Fuchs (FPE3) CMD 2024 summary

Strategic direction and business model

• Maintains a decentralized, customer-centric approach with 55 subsidiaries and 35 production locations, focusing on local decision-making and strong regional presence.

• Fuchs 2025 strategy emphasized market segmentation, digitalization, sustainability, and mobility transformation, with a new Fuchs 100 strategy cycle to launch in 2026, targeting the company’s centennial in 2031.

• The company leverages a broad product portfolio of over 10,000 formulations, with more than 10% of its workforce in R&D, focusing on specialty lubricants for over 25 industries.

• Strategic acquisitions, such as LUBCON and STRUB, have expanded specialty product offerings and strengthened the global footprint.

• Culture, open feedback, and performance-based incentives are highlighted as key differentiators, with broad organizational participation in strategy development.

Financial guidance and performance

• Targeting €500 mn EBIT by 2025, with mid single-digit organic growth and a long-term EBIT margin of 15%.

• 2024 and 2025 are expected to be record years, with the 2025 EBIT stretch target of €500 mn still in place.

• Cash conversion remains strong, averaging 80% of net profit, supporting a consistent and growing dividend policy, with 22 consecutive years of dividend increases.

• Balanced capital allocation with €3.0 bn total cash generation from 2004–2023, supporting dividends, acquisitions, and share buybacks.

• Ongoing annual CAPEX of €80 mn from 2024, with no major new CapEx program planned in the near future.

Growth initiatives and market development

• Growth is driven by market segmentation, focusing resources on high-potential segments and scaling successful approaches globally.

• Investments in new plants and R&D hubs in China, the US, and Germany position the company close to key customers and innovation centers.

• The company is expanding in Africa and other emerging markets, using a phased approach with local partners and joint ventures.

• Partnerships with OEMs like DMG MORI and Mercedes-Benz enable standardization, co-development, and global supply of lubricants, especially in high-tech and semiconductor sectors.

• Success stories in energy storage, food, paper, and basic metal industries demonstrate scalable, customized solutions and global account management.