Fuchs Petrolub SE, the world’s largest independent lubricant supplier, reported today that its profits fell 3% in 2020 – and that management considered it an accomplishment that they did not fall further during the year of COVID-19.
Full-year earnings after taxes were €221 million, matching the company’s estimate in a provisional report issued last month. Sales revenue decreased 8% to €2.4 billion.
Officials at the Mannheim, Germany-based company credited the performance to aggressive spending cuts and proactive steps to keep its finances liquid.
“The Executive Board reacted rapidly to these challenges, vigorously reducing costs and systematically securing liquidity,” Supervisory Board Chairman Kurt Bock wrote in the company’s annual report. At the same time, Fuchs deployed the second-largest capital investment budget in its history and completed several acquisitions.
“As a result, the company got through the COVID-19 pandemic relatively well. [Earnings before interest and taxes] decreased by only 3% compared to the previous year, while sales revenue declined by 8%.” Bock noted that Fuchs also increased the dividend paid to shareholders.
As with many other companies in Europe and the Americas, the pandemic hit Fuchs hardest during the second quarter, when earnings fell by 50% compared to the same period of 2019. By the end of the year the situation had greatly improved, however. For the fourth quarter the company posted earnings after tax of €79 million, which was 52% higher than the final quarter of 2019. Sales revenue rose 3% to €638 million.
The impacts of the pandemic varied from region to region. Revenue in the Asia-Pacific region decreased 3% to €638 million in 2020, while Europe, the Middle East and Africa fell 7% to €1.4 billion and the Americas dropped 6% to €387 million.
Fourth quarter revenues rose 2% to €386 million for Europe, the Middle East and Africa, 3% to €189 million for Asia-Pacific and 8% to €106 million in the Americas.
Fuchs’ annual report included a breakdown of sales revenue by product group. The €2.4 million revenue in 2020 included about €1.1 million in automotive lubricants – mainly engine oils, gear oils and shock absorber fluids – down slightly from 2019. Sales revenue from industrial lubricants and specialties – mainly metalworking fluids, corrosion preventatives, hydraulic and gear oils, greases and other specialty products – totaled €1.2 million, also down slightly from 2019. The other products segment – which mainly includes toll blending, chemical process management and trade activities – declined 11% to €72 million.