FUCHS GROUP...Q1 2018 earnings summary l 18 Strong organic growth across all regions, particularly...
Transcript of FUCHS GROUP...Q1 2018 earnings summary l 18 Strong organic growth across all regions, particularly...
FUCHS GROUP
New Thinking
| FUCHS Capital Market Day, June 2018
| Stefan Fuchs, CEO
| Dagmar Steinert, CFO
FUCHS at a glance
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More than 5,000employees
Preference share is listed
in the MDAX 58 companies worldwide
€2.5 bn
sales
No. 1among the independent
suppliers of lubricants
The Fuchs family holds
54% of
ordinary shares
A full range
of over
10,000lubricants and related
specialties
Established 3generations ago as a
family-owned business
Full-line supplier advantage
Industrial lubricants
~55%e.g. Industrial oils, MWF/CP* and greases
Automotive lubricants
~45%e.g. Engine & gear oils, hydraulic oils, shock absorber fluids, etc.
Sales 2017: €2.5 bn
(~80% international)by customer location
100,000 customers in more than 150 countries
Heavy Duty Steel & Cement Aerospace Agriculture industry Wind energy Food
MiningConstructionEngineeringManufacturingCar industry Trade, Services &
Transportation
*metalworking fluids/corrosion preventives
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Well balanced customer structure
Top 20 Customers account for ~ 25% of 2017 sales
19%
29%
9%
29%
7%7%
Sales 2017:€2.5 bn
Industrial goods manufacturing
Vehicle manufacturing
Energy and mining
Trade, transport and services
Agriculture and construction
Engineering / Machinery construction
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FUCHS‘ Strategy
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Profitable Growth:
Internationalization of core activities
Local production in 33 plants
Agile network structure based
on common values
People:
▪ Employer
Branding
▪ Culture
▪ Talent-
management
▪ Learning
Utilize disruptions like
e-mobility, digitalization, etc.
as an opportunity
Global
standards,
processes
and branding
Employer Branding – FUCHS as employer brand
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Investment in the futureR&D, capex, regular amortisation & depreciation
70
52 50
93
105
28 30
39
4753
0
20
40
60
80
100
120
2013 2014 2015 2016 2017
Capex Regular amortisation/depreciation
39
9
€ mn
PPA
0
5
10
15
20
25
30
35
40
45
50
2013 2014 2015 2016 2017
R&D expenses 2017: €47 mn Capex 2017: €105 mn
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Investment initiative
Growth/replacement/efficiency
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▪ For 2016 - 2018 around €300 mn capex was planned with focus on the expansion of Mannheim,
Kaiserslautern and Chicago as well as new plants in China, Australia and Sweden. As of today
we expect capex to be ~ €340 mn.
▪ From today‘s perspective more than €100 mn p.a. will be spent on growth and replacement
investments as well as efficiency improvements in the years 2019 - 2021.The focus is on the
expansion of the German, Chinese and US plants. Background is the significant volume
increase, technological changes and a changed product mix.
▪ From 2022 onwards, investments should be back on par with the scheduled increased annual
amortization/depreciation.
Maintenance capex amounting to the level of amortization/depreciation
“3C grease commitment”
Grease plant Harvey, IL/USA
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Investment initiative
Beresfield (Newcastle), Australia
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Investment initiative
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0
50
100
150
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
€ mn
Highlights Q1 2018
Sales +4%
to € 643 mn
Outlook 2018 unchanged
▪ Sales +3% to +6%
▪ EBIT +2% to +4%
▪ Investments of around € 140 mn
▪ Strong organic growth across all three regions:
Europe, Asia-Pacific, Africa and Americas
▪ Negative FX effect impacting sales and EBIT
EBIT currency related
down by 2% to €92 mn
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Regional sales growth Q1 2018
Q1 2017
(€ mn)
Q1 2018
(€ mn)Growth Organic External FX
Europe 368 396 +8% +9% - -1%
Asia-Pacific, Africa 181 199 +10% +18% - -8%
Americas 104 95 -9% +7% - -16%
Consolidation -35 -47 - - - -
Total 618 643 +4% +10% 0% -6%
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Income statement Q1 2018
€ mn Q1 2017 Q1 2018 Δ € mn Δ in %
Sales 618 643 25 4.0
Gross Profit 226 225 -1 -0.4
Gross Profit margin 36.6 35.0 - -1.6 %-points
Other function costs -137 -136 -1 0.7
EBIT before at Equity 89 89 0 0.0
At Equity 5 3 -2 -
EBIT 94 92 -2 -2.1
Earnings after tax 66 67 1 1.5
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Development EBIT – Cost of Capital – FVA
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86
129
161
195
172180
250264
293
312 313
342
371 373
4958 61 59 62 63 67
78 85 9083
96113
123
37
71
100
137
110 117
183 186
208222
230246
257250
0
50
100
150
200
250
300
350
400
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
EBIT
Cost of capital
FVA
€ mn
Cash flow Q1 2018
€ mn Q1 2017 Q1 2018
Earnings after tax 66 67
Amortization/Depreciation 13 14
Changes in net operating working capital (NOWC) -25 -33
Other changes 2 -9
Capex -14 -18
Free cash flow before acquisitions 42 21
Acquisitions - -1
Free cash flow 42 20
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Net operating working capital (NOWC)*
21.0%
19.9%
21.0%21.3%
21.8%22.3% 22.3%
18.0%
19.5%
21.0%
22.5%
300
350
400
450
500
550
600
2012 2013 2014 2015 2016 2017 Q1 2018
NOWC (in € mn) NOWC (in %)
77
NOWC (in days)
73
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* In relation to the annualized sales revenues of the last quarter
78
81
79
77
82
Inventories/days 79 75 76 80 84 84 81
Debtors/days 52 53 56 54 57 56 58
Payables/days 39 43 43 42 48 45 45
Q1 2018 earnings summary
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▪ Strong organic growth across all regions, particularly in Asia-Pacific, Africa
▪ Strong negative FX-effects impacting sales and earnings; This effect will most likely weaken over the
course of the year
▪ Before currency translation increase in gross profit as a result of higher sales prices and volumes
▪ Increase in earnings after tax; tax rate decreased to 28% (31) due to lower withholding tax for dividends
and due to the American tax reform
▪ Capex increase according to plan (€ 140 mn for the full year 2018)
Outlook 2018
Performance indicator Actual 2017 Outlook 2018
Sales € 2,473 mn +3% to +6%
EBIT € 373 mn +2% to +4%
FUCHS Value Added € 250 mn At previous year‘s level
Free cash flow before acquisitions € 142 mn At previous year‘s level
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Breakdown ordinary & preference shares(December 31, 2017)
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Fuchs family54%
Free float46%
Free float100%
Basis: 69,500,000 ordinary shares
Ordinary shares Preference sharesMDAX-listed
Basis: 69,500,000 preference shares
Characteristics:
▪ Dividend
▪ Voting rights
Characteristics:
▪ Dividend plus preference profit share (0.01€)
▪ Restricted voting rights in case of:
▪ preference profit share has not been fully paid
▪ exclusion of pre-emption rights (e.g. capital
increase, share buyback, etc.)
Stable dividend policy
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
€ mn
0.25
0.91
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
Payout Ratio 2017: 47%
Dividend per Preference Share Market Capitalization
Our target: Increase the absolute dividend amount each year or at least maintain previous year’s level.
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Disclaimer
The information contained in this presentation is for background purposes only and is subject to amendment, revision and
updating. Certain statements and information contained in this presentation may relate to future expectations and other
forward-looking statements that are based on management’s current views and assumptions and involve known and
unknown risks and uncertainties. In addition to statements which are forward-looking by reason of context, including
without limitation, statements referring to risk limitations, operational profitability, financial strength, performance targets,
profitable growth opportunities, and risk adequate pricing, other words such as “may, will, should, expects, plans, intends,
anticipates, believes, estimates, predicts, or continue”, “potential, future, or further”, and similar expressions identify
forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and
assumptions which could cause actual results or events to differ materially from those expressed or implied by the
forward-looking statements. These factors can include, among other factors, changes in the overall economic climate,
procurement prices, changes to exchange rates and interest rates, and changes in the lubricants industry. FUCHS
PETROLUB SE provides no guarantee that future developments and the results actually achieved in the future will match
the assumptions and estimates set out in this presentation and assumes no liability for such. Statements contained in this
presentation regarding past trends or activities should not be taken as a representation that such trends or activities will
continue in the future. The company does not undertake any obligation to update or revise any statements contained in
this presentation, whether as a result of new information, future events or otherwise. In particular, you should not place
undue reliance on forward-looking statements, which speak only as of the date of this presentation.
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