2000 was one of the most difficult years ever for the entire sector, since the prices for crude oil tripled at times, resulting in price hikes for most of the raw materials. Nonetheless, the globally operating lubricants manufacturer FUCHS PETROLUB AG, Mannheim, Germany, succeeded in significantly upping both sales and earnings. Sales increased by 8.1 % (or Euro 68.0 mn) to reach Euro 902 mn (834), and the Group's after-tax profits rose by 8.3 % to Euro 18.5 mn (17.1), the best result ever in its history. Capital expenditures in tangible and intangible fixed assets, at Euro 32.5 mn, exceeded the previous year's level of Euro 30.0 mn. Worldwide staff rose by 1.6 % to reach 3,952 people. An increase in the cash dividend of 8.1 % and 7.1 % respectively to Euro 3.87 per ordinary share and Euro 4.38 per preference share will be proposed to the AGM.
The internal growth of Euro 44.2 mn (or 5.3 %) is primarily attributable to price changes, but also to changes in quantities and mix, with almost all regions contributing to this increase. As a consequence of acquisitions, pro rata sales of Euro 12.4 mn have been added. Deconsolidation of FRAGOL SCHMIERSTOFF GMBH+CO.KG, a company operating mainly in the fuels sector, meant that sales were reduced by Euro 38.7 mn. This is why in the result external growth is shown at - Euro 26.3 mn or - 3.2 %. Currency-related effects resulting from the Euro's weakness came to Euro 50.1 mn or 6.0 %.
The share of international sales rose to 81 % (76 %), due to solid growth achieved abroad and to the deconsolidation effect in Germany. Adjusted for the deconsolidation effect of FRAGOL, an increase in domestic sales of Euro 6.3 mn or 3.1 % was recorded, while turnover in the rest of Europe rose by Euro 24.8 mn (7.4 %). Whereas in the markets of Western Europe price hikes could not be passed on to consumers in full, the growth rates achieved by the Group companies in Central and Eastern Europe, at Euro 11.4 mn (41 %), continued at a high level. In North and Latin America, sales were once again substantially upsized, by Euro 42.5 mn or 24 %. Asia-Pacific and Africa, with a rise of Euro 31.9 mn (26.6 %), likewise made a significant contribution towards boosting sales, as a result of good internal and external growth.
Business with industrial lubricants showed an overproportional increase of 17.1 %, and thus now accounts for 67 % of the Group's lubricants business. Sales of automotive lubricants grew by 7.7 %, though their proportion of overall lubricants turnover fell from 35 % to 33 %.
The Group's year-end after-tax profit reached Euro 18.5 mn (17.1), thus constituting the best-ever result in its history. The 8.3 % rise in profits was slightly above the increase in sales (8.1 %). The main sources of the Group's profits were the German specialty companies and the USA business, but the result was also boosted substantially by contributions from Asia, Latin America, and from Central and Eastern Europe. In Western Europe, at the German FUCHS DEA SCHMIERSTOFFE GMBH & CO. KG and in Australia, by contrast, the pressure of competition made it exceptionally difficult to pass on even a less-than-adequate fraction of the material price hikes to the customers.
Gross earnings from sales were up by Euro 17.5 mn to reach Euro 329 mn, though the increase lagged behind the actual rise in turnover (5.6 %). The principal reason for this disparity was that the expenses incurred in 2000 for raw and packing materials were up by 10 % - and in the lubricants sector by as much as 21.7 %, due to higher oil prices.
As far as other operating expenses and income are concerned, a balanced result was achieved, whereas in the previous year a negative balance (Euro - 3.9 mn) had sonmewhat diluted the earnings before interest and taxes figure (EBIT). Income from investments amounting to Euro 1.3 mn (1.4) included, this meant that EBIT increased by 3.3 % to reach Euro 56.9 mn (55.1).
Capital expenditures in fixed assets in 2000 again focused on the optimization of production facilities and logistics, with investments in tangible and intangible fixed assets (excluding acquisition goodwill), at Euro 32.5 mn, exceeding the preceding year's level of Euro 30.0 mn. Goodwill acquired accounted for another Euro 2.8 mn (1.4). Major capital expenditures were made in Germany, the USA and in the UK. In Germany, FUCHS DEA SCHMIERSTOFFE GMBH & CO. KG's new logistics center is now nearing completion, with inauguration scheduled for May of this year.
On 31 Dec. 2000, the Group was employing 3,952 (3,889) people worldwide, a slight increase of 1.6 %. 952 employees or 24,1 % of total staff on the overall payroll were working in Germany, and 75.9 % or 3,000 persons abroad.
FUCHS PETROLUB AG's year 2000 closed with an after-tax profit of Euro 4.6 mn (13.1), which, together with the profit brought forward of Euro 12.8 mn (8.9), produces a distributable profit of Euro 17.5 mn (22.0). The appropriation of profits proposed to the shareholders by the Executive and Supervisory Boards for the past business year is an increase in cash dividends of 8.1 % and 7.1 % respectively to Euro 3.87 per ordinary share and Euro 4.38 per preference share. No tax credit falls due for the domestic shareholders in regard for year 2000.
The first quarter of 2001 continued to be characterized by very high prices for raw materials, meaning that pressure on margins has not as yet eased. Sales came to Euro 234.4 mn, 6.5 % up on the preceding year. Note that due to the slump in North America's automotive and steel industries, there was a slight decline of 0.9 % at least when calculated in national currency, but a rise of 5.8 % when calculated in Euro.
For 2001 as a whole, on the basis of the present-day exchange rates and without allowing for any acquisitions, the Group anticipates sales of about Euro 965 mn, and continuing good profit figures.
Mannheim, 30 April 2001
FUCHS PETROLUB AG
Public Relations
Friesenheimer Str. 17
D-68169 Mannheim
Germany
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