FUCHS posts slight decrease in sales revenues of 1% and decline in earnings of 19% in the first half of the year - investment initiative will be continued

"The first half of 2019 was disappointing for FUCHS. After a weak first quarter in Europe and Asia, the decline in sales revenues in the second quarter has now also impacted North and South America, and thus all our key markets. The lower sales revenues combined with the planned cost increase led to an EBIT of 19% below the previous year, which was far below our expectations. Nevertheless, we still achieved a respectable EBIT margin of 12.1% thanks to our extremely solid economic base.

We do not expect the global general economic situation to improve over the remainder of the year. In particular, we no longer anticipate an upturn in the automotive sector, which is important for us. In this context, we are revising our forecast for the current year downward significantly.

FUCHS is reacting carefully to the changed situation and has already taken measures to reduce costs. Wherever possible, we will continue to reduce our expenses with a sense of proportion and for the time being will not further increase our workforce as planned. Despite all these adversities, we continue working on the basis for future growth with determination: the modernization and expansion of our plants will continue as well as our FUCHS 2025 initiative, which engages with the topics culture, strategy and structure," states Stefan Fuchs, Chairman of the Executive Board of FUCHS PETROLUB SE.

- Sales revenues down by 1% at EUR 1,296 million

- Earnings (EBIT) down 19% at EUR 157 million

- Outlook for 2019 adjusted:

- Sales revenues: between -3% and +0% (previously between +2% and +4%)

- EBIT: between -30% and -20% (previously between -8% and -5%)

FUCHS at a glance

(1) Prior-year figures adjusted.
(2) By company location.

Sales revenues and earnings
In the first half of 2019, FUCHS PETROLUB recorded a slight decline
(-1%) in sales revenues to EUR 1,296 million (1,311). In addition to the weak development due to the lack of an upturn in the automotive markets, which is still influencing the EMEA and Asia-Pacific regions, the North and South America region was also impacted by decreasing sales revenues in the second quarter.

The income statement for the first six months was dominated by the decline in sales revenues and the planned increase in costs in connection with the growth program. EBIT was down 19% year-on-year at EUR 157 million (193). Earnings after tax declined by 20% to EUR 112 million (140). Earnings per ordinary share thus decreased year-on-year from EUR 1.00 to EUR 0.80, while earnings per preference share fell from EUR 1.01 to EUR 0.81.

At EUR 16 million (85), free cash flow before acquisitions was significantly lower than in the previous year. Reasons for this are among others the reduced earnings and the increased investments in non-current assets of EUR 76 million (41).

Sales revenues and earnings by region
At EUR 799 million (829), sales revenues in the EMEA region were down 4% year-on-year. This was largely attributable to the weakness of the German automotive market and to the declining automotive demand in China, which also led to a downturn of the Chinese business generated out of Germany. The Asia-Pacific region recorded a decline in sales revenues of 4% to EUR 355 million (369). Despite falling sales revenues in the second quarter, North and South America increased its sales revenues in the first half of the year. The region achieved organic growth of 3%. Due to the strong US dollar, the region posted currency effects of +4%. Its sales revenues therefore rose by 7% to EUR 212 million (199).

In all three global regions, EBIT was negatively impacted by the decline in sales revenues and the planned cost increase as a result of the growth program. In EMEA, there was a 21% drop in EBIT to EUR 80 million (101). The Asia-Pacific region's EBIT decreased by 21% to EUR 44 million (56). EBIT in the North and South America region was down by only EUR 1 million year-on-year at EUR 29 million (30).

Outlook
Due to the currently difficult global economic environment and the gloomier prospects for the second half of the year, the outlook for the full year 2019 has been adjusted. FUCHS now anticipates a slight decrease in sales revenues of between -3% and 0% (previously: between +2% and +4%). With regard to EBIT (based on 2018 EBIT including one-off income), the Group expects a decline of between -30% and -20% (previously: between -8% and -5%). Despite more difficult general conditions, the investment program for future growth and efficiency increases of around EUR 180 million will be continued.

Mannheim, August 1, 2019

FUCHS PETROLUB SE
Public Relations
Friesenheimer Str. 17
68169 Mannheim, Germany
Tel. +49 621 3802-1104
tina.vogel@fuchs.com
www.fuchs.com/group

The following information is available online:
Image and video material:
www.fuchs.com/group/mediagallery
www.presseportal.de/pm/110448/4215560

About FUCHS
The FUCHS Group develops, produces and markets high-grade lubricants and related specialties for virtually all industries and areas of application. Formed in Mannheim in 1931, the Group employs more than 5,000 people worldwide at 58 operating companies. FUCHS is the world's largest independent lubricant manufacturer. Its most important markets in terms of sales revenues are Western Europe, Asia and North America.

Important note
This press release contains statements about future developments that are based on assumptions and estimates by the management of FUCHS PETROLUB SE. 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, for example, include changes in the overall economic climate, changes in procurement prices, changes in exchange rates and interest rates, and changes within the lubricants industry. FUCHS PETROLUB SE provides no guarantee that future developments and the results actually achieved in the future will match the assumptions and estimates set out in this press release and assumes no liability for such.