Fuchs SE

Dear ladies and gentlemen, welcome to the third quarter results 2026 analyst conference call of Fuchs SE. This conference will be recorded. As a reminder, all participants will be in listen-only mode. After the presentation, there will be opportunity for analysts of Fuchs to ask questions. May I now hand you to Andreas Schaller, Head of Investor Relations at Fuchs SE, who will start the meeting today. Please go ahead.

Thank you, Nadia, and good afternoon, ladies and gentlemen. This is Andreas Schaller speaking. On behalf of Fuchs SE, I wish you a very warm welcome to today's conference call on the results of the first nine months of 2026. We already pre-announced sales and EBIT and the change to guidance on Monday last week, and today we will run you through the full set of numbers. With me on the call today is our CEO, Stefan Fuchs, and our CFO, Esma Saglik. As always, Esma and Stefan will run you through the presentation, which is then followed by a Q&A session. All the documents for this call are available on our homepage, and we assume that you have them in front of you. Please be also aware of our disclaimer on page two of our presentation. And now it is my pleasure to hand over the call to our CFO. Esma, please go ahead.

Thank you very much, Andreas. Hello and also a very warm welcome from my side to our Q3 call. Let me start with the key highlights of our nine-month performance. After a strong first half year, our business developed even better in the third quarter. Sales reached 3.1 billion euros, an increase of 16% year over year. And importantly, growth was broad-based. This strong sales development translated into an even stronger earnings performance. EBIT increased by 25% to €409 million and our EBIT margin improved by 1% to 13.1%. This is a new record result and shows the strength of our earnings performance. We continue to grow profitably and efficiently. Free cash flow before acquisitions came in at 92 million euros. The decline compared to last year was mainly due to higher working capital driven by inflation. Overall, we delivered an excellent nine-month performance with strong growth, record earnings, and higher profitability. Now, let's have a look at our quarterly sales development. Q3 was another very strong quarter. Sales reached 1.1 billion, up 25% year over year, and 5% compared to Q2. The growth drivers changed during the year. In the first half, growth was mainly driven by volume. In Q3, volumes normalized and came out better than expected. At the same time, Pricing became a stronger driver, reflecting higher raw material costs. So, after a very strong Q2, we continued our strong sales momentum in Q3. Let us now have a closer look to our sales development. Organic growth was clearly the strongest contributor, adding 359 million euros, or 13%. External growth added another 68 million euros, mainly from the full consolidation of our former joint venture in Turkey. Currency effects were broadly neutral over the nine months and even improved during the third quarter. In summary, this means that the majority of our growth was organic. Turning now to EBIT, our strong sales growth also led to a very strong EBIT development. EBIT in Q3 reached 149 million euros, up 27% year on year and 10% compared to Q2. This is our highest quarterly EBIT we have ever achieved so far. The strong result reflects that we were able to scale our business on the existing cost base. We have had a good business performance together with effective pricing and Strict Cost Management. And now, let's go over to the KPI summary, starting with the gross margin. Our gross margin remained solid at 34.3%, slightly below last year, and that mainly due to inflation on sales. Other functional costs increased by 6%, which was well below our sales growth of 16%. The increase mainly came from our acquisition in Turkey as well as the higher freight and selling price. And our equity also includes a negative one-off impact for the spire in Saudi Arabia of a mid single digit million euro amount. Despite this effect, EBIT increased by 25% to 409 million euros and our EBIT margin improved This is a very strong result and shows the improvement of our profitability. CapEx came in at 61 million and remains in line with our full-year guidance. Our net operating working capital increased significantly. This was mainly driven by inflation and led to a higher capital commitment. As a result, free cash flow before acquisitions came in at 92 million euros. Considering the significant inflation-driven increase in working capital, this is still a good cash flow result. All in all, we can say that we managed the inflationary environment well and delivered a record result with higher profitability. Let us now look at the regions starting with EMEA. Sales increased by 17%, with strong organic growth of 12%. The full consolidation of Turkey and positive currency effects provided additional support. The positive development was broad-based, with strong contributions coming from Germany, South Africa, the UK, Poland, and Italy. EBIT increased by 15% to 196 million euros supported by the strong sales performance. EMEA therefore contributed significantly to our strong nine months performance. Now moving over to Asia Pacific. Sales increased by 13% with organic growth of 12%. Australia and China were the main contributors. We also saw strong relative growth across several small amounts. Currency effects improved during the year and were slightly positive after nine months. EBIT increased by a very strong 28% to €131 million, mainly driven by Australia and China, as mentioned. The result also includes the €7 million gain for the land sale in Australia, which was recorded in Q1 already. Asia-Pacific therefore delivered a very good result with strong organic growth and a significant improvement in earnings. And last but not least, let's have a look to America. Sales increased by 14% despite negative currency effects. Organic growth was particularly strong at 17%, mainly driven by North America. Also, South America developed well, with sales clearly above last year. EBIT increased by 42% to €81 million. Both North and South America contributed to this strong improvement. The increase also reflects the weaker result last year, which was impacted by uncertainties around tariffs. Currency effects improved during the year and turned slightly positive Overall, America's had a strong result with excellent organic growth and a significant improvement in earnings. And now, let's move to the net operating working capital. Our NOWC increased to over €1 billion at the end of September, representing 23.1% on annualized sales. Compared with the year-end 2025, inventories increased by €210 million, mainly due to higher raw material costs. Also, the balance of receivables and payables increased by another €104 million, reflecting the higher price levels. In summary, higher prices have also led to higher working capital. and managing working capital remains a clear priority for us. But at the same time, we need to ensure raw material availability and reliable supply to our customers. Looking to our cash flow and net liquidity, our stroke earnings provided a solid contribution to cash generation. Free cash flow before acquisitions came in at 92 million euros. As mentioned before, the higher capital commitment in working capital had a significant impact. After dividend payment and acquisition, net liquidity stood at 41 million euro at the end of September. Considering the impact on inflation, it is a good cash flow result. Our balance sheet remains solid and gives us the financial flexibility we need. Before moving to the raw materials, Let's have a short summary. We delivered a very strong performance in the first nine months. Sales grew by 16%, EBIT increased by 25% to a new record level, and our EBIT margin improved to 13.1%. This shows that we were successfully converting our strong sales growth into earnings. Free cash flow was impacted by higher working capital due to inflation. Still, at 92 million euro, it remains solid in the current environment. All in all, we are very pleased with our strong performance in the first nine months. And now let's move to the raw material. The market environment remains volatile. The conflict in the Gulf region continue to impact important trade routes and infrastructure. Supply remains tight. Higher crude oil prices, freight costs and risk premiums are putting further pressure on chemicals and base oil prices. Visibility remains limited. And we believe we have not yet seen the peak. As mentioned before, we are well positioned to manage this environment. Our broad sourcing network gives us the flexibility and we remain in close dialogue with our customers. And as also said in the prior course, we expect supply condition to remain challenging for some time. And finally, let's move to our outlook for the full year. For Q4, we expect sales to remain above the prior year level, mainly driven by inflation. At the same time, volume development is likely to slow due to pre-buying effects in the first half year and the usual seasonality towards the year end. Like I said, visibility remains limited. Risks around volumes, costs, and margins remain high. Therefore, we should not simply extrapolate the very strong result of Q2 into Q4. At the same time, our very strong performance in the first nine months gives us the confidence to raise our full year out. For sales, we now expect around 4.1 billion euros. For our EBIT, we now expect around 500 million euros. and for FEA, we expect around 300 million euros supported by the strong earnings development. Our free cash flow outlook remains unchanged at significantly below 270 million euros. This reflects the strong increase in raw material costs and sales prices and the related buildup of net operating working capital. Overall, we are well on track for a strong career. We remain focused on profitable growth and will continue to manage the current environment with the same discipline as before. And with that, I hand over to Stefan for companies.