The positive development of sales revenues continued in the third quarter of 2004 for international lubricant company FUCHS PETROLUB AG in Mannheim. With internal growth of 7.6 % and external growth of 0.6 %, the FUCHS PETROLUB Group achieved a 5.8% increase in sales revenues to reach €830.8 million (785.5) over the first nine months of 2004, despite negative currency translation effects (-2.4%). The Group also continued its successful course in terms of earnings, reaching the highest net profit after taxes within a single quarter so far with a total of €11.0 million (9.5). At €29.9 million (22.7), profit for the first nine months thus exceeded last year's figure by 31.7%. Earnings per ordinary and preference share for the nine months were €4.48 and €4.60 (3.96 and 4.09) respectively before scheduled goodwill amortization. Burdens on the purchasing side increased in the third quarter of 2004. In addition to considerable price increases for base oils, there were also significant rises for additives, packaging materials and energy and transport costs. Not least because of the excellent profit of the first nine months the Group confirms its previous forecast of achieving a double-digit increase in net profit for the entire year 2004.
The positive development of sales revenues carried across all regions, with Western Europe achieving a pleasing 4% internal growth and Germany even reaching a 5% internal rise in sales. External growth resulting from the acquisition of a French industrial lubricant business at the beginning of the year trading under the brand WYNN'S was partially covered by the disposal of low-margin trading activities in Germany and England midyear in 2003.
The basis for this successful development in earnings was strong growth in sales once again. Gross profit rose to €307.2 million (292.7), although this rise was slightly under-proportional (5.0%) as the result of rising feedstock prices. The gross margin reached 37.0% (37.3). At 2.8%, the rise in selling and administrative costs and research and development expense was significantly lower than the increase in gross profit. As a result, operating profit in the first nine months of 2004 rose by 11.6% to €78.9 million (70.7).
Earnings before interest and taxes (EBIT) reached €65.5 million (58.3), including value adjustments from the previous quarter on receivables from associated companies and making allowance for goodwill amortization. The EBIT margin reached 7.9% (7.4). Financial performance improved by 25.1% to reach €-13.7 million (-18.3), as the result of clear reduction in debt and lower interest rates. Net profit after taxes therefore rose by 31.7% to €29.9 million (22.7).
In the first nine months of 2004, the Group invested €14.5 million (12.3) in tangible and intangible assets. More than half the tangible asset investments were made at sites in Mannheim, Stoke-on-Trent in England and Harvey near Chicago, USA.
As of 30 September 2004, the FUCHS PETROLUB Group employed 4,185 people (4,166). The number of employees thus increased by 19 (+0.5%) over the preceding year's equivalent date, with a total of 1,086 in Germany and 3,099 abroad.
Increases in purchase prices, already mentioned in the report on the first half, rose strongly in the third quarter. However, despite these burdens, the Group continues to aim for a double-digit profit increase for the entire year. Given the strong fourth quarter of last year, it is unlikely that the 31.7% increase rate of the first nine months will continue for the remainder of the year 2004.
Mannheim, 15 November 2004
FUCHS PETROLUB AG
Öffentlichkeitsarbeit
Friesenheimer Str. 17
68169 Mannheim
Tel.: ++49 (0) 621 3802 - 105
This press release is also available on the Internet at www.fuchs-oil.de.
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.