In 2003 the globally operating lubricant producer FUCHS PETROLUB AG in Mannheim, Germany, achieved again the best result in the group's history. Despite the demanding macro-economic situation the strategic concept combining growth with focussing and specialization led to a gratifying development. Sales revenues reached € 1,040.9 million, operative profits rose to a record value of € 93.2 million (90.7) and the consolidated net income for the year increased by 28.2 % to € 30.9 million (24.1). The total return on capital was upped to 17.4 %. After several years of high investment rates capital expenditure on tangible and intangible assets was reduced to € 18.7 million (28.8). The worldwide workforce increased to 4,220 (4,081) persons, essentially due to consolidation factors. FUCHS PETROLUB AG reported a net income of € 28.5 million for 2003, and will be proposing to the shareholders a dividend increase of € 0.10 to € 1.56 per ordinary share and € 1.73 per preference share. In the first quarter of 2004 the group achieved total revenues of € 266.9 million (263.4). For the current year the group is confident to continue to increase profits further in 2004 despite the continually difficult environment.
Internal growth in sales, with contributions particularly coming from the Asia-Pacific, Africa region, totalled 3.8 %. In all regions it was driven particularly by changes in mix and prices. This led to an increase in sales of € 29.8 million or 20.2 % in the Asia-Pacific, Africa region. But also the Americas achieved a respectable growth with € 14.3 million or 6.6 %. Giving up low-margin standard product operations in Europe slowed down the increase in sales. This effect overlaid the increase in sales achieved by the affiliates in Central and Eastern Europe and also in Western Europe. A slight external growth of 0.4 % resulted from the balance of newly consolidated sales and operations given up. The euro's sharp rise had an adverse effect on sales, which were reduced by 6.4 %. Thus consolidated sales were nominally reduced by € 23.8 million or 2.2 % to € 1,040.9 million.
The operating result was increased to € 93.2 million (90.7). The operating margin is now 8.9 % after 8.5 % in the preceding year. Europe followed by the Americas made the biggest contributions to the earnings in absolute terms. The increases in income achieved in local currencies in the Asia-Pacific, Africa region were adversely affected by the development of exchange rates. The other operating income shows a positive balance of € 1.3 million (-5.7). Thus earnings before taxes, interest and write-downs (EBITA) amounted to € 94.4 million (85.0), which is a new record. Earnings before interest and taxes (EBIT) reached a value of € 75.1 million (70.0) corresponding to a rise of 7.3 % compared to the preceding year.
As a result of the reduced financing volume the expenditure on interest was declining so that the negative financial result dropped by € 2.9 million to € 23.1 million (26.0). The group's taxation ratio of 40.6 % (45.2) was close to the target ratio of 40.0 %. Despite the worldwide declining demand for lubricants, a 10 years high of base oil price, a dollar exchange rate, which was 20 % below the average of 2002, the group succeeded in increasing record 2002 earnings by 28.2 % to € 30.9 million (24.1) in 2003.
The projects for concentration and increasing efficiency carried out at various sites reduced capital expenditure on investment as expected. During the reporting period € 18.7 million (28.8) were invested in tangible and intangible assets (excluding the acquired company values). Major investments in tangible assets were the completion of the preceding year's investments in the U.S. and the erection of storage facilities and the conversion of part of the Mannheim factory.
Worldwide, the group was employing 4,220 (4,081) people on 31 December 2003. Primarily due to consolidation factors, the total payroll thus increased by 139 people or 3.4 %. 1.103 (1.156) were employed in Germany, and 3.117 (2.925) abroad.
In the past business year, FUCHS PETROLUB AG achieved a net income of € 28.5 million, which is € 11.7 million up on the preceding year's figure of 16.8. This gratifying development was attributable to investment income, up by € 37.9 million to € 84.4 million (46.5). The Executive and Supervisory Boards will be proposing to the shareholders an increase of € 0.10 in the dividends for the past business year, to € 1.56 per ordinary share and € 1.73 per preference share.
The group had a good start into 2004. Internally the group increased sales revenues in the first quarter of the ongoing business year by 5.5 %. Taking currency-translation efects into consideration nominal growth amounted to 1.3 %, i.e. sales revenues of € 266.9 million (263.4) were achieved. For the whole business year 2004 the FUCHS PETROLUB group is confident to be able to increase earnings even further. Investments in tangible and intangible assets are planned to amount to € 23 million, i.e. slightly more than in the preceding year.
Mannheim, 23 April 2004
FUCHS PETROLUB AG
Public Relations
Friesenheimer Str. 17
D-68169 Mannheim
Phone: (0621) 3802 - 105
The press release is also available on the Internet under 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.