FUCHS PETROLUB SE The lubricants specialist · 8/27/2013 · FUCHS - business model Fully focussed...
Transcript of FUCHS PETROLUB SE The lubricants specialist · 8/27/2013 · FUCHS - business model Fully focussed...
FUCHS PETROLUB SEThe lubricants specialist
Stefan Fuchs, CEO Reiner Schmidt, Member of the Group Management Committee
Commerzbank Sector Conference Week27 August 2013
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Overview and business model
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FUCHS – the lubricants specialist
� Founded in 1931
� 2012 sales revenues: €1.8 bn
� 2012 number of employees: some 3,800from 36 countries
� 33 production facilities
� 100,000 customers in more than 100 countries
� Member of the MDAX, the DAXplus Family 30 and the STOXX Europe 600
� Preference shares: 100% free float; Ordinary (voting) shares: 52% FUCHS family
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FUCHS - business model
� Fully focussed on lubricants
� Leader in technology, innovation and specialisation
� Independent
� Full-line supplier
� Global presence
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0
1.000
2.000
3.000
4.000
5.000
6.000
China USA India Japan Russia Brazil Germany Korea Iran Mexico
55
K tons
Lubricants MarketRanking Top 10 Lubricant Countries 2012
6,000
5,000
4,000
3,000
2,000
1,000
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Manufacturers today:
130 major oil companies
590 independent manufacturers
720 manufacturers
Competition – strong fragmentation
High degree of fragmentation.
1.700 manufactures in the nineties. Concentration continues, but slowed down.
� FUCHS is globally present.
� FUCHS is the leader in lubrication technology.
� FUCHS has solutions for all tribological challenges.
� Lean organisation, fast decision making.
Source: FUCHS Global Competitive Intelligence
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The business model has paid dividends
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1,17
8
1,39
4
1,36
5
1,32
3
1,19
2
1,04
1
1,06
5
1,45
9
1,65
2
1,81
9
1,09
6
0
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600
900
1.200
1.500
1.800
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012
€ mn
8
Sales revenues have increased by 5.5% p.a.
CAGR 5.5%1,800
1,500
1,200
900
600
300
0
* comparable
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183.
1
207.
3
34.7
40.2
48.7 74
.2 97.2
120.
3
110.
3
121.
4
171.
6
0
50
100
150
200
250
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012
Earnings after tax have increased by 19.6% p.a.
Earnings growth 15.9% 21.1% 52.4% 31.0% 23.8% -8.3% 10.1% 41.4% 6.7% 13.2%
CAGR 19.6%
Ear
ning
s af
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tax
(in €
mn)
* comparable
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Fuchs Value Added (FVA) 10.3 24.1 37.4 71.4 100.3 136.5 110.1 116.8 182. 7 186.0 208.2
0
50
100
150
200
250
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
FUCHS Value Added has increased by 35.1% p. a.
CAGR = 35.1%
FVA = Fuchs Value Added
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Reasons for the positive development during the last 10 years
� Internationalization
– Via acquisitions in the nineties– Frontrunner in emerging markets; market entry China in the mid eighties
� Forming of a united group
� Focused Communication
– For international key accounts
– For global R&D projects– etc.
� Thorough understanding of customer processes
� Lifting of synergies
� Lean cost management
� Strict cash focus; incentives based on FVA
� Lowering of debt and reducing tax rate to ~30%
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Mission Statement – Values –Sustainability
FUCHS PETROLUB SE
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800
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1.800
1931 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Sal
es €
mn
1313
FUCHS – 82 years of tradition and continuous growth
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
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Mission Statement of the FUCHS PETROLUB Group
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Trust
Creating�Value
Respect
Reliability
Integrity
Values of the FUCHS PETROLUB Group
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Sustainability
ecological economic
social
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Good return for shareholders
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Steady dividend increase
Euro
0,00
0,20
0,40
0,60
0,80
1,00
1,20
1,40
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CAGR 24.5%
� IPO 1985; since then every year profit generation and dividend payments
� Company policy: aim to raise dividends year on year; at least to hold steady
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Dec. '02 Dec. '03 Dec. '04 Dec. '05 Dec. '06 Dec. '07 Dec. '08 Dec. '09 Dec. '10 Dec. '11 Dec. '12 June '13
Market capitalisation
€ mn
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Financials
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Sales / EBIT margin before at equity incomeSustainable sales growth
1,45
9
1,17
8
1,39
4
1,36
5
1,32
3
1,09
6
1,04
1
1,65
2
1,81
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1,19
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600
900
1.200
1.500
1.800
2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012
Euro mn
1,800
1,500
1,200
900
600
300
0
* comparable
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29.4%***(25.6)
17.9%***(17.5)
52.7%***(56.9)
Regional sales revenues and EBIT in 2012*
* companies’ locations ** before at equity***customers’ locations
€ mn(variance to LY %)
Sales FUCHS1,819
EBIT margin** 15.3% (15.6)
Europe*Sales 1,080.7 +7.4%EBIT 133.6 +1.4%EBIT margin** 12.3% (13.0)
North and South America*Sales 320.3 +13.3%EBIT 67.5 + 7.0%EBIT margin** 21.1% (22.3)
Asia-Pacific, Africa*Sales 486.8 +18.1%EBIT 96.3 +33.2%EBIT margin** 17.1% (16.6)
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All world regions contribute to the success
0
50
100
150
EBIT (€ mn) 2008 - 2012
Europe Asia-Pacific, Africa
North and South America
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800
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
net debt Dec. 31 equity Dec. 31
24
€ mn
124 € mn share buy-back
Solid balance sheet
65 € mnpensions
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20
30
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
investments depreciation
25
Highest investment in the company’s history
€ mn
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EBIT increase by 5.8% or €8.4 mn
€ mn 1-6/2013 1-6/2012 Variance
Sales revenues 910.3 910.0 0.3 0.0%
Gross profit 343.1 330.1 13.0 3.9%
Gross profit margin 37.7% 36.3%
Admin., sales, R&D and other net operating expenses 196.1 192.2 3.9 2.0%
Expenses as a percentage of sales 21.5% 21.1%
EBIT before at equity income 147.0 137.9 9.1 6.6%
EBIT margin before at equity income 16.1% 15.2%
Income from participations 6.8 7.5 - 0.7 -9.3%
EBIT 153.8 145.4 8.4 5.8%
Earnings after tax 107.6 101.8 5.8 5.7%
Net profit margin 11.8% 11.2%
Earnings per shareOrdinaryPreference
1.511.52
1.421.43
0.09 6.3%0.09 6.3%
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Q2 2013 EBIT is the highest ever
73.468.8
78.872.972.5
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Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13
€ mn80,480.4
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Free cash flow at previous year‘s level
€ mn 1-6/2013 1-6/2012
Gross cash flow
Change in working capital
107.6
-23.0
105.5
-26.4
Other changes -10.3 -2.5
Operating cash flow 74.3 76.6
Capex (incl. financial investment) -33.6 -33.4
Other changes 4.1 1.8
Free cash flow 44.8 45.0
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Outlook for the FUCHS Group
Outlook for the year 2013
� FUCHS confirms its planning for organic growth in 2013 in the low single-digit percent range. To what extent sales revenues will be influenced by changes in currency exchange rates remains to be seen.
� FUCHS anticipates a further increase in earnings before interest and tax (EBIT), profit after tax, and earnings per share in 2013.
� FUCHS is planning a high cash flow notwithstanding significant capital expenditure at a similar level as 2012.
Outlook is based on a stable economic environment in the next quarters, which isnot negatively effected by the various political and financial risks around the globe.
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Continuation of growth initiative
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Our asset: global presence
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Investments in new plants, efficiency and R&D
CHINA: Shanghai (2008)
India: Mumbai (2010)
USA: Chicago (2012/2013)CASSIDA (2010)
Australia: Melbourne (2012) Germany: Kiel (2012)
Germany: Kaiserslautern (2009)
Germany: Mannheim (2012)
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New plant Yingkou, China - layout
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New plant Yingkou, China - construction
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New plant Kaluga, Russia - layout
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New plant Kaluga, Russia - construction
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Additional R&D and Sales staff
1.600
1.700
1.800
1.900
2.000
2.100
2.200
2006(Dec)
2007(Dec)
2008(Dec)
2009(Dec)
2010(Dec)
2011(Dec)
2012(Dec)
production & admin
sales & R&D
2,200
2,100
2,000
1,900
1,800
1,700
1,600
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Our asset: cutting edge technology
R&D expenditure (€ mn)
0
10
20
30
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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Broad customer base and a huge variety of applications
mining
steel
cement
cars
railaviation
agriculture
construction
conveyors
food industry
trucks
wind
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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 results may differ significantly from these assumptions and estimates due to a variety of factors. These factors can include changes to the overall economic climate, 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 agree with the assumptions and estimates set out in this presentation and assumes no liability for such.