FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of...

51
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

Transcript of FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of...

Page 1: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

FUCHS PETROLUB SEThe leading independent lubricantsmanufacturer of the worldDr. Alexander Selent, Vice Chairman & CFODagmar Steinert, Head of Investor Relations

Main First Bank, Zurich, 5 June 2014

Page 2: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

The leading independent lubricants manufacturer of the world

� Founded in 1931

� 2013 sales revenues: €1.8 bn

� 2013 number of employees: 3,888from 36 countries

� 31 production facilities

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� 31 production facilities

� 100,000 customers in more than150 countries

� Member of the MDAX, DAXplusFamily 30 and STOXX Europe 600

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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 major oil companies)

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� FUCHS is a full-line supplier (advantage over most independent companies)

� Global presence (advantage over most independent companies)

Page 4: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

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

FUCHS PETROLUB SE4

� Creating shareholder value by generating returns above the cost of capital

� Remain independent which is decisive for FUCHS’ business model

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Africa5% Middle

East

South America

8%

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 specialities.

Demand(mn t)

36.4 35.3

FUCHS PETROLUB SE5

East6%

Asia-Pacific43%

North America

19%

Central/Eastern Europe

9%

Western Europe

11%

8%

Source: FUCHS Global Competitive Intelligence

5

39%52%

34%

28%

27%20%

Europe

Americas

Asia-Pacific & Rest of World

2000 2013

(mn t)

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2013 per-capita lubricants demand shows significant growth opportunities

18.8

15

20

kg

FUCHS PETROLUB SE6

9.07.7 7.8

5.43.7

1.8

4.9

0

5

10

Source: FUCHS Global Competitive Intelligence

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5.000

6.000

7.000

K tons

Top 20 Lubricants Countries 2013

FUCHS PETROLUB SE

0

1.000

2.000

3.000

4.000

China USA India Russia Japan Brazil Germany Korea Mexico Iran Indonesia UK Canada France Thailand Taiwan Turkey Australia Egypt Italy

7

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manufacturers:

130 major oil companies

590 independent manufacturers

720 manufacturers*

Competition – strong fragmentation

High degree of fragmentation continues in the industry

Concentration especially among smaller companies

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Differences in the size of manufacturers are enormous. World-wide the top 10 finished lubricants manufacturers including FUCHS hold more than 50% of global volumes while the remainder of more than 700 manufacturers share less than 50%.

sizes:

manufacturers volumes%

top 10 > 50.0

710 < 50.0

720 100.0

Source: FUCHS Global Competitive Intelligence

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FUCHS PETROLUB SE9

FUCHS – strategic position

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FUCHS is fully focused on lubricants

Sales €1.8 mn

Industrial lubricants56.0%

Automotive lubricants40.4%

other3.6%

FUCHS PETROLUB SE

100,000 customers

10

Automotive industry

passenger cars & trucks

Manufacturing

steel & cement

Mining &

wind energy

Construction &

agriculture industry

Trade, services & transportation

railway & food industry

Engineering

conveyer belt & aeronautic

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FUCHS is strategically well positioned as we are the 9th largest lubricant company in the world*

FUCHS PETROLUB SE11

* by volume

Source: FUCHS Global Competitive Intelligence

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Among 590 independent lubricants companies FUCHS is the number 1.

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companies FUCHS is the number 1.

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FUCHS is the Specialist for Lubricants

Automotive Oils

56.0%MWF/CP/Greases*

8.3%

ProcessOils9.9%

Worldwide lubricant market 2013(volume)

Automotive Oils

45.8%MWF/CP/Greases

30.0%

Process Oils1.6%

FUCHS manufactured lubricants 2013 (volume)

FUCHS PETROLUB SE13

*metalworking fluids/corrosion preventatives/lubricating greasesSource: FUCHS Global Competitive Intelligence

Industrial Oils

25.8%

8.3%

Industrial Oils

22.8%

30.0%

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FUCHS is the specialist and occupies technology and market leadership positions in strategically important niche areas

� High-performance No. 1 speciality open gear lubricants (cement industry etc.)

� Mining specialities No. 1

� Metalworking No. 2-4fluids

� Corrosion No. 2 preventives

FUCHS PETROLUB SE1414

� Mining specialities No. 1(fire-resistanthydraulic fluids for underground coal mining and high-performance lubricants

� Environmentally Friendly lubricants

� Forging lubricants No. 2

� Greases No. 3-4

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FUCHS - the niche specialist

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� 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 application areas.

� The Group‘s research and development expenses were EUR 30.6 million.

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Manufacturing industry (incl. Chemicals

production)*20%

Automotive industry (vehicle manufacturing

and components)27%

Breakdown of group sales revenues by customer sector

FUCHS PETROLUB SE16

Energy and mining9%

Trade, transport and services

28%

Agriculture and construction

8%

Engineering8%

As a percentage of sales* Manufacturing industry = producer goods, capital goods, consumer goods

Source: FUCHS Global Competitive Intelligence

2013 Sales FUCHS€1,831.6 mn

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We have a worldwide network

FUCHS PETROLUB SE17

production sites

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Comments

around €1.8 bn in sales (80% outside Germany, Asia Pacific is FUCHS’ 2nd largest regional market), #9 worldwide and by far the largest independent producer, close to customers

FUCHS’ strategic position is a combination of …

Size & GlobalPresence

Focus On Higher Value

High Degreeof Specialisation&

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leader in innovation, specialisation& technology, clear focus on high-value products & market segments, basis for strong profitability, high cash flows & value creation

optimized and highly flexible cost structure, highly committed teams in management, production, R&D, sales and admin supported by company’s independence, steering via FVA tool successful

Higher ValueLubricants

of Specialisation&Technical

Excellence

MotivatedEmployees

Local & FlatOrganisation

Independence & Financial Strength

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FUCHS PETROLUB SE19

Our business model has paid dividends

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4.000

5.000

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.

200

250

FVA = Fuchs Value Added FUCHS market capitalization

FUCHS PETROLUB SE

0

1.000

2.000

3.000

20

24.1

37.4 71

.4 100.

3 136.

5

110.

1

116.

8

182.

7

186.

0

208.

2

221.

9

0

50

100

150

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

€ mn

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1.800

€ mn

During the past 10 years, sales revenues have increased by 5.8% p.a. and earnings after tax by 18.5% p.a.

250

€ mn

Sales Earnings after tax

FUCHS PETROLUB SE21

1,04

1

1,09

6

1,19

2

1,32

3

1,36

5

1,39

4

1,17

8

1,45

9 1,65

2

1,81

9

1,83

20

300

600

900

1.200

1.500

2003 2004 2005 2006 2007 2008 2009 20102011*2012 2013

* comparable

40.2 48.7 74.2

97.2

120.

3

110.

3

121.

4

171.

6

183.

1

207.

0

218.

6

0

50

100

150

200

250

2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012 2013

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Solid financing

400

600

800

1.000

€ mn

FUCHS PETROLUB SE22

-600

-400

-200

0

200

400

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

net debt/net cash equity

Page 23: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

1,00

1,20

1,40

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

1.201.00

FUCHS PETROLUB SE

0,00

0,20

0,40

0,60

0,80

1,00

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2323

1.00

0.80

0.60

0.40

0.20

0.00

Page 24: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

FUCHS PETROLUB SE24

Use of Cash

Page 25: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

There is a clear priority with regard to the use of cash

1. Reinvest in the business

Capex

Working capital

Acquisitions

FUCHS PETROLUB SE25

Share re-purchases

2. Return cash to shareholders

Dividends

Clear priority

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FUCHS PETROLUB SE26

Growth Initiative

Page 27: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

46.6

71.4 72.8

50

60

70

80

Growth initiative - We have significantly expandedour capacity

mn

Main focus of investments were the construction of new plants in growing regions such as Russia, China and Brazil as well as the modernization and expansion of existing sites in the U.S. and Australia.

Capex

FUCHS PETROLUB SE

22.2

28.8

18.2

24.4

46.6

30.132.5

37.0

24.3

23.919.7

20.8 20.0 20.022.5

26.4 26.9 28.2

0

10

20

30

40

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

27

€m

n

Depreciation

Capex

Page 28: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Growth initiative – investment in new sites, efficiency and R&D

India: Mumbai (2010) Australia: Melbourne (2012) Germany: Kaiserslautern (2009)

Germany: Mannheim (2010)

FUCHS PETROLUB SE28

Brazil (2013) USA: Chicago (2012/2013)Russia: Kaluga (2013)

China: Yingkou (2013)

Page 29: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Capex - completed in 2013

FUCHS PETROLUB SE29

Page 30: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Capex – planned for 2014

FUCHS PETROLUB SE30

Page 31: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

4.000

Growth initiative –Personnel increase mainly in sales and R&D

Number of employees (on 31 December)

38.9% Marketing and sales

1,512 (1,463)

34.8%Production

1,353 (1,334)

FUCHS PETROLUB SE

3488

3584

3669

3773

3888

3.000

3.500

2009 2010 2011 2012 2013

31

10.2%R&D398

(378)

16.1%Administr.

625(598)

2013:3,888 employees

Page 32: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

FUCHS PETROLUB SE

Share Buyback

Page 33: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

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 through issuance of bonus shares at the ratio of 1:1, scheduled for June this year.

FUCHS PETROLUB SE3333

ratio of 1:1, scheduled for June this year.

� Withdrawal of the repurchased shares also scheduled for June this year.

� Dividend policy of constantly growing or at least steady payouts will be continued.

� No impact on acquisition strategy.

Page 34: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Total return to FUCHS shareholders through dividend distribution and share buyback – cash-out

140

160

180

€ mn

Dividend distribution and share buyback – Cash-out

FUCHS PETROLUB SE34 FUCHS PETROLUB SE

0

20

40

60

80

100

120

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

dividend distribution - cash-out share buyback

Page 35: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

FUCHS PETROLUB SE

Q1 2014

Page 36: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

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

FUCHS PETROLUB SE

� Outlook for the financial year confirmed

36 FUCHS PETROLUB SE36

Page 37: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Sales revenues up 3.3% despite unfavorable currency effects

442.0 468.3 468.7 452.6 456.8

400

500

€ mnSales Revenues

FUCHS PETROLUB SE

0

100

200

300

Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14+3.3% YoY

+0.9% QoQ

FUCHS PETROLUB SE37

Page 38: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

EBIT increased by 3.0%

73.480.4 83.4

75.1 75.6

60

80

EBIT (€ mn) – quarterly development

FUCHS PETROLUB SE

0

20

40

60

Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

+3.0% YoY

+0.7% QoQ

FUCHS PETROLUB SE38

Page 39: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Sales revenues increased organically by 7.3%

� Organic growth 7.3% or €32.2 mn

� External growth 0.2% or €0.8 mn

442.0 32.2

0.8

-18.2 456.8

400

450

500

organicgrowth

externalgrowth

currencyeffects

€ mn+€14.8 mn (3.3%)

FUCHS PETROLUB SE39 FUCHS PETROLUB SE

� Currency effects -4.2% or -€18.2 mn

200

250

300

350

SalesQ1 2013

SalesQ1 2014

Page 40: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

19.5 5.632.2

10

20

30

40€ mn

Asia-Pacific /Africa

North- and South America

Group*

Organic growth Currency effects

Regional sales growth 1st quarter 2014

1.7 -0.2 14.8

Organic growth rose considerably in all three regions

FUCHS PETROLUB SE40

-1.1 -11.3 -5.8-18.2

19.513.0

5.6

-20

-10

0

10

Total growth +7.2% +1.4% -0.3% +3.3%

External growth Currency effects

Organic growth +7.4% +11.0% +7.4% +7.3%

Currency effects -0.5% -9.6% -7.7% -4.2%

* Consolidation effect -€5.9 mn

0.8

0.8

FUCHS PETROLUB SE

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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 percentage of sales 21.5% 21.6%

FUCHS PETROLUB SE

EBIT before income from at equity 72.6 70.2 2.4 3.4%

EBIT margin before income from at equity 15.9% 15.9%

Income from at equity 3.0 3.2 -0.2

EBIT 75.6 73.4 2.2 3.0%

Earnings after tax 52.8 51.6 1.2 2.3%

Net profit margin 11.6% 11.7%

Earnings per shareOrdinary Preference

0.750.76

0.720.73

0.03 4.2%0.03 4.1%

FUCHS PETROLUB SE41

Page 42: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

The regional results show increased segment earnings for Europe and decreased segment earnings for the other two regions.

1st quarter 2014

22.1

13.7(15.3)

-1.5(-0.2)

75.6(73.4)

75

100

+3.0%-10.5%

-8.7%

€ mn

FUCHS PETROLUB SE

41.3(34.1)

22.1(24.2)

(73.4)

0

25

50

Europe Asia-Pacific, Africa

North and South America

Holding costs/cons.

Group

+21.1%

EBIT margin before income from at equity(previous year)

14.3% 16.4% 18.2% 15.9%(12.7) (18.1) (20.2) (15.9)

FUCHS PETROLUB SE42

Page 43: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Net operating working capital increased as expected

€ mn Q1 2014 Q1 2013

Gross cash flow

Changes in net operating working capital

57.5

-32.1

52.6

-10.8

Other changes 3.6 1.4

FUCHS PETROLUB SEFUCHS PETROLUB SE43

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

Page 44: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

14.2

Investments according to plan

€ mnKey investments

Primarily in Germany, China and the USA. For the following quarters, we expect higher capital expenditures for our projects in Brazil, Australia and the USA that are currently being prepared.

FUCHS PETROLUB SE

6.5

Q1 2014 Q1 2013

currently being prepared.

FUCHS PETROLUB SE44

Page 45: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Further personnel with focus on sales and technical

3,9813,888

The number of employees has grown by 93 people since the beginning of the year. The new

FUCHS PETROLUB SE

31 March 2014 31 Dec. 2013

beginning of the year. The new hires were made mainly in Asia-Pacific, Africa and Europe.

FUCHS PETROLUB SE45

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Outlook 2014

Page 47: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

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 EBIT by a low single-figure percentage

FUCHS PETROLUB SE

� The forecast for an increase in EBIT by a low single-figure percentage continues to apply.

� Capital expenditure is also likely to increase in subsequent months, although net operating working capital (NOWC) should show no further significant increase. Taking into account the anticipated earnings development, we therefore once again expect to record free cash flow in the three-digit million range for 2014.

FUCHS PETROLUB SE47

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Shareholder structure

Page 49: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Breakdown of shares as of 31 December 2013

Free float*)

Fuchs family52%

own shares0.5%

Ordinary sharesOwn shares

0.5%

Preference shares

35,490,000 35,490,000

FUCHS PETROLUB SE4949

Free float*) 47.5% Free float

99.5%

35,490,000 ordinaryshares

35,490,000 preference

shares

*) voting rights notification DWS Investment, Frankfurt: 5.2% (15 Dec. 2003)

Page 50: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

Thank you for your attention

This presentation contains statements about future development that arebased on assumptions and estimates by the management of FUCHSPETROLUB SE. Even if the management is of the opinion that theseassumptions and estimates are accurate, future actual developments andfuture actual results may differ significantly from these assumptions andestimates due to a variety of factors. These factors can include changes to

FUCHS PETROLUB SE50

estimates due to a variety of factors. These factors can include changes tothe overall economic climate, changes to exchange rates and interest ratesand changes in the lubricants industry. FUCHS PETROLUB SE provides noguarantee that future developments and the results actually achieved in thefuture will agree with the assumptions and estimates set out in thispresentation and assumes no liability for such.

Page 51: FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of the world Founded in 1931 2013 sales revenues: €1.8 bn 2013 number of employees:

FUCHS PETROLUB SE51

FUCHS PETROLUB SE

Investor Relations

Friesenheimer Str. 17

68169 Mannheim

Telefon 0621 3802 1201, Fax 0621 3802 7274

[email protected] , www.fuchs-oil.de