Fuchs SE

Dear ladies and gentlemen, welcome to the analyst conference called Fox Petrolub SE. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions for analysts. If any participant has difficulties hearing the conference, please press star key for a buzzer on your telephone for great assistance. May I now hand you over to Lutz Ackermann, who will start the meeting today. Please go ahead.

Yeah, good afternoon, ladies and gentlemen. Lutz Ackermann speaking here. On behalf of Fuchs Viertelup, I wish you a very warm welcome to today's conference call on the half-year figures. With me on the call today is Dagmar Steinert, CFO. And as always, Dagmar will run you through the presentation in a second. All the documents have been uploaded on the IR section of our homepage at 7 a.m. this morning, so you can find everything there. Having said that, I would like to hand over to Dagmar. Please go ahead.

Thank you, Lutz. Good afternoon, ladies and gentlemen. And I will lead you through our presentation and would like to start with chart number two. So here you have the highlights of our first half year. And we had a solid first half in a really difficult market environment. Our sales are up 16%. year on year, and that's mainly price driven. Our EBIT with 180 million is down 6%, but the last year was really strong and had positive effects from the corona situation. Overall, the global crisis situation remains difficult and it's very uncertain. Having a slight view at our outlook for the full year 22, we upgraded somehow our sales outlook where we said it will be now at the upper end of the range between 3 billion and 3.3 billion. everything else is unchanged. And I just would like to remember you on our long-term financial target, which we published roughly four weeks ago when we had our capital market day and where we are still really confident that we are going to prefer. I come now to chart number three. our sales development on a quarterly basis. As already said, half-year figures are up 16%, but if you look at the quarterly development, Q2 22 to the first quarter 22, our sales are up 3%. And overall, you can see the massive impact of inflation and sales price increases. Year on year, the second quarter is up 16% to 17%, which is in line with the full half-year figures. Turning to the next page, number four, our EBIT development on a quarterly basis. Here, as already mentioned, we are below previous year figure, 11 million, and on a quarterly basis, SECOND QUARTER, 22, COMPARED WITH THE FIRST QUARTER, 22, IT'S MINUS 6%. AND QUARTER TO QUARTER, Q2 22 TO Q2 21, IT'S DOWN 3%. SO I THINK WE QUITE DELIVERED. COMING TO CHART NUMBER FIVE, OUR SALES DEVELOPMENT, OUR SALES BRIDGE. first half 21 to first half 22. As you can see, overall, we have a strong organic growth, 12%. We have no significant external growth, and we have a tailwind from the currency side due to a weak euro. So we gained 4% on the currency side. Overall, as already mentioned, OUR SALES GROWTH IS PRICE DRIVEN, SO WE SEE, OF COURSE, LESS VOLUME. ON THE NEXT CHART, CHART NUMBER SIX, WE HAVE OUR EARNING SUMMARY. WITH OUR INCREASING SALES NUMBER, WE MANAGED THAT OUR GROSS PROFIT COULD BE INCREASED BY IN ABSOLUTE FIGURES 27 MILLION or 5% on a year-on-year basis. This 5%, of course, is growing below the sales growth, and that's due to the high price increases on the raw material side. The other function costs are up 12%, and that's driven by especially higher freight costs, ENERGY AND OF COURSE SIGNIFICANT HIGHER PERSONAL COSTS OVERALL OUR EARNINGS ARE DOWN SIX PERCENT YEAR ON YEAR AND OUR EBIT MARGIN IS 11 PERCENT COMPARED WITH 13.5 PERCENT IN THE PREVIOUS HALF YEAR WE HAVE COMPARED WITH PREVIOUS YEAR A LOWER CABEX FIGURE AND IF YOU LOOK AT THE NUMBER of our net operating working capital outflow. There you can see that these numbers increased. Our free cash flow before acquisition came in at zero compared with 12 in the previous year. And we come later to a chart where you can see the net operating working capital development, which of course is the driver for our free cash flow. And I just would like to remind you that in the last year, in the year 21, for the full year, we reported a free cash flow before acquisition of 90 million. And besides a high outflow for net operating working capital, we also had a significant one-off burden due to tax payments. Coming now to the regions, on chart number seven, our region, EMEA. EMEA managed to increase sales by 16%, and that is, again, as for the whole group, mainly price-driven. We see a strong organic growth of 15%, and, of course, less currency effects, as overall for the group, currency is due to the weak euros, But there are some positive currency effects from South Africa and Great Britain. We have negative effects from Poland and Sweden. But overall, it's a balanced number. We've seen within our countries in the region EMEA, most countries with double-digit growth rate. ANYHOW, OUR EBIT IS 10% LOWER THAN PREVIOUS YEARS BIGGER, AND THAT'S ESPECIALLY THE CASE IN GERMANY, SOUTHERN EUROPE, AND OF COURSE, WE HAD A 3 MILLION EURO WRITE-OFF FOR EQUITY STATE IN AFRICA. IN OUR REGION, Asia Pacific and chart number eight, our sales are up 7%. But that's now mainly driven by currency effects, as of course China is a big portion of our region, Asia Pacific, and due to the lockdowns in China as a result of the zero COVID strategy, of course, sales are down in China. We see positive organic growth in Southeast Asia and Australia. The earnings or the average of the region was 55 million is 13% lower than the very strong first half of the year 21. There we had a lot of like catch-up effects from Corona. Of course, we have a significant lower contribution from China, but on the other hand, Southeast Asia and Australia have earnings growth. On chart number nine, North and South America, we see a strong sales growth, 34%, and of course, a very high currency effect with 13%. That's mainly North America. Here again in this region, the organic growth is price driven.