The FUCHS PETROLUB Group achieved a significant organic increase in sales revenues of 9.0% or €62.0 million in the first half of 2008. This increase was in particular driven by volume. Slight external growth contributed a further 0.5% or €3.1 million. The current strength of the euro on the other hand led to negative translation effects. Translation effects reduced growth by around a half, namely by 4.8% or €32.7 million. There was a net increase in sales revenues from 4.7% or €32.4 million to €718.7 million (686.3) .
Driven by good growth in sales revenues, the gross profit increased by €7.1 million or 2.8% to €260.3 million (253.2), while expenses for marketing and sales, administration and R&D showed only a disproportionately small increase of +€3.5 million or 2.2%. Accordingly the operating result grew by €3.6 million or 3.8% to €98.3 million (94.7). The earnings before interest and tax (EBIT) increased by 4.6% or €4.3 million to €98.4 million (94.1).
Lower borrowings of interest-bearing capital led to an improved financial result. Net financial expenditure decreased to €4.0 million (4.7). In addition, the reduction of the rate of taxation to 31.0% (34.9) contributed to the increase in the net result. The earnings after deduction of income taxes of €29.3 million (31.2) were €65.1 million (58.2).
Investments in property, plant and equipment and intangible assets came to €18.8 million (9.8) in first half of 2008. The construction of a new factory in China, the purchase of real estate in India and the construction of a new plant for the FUCHS LUBRITECH Group in Kaiserslautern were the focus of the capital expenditures.
As at June 30, 2008, the workforce of the FUCHS PETROLUB Group consisted of 3,883 employees worldwide. The increase in the workforce by 96 employees since the start of the year (+2.5%) is due to the full consolidation of our joint venture in Japan, the filling of vacant positions and the business-related expansion of employment in Europe and Asia.
The FUCHS PETROLUB Group benefits from its well-balanced positioning with regard to customer, industries and regions. This is the basis for previous and further organic growth for the entire year of 2008. In addition to this, the substantial raw material price increases make price adjustments necessary with a subsequent increase of sales revenues. For the earnings before interest and tax (EBIT) FUCHS aims to achieve a slight increase over the previous year's result, despite higher raw material costs, stress and strains from currencies and the emerging slow-down of overall economic growth. Earnings per share will additionally benefit from a better financial result and a lower tax rate as well as from a lower number of shares due to our share buyback program.
The first half year of 2008 at a glance
| (in € million) | 1-6/2008 | 1-6/2007 |
|---|---|---|
| Sales revenues (1) | 718.7 | 686.3 |
| Europe | 498.3 | 468.6 |
| North and South America | 98.2 | 109.0 |
| Asia-Pacific, Africa | 139.6 | 124.7 |
| Consolidation | -17.4 | -16.0 |
| Earnings before interest and tax (EBIT) | 98.4 | 94.1 |
| Midyear profit after tax | 65.1 | 58.2 |
| Earnings per share in € * | ||
| Ordinary share | 2.59 | 2.22 |
| Preference share | 2.62 | 2.25 |
| Gross cash flow | 71.2 | 66.9 |
| Capital expenditures (2) | 18.8 | 9.8 |
| Employees (as at June 30) | 3,883 | 3,822 |
(1) By company location
(2) In property, plant and equipment and intangible assets
Mannheim, August 6, 2008
FUCHS PETROLUB AG
Public Relations
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.
Link to the quarterly report:
www.fuchs-oil.de/fileadmin/fuchs_upload/pdf_addons/QR2008/QB37e.pdf
Important note
This press release contains statements about future developments 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 in 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.