- Demand remains weak
- Measures for strengthening earnings take hold
- Positive development of earnings in the Asia-Pacific, Africa region
- Free cash flow rose to EUR 89 million
The first half year of 2009 at a glance
| (Values in EUR million) | 1-6/2009 | 1-6/2008 |
|---|---|---|
| Sales revenues (1) | 569.6 | 718.7 |
| Europe | 361.5 | 498.3 |
| North and South America | 85.2 | 98.2 |
| Asia-Pacific, Africa | 135.9 | 139.6 |
| Consolidation | -13.0 | -17.4 |
| Earnings before interest and tax (EBIT) | 66.7 | 98.4 |
| Midyear profit after tax | 43.1 | 65.1 |
| Earnings per share in EUR | ||
| Ordinary share | 1.80 | 2.59 |
| Preference share | 1.83 | 2.62 |
| Gross cash flow | 50.0 | 71.2 |
| Capital expenditure (2) | 15.2 | 18.8 |
| Employees (as at June 30) | 3,593 | 3,883 |
(1) By company location
(2) In property, plant and equipment and intangible assets
Performance
The FUCHS PETROLUB Group was also impacted by the significant drop in global demand for lubricants in the first half of 2009. Sales revenues fell by 20.7% compared with the previous year's figures, reaching a level of EUR 569.6 million (718.7). The figures for the second quarter were slightly better than those of the first quarter (4.5%).
At EUR 206.9 million (260.3), gross profit was 20.5% below the level for the same period of the previous year. At 36.3%, the gross margin remained at the previous year's level (36.2). Through the implementation of cost-cutting measures across all divisions, it was possible to partially offset the decline in gross profit. The savings in payroll costs since the beginning of the year and lower non-payroll expenses, led to a drop in functional area costs of 12.2% to a level ofEUR 142.3 million (162.0).
Earnings before interest and taxes (EBIT) reached a level of EUR 66.7 million (98.4). The EBIT margin, i.e. EBIT in relation to sales revenues, reached a level of 11.7% (13.7). At EUR 40.2 million, EBIT in the second quarter was significantly above the figure from the first quarter (26.5).
After financing expenses of EUR 4.7 million and income tax of EUR 18.9 million (29.3), earnings were EUR 43.1 million (65.1).
The Asia-Pacific, Africa region enjoyed a positive development. At EUR 23.3 million (17.6), this region increased earnings by almost one third.
Cash flow development remained strong, primarily due to the reduction in inventories: The Group generated a free cash flow of EUR 89 million in the first half of 2009. This allowed financial liabilities to be reduced and the liquidity cushion to be increased.
Capital expenditure and investments in companies
Investments in property, plant and equipment and intangible assets were EUR 15.2 million (18.8) in first half of 2009.
At the start of August, FUCHS PETROLUB AG acquired the lubricant business of DYLON in the US via its US subsidiary FUCHS LUBRICANTS CO. The key segment here is the specialty business in the areas of forging and special greases, which generated sales revenue of USD 9 million in 2008 (EUR 7 million).
Employees
As at June 30, 2009, the Group's workforce consisted of 3,593 employees. The reduction by 262 employees since the end of 2008 is due to adjustments that have been made to cater for the sharp downward trend in the Group's sales revenues worldwide.
Outlook
In the light of the global recession, FUCHS also expects to see sales revenues below those of the previous year in the second half of the year. The Group strives to achieve similar earnings in the second half of the year as in the first half of 2009. To what extent general economic developments will permit that remains to be seen. FUCHS PETROLUB intends to at least maintain the good cash flow of the first half of the year throughout the entire year. At the same time, the Group continues its investments in the specialty business, in research and development and in growth markets.
Mannheim, August 6, 2009
FUCHS PETROLUB AG
Public Relations
Friesenheimer Straße 17
68169 Mannheim
Germany
Phone: ++49 (0)621 3802-124
The information below can be accessed at the following web addresses:
Press release:
www.fuchs-oil.com
Interim report for the first six months and second quarter 2009:
www.fuchs-oil.de/fileadmin/fuchs_upload/pdf_addons/QR2009/QB63e.pdf
Press photos:
www.fuchs-oil.de/pressphotos.html
Important note
This press release contains statements about future developments 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 in 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 press release and assumes no liability for such.