Fuchs Se · XETR:FPE

Fuchs — Fuchs Petrolub — German, Swiss & Austrian Conference 2015

44 slides from Fuchs's conference presentation, June 2015

  1. Slide 1: FUCHS PETROLUB SE – The leading independent lubricants manufacturer of the world

    FUCHS PETROLUB SE The leading independent lubricants manufacturer of the world Stefan Fuchs, CEO Dagmar Steinert Steinert, Head of Investor Relations German, Swiss & Austrian Conference - Handout June 2015

  2. Slide 2: Business model & Strategic position

    Business model & Strategic position 2

  3. Slide 3: The leading independent lubricants manufacturer of the world

    The leading independent lubricants manufacturer of the world  Founded in 1931  €1.9 €1 9 bn sales revenues *  4,112 employees *  50 operating companies worldwide*  30 production facilities *  100,000 100 000 customers t iin150 150 countries ti * Data 2014 3

  4. Slide 4: FUCHS - business model

    FUCHS - business model Based on five elementary values Trust Creating g value Respect p Reliabilityy Integrity g y 4

  5. Slide 5: FUCHS - long-term strategic objectives

    FUCHS - long-term strategic objectives  Continue to be the world’s largest independent lubricants company  Value-based growth through innovation and specialisation leadership  Organic growth coupled with external growth  Creating shareholder value through FUCHS Value Added (FVA) principles  Rem

  6. Slide 6: The FUCHS Brand house – Brand relaunch

    The FUCHS Brand house – Brand relaunch Being first choice Vi i Vision Charakter Reliability Proximity Continuity Promise Technology, that pays back Brand LUBRICANTS. TECHNOLOGY. PEOPLE. Nucleus 100% focus holistic solutions personal commitment Positioning My Lubricants Company 6 FUCHS PETROLUB SE

  7. Slide 7: Regional breakdown by customers' location

    Regional breakdown World lubricants demand 2000 / 2014 FUCHS sales revenues 2014: €1.9 bn 36.4 mn t 35.4 mn t 19% 27% Europe p 31 0% 31.0% 28% 34% Americas 51.9% Asia-Pacific & 17.1% Rest of World 53% 39% by customers’ location 2000 2014 Source: FUCHS Global Competitive Intelligence 7

  8. Slide 8: 2014 per-capita lubricants demand shows significant growth opportunities

    2014 per-capita lubricants demand shows significant growth opportunities kg Latin 19.0 America 20 9% (8%) Africa Middle 6% (5%) East Western 5% (5%) Europe 11% (14%) 15 Eastern 10 9.0 Europe Word lubricants 7.9 7.4 8% (13%) demand 2014: 35 mn t ((2000: 36 mn t)) 53 5.3 49 4.9 5 3.7 1.7 North America

  9. Slide 9: Top 20 lubricants countries 2014

    Top 20 lubricants countries 2014 K ttons  FUCHS is present in every 7,000 important lubricants country. 6,000  China and the USA cover more than one third of the world 5,000 lubricants market. 4,000 3,000 2,000 1,000 0 9

  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: Competition – strong fragmentation

    Competition – strong fragmentation manufacturers:  High Hi h d degree off ffragmentation 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 v

  12. Slide 12: 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 12

  13. Slide 13: Worldwide network – stronger networking

    Worldwide network – “stronger stronger networking” networking production sites 13

  14. Slide 14: FUCHS – the niche specialist & technical expert

    FUCHS – the niche specialist & technical expert 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: Return for shareholders

    Return for shareholders LUBRICANTS. TECHNOLOGY. PEOPLE. 15

  16. Slide 16: Sales up 5.5% p.a. and earnings after tax up 16.3% p.a. over 10 years

    During the past 10 years, sales revenues have increased by 5.5% 5 5% pp.a. a and earnings after tax by 16.3% 16 3% p p.a. a Sales Earnings after tax € mn € mn 1,800 1,500 1,200 1,819 1,832 1,866 1,652 2 900 1,459 1,394 1,365 1,323 1,192 1,178 1,096 600 300 0 2004 2005 2006 2007 2008 2009 2010 2011 2

  17. Slide 17: FUCHS market capitalization and FUCHS Value Added

    During the past 10 years, FUCHS Value Added has increased by 20 % p. a. and market capitalization has increased constantly and presently is around €5 bn bn. FVA = Fuchs Value Added FUCHS market capitalization € mn 7 229.7 221.9 200 5,000 5,000 208.2 186.0 182.7 4,000 4 000 1 150 136.5 3,000 16.8 100

  18. Slide 18: Since IPO in 1985 we have paid dividends

    Since IPO in 1985 we have paid dividends Di id d per preference Dividend f share h (adjusted for changes in equity structure) € 0.9 0.90 0.8 0.80 0.7 0.70 0.60 0.6 0.50 0.5 0.40 0.4 0.30 0.3 0.20 0020 0.2 2 0.10 0.1 0.00 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 18

  19. Slide 19: Pay-out ratio almost 50%

    Pay-out ratio almost 50% in % 19

  20. Slide 20: Q1 2015 and outlook

    Q1 2015 and outlook LUBRICANTS. TECHNOLOGY. PEOPLE. 20

  21. Slide 21: 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 21

  22. Slide 22: 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

  23. Slide 23: Q1 2015: Organic growth in Asia

    Q1 2015: Organic growth in Asia Regional R i l sales l growth th st 1 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 32 3.2 19 1 19.1 13.9 External growth 0 7.4 4.2 -1.0 0.0 -3.0 -10 -20 -8.1 -1.3 Total grow

  24. Slide 24: Q1 2015: Increased segment earnings for Asia-Pacific, Africa and Americas

    Q1 2015: Increased segment earnings for Asia- Pacific Africa and North and South America Pacific, 1st quarter 2015 € mn 100 +20.4% +8.1% 75 16.5 -0.8 +20.4% (13.7) (-1.5) 81.7 26.6 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/

  25. Slide 25: 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 37 36 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 25

  26. Slide 26: Outlook 2015 for the FUCHS Group

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

  27. Slide 27: Growth initiative

    Growth initiative LUBRICANTS. TECHNOLOGY. PEOPLE. 27

  28. Slide 28: Growth initiative – we have significantly expanded our 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 capacities. Capex Depreciation 28

  29. Slide 29: 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 g building Plant Mannheim 2013 - 2015 29

  30. Slide 30: New jobs with focus on sales and technology

    New jobs with focus on sales and technology 2,100 2,000 Nearlyy 70 % of the 600 jobs 1,900 created during the last 5 years 1 800 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) 30

  31. Slide 31: Growth initiative: acquisitions 2014

    Growth initiative: acquisitions 2014  Acquisition q of the lubricant business of LUBRITENE g group p in May y 2014  Sales approx. €15 mn p.a.  Business mainlyy exists of lubricants for mining g and the food industry y  Acquisition of the lubricant business of the Batoyle Freedom Group in June 20

  32. Slide 32: Growth initiative: acquisitions 2015

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

  33. Slide 33: Appendix - The year 2014 - Shareholder structure

    Appendix - The year 2014 - Shareholder structure 33

  34. Slide 34: EBIT at previous year's level

    EBIT at previous year’s year s level € mn 2014 2013 ∆ Mio. € ∆ in % Sales revenues 1,865.9 1,831.6 34.3 1.9 Gross profit 693 2 693.2 689 9 689.9 33 3.3 05 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 2

  35. Slide 35: 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

  36. Slide 36: Regional sales revenues and EBIT in 2014

    Regional sales revenues and EBIT in 2014* 2014 € mn (variance to previous year %) Europe* Asia-Pacific, Africa 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**

  37. Slide 37: Breakdown of group sales revenues by customer sector

    Breakdown of group sales revenues by customer sector FUCHS sales revenues 2014: €1,866 €1 866 mn As a percentage A t off sales l * Manufacturing industry = producer goods, capital goods, consumer goods Source: FUCHS Global Competitive Intelligence 37

  38. Slide 38: Record free cash flow of €187.9 mn

    Record free cash flow of €187.9 €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 38

  39. Slide 39: 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% 3 5% 2014 2013 ∆ FVA +3 5% +3.5% €230 mn €222 mn (FVA) (FVA) ∆ 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 ∆ Capital Employed +5.9%

  40. Slide 40: Solid balance sheet – equity ratio 71.7%

    Solid balance sheet – equity ratio to 71.7% and net payment items of €185.7 €185 7 mn € mn 2010 2011 2012 2013 2014 q y 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% 42.7% 3

  41. Slide 41: Shareholder structure

    Shareholder structure 41 FUCHS PETROLUB AG

  42. Slide 42: 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) 42

  43. Slide 43: Disclaimer

    Disclaimer This presentation Thi t ti contains t i statements t t t about b t future f t d development l t that th t are based on assumptions and estimates by the management of FUCHS PETROLUB SE. Even if the management is of the opinion that these assumptions ti andd estimates ti t are accurate, t f

  44. Slide 44: FUCHS PETROLUB SE Investor Relations

    FUCHS PETROLUB SE Investor Relations Friesenheimer Str. 17 68169 Mannheim Phone +49 (0)621 3802 1201, Fax +49 (0)621 3802 7201 ir@fuchs-oil.de, www.fuchs-oil.com

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