FUCHS PETROLUB AGThe leading independent lubricantsmanufacturer of the world
Dr. Alexander Selent, Vice Chairman & CFODagmar Steinert, Head of Investor Relations
Warburg Highlights 7 June 2013
FUCHS PETROLUB AG2
FUCHS – the leading independent lubricants manufacturer of the world
� Founded in 1931
� 2012 sales revenues: €1.8 bn
� 2012 number of employees: some 3,800 from 36 countries
� 33 production facilities
� 100,000 customers in more than 100 countries
� Member of the MDAX, the DAXplusFamily 30 and the 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 FUCHS PETROLUB AG5
39%52%
34%
28%
27%20%
Asia-Pacif ic & Rest of World Americas Europe
Lubricants Market
Western Europe
11% (14%)
Latin America9% (8%)
Eastern Europe
9% (13%)
Africa6% (5%) Middle East
5% (5%)
Asia-Pacific41% (29%)
North America
19% (26%)20
0020
12
2012
36.4 mn t 35.0 mn t
*without marine oils
Global lubricants demand 2012: 35.0 mn t
� 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.
FUCHS PETROLUB AG6
2012 per-capita lubricants demand shows significant growth opportunities
5.0
1.83.6
5.4
7.77.79.1
19.0
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 Competitive 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 Competitive 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
FUCHS
LUKOIL
JX N
IPPON O
ILPETRONASPERTAM
INA
GULF / H
OUGHTON
VALVOLI
NE
* by volume
Source: FUCHS Global Competitive Intelligence
FUCHS PETROLUB AG10
Among 590 independent lubricants companies FUCHS is the number 1.
FUCHS PETROLUB AG11
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 AG12
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 AG13
10% of total staff – more than 350 chemists, engineers and other technical experts – work in R & D around the globe and ensure technical leadership in key products and application areas.
FUCHS research and development
FUCHS PETROLUB AG14 FUCHS PETROLUB AG14
FUCHS PETROLUB Group Customer PortfolioCustomer Sectors*
Trade 25%
Energy & M ining 9%
Engineering 8%
Vehicle Components 10% Vehicle M anufacturing 15%
Producer Goods 14%
Capital & Consumer Goods 6%
Transport & Service 3%Construction 2%
Other Sectors 2%
Agriculture & Forestry 6%
*Breakdown as percentage of sales 2012Source: FUCHS Global Competitive Intelligence
FUCHS PETROLUB AG15
FUCHS manufactures in 33 production plants all over the world
FUCHS PETROLUB AG16
Comments
around € 1.8bn 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 AG17
The business model has paid dividends
FUCHS PETROLUB AG18
During the past 10 years, sales revenues have increased by 5.5% p.a.
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
300
600
900
1.200
1.500
1.800
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012
Euro mn
CAGR 5.5%1,800
1,500
1,200
900
600
300
0
* comparable
FUCHS PETROLUB AG19
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
During the past 10 years, 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
ter
tax
(in E
uro
mn)
* comparable
FUCHS PETROLUB AG20
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
During the past 10 years, FUCHS Value Added has increased by 35% p. a. and generated a significant premium on our cost of capital
CAGR = 35.1%
FVA = Fuchs Value Added
FUCHS PETROLUB AG21 FUCHS PETROLUB AG21
During the past 10 years, dividends have been increased by 24.5%
CAGR (preference shares): 10.9% since 1985€
0,00
0,20
0,40
0,60
0,80
1,00
1,20
1,40
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
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
CAGR 24.5%
FUCHS PETROLUB AG22
Balance sheet
FUCHS PETROLUB AG23
Solid balance sheet – increase of equity ratio to 70.5% and net payment items of €134.8 million
72.8x
+64.9
39.1%
31.0%
66.8%
658.2
20113
54.2x
+72.4
42.7%
36.6%
61.1%
546.5
2010
25.7x
+31.7
32.8%
35.3%
52.7%
392.9
2009
70.5%44.8%45.6%Equity ratio
183.1x
+134.8
39.7%
29.0%
781.7
2012
23.2x
-7.7
38.3%
37.1%
325.9
2007
33.3%Return on equity (ROE)
-104.6Net debt 1 (-) / net cash (+)
315.3Equity
19.3xEBIT/financial result 2
32.0%Return on capital employed (ROCE)
2008Euro mn
1 excl. pensions2 adjusted by participation write-offs3 comparable
FUCHS PETROLUB AG24
We have frequently been asked about use of cash
Share repurchases
1. Reinvest in the business
2. Return cash to claim holders
Capex
Working capital
Acquisitions
Dividends
Clear priority
FUCHS PETROLUB AG25
Growth initiative
FUCHS PETROLUB AG26
We are prepared for the future
� Additional people
� Additional capex
� Additional opportunities
– Margin management
– Small market shares in certain product areas and countries
– More focused– Strong team in our industry
– Global network
FUCHS PETROLUB AG27
Highest investment in the company’s history
71.437.032.530.146.624.428.818.7 22.2 18.228.827.9
26.422.520.020.819.724.327.2 26.920.027.0 30.2 23.9
3.8%
2.3%
2.2%
2.6%
3.3%
2.0%
1.8%
2.7%
3.0%
2.4%
1.4%
1.8%
0
10
20
30
40
50
60
70
80
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120%
1%
2%
3%
4%
5%
6%
investments
depreciation
investments as a percentage of sales
Euro mn
Apart from the construction of the new sites in growing regions such as Russia and China or the modernization of existing plants such as in the U.S., we have inaugurated the new research and development centre in Mannheim.
FUCHS PETROLUB AG28 FUCHS PETROLUB AG28
Investments in China, Australia and India
FUCHS PETROLUB AG29
New plant in Yingkou, China - plan
FUCHS PETROLUB AG30
New plant in Yingkou, China – construction progress
FUCHS PETROLUB AG31
New plant in Kaluga, Russia - plan
FUCHS PETROLUB AG32
New plant in Kaluga, Russia – construction progress
FUCHS PETROLUB AG33
+104
Employees
FUCHS is expanding and acquired 138 employees in 2011 and 104 employees in 2012. We have budgeted for another 100 employees in 2013.
FUCHS expands and hires 104 additional employees in 2012.
We plan for additional new hires in 2013.
3,773 3,669
1.000
1.500
2.000
2.500
3.000
3.500
4.000
2012 2011
4,000
3,500
3,000
2,500
2,000
1,500
1,000
FUCHS PETROLUB AG34
The year 2013
FUCHS PETROLUB AG35
1st quarter 2013: Sales revenues just below previous year’s level due to currency effects. Slight increase in EBIT.
15.3%15.9%EBIT margin before income from at equity
-0.9 -22.0%4.13.2Income from at equity
1.8 2.6%68.470.2EBIT before income from at equity
0.720.73
11.7%
51.6
73.4
21.6%
95.4
37.5%
165.6
442.0
Q 1 2013
0.00.0
0.720.73
Earnings per shareOrdinary Preference
11.5%Net profit margin
0.9 1.2%72.5EBIT
1.9 2.0%93.5Sales, admin., R&D and other net expenses
3.7 2.3%161.9Gross profit
0.2 0.4%51.4Earnings after tax
20.9%Expenses as a percentage of sales
36.1%Gross profit margin
-6.4 -1.4%448.4Sales revenues
Variance Q 1 2012€ mn
FUCHS PETROLUB AG36
Outlook for the financial year 2013 confirmed
� 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.
FUCHS PETROLUB AG37
Shareholder structure
FUCHS PETROLUB AG38
Shareholder structure
Ordinary shares in %
Others43.1%
Fuchs family51.7%
DWS Investment,
Frankfurt5.2%
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 AG39
Thank you for your attention!
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
Telefon 0621 3802 1124, Fax 0621 3802 7274
[email protected] , www.fuchs-oil.de