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FUCHS PETROLUB AGThe leading independent lubricantsmanufacturer of the world
Dr. Alexander Selent, Vice Chairman & CFOReiner Schmidt, Member of the Group Management Committee
January 2013
FUCHS PETROLUB AG2
The leading independent lubricants manufacturer of the world
� Founded in 1931
� 2011 sales revenues: €1,668.1 million
� 2011 number of employees: 3,722 from 36 countries and 50 companies
� 34 production facilities
� 100,000 customers in more than 100 countries
� Member of the MDAX, DAXplus Family 30 and STOXX Europe 600
FUCHS PETROLUB AG3
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)
� FUCHS is a full-line supplier (advantage over most independent companies)
� Global presence (advantage over most independent companies)
FUCHS PETROLUB AG4
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
� Creating shareholder value by generating returns above the cost of capital
� Remain independent which is decisive for FUCHS’ business model
FUCHS PETROLUB AG5
Regional Breakdown Global Lubricants Demand
Global Lubricants Demand 2011: 35,1 mn t
Asia-Pacific41%
North America20%
Central/Eastern Europe
9%
Western Europe
11%
Latin America8%
Middle East6%
Africa5%
� The largest and fastest growing regional lubricants market is Asia Pacific.
� North America and Western Europe are mature markets. The focus is on higher value lubricants and specialities.
Source: FUCHS Global Strategic Intelligence
FUCHS PETROLUB AG6
2011 per-capita lubricants demand shows significant growth opportunities
5.0
1.83.6
4.9
7.88.7
9.8
19.8
0
5
10
15
20
North
Amer
icaW
ester
n Eur
ope
Middle
East
Centra
l / Eas
tern
Eur
ope
Latin
Amer
icaAsia
-Pac
ific
Africa
Wor
ld
kg
Source: FUCHS Global Strategic Intelligence
FUCHS PETROLUB AG7
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
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 Strategic Intelligence
FUCHS PETROLUB AG8
FUCHS – strategic position
FUCHS PETROLUB AG9
FUCHS is strategically well positioned as we are the 9th largest lubricant company in the world*
SHELLEXXON BP
CHEVRON
TOTALPETROCHIN
ASIN
OPECID
EMITSU
FUCHSNIP
PON OIL
LUKOIL
VALVOLI
NEPETRONASPERTAM
INA
INDIA
N OIL
* by volume
Source: FUCHS Global Strategic Intelligence
FUCHS PETROLUB AG10
Among 590 independent lubricants companies FUCHS is the number 1.
FUCHS PETROLUB AG11
World Lubricants Market 2011
MWF/CP/Greases*
8.4%
Industrial Oils
25.8%
Automotive Oils
55.6%
Process Oils
10.2%
FUCHS is the Specialist for Lubricants
FUCHS Finished Lubricants 2011
MWF/CP/Greases*
31.5%
Industrial Oils
25.2%
Automotive Oils
41.8%
Process Oils1.5%
*metalworking fluids/corrosion preventatives/lubricating greases
Source: FUCHS Global Strategic Intelligence
FUCHS PETROLUB AG12
FUCHS is the world market leader in strategically important and high-value business segments and niches
� High-performance speciality open gear No. 1 lubricants (cement industry etc.)
� Mining specialities (fire-resistant No. 1hydraulic fluids for underground coal mining and high-performance lubricants
� Environmentally friendly and No. 1 biodegradable lubricants and processing fluids
FUCHS PETROLUB AG13
FUCHS is the world market leader in strategically important and high-value business segments and niches
� Metalworking fluids No. 2-4
� Corrosion preventives No. 2
� Forging lubricants No. 2
� Greases No. 3-4
FUCHS PETROLUB AG14
10% of total staff – more than 350 chemists, enginee rs and other technical experts – work in R & D around the globe a nd ensure technical leadership in key products and applicatio n areas.
FUCHS research and development
FUCHS PETROLUB AG15
FUCHS PETROLUB Group Customer PortfolioCustomer Sectors*
Trade 26%
Energy & M ining 9%
Engineering 9%
Vehicle Components 9% Vechicle M anufacturing 13%
Producer Goods14%
Capital & Consumer Goods 6%
Transport & Service 3%
Construction 2%Other Sectors 2%
Agriculture & Forestry 7%
*Breakdown as percentage of sales 2011
Source: FUCHS Global Strategic Intelligence
FUCHS PETROLUB AG16
FUCHS manufactures in 34 production plants all over the world
FUCHS PETROLUB AG17
Comments
around € 1.7bn in sales (70% outside Germany, Asia Pacific is FUCHS’ 2nd largest regional market), #9 worldwide and by far the largest independent producer, close to customers
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
Size & GlobalPresence
Focus On Higher ValueLubricants
High DegreeOf Specialisation &
Technical Excellence
MotivatedEmployees
Local & FlatOrganisation
Independence & Financial Strength
FUCHS’ strategic position is a combination of…
FUCHS PETROLUB AG18
The business model has paid dividends
FUCHS PETROLUB AG19
2011 was for FUCHS a record year for sales, we have doubled sales since 1999. CAGR is 6%
834
1,39
4
1,36
5
1,32
3
1,19
2
1,09
6
1,06
5
1,17
8 1,45
9
1,66
8
1,04
1
0
300
600
900
1.200
1.500
1999 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Euro mn
CAGR 6 %
FUCHS PETROLUB AG20
2011, a new record year for EBIT, CAGR is 15.9% for the last ten years
264.2250.1
179.9171.7195.2
161.2
128.8
94.884.480.660.6
15.7%
6.3%7.6% 8.1%
8.8%
10.7%
12.1%
14.1% 14.7%
16.6%
12.1%
020406080
100120140160180200220240260280
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
EB
ITD
A (
EU
R m
n)
5%
7%
9%
11%
13%
15%
17%
19%
EBIT EBIT margin before income from participations
EB
IT (
Eur
o m
illio
n)
EB
IT m
argi
n be
fore
in
com
e fr
om p
artic
ipat
ions
CAGR 15.9%
39.0% 5.6%4.8%-12.0%21.1%25.2%35.9%12.3%4.7%33.0%--EBIT growth
FUCHS PETROLUB AG21
19.0
183.4
34.7 40.248.7
74.2
97.2
120.3 110.3
121.4
171.6
2.0%
3.3% 3.9%4.4%
6.2%
7.3%
8.8%
7.9%
10.3%
11.0%11.8%
0
20
40
60
80
100
120
140
160
180
200
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
0%
2%
4%
6%
8%
10%
12%
14%
2011, a new record year for net profit, CAGR is 25.4% for the last ten years
41.4% 6.9%- 8.3 %23.8 % 10.1%52.4 %21.1 % 31.0 %15.9 %82.6 %net profit growth
Net
pro
fit (
Eur
o m
n)
Net
pro
fit m
argi
n
CAGR 25.4%
FUCHS PETROLUB AG22
-50
0
50
100
150
200 Euro mn
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Fuchs Value Added (FVA)
Fuchs ValueAdded (FVA) -13.6 10.3 24.1 37.4 71.4 100.3 136.5 110.1 116.8 182.7 186.8
Again, we have generated a significant premium on our cost of capital (FVA)
FUCHS PETROLUB AG23
Interim report September 2012
FUCHS PETROLUB AG24 FUCHS PETROLUB AG24
� Sales revenues and earnings enjoy double-digit growth
� Earnings before interest and tax (EBIT) up 12.3 % to €224 million
� Positive outlook for the financial year
� Sales revenues and earnings enjoy double-digit growth
� Earnings before interest and tax (EBIT) up 12.3 % to €224 million
� Positive outlook for the financial year
Interim Report as at September 30, 2012
FUCHS PETROLUB AG25
469.2461.6448.4412.3420.9414.6403.8
0
100
200
300
400
500
Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12
Previous year‘s figures have been adjusted for reasons of comparability
At € 469.2 million (420.9) sales revenues in the third quarter of 2012 hit a new record
Quarterly sales revenuesEuro million
+11.5% YoY
FUCHS PETROLUB AG26
78.872.972.5
63.966.166.167.4
0
20
40
60
80
Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q 3 '12
At € 78.8 million (66.1) EBIT in the third quarter of 2012 hit a new record
Quarterly EBIT development Euro million
Previous year‘s figures have been adjusted for reasons of comparability
+19.2% YoY
FUCHS PETROLUB AG27 FUCHS PETROLUB AG27
1.4
89.61,239.3
1,379.2
48.9
900
950
1000
1050
1100
1150
1200
1250
1300
1350
1400
organic growth
Sales1-9/2011
Sales1-9/2012
external growth
currency effects
� Organic growth of 7.2 % or €89.6 million
� External growth 0.1 % or €1.4 million
� Currency effects of 4.0 % or €48.9 million
Euro mn Increase in sales by 11.3 % or €139.9 million to €1,379.2 million (1,239.3)
The growth in sales revenues was driven by increased sales volumes, raw material related price increases and by positive effects from currency translations
FUCHS PETROLUB AG28 FUCHS PETROLUB AG28
1.4 1.45.827.2
16.248.9
55.8 31.316.9
89.6
0
2 0
4 0
6 0
8 0
10 0
12 0
14 0
Euro mn
58.5Asia/Pacific,
Africa
33.1North and
South America
* incl. consolidation effects of -€53.6 million
Total Growth in % + 8.3 + 19.1 + 15.7 + 11.3
139.9Group
63.0Europe
Organic Growth
External GrowthCurrency Effects
Organic Growth in % + 7.3 + 10.2 + 8.0 + 7.2
All three world regions have contributed to the sales growth
FUCHS PETROLUB AG29 FUCHS PETROLUB AG29
EBIT has increased by 12.3% or €24.6 million
Euro mn 1-9/2012 1-9/ 2011 Variance
Sales Revenues 1,379.2 1,239.3 139.9 11.3 %
Gross Profit 503.0 458.0 45.0 9.8 %
Gross Profit Margin 36.5 % 37.0 %
Admin., Sales, R&D and other expenses 289.5 262.7 26.8 10.2 %
Expenses as a percentage of sales 21.0 % 21.2 %
EBIT before income from participations 213.5 195.3 18.2 9.3 %
EBIT margin before income from participations 15.5 % 15.8 %
Income from Participations 10.7 4.3 6.4 148.8 %
EBIT 224.2 199.6 24.6 12.3 %
Earnings after Tax 156.9 136.9 20.0 14.6 %
Net Profit Margin 11.4 % 11.0 %
Earnings per ShareOrdinary Preference
2.192.21
1.911.93
0.28 14.7 %0.28 14.5 %
FUCHS PETROLUB AG30 FUCHS PETROLUB AG
0
50
100
150
200
250
(previous year‘s figures in brackets)
Europe North and South America
AsiaPacific,Africa
Holdingcosts/cons.
Group
104.4(101.9)
71.0(54.6)
51.5(46.2)
226.9(202.7)
224.2(199.6)
-2.7(-3.1)
Euro mn
EBIT margin before income from participations
12.6 %
(13.3)
16.8 %
(16.8)
21.1 %
(21.9)
15.5 %
(15.8)
All three world regions have contributed to the EBIT growth
2.5 %
30.0 %
11.5 % 12.3 %
EB
IT
FUCHS PETROLUB AG31 FUCHS PETROLUB AG31
Free cash flow
Euro million 1-9/2012 1-9/2011
Gross cash flow
Changes in net current assets
163.4
-47.2
147.4
-81.3
Other changes 14.5 15.5
Operating cash flow 130.7 81.6
Investments -47.6 -24.4
Other changes 5.4 2.9
Free cash flow 88.5 60.1
FUCHS PETROLUB AG32 FUCHS PETROLUB AG32
47.6
24.4
1-9/2012 1-9/2011
Investments in R&D and Emerging Markets according to Plan
Euro millionKey Investments
� New Research and development center in Mannheim completed
� Construction of a facility in Russia and China
� Modernization of US production site
� Increase in capital in Turkey for acquiring an automotive lubricant business
FUCHS PETROLUB AG33
Major projects
CHINA: Shanghai (2008)India: Mumbai (2010) Russia: Kaluga (2011/2012)CASSIDA
Germany: Mannheim Germany: KielGermany: Kaiserslautern Germany: Mannheim
FUCHS PETROLUB AG34 FUCHS PETROLUB AG34
3,757
3,679
'30.09.2012 30.09.2011*
Number of employees has increased
78 additional employees mainly in R & D and sales
* comparable
FUCHS PETROLUB AG35 FUCHS PETROLUB AG35
Outlook
Based on the premise that the overall economic situation will not be subject to significant change in the fourth quarter, we expect earnings before interest and tax (EBIT) for the financial year to be around 10% over the previous year’s figure. This prediction is based on the assumption that raw material costs and sales prices will remain largely stable.
The high capital expenditure of the first nine months is set to continue over the coming months. Nevertheless, free cash flow should be above €100 million.
FUCHS PETROLUB AG36
Shareholder structure
FUCHS PETROLUB AG37
Shareholder structure as of 31 December 2011
Ordinary shares in %Maw er Investment Management Ltd.,
Canada 3.0%
Others40.1%
Fuchs family51.7%
DWS Investment, Frankfurt
5.2%
Total equity in %
Others74.2%
Fuchs family25.8%
Base: 35,490,000 shares Base: 70,980,000 shares(ordinary shares) (ordinary and preference shares)
FUCHS PETROLUB AG38
Mission statement
LUBRICANTS .
TECHNOLOGY.
PEOPLE.
FUCHS PETROLUB AG39
Disclaimer
This presentation contains statements about future development that are based on assumptions and estimates by the management of FUCHS PETROLUB AG. 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 AG 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.
FUCHS PETROLUB AG40
FUCHS PETROLUB AG
Public Relations / Investor Relations
Friesenheimer Str. 17
68169 Mannheim, Germany
Phone +49-621 3802 1124, Fax +49-621 3802 7274
[email protected] , www.fuchs-oil.com