Fuchs Petrolub raises outlook for the year as sales revenues increase by 10% in first half
Fuchs Petrolub reported that its sales revenues during the first six months of 2017 have risen by 10% to EUR1,247 million (USD1,136 million), due primarily to increased volumes.
“As expected, Fuchs Petrolub is growing profitably. We have met our earnings targets and exceeded our sales revenue targets. Despite our growth initiative, which involves significant investments, we have once again generated a solid free cash flow,” says Stefan Fuchs, chairman of the Executive Board of Fuchs Petrolub SE.
The group’s organic growth was 7%. The Asia-Pacific, Africa and North and South America regions, in particular, had strong organic growth in their sales revenues. The company’s acquisitions in 2016 in North America made a contribution of one percentage point to increased sales revenues, while the positive but declining currency effect had an impact of +1%.
The company also posted an increase in earnings. Overall, EBIT (earnings before interest and taxes) rose by 4% to EUR190 million (USD183 million) and earnings after tax increased by 6% to EUR134 million (USD127 million). Earnings per ordinary and preference share grew to EUR0.95 (USD0.90) and EUR0.96 (USD0.91), respectively.
At EUR53 million (USD72 million), free cash flow before acquisitions was down on the previous year for business-related reasons due to greater commitment of funds in working capital and higher capital expenditure.
Sales revenues and earnings in the regions
Sales revenues in Europe grew organically by 4% to EUR751 million (USD721 million). Organic growth in sales revenues was achieved in Central and Southern Europe in particular. Asia-Pacific and Africa also posted strong organic growth (+19%). Strong growth in sales revenues was recorded in China, while Australia and South Africa saw a considerable increase as well. Overall, sales revenues in the region increased by 22% to EUR363 million (USD298 million). The North and South America region achieved substantial organic growth (+8%) in North America and grew by 19% to EUR205 million (USD172 million), taking into account external growth (+6%) and a positive currency contribution (+5%).
Business development was positive in the first six months of the year and the Fuchs Group expects this trend to continue, particularly in terms of sales revenues. This development is particularly volume-driven, but also price-driven.
The group reaffirmed its earnings outlook for 2017, but adjusted its sales revenue outlook in line with the changed overall conditions. Fuchs Petrolub is anticipating growth in sales revenues of 7% to 10%. The group is anticipating a rise in EBIT of between 1% and 5%.