24 FUCHS PETROLUB SE
Slide 25: There is a clear priority with regard to the use of cash
There is a clear priority with regard to the use of cash Capex 1. Reinvest in Working capital the business Acquisitions Clear priority Dividends 2. Return cash to shareholders Share re-purchases 25 FUCHS PETROLUB SE
Slide 26: Growth Initiative
Growth Initiative 26 FUCHS PETROLUB SE
Slide 27: Growth initiative - We have significantly expanded our capacity
Growth initiative - We have significantly expanded our capacity 80 Main focus of investments were the construction of 71.4 72.8 new plants in growing regions such as Russia, China 70 and Brazil as well as the modernization and expansion of existing sites in the U.S. and Australia. 60 50 46.6 € mn Ca
Slide 28: Growth initiative – investment in new sites, efficiency and R&D
Growth initiative – investment in new sites, efficiency and R&D India: Mumbai (2010) Australia: Melbourne (2012) Germany: Germany: Kaiserslautern (2009) Mannheim (2010) Brazil (2013) Russia: Kaluga (2013) USA: Chicago (2012/2013) China: Yingkou (2013) 28 FUCHS PETROLUB SE
Slide 29: Capex - completed in 2013
Capex - completed in 2013 29 FUCHS PETROLUB SE
Slide 30: Capex – planned for 2014
Capex – planned for 2014 30 FUCHS PETROLUB SE
Slide 31: 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% Marketing 34.8% and sales Production 4.000 1,512 1,353 (1,463) (1,334) 2013: 3888 3.500 3773 3,888 employees 3669 3584 3488 16.1% 10.2% Administr. R&D 625 398 3.000 (598) (378) 2009 2010 2011 20
Slide 32: Share Buyback
Share Buyback FUCHS PETROLUB SE
Slide 33: Share buyback
Share buyback Started on 27 November 2013, ended on 28 April 2014. Repurchase of 740,000 ordinary shares at an average price of €61.78 per share and 740,000 preference shares at an average price of €70.94 per share. Total purchase price amounted to €98.4 mn. Capital increase from corporate funds thr
Slide 34: Total return to shareholders through dividends and share buyback
Total return to FUCHS shareholders through dividend distribution and share buyback – cash-out Dividend distribution and share buyback – Cash-out € mn 180 160 140 120 100 80 60 40 20 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 dividend distribution - cash-out share buyback 34 FUCHS
Slide 35: Q1 2014
Q1 2014 LUBRICANTS. TECHNOLOGY. PEOPLE.
Slide 36: Good start into the year 2014
Good start into the year 2014 Sales revenues up 3.3% despite unfavorable currency effects Earnings before interest and tax (EBIT) increase by 3.0% to €75.6 mn Outlook for the financial year confirmed 36 FUCHS PETROLUB SE
Slide 37: Sales revenues up 3.3% despite unfavorable currency effects
Sales revenues up 3.3% despite unfavorable currency effects Sales Revenues € mn 500 468.3 468.7 452.6 456.8 442.0 400 300 200 100 0 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 +3.3% YoY +0.9% QoQ 37 FUCHS PETROLUB SE
Slide 38: EBIT increased by 3.0%
EBIT increased by 3.0% EBIT (€ mn) – quarterly development 80.4 83.4 80 73.4 75.1 75.6 60 40 20 0 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 +3.0% YoY +0.7% QoQ 38 FUCHS PETROLUB SE
Slide 39: Sales revenues increased organically by 7.3%
Sales revenues increased organically by 7.3% € mn +€14.8 mn (3.3%) 500 0.8 -18.2 456.8 442.0 32.2 450 external growth currency organic effects Organic growth 7.3% or €32.2 mn 400 growth External growth 0.2% or €0.8 mn 350 Currency effects -4.2% or -€18.2 mn 300 250 200 Sales Sales Q1 2013 Q1 2014 39
Slide 40: Organic growth rose considerably in all three regions
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 5.6 External growth 13.0 0.8 0 0.8 -11.3 -5.8 -10 -1.1 -18.2 -20 Total growth +7
Slide 41: EBIT before income from at equity developed in line with sales
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% 37.5% Sales, admin., R&D and other net expenses 98.3 95.4 2.9 3.0% Expenses as a percentag
Slide 42: Regional results by segment earnings
The regional results show increased segment earnings for Europe and decreased segment earnings for the other two regions. 1st quarter 2014 € mn 100 -10.5% +3.0% 75 13.7 -1.5 -8.7% (15.3) (-0.2) 75.6 22.1 (73.4) 50 +21.1% (24.2) 25 41.3 (34.1) 0 Europe Asia-Pacific, North and Holding Group Africa Sou
Slide 43: Net operating working capital increased as expected
Net operating working capital increased as expected € 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 43 FUCHS PETROLUB SE
Slide 44: Investments according to plan
Investments according to plan Key investments € mn Primarily in Germany, China and the USA. 14.2 For the following quarters, we expect higher capital expenditures for our projects in Brazil, Australia and the USA that are currently being prepared. 6.5 Q1 2014 Q1 2013 44 FUCHS PETROLUB SE
Slide 45: Further personnel with focus on sales and technical
Further personnel with focus on sales and technical 3,981 3,888 The number of employees has grown by 93 people since the beginning of the year. The new hires were made mainly in Asia- Pacific, Africa and Europe. 31 March 2014 31 Dec. 2013 45 FUCHS PETROLUB SE
Slide 46: Outlook 2014
Outlook 2014 46 FUCHS PETROLUB SE
Slide 47: Outlook for the FUCHS Group
Outlook for the FUCHS Group Outlook for the year 2014 The forecast for organic growth in the low single-figure percentage range for the year remains in place. The Executive Board does not expect to be able to maintain the growth rates recorded in the first quarter. The forecast for an increase in EB
Slide 48: Shareholder structure
Shareholder structure 48 FUCHS PETROLUB SE
Slide 49: Breakdown of shares as of 31 December 2013
Breakdown of shares as of 31 December 2013 Ordinary shares Preference shares own shares Own shares 0.5% 0.5% Fuchs family 52% 35,490,000 Free float*) 47.5% 35,490,000 ordinary Free float preference 99.5% shares shares *) voting rights notification DWS Investment, Frankfurt: 5.2% (15 Dec. 2003) 49 FU
Slide 50: 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. Even if the management is of the opinion that these assumptions and estimates are accurate, future actual developments and f
Slide 51: FUCHS PETROLUB SE Investor Relations
FUCHS PETROLUB SE Investor Relations Friesenheimer Str. 17 68169 Mannheim Telefon 0621 3802 1201, Fax 0621 3802 7274 contact@fuchs-oil.de, www.fuchs-oil.de 51 FUCHS PETROLUB SE