As expected, internal growth in sales revenues slowed down in the second quarter due to base effects. The increase amounted to 14.6 % in the first half of 2006. Internal growth was mainly driven by price adjustments due to considerable increases in raw material prices in the previous quarters. Additionally, the product mix was improved and low-margin business was discontinued. Due to the strengthening of the euro against the US dollar in the second quarter of 2006 currency translation effects are now only 2.2 %.
An increase in sales revenues of EUR 96.1 or 16.7% more than compensated for the increased cost of products sold resulting from raw material price hikes. Thanks to continued efficient cost management other expenses increased by only EUR 5.3 million or 3.5 % in the six month period. Therefore operating profit rose by EUR 19.9 million or 34.7 % to EUR 77.3 million (57.4). Earnings before interest and tax (EBIT) increased by 31.3 % to EUR 75.0 million (57.1). All three world regions increased their profits.
As of June 30, 2006 the FUCHS PETROLUB staff totaled 4,041 worldwide, which remained at the level of the previous quarter (4.037). In the first quarter of 2006 the workforce decreased by 100 employees following the sale of the subsidiary in Bangladesh.
For the 2006 financial year FUCHS PETROLUB AG anticipates significant growth in sales revenues from both price and mix effects. The internal growth rate of 14.6% achieved in the first six months will probably decrease due to base effects. The Group is aiming for a double-digit increase in EBIT before special effects over the previous year which amounted to EUR 121.2 million. The prerequisite, however, is that geopolitical events will not negatively impact our performance. The deconsolidation of the divested polishing division LIPPERT-UNIPOL will take place in the third quarter and will have no material influence on the Group's earnings.
Mannheim, August 3, 2006
FUCHS PETROLUB AG
Public Relations
Friesenheimer Str. 17
68169 Mannheim
Phone: ++49 (0) 621 3802 - 105
The first half-year 2006 at a glance
FUCHS PETROLUB Group
(Values in EUR million) | 1-6/2006 | 1-6/2005 |
|---|---|---|
Sales revenues 1 | 671.8 | 575.7 |
Europe | 439.6 | 382.6 |
North and South America | 124.4 | 105.8 |
Asia-Pacific, Africa | 119.6 | 96.8 |
Consolidation | -11.8 | -9.5 |
Earnings before interest and taxes (EBIT) | 75.0 | 57.1 |
Net profit for the first half-year | 44.1 | 31.1 |
Gross cash flow | 54.2 | 40.6 |
Capital expenditure3 | 10.2 | 11.8 |
Employees (on June 30) | 4,041 | 4,154 |
1 By companies' headquarters
2 In property, plant and equipment and intangible assets
The press release can also be found on the Internet at www.fuchs-oil.de.
Quarterly report:
www.fuchs-oil.de/fileadmin/fuchs_upload/pdf_addons/English/QB_2006/QB_2_2006_e.pdf
Important note
This Press Information 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 press release and assumes no liability for such.