FUCHS PETROLUB SE — Interim / Quarterly Report 2016

Nov 7, 2016

Q1 – 3 2016

Quarterly Statement as at September 30, 2016

• Sales revenues increase by 11% to € 1.7 billion
• Earnings (EBIT) up 6% to € 276 million
• Outlook for the financial year 2016 reaffirmed:
• Organic and acquisition-based growth in sales revenues at the top end of the forecast range of 7% to 11%
• Growth in sales revenues between 7% and 8% taking into account negative currency effects
• EBIT gains in the range of 4% to 6%

Content

FUCHS at a glance	03
Business development in the first nine months of 2016	04
■ Development of sales revenues in the Group	04
■ Development of sales revenues by region/segment	05
■ Group results of operations/Income statement	06
■ Results of operations of the regions/segments	07
Outlook	08
Balance sheet	09
Statement of cash flows	10
Financial calendar, contact and imprint	11

FUCHS at a glance

in € million	Q1 – 3 2016	Q1 – 3 2015	Change in%
Sales revenues 1	1,702.9	1,538.8	10.7
Europe	1,080.1	892.6	21.0
Asia-Pacific, Africa	450.8	443.4	1.7
North and South America	260.0	266.9	–2.6
Consolidation	–88.0	–64.1
Earnings before interest and tax (EBIT)	276.2	260.9	5.9
Earnings after tax	191.5	180.9	5.9
Capital expenditures	52.8	29.1	81.4
Free cash flow before acquisitions	145.3	143.1	1.5
Earnings per share in €
Ordinary share	1.37	1.30	5.4
Preference share	1.38	1.31	5.3
Employees as at September 30	4,870	4,347	12.0

1 By company location.

"FUCHS PETROLUB remains on course for growth. Despite unfavorable currency effects, the Group recorded a double-digit increase in sales revenues in the first nine months of 2016 attributable to organic growth and the acquisitions completed in 2015. EBIT increased by 6% and free cash flow before acquisitions is above the previous year's level, despite higher capital expenditure."

Stefan Fuchs, Chairman of the Executive Board at FUCHS PETROLUB SE

Business development in the first nine months of 2016

Development of sales revenues in the Group

Development of sales revenues in the Group

(in € million)

• Sales revenues up 10.7% to € 1,702.9 million (1,538.8)
• Organic growth in Asia and Europe accelerated over the course of the year
• External growth from the acquisitions made in the previous year decreased; PENTOSIN reported as external growth for six months, while STATOIL FUEL & RETAIL LUBRICANTS reported as external growth for nine months
• Opposing currency translation effects

Development of sales revenues by region / segment

Europe

(in € million)

Asia-Pacific, Africa

(in € million)

At € 1,080.1 million (892.6), sales revenues in Europe are 21% above the previous year, largely as a result of acquisitions

• Organic growth, particularly in Germany as well as Central and Eastern Europe
• External growth through PENTOSIN in the first half of 2016 and through STATOIL FUEL & RETAIL LUBRICANTS in the first nine months of 2016
• Negative conversion effects, primarily in Eastern Europe and the UK

At € 450.8 million (443.4), Asia-Pacific, Africa is 1.7% above the previous year's level

• Organic growth, primarily in China, India and South Africa
• External growth in China through PENTOSIN
• Virtually all currencies weaker relative to the euro

At € 260.0 million (266.9), North and South America remains 2.6% below the previous year

• Ongoing weak demand in the mining, oil, gas and steel industries is hindering organic business development in North America. South America displays slight organic growth
• External growth in Brazil through the acquisition of PENTOSIN and in North America through the white oils and food machinery lubricants business from Chevron
• Negative currency effects as result of weak South American currencies

Group results of operations / Income statement

Income statement

(in € million)

	Q1 – 3 2016	Q1 – 3 2015
Sales revenues	1,702.9	1,538.8
Cost of sales	–1,061.7	–948.1
Gross profit	641.2	590.7
Selling and distribution expenses	–256.0	–228.8
Administrative expenses	–88.8	–79.1
Research and development expenses	–32.6	–28.7
Other operating income and expenses	–1.2	–4.7
EBIT before income from companies consolidated at equity	262.6	249.4
Income from companies consolidated at equity	13.6	11.5
Earnings before interest and tax (EBIT)	276.2	260.9
Financial result	–2.1	–3.1
Earnings before tax (EBT)	274.1	257.8
Income taxes	–82.6	–76.9
Earnings after tax	191.5	180.9
Thereof
Non-controlling interests	0.4	0.3
Profit attributable to shareholders of FUCHS PETROLUB SE	191.1	180.6
Earnings per share in €1
Ordinary share	1.37	1.30
Preference share	1.38	1.31

1 Basic and diluted in both cases.

• Income statement influenced by previous year's acquisitions
• Gross profit up 8.5% or € 50.5 million to € 641.2 million (590.7); acquisition-based increase subproportional to increase in sales revenues of 10.7%
• Expenses for selling, distribution, administration, research and development, as well as other net operating expenses rose by 10.9% or €37.3 million to €378.6 million (341.3) also due to acquisitions
• EBIT up 5.9% or € 15.3 million to € 276.2 million (260.9)
• Earnings after interest and taxes also increase by 5.9% (+ € 10.6 million) to € 191.5 million (180.9)
• Earnings per share (ordinary and preference shares) increased to € 1.37 and € 1.38 (1.30 and 1.31)

Results of operations of the regions / segments

Segments

(in € million)

				Holding	FUCHS
	Europe	Asia-Pacific, Africa	North and South America	including consolidation	PETROLUB Group
Q1–3 2016
Sales revenues by company location	1,080.1	450.8	260.0	–88.0	1,702.9
EBIT before income from companies consolidated at equity	147.5	77.4	47.3	–9.6	262.6
in % of sales	13.7%	17.2%	18.2%	–	15.4 %
Income from companies consolidated at equity	1.2	12.4	–	–	13.6
Segment earnings (EBIT)	148.7	89.8	47.3	–9.6	276.2
Investments in long-term assets	25.6	8.7	15.9	2.6	52.8
Employees as at September 30	3,154	1,039	578	99	4,870
Q1–3 2015
Sales revenues by company location	892.6	443.4	266.9	–64.1	1,538.8
EBIT before income from companies consolidated at equity	126.4	76.8	50.4	–4.2	249.4
in % of sales	14.2%	17.3%	18.9%	–	16.2 %
Income from companies consolidated at equity	1.2	10.3	–	–	11.5
Segment earnings (EBIT)	127.6	87.1	50.4	–4.2	260.9
Investments in long-term assets	18.8	6.1	3.5	0.7	29.1
Employees as at September 30	2,643	1,032	576	96	4,347

Europe increases EBIT by € 21.1 million or 16.5% to € 148.7 million (127.6)

• Gains recorded in many countries, largely driven by acquisitions, yet at a lower level due to amortization of acquired customer base
• Weak British pound affects raw materials purchasing and currency translation

Asia-Pacific, Africa increases EBIT by € 2.7 million or 3.1% to € 89.8 million (87.1)

• Gains primarily recorded in China and India
• Economic and currency-based burdens in Australia and South Africa

At € 47.3 million (50.4), EBIT in North and South America is € 3.1 million or 6.2% below the previous year

• Ongoing pressure from the development of individual customer sectors in the US
• Increases in earnings in South America would appear to suggest that the economy has bottomed out

Outlook

Outlook for the financial year 2016 reaffirmed:

• The organic and acquisition-based growth in sales revenues will be at the top end of the forecast range of 7% to 11%
• Taking into account negative currency effects, we expect sales revenues to grow between 7% and 8%
• EBIT gains in the range of 4% to 6%
• Free cash flow before acquisitions anticipated in the upper range of the forecast of € 170 million to € 200 million
• FUCHS Value Added slightly above the previous year

FUCHS PETROLUB SE Mannheim, November 3, 2016

Balance sheet

in € million	Sept. 30, 2016	Dec. 31, 2015
Assets
Intangible assets	294.0	284.2
Property, plant and equipment	385.4	364.9
Shares in companies consolidated at equity	42.0	38.6
Other financial assets	4.0	4.7
Deferred tax assets	36.6	33.8
Other receivables and other assets	1.5	1.3
Long-term assets	763.5	727.5
Inventories	316.9	297.2
Trade receivables	351.6	320.6
Tax receivables	1.9	4.3
Other receivables and other assets	21.0	21.6
Cash and cash equivalents	116.8	119.1
Short-term assets	808.2	762.8
Total assets	1,571.7	1,490.3
Equity and liabilities
Subscribed capital	139.0	139.0
Group reserves	795.9	694.4
Group profits	191.1	235.8
Equity of shareholders of FUCHS PETROLUB SE	1,126.0	1,069.2
Non-controlling interests	0.9	1.0
Total equity	1,126.9	1,070.2
Pension provisions	37.8	33.2
Other provisions	3.3	3.3
Deferred tax liabilities	44.8	46.5
Financial liabilities	0.0	0.0
Other liabilities	4.5	3.9
Long-term liabilities	90.4	86.9
Trade payables	168.2	157.3
Provisions	41.5	37.0
Tax liabilities	26.0	28.4
Financial liabilities	9.4	17.7
Other liabilities	109.3	92.8
Short-term liabilities	354.4	333.2
Total equity and liabilities	1,571.7	1,490.3

Statement of cash flows

in € million	Q1 – 3 2016	Q1 – 3 2015
Earnings after tax	191.5	180.9
Depreciation and amortization of long-term assets	35.3	27.6
Change in long-term provisions and in other
non-current assets (covering funds)	0.4	0.3
Change in deferred taxes	–2.3	–1.3
Non-cash income from shares in companies consolidated at equity	–13.6	–11.5
Dividends received from companies consolidated at equity	11.6	7.3
Gross cash flow	222.9	203.3
Gross cash flow	222.9	203.3
Change in inventories	–21.8	–18.1
Change in trade receivables	–36.9	–20.7
Change in trade payables	13.7	4.6
Change in other assets and other liabilities (excluding financial liabilities)	21.6	2.5
Net gain/loss on disposal of long-term assets	–0.1	0.0
Cash flow from operating activities	199.4	171.6
Investments in long-term assets	–52.8	–29.1
Cash paid for shares in companies consolidated at equity	–1.6	0.0
Proceeds from the disposal of long-term assets	0.3	0.6
Cash flow from investing activities	–54.1	–28.5
Free cash flow before acquisitions	145.3	143.1
Cash paid for acquisitions	–19.8	–112.3
Cash acquired through acquisitions	0.0	2.6
Cash flow from acquisition activities	–19.8	–109.7
Free cash flow	125.5	33.4
Dividends paid for previous year	–113.7	–106.6
Changes in financial liabilities	–9.6	9.1
Cash flow from financing activities	–123.3	–97.5
Cash and cash equivalents at at Dec. 31 of the previous year	119.1	202.1
Cash flow from operating activities	199.4	171.6
Cash flow from investing activities	–54.1	–28.5
Cash flow from acquisition activities	–19.8	–109.7
Cash flow from financing activities	–123.3	–97.5
Effect of currency translations	–4.5	5.8
Cash and cash equivalents at the end of the period	116.8	143.8

Financial calendar

Dates 2016
November 3	Quarterly statement Q1–3 2016
Dates 2017
March 21	Annual report 2016
April 28	Quarterly statement Q1 2017
May 5	Annual General Meeting in Mannheim
August 1	Half-year financial report 2017
October 27	Quarterly statement Q1–3 2017

The financial calendar is updated regularly. You can find the latest dates on the webpage at www.fuchs.com/financial-calendar

Contact and imprint

If you have any questions regarding the company or should you wish to be added to our mailing list for corporate publications, please contact our Investor Relations team:

E-mail: ir@fuchs-oil.de

Thomas Altmann Telefon +49 621 3802-1201 Telefax +49 621 3802-7274 thomas.altmann@fuchs-oil.de

PUBLISHER

FUCHS PETROLUB SE Friesenheimer Straße 17 68169 Mannheim www.fuchs.com/gruppe

Disclaimer

This quarterly report contains statements about future developments 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, for example, include changes in the overall economic climate, changes in procurement prices, changes to exchange rates and interest rates, and changes within the lubricants industry. FUCHS PETROLUB SE provides no guarantee that future developments and the results actually achieved in the future will match the assumptions and estimates set out in this quarterly statement and assumes no liability for such. We do not assume any obligation to update the future-oriented statements made in this quarterly statement.