FUCHS reports 19% annual increase in lubricant sales globally
FUCHS PETROLUB SE reported global lubricant sales of EUR3.4 billion (USD3.6 billion) last year, a 19% year-on-year increase.
Increases in raw material costs and the resulting sales price increases led to a significant inflation of net operating working capital, the largest independent global lubricant manufacturer based in Mannheim, Germany, said.
“The Russian-led war in Ukraine was the most affecting theme for us in 2022. It is an incomprehensible act and something we unreservedly condemn. Our thoughts are especially with our colleagues in Ukraine, who are working with pride and courage in their homeland,” said Stefan Fuchs, chairman of the Executive Board.
“Already volatile commodity markets have become even more heavily strained by this war. Supply bottlenecks with an unprecedented shortage of raw materials, roughly 70% increases in raw material costs in just two years, and high inflation rates impacting our costs preoccupied us throughout the whole year. Our primary goal was to ensure a secure supply for our customers even in these extreme conditions, which we achieved through an exceptional all-round team performance. In China, our growth market of the past few years, the country’s zero-Covid policy has paralyzed the economy and thereby affected our business. The recent reversal of this policy will revive China’s economy in the course of 2023, but it caused a near-complete standstill by the end of 2022. We are proud that the decline in China was offset by very good developments in a large number of other countries,” he said.
In the past financial year, FUCHS was able to significantly increase sales revenues in all regions. Earnings before interest and taxes (EBIT) also increased year-on-year, except for the Asia-Pacific region.
The EMEA (Europe, Middle East and Africa) region generated sales revenues of EUR2,036 million (USD2,149 million) in the past financial year, 19% higher than in the prior year, driven by prices. The region was confronted with high cost increases in the past fiscal year, but was able to offset these additional burdens and improved EBIT by EUR4 million (USD4.2 million) to EUR170 million (USD179.4 million).
The Asia-Pacific region reported sales of EUR929 million (USD980 million) for the past fiscal year and overall growth of EUR74 million (USD78 million) or 9%, primarily driven by foreign exchange. EBIT of EUR113 million (USD119 million) fell short of the very good prior-year result by EUR9 million (USD9.5 million). The weak development of China due to the lockdown had a negative impact on the region. India, Southeast Asia and Australia, on the other hand, achieved encouraging growth in earnings.
Following high sales growth in the previous year, the North and South America region also delivered convincing growth rates in 2022, driven by business expansion, price increases and positive currency effects. Sales revenues increased by no less than 39% from EUR471 million (USD497 million) to EUR653 million (USD689 million). EBIT increased by 28% to EUR77 million (USD81.2 million) and contributed EUR17 million (USD17.9 million) more to the Group’s earnings than in the previous year. Nye Lubricants, the North American specialties producer acquired in 2020, and the Mexican subsidiary were the main contributors to the positive earnings trend. South America also developed positively.