FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of...
Transcript of FUCHS PETROLUB SE The leading independent …...The leading independent lubricants manufacturer of...
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
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
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)
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
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� Creating shareholder value by generating returns above the cost of capital
� Remain independent which is decisive for FUCHS’ business model
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
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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)
2013 per-capita lubricants demand shows significant growth opportunities
18.8
15
20
kg
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9.07.7 7.8
5.43.7
1.8
4.9
0
5
10
Source: FUCHS Global Competitive Intelligence
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
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 – strategic position
FUCHS is fully focused on lubricants
Sales €1.8 mn
Industrial lubricants56.0%
Automotive lubricants40.4%
other3.6%
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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
FUCHS is strategically well positioned as we are the 9th largest lubricant company in the world*
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* by volume
Source: FUCHS Global Competitive Intelligence
Among 590 independent lubricants companies FUCHS is the number 1.
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companies FUCHS is the number 1.
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)
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*metalworking fluids/corrosion preventatives/lubricating greasesSource: FUCHS Global Competitive Intelligence
Industrial Oils
25.8%
8.3%
Industrial Oils
22.8%
30.0%
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
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� 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
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.
Manufacturing industry (incl. Chemicals
production)*20%
Automotive industry (vehicle manufacturing
and components)27%
Breakdown of group sales revenues by customer sector
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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
We have a worldwide network
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production sites
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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Our business model has paid dividends
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
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
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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
Solid financing
400
600
800
1.000
€ mn
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-600
-400
-200
0
200
400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
net debt/net cash equity
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
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Use of Cash
There is a clear priority with regard to the use of cash
1. Reinvest in the business
Capex
Working capital
Acquisitions
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Share re-purchases
2. Return cash to shareholders
Dividends
Clear priority
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Growth Initiative
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
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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
Growth initiative – investment in new sites, efficiency and R&D
India: Mumbai (2010) Australia: Melbourne (2012) Germany: Kaiserslautern (2009)
Germany: Mannheim (2010)
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Brazil (2013) USA: Chicago (2012/2013)Russia: Kaluga (2013)
China: Yingkou (2013)
Capex - completed in 2013
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Capex – planned for 2014
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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
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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 through issuance of bonus shares at the ratio of 1:1, scheduled for June this year.
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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.
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
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Q1 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
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� Outlook for the financial year confirmed
36 FUCHS PETROLUB SE36
Sales revenues up 3.3% despite unfavorable currency effects
442.0 468.3 468.7 452.6 456.8
400
500
€ mnSales Revenues
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0
100
200
300
Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14+3.3% YoY
+0.9% QoQ
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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
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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%)
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� Currency effects -4.2% or -€18.2 mn
200
250
300
350
SalesQ1 2013
SalesQ1 2014
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
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-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
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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%
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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%
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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)
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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
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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
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.
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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.
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Outlook 2014
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
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� 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.
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Shareholder structure
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)
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
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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.
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FUCHS PETROLUB SE
Investor Relations
Friesenheimer Str. 17
68169 Mannheim
Telefon 0621 3802 1201, Fax 0621 3802 7274
[email protected] , www.fuchs-oil.de