At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity for the analysts of Fuchs to ask questions. If any participant has difficulties hearing the conference, please press star followed by a zero on your telephone for operator assistance. May I now hand you over to Lutz Ackermann, who will lead today's conference. Please go ahead, sir. Yeah. Good afternoon, ladies and gentlemen. This is Lutz Ackermann speaking. On behalf of Fuchs Petrolub, I would like to wish you a very warm welcome to today's conference call on the half year figures. As always, all the relevant documents have been uploaded on our IR section on our homepage this morning. With me on the call today is Dagmar Steinert. Dagmar will run you through the presentation in a second, which is then followed by a Q&A session. Yeah, Dagmar, I would like to hand over to you, and please go ahead. Thank you, Lutz. A warm welcome from my side as well. Thank you for joining us today. I will start with chart number two, our highlights chart for the first half 2021. As you can see, after a strong start to the year, our business performed well again in the second quarter. Overall, we generated sales of EUR 1.4 billion. That's 26% above prior year. Our earnings, our EBIT, increased disproportionally by 71% to EUR 191 million. This sales growth is strongly driven from the automotive industry in China. In the second quarter, first price increases are implemented. What's very important, our sales and EBIT in the first half 2021 is also above the prior crisis year, 2019. The supply chain situation continues to be tense. There's no relief in for the next month. Based on these positive business developments in the first 6 months, we are more optimistic in our view into the second half of this year. We raised our outlook. Our sales we expect to come in at the upper end of the range of EUR 2.7 billion-EUR 2.8 billion. Our EBIT range will increase to EUR 350 million-EUR 360 million. Of course, our Fuchs Value Added, our most important KPI, increased. We see it for the full year 2021 around EUR 200 million. Now I would like to turn to chart number three, our sales development by quarters. As you can see, our first quarter 2021 and our second quarter 2021 are both above all quarters of the pre-crisis year 2019. As already mentioned, in the second quarter, we've seen first price increases compared with the first quarter. That's the reason for the increase. Coming to the next chart, the quarterly EBIT development, chart number four. This follows, of course, the development of the sales. You see our quarterly earnings in 2021 are above the quarter 2019 and, of course, you see the impact of the crisis in 2020 with these very weak second quarter, our best quarter, Q4 in the previous year, which contains a one-off compensation. The level of our earnings in 2021 is still on a high level. You can see in our second quarter that our margin is sequentially weaker due to higher raw material prices. With that, I would like to turn your attention to chart number five, our group sales. We see an organic growth of 27% or EUR 307 million. Compared with the first half 2019, we have an increase of 9%. The external growth is due to acquisitions in 2020 in North America, and the negative currency effects are mainly due to Americas. We see on the one hand a weak U.S. dollar and, of course, high inflation in the South American countries. These sales increase or significant year-on-year upturn is volume driven and we have in all regions higher sales, of course, most dynamic in Asia Pacific, mainly China. On the next chart, number six, our net operating working capital. You see quite a high number for our net operating working capital of EUR 624 million or 21.8 percentage points in relation to annual sales of the last quarter. This is an impact of the high volume in sales and, of course, on these increased raw material prices. There, of course, these both effects pushed our inventories as well as trade receivables. Of course, this increase in net operating working capital, it's a timely issue that also impacts our cash flow. Before I come to the cash flow, I will give you an overview about our earnings, starting with page number seven for the full group. With this strong sales growth, we improve our gross profit by 27% or over EUR 100 million, and it comes in at EUR 497 million. We report a gross margin of 35.2% in the first half of this year. This is 0.4 percentage points above the last half year. Looking into the quarters, we see in the second quarter this year, with a margin of 32.9%, a margin which is 2.7 percentage points lower than in the first quarter of this year, of course, due to the increasing raw material prices. Looking at the other functions costs, we see an increase as well, it's under proportional compared with the gross profit, it's mainly driven by higher selling expenses. Therefore, our EBIT is up by 71% year-over-year, our EBIT margin is 13.5 percentage points after 10% in the last year. Our CapEx is lower, more or less nearly half. As you know, we finished our big CapEx program in the last year. With that, I would like to come to the regions, starting with Europe, Middle East, Africa on page number eight. As you can see, sales are up above 20%. The last year, of course, was hit hard by the pandemic. Compared with 2019, the year before the pandemic, sales are 6% higher. We have seen in almost all countries in this region a high double-digit growth rate. Above average rises in South Africa and Russia, as well as France, Spain, and Italy. The weak Eastern European currencies, of course, have an impact on our sales as well. Due to these growth rates in sales, we have a significant growth in earnings in almost all countries, also compared to the first half of 2019. On the next page, on page number nine, you see the region Asia Pacific. There, the last year was less impacted from Corona compared with the other regions. On the other hand, we have a high dynamic demand in Asia Pacific, especially in China, which remains to benefit from a strong demand of the automotive sector. In the first half, sales are up by 30% and 19% up on the pre-crisis level in the first half of 2019. Looking at the earnings on the EBIT, we see a significant earnings growth in almost all countries, but of course, highest absolute growth in China, of course, which is dominating, but followed by India. On the next page number 10, the region North and South America as well reports higher sales compared to previous year and higher sales compared to 2019. Of course, we have to keep in mind that in 2020, we had the acquisition in North America of Nye. Looking at the earnings, North America doubled earnings compared with the previous year, but this was highly impacted by bad debts as well as pandemic. We've seen as well quite a considerable recovery in all South American countries, which in the last year have been hit very hard by Corona. On the next page, on page 11, you see the development of raw material price increases in 2021, as this is for us something we've never seen in this impact before and which, of course, affects our business. As you can see in Europe and America, somehow the increases seem to stabilize a bit, but of course remain on a high level. We still expect margin pressure to continue in the second half of the running year, and of course, we are ongoing increasing our selling prices and try to mitigate the margin compression. With that, I would like to come to our outlook to page number 12, and as already mentioned, due to the strong first half year, we raised our expectations and are more optimistic regarding the second half of this year. We expect our sales to be at the upper end of the range of EUR 2.7 billion-EUR 2.8 billion. Our EBIT range, we increase to a range of EUR 350 million-EUR 360 million. That, of course, positive impacts our Fuchs Value Added, which we see around EUR 200 million. Our expectations for free cash flow before acquisitions stays around EUR 110 million. There you have to keep in mind, of course, that the strong demand as well as the increasing raw material prices impact net operating working capital, where we've seen in the cash flow statement already a high number. With that, I would like to come to a last chart for the outlook for the cash flow, because I know that it might be harder to understand and therefore we put this chart in our presentation where you see a bridge to give you explanation from the free cash flow before acquisitions from 2020 to the free cash flow before acquisitions for the running year, which we expect to come in at EUR 110 million. Of course, we will have, compared with 2020, a positive impact from our earnings after tax. We will additionally have a positive impact from our lower CapEx as we spend around EUR 80 million in 2021 and in 2020, we spent EUR 122 million. Now I will come to the net operating working capital, where you see quite a big negative impact. On the one hand, you have to keep in mind, in 2020, we had a cash inflow of EUR 34 million as we had less business overall. In the running year, due to the high demand and price increases, we have to build up net operating working capital, so there is a swing. Then with other changes, we have another swing. In the last year, in 2020, everybody reduced advanced payments for taxes and at the end of the year, we came out better than originally expected. Therefore, in 2020, in December, we had higher tax liability, which is, of course, positive for cash flow. In the year 2021, of course, we have to the cash out of these tax liabilities. In addition, we have higher advanced tax payments in 2021 for the running year, therefore, of course, we have there a turnaround again. In 2020, there was a cash inflow from others of EUR 25, in 2021 there will be a outflow. These both things are the reasons why our cash flow is just around EUR 110 million in the running year. I hope that that explanation gives you a better feeling on that number. With that, I would like to close the short presentation and would like to answer your questions. Okay. Please, operator, take over for the moderation of the Q&A session. Thank you. We will now begin our question and answer session. One moment please, for the first question. The first question is by Markus Mayer of Baader Bank. Yeah, good morning. Two questions, if I may. The first one is on the volume or the split of the organic growth in the first half, volumes versus price, versus the expected split in the second half. Is my assumption right that the first half organic growth mainly was volume driven, then potentially in the second half, there will be a significant price effect on the organic growth, but more flavor on this would be of interest. Then I will ask my second question afterwards. Okay. Thank you for your question. Well, if you compare the first half 2021 with the first half 2020, you are absolutely right, that's volume driven. If I look on a quarterly basis, in the first quarter 2021, it still was volume driven. Now in the second quarter, compare the second quarter to the first quarter 2021, we already see effects from price increases. How big have been these price effects sequentially? Really significant, or will it, in particular, then kick in in the third quarter and the fourth quarter? We see the second quarter in sales is EUR 17 million above the first quarter of this year, and that is price driven. Okay. Understand. Good. My second question would then, several questions in one question, but it circle around the Chemtool plant fire at your U.S. competitor, and also partly additive supplier, Lubrizol. The question would be, or the questions would be, how do you think this will impact you? How, if you have the chance to gain market share in the U.S. grease market, if my assumption of that Lubrizol has roughly 30% market share at U.S. greases from this plant is correct, and also where your grease plant in Chicago is currently capacity utilization, can you basically step into this lack of current capacities? All kind of flavors from this would be quite interesting. The short answer is yes. We will benefit. We don't know to which extent. It was the fire in the U.S. where the Chemtool site totally burned. We already see customers from Chemtool approaching us to get products from us. We expect that it will take at least two years until everything is built up again. Of course, one or the other product will be produced, not by us, but I guess from toll blender, because that is quite common in the U.S. We expect, of course, or we will try to have a positive effect out of that. As another question, the capitalization of your Chicago plant, is this already at full capacity, or you still have ample capacity to also serve then the additional Lubrizol customers? We still have additional capacity to serve that customer, so there won't be any capacity restraints regarding that. Okay. Very good then. Also the new grease plant in Germany is also up and running meanwhile? It's up and running. We started production, I think, half a year, something around that ago. Yes, it's running. It's a different kind of greases, as it's in Germany, it's polyurea greases. In Chicago, in Harvey, we are more producing greases with lithium. Okay. Just the last question on this, I already thank you for all the answers. The customers of Lubrizol, I guess they are mainly in the industrial manufacturing field, where also then the approvals for the grease are less severe than they are for automotive. Is this correct? This is correct. You are quite familiar with the market. Yes. Okay. Thank you so much. See you soon then in September on our conference. Yes. Looking forward to that. The next question is by Martin Roediger of Kepler Cheuvreux. Hello. Good afternoon, Ms. Steinert. Good afternoon, Lutz. I have also a few questions. I would also like to ask them one by one. Did the strong momentum you may have seen still also at the end of Q2 continue at the beginning of Q3? I would like to know what does your order book tell you for right now, July, August? That we get a flavor on did the demand momentum continue? Well, as you know, we have a very short visibility, and therefore, order backlog doesn't really play a role for us. Of course, it gives us visibility for a couple of weeks. It's a mixed situation because, on the one hand, of course, we still see good demand. On the other hand, regarding the automotive industry and the shortage of semiconductor and so on, there are more plants closed from customers and, of course, we expect, in the third quarter, therefore, somehow, less demand from that side. Today we don't really have that much visibility. Okay. Can you hear me? Yeah, we can hear you. Go ahead. Okay. Sorry. Another question. On the raw material price inflation, which you also show in your charts, but your Q2 results have been quite well, and the burden appears to be less worse than feared. Is it also partly because of accounting? Sometimes, we know from other companies, booking of raw materials First-In, First-Out, or is it an average pricing of the input cost so that the bigger effect from the raw material price inflation is still to come in the third quarter? We use for accounting for raw material prices, the average prices. That is the reason why I said in the last conference call that the first quarter is not really impacted that much from increasing raw material prices and, of course, increasing selling prices from our side. In the second quarter, we see both. We see starting the effect from our price increases, and on the other hand, as mentioned, with the lower gross margin in the second quarter compared with the first quarter, that is the raw material price increase impact as well. Therefore, we will have the main negative impact from that in the second and in the third quarter. Our price increases, which we already implemented, are seen partly in the second quarter. We will see, of course, then more in the third quarter, but we will see as well higher raw material prices in the third quarter. Yeah. You are right. It always comes into the P&L with some time lag. The final question from my side is, did you already also benefit from a better mix in the second quarter? We see right now automotive companies also changing the mix of their product portfolio, more selling SUVs and electric cars, and less all the bread-and-butter cars or the smaller cars. Has that been also favorable for you in your mix in your portfolio? Well, we always have, of course, a bit of impact from product mix quarter by quarter. In the second quarter compared with the first quarter, there is no big impact from a product mix. It's just volume driven that it is better than originally expected. Okay. Thanks a lot. Mm-hmm. You're welcome. The next question is by Sebastian Bray of Berenberg. Hello. Good morning. Good afternoon, I should say, and thank you for taking my questions. I'd have two, please. The first is on levels of absolute volume sales at Fuchs now relative to the last time earnings were peaking around 2017, 2018 time. How are volumes now relative to the 2017, 2018 period? I'm just trying to get an idea for what exactly has happened to the profitability per ton 3 to 4 years. My second question is on the CapEx outlook. Where relative to your initial expectations are you in terms of capacity utilization? If demand remains strong, when exactly do you think you'd need to go substantially above the level of EUR 80 million per annum? Thank you. Sebastian, I will start with your second question with the CapEx. As we finished our big investment program or initiative, which was not only adding capacities, it was modernizing, increased efficiency, somehow, implementing a certain level of operations within the group. With the year 2021, one year earlier than originally expected, we are back to levels of amortization depreciation around EUR 80 million. This gives us enough room for smaller medium-sized projects besides maintenance and everything. Therefore, even if we need to add capacity, we won't exceed material, this level of CapEx, and you won't see such a CapEx program again, because there is enough room in our CapEx budget. Of course, looking at capacity as we produce in batches, we could quite easily increase batches, therefore increase somehow capacity. Even if demand remains years at that level, we wouldn't run out of capacity. Coming to your first question, which I answered as the second question, about profitability per ton. We don't give that information as it is very simple to say that's the volume, that's the profitability, but then you have to get very deep into it, like looking at products, product groups and this kind of information, we are not willing to give them or to make it public because that would give competitors information how we do our pricing and everything. As you know, that there's this ongoing trend towards lower volume lubricants. Just looking at the volume doesn't necessarily mean that if there is the same level of volume or less volume, that's a decrease in business. Anyhow, we increased our volume. That information, of course, I can give you. If you, for instance, look at the year 2020, besides the crisis, where we bought Nye, this very specialized lubricant company in North America, and they are highly profitable. They produce extremely low volume products. We added to our group some profitability, but hardly added any volume. Even there, it would be somehow misleading. Yeah, I hope you understand that we don't give more information on that side. Yes, of course, that's helpful. If I may extend that, is there any reason why you think Fuchs in the longer term would not be able to return to the levels of profitability that we saw in 2017, leaving aside the current increase in raw material prices? No. Medium, long term, we should definitely come back to already seen profitability levels, yes. That's helpful. Thank you for taking my questions. The next question is by Isha Sharma of Stifel. Hi, good afternoon. Thank you for taking my question. I just actually have one left now. On the raw material cost inflation in the past, whenever there was an uptick, and I do appreciate that you have not seen something as drastic as this time. However, we have seen a fluctuation of close to 100-150 basis points from one quarter to another in your profitability. I do understand that it might take a little bit of time till that shows in your P&L but are there other costs or other reasons for OpEx to be higher than in the past that we might not see a quicker recovery in profitability? Is it fair to assume that when the prices stabilize, the raw material costs stabilize, then you will be able to swing back the profitability pretty fast? Thank you for your question, Isha. Well, if raw material price increases stabilize, then of course, it's just a question of some months that we will come back to better margins. There's always this time lag, of course, 3 to 6 months. On the OpEx side, what we face today is, of course, besides higher selling costs due to the strong demand, we have significantly higher costs of freight as logistic costs are increasing sharply, and it's sometimes even difficult to get containers. Flights, then, of course, for instance, in Germany, due to the high water, streets are disturbed and trains are not running. There's a quite sharp increase in logistic costs, and that, of course, drives OpEx. Looking at OpEx in total, these two areas are the main increases. What will be ongoing, but that's already in the numbers, is costs for IT, as we, as well as other companies, go more for software as a service, which you see directly in OpEx and not in CapEx. That's very helpful. Thank you so much. You're welcome. The next question is by Eleanor Seddon of UBS. Hi there. Afternoon. Thanks for taking my question. I've actually got a couple if there's time. The first one is just around demand trends in the autos market. We've brushed on it, but I'd be interested to know globally on a more evaluation that way. For example, we know APAC is strong, but if you could talk about activity between APAC and EMEA, that would be really helpful. I'll, yeah, go to the next one after you've dealt with that one. I'm not sure if I got your question right? You want to have more insights on the automotive industry in APAC or? More in EMEA and the Americas. I think general understanding is APAC is strong. If you have more comments beyond that, then obviously feel free to add. Yeah, no, APAC is strong, as you said, but as well as Europe, Germany, and even America. You have to take into account our activities in North America regarding automotive industry are not that big. For our business and our customers, we see there a good demand and it's performing well. Okay, brilliant. Turning to CapEx, obviously you've guided for, or previous comments were around an EUR 80 million figure, roughly in line with depreciation. It seems like you're tracking a little bit lower than that at the moment. Is there a lot more spending to come in the second half, or have some projects perhaps been pushed a little bit into next year? We haven't pushed anything into the next year. It should come in the second half. Of course, it's always a question. Some of them might be shifts or delays, but not because we shifted, but maybe that there are materials are not available or too long delivery times for some machinery or technical equipment, but no shifts or delays from our side. Great. Of course. Thanks. Last little one was we were just talking about, well, you were just talking about the freight challenges, for example, in Germany. Have you had any communication from those providers, kind of how long they expect that disruption might continue or when they expect to be back to business as normal? No, we don't have it. Of course, it's different from company to company or any operation. We are really lucky as we as a group are not direct affected and it's just indirect through maybe logistic. For instance, in our plant in Germany, we get less material via rail as there are disruptions on the railways, but I don't know how long this will take, so there's more done by truck, just as an example. Great. That makes sense. Thanks so much, Dagmar. You're welcome. I hand back to Lutz Ackermann for closing remarks. Yeah. Thank you very much, operator. Thank you for the participation today at our conference call. As always, if you have any further questions, don't hesitate to contact us. We see us at the next conference call, which takes place on 29th of October. Until then, stay safe and have a nice day. Bye-bye. Thank you very much. Bye-bye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.